5 Reasons Why Mobile Marketing Automation Will Produce The Next Unicorn

1. It’s B2B, SaaS, Enterprise and Mobile — Mad Hot Categories in Venture

We’ve got Slack. The fastest growing enterprise SaaS company ever and it’s mobile, not to mention it’s got the whole “messaging” thing too which is a category that has produced a fair share of unicorns. What’s particularly interesting about the mobile marketing automation space is that is bridges an interesting gap that Slack themselves talks about in this killer article “We Don’t Sell Saddles Here”. In it, founder Stewart Butterfield points out that “nobody was looking for Slack” — by that he meant Slack wasn’t selling a commodity people were already looking for. Slack was not selling saddles, they were selling a dream. They had to show people something that was missing — they just didn’t realize it. Creating a market is particularly hard, but it frequently where innovation and huge valuation upswings occur. In the case of mobile marketing automation, it dovetails on a fairly commoditized market, mobile analytics, but is also creating a new market in driving user behavior on mobile. Just yesterday Amplitude, yet another mobile analytics company, raised nearly $10 million, promising to sell way way cheaper “saddles” than the incumbents like Mixpanel (850M valuation) and Localytics (200M valuation). Of course, there are already several well funded players in the mobile marketing automation space like Urban Airship and WizRocket, even Parse has repositioned themselves somewhat in this light. But the true innovation in this arena is yet to come — it’s right on the cusp from being something nobody realizes they want to something everyone must have. Big opportunity.

2. Classic Marketing Automation Already Sports Numerous Billion Dollar Companies

In my previous life (2000’s) I lived and breathed web based CRM. Salesforce ruled and there was this up-and-coming category of enterprise software called “marketing automation”. The first to break out was Eloqua and they got in tight with Salesforce early on. At first, nobody knew they even needed marketing automation. Sure, they knew they needed web analytics, which, incidentally, Google single-handedly category-flattened. Initially, marketing automation was about getting your web visitors to convert using the analytics data you were already collecting. That continued to evolve, helping companies do more with existing users and customers. But Eloqua, and literally hundreds of others like Marketo, Pardot and Silverpop flooded the market. Marketing automation became a par-for-the-course, very expensive, enterprise software for all the big budget hollywood style companies at that time. Eventually, marketing automation became a commodity — each new entry popped on the scene with a new hook, new feature, new pricing… basically, a new saddle. And yup, we’ve got more than a few billion dollar marketing automation companies now.

3. The Opportunity on Mobile is Not Getting More Users, It’s Getting Users to Do What You Want Them to Do

This is the big vision that is yet to be understood by most mobile publishers. Funny that the same thing happened on web as is now happening on mobile. On the web it was initially about getting more people to land on your site and using sheer brute force combined with increased website visitors, you end up with enough customers to warrant your marketing spend. But eventually, partly thanks to marketing automation companies, we realized that it was about getting more from what you already had — not simply increasing the pool. Mobile is headed in the same direction, but it’s way more important. It’s way more expensive to get a download of your app than get a visitor to your website — so on mobile, the idea of “converting” more people is exponentially more important. Moreover, I say its literally about extracting more value from your mobile users. Now, let me drop you your head because I get donkey punched fairly often for taking this stance. But here goes. When it comes to mobile, you should be almost blindingly focused on your 20% of users that are already digging your app. Those are the users you can actually direct to desired actions. Sure, you can send push notifications and emails all day long to those users that came in for a few days then bailed in a last ditch effort to get them back into your app, but that’s a waste of time. Almost every mobile publisher will tell you that there is this small, unique, special group of users that just fucking love the app. My experience is that it’s about 20% of your total base. Those are the guys you have the biggest opportunity with. They’ll stay in your app an hour a day if you give them what they want. The future of mobile marketing automation is about identifying those users, organizing them and directing them to desired activities (i.e. the ones that make you the most money or value).

4. It’s Totally Cross Vertical, Cross Industry and Cross Platform

To the many VC’s that have told me “You’re playing in a small market” or “I just don’t see how this is a big opportunity”. Mobile marketing automation is cross vertical, cross industry, cross platform, in other words, is a big fucking opportunity. No matter what kind of mobile app you have, what industry you’re in, how big or how small, you must have some semblance of a goal right? Maybe your goal is simply getting users to consume more ads so you make more money. Or maybe it’s buying IAP’s. Maybe it’s discovering more products you sell, or watching more videos, or inviting friends, or sharing on FB, Twitter and Instagram. Whatever it is, mobile marketing automation will be there.

5. Because Analytics are Cool, But Actually Doing Something With That Data is Way Fucking Cooler

Who doesn’t love mobile analytics, it’s just so cool. Everyone is just killing it with their 35% DAU/MAU right? Isn’t it awesome to know how many people downloaded your app today? How many people opened it? What cohort watched a video and which one stayed for 7 days. All that shit, it’s par-for-the-course right? Sure, and there are a hundred companies offering it, including Google Analytics. It’s fairly commoditized and the cost is eroding quickly. But now what should you do with that data? For the most part publishers are using it for two things: retention and acquisition. That’s logical, “please help me keep these users I just paid $2.25 on Facebook”. But the truth is, you can’t. On mobile people are finicky. They come and go. That’s the salt of it. But you also want more users right? Keep the funnel full at all costs. I’m being extremely obtuse of course. There is a lot more to mobile analytics than plugging the hole in the bucket and filling the bucket with more water. Many sophisticated companies are getting a lot of value from Mixpanel, Localytics, Flurry, etc. But the ugly truth is that most people pay way more than they should just to get DAU, MAU and 7-Day retention. Enter mobile marketing automation. This is where we actually collect actionable data and then take intelligent decisions and direct people to do what we want them to do. This is how you are going to achieve real value from your mobile app and this is how you are going to extract 3x, 5x, 10x or more value from your best users. Like they used to say in good ol’ days, “more wallet share”.

So that’s that. 5 reasons why mobile marketing automation is the next big thing. What do you think?