Doug Merritt is CEO of Baynote, a personalization and digital marketing optimization solutions provider.
AdExchanger.com: First, please share a bit of background on you. And what drew you to Baynote?
DM: I’ve been in the technology industry for over 25 years and just joined Baynote in January. Most recently I was EVP Global on Demand Applications at SAP, where I was also a member of the Executive Council for SAP AG.
For the last five years, I have noticed a big shift in how technologies are adopted inside organizations. Traditionally, the technology buying decisions were made in the IT department. But as companies like Google, Facebook and Twitter introduced business users to services that have disrupted how we live, work and communicate, this non-technical audience has begun demanding the products they want to improve their daily tasks. The business buyer that is creating the most disruption and where there’s an incredible opportunity for Baynote is the CMO and their extended digital marketing organization.
I was attracted to Baynote because of its highly measurable value proposition for this audience, and the executive team’s ability to execute on a compelling vision around the adaptive web. Baynote has a proven technology that has been implemented on over 300 websites, primarily in e-commerce, and I saw a big opportunity for the company to apply the same technology to help companies across industries solve a common problem: creating more personal and relevant digital experiences for their consumers that drive loyalty and revenue.
What problem is Baynote solving?
We dramatically reduce the expert involvement and manual effort that most marketers require to instantly adapt to the evolving customer needs during any website visit. We meet this challenge by providing a unique technology that adapts on-line content in real-time, depending on the behavior of the customer.
Baynote helps digital marketers and e-commerce teams deliver personalized, engaging experiences to their customers at all touch points - on the web, on their mobile devices, through email, in their social media interactions or while viewing video. Our solution gives marketers a highly measurable method for understanding and automatically responding to customer intent that is proven through our hundreds of major brands who have reported increased conversions immediately after implementing Baynote.
What we’ve found through our experience that knowing personal details of your customers is not as critical as knowing what they want or seek in the moment that they are on your site. Rather than relying on profiles based or historical data, and risk serving up a stale or inaccurate experience, we look at the collective actions of their like-minded peers to deliver what they want, right now. Of course, we can combine this “in the moment” understanding of needs with personal profile data for even more targeted delivery; however, our customers have seen that the missing ingredient to a relevant personalized experience is the end-user intent in the moment.
What is the target market for Baynote? Or what are the characteristics of Baynote's target market given that Baynote has wide-ranging use?
You’re right, Baynote’s solutions can be used in almost any market or for any company that has a digital presence, so the potential target market is quite broad. Ultimately, we’re interested in selling to anyone who needs to adapt the digital experience for their audience, and almost every vertical market needs this. However, to gain momentum, we have to focus our sales and execution on a smaller set of high opportunity segments. To date, we’ve been focusing on telecommunications (including IPTV and mobile), high tech, electronics, consumer products, media and entertainment and of course, retail.
Do you see an application for Baynote's products today with data-driven advertising? Perhaps attribution modeling as it relates to ad spend across digital channels and offline, too?
Yes, we’ve had discussions with different firms about assisting with solutions in the dynamic advertising area. Our Collective Intelligence Platform observes end user behaviors, drawing on what the invisible crowds are telling us through their behavior. Adding this perspective to dynamic or data-driven advertising solutions increases the accuracy and value of advertising display.
When will Baynote products "cross the chasm" if you will?
For years, organizations have been experimenting with different approaches to personalize the digital experience. It’s always been an interesting concept, but now, with a large portion of the world’s population online, and the body of content growing exponentially, personalization is now an imperative. Given the open, scalable and proven capability of Baynote’s platform, I think we’ll see the rate of our installations move onto an exponential growth curve during the next year and a half.
Real-time bidding has impacted the online media space. How does the concept of "real-time" impact Baynote?
Real-time makes a huge impact on Baynote – in fact, it is Baynote. Baynote was founded on the principal of using the wisdom of the crowds to efficiently deliver a personalized digital experience for the end-user automatically – in real time. The result is something we call the “adaptive web”, which is to say a digital experience that is always relevant and based on users' current intent and interests. It also must be device-agnostic, which is especially important given the increased mobility of the online experience and the diverse array of on-line interactions, (video, games, tweets, social interactions in addition to web). Baynote is device independent and works across all forms of content.
Do you see Baynote offering through agencies, direct to the CMO? What's the sales strategy?
Right now we primarily sell direct to the CMO and digital marketing/e-commerce decision makers. However, I’d love to see interactive agencies and solution providers that serve CMOs become strong resellers of our technology. My goal is to have the majority of our revenue coming through channels in the next 12–18 months. Today, we do work with a number of large interactive agencies like SapientNitro.
Thinking about the CMO, what are the big challenges they face today -and where do you see Baynote fitting?
CMOs need actionable insights, but the environment is progressing so quickly and dynamically that they are having a hard time making the most of data available to them. They are all responsible for digital content on their websites, and are doing some form of promotions, pricing optimization, site search improvement, customer engagement – the list goes on. But so much of what they’re doing is manual, very expensive and fraught with error.
Marketing is about true revenue generation – feeding the revenue ramp of the sales team. It is also about fostering and maintaining customer loyalty. Baynote meets these challenges by gathering customer insights and using this data to automatically adapt the online experience so it is relevant, personal and convenient – all without requiring intervention by the CMO. This not only drives revenue through increased conversions, but it frees up the CMO’s time to focus on more strategic and complex initiatives.
Regarding your recent funding, what are your plans for the funds? And, any target date for profitability, for example?
Baynote has been growing steadily year-over-year by approximately 100 percent since we shipped our first products in late 2006. In January, we announced $13 million in Series C Financing led by SingTel Innov8, which is the investment arm of Singapore Telecommunications Limited.
We’re using the new capital mainly to advance our entrance into new high-growth industries, such as telecommunications and financial services, and accelerate product R&D. Funds will also be used to more aggressively expand our brand exposure worldwide. As I alluded to earlier, based on our current position and the opportunity that lies ahead, I expect Baynote will soon hit a stride of even more explosive growth.
My goal for Baynote in 2011 is to ensure the success of our customers while efficiently penetrating new high-growth markets and developing all functional areas of the organization to scale in line with our multi-billion dollar market opportunity. An IPO at some point in the future would be an obvious outcome of our success, though this is not on the horizon for 2011.
3-5 years from now, what milestones would you like the company to have accomplished?
The only way that I know to grow a company to greatness is with consistent, aggressive attention on our customers and our employees.
We will have industry best customer satisfaction. Everything we do must benefit and impact our customers in a tangible way. They need to be able to see, touch and feel the benefits that they are receiving from Baynote. Baynote helps our customers differentiate from their competitors, serve their customers much more effectively and meaningfully increase revenues. I have a goal of having 100% of our customers be referenceable and articulate about Baynote’s positive impact on their business. Given the reality of line-of-business buying and our SaaS model, I believe this goal is an imperative.
Secondly, I want to complement our leading position in customer satisfaction with best in class levels of employee engagement. I don’t want to oversimplify it, but I believe that consistent focus on customers and employees ultimately leads to the high levels of revenue, profit, growth and outsized market share performance that companies strive for.