Startup Lytics Raises $7M, Wants To Help You Build Your Own Marketing Cloud

james mcdermott lyticsThe value of a marketing cloud, as Forrester Research pointed out Tuesday, is in the level of its integration.

But Portland, Oregon-based startup Lytics takes the position that whatever level of integration the big-name marketing suites offer simply isn’t enough. The company, which started in 2012, made its “marketing activation platform” generally available on Wednesday and revealed $7 million in Series A funding led by Comcast Ventures, bringing its total to $9.2 million.

Lytics provides the glue that lets marketers link their disparate technologies. Its value proposition is that it enables companies to build their own clouds out of various point solutions, merging data from systems likes email, social media, web and point-of-sale quickly and easily.

It accomplishes this heady task via 80 connectors that link to parts of the marketing ecosystem, as well as through API connections, said company CEO and co-founder James McDermott.

“Fundamentally our platform was designed to integrate with different marketing execution tools,” he said.

Lytics’ self-serve platform consists of data-management tools (it’s not a DMP, McDermott insisted) and has a layer of analytics designed to make predictions, such as which customers might churn, and suggestions, such as how and where a company should message those churn risks.

Lytics has 15 beta clients including Intel, Condé Nast and DirecTV.


DirecTV, in particular, uses Lytics in its Digital Innovation Lab (D Lab), a two-year-old incubator of roughly 20 technologists and strategists, which serves as a testing bed for experiments that might eventually become DirecTV products.

“We use Lytics to create a rich profile on what people are doing, and we’re using that information to create different A/B tests,” said D Lab director John Dao. “For example, if we’re coming up with a new way to have customers interact with video, well provide different experiences to different people.”

DirecTV’s D Lab used Lytics because it wanted to focus on developing various products and content related to those products, instead of stitching together various measurement software.

One of the key data points Lytics provides, Dao said, is understanding what people do on the various sites the D Lab builds to support its experiments and how frequently those people return.

“If we get to a place where we can understand what drives engagement, we can try to find ways to drive adoption across less engaged folks,” Dao said. “Certain individuals come back to the site two or three times a week. We want to get into the reasons why. Maybe it’s about their preferences, something about that persona, and maybe there’s a way to identify if that group is bigger.”

Though DirecTV’s D Lab uses Lytics to help with product development, McDermott positions his company as a competitor to the conventional marketing clouds fielded by bigwigs like Salesforce.com and Adobe.

According to McDermott, the enterprise tech players simply can’t integrate very well no matter how hard they try. “They’re running a play from the IT world, which is roll up a number of IT applications and create a suite of tools that are loosely affiliated but not truly integrated,” he said.

Interestingly, one of Lytics’ investors and board members is Brett Queener, former EVP and GM of Salesforce Marketing Cloud (and current COO of hiring platform SmartRecruiters).

“When I pitched my vision to him, he was like, ‘That’s what we wanted to do at Salesforce,’” McDermott recalled.

He hopes 2015 will be a year of “tremendous customer growth,” and he intends to use the funds he’s accrued to staff up from the 30 employees he has now.

That being said, the climb won’t be easy as Lytics is entering a highly competitive landscape. Even if marketers grumble about Adobe’s or Salesforce.com’s integration, those companies are very well entrenched. And there are also independent players fighting to be the pipelines connecting point solutions, such as IgnitionOne and Integrate (which also has funding from Comcast Ventures).

 

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