TMW #053 | Mailchimp’s $10 billion opportunity, CMOs and Martech spending and Amazon going BNPL.

Sep 5, 2021

Welcome to The Martech Weekly, where every week I review some of the most interesting ideas, research, and latest news. I try to look to where the industry is going and make sense of it all.

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Welcome to #053, another big week in the marketing technology landscape.

I have one thing for you before we get started, and it’s TMW’s first-ever event! It’s called Making Sense of Martech: GREENROOM - go behind the podcast recordings and have a conversation on the biggest topics impacting our industry today.

The first episode is a deep dive into the tectonic shifts in online advertising covering privacy, ad fraud, the death of cookies, and the role of big tech. I’ll be interviewing David Finkelstein, the CEO of BDEX and an AdTech pioneer. You’re welcome to bring your questions too! Tickets are now open. Get one.

Here’s the week in Martech:

  • Mailchimp’s $10 billion opportunity. Intuit, the world’s largest accounting software company thinks Mailchimp is a vital piece in building a business OS.
  • CMO spending on Martech. Marketing budgets are down by as much as 41% this year, but a lot of it is now going into marketing technologies and analytics.
  • Amazon + Affirm. The partnership will open BNPL capabilities to Amazon’s sprawling eCommerce empire.
  • Everything else: Tealium and Google on customer privacy, first principles in platform management, customer effort scoring, refund innovation, Mcbroken, and moderating the metaverse!

✍ Commentary

Mailchimp + Intuit. Intuit is in talks to acquire Mailchimp for a mind-boggling, $10 billion. That’s a big valuation for a company that was and is to this day bootstrapped. What does the world’s largest accounting and tax software company want with an email marketing platform designed for small businesses? And what can we learn from not just Intuit’s interest in Mailchimp but also the broader trends around financial companies bleeding into the marketing technology domain?

The story of Mailchimp is really quite astounding, and a perfect example of lean, iterative product development to an emerging market with a massive addressable audience. Started in the early 2000s, the company was launched by a pair of marketing and design agency founders. Mailchimp kind of came out of nowhere, and then quickly became #1 in the category set for basic email marketing.

To give you one insight into how ubiquitous Mailchimp is today, in 2020 alone the company sent more than 333,000,000,000 emails. If I say “email marketing” most people will probably think “Mailchimp!” In recent years, Mailchimp has gone down the path that most other ESPs have gone by offering a fully integrated suite of marketing technologies including CRM, eCommerce features, and website builders. They’ve done this by slowly and iteratively moving into other areas and competing with the likes of Squarespace and Shopify.

Intuit is a ubiquitous company in other ways. The company is the leader in productizing tax returns (Turbo Tax), and is expanding its horizons into personal accounting (Quickbooks), and lending (Credit Karma). Intuit is becoming a financial super app, in the same vein as Afterpay (you can read my analysis of their acquisition to square here) and so the ambitious, left-of-center exploration into a Mailchimp acquisition makes a lot of sense. Almost all major financial apps are pushing into becoming the default OS for small business operations. The core reason for this is small business owners have no idea what they are doing with technology most of the time. For them to be able to navigate digital marketplaces, there’s a clear and pressing need to figure out how to integrate apps and manage their accounts quickly and easily. Intuit’s play into marketing technologies is no different from Afterpay’s value proposition to retailers - let us handle the marketing operations and customer demand along with everything else.

While the price tag of $10 billion may seem steep, Klavio, a direct Mailchimp competitor is valued in the realms of $9.5 billion. The reason for this is the sheer scale in which these companies have captured the small to medium business market, and the opportunity on the table as these small businesses grow over time. I’m a user of Mailchimp, this email is a Mailchimp email, and I’m happy with it. But I won’t be surprised if eventually, I would be able to apply for Quickbooks to manage all income from email marketing or browse a number of financial options while I’m reporting on email conversion rates. The gap between revenue operations and marketing operations is getting smaller, and a stronger indicator of this is that Intuit would be willing to pony up $10 billion for the smiling email chimp. Links: Bloomberg. Analysis. The story of Mailchimp.

📈Chart Of The Week  

Marketing budgets and technology. Gartner has released the annual state of marketing budgets report and in it are a few surprising findings. While 2021 has seen a 42% drop in marketing budgets as a share of company revenue, investment into marketing operations technology and marketing analytics is edging to the top of the budget allocation list. Report. Analysis via Cheifmartech.

📰 Latest Developments

Amazon & Affirm. Amazon is partnering with an outlier BNPL company to integrate the now-ubiquitous payment method into the world’s largest eCommerce store. Friendly reminder that most BNPLs are loss-making companies and a lot of this is about cementing Amazon’s already dominant grasp on the customer. Link

Contentsquare acquires Hotjar. There were three major players in the behavioral analytics space, and now there are two. This just shows that this area of Martech is becoming more concentrated as the enterprise market adopts more of these tools. Link

Twitch and Reddit protests. The creator economy is hitting a fever pitch right now, but the reality is that if you want to create content and sell it online then the platforms you deal with will mediate your audience for you, including the haters. This week Twitch and Reddit users staged a “day off” against the platforms to send a message about content moderation and protecting online creators from abuse. Link

📚 Reading

Platform management: Returning to first principles. Platforms should be designed to address aggregated demand in a way that allows developers to build and deploy things that most people can access. Platforms have become an incredibly messy topic in Martech, and going back to first principles thinking can help untangle where building a platform makes sense. Link

Google and Tealium on privacy. This is technically not a read, but a very interesting view into where some of the larger platforms are thinking about protecting customer privacy. The current narrative is that first-party data is the most viable way to address privacy and manage advertising performance at the same time. Link

1 year building a solo media company. The Generalist is one of my favorite newsletters. In just twelve months they hit 40k subscribers and $300k ARR. The founder has never worked in journalism but is now literally a one-man media business. Here’s the transparent step-by-step story of how he did it. Link

🔢 Data & Insights

Martech replacement survey. A survey from looks at the changing behaviors of marketing technology management. 67% of respondents said they have replaced at least one technology in their stack in the past year. Link

Government adoption of tech. Gartner has released a forecast on global government spending on technology. By the looks of things, growth in software and data investments point to a future where citizenship will be completely mediated through our devices. Link

How many people work in Martech? Apparently, quite alot. According to LinkedIn data, about 12 million people have a job title that includes “marketing operations” about the same for digital marketing and online marketing. It baffles me that there are still no clear Martech courses in universities, perhaps a topic for another time. Link

💡 Ideas

Customer effort scores. A metric that kind of works like NPS, but is more specific to a particular task a customer is trying to complete. What I like about it is the insight possibilities of looking at how hard a customer has to work when dealing with your product. Link

Refundid. This is a BNPL that loans to the companies when customers request returns. It’s supposed to speed up refunds while taking on some of the risks for returned products. Link

Non-Fungible Talent. Cryptocurrencies are creating new classes of digital talent. Link

✨ Weird and Wonderful

Pokemon or a big data tech company? Link

Mcbroken. Someone hacked the McDonalds API to pinpoint where stores have broken ice cream machines globally. Link

Moderating the metaverse. Apparently, Roblox has a widespread problem of people recreating mass shootings on their platform. Turns out when you give everyone on the planet the tools to create, some of them will create bad things. Link

Stay Curious,

Make sense of marketing technology.

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Juan Mendoza

Juan Mendoza is an expert in researching global media, marketing, data, and technology trends. He is the CEO of The Martech Weekly, a media and research brand with subscribers in over 65 countries.

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