This week on the Digital Velocity Podcast, Larry Kavanagh of NaviStone joins Erik and Tim to discuss what identity resolution is, how to leverage it to build first-party data, and how it can ultimately increase your bottom line.
Larry defines identity resolution as, “…connecting a consumer to both online and offline, all the different interactions that they have. I break it into sort of two categories, first-party identity resolution and third-party identity resolution.”
He continues, “…first-party identity resolution is connecting all those interactions that a consumer has with a particular brand…but identity resolution is really about connecting those different activities that are on the first-party side, that are associated with a particular brand…third-party identity resolution is really about building audiences for advertisers.”
Larry explains the purpose behind identity resolution, “So, think about a marketing program where you don't have to give a discount, you're not giving away any gross margin. Just by understanding what someone's interested in, you can get twice as much sales for the same marketing dollar. That's the goal behind identity resolution, and understanding sort of all of these interaction points is to find ways to grow your business by delighting your customer with what they want without having to give away margin or product.”
Listen to this episode to learn more about identity resolution and how it can help you build first-party data and increase sales.
About the Guest:
Larry Kavanagh is a co-founder of NaviStone and serves as its chief executive officer. Larry is responsible for overseeing the development of big ideas, creating big relationships, and solving big problems.
Larry is a serial entrepreneur and has overseen several successful startups, including DiMinSite, an Ecommerce platform company that made the Inc. 400 list in 2005. He has been a featured speaker at Shop.org, e-Tails, Direct Marketing Association, National Etailing and Mailing Organization of America, and the CohereOne Summit. His work has been recognized through awards from Inc. 500, John Barrett Entrepreneurship, and the Cincinnati Business Courier.
Erik Martinez: [00:00:00] Welcome, to this week's episode of the Digital Velocity Podcast. Today, Tim and I are talking with Larry Kavanagh, who is the CEO and co-founder of NaviStone to discuss how digital marketers can utilize identity resolution to enhance their marketing campaigns and activities. Larry, welcome to the show.
Larry Kavanagh: Great to be here. Thank you.
Erik Martinez: Larry, just to get started today, would you mind telling us a little bit about yourself and your journey into this space?
Larry Kavanagh: Keep in mind, this is a 35-year journey. I'll try not to take up all of the podcast describing it. [00:01:00] Don't be afraid that I'm going to start in college. In college, at the University of Chicago, I was both a chemistry major and the editor of the school newspaper, which was, it turns out, the exact right background for digital marketing and direct marketing. Although, I just didn't know it at the time and neither did my parents. Out of school, I was hired by a publishing company in Cincinnati and they taught me direct response copywriting and also taught me really how to analyze a direct mail campaign.
After four years there, I moved to, traditionally what used to be called a mail order catalog company. I'm not sure that anybody even refers to them that way anymore, but they had a call center, they had a warehouse, and they generated business primarily by sending out catalogs.
I got hired as the VP of marketing or director of marketing. This was the early nineties, and this was a time when microcomputers were just getting to the point where you could really do some sophisticated things with them.
I had taken some programming classes and taken some statistics classes[00:02:00] and actually took a raw data dump of our half a million customers and created like a crude database and ran it through some statistical modeling software and really changed how we were selecting who we are going to mail the catalog to, and got into some personalization, figured out like what covers we ought to put on for different people.
It had the effect of, within a first couple of years, doubling the sales of the business and increasing the bottom line by like 20 fold. It was like a real early example of the power of personalization and really database marketing. It's one of those things where if you do really well at something, you get promoted to something else, so I became general manager of the business, and at about 28 years old, I was running about a hundred person company, which was a fantastic learning experience.
And so, what did I do with that? I decided I never wanted to have a job again and became an entrepreneur. In the late nineties, I started my first business and I have been I would say gainfully unemployed since, been an entrepreneur since. That first business was [00:03:00] actually a database marketing and statistical modeling business. I had some, again, they still call themselves catalog companies. I had some catalogers as clients, but it was the late nineties. I had some clients who were early dot coms. I'm sure you guys can remember back at least somewhat to that time.
In the late nineties, people thought Ecommerce was just really building. What people thought Ecommerce marketing was all about was eyeballs. They thought that Ecommerce was going to be much like terrestrial TV. Remember, there's no streaming back then. It's just NBC, ABC, CBS, and they thought it's all about getting eyeballs. People did these massive contracts with Yahoo to get 30 million impressions.
That's all it was going to take to run an Ecommerce site. If you had 30 million impressions, by gosh, people would come and they'd buy stuff, and yeah, it didn't work. It turned out that Ecommerce advertising was a lot more like traditional direct marketing advertising. You had to figure out who's the right audience. You had to figure out what's the right message to deliver to them. You had to [00:04:00] figure out what's the right offer, and had to measure it and see if it actually worked or didn't work.
Again, I have a little bit of programming. I created a really crude web analytics program because there were no web analytics programs back then that were actually saying, for example, Hey, if you send out this email, we're going to put something in the link that you click on it, if you come back, we're going to capture that, so we know how many clicks we got from an email. Like that didn't exist.
Erik Martinez: We're all spoiled with the free Google Analytics, right?
Larry Kavanagh: I remember urchins.
Erik Martinez: Stumbled across a site a couple of weeks ago that still had urchin code in it.
Larry Kavanagh: Well, Google Analytics was originally urchin. UTM Urchin Tracking Method or something is what the UTM codes are in Google. Again, old, long career. I'll speed it up. Found out that with some analytics, you could really figure out like what worked online, what didn't work.
Worked for a couple of dot coms. eBags is probably the one that did the best. All the other ones are long gone, blew up, because they knew how to spend money better than they knew how to make money, but I learned enough about digital marketing that it was like, all right, I'm going to really leave the classic [00:05:00] direct mail world and go into digital marketing.
So, I had this first stage of my career that was in classic direct mail, and now I'm moving into digital, and create something that small to mid-size enterprises could use, and they'd pay like a flat monthly fee that would be more like $3000 to $5,000 and not millions of dollars.
I did this because the consumers that were going online, back in the early two-thousands, that was when Ecommerce was like 1% of the US economy or half a percent of the US economy. They were 10% of what was happening for traditional catalog companies that those consumers were already accustomed to buying at a distance.
Started an Ecomm platform business called DiMinSite. You know, this was again at a time when there weren't, I call them point solutions. There weren't all of the MarTech companies that really focus on a specific aspect of Ecomm, so because there weren't, we wound up building things like a recommendation engine. We wound up building a triggered email software. We started an internal PPC agency because there weren't any PPC agencies. We were doing [00:06:00] SEO for companies.
So, in the mid-two thousands, I really got exposed to a lot of different MarTech, because first, we built them, but then as the point solutions came along, they were way better than the stuff we were building. So, we started then adapting those point solutions and integrating them into the platform. That's really where I learned how all MarTech worked but continued to see that it was still all about that classic identify an audience, personalize to them, and measure results was still the game.
Because a lot of our clients were traditional mail order catalog clients, there was something else I noticed at the time, and a lot of other people did too, I noticed this connection between when our clients sent out direct mail, they got a lot of people visiting their websites.
You know, they would have this huge traffic spikes. Much, much bigger than the spikes today, because today people are doing so many other digital marketing things. There weren't that many other digital markets, so someone would go from a thousand web visitors a day to 8,000 web visitors. That kind of spiking.
What I also learned though, is because we had done abandoned cart emails, where someone's on the site, they leave the site, [00:07:00] send him an email, a lot of them come back and buy. I learned the trigger direct mail worked as well. That, if we could tie, and this gets a little bit into identity resolution, if we could tie that someone visited the site and then had our clients send them a piece of direct mail, we saw that they returned and bought at a really great rate.
We did that for a couple of clients. One of them did it in a big way, but we really never made it part of our platform because, frankly, we were not venture financed, we were bootstrapped. It turned out that customers were actually more interested in making sure their sites were like up all the time, and it took all of our energies to do that, as well as integrate these great point solutions that were coming out.
In 2013, I left DiMinSites, the Ecomm platform business, and really went back to this idea of can we do triggered direct mail based on a website visit? I kind of liked it because it combined the first part of my career with the second part of my career, the classic direct mail part with the digital part.
That's been really since 2013. Initially, [00:08:00] developed it as a part of a company that I co-founded called CohereOne that Tim is now very aware of. Then, actually, took venture funding, spun the NaviStone product out of CohereOne where we have refined and developed and grown, and, you know, I went to becoming one of those MarTech point solutions that we had wound up integrating within the late two thousands. So, that's my journey, man.
Tim Curtis: One of the things that obviously having known you as well as I have over the years, I think you spoke to this already, but it's that sort of that classical training of traditional database marketing in the form of catalog or direct mail, and then that training combined on the digital side, you know, in those early days of the Wild West of digital and the ability to fuse those two together. It really, to me is it's the fusion of those two, the synergy of the offline and the online, the digital and the analog, if you will, that really creates what I think is probably the best alchemy for success in Ecommerce because you understand that there [00:09:00] are outside elements that are very much driving online demand.
Some of those channels, for example, on the digital side, are actually more receptive than they are pushing traffic. So, they benefit, for example, when a, catalog or trigger direct mail is sort of in that mix. Let's get Larry's definition of what identity resolution is.
I think there's a lot of misconceptions about identity resolution, so I think it'd be good to hear from you, specifically your version of what that means.
Larry Kavanagh: Fundamentally, identity resolution to me, is connecting a consumer to both online and offline, all the different interactions that they have.
I break it into sort of two categories, first-party identity resolution and third-party identity resolution. So, first-party identity resolution is connecting all those interactions that a consumer has with a particular brand. So, that might be, visiting a retail store. This is where I say, identity resolution has been going on for a long time because if you think about it, retail store [00:10:00] chains, they were connecting if someone visited one retail store and they visited a different retail store.
You think about, Kroger supermarkets they have loyalty cards that are connecting visits across stores, but identity resolution is really about connecting those different activities that are on the first-party side, that are associated with a particular brand.
The primary use case of that are attribution. What program actually resulted in someone either making a first purchase or a repeat purchase, but also the personalization. It's been around for a long time, but I think what's made it come to the forefront more today is all of the data that's associated with digital, that while we've been associating data, we've been trying to resolve data for a long time, but today between apps and websites and chats and analytics programs, there's just such a greater depth of data that's available today. That's what's really sort of taken this idea of identity resolution, Hey, let's link a couple of things together to Hey, let's really understand sort of the customer journey. Now, that's first-party for brands.
For third-party identity [00:11:00] resolution is really about building audiences for advertisers.
So Facebook, Google, they're doing that third party identity resolution, The Trade Desk. The Trade Desk is a platform that is bringing together audiences that advertisers can use that based on that third-party identity resolution. I think those are really two different things. They're entirely different animals, really from every aspect, how you collect, et cetera. That make any sense?
Tim Curtis: It does, and I think the natural lead on to that is when you're talking about identity resolution, the thing that always comes back from the brand side is, the first question is about privacy. All the misconceptions about what a first-party cookie is versus a third-party cookie, based identity resolution, the building of those audiences.
I, obviously, have insight into that first-party cookie. We've used NaviStone back in the day, even before it was NaviStone. I had a chance, on the client-side, to run some of those tests. So, we've seen the power of what identity resolution can do and how it can fuel your digital marketing and your direct marketing campaigns, but I think [00:12:00] it might be beneficial for you to speak again, in layman's terms, on the privacy and kind of compare and contrast the first-party versus this third-party cookie that we all know is going away, and the complications maybe of that third-party side.
Larry Kavanagh: Well, and it's not just third-party cookie. That's why I break it out into use cases, first-party use case third-party use case. On the third-party use case, you've also got mobile ad IDs, or Apple's IDFA. You've got IP addresses that are used. It's not just third-party cookie. The third by cookie is a way in which identity is resolved across websites, but there's a lot of different third-party identity resolution mechanisms, collecting cell phone numbers and sharing cellphone numbers. Hashed email can be another way that third-party identity resolution happens. A lot of the privacy concerns are around those third-party cases.
There are privacy concerns for the first-party case. I'll start with the first-party case. So, this is where someone's interacting with the brand across a lot of different platforms. We [00:13:00] can drill into it if you want, but at a very high level, the brand's responsibility is making sure that they disclose what it is they're doing, what they're collecting, allowing the consumer to have access to that, deleting information if the consumer asks for it to be deleted. The only other thing for a brand for first-party is really how they're sharing data, but even there it's really, for the most part, the disclosure regime.
On the third-party side, that's where a lot more of the legislation and privacy implications are aimed because you know you're interacting with a particular brand when you're in their store and on their site, et cetera. The third-party application is this unknown application where you might think that what Facebook is doing, is like when you're on Facebook, that's all the information that they're collecting. Not so much. That Facebook-like icon that is on a number of sites, Facebook is able to see, they can collect, they know that you were on this site and this site. Any site that actually has that Facebook icon on it, they have the ability to see that information, and privacy regulations there go all the things I said about [00:14:00] first-party, to some extent, plus restrictions on can you sell the information? Restrictions on how well you protect the information. You're allowed to ask Facebook or ask Google all the different ways of collecting information, and you're allowed to say don't collect, but Google and Facebook aren't allowed to then give you like a lesser version of their service because you asked not to collect. So, the brands have to worry about the privacy side. I think that's a more manageable set. It's still hard work. I'm not trying to minimize it. The place where the privacy impacts are, are on that third-party use case for identity resolution.
Erik Martinez: Larry, what does that mean in terms of advertising in the future, right? As all these privacy laws start to take effect, or are getting considered in legislatures throughout the country, what does that mean in terms of information collection, exchange, and the vehicles available to digital marketers in order to continue building out these campaigns?
Larry Kavanagh: Yeah, I think the direction is definitely towards, [00:15:00] and you guys see this too, towards first-party marketing, not just first-party cookie, but just first-party marketing. Someone is on your website, using that information to figure out how to personalize your website for them. What are the right recommendations to make for them? Sending them emails, reaching out to them. That's going to be much more of the use case is using first-party data for marketing purposes, for advertising purposes. The thing is, that has some limitations, but on the flip side, it's got some pluses too. I think it's more comfortable for consumers to have interacted with a brand and be hearing from a brand that they've interacted with.
In the places where there are going to be still these prospecting opportunities are going to be the places where it's not really based on third-party, but it's still based on the consumer interaction. So, I'll give you an example, Google product listing ads. Those are going to stick around. They're not really based on knowing who I am, so to speak.
I've done a first-party interaction. I've search for a particular thing, and these brands have said, Hey, I want to market to people who are searching for those particular things. That is a first-party interaction, and that's the type of interaction that I think is really where [00:16:00] the future is headed. We'll see less and less of that entirely based on third-party information.
Erik Martinez: We use, in our marketing campaigns that we do for our clients, we use Criteo right, and Criteo is a classic example of the old way of doing things, but they're claiming we're doing the new way of doing things. How does Criteo really navigate that divide as the third-party cookies going away, or being diminished to the point where it's useless, how does a company like Criteo successfully navigate that transition and deliver upon the promise of retargeting to all these consumers who visit these types of sites?
Larry Kavanagh: I don't know Criteo's plan in particular, or specifically, but I'll tell you what I've seen in general in terms of how marketers who are relying on that, what they're doing. They're establishing first-party relationships with the places where those ads might appear.
So, there'll be like a Criteo first-party cookie that would be causing an ad for another one of Criteo's [00:17:00] partners to appear. So, think of it as an old terrestrial TV, where you're watching a program and an ad appears because that program put it there, the TV show put it there. The Criteo publisher partners will begin to have more of the first-party relationship with where those ads show up.
I'm gonna use an example, again, I have no knowledge that they do this, but NFL.com, a lot of traffic. Criteo could have a first-party relationship with NFL.com and be able to display an ad that appeared where someone visited one of their advertiser's site and now on NFL.com because they've got that first-party relationship with NFL.com. They can have that advertising appear.
Tim Curtis: Let's talk a little bit about how you turn it into action. Obviously, that concept of taking that identity resolution to identify opportunities for direct mail, bottom of funnel conversion-based opportunity. That's evolved from where NaviStone originally was, including your identity graph, of course, has it has evolved as well, but let's talk about a little bit marketers today and identity resolution and what type of [00:18:00] power can be unleashed by this rich first-party data?
Larry Kavanagh: Yeah, so I think there's two things there. So, first of all, and the Consumer Data Platform, CDP, are a great place to look for how identity resolution can be used. Segment.com, for example, they have APIs that reach into analytics programs into Google or into Facebook, into email programs, into retail stores CRM systems, and they produce a nice report that shows like the top 10 types of data that brands are collecting on their consumers to then be able to further personalize the interactions that they're gonna have with consumers.
I think number one would be go to any of the CDPs. I'm using segment.com as an example, but look at any of the CDPs and they have these APIs that are designed, and you can see the types of data that they are bringing in, as well as like the companies that a brand might work that are collecting that [00:19:00] data that they're sending in and it's on the brand's own customers for the most part. So, that's the magic to it. I think that's a place to start, is if you haven't just looked at what people are doing, but then thought about how could we do that, how could we use that? That would be a place to start.
Now, I don't mean to scare anybody, but on the flip side, talking about brands and first-party data, I'd also make sure that you're buttoned up in terms of are you disclosing properly what it is you're doing.
Everyone's seeing more pop-ups on websites that people have to click through in order to interact with the website. That is one means of disclosure, but also making sure you're buttoned up on if a consumer asks to see what information you've collected, that you have the ability to show that. If a consumer asks for you to delete their information, that you have the ability to do that.
On the one hand, I think looking at what other information can you get, but on the flip side, also being sure that you are staying on the right side of where privacy legislation is today and where I think it looks like it's heading in the future.
Tim Curtis: You make a good point. Back several years ago when GDPR first came on the scene, here in the states, there was a [00:20:00] kind of a question about what will the impact be here in the states. Obviously, GDPR was focused on European Union. I, at that point in time was working both with American brands as well as European brands, and there was a lot of uncertainty, I would say, surrounding the whole identity resolution piece and the legalities and what all was entailed, and a very important development occurred within GDPR that really made things much more complicated for brands around the globe. That was identifying where and how you acquired a name. Most brands had not really put anything into place which captured the acquisition, where that initial permission was granted.
The other thing that I think we need to do is really audit internally. Again, to your point to determine, do we have the information to show them if they request it? What is that opt out process, and what is the deletion process? For brands that perhaps were involved in direct mail, there's been versions of this that have existed for years. So, it's really been more of a slight modification to those processes. For those that are digital natives, pure plays, if you will, it's been a little bit more [00:22:00] programming. I think that's where some of those cottage industry, software platforms now that are helping to ensure that that process is a bit more seamless. So, I just think those are the two things that brands really need to take a close look at and would be interested in your perspective.
Larry Kavanagh: I think even taking it one step further than audit.
I think you need to be engineered for privacy, when we say for privacy, to be more specific, it's for being able to share back with the consumer what data you have, being able to share where you got that data, being able to delete, it's engineered for the privacy landscape. I think that's the tricky part, or the hard part. If you're starting from scratch, sure, you can engineer for privacy and be doing everything right. The tricky part is what do you do with the data you collected yesterday and the day before? So, I think it is a sort of a re-engineering process.
To be honest, there was a couple of reasons why I think CDPs are frankly growing so quickly, consumer data platforms, because they are absolutely, in general, designed for those kinds of disclosures and exposing the access to data and for the opt-outs type of [00:23:00] thing. I'm not saying everyone has to switch over to a CDP, but I think the reason to study those is to see what things are built into theirs as a way of trying to re-engineer our systems. Both from the standpoint of, Hey, here's some data that we can also incorporate that will be super useful, but here's also how we can make sure we are staying on the right side of privacy legislation.
Erik Martinez: So, Larry, in your opinion, just talking about data collection, if somebody were to just start down this path and say, Hey, I need to invest in identity resolution, beef up my marketing activities. What types of data should I collect?
Larry Kavanagh: Well, if we're talking about a brand, so I'm going to leave aside the third-party, the Facebooks and the Googles of the world, and just talk about a brand, don't think about it as purely from a digital standpoint. Think about where do we interact with our consumers and where do we interact with our customers? When our customers are interacting with customer service, that's an interaction point that could be pretty useful in personalizing what it is you're going to do in the future. So, don't limit it to just online, but that's [00:24:00] the starting point is those interaction points, and really I'd then take it further.
Today in the restaurant industry, some of the top-end restaurants have servers taking notes on particular guests at particular tables, and putting that information into their version of, I'm not sure it's a CDP, but that interaction is like a real person interaction that's also being recorded. Then when someone comes back to the restaurant you can have a moment of delight by surprising them with something that was recorded from that previous interaction that will have them just have a wonderful experience when they're coming back, a welcoming experience when they're coming back. Like I say, it's any of those interactions, it can be a person-to-person interaction. It doesn't have to be a digital interaction or a transaction interaction.
Tim Curtis: You're right. You know, so oftentimes we overlook the qualitative and we focus on the quantitative, the clicks, where were they on the site, et cetera. In that restaurant environment, it's very much hospitality-driven, obviously, and it's capturing those, what they call the magic moments, maybe it was a particular [00:25:00] bottle of wine, maybe it was a particular appetizer or dessert. So, the server has the ability to log those essentially into that customer's profile, and so unbeknownst to the customer when they come back, I've even seen it before where they'll slide that dessert on the table as a complimentary thing and wink and say, we know you like it.
It's those little moments where something that is nice and a fun evening becomes something special, and that's an example of taking first-party data, looking for opportunities within your interaction with clients and understanding what those are.
Many times what I tell clients is look for customers who buy certain things. If they're buying higher-end items, or they're buying something along those lines, that's a first-party data point, right? You can take that, classify them, flag them, if you will, and you have another way to identify and talk to them, and make it special.
Erik Martinez: It's all about the experience, right? It's like walking into your favorite cafe and that person knows [00:26:00] exactly what you're going to order and they have it ready for you before you even get to the counter. It's elevating that experience to a new level. You made a really good point about, don't always worry about the bits and bytes of it, make it more about the user experience, and then you're probably going to stay on the right side of the equation 99% of the time.
Larry Kavanagh: That's why I say, people have been doing identity resolution for a long time. It's just become a hot topic because there's so much data involved with the bits and bytes, but just going back to Tim, your point about like knowing the basics of direct marketing in order to do Ecommerce.
Know the basics of identity resolution. You're trying to capture those interaction moments that you can use to create customer delight, customer retention. Not getting lost in the bits and bytes of it, but starting from that, but then a lot of it is going to be in the bits and bytes, don't get me wrong, but if it's the framework that you're looking for, if you start from that framework, you're going to have a lot more fruitful interactions.
Tim Curtis: I think of a real-life example for me is Starbucks. Everybody who knows me well, [00:27:00] sees me with a corresponding venti in my hand, right? I can walk into my Starbucks, just any morning and there could be 40 people waiting at the counter for their coffee, and one of the baristas will see me and she'll call me, Hey Tim, it's over here. So, she'll lead me over to another area where I can pick it up. They have turned that personalization. They know when my particular coffee comes up on the sticker, they know, oh, he's going be here in a couple of minutes. She even told me, I can make yours blindfolded now.
That's the level of personalization that a brand as large as Starbucks can create those personalized experiences in store. So, it's possible. I just think we have to think differently about identity resolution and to your point, Larry, it's about understanding the basic tenants of identity resolution. I'm not talking about being able to identify the entire identity graph. I'm just saying the basic elements of identity resolution and the ability to translate that into moments that you can capture information that is going to surprise and delight your [00:28:00] customers in whatever setting that is.
Larry Kavanagh: Yeah. So, I will give you a NaviStone example now. One of the things that we found is that understanding what category of item somebody is really interested in and then personalizing on a postcard, not an image of exactly what somebody looked at, but actually, more of a hero image, that's an inspirational image, that is an emotional image, but it's about the thing they looked at, about the thing we know they're interested in, literally doubles response.
So, think about a marketing program where you don't have to give a discount, you're not giving away any gross margin. Just by understanding what someone's interested in, you can get twice as much sales for the same marketing dollar. That's the goal behind identity resolution, and understanding sort of all of these interaction points, is to find ways to grow your business by delighting your customer with what they want without having to give away margin or product.
Tim Curtis: You've done it in a way at NaviStone, I do a lot of speaking, and I've talked about NaviStone and the whole concept of [00:29:00] identity resolution for specific postal retargeting. I've just point-blank called it I think one of the largest and most important technological developments in direct mail, probably in the last two to three decades. What we're seeing and what we're achieving with brands utilizing that NaviStone approach to postal retargeting, it's just nothing short of extraordinary. We've not seen these kinds of results for a very long time and it's complimentary to the digital retargeting and the email remarketing that's also going on in that bottom of funnel. It's understanding how those all play against and with one another that you can really develop a very potent tool, and so that's whereas that technology has evolved, and you've really refined that in your offering it NaviStone, that's where we're really seeing brands experiencing a lot of growth and new conversion [00:30:00] numbers coming in that are really quite healthy to the bottom line.
Larry Kavanagh: Yeah, that's for sure, and thank you for that. I could have done a lot of different things after leaving the Ecomm platform business, you know this idea enfolded me for a lot of reasons and you articulated them better than I could.
Erik Martinez: So, Larry, if somebody is starting to think about how do I use identity resolution in my business, what are the steps in order to get started? What do I need to do first? What do I need to do second? I'm definitely one of those people who over the years has gone from this concept of really complicated plans to coming down to simple plans, right? What are the simple things I can do today to make progress and work on the things that will help me surprise and delight my customers?
Larry Kavanagh: Everyone is using identity resolution today. They may not call it that, but everyone is using it today. So, I would start with like an inventory of how am I using it today. Inventory of how you're using it, inventory of your interactions. How are [00:31:00] you interacting with clients? You'll see there are gaps. We're interacting over here, we're not doing anything with calls to our customer service line. I'm using that as like an example of something that may be left out. I'm not saying you should do that, but you can identify that as like here's a gap in interaction that we are not using in our existing identity resolution programs, the places where we are matching the fact that we know who our customer is with what they're doing. When you come up with that sort of gap analysis of what are we doing and what are we missing, I think you're going to find that you'll have four or five things and I'd be stunned if one or two of them didn't pop out and go, there's like a huge opportunity.
Erik Martinez: That's great. That's fantastic. So, let's change tracks here and let's talk a little bit about the big walled gardens, Google and Facebook, and what they're doing and what we need to know as digital marketers to play in those spaces, but also be cognizant of [00:32:00] how that ecosystem is changing. I know you have some very specific thoughts on this.
Larry Kavanagh: You can't not play to start number one. You know, there was a point in time, years ago where people said about Amazon, Hey, if you're a merchant on Amazon, you've got to separate yourself from that. There are a few brands that have been able to do that, but at the end of the day, most companies can't ignore the gorilla in the room. So, the question is how do you use that to your advantage. How do you do what you can with it?
So, I actually saw a presentation on Monday by a company out of Denver called MetaRouter that has worked with Home Depot to convert some of Google's and Facebook's third-party cookies into first-party cookies, and then really take control of what data is being shared back into Google and Facebook.
One thing I would think about is knowing that you have to play with those guys, it becomes a win-win in that Home Depot taking back some of it's first-party data that it was giving away to Google and Facebook. The flip side is some of the things that would have gone [00:33:00] away with the third-party cookie where they are able to use Google and Facebook effectively, they're able to retain. That's probably a more high-end sophisticated strategy perhaps, but I don't think you have to be Home Depot. You know, I think that's a future trend, something to look out for is use the fact that the third-party cookie is crumbling to take back some power in some of those big relationships.
Tim Curtis: So, in that line, you're talking about Google and Facebook and some of those larger players, let's get a little bit of prognostication, if you will. So, we're all familiar with Apple's intelligent tracking prevention, the impacts of that, of course. Now, we have Apple iOS 15, which not only further confines what we're going to be able to get out of app beta, but also now puts in place the first real blocking mechanisms or anonymization of email addresses.
That click activity begins to fade away and you lose visibility there. I've heard other email executives leading large email companies, describe it as death by a thousand cuts. So, [00:34:00] I'd like to hear your thoughts and your prognostication on where you think it's going, and more importantly, what you think the impact is going to be for those executives sitting on the brand side?
Larry Kavanagh: I was actually just reading about The Trade Desk just the other day. Interestingly, Facebook reported absolutely some hit from the app to app, Apples big warning screen that comes up that is effectively preventing app to app tracking.
Which is really an attribution problem more than anything else, primarily an attribution problem. The Trade Desk, interestingly, actually reported increased earnings. They actually were talking about how they essentially had mitigated that particular impact.
Now, to your point, you're saying, all right, there's a little bit of a war going on. There's the big developers take away something, third-party cookie, app tracking, the IP address maybe something that's going to go away in the future, as well. Each time there's like some push on this side, the companies that rely on third-party data push back in some, so at what point do the ideas run out?[00:35:00]
What I would say is that I don't think that they're going to run out of ideas in the next five years. I think there is actually a lot of really smart people who are figuring out if this thing happens, we can do this thing and we'll get around it. The Trade Desk, they're a public company, their last quarterly report actually shows that, at least for this round, they figured out a way around, but I think in the long run, where a brand should focus is really on the first-party uses. These third-party uses are going to be fighting a battle. At some point, they're going to run out of things that they can do.
So, I think, as brands are looking at sort of their MarTech roadmap, where are they going to invest, what are they going to look at, I think the first-party solutions are really deserve a lot more attention, and should get more weight on their roadmap.
Tim Curtis: So, is Armageddon a real thing?
Larry Kavanagh: I don't think it's next year. I don't think it's the year after, but it's under a lot of pressure. At some point, I think 10 years from now, it will be down. It may be sooner, if things move slower than you think. There's so much money in the third [00:36:00] party technology stack that the sheer weight of money is going to keep the fight up. That said though, if you're a CMO who thinks you're only going to be there for a year, sure, do third-party stuff, but if you're someone who thinks no, I'm with this brand, and I'm going to be here for 5 or 10 years, I would dial back my investment in the third-party stuff. Take the low-hanging fruit, take the stuff that works and invest heavily in the first-party stuff.
Erik Martinez: That makes a lot of sense. Larry, with that thought, what's the last piece of advice you would like to leave our audience with today as we talk about identity resolution, or it could be on any other topic that you want? It could be on windsurfing or cliff diving, or if you do any of those things.
Larry Kavanagh: I'll take you up on that. I would say my piece of advice to marketers listening is be curious. I learn a lot by seeing MarTech software demos. I was in an event Monday, I told you about one of the softwares. I saw another software that has created a combination of artificial intelligence, and the browsing data is able to give every image a score about [00:37:00] whatever it is you're trying to get it to do, are you trying to get clicks? My advice is be curious and see a lot of demos.
Erik Martinez: That's fantastic advice. This environment we live in is probably the most complicated environment that we've ever seen as marketers. There's so much information on so many different levels. We can just talk about websites and spend a year just talking about MarTech solutions for websites, much less, the advertising space, much less the privacy space, and so on and so forth. So, there is a lot digital marketers need to think about in today's environment.
Larry Kavanagh: I was just going to add is you don't have to know, go outside of what is directly related to your space. I was at a presentation last night in the restaurant industry about how Open Table is used. Now, I don't have anything to do with restaurants. I was like, oh, that's an interesting idea. I can apply this over here. Don't just think, okay, I'm a website manager, so I got to do web technology. Look at what's going on [00:38:00] in different verticals, and again, just be curious, and you'll find some things that apply back to you.
Tim Curtis: Highly disruptive industries, like travel and hospitality can provide all sorts of clues about where retail could go.
Erik Martinez: Cross industry pollination is probably one of the greatest opportunities to learn. Our business, we're seeing lots and lots of applications, because we work with home builders and we work with Ecommerce retailers, we're seeing the convergence of those industries rapidly coming in the future. It's not going to come all at once, but the ability to buy your home online is a very real thing today and is being done in some limited situations. Larry, where do you go for your top sources of inspiration? You've mentioned going to events and doing software demos. What other resources or tools do you use to stay ahead of the game?
Larry Kavanagh: So, that was the one I was going to give you, [00:39:00] but I'll give you another one. Actually, this friend, who I met with last week, was the one who passed this along to me. The idea is to every once in a while, every year or every two years, reach out to somebody who you have some connection with, like they're gonna answer the email or answer the text and go out to lunch with them. What I found, I spent a little time and did that two weeks ago intentionally, is that you actually get more ideas from your weak social networks than you do from your strong social networks.
Your strong social networks you talk to you so often, I'm not gonna say you have group think, but there's like very little disturbance, they're not going to give you that sort of out of the blue thought, but your weak social networks are where you get those out of the blue thoughts that can be sort of interruptions.
I would say, go through your LinkedIn, find someone you know, you almost certainly see two dozen people that you're like, Hey, that person is a really interesting person and I haven't talked to them in two years, and set up a Zoom. Talk to them for 30 minutes about what's going on.
Erik Martinez: That's a great idea. I don't do it quite intentionally, but I think my experience also backs up [00:40:00] that data point that you get some of your best ideas from outside your normal scope of relationships. Two more questions. One, what do you wish you had known back when you started your career that you didn't know?
Larry Kavanagh: Certainly, if I look back, if I had perfect foreknowledge, or even if I had imperfect foreknowledge, I can see that I would have made some different choices in some things, but I gotta tell you, I'm glad that I didn't know those things. The journey, that I probably spent the first 30 minutes of this podcast describing, wouldn't have happened if I had known in advance what was going to happen. I learned a lot by not knowing in advance what was going to happen. When I get asked that question, I'm like, I don't think there's anything that I wish I would have known because it would have changed the journey in a way that I'm not sure would have been great.
Tim Curtis: That's particularly insightful.
Erik Martinez: I think that's a fantastic answer.
Larry Kavanagh: Thank you.
Tim Curtis: Larry, for the audience, what's a great way for someone to reach out and connect with you?
Larry Kavanagh: Certainly, you can go to the NaviStone website. We've got a contact us and just put in the comments that, I'd like to [00:41:00] connect with Larry. Go to LinkedIn, if you want to try to spell my name. It's Larry K A V A N A G H and happy to connect on LinkedIn.
Erik Martinez: Larry, we really appreciate all the time and your expertise today. Look forward to having this conversation again in the future and see where your prognostication skills...
Tim Curtis: Where they end up.
Erik Martinez: See if he got it right. Larry, thank you very much again. This is Erik Martinez from Blue Tangerine,
Tim Curtis: and this is Tim Curtis from CohereOne,
Erik Martinez: Have a great day.