BTC Podcast Ep 7: Michael Katz, mParticle & the Importance of Data | Hathway

BTC Podcast Ep 7: Michael Katz, mParticle & the Importance of Data

Published by Kevin Rice, CMO
August 20, 2020

Michael Katz, mParticle & the Importance of Data

Michael “MK” Katz’s passion for helping companies solve unique business challenges through the application of data, led him to co-found mParticle, a leading customer data platform providing data infrastructure for brand’s marketing technology stacks. MK does us all a favor by breaking down (in layman’s terms) what a CDP is/does, how brands are using this data (you may have heard of Burger King’s “Whopper Detour”), and at what stage of digital maturity a CDP becomes essential. He also gives us examples of how mParticle and CDPs in general have been able to help brands succeed against the odds during COVID.

Check out this episode and a handful of others on your favorite podcast platform or the video below.

 

Video Transcription

Kevin:

Hey everybody. Welcome back for another fantastic episode of Beyond The Counter, the show where we go behind-the-scenes to talk about the restaurant industry, retail, food service, food and beverage, basically everything that goes on to put your favorite foods on your table. This is really a show for anyone in the restaurant industry, food service industry, who wants to know more about trends, marketing and technology from leaders in the space.

Jesse:

Today we’re going to be speaking with Michael “MK”Katz, the CEO and co-founder of mParticle. He’s got a lot of interesting things to share with us about the state of data and how that may or may not be changing during COVID.

Kevin:

So if you’re new to the show, welcome! If you’re returning, we definitely encourage you to share with your friends and colleagues and please send us any questions, comments, feedback, we’d love to hear from you! Let’s jump into it.

 

Kevin:

Hey everybody. Welcome to another exciting episode of Beyond the Counter, as always you’ve got Kevin and Jesse here and we’re super excited, we’ve got a great guest today, we’ve got MK, Michael Katz, the CEO and co-founder of mParticle. mParticle’s a leading customer data platform that we at Hathaway work with with a number of mutual clients. So we’re excited to have you here. Thanks Mike. Can I call you MK?

MK:

Call me whatever you want. I’ve certainly been called a lot worse, so it’s, it’s great to be here.

Kevin:

Fantastic. How are you holding up? I understand you’re normally based in New York, but you’re holed up in the Hamptons?

MK:

Yeah. Yeah. So we got out to South Hampton probably about four months or so ago. We have two dogs and a four year old son, so staying in a small New York city apartment was not in the cards for us. So it’s been, it’s been good. It’s been relatively calm and somewhat uneventful out there. And it’s good to give everybody space and let, let the little guy run around.

Kevin:

Awesome. Well, good man. Glad, you’re staying safe and that the family’s doing well again, we appreciate you being here. I I know you have had a super interesting career and as I was just kinda going through your LinkedIn, you’ve started a couple companies, sold them. I’d love for you to just tell our audience a little bit about yourself, your career and what led you to starting mParticle.

MK:

Yeah. Well thank you for the kind words. It doesn’t always feel interesting, but it’s definitely fun.

Kevin:

It’s more interesting than customer data. Come on.

MK:

I know exactly, exactly. I think I’m a builder and an operator at heart, and I’m really passionate about helping companies solve unique business challenges through the application of data. This is the second time I’ve done it. The first company that I created along with my brother, Andrew who’s our cofounder here at mParticle and was my cofounder at my first company. What made us really special and unique and differentiated was the data platform that we had built. And so we had some really strong ideas and opinions of how things would shake out. But, I think for me specifically, mParticle has always been really personal. So we built a great company first time around, and then it got acquired back in 2011 by Yahoo and unfortunately I just had to watch it die, a slow, painful death inside a really big, somewhat inept company. And me, I ended up getting pushed out. So mParticle became like my, my revenge story or like my revenge company. And that combined with the fact that I felt like we had a great idea. We had a unique perspective on how we felt the marketing tech ecosystem would evolve, especially based on what we saw from the ad tech ecosystem from the mid 2000’s to say 2011 or so, to the deep domain expertise that we had acquired by building what was really, industry leading first party data infrastructure, and applying that to a new industry, all signs just pointed to, to us going out and building again. So it’s been an incredible ride so far and we get to work with, I get to work with awesome people all day long, both internally and externally, yourselves included. There’s not a day goes by where I don’t consider myself like the luckiest CEO out there.

Jesse:

So tell us, it’s not just another three letter acronym. What is a CDP? What is it? What is CDP not, and how should marketers and folks in digital and IT look at a CDP.

MK:

Yeah. So look, I will preface this by saying, I’ve never been asked this question before. I’ll preface it by saying yes, probably 10 different people, 10 different CEOs of different CDPs and you’ll get 10 different answers. And I think part of that is like it’s a new space. There’s a lot of buzz and hype around it. I think a lot of it’s warranted, maybe some of it isn’t, but I think like for, for me, the way I think about the customer data platform is that it is data infrastructure for your marketing technology stack full stop. So we don’t get into the application or the execution layer. We sit squarely in the infrastructure layer. So ultimately our job is to deliver data from various sources and systems, places where customer data is created or may reside and then deliver it to all the various endpoints and APIs that ultimately consume it. And do it in real time, that’s like the stock description, but, from a more practical standpoint, there’s probably a ‘jobs to be done lens’ that I could look at things through. Our role that we serve when we work with customers is probably twofold. I’d say it’s about improving data quality and improving/ simplifying integrations. We’re in a day and age in 2020 and admittedly, we probably have been for the past number of years, but brands aren’t built around a media plan anymore. They’re defined and built around customer experience. And the quality of the entire customer experience is what defines and build sprints, right? It’s not, so it’s not just like the first mile or, or, or the last mile. But, defining ‘how do I create the best possible customer experience holistically’ is probably one of the biggest moats that any brand can build around itself. So, yeah, I mean, typically that’s that, that’s how I think about it. It’s infrastructure to end up delivering data that underpins world-class industry defining customer experience.

Kevin:

So, we’ll get into some use cases, cause I definitely want to get your opinion on like, what are some use cases that having a CDP in your technology stack can unlock and specifically for the QSR restaurant category, but before we do, I’d say three years ago, 99% of people had not heard the term ‘customer data platform’, three or four years ago. Right. And then it just caught on like wildfire, Forester started reporting on it, saying it’s the number one investment by CIO’s and what was it about now because we’ve been talking about like, as an industry or just marketers and technologists, we’ve been talking about single view of the customer for like 10 years. And why is it now that all of a sudden we’re able to actually start to move towards realizing that vision?

MK:

Yeah. So the reality of the world that we all live in now is that there’s more data being created and consumed than ever before. Different types of data, just more, more platforms and devices creating data. I mean, we walk around with, in our, in our hands or in our pockets that are generating data, even, even as we’re not using it right. Or actively using it. So you have more data going to more sources and systems and end points and applications and websites and API APIs then than ever before. And there is this incredible ecosystem of, of tools that help brands create these experiences and then, and then measure these experiences. And these tools are all built to do their jobs really well. But one of the unintended consequences of that fragmentation is the more tools that brands use to underpin those experiences, the more data silos there become.

MK:

And I think you look at any company across any industry, big or small, and everybody’s dealing with data silos and data fragmentation. And so why now? I would say it is that fragmentation, on both sides, right? So you have more consumer platforms, right? So the customer experience is no longer single threaded, so it’s not just about going to a website or not. There’s websites, there’s mobile applications, there’s connected TV applications, there’s point of sale systems, there’s wearables, there’s the whole IOT universe, right. The shift to 5G is also going to further accelerate that, and then you have on the other side, fragmentation of all of the different vendor and service provider ecosystems that consume that data exhaust. And so more fragmentation here, more fragmentation here means that you have to do something in the middle to get your hands around all of this data, to wrangle it, to get it into a a better, more hygienic state by which you can then map the customer journey more holistically by which you can simplify your downstream integrations.

MK:

I wish you can connect data in real time across your different marketing channels and partners, to create truly personalized, but also consistent experiences across different different touch points. There’s really no shortage of use cases. But as technology continues to fragment, there’s always going to be an opportunity for aggregation of some sort.

Jesse:

Yeah, we do a lot of consulting with our clients where we help them make a build versus buy versus just like crawl, walk, run decisions with technology platforms. And sometimes we might advise a customer, “Hey this particular platform or type of platform might be in year two or year three of your maturity, and let’s not worry about it right now”, then there’s other platforms; for example, where you vault your credit cards that are so foundational and are so difficult to migrate away from that you really have to get it right from the beginning. Do you see CDP fitting into that part, does it have to be foundational? Can it be a various stages in the journey? I’m wondering what your thoughts there are and what you might advise brands at various levels of maturity to to decide.

MK:

Yeah. Great, great question. Look, I think every company in the world to not only exist, but also thrive on a, on a go forward basis has to, has to become a digitally native company. Right. And I think that’s really the thing that COVID accelerated by a bunch of years. When you think about that digitization or digital transformation, I think that there’s, well, there’s a number of phases, but like, I’m going to try to simplify it. I think that there’s two distinct phases. There’s the 0-1 phase. So I’m going to get rid of the fax machines and I’m going to move to DocuSign or EchoSign and just catch up with the rest of the world. I’m going to stand up a a website that goes beyond brochureware and gets into being able to support transactions and doing it seamlessly and make my products and services and goods available online for people to consume and buy, and move to the cloud and all that stuff. So I look at all those activities as, as of fitting squirrely in that zero to one stage.

And then you have 1-N stage. And when you’re going from 1-N, you’re dealing with a whole bunch of new challenges and opportunities that you either didn’t think about before, or you didn’t invest in significantly before. And that’s everything from personalization to data governance to effective marketing orchestration and data, the data quality that underpins all of it, and these are higher order challenges. So I would put ourselves at the1-N stage, but we really need to be thought of as the very first part of that 1-N stage, because without that as a brand you’re building, can you build the house? Sure. But you’re going to be building it on, on a shaky foundation.

Kevin:

Yeah. A lot of those things you talked about we put those in the acceleration phase. So, in the restaurant category, we’ll tend to look at like four phases of digital maturity. So some level of initiation phase, a foundational building phase an acceleration phase, and then ultimately getting to true innovation our version of your zero to one is that initiation phase, you’re starting to take online orders, maybe you’re building a loyalty program, but you’re just starting to move in that direction. Foundational is really where you’re putting custom experiences, a more robust software, and really where we start looking at implementing CDPs so that as you move into more of an acceleration phase, you can do a lot of the testing, the optimization, the more advanced analytics that you mentioned in the past, and then eventually become an innovator where digital is a true part of your DNA and really every aspect of your business.

MK:

Yeah. I like the way you, you, you put that you parsed out that 1-N phase, I think much, much better than I did. But it’s, it’s ultimately about going from existing and, and just being there to being really good at delivering that customer experience.

Kevin:

So, so in the restaurant category you guys work with, or mParticle works with a lot of amazing brands and you help them unlock a lot of use cases that are more sophisticated. One example was the Whopper detour campaign. Certainly want to hear about that, but also would love to hear what other use cases specific to the restaurant industry does having a CDP in place help unlock for marketers and technologists?

MK:

Yeah. So if I step back, I think QSR as well as retail have always been incredibly valuable verticals to us are incredibly important verticals to tell us because of the multichannel nature of that customer experience. Again, brands are not built on, on the media plan anymore. So it’s all about how do I deliver something to the customer that turns them from this passive state to more of an active customer, to a brand enthusiast and loyalist, to somebody that’s screaming from the mountain tops, “I loved my interaction with this brand”. And because of the multichannel nature of QSR, especially with, with mobile at the center where a lot of the ordering is happening, data unification and the need to improve data quality are at the center of the bullseye.They are the nucleus of it. I would also just say, like CPG is an interesting vertical for us increasingly over certainly the past couple of years as many CPG brands have moved from outsourcing the customer relationship to retail brands and now wanting to own that customer relationship directly. But in all cases, yeah, it’s all about customer experience and personalization and being able to do something for the customer that feels unique and novel and, and smart.

And I think like the Burger King example was a great one. They came to us and said, we have this great idea, we want to conquest our closest competitor and anybody that has our app on their phone. We want to be able to deliver them real time notifications based on where they are in proximity to that competitor’s locations. And so they had to draw 17,000 geo-fences around those competitors stores around the United States and as users were going into those geo fences, we would collect the signal. We would get it off to the geo-fencing partner of ours, a company called Radar here in New York City and we would get the ping back from them. We’d get that data off to the marketing automation partner Braze, and we would then deliver that information to the next vendor who would deep link them into an experience where they could then go and redeem the QR code at the point of sale system. If they did it in under 10 minutes, they could do it for a penny and all the while we’re also getting data into their data warehouse as well as their product analytics, as well as a few other vendors on the periphery. And so being able to do that and do it in real time, you know, before they talked to us, they talked to Salesforce who quoted them this outrageous number. It was millions of dollars, and it would take them 18-24 months to deliver V1 of this; we had them literally up and running in less than two weeks. And it was done at a fraction of the cost.

They obviously went on to do incredible things with that campaign, culminating in them winning the Cannes Lion Grand Prix last summer and I think it’s widely heralded as the single campaign that was responsible for putting Burger King on the map as a really sophisticated technology organization, cause I don’t think that most people thought of them as this highly sophisticated technology company before that.

Kevin:

Yeah, that campaign launched mobile ordering for them. They didn’t have mobile ordering before this campaign launch. So yeah, totally thought of them as a leader in technology at the time.

MK:

Yeah. I mean, they send it to the number one spot in the App Store. And so if you have the number one spot in the app store for, I think it was like a week or two, there’s no denying you’re a technology company. So it was just, it was just fascinating to see all of the commitment on their side and the coordination across a number of vendors who are all aligned to make sure that we delivered the best possible experience for them as the brand and the customer. I would also say that all of the excitement and the value that we can create as a technology as this customer data platform and all of the facilitation that we do to accelerate digital transformation, the platform is only one part of it, right? You still need, you need the people and you also need the process to support it. And without those two other legs of the stool, no platform by itself is going to get you all the way there.

Jesse:

Can you give us any examples of how your platform or CDPs in general have helped brands succeed despite the odds during COVID?

MK:

Yeah. I think that there’s a few examples here. When I think about the hardship or the pain that brands were feeling as COVID kicked in and the world became disrupted and everybody separated and nobody was really going into any physical locations and nobody was congregating in large groups. The only way to truly survive that was by being able to make that shift to digital channels and for a number of our customers who already had a digital presence and were already in that, or that 1-N state, it was about moving further along that digitization process. So I forget the exact stages that you guys used, but it went from, I would say like the I think about it in terms of like the product development life cycle, it went from the commercialization phase where they knew that they had to unify data and they wanted to be able to simplify the connectivity aspect of it out to the marketing tech ecosystem, and then really getting into that optimization phase so bringing on more partners and looking at the CDP through the lens of change management and life cycle management.

Unfortunately for some of our customers their businesses were deeply impacted by COVID and they had to do furloughs or reduction in forces, and the one thing that stayed constant was, was the CDP, because even if they weren’t running marketing campaigns, they still had to analyze customer data, they still had to provide customer support, they still needed to get data from multiple different systems to multiple different destinations and end points. And as there was turnover within the team, the CDP was the system that allowed them to maintain continuity in their business. And I think it became really apparent to us when, not the types of companies that you would think would actually do well during COVID. So the shift to mobile ordering I think was a great example.

We have a number of eCommerce businesses like Walmart that saw a massive acceleration in ordering through their mobile apps and websites. But then we actually saw a number of businesses that had been meaningfully disrupted primarily in the travel and hospitality spaces come to us and say, “Hey, things are not good for us right now”, but we’ve also been granted this opportunity. We’ve been given a moment in time where we are completely free of the normal day to day pressures of running the business and the demands and constraints of trying to meet the demands of the business. And we have this moment in time where we can implement infrastructure so that we can come out stronger on the other side. So there’s companies like Lyft who came to us during COVID and we started working with those guys in, I don’t know, April or so and they started running data into the system and getting data to to a much better place and I think it had been for them and then running cross channel campaigns and augmenting their personalization efforts for both sides of their marketplace for both drivers and riders. And to see companies come and say what, if I’m going to do this right, how would I do it? And to see them identify the CDP as the core underlying infrastructure, I mean, it gave our employees, definitely our investors, a ton of hope in what this means for the viability of the company and the category long term.

Kevin:

MK, this has been a fantastic conversation, and we sincerely appreciate you coming on the podcast and sharing some pearls of wisdom on data and data strategy, it’s become a huge part of what we do in our day to day solutions that we create for restaurant brands. And you guys have been a fantastic partner so thank you for your support and stay safe out there.

MK:

Absolutely. Yeah, couldn’t do it without you guys. Thanks for having me on. It’s been awesome. So good to see you guys, and yeah. Stay safe. Be well.

Jesse:

So MK sounds like he’s yet another believer that COVID is the great accelerator and in his perspective, that companies to make it today and in the next few months or years are going to have to become digitally native companies. If they’re not already, and being digitally native means being data-rich having to be able to collect that data, analyze that data, act on their data, CDPs are a big part of it. What do you think, Kevin?

Kevin:

Yeah, it was great to hear just a simple definition of what CDPs actually are, what they can do and some of the use cases that they can unlock. You know, a lot of brands are at that foundational stage of their maturity model where integrating a CDP is critical so that they can continue to move and evolve and move into more of like an acceleration phase and start doing things like personalization, contextually, relevant communications, and really understand who their customers are at an individualized level. I mean, with COVID & the pandemic that we’re in right now and the massive shift towards digital ordering, restaurant brands are capturing more data on an individual basis than ever before and it’s really helping restaurants to understand who their customers actually are. And this will fuel the next wave of digital transformation, which will really be built on personalization.

Jesse:

One of the interesting takes that MK has, which I think plays very well with how we operate as a company at Hathway, is that one of the key purposes of data is to actually provide a better experience for the customer and that the more you know about your customer, the better you can personalize that. You think about it when you go into a brick and mortar environment, like maybe your favorite restaurant or favorite bar, sometimes we’ll come back after COVID, it’s the ones who know you, you know, where everybody knows your name, right? And I think if businesses can, you know, can play off of that responsibly and actually create a better experience, they’re going to see more loyalty with customers and data is really what’s driving that.

Kevin:

Absolutely. I mean, if you look at most applications in the restaurant industry they’re the same for every user, they might say, ‘Hello, Kevin’ or ‘Hello, Jesse’, but beyond that it’s largely the same experience. But if I am a very infrequent customer, but you’re a heavy user, who’s to say we shouldn’t have totally different experiences when we interact with their applications or websites. I would say that they absolutely should have very different experiences.

Hey! If you liked the show please share with your friends, your colleagues, your coworkers, and if you have any feedback or any topics that you’d like us to cover, please shoot us a note! We look forward to seeing you on the next episode of Beyond the Counter!