Latest / Talk Commerce / Data Drives Growth: Bonsai CEO Matt Butler Live from eTail West
Transcript
- Brent Peterson (00:01.01) All right, welcome to this episode of Talk Commerce. Today I have Matt Butler at eTale from Bonsai. Matt, give us a better introduction than I just did. Tell us your day -to -day role and one of your passions in life. Thanks, Brent. Yeah, I'm Matt Butler, CEO of Bonsai, so co -founder. And Bonsai measures and generates incremental outcomes for our clients. And we're all about doing that through first party data. So talk about all that, I'm sure, if you want. But yeah, a couple other things about me coming to eTale is really a great experience. It's February here in Palm Springs. I'm from Chicago. We're mainly Chicagoland based. Got two kids, wonderful wife. Although it was a little warmer this February. We're usually digging out from snow. But you know. Yeah, really loving the experience being here. So, you know, my background, we've been doing Banzai for a few years now, started in 2020. A life before that in retail analytics at Google and tech services and some other stuff. But yeah, you know, my passion, there's a lot. Seeing all the golf courses outside here, by the way, is making me a little jealous that we're inside. Maybe we can. sneak a few holes in, Brent. But yeah, loved the golf, former baseball guy, loved sports, but I would say from a professional perspective, my original passions were in, believe it or not, in journalism. So I'm a frustrated writer. Got into data analytics kind of at a time when someone like myself could get into data analytics and then was lucky enough to have a chance to build a career. But... You know, the thing for me was always about I'm endlessly fascinated by true stories. And I see, you know, what you do in data and analytics is really that's the way you tell true stories today. And yeah, I mean, that drives a lot of what we do. But yeah, it's also a little bit about, you know, kind of, I guess, what got me here. That's great. OK, so before we get started, I need to ask just an important question. Cubs or white socks? So. Brent Peterson (02:25.038) Now you're going to make me name drop Brent. So I'm a Cubs season ticket holder, lifelong Cubs fan. And one of my good buddies from my college days is the general manager of the White Sox. So I'm real proud of Chris. And so I'd be lying if I said I wasn't obviously. I'm playing both sides of the aisle. Looking forward to seeing both. both have a big 2024. Yeah, and I think you you you've got a great position because you can be a fan of both, right? Exactly. Yeah, you don't have to actually pick a pick a side. You know what? You know, the Cubs when they're up, you know, the socks are down one year, the other season socks will be up, the Cubs will be down. And, you know, both stadiums have great. food and cold beer. So what can you say? Right? My dad is from Chicago and we used to go for a weekend in the summer to see Cubs a whole series. I saw Sosa against McGuire in 1998, which was fantastic. The race to 62, right? Yeah. they broke the home record. Was it 62? I forget now. It was 61. Yeah, to get to 62. And my dad is also a data geek. his nickname in high school stats. So we'd always end up sitting, we'd sit in the left field, not in the bleachers, but in the left field side, and we would inevitably meet somebody else that grew up in the 50s in Chicago, and they would talk about like, who's the shortstop from the 1953, oh, my dad, it's whatever. So anyways, that's my... That's so cool, yeah. So that is a direct correlation with data, because baseball's a great data sport, right? It's the data sport, right? And then the argument over... You know, do you win a championship with analytics or do you win it with, you know, the town in the eye? And I like to think of it as, you know, really as a debate of what wins you the championship data, which will teach you how to win a whole season or the other things that might win you a game or an inning or a pitch, right? So yeah. Yeah. So that is directly related to how people use the data on their websites, right? Like you're a long -term goal is to win. You want to win as your company. Brent Peterson (04:36.206) Tell us a little bit about how Banzai fits that data in and helps them. More than the, like the short term wins are easy. Like you could do a short term play on Facebook ads or whatever and get something. But the really goal is the long term. I mean that really gets to, I think what I guess, you know, we've seen for a little while now, but I say I hear all the time, which is talk about the kind of trajectory of, you know, Even before the pandemic, but post pandemic, you know, there was definitely a time when you like to scale your brand or your business. It was to some degree as simple as having a good site, great product, give a bunch of money to Google, give a bunch of money to Facebook, you know, depending on your category, right? But, and it scaled and it worked and like, as long as you didn't totally mess it up. your business could go up and to the right. And that's different now, right? The attention around your consumer is incredibly sophisticated. So many platforms, it's competitive. And so everyone's sort of hit this sort of plateau, is what we hear. And so, yeah, I guess that gets to how Banzai thinks about the world, thinks about how we help businesses kind of get back on that upper trajectory is that, you know, the days of... of being able to simply throw more money at driving additional short -term outcomes or conversions from your ad platform, it wasn't adding up to long -term value. A lot of the sales you can generate by doing that aren't incremental. They're not new. They're not from new customers. They're not growth, right? And so... Tackling that is then hard, but that is where the revolution on the measurement side and how to use this stuff comes into play. Bonsai is a first -party measurement solution. There's been measurement platforms for a long time. Our sort of aha was that you could do all the things you need to do, not by a company giving you another piece of technology to put on your website to collect and store and track and measure the data that it wanted, but to say, hey, a business is zoned sales data. Brent Peterson (06:49.87) customer behavior insights and identity and touch points, those things, when stitched together, can dive deeper so that when you're thinking about acquiring a customer from a Google, you can see what else that customer is doing. You can understand if it's really a new one or how to optimize media to find that next new customer. So yeah, I guess that oversimplified, I know, but there's a lot around how we think about it. This is why we're doing what we're doing. And, uh, And yet what we're seeing is that this is not only, I guess the other thing is like, for a company to think that they could solve their own data, integrate it, measure it, and then activate it, it sounds, even saying that sounds daunting, right? If you're not running a data company, how do you do that? And not just like people like us, but like with the way things have gone with AI in the cloud and like just sort of democratization of the tools to do that, it is achievable now, right? And that was my message on Monday talking to folks at the. And we did these round tables and met a lot of great people here at eTail. And honestly, that's what I wanted to talk to them about is like, if I could tell you one thing is I want you to feel like you can do this now. Yeah. When you're talking about like data wins and a lot of measurements and testing, I saw an interesting study that Booking .com is really big into CRO. And they consider 10 % wins a great outcome. is they're learning something from each one. What is a good, like if we talk about a batting average, 400 is unachievable anymore. Is there a good win rate for data or is it different for everybody? Absolutely. You know, this other thing is like resetting the paradigms, right? So it's so much of what we've done in marketing measurement has been to say, well, I got to launch on a platform and I got to see, I got to have data that says it's a 10 to 1 R1, right? I've got to have 2 ,000 % returns. So like, if you take a step back, right, if you're in the marketing or you're in this ecosystem and you're not from a finance and operations and whatever it like, like I run a business, right? So people who might not know this, right, like there's no such thing as a thousand percent ROI. Like if there were a thousand percent ROI's, right, like we wouldn't need that many people here, like it all go home, right, it's a lot easier. It's not that easy. So like to book an example of like 10 % being like a great win rate when they're thinking about test during iterating, that is how you have to think about it. Now that feels different. Brent Peterson (09:13.806) talking in lower numbers, but the real numbers, right? So some of our big wins were helping clients take, you know, pools of like large pools of money for acquisition, drive 15 % better throughput, right? And you're like, okay, 15%, you know, guys, that's 10 million more incremental annual dollars, right? Like, so those, and then people are like, wow, right? Like, okay, now this is like, so yeah, so, um, I surely wouldn't put a number on what's a good or bad result, but if you can frame it in the context of that individual business, 5 % might be amazing. In some businesses, a 10 % lift is all you need. I don't know if that makes any sense, but it definitely is thinking. It's like the weighted on base in baseball. Oh, 112, what does that mean? That means they're 12 % better than all the average, you know, the whole like these players, right? That's amazing, right? So yeah, same way with measuring things from an incremental lens with first party data. Do you find it harder to convince the CFO, the CMO, the CTO on the importance of that small incremental lift? Great question. I would frame it as I think there are two big challenges that I see. So that question of that small win being an important one, that takes change management on the marketing side and the CMO side. I never have a concern, I never get anything but excitement from the financial side. The CFO conversation with that kind of win when they start believing like, I'm looking at the same data you're looking at and I'm seeing that same 12 % change too. I mean it's just smiles and high fives, right? Like we're not. There's nothing more to talk about. They know what that means, right? On the marketing side, it's feeling, you know, the challenge of feeling okay with that. Now the other thing is, I don't if this makes any sense, but if I took that question and added another layer, you know, so much of what marketing has had to do, right, in so many organizations is, I don't want to say defend their existence, but like build the story around, hey, marketing is driving growth. And the way they think about analytics is around, well first, Brent Peterson (11:30.284) you know, bring me a lot of data that shows that what we're doing is really adding value. We know we're adding value. Our finance team is skeptical, or our operators are skeptical. And so it becomes this like, you start with saying, just find things that sound really amazing, and then you end up in a credibility issue on the financial side, where you're kind of arguing over like, well, are these really right? So I think it's around making the marketers not so much, like the 12 % thing is part of it, but really, I think of it as helping, partner, not just with a platform, but with expertise and an advisor who can walk with the marketer to the finance desk and say, this conversation doesn't need to feel so scary. You can be credible in this room. And we want to help you feel OK telling them the truth, not what you think they want to hear. And then that, it takes time. But that we see is a real magic that can happen. Earlier you mentioned the change in how maybe Google Ads are working now. It certainly has changed over the last 20 years, right? One of the things, and then first -party data, how you collect that data has changed. I can remember 20 years ago that people would literally print money with their Google Ads. You would just be turning on a spigot. You'd get instant attention. What's the difference now, you think? besides of course iOS 14 or whatever, the difference now, is it because people are being more protective of their data or is it just a different way that those ads are going out there? Great question. So we have this slide internally. Someone had me kill this slide, but we were telling the same arc where, long story short, we said, hey, there was a time when basically... All you had to do was give Google money. You didn't have to make any good decisions, and it would work. And now you actually have to have a strategy. What you're saying, though, resonates a ton because I think the thing that drives what you said, which is very a real dynamic, is the fact that... Brent Peterson (13:45.038) It wasn't that long ago that digital, while growing incredibly quickly, it wasn't the majority of media and marketing with respect to investment like it is now. I mean, it's obviously like the pervading investment bucket, not just in retail, but in CPG and fine tech. Pick a vertical, it's largely digital drives your media plan, your marketing plan. Back then, it was still going up that curve. digital, Google being the primary one, but all digital frankly, these are auctions. Until everyone's in the auction, you get it at a discount, right? And so ultimately the pricing was still like the relevance, the way you could reach a new customer at the right time, right? Searches of, we don't need to probably re -explain what search is, but it's a great tool to like connect, right? The right product with the right person. And yeah, there was a value gap there and folks who were in front. handing the money to Google. We're smart and great winners. Once everyone's doing it, it's priced in, right? It's like getting ahead on a stock. If you're in like, you know, I'm not a, I don't play the stock market, I guess. You're very active. I'm too busy doing what we do. But yeah, I would imagine like if you got Apple 20 years ago, you were probably pretty excited, right? And now you're getting Apple, you're still probably pretty excited. You can still make great returns. You're probably not making. 200X like the folks early on, right? So I think that's the dynamic, right? And so it's just more priced in and it means that little mistakes in who you show your ads to, how you're thinking about it, not valuing the right interactions can move, that can be the thing that like cuts you off. So I think that ultimately drives it. It makes the decisioning of like what you're willing to pay. so much more important. And the data behind that, like so Bonsai would help in that data, how the merchant would see that data and then make some better decisions on how they would do it. Does it matter if it's PMAX or whatever the normal thing or? No it doesn't, that's the beauty. Things like PMAX are a great example of like the many vehicles through which you achieve this and we can definitely dive into that if you want. I can put my ex -Google hat on. But um... Brent Peterson (16:04.654) But I mean, honestly, it really doesn't. From the perspective of this, the limitation, if you're thinking about acquiring more, say your business is driven largely by shopping experience on Google, or say that you're a new direct -to -consumer brand and it's largely driven by Instagram. In both cases, you're trying to reach a relevant audience at an auction. The data that you're typically using to do that, if you're the retailer, if you're the merchant. is what data is being collected by Google or by Facebook. And Google has incredible volumes of data. It only has a small part though of what the actual journey looks like. So Google's data, as great as it is, they can never know. But they've truly, like that next ad click that you've bought really brought a brand new Brent. to my store that will buy and is going to spend $1 ,000 and that $10 interaction was amazing versus, you know, Matt's been shopping that, you know, they've had me for two decades and I was just trying to log into the website, you know. They've spent $10 on me and they didn't make me shop anymore, right? We might have used the same terms. You might have looked at the same product. Google might record those as the same conversion. Mine's not incremental and yours is. So that third party view of the world is very sophisticated and there is a lot of great attribution capabilities. And I'm not saying there's a great data science applied to what they can do with respect to understanding that journey, but they can only understand a part of it. And so where first party comes in is when you have this in an environment where you can piece things together in a meaningful way. The long -term value of first -party multi -touch attribution is not. I have 100 % of my customers in every touchpoint here, because we know, like you brought up iOS, there's other examples. By the way, there's never been perfect data. It's only just changing how this mix is changing, but to have more of a complete view is better than not. And you'd be amazed at scale, the ability to dive into the first -party data and say, hey, these touchpoints just in general are not. Brent Peterson (18:17.742) nearly as new as these ones. And if I am able to tell Google that and make these ones not something I want as many of and these ones I want more of, it's amazing how that same Google dollar goes further. And I didn't change from shopping to PMAX or my new, it wasn't a keyword thing or I wasn't rotating in creative and all those things are kind of like ultimately noise, right? Like it's getting that right with data about who you're trying to reach that only you have. And then again, pricing it right. And yeah, I mean, I think that is where first party measurement, we do these algorithms that help clients do this that we're really excited about. But if you didn't have an algorithmic solution and you just left with like, well heck, what if I just could capture some of this and send more insights back about my actual customer journeys back to Google? You'd be a heck of a lot further along to having an upward to the right growth with your Google program. When, okay so you did mention capturing, like I think last year client telling was sort of a buzzword where at POS you're trying to capture more information from your client in store. Correct, yeah, yeah, yeah. How important is it for a retailer who has brick and mortar and online to try to capture more of that data? Either to try to get people who are online into the store or in the store online. So. Maybe let's break it into like two things we would recommend to anyone with this question. So one is have a single source of truth with your customer identity. If you've got online and you're going into stores, unify that customer ID, right? Like use a point of sale that like you can bring that data together if you're a brick and mortar going online. Same approach, right? Have a single view of your own customer. That's huge. From there is transaction data, from there is financial data, from there is gross margin and all these other things that you can break in. But that's fundamental, right? Get a single view of your own customer and your own business. Yeah, and then it is both true that it can be challenging to bring things other than online into the view of the digital journey. So it's not trivial, right? And bringing this together is why, I guess, the bond size exists and other things. But. Brent Peterson (20:39.438) don't think it's not possible. And that is another, like, that, you know, I couldn't say that eight years ago, couldn't say that seven, five years ago potentially, where there was a decent lift. If you didn't have, like, a good amount of engineering within your own organization, it might not be something within your capabilities, because you might need to build your own APIs, you might need to store your, you know, bring your information from on -premises to the cloud. And, like, there's stuff to do. There's nothing. A lot of this is democratized now. And so just think about it as a new world where really there's not a lot of difference to many of us when we see a store, we see it online. To us, it's like the same opportunity. And get it unified. And then from there, work either with your own teams or bringing that information back into a view where you have analytics, where you have marketing, is achievable. And then, yeah, you're kind of on your way. Okay, so last question. That identifier is there, and let's just say we're looking into the, looking forward into 2024. What are you seeing that's gonna shift the merchant to do more with data rather than less? And do you think there's still a lot of merchants out there that just are measuring bad data or not measuring at all? The second part of that is still a challenge. There's a lot more merchants out there than you might think who are like, we need to start measuring anything. Or are awakened to the idea that there's more to measure than just how many clicks and impressions you got. So that's the first bit, right? So one, there's a lot more to measure and it's powerful if you do. The, sorry, the first part of that question again, the... Sorry. It was, what was the first part of my question? I'll have to go back and look at it. Getting, identifying that. 2024, like what's coming. Sorry. Yeah. Lost in my own. No, it's all Rambling answer. So. Brent Peterson (22:48.75) The biggest thing that we're seeing that's like really really changed is that you were able to I think the Apple situation is like very very much central in like such a like the whole Apple Facebook thing like when you When you can get all of Facebook identity through your customers who are on iOS and like a lot of your bigger, a lot of any kind of brand, right? iOS is a ubiquitous part of the retail consumer experience in the States anyway. To have that like genuinely basically just broken on the ad platform side and then have Facebook basically turn to their customers and say, you guys better figure out how to send us your conversion data. you have this sort of moment where everyone's like, what does that even mean? Like, our conversion data? Like, you want us to tell you? Oh my God, what does that mean? Well, it means we have to have our, well, where's your system record? And where's your customer ID? And where's your CRM? And so it was this like, oh, bleep moment of like, guys, what they asked you shouldn't be this hard to do. And it just exposed everyone to like, oh my goodness, like, we've got a lot of work. So I think, you know, 2024 is not the first, this is sort of the, I think we, I guess I consider myself as one of these people though, I think a lot of us who are, you know, on some of the, you know, more bleeding edge of this, we tend to think of this as an old problem. 2024 feels to me like a more of a mainstream, like now this is like real. Everyone has realized this is a massive problem for them. Now, where are they in like the stages of grief? I don't, like, I think there's, there's a lot to say there, right? So I think majority of people probably. are definitely not over the grieving process to even begin actioning. So my view is if you're willing to even begin thinking about how to solve this, you're gonna be ahead. But I think that's the thing that we'll see more broadly is we're gonna start seeing people have to address, or at least have to have an answer to their boards or to their finance teams or anyone, this sort of mainstreamization of. Brent Peterson (25:09.006) we're the retailer, we need to own our customer conversation and our data around it, frankly. And then what are we doing with that? I think is, that's 2024, how that plays out. Does it advance everyone's understanding of measurement? Do they all start doing econometrics? Are they doing algorithm? I don't know. I don't think that's necessarily like, I think that goes mainstream in 25, six, seven and beyond. But this year is definitely like, you're not getting your. your house in order, you're probably officially going to start falling behind. Okay, wow, okay, good. I like what you said about just not getting stuck into the point of really not knowing your own data. I think, generalization, but a lot of merchants are in that spot. And do you think when you get to mid -market, then that whole concept changes for some reason? Because you... are mature enough where you have to know your data? Is there a point in which you go from small business, mid -market, and of course enterprise, there's gonna be a bunch of people that are gonna say we have to have this? Well it's funny, right? Because there's such great platforms out there. You can talk about BigCommerce or Shopify or many others who, you know a lot of times the small businesses are gonna have a better data model than the mid -market and enterprise. Because they're basically built on a platform that like, built stood you up, how anything should be stood up. And so now a lot of those companies may not be at a scale to take advantage of that, but if and when they grow big enough, they're ahead. Just by nature of having come along later. It doesn't happen on its own. I think this is the thing though, right? And I think it gets placed on the marketer to solve this, and I think this is where... It's not just the finance people need to listen to the marketers better and share the conversation, but this is like the IT side of the conversation. IT can be the friend, technologists can be the friend of the marketers. Marketers have to stop putting IT in a corner, and IT needs to put their guard down and just acknowledge that they are the people that can help understand and deliver on this. Brent Peterson (27:18.926) But you know, and IT rightfully so has been put in some challenging situations at companies, but they're the key to success. They're only better together. But yeah, you've got to work ahead of you if you're mid -market, especially if you've been around a little while. Yeah, you're probably behind the small business, frankly, on some of this stuff. So I would say it is not fixing itself. So get to work. Right. So we have a few minutes left. Let's talk about e -tail. This is your second time. Tell us your impression and what do you think? Yes. So I've officially been to e -tail twice. My company's first time here. I think, I was saying this morning, if you don't like coming to Palm Springs in February, I don't really know what to say. So that's a great, the setting is wonderful. I think. It's such a great blend of, you know, in a few days you can get a pulse on what's really going on and what do you need to know for the year here, which is awesome. And it is definitely intimate enough to actually do what we're doing today, Brent, and have a conversation. I think that's the only other challenge in the space, right, is it's, we've all know the examples. It can be really hard to do that in certain environments. And here, it's that sort of perfect fit for me. I'm really impressed with... The folks I've talked to on the retail side, the diversity of the experiences, it's not just all marketers or ops folks. There's merchants, there's of course executives, there's people, there's CRM, and they're coming together, which I like, so that's better, that's awesome. And then, you know, on sort of like the side, like looking at the technologies that are out here, yeah, I mean, you're seeing a lot of... A lot of stuff starting to mature. I'm of course excited to see the measurement space starting to become something that isn't just a tack -on or something that some magic tool can do for you, but a lot of real, true first -party solutions that are coming to market. That's exciting. And then you're seeing all kinds of stuff, right? I sat in a part of a thing this morning where so much is being done around returns and post -purchase. Brent Peterson (29:36.652) Again, not new concepts, but you're starting to see the other elements of the value chain starting to get filled in. So it's not just all like, and no disrespect here, but it's not all just VR and pictures and shopping carts and 360 videos and great stuff, but ultimately parts of the pie, right? You're starting to see the other parts of the operation really be served here and like that. I really love that. Yeah, that's great. Matt Butler with Bonsai Data Solutions. Thank you so much for being here today. Thank you, Brad.