After building brands across our careers, and then investing in the technology companies that support brands (including Motion, Air, and Prescient), we spend a ton of time thinking about the evolution of the marketing stack that will amplify a brand’s message and drive adoption.
The playbook for a vertically integrated brand has changed dramatically over the last 3-5 years. Today, it has never been easier to launch a brand and never been harder to scale one. Why?
Though amazing technology has made it easier than ever to start a new brand, it has also resulted in more competition for both consumer wallets and ad inventory. General Data Protection Regulation (GDPR) has broken our marketing channels and acquisition efficiency has eroded. The tactics that marketers used five years ago are essentially null and void. Digital advertising platforms like Meta have become a commodity now; any marketer can tap into the platform's full functionality, leaving little room for differentiation in ad targeting.
In today’s world, brands are facing new challenges in sourcing customers and gaining visibility, which makes us–as technology investors–excited, because we see new ways for technology to help brands combat these obstacles.
At Headline, we’re keeping our eyes on five key areas of the marketer’s tech stack where we’ve noticed evolution: tracking, content, brand, search, and merchandising.
1) Tracking is Dead Putting CAC Under Pressure
After iOS 14.5 was released in April 2021, and changes around digital privacy accelerated, the magic ability to target customers that Meta once provided marketers became progressively harder to tap into. This massively increased pressure on CACs. In response to these factors, marketers are looking at new solutions.
To understand customer personas–and not lose them on the conversion journey–marketers will push conversion closer to the point of acquisition. For example, Fermat creates AI-driven customer journeys based on different ad creatives. Not only does it drive faster conversion, but it also optimizes photography, headlines, descriptions, and site experiences to learn from different customer behaviors and user personas constantly. This ultimately acts as an extension of lean marketing and merchandising teams. (TikTok and Meta Shops will also be utilized to drive fast purchases; this will have limitations and drive low AOV.)
Over the last 10 years, multi-touch attribution models have become a go-to solution, as we saw the rise of companies like Northbeam, Rockerbox, and TripleWhale. Due to deprecating pixels, and massive improvement in AI, we are already seeing Media Mix Modeling (MMMs) re-emerge in a meaningful way, offering a next-generation of Neilson to modern brands–at a more affordable price point, and with daily refreshes. Couple this with geography lift tests, as companies like Haus are quickly becoming the new normal. (This next generation of measurement is what led to our recent investment in Prescient, as well.) Companies will also look to stitch together available data to drive results. Brands use Blotout, for instance, weave together identities without 3rd party cookies.
As digital CACs rise, there will be continued demand for retention tools and omni-channel distribution.
2) Content is King
The biggest levers brands have to drive performance are pushing more customers into the brand’s funnel and converting them efficiently. As mentioned earlier, when marketers push for conversion closer to the acquisition source, the other key lever they can pull is driving customers into the funnel through creative assets.
Motion, a Headline portfolio company, has quickly become a core part of the marketing stack by pioneering a new category of creative strategy, allowing brands to iterate on assets more quickly, design creative with more insights, and ultimately drive results.
We have also seen a rise in next-generation video creation tools like Butter and Modyfi that bring faster and more collaborative iteration to the motion graphic industry. These next generations of data-driven creatives will become key leaders and decision-makers for brands.
3) Investment in Brand Marketing Rises
Brand is historically hard to track, but it will get smoother in time with new tech tools. Soon, there will be more technology to support brand tracking initiatives and omnichannel growth.
For example, Tracksuit is a brand-tracking tool to help companies keep tabs on brand marketing funnels. As companies start to reinvest in top-of-funnel and omnichannel commerce, there will need to be better ways for smaller brands to track awareness and top-of-funnel impact.
4) SEO and SEM Will Change
Whether Google continues as the king of shopping search, or we see a next-generation, AI-driven discovery platform, what does seem clear is that discovery will evolve to give customers more and better personalized shopping experiences.
Some of these upgrades will be delivered through the brands themselves. For example, companies like Optiversal provide brands with improved, automated ways to optimize SEO. If you search blue sneakers, for instance, Dick’s Sporting Goods might provide you a custom landing page with individualized item recommendations based on your searches rather than a simple, curated landing page. By doing this, there will be exponentially more iterations of landing pages that a unique customer can experience.
Separately, DTC search models like Deft create new ways to curate commerce search by focusing on the consumer experience.
5) Site Merchandising Is Changing
Customer experiences will continue to get more tailored based on brands, personas, and the channels by which users find the product, which will automate much of the practice around site merchandising. We believe new brand modules will learn from customer behaviors and channels. We also think shopping assistants like Manifest, which help customers navigate and receive curated search and shopping experiences based on their needs, will continue to pick up traction.
While a new and improved marketing stack is becoming clearer each day, with each new tool, we’re still in the early innings. There will continue to be more advancement to come, and Headline is excited to support and invest in the next category-defining companies for marketers.
If you’re building within the marketer’s tech stack, please email taylor@headline.com or nikki@headline.com.