Thursday, May 22, 2014

The Battle for Enterprise Social Media Management Software Part 2 – Catching Up with Spredfast CEO Rod Favaron

Executive Interview Series by Vinay Bhagat, CEO TrustRadius

As discussed in the first article in this series, a number of very well-funded companies are competing for the enterprise social media management spend and Spredfast is one of them. I had a chance to sit down with Spredfast CEO, Rod Favaron to get an update on their business and recent merger.

Rod and his team have had a very busy start to 2014. On January 3rd, Spredfast announced $32.5m in series D funding bringing their total funds raised to $64m. On April 2nd, Spredfast merged with social curation software company, Mass Relevance.

Context for Mass Relevance Merger

Sharing Austin as a headquarters, Rod and Sam Decker, CEO of Mass Relevance, talked quite regularly. As Rod shared in our interview, “The more we talked, the more we saw the inevitability of our platforms coming together. Up until now our products have been very complimentary with no overlapping functionality, but we were starting to see connection points”.

Furthermore, Spredfast increasingly believes that the winning approach within the enterprise is an integrated social suite, “With the merger we’ve signaled our desire to compete on a wider platform footprint.”
Today there is limited customer overlap, but they see opportunity for cross-sell. “Today, of the 9k targets we see for our software in North America, we have a combined 600 customers. We talked to 20 joint customers and there seemed to be some interesting engagement points.”

Both products are favorably rated on TrustRadius. Spredfast achieves an 8.0/10 likelihood to recommend score across 27 end-user reviews, and Mass Relevance an 8.5/10, though with just two data points currently.

First new integrated product – Spark

Spredfast announced a new product called Spark on May 15th. It is the merged company’s first new product that leverages both platforms. Spark is a discovery tool which helps a business monitor and respond to real-time trends. Spark had been in development by Mass Relevance prior to the merger. Mass Relevance has a direct feed from Twitter and found that the same technology they had developed for curation and display, which has the ability to ingest a huge amount of data and apply rules, could be repurposed for real time insights and trend discovery. Spark supports trend discovery on a category or geographic basis.

Spark works by using the core Mass Relevance platform (now rebranded Spredfast Experiences) to do trending content discovery and passes that trending content to the core Spredfast Platform (now rebranded Spredfast Conversations) to enable engagement around it. The initial release of Spark focuses on Twitter but Spredfast plans to support other networks.

Spark is not positioned as a listening platform and Spredfast will maintain its partnership with listening software vendor Brandwatch. Per Rod, “Listening platforms have many different uses. Spark is focused on empowering discovery in the moment.”

Speaking to the typical use cases for Spark, Rod shared, “If you’re a brand, you have tent pole events throughout the year (e.g. Back to School) for which you have long lead times to plan around. We’ve historically handled those types of events really well in Spredfast.  However, there’s opportunity between those tent pole events to discover social conversations on the web that you can insert your brand into. If you’re Cheerios, how do you discover content about families eating breakfast together? Spark gives you the ability to find nuggets that fit your brand promise. It enables you to discover and insert your message in the right sort of way. If you are a media company like ESPN, Spark helps you decide what stories to lead with.”

Product Integration Plans

There is no current plan for a fully unified code base or user interface. The focus is surgical integrations to support key processes and single sign-on. They have identified five such processes including Spark. Both platforms were built with a similar stack. Both are run on Amazon and use the same database.

Use of Series D Proceeds

The recent financing will be applied towards go to market expansion and product development. Spredfast still sees a lot of opportunity in North America but has been expanding internationally. Spredfast has combined their UK office with Mass Relevance, are hiring aggressively to support growth in Western Europe, and have opened an office in Sydney. “We now have users in eighty countries and twenty percent of our business is outside the US.”

One product development area that reviews on TrustRadius indicate warrants further investment is user interface. While early reviewers were quite critical of the interface, more recent reviews indicate that it has greatly improved but would still like to see enhancements including better mobile support.  Another area cited as an area for improvement is supporting more integration to other systems to support analytics. To quote one review “I actually don’t think the tool does anything “poorly” but I do see opportunities for the tool to become integrated in more enterprise level systems, such as community platforms (Jive) and web analytics tools (Google Analytics, Omniture, NetInsights). There’s a lot of opportunity to break down siloes of information and processes by becoming integrated with any of these tools

Competing with Large Enterprise Software Companies

Spredfast believes that pure play social vendors are keeping pace with the rapidly evolving social landscape much more effectively than the large enterprise software companies like Adobe, Oracle and Salesforce, but acknowledges that those companies have a lot of mindshare in the enterprise.

Rod stated, “We think the market needs an independent social first platform and that the market is evolving from a point to suite based solution. The big vendors are not doing the right things. They have either bought the wrong things or not been able to innovate fast enough. In social, product innovation is occurring at 100 miles/ hour”.

There is supporting evidence on TrustRadius that the larger software companies have failed to keep pace. For example, one user shared “What was once a great tool, now feels neglected and unloved” when reviewing Radian6, acquired by Salesforce.

Competing with Pure Play Social Media Management Software Companies

Sprinklr is Spredfast’s most direct competitor as another pure play social vendor with a suite offering squarely focused on the enterprise. Speaking to their differences, Rod shared “we have chosen different product paths. By merging with Mass Relevance, we are expanding our suite to include content and screening, and are connecting social with digital display. Connecting brands with media is very unique. Our focus is looking to the future of marketing.”

When asked specifically about Sprinklr’s newly launched paid media offering, Rod responded, “We have done paid media for a year, however it only supports content created within Spredfast.”

While planning to further broaden its suite, Spredfast acknowledges it cannot encompass everything and needs to integrate to other social solutions. “We are open towards the listening community and the ad platform community. Even though it’s a suite, it doesn’t solve everything. We have chosen to pursue the elements we consider most important to be unified”.

As discussed in part 1, Hootsuite raised $165m in 2013 and has been aggressively expanding into the enterprise. Spredfast downplays Hootsuite’s competitive threat. “Hootsuite is doing a great job everywhere but the enterprise. It takes a different product and DNA to compete there. We do not see them competitively in the enterprise.”  On TrustRadius, 37.5% of Hootsuite Enterprise reviews are from people at companies with more than 500 employees, though it’s not evident whether implementations are enterprise wide or just departmental.

Helping Customers Succeed

While the social marketplace has matured significantly, the number of people with deep experience is still limited. Rod stated, “Three years of social experience is about as much as people have. The market has matured a lot and the teams out in the marketplace are deeper, but it’s not formulaic yet like email.” 
Spredfast emphasizes their focus on customer success as a differentiator, “We get high marks for making customers successful. The product is an important part, but know-how and support and training are often the difference between success and failure.”

Closing Thoughts

Historically the social media management space has experienced a lot of churn among products, coupled with significant M&A activity. These factors have all been quite disruptive for companies. Rod emphasizes, “This is a journey. If you’re running social at a big brand or media company, you need to pick partners who have some width and depth and share a vision of where you see social is going. It’s a fast moving market. Pick partners who see the market the same way you do. Social networks are not standing still. You want to pick someone who’s keeping up with that. It’s a very fast paced market. Every quarter there are new content opportunities.”

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