Scaling without Distractions

The Problem

Datadog was riding a wave of incredible growth, but lacked the capacity to fully capitalize on new market opportunities.

When B2B software companies reach the expansion stage – the point at which the business has achieved product market fit and go-to-market repeatability — they typically begin to hone in on one key objective: growth. That includes growth of the company’s team and corporate structure, and it most certainly includes the continued growth of its customer base.

That’s precisely the circumstance cloud monitoring and analytics company Datadog found itself in as the company entered 2014. The business had already experienced dramatic growth in 2013, and in February announced $15 million in Series B financing that would help Datadog aggressively scale its sales and marketing organization, and explore new untapped distribution channels.

Access to capital was just one piece of the growth equation. The other, as Datadog’s management team began to discover, was having the capacity and expertise in-house to actually deploy it intelligently and efficiently.

“We found that scaling quickly creates numerous time-management and resource issues. We had an idea of the marketing channels we wanted to explore, but we also needed to focus significant internal energy on hiring and onboarding new team members, and maintaining customer acquisition momentum. We didn’t have enough fully ramped team members to actually test all of the marketing channels relevant to our target audience, and the concern was that if we tried to do too much, it would actually slow us down.” – Amit Agarwal, Chief Product Officer

Another concern: Datadog’s target persona, DevOps. Like most developers, this persona is notoriously difficult to crack with paid advertising because of its constituents’ disdain for being sold to and their frequent use of adblocking technology. Naturally, this raised questions about whether investing time and resources into paid marketing channels actually made sense for the business.

The Results

Discovering New Marketing Channels Without Distractions

Thankfully, Datadog didn’t have to worry. In June, the company reached out to OpenView and requested the help of the firm’s Expansion platform — a collection of operational consultants with rich sales and marketing expertise.

The objective was simple: Run a series of experiments on several paid marketing channels, determine whether any of them were viable lead generation sources, and develop a framework for discovering, testing, implementing, and monitoring new channels in the future.

After reviewing those findings with Datadog’s team, OpenView began executing a work plan that included three key phases:

1. Discover

OpenView’s market insights team researched and prioritized new channel targets based on Datadog’s target personas.

2. Implement

  • Brainstorm Creative: To optimize the effectiveness of paid ads, OpenView worked with Datadog to brainstorm display and text ad creatives for specific personas and buyer journey stages.
  • Setup: Using various ad sets with differing calls-to-action, colors and formats, OpenView implemented test campaigns on the selected channels.

3. Assess

  • Monitoring and Iteration: OpenView monitored performance and iterated with different ad combinations to optimize click-through rates and conversions on the channels being tested.
  • Identifying top channels: After several month-long testing cycles, OpenView selected the most effective channels that met or exceeded Datadog’s cost-per-lead and conversion rate targets.

In all, the project took about eight weeks to complete and the final deliverables included recommendations for optimal paid marketing channels for Datadog’s personas, display and text ad creative, landing page optimization, and closed-loop channel influence tracking through Google Analytics and Pardot.

The Results

Measureable Results and Immeasurable Value

Harris says OpenView’s ultimate goal was to deliver a truly comprehensive channel analysis and give Datadog’s marketing team a framework to immediately hit the ground running by testing new channels on their own. In the time OpenView managed Datadog’s paid channel program, the team discovered and implemented successful programs on three previously unknown channels that Harris believes will continue to deliver qualified leads within Datadog’s target cost-per-lead. For Agarwal, however, the results of the joint initiative go well beyond the short-term quantitative outputs.

“The hard work OpenView put into this project really allowed our team to get moving in the right direction without any wasted time or effort. What I appreciated most was OpenView’s willingness to get into the weeds and actually implement their ideas, rather than just giving typical high-level consulting guidance or advice. By really owning this project, it allowed us to focus on other key initiatives and maintain our momentum. For an expansion-stage company like ours, that’s immensely valuable.”

For Harris, that’s the ultimate testimonial for what OpenView’s Expansion Platform is designed to do. “Every expansion-stage company needs to experiment with and test new growth channels, but very few have the capacity or time to do it, which often leads to at-line growth after they’ve drained the channels they’ve always used,” Harris says. “Conversely, if they do make time for it, it can distract them from other important growth steps, and if they never make time to do it, then they might be leaving revenue on the table. What we try to do is step in and help software companies find and run experiments on the highest-performing marketing channels to scale their growth so they can stay focused on execution.”