So structurally, you have to get the machine right so that you can use various channels like content and paid media to obviously drive into the top of the funnel. And then you need the mechanisms to take that top of the funnel and move it through a qualification framework. So there are a whole massive operating mechanisms that have to be done right in order to trust that what you’re seeing coming in the top of the funnel is going to convert into qualified pipeline and ultimately, into bookings. And that’s all very kind of structural and very hard work and the teams have done an amazing job of building that machine. The second thing you have to get right is you have to match your campaigns to the environment. And so I think that’s it’s probably one of the things that we didn’t do quite as well last year as we could have, is I think we were marketing a lot of more future state use cases for our platform at a time when I think we’re still — I think maybe the market was expecting that the snapback would come faster.
And so what happened there, and it was really interesting to watch is because we have the demand generation machine built, we could see the demand coming in the top of the funnel through campaigns that were geared around products that weren’t really as much part of the core. So we were leading with AI messaging and more transformational CMS messaging. And then what we were finding was that a lot of those things were converting more in the core. And so that is — it’s I would call it like a half miss in terms of the marketing execution. As we’ve shifted to more value-based messaging around the things that you’re — that are the breadth and capability of our platform can do, you start matching campaigns up more to where the buying centers are interested today, which is much more in how do I either do more with what I have or how do I improve a set of fragmented vertical solutions into a broader one.
And so that’s another thing that we expect as we run better campaigns this year. We think that the matching of what our customers are really interested in today. and the areas of expansion that they’re most interested in with our marketing campaigns and ultimately, the demand generation machine is part of making that whole system work better. Hopefully, that makes some sense.
Tom White: Yes. That was very helpful color. Thank you. Just maybe a follow-up on the guidance for this year. I guess at the midpoint, the full year outlook implies that adjusted EBITDA expenses are down about $10 million year-over-year. Can you maybe just parse out a little bit more the drivers and maybe Darryl can weigh in here too if he wants. But you talked about adding some heads, which will take a little bit of time to ramp. But then I guess you have the sort of the full year impact of some of the operational changes you made last year. And just trying to understand like how much more kind of further rationalization of the cost base is kind of baked into the outlook or is it just kind of like the full year kind of benefit, if you will, from some of the stuff you’ve implemented last year? Thanks.
Mike Walrath: Yes. So I’ll start, and I’m sure Darryl will do a better job talking through some of the numbers. But like principally, I think what we’re doing — and by the way, this is something we see our customers doing. It’s part of the thing that colors our view on the environment is that once you start getting the organization really focused on efficient operations, you continue to find opportunities to in various ways to be more efficient. So that can be spans and layers that can be duplication within the organization silos and we’ve been talking about all this for a couple of years. I think in a perfect world, it never really ends, but obviously, the lifting gets a lot less heavy as we get into finer and finer optimization.
So I really think that’s probably the phase that we’re in for the course of this year. It’s just — it’s become part of the — I think, the culture here to think about the efficiency impact and the opportunities to be more efficient across the board. And that allows us to continue to show improvement in the — on the expense line. And on the EBITDA line, while making really critical investments that are going to be product investments and revenue driving.
Darryl Bond: Yes. And Tom, the only thing I’d add to that is when you look at the EBITDA number in Q1, we’ve got some seasonal spend that happens in Q1 for certain sales events that don’t happen in other quarters of the year. And then to the point that Mike was making earlier about our marketing campaigns and us being able to really attack that area. We pulled some marketing spend up on demand gen up into Q1, which is also going to impact the quarterly number when you sort of look at the rest of the year.
Tom White: Okay, appreciate it, guys. Thank you.
Operator: The next question is from Naved Khan with B. Riley. Please go ahead.
Unidentified Analyst: Hi, thanks for taking my question. This is Ryan on for Naved. I was wondering if you could talk about the customer budgets for the upcoming year and whether there’s room to drive upsells into the customer base? And then related to that, I was also hoping to get some clarity around the opportunity for mid-tier customers versus enterprise customers? And then I have a follow-up after that.
Mike Walrath: Sure. So I think as — we see it as — we expect to see a lot of similar discussions this year that we’ve been having over the last kind of six to eight quarters, which is they usually start with what’s the value that I’m getting from the platform today. And I think that that’s a great place to start the conversation. Then it becomes, what are the other things that this platform can do potentially more efficiently than other things. So we still continue to see a lot of interest from customers, particularly larger customers, in having less vertical software and less kind of very specialized software doing lots of different things in their marketing department versus more versatile broader solutions that can do more.
