Customer Experience Matrix

B2B Marketing University Part 2: Marketing Content Has to Work Harder

2009-11-06T11:42:00.008-05:00

Summary: As marketers add more content to meet needs throughout the purchase cycle, they must work harder to ensure prospects actually read it.

One of the emergent themes at Tuesday’s session of the B2B Marketing University was the growing importance of marketing “content”. The general logic was that marketers increasingly interact with prospects throughout different stages of the sales cycle, and each stage needs different materials. The materials also need to be tailored to different types of buyers – or “personas” if you want to get fancy – so you need even more variety.

Of course, buying stages and buyer types have always existed. But much of the information now delivered through Web interactions was previously delivered in person by salespeople, who could just talk or write an email. Since Web interactions require formally prepared “content”, the need for content has grown.

There’s no arguing with that, and as someone who is paid to write the occasional white paper, I'm glad to hear it. But, still, as I listened to people talking about needing to build more and more content, this little voice in my head kept reminding me of another grand theme of the conference, which is the increasing range of information that prospects already have available. Odd, my little voice said: We’re being told to generate more content even though buyers have less time to read it.

This isn’t really a contradiction. The greater competition for buyers’ attention actually means we have to build content they find more useful than anyone else’s. Creating a wide variety of items does this by letting us offer buyers something that precisely matches their needs of the moment.

The little voice went away after that. (It helped that the bar had opened.) But this perspective also offers some additional guidance. Recognizing that buyers are extremely time-constrained, marketers should:

- create small, bite-sized pieces of content rather than huge chunks of it. (Yes, this implies fewer, shorter white papers. **sigh** But there are still situations where old-style, long white papers are appropriate.) The good news here is this should help to keep content creation costs down.

- put additional energy into mechanisms that make it easier for prospects to find the content they want. This means bulking up on-site search engines and carefully monitoring the queries people submit. It also means better navigation tools to expose what’s available so people can find it quickly. As a side benefit, letting people specify exactly what they want to know also lets you store that information and use it to better target your future treatments.

- ruthlessly evaluate the utilization of the content we do provide, to ensure we don’t create more than necessary and to identify topics that may need additional coverage.

- incorporate feedback mechanisms so that prospects can rate the content we’ve sent them, again to foster continuous improvement.

- make the content easily available to salespeople so they can use it themselves. This saves them the time spent crafting emails that convey pretty much the same information.

In sum, as marketers increase their investment in content, they also need to manage that investment more carefully. This may mean shifting funds from content creation to content distribution and evaluation. Bad news for marketing creators, perhaps, but good news for marketing performance.

B2B Marketing University: For Now, Marketing Automation and CRM Are Still Separate

2009-11-05T15:43:00.006-05:00

Summary: Marketing automation and CRM systems may eventually converge, but for now marketers need help explaining why they need a system of their own.

I hugely enjoyed yesterday’s Boston session of the Silverpop-sponsored B2B Marketing University. (You can catch another session in Atlanta next week and in Seattle on December 1.) I won’t try to recap four hours of insights from Adam Needles from Silverpop, Carlos Hidalgo of Annuitas Group and Joe Moloney of Conselltants (no Web site, it seems), as well as Yours Truly. But there were a couple of topics that caught my fancy:

1. People still don’t understand the difference between marketing automation vs. CRM.

I really thought the distinction was pretty clear by now, but the question came up more than once. My own answer boiled down to a perhaps-not-convincing “trust me, they’re really different”, although I’ve addressed the question in depth in the resources section of the Raab Guide Web site.

Joe Moloney gave a more detailed answer about limits in Salesforce.com in particular, including lack of CAN-SPAM compliance and limits on mass emails. Someone (I think it was end-of-day panelist Meg Heuer of Sirius Decisions) also pointed out that CRM data is often very dirty, which isn't a problem for salespeople working with one record at a time, but making it hard to use for marketing.

The immediate take-away here is that the industry still needs to educate prospective buyers on why marketers need a separate system. Vendors take note.

2. Will Marketing automation and CRM remain separate?

The discussion also segued into whether marketing automation and CRM will merge in the long run. I still suspect they will, driven by the need for ever-closer cooperation between marketing and sales teams in managing prospect relationships. But the other presenters disagreed, largely arguing that the separate groups have distinct needs. (See Who’s Afraid of the Big, Bad Wolf? Is Salesforce.com a threat to vendors of marketing automation solutions? by Market2Lead CMO Kevin Joyce for a good statement of the separatist position.)

Part of the reason I expect convergence to happen is that it’s already taking place. (The past is so much easier to predict than the future.) The movement is coming mostly from the marketing automation side, presumably because there is more money to gain by moving into sales from marketing systems than vice versa:

- marketing automation systems for small businesses (Infusionsoft, Office Autopilot, Net-Results, ActiveConversion, etc.) typically include a CRM option for clients who don’t want to pay for a separate Salesforce.com or other license

- firms aimed at larger installations (Marketo, Eloqua, Pardot, Genius.com) are providing widgets that give sales people direct access to marketing automation information.

3. Technology may impede Software-as-a-Service sales automation vendors from adding marketing automation.

As Joe Moloney was listing the limits that Salesforce.com places on mass access to client data, I recalled that these are in place fundamentally to avoid large analytical queries that could slow down response for all other users of the shared systems. This isn’t an inherent problem with Software-as-a-Service itself: remember, the B2B marketing automation vendors themselves all operate on a SaaS model, and there is a growing number of SaaS business intelligence systems too.

But even though modern database technology allows one system to handle both CRM transactions and analytical marketing queries, this does take an appropriate design. I strongly suspect that existing SaaS CRM vendors like Salesforce.com would need to fundamentally rearchitect their systems to support serious marketing automation processing, especially for clients with millions of contact records. This may impede them from adding marketing automation capabilities, although newer SaaS CRM systems could emerge that are designed from the start to do both.

From this perspective, another reason combined marketing automation/CRM systems are first being offered to small companies may be that it’s easier to provide good performance for both applications when volumes are small.

Yesterday also triggered another set of thoughts regarding the importance of marketing content. But since one of these was the need to keep materials short, I’ll put them into a separate post.

Survey Suggests Marketers Are Moving from Paid to Social Media

2009-10-26T14:08:00.004-04:00

Summary: a new survey suggests that marketers are less focused on lead generation than on final sales, growing current customers and building online communities. I’m not sure I trust the data, but it’s a pretty picture nevertheless.

I don’t know quite what to make of the 2009 Survey on Marketing, Media and Measurement released earlier this month by custom content company King Fish Media.

- On one hand, it’s a rare opportunity to see data from business, rather than consumer, marketers. (Of the 230 respondents, 52% were pure B2B and another 36% were mixed B2B and business-to-consumer.) So I'd really like to believe it.

- But on the other hand, the sample seems dangerously unrepresentative: 44% said their organization’s primary industry was “publishing/media/advertising/marketing”, which is vastly higher than the real-world proportion. Presumably this was the result of the survey method – an online survey based on email invitations to the lists of King Fish and co-sponsors HubSpot, Junta42 and Upshot Institute. In addition to the industry skew, this probably reached a group that’s much more online-oriented than marketers as a whole.

The best I can do is to treat the results very carefully: assuming that this group shares some characteristics of the broader universe, but keeping in mind that some answers might reflect its atypical composition. Here goes.

1. Marketing Measurement Practices

The group reported using three broad types of marketing success measurements:

- 91% measured new customers acquired or leads generated.
- 63% measured customer retention or sales from current customers or lapsed customers.
- 54% measured brand-marketing-style metrics such as awareness, perception or intent.

Directionally, this seems about right: more marketers focus on new business than on existing customers, and brand-style measurements are less common than business results. The figures for existing-customer measurements are higher than I would expect, but perhaps that’s because publishing marketers are more directly responsible for renewals than business marketers in general.

Another oddity was that more people report measuring new customers (77%) than leads (73%). An optimist would treat this as evidence that marketers are adopting an end-to-end vision (as they should) rather than ending their responsibility when a lead is handed over to sales. But think the more likely cause is that marketers in publishing are more likely to sell directly (i.e., without a sales force) than in other industries.

Incidentally, the survey also found that 73% of respondents had guidelines in place to measure marketing success, but just 50% said their company requires a measurement plan as part of its program approval process. Treat this as you wish: is it impressive that 73% have measurement guidelines or frightening that 27% do not? Also bear in mind that 91% were at least using measurement on acquisition programs (some, apparently, without standard guidelines). So I think we can conclude that basic measurement is widespread, although its quality and consistency are questionable.

2. Spending on Acquisition vs. Existing Customers

Media spending by purpose was distributed:

- 56% for new leads
- 33% for retention
- 10% for other

This is interesting because I don’t recall seeing other data showing this split. The actual numbers show much more spending on retention than I would have expected. As with the measurement figures, this probably reflects the business of the survey responders.

3. Media Preferences

The main thrust of the survey was how marketers view different media. Marketers were asked to rate "the most effective way to communicate with customers and prospects", with separate answers for each. Here are the results:

	for prospects/leads	for current customers
corporate Web site	75%	70%
social media	73%	72%
custom content and media	70%	77%
face-to-face events	69%	62%
white papers / e-books	67%	52%
Webcasts and virtual trade shows	64%	51%
e-mail marketing	58%	78%
online advertising	42%	13%
direct mail promotions	33%	34%
print advertising	33%	17%
broadcast advertising	10%	11%

If there’s a pattern here, it’s that awareness-generating media (e-mail, direct mail and online/print/broadcast advertising) rank shockingly low, especially for prospecting. Apart from using email for customer communications, the respondents gave their highest rankings to the corporate Web site, social media, and custom content.

But how, exactly, can they attract traffic for the Web site, social media message and custom content if they don’t reach out to new audiences? I can think of (at least) two answers:

- they can’t, and the answers just reflect an infatuation with online media. I’m not saying the respondents are poor marketers: chances are they really do use the low-ranked media, but don’t consider them terribly effective. (Other answers in the survey suggest the same thing, showing that budgets are moving away from the low-ranking media to the high-ranked categories.)

- they can, by using social media and custom media in the awareness- and traffic-building roles previously handled by paid advertising. Put another way, the traditional first steps of generating awareness and interest are handled by the community rather than by marketers themselves. In this world, marketing’s role becomes to nurture communities of enthusiasts and evangelists, and then to meet the needs of prospects attracted by the community. This is what I meant in my September 23 post about community-centric marketing replacing customer centricity. (Can I coin CBM as a new acronym for Community Based Marketing?)

Obviously the second possibility is more intriguing. It’s surely correct to some degree, although the Big Question is how quickly and how far marketers’ role will shift. Given my concerns about this survey, I wouldn’t treat its results as definitive answers. But they're still tasty food for thoughts.

SalesFusion Combines Online and Offline Marketing with CRM

2009-10-22T12:42:00.006-04:00

Summary: SalesFusion combines all channels within marketing, and merges marketing automation with CRM as well. This one-stop-shopping will be most attractive to small and mid-size companies, although I expect that larger firms will eventually want it too.

Look, I know online marketing is important. But let’s not forget that offline channels still account for nearly 90% of total advertising expenditures. Business marketers probably spend more online, but, once you add in the cost of salespeople, I’d guess that online spending still accounts for less than 10% of the combined total.

My point here – have you met my pet, Peeve? – is that nobody needs a comprehensive online marketing suite. They need a comprehensive marketing suite, period, that includes both online and offline activities. And, while we’re on the subject, they need REALLY TIGHT integration between marketing and sales automation, if not one shared system.

This brings us, somewhat abruptly, to SalesFusion360, a B2B marketing automation system that does merge online, offline and sales channels. This breadth isn’t accompanied by tremendous depth: SalesFusion’s campaign management and built-in CRM tools are a bit limited. But the system does offer a comprehensive solution for smaller firms and, at least on the CRM side, can integrate with more powerful solutions including Salesforce.com, Microsoft Dynamics CRM and Siebel CRM On Demand.

Let’s start with SalesFusion’s strongest point, which is the scope of marketing channels supported. Beyond the usual outbound email and Web forms, the system provides:

- Web analytics to support search engine optimization and Web advertising,
- API-level integration with Google AdWords to support paid keyword campaigns,
- IP-address lookup to identify the company and location of anonymous Web visitors (and send rule-based alerts to salespeople),
- personalized URLs (PURLs) to tie in responses from offline campaigns.
- online chat and
- telemarketing support through the CRM component.

Results from all these channels are managed through a unified campaign structure, which creates a hierarchy of campaigns and subcampaigns to allow channel-level rollups. Campaign data includes budgets, actual costs, and revenues imported from sales opportunities.

The email features cover all the basic requirements: template-driven personalized messages, universal and campaign-level exclusion rules, and both static and dynamic list definitions. Campaigns can be executed manually by the user or triggered by selected events including completion of a form, selecting a specific answer within a form, completing a step in a multi-step marketing campaign, or reaching a score threshold.

The main weakness is that multi-step campaigns can only send messages in a fixed sequence (i.e., no branching based on prospect behavior) at fixed intervals. A skilled user could implement some branching by using step-level inclusion and exclusion rules to send different messages to different people and by using Web forms to send leads to new campaigns. But these are awkward solutions. SalesFusion promises a more flexible, visual campaign builder and dynamic content generation for delivery early next year.

The system’s features for lead scoring and routing are more impressive. Users can build separate scoring rules for different marketing campaigns, regions, products or other entities. These scoring rules can be active for specified date ranges and can post scores at contact or account levels.

Users can define value ranges (hot, warm, cold, etc.) for each score, and can set up routing rules triggered by entry into each range. These rules trigger an email campaign, send an alert, create a log entry, or add a lead, task or opportunity record in the CRM system. Multiple scores are particularly important at large companies where contacts need to be treated differently for different products, regions and other variables.

Each scoring rule can incorporate Web activity, campaign events, form responses and static data. Score calculations can ignore events before a specified period, but do not make interim reductions as events reach this limit. The system can cap the number of points earned by any one type of event, although this takes some configuration by the vendor. Users can specify whether scores are recalculated on daily, weekly or monthly.

The integrated CRM system provides most of the features needed by small and mid-size companies, and is used by about half of SalesFusion's current clients. The company plans to enhance the CRM system to be more competitive with enterprise-class systems by early next year. The CRM and marketing automation components of the system already work on a shared data structure. Clients who use a separate CRM system can synchronize data via regular updates.

Reporting includes prebuilt dashboards and an ad hoc report writer that lets users query system tables directly. The latter is an unusual feature for Software-as-a-Service systems like SalesFusion, since most vendors are concerned that ad hoc queries could harm system performance.

SalesFusion starts at $250 per month for a light version with limited features, under 1,000 names in the database, five users, and 10,000 emails per month. The lowest-priced full version costs $1,500 per month and includes up to 25,000 names, 75 users, and 125,000 monthly emails. CRM is currently included at no extra cost, although the vendor plans to start charging around $10 per user per month when the enhanced version is released.

The first version of SalesFusion was released in 2003, when the company was named FirstReef. It merged in 2007 with online forms vendor AxiomFire and assumed its current name in January 2009. The system has about 50 current installations, many sold by resellers including some major accounts in Australia and South America. SalesFusion is now expanding its direct sales efforts.

5 Steps to Marketing Measurement Maturity

2009-10-12T09:52:00.003-04:00

Summary: marketing performance measurement can start with simple response tracking, and grow in stages to show business impact, track the buying process, optimize results and demonstrate strategic alignment. Each stage adds new data, systems, measures and processes.

I’ll be talking about marketing measurement this Tuesday at Silverpop’s B2B Marketing University seminar in Palo Alto, with a repeat performance in Boston on November 4. The core of my presentation will be a 5-step measurement maturity model for B2B marketers. This post will give you a brief summary.

A little background: marketers’ objectives for performance measurement generally fall into five broad categories: measure response, show business impact, track the buying process, optimize results and demonstrate marketing alignment with business strategy. Each category has different requirements for data, systems, measures, and processes. Because some of these requirements overlap, there’s a natural progression starting with the simplest requirements and adding new requirements for each stage. This progression leads to a maturity model. Here are the details.

1. Measure Response. The most basic requirement is simply to count the number of responses to each marketing program. This stage also includes the closely related step of calculating the cost of those responses for a simple cost-per-response measure that can be used for a rough ranking of investments.

Key data needs for this stage include mechanisms to capture responses and campaign costs and to link responses to campaigns. This requires a campaign management system to execute the campaigns and track their costs, and a marketing database that stores the identity, promotion history and response history of leads generated by the campaigns.

2. Show Business Impact of Marketing Campaigns. The cost per response tells little about the business impact of a marketing program. You must also know the value of those responses. At a minimum, this requires linking marketing leads to closed sales. This typically means importing closed opportunity records from a sales automation system and linking those opportunities back to the original marketing lead. Add the cost data already gathered in stage 1 (response measurement) and you can calculate a simple Return on Investment based on revenue / acquisition cost.

Of course, true ROI is based on profits, not revenue, and incorporates all incremental costs, not just the initial marketing expense. A proper business impact measurement thus requires capturing the full marketing, sales and product costs associated with new leads, as well as their actual or estimated long-term value. These give a ROI measure that comes reasonably close to showing the true business impact of each acquisition campaign.

In terms of new requirements, this step adds sales opportunity data, which implies integration with a sales force automation or CRM system. It also requires processes to assign opportunities to leads and leads to campaigns, and, optionally, ways to import and connect lifetime costs and revenues.

Keep in mind that this approach only applies to lead acquisition campaigns, not to campaigns that nurture existing leads or customers, or branding campaigns that don’t generate a direct response. This is a smaller issue for B2B marketers than many consumer marketers, who often have no direct way to identify the customers acquired or influenced by their activities.

3. Understand the Buying Process. This stage looks at the impact of non-acquisition marketing treatments on moving customers through the buying process. It requires defining stages within the buying process, tracking the movement of individual leads through those stages over time, recording the marketing treatments applied to those individuals, and measuring the correlation (if any) of treatments to stage changes. The result is both a more detailed understanding of the buying process and a way to decide which treatments are most valuable.

Meeting these requirements implies capturing more information about leads, including static attributes (company, job title, etc.) and behaviors such as Web site visits and email responses. These can be used in scoring models or other tools that decide which stage a lead is in at any given moment. The system must also keep a history of each lead’s stages over time, so it can correlate stage changes with treatments. The treatments themselves are already captured in the marketing database needed for response measurement, so they do not represent a new requirement.

4. Optimize Results. Once you’re tracking lead movement through process stages and measuring the impact of individual treatments, you’re ready to build an end-to-end model that calculates the impact of each small change on final sales. You can then optimize the combination of treatments across the process. For example, you might find you can spend less on acquiring new leads if you spend more on nurturing existing ones, to produce the same sales volume at lower cost.

The calculations for this type of optimization are fairly simple, and they don’t require any new information beyond the previous stage in the maturity model. But you do need more precise information about the impact of different treatments, which means formal testing of alternative treatments and careful analysis of results. You’ll also need a business simulation model that can estimate the impact of changes on near-term revenues and costs, since the company still has its quarterly targets to hit. You'll also need to define you goals -- higher revenue? higher profit rate? lower marketing costs? -- so you know what to optimize.

Ideally, you’ll also add optimization software that can automatically find the best of all possible treatment combinations. But few B2B marketers have the data volume or statistical skills required for this, so you’ll probably end up manually running a variety of scenarios through your simulation model instead.

5. Demonstrate Strategic Alignment. Delivering the optimal set of treatments won’t satisfy your CEO if your marketing programs don’t align with the larger business strategy. That alignment may in fact require campaigns that produce low short-term returns, such as investing in a new product or market segment.

To demonstrate alignment, you must first show that your planned marketing activities support business goals, and then show that those activities have yielded the expected results. For example, a strategy based on selling to a new group of customers might yield a marketing plan with 10% of acquisition spending aimed at generating leads from that segment, and a goal of that segment accounting for 5% of new leads received.

The exact requirements for this stage will depend on your specific strategic goals. But it’s likely that you’ll need more information about the purposes of your marketing spending (so you can show which funds are supporting which strategic goals) and more about lead attributes and behaviors (so you can show that results are in line with expectations).

Incidentally, demonstrating strategic alignment doesn’t depend directly understanding the buying process (stage 3) or optimizing results (stage 4). So a company that has reached stage 2 in the maturity model could jump immediately to demonstrating strategic alignment if desired.

Final Thought: once you get past counting response, all later stages in the maturity model assume you are measuring your marketing performance against the ultimate goals of closed sales and long-term customer value. This is increasingly necessary as marketing remains involved with leads even after they are officially transferred to sales. It implies that marketing and sales must integrate their systems, so they can view, coordinate, analyze and ultimately optimize sales and marketing activities across the entire buying cycle.

In companies where the marketing's responsibility still ends with the hand-off of qualified leads to sales, the maturity model could be adjusted to optimize only through that stage. But that's an increasingly obsolete approach.

Beautiful BABI: SiSense PrismCubed Offers Business Intelligence for Business Analysts

2009-10-10T16:08:00.007-04:00

Summary: SiSense PrismCubed offers a reasonable option for a business-analyst business intelligence system. It’s probably a little harder to use than some competitors, but gives a bit more power and flexibility in return.

SiSense PrismCubed, officially launched this past August, is another member of the growing set of business intelligence systems aimed at empowering business analysts to build their own applications. I’ve also written about QlikView and Lyza, and think there are others.

What distinguishes these tools from other business intelligence systems is they let non-technical users manipulate source data in more sophisticated ways than a spreadsheet or report writer. Specifically, data from several sources can be merged on a common key, filtered, aggregated and processed through complex formulas.

This sort of manipulation has traditionally required SQL programmers, OLAP cube designers, or similar technical experts. Allowing business analysts to do it without having to learn deep technical skills is precisely what lets them build applications with minimal external assistance. (I say "minimal" because technical staff must still handle connections to the source data.)

These systems also provide report creation and distribution. But unlike business-analyst data manipulation, those capabilities are also found in other business intelligence products.

You’ll note that my definition does NOT specify a particular database technology, such as in-memory or columnar, that the data is updated in real time, that the system is targeted at mid-sized businesses, or that results are distributed pervasively through the organization. Those have all been proposed as ways to classify business intelligence systems, and several of the products in my business-analyst business intelligence (BABI--how cute!) category fall into one or another such group. But I think it’s a mistake to focus on those other features because they don’t get at real value provided by these tools, which is the flowering of applications made possible when business analysts can create them independently.

Now that I've defined a new type of application, complete with the all-important acronym, the next step is defining an evaluation framework to help compare the competitors. I’d like to claim I do this through deep research and brilliant insights into user needs, but, in fact, I generally start with the features in the existing systems. This runs the risk of missing some critical requirement that no vendor has yet uncovered, but it saves a ton of work. And I can still argue that I’m piggybacking on the vendors’ own deep research and insights as embodied in their products.

In any event, a starter set of review criteria for BABI systems (sorry, but I find the acronym irresistible) would include:

- combine data from multiple, heterogeneous sources (relational databases, CSV files, Excel tables, etc.)

- allow non-technical users to define processing flows to manipulate the data (merge, filter, aggregate, calculate)

- present the manipulated data in a structure that’s suitable for reporting and visualization

- allow non-technical users to create applications including reports, visualizations, and (optionally) additional functions such as data refresh and export

- allow other users to view (and optionally interact with) the applications

- meet reasonable performance standards for data load, storage, response time and scalability

- use appropriate technology (actually, I don’t care if the thing is powered by hamsters. But understanding the underlying technology helps to predict where problems might arise.)

- affordable pricing (not exactly a criterion, but important nevertheless)

Obviously these criteria could be much more detailed, and no doubt they will grow over time. But for now, they provide a useful way to look at PrismCubed.

1. Combine data from multiple sources: PrismCubed provides a wizard to connect with different data sources, including SQL Server, Oracle, CSV files, Excel and Amazon S3 logs (which earns them extra coolness points). The system can read the database schemas directly, saving users the need to define basic data structures. Users have the option modify structures if they desire. A connection can be live (i.e., the source is requeried each time a report is run) or reloaded on demand from within a completed application. This provides real-time data access, which isn’t always available in business intelligence systems. The system can also reload data automatically on a user-specified schedule.

2. Allow non-technical users to manipulate source data: PrismCubed does a particularly good job here. At a basic level, users can write complex formulas to add derived fields to a table during the import process. More important, a drag-and-drop interface lets them build complex visual processing flows from standard icons including data definition, filtering, inclusion or exclusion, unions, and top or bottom selects. These flows can combine multiple data sources and include branches that generate separate output sets that are all available to use in applications.

3. Present the manipulated data for reporting: the system automatically classifies input data as dimensions (text, dates, etc.) and measures (numbers which can be aggregated). Users can override the system’s assignments and can add new dimension fields during the data load. They can create derived measures at any time. Once the load is complete, the system presents the dimensions and measures in an “ElastiCube” available for reports and other applications.

4. Create reports and other applications: the system provides a remarkably rich development environment. Users build applications by dropping different types of objects (which the vendor calls widgets) onto dashboard pages. Widgets can make selections; display data in pivot tables, charts, calendars, and images; and execute actions including refresh data, jump to different pages, query external data sources, edit data, and export to Excel. A dashboard can have multiple pages.

The primary reporting widget is the pivot table, which itself is built by dragging dimensions into rows and columns, and the measures into cell values. Users can apply filters to widgets, such as selecting the top 10 values for a dimension. These filters can be static (a fixed list) or dynamic (reselected each time the dashboard is updated). PrismCubed also provides special features for time series calculations such as period-to-period growth and differences. That's a nice touch, because those can be quite difficult to define with conventional reporting systems.

Reporting widgets can be connected to the ElastiCube dimensions and measures or directly to SQL data sources. Users can also specify whether selections made in one widget affect the data displayed in other widgets. There are actually three options here, including complete independence, direct links from one widget to another, and global impact on other widgets. This gives more flexibility than systems that automatically apply global selections, but does force users to do more work in specifying which approach they want.

Widgets, filters and other components can be stored in a central repository and reused across applications.

5. Share applications: Users can export dashboard contents to Excel tables or can copy an entire dashboard as a static PDF. Applications, including underlying ElastiCubes, can be copied and run on another user’s PC. In addition, a Web server due for release this month (October) will let dashboard creators publish their dashboards to a central server, where other users will be able to access and modify them. The server will provide fine-grained control over what different users are allowed to change.

6. Scalability and Performance: SiSense has tested the PrismCubed engine on multiple terabytes of data. It cited one client who loaded 30 million telephone call detail records in 30 to 90 minutes. Loaded data usually takes somewhat less disk space than the original source. The system currently requires a complete reload to add new data to an existing ElastiCube, although the vendor plans to add incremental appends by the end of November. Once the data is loaded, reports within applications usually update in seconds.

7. Technology: PrismCubed stores data in a columnar data structure. It also stores a dimension map for each column, but doesn’t preaggregate the data along the dimensions. As with other columnar databases, this avoids the need for specialized data structures to handle particular queries. When data has not been preloaded into the system, PrismCubed can also run the same query across multiple external data sources.

Although PrismCubed stores the entire ElastiCube on disk, it only loads into memory the columns required for a particular query. This lets it can handle larger data sets than purely in-memory systems without massive hardware. There might be some problems if the selected columns for a query exceeded the system’s available memory.

PrismCubed runs on Windows PCs with the .NET framework installed. On 64 bit systems, this means the amount of potential memory is virtually unlimited. Although PrismCubed itself is new, a previous version of the product using the ElastiCube database engine was launched in September 2008 and has more than 6,000 users.

8. Pricing: PrismCubed is priced on an annual subscription basis, which is unusual for this type of product but common among hosted BI vendors. SisSense offers several versions of PrismCubed, ranging from a free Viewer that can only access dashboards created elsewhere, to a $1,500 per year Professional edition that allows full creation of dashboards and ElastiCubes. There are also a free version (limited to 2,000 rows of data), a $300 per year Personal edition (which can create dashboards but not share them), and a $700 per year Analyzer that can build and share dashboards but not ElastiCubes. Server pricing wasn’t quite set when I spoke with SiSense but will probably be around $3,500 per year per server.

These prices are quite reasonable compared with similar vendors, even considering the recurring annual subscription fees, particularly because the end-user Viewer is free. Price details are published on the vendor’s Web site.

Survey Looks for Hostility to Behavioral Targeting, and Finds It

2009-10-09T10:55:00.003-04:00

Summary: a new survey found that most Americans oppose behavior-based Web targeting. The authors clearly had an agenda, but the industry still needs to present its side of the story.

A recent survey conducted by professors by UC/Berkeley and University of Pennsylvania concluded (to quote its full title) that “Contrary to what marketers say, Americans Reject Tailored Advertising and Three Activities That Enable It.” Is it just me, or do I detect a bit of hostility?

The headlined finding of the survey was that 66% of respondents said they did not want Web sites to show ads tailored to their interests. As eMarketer pointed out in its article on the study, this conflicts with other surveys have found consumers receptive to targeted Web ads.

The Berkeley/UPenn study claims it is more accurate because it is the first nationally representative telephone (rather than Internet-based) survey on the topic. I doubt that really had much impact on the results. As a detailed critique by the business-friendly Progress & Freedom Foundation points out, the answers were more likely influenced by the structure of the poll itself, which asked a variety of somewhat tendentious questions leading up to the final answers.

My own critique is that the questions all asked whether people wanted to see tailored ads, not whether they preferred tailored ads vs. non-tailored ads. People may have interpreted the unstated alternative as no advertising at all. In that case, their rejection had less to do with tailoring in particular than with the near-universal dislike of advertising in general.

Still, the answers I found most interesting have received relatively little attention. This was a set of three questions that found:

- 67% of Internet users agree they have “lost all control over how personal information is collected and used by companies”, but

- 58% feel “most businesses handle the personal information they collect about consumers in a proper and confidential way” and

- 54% agree that “existing laws and organizational practices provide a reasonable level of protection for consumer privacy today”.

In other words, people have finally accepted Scott McNealy’s famous advice from 1999: “You have zero privacy anyway. Get over it”.

I’d like to end the story there, if only for artistic reasons. But the survey also asked several questions about consumers’ understanding of current privacy laws, which basically found that most people think they have more protection than they really do. Another series of questions found support for laws giving consumers rights to insist that companies delete their information.

I don’t take the results too seriously because the questions didn’t indicate these would be new laws or balance the laws against reduced free content or the cost of more regulation. But they do suggest that people might support stronger regulation if they understood how poorly they are now protected. So there continues to be a real need for marketers to both do a good job of protecting consumer privacy and of educating the public and legislators about the benefits provided by easy access to consumer information.

More Surveys Agree: Web and Non-Web Data Must Be Integrated

2009-09-29T18:26:00.003-04:00

It’s not that I’m obsessive, but just to gnaw a bit more on last week’s bone about the coming unification of Web and other marketing data...

- a recent survey sponsored by enterprise marketing automation vendor Unica found that “integration with other marketing solutions” was the most commonly cited web analytics challenge (46%).

This was followed by “verifying accuracy of data (inflation/deflation)” (41%) and “not comprehensive/missing types of data” (32%). It’s interesting that the question was about Web analytics in particular – even analyzing Web results by itself requires non-Web data.

- another survey by another marketing automation vendor, Alterian, found the most-commonly cited top obstacle in online marketing (25% of respondents) was “integration of online with database marketing and offline channels”.

Now, this isn’t exactly the same answer as the Unica survey, since the question isn’t limited to data integration. But Alterian also reported that “lack of ability to assess or manage internal infrastructure and culture challenges (25%) and the integration of all the technology to power the cycle (20%) were identified as the biggest factors in implementing the customer engagement cycle.” So clearly data and system integration are indeed primary concerns for multi-channel marketing.

For still more on this topic, see today’s post on the MPM Toolkit blog, describing a very detailed report in eMarketer about Online Brand Measurement. This provides still more evidence for the need for integration of Web and non-Web data, in addition to other issues.

Case closed.

Web Analytics Is Dead. So Is Customer Centricity. I Need a Drink.

2009-09-23T23:13:00.005-04:00

Summary: Web analytics is merging into the broad world of marketing measurement across all media, which itself is shifting focus from tracking individuals to understanding group behavior. Although Web analytics and marketing automation vendors are currently wrestling over who will house customer data, both are likely to lose custody to enterprises who want to control their data for themselves.

Even as analysts are still sorting through the implications of last week’s acquisition of Omniture by Adobe, the industry saw two additional important announcements this week: Omniture combining its data with comScore to help measure Web advertising audiences, and Nielsen working with Facebook to poll consumers on advertising impact.

Both announcements share several interesting features: they don't rely on traditional Web analytics (tracking page views); they involve vendors who report data from consumer panels; and they relate to measuring advertising measurement. Maybe they coincided simply because the big Advertising Week conference is now under way. But I think they, along with the Omniture/Adobe deal itself, hint at something more profound: the end of Web analytics as we know it.

Ok, that may not be as earth-shattering as the end of several other things you might imagine. But many marketers are just getting their arms around traditional Web analytics. So it’s worth warning them that things are about to change again.

Smarter Content on the Way

Let’s start with Omniture/Adobe. After thinking about it for a week (and hearing what the participants said), I think the main purpose of the deal was to let Adobe build content that was more intelligent in two ways:

- First, the content will be inherently “instrumented” to report how, when, where and which people are consuming it, using techniques go beyond traditional Web analytics methods (server logs, Javascript tags and cookies). This is needed because content increasingly exists outside of plain vanilla Web pages that can be tracked with conventional techniques. Problems include Flash, video, audio and other non-HTML Web content; venues like mobile, digital video recorders and interactive TV; widgets that migrate through social networks; and plain old cookie deletion. Web analytics vendors are striving to extend their technologies to capture these, but at some point you have to look for a different basic model. Content that can itself “phone home” rather than relying on the carrier medium could be the long-term answer.

- Second, content will be self-optimizing. This involves built-in tests and, perhaps, a sort of swarm intelligence where subsequent views are actually modified based on previous results reported by the content itself. Imagine a widget with a built-in A/B headline test: every time someone accesses it, the widget offers one headline or the other, and reports the result to a central server. (This could be done without transmitting personally identifiable information, so privacy issues are minimal.) Once a pattern emerges, the server could instruct the distributed widgets to only display the winning headline, or, better still, to start a new test. Even without a central server, each copy of the widget could still run its own test and, assuming it’s accessed enough times, adjust all by itself.

Who Owns The Data?

So far so good, and I think that’s plenty of reason to justify spending $1.8 billion for Omniture. But I also think Adobe was interested in the fact that Omniture controls so much of its clients’ data.

There is a battle brewing over that issue: like most Web analytics vendors, Omniture stores Web traffic data on its own servers and sells clients the ability to access that data. That didn’t raise any particular business issues when Web data was viewed largely in isolation. But as the Web takes an increasingly central role in customer contacts, marketers need to merge that Web data with their other customer information. Indeed, if you want to use that data to help guide customer interactions across channels, the data must be not just centralized but also updated in real-time. That means marketers either give all their non-Web data to their Web analytics vendor, or directly capture Web analytics data on their own servers.

The Web analytics vendors see this future and recognize that they’ll be more important to their clients, and thus able to charge higher fees, if they hold everything. Marketing automation vendors and in-house IT groups see the same future and recognize the threat to their own positions. Thus, the business-oriented marketing automation vendors (i.e., demand generation vendors: Eloqua, Silverpop, Marketo, etc.) already capture Web behavior in their own systems and integrate it directly with customer management. The big consumer-oriented marketing automation vendors (SAS, Teradata, Unica) also offer Web analytics, although perhaps less tightly integrated.

The problem here is that the Web analytics vendors and demand generation vendors are largely SaaS systems, so both hold the integrated customer data outside of the client’s own data center. It’s not clear that clients – especially big enterprise clients – will continue to accept this. The consumer-oriented marketing automation vendors already largely support on-premise configurations, so they may be the real winners in this battle. Yet bear in mind that looming behind the marketing automation vendors are the enterprise CRM vendors, who also offer largely on-premise installations. They may eventually gobble up the marketing automation business and the Web analytics data along with it. In that case, Web analytics vendors who hope to become rich stewards of centralized customer databases will be very disappointed.

Customer-Centricity Is Obsolete

I also think there may be one still deeper trend at play here, although this is more speculative. Let’s call it a shift from customer-centric to community-centric marketing. Since customer centricity has been the ultimate goal of marketers, or at least marketing gurus, for several decades, I expect some skepticism.

But think of it this way: marketing has always been about deploying and propagating messages to consumers. In recent years, we’ve striven and become technically more able to target those messages directly at individuals. Yet messages were never really limited to one person. Even if they were delivered privately, they could be shared directly through conversation, physical and electronic pass-along, and indirectly as consumers discussed their experiences with the company in general. Thus, there has always been a community component to marketing campaigns. In cases such as word of mouth programs, this was even the primary objective.

Today, of course, that sort of sharing has become increasingly important for every marketing project. Thus marketers have more need to track the secondary impact of their messages on the larger community. Happily, they also have more technology to do the tracking.

Here’s what’s interesting, though. Marketers will never be able to trace the exact path of each message from one person to another. And even if the data were available, there were no privacy constraints and they could handle the volume, marketers would still face the insurmountable challenge of that multiple messages influence final behavior. That is, they could never meaningfully say that one particular message was the single reason a customer did something. All they can ever do is to look at the many different messages a customer probably received and compare these with actual behavior. If the customer did what you wanted, the messages somehow worked.

If this sounds familiar, it should: it’s the classic problem faced by brand marketers in measuring the value of their investments. Their solution has always been to measure intermediate variables such as consumer attitudes, and to measure these through samples rather than by polling everyone in the market.

This brings us full circle to the panel-based attitudinal research at the core of the Omniture/comScore and Nielsen/Facebook deals. Once you recognize that what’s most important is the broad community impact of your marketing efforts, you fall back on those types of measures rather than attempting the impossible, and impossibly expensive, task of tracing the exact path followed by each individual. In other words, what we’re seeing here is not some Mad Men-style reversion to obsolete brand marketing behaviors, but a recognition that modern marketing is community-driven, so its measurements must be as well.

Now, if I can just find a reason to bring back the three-martini lunch….

RightNow Adds Social Community Capabilities (But Don't Expect Support Costs to Fall as a Result)

2009-09-17T18:10:00.005-04:00

Summary: RightNow has extended its social media footprint by purchasing HiveLive, which lets companies build public and private communities. It also released a benchmark survey showing that online channels (email, chat, Web self-service) don't do much to reduce customer service telephone calls.

In keeping with my recent posts about broader utilization of social media, I had a chat earlier this week with on-demand CRM vendor RightNow , who updated me on their recent purchase of HiveLive. HiveLive provides a social community platform, which means it lets companies build their own discussion groups, forums and such. HiveLive has many features to support business communities, both in terms of engaging with customers over issues such as product features and bugs, and in terms of building internal communities such as project teams.

HiveLive fits with RightNow’s vision of giving customers a seamless flow between community applications and a company’s traditional service systems. For example, if a question posted to a forum goes unanswered for a specified time, it can be escalated into a service system as a case to be handled by the company’s support group. If I understood correctly, RightNow and HiveLive can do this already.

We discussed deeper sharing, such as having answers developed in a public forum become part of a company’s internal customer service knowledgebase. That’s something RightNow may add in the future.

Our discussion veered onto other topics, and in particular how seriously companies really take the goal of improving the customer experience. RightNow shared a copy of its recent RightNow Multi-Channel Contact Center Benchmark Report, which was interesting in its own right.

One tidbit I found particularly intriguing was how few telephone service calls are “deflected” into email, chat and Web self-service channels. In the survey, most companies reported that fewer than 10% of customers in those channels would otherwise have made a phone call.

You could see this as bad news for the theory that having alternate channels available will reduce the need for call center agents. Or you could consider it good news that customers have more choices to pick the interaction method they find most congenial.

Another interesting item was that 55% of companies have some mechanism to gather feedback from customers, but just 10% of those use an IVR survey, which I personally consider the most effective way to gain broad participation. Again, you can treat this as good news (at least half the companies are trying) or bad news (just 5% of the total are doing it effectively). Either way, it’s food for thought.

Acxiom Uses Social Media Data to Segment Email Lists

2009-09-17T13:21:00.005-04:00

Summary: Acxiom's new social media marketing tool gathers public data about social media links and uses it to segment email lists. It's a different, and arguably more practical, approach to helping marketers take advantage of social media.

Acxiom last week released a new “social media marketing” solution called Relevance-X Social.

The press release is frustratingly vague (“With the ability to engage socially active customers and prospects in their preferred networks, marketers can link that knowledge to relevant communications that ignite conversations on behalf of the brand.”) But, on talking to the company, it turns out there is a pretty interesting product here. (Disclosure: I am a consultant to Acxiom, although I had nothing to do with this product).

What Acxiom has done – and this is so Acxiom – is to ignore the content posted in people’s social media comments or profiles, and just capture the “hard” information about links between people and membership in groups. Apparently (and I’m taking Acxiom’s word on this), this data is publicly available from most social networks (Twitter, Facebook, MySpace, LinkedIn, Plaxo and some more specialized ones) once you know someone’s email address. So Acxiom has taken its own database of more than 500 million email addresses and found the connections for each.

Relevance-X then accepts a marketer’s own email list – presumably its customers or prospects – and returns information from its own database about the matching names. This avoids at least some privacy and spam issues, since marketers are only given information about people they already have some type of relationship with.

The main application of this information is sending targeted emails. Thus, a bank might send one message to customers who belonged to a financial planning group, and a different message to customers who don’t. Other segmentation might be based on the total number of connections, membership in the company's own fan group, or information the company already knows from other sources.

The key point here is that Acxiom is using social media to execute traditional database marketing. This is quite different from most social media marketing products, which boil down to monitoring for posts on specified topics, responding to individuals, or to publishing messages to groups through the network itself. In a way, it seems rather old-fashioned to use social media data as a basis for outbound marketing. But for marketers struggling to find a practical use for social media, it's better than many alternatives.

(As Ed Park points out in a comment below, other vendors including RapLeaf and Unbound Technology also build similar databases by capturing social media links.)

Relevance-X includes two other components. One is the ability to tag the content it publishes – such as links within emails or messages posted to group pages – so marketers can track response. This is done with standard page tags and browser cookies, so what’s important here is not the technology but the ability to measure results. Again, this is something that traditional database marketers consider essential – and that other social media products sometimes struggle to accomplish.

The other component is a separate social media monitoring service that tracks keyword mentions, sentiments and trends, but on an aggregate basis rather than by tracking individuals. Acxiom is using a third party product for this. The goal is to supplement the direct response tracking with a more general measure of marketing program impacts.

Pricing for Relevance-x Social is based on the number of relationships (typically email addresses) researched and on the number, size and complexity of the campaigns being managed. It can be purchased on a campaign-by-campaign basis or annual subscription. Pricing for a basic campaign could start at around $25,000.

Adobe Buys Omniture: Good for Marketers, Bad for Marketing Automation Vendors

2009-09-15T17:43:00.009-04:00

Summary: Adobe's agreement to purchase Omniture illustrates the on-going convergence of Web content management and Web analytics systems. This puts pressure on marketing automation vendors, who also want to provide Web analytics and content management, and who are already being pressed by customer relationship management (CRM) vendors. That's a pretty unpleasant position.

Adobe's announcement that it will purchase Omniture for $1.8 billion makes perfect sense. As I discussed in July, marketers have a lot to gain from tight integration between a Web content management system (CMS) like Adobe's Dreamweaver and Web analytics and optimization like Omniture.

Let's take it as a given, then, that major Web content management systems will soon include integrated analytics. This sets up a new clash between marketing automation vendors and Web CMS vendors. One of Omniture's major selling points before the merger was its ability to combine information across all online marketing channels, and I think they were working towards adding offline channels as well. Although short-term priorities will probably shift now towards Adobe integration, I doubt their long-term ambitions in that direction will evaporate.

And even if the CMS vendors do restrict their focus to online, they will still be competing with Web CMS and analytics solutions from marketing automation vendors who realize that online is too big a sector for them to ignore. Even though both sets of vendors will need to provide some degree of openness so their clients can move data from one platform to another, both will really want to sell their clients the entire execution and analysis stack, and will tightly integrate them to encourage this.

I think I've made this point before, but I'll repeat it again: the marketing automation vendors are really being squeezed between the Web vendors on one side, and the CRM vendors on the other. This is a very unpleasant position, since both CMS and CRM vendors are much larger than the marketing automation specialists. It's hard to see how they can survive as anything but niche products in the not-too-distance future.

This position probably puts me at odds with industry analysts who see great opportunities for growth in the marketing automation space. (I'd point to specific examples but can't find any just this minute.) The general argument seems to be that low adoption rates mean there's plenty of unmet need that will eventually lead to sales. I agree that adoption is low -- but there's no guarantee that the marketing automation specialists will be the ones who fill the gap. Improved CRM or CMS offerings might actually meet marketers needs. And if since nearly everyone has or needs a CRM and CMS system, it will actually be easier for companies to use the expanded features in their existing systems than to buy a separate marketing automation product.

If anybody has a good counter argument, I'd be happy to hear it.

Two further thoughts:

- When I asked one of the marketing automation vendors recently whether he considered CMS vendors as competitors, he said he didn't because CMS vendors still sell primarily to IT, while marketing automation is purchased by marketing. Assuming this is true, then Omniture also helps Adobe by giving access to marketing departments.

- The acquisition may make marketing automation vendors more attractive acquisition candidates for CMS vendors wishing to beef up their marketing capabilities. Autonomy (Interwoven), Open Text, and EMC (Documentum) could all swallow a Unica, Aprimo or Alterian without stopping to chew.

A Heartwarming Story of Social Media, Family and QlikView

2009-09-11T14:08:00.008-04:00

My son works as a sports researcher at a cable television network. His job seems mainly to be looking things up in online databases and, on broadcast days, watching several games simultaneously. It's nice work if you can get it.

In terms of technology, Microsoft Word and Excel meet most of his needs. But I did introduce him to QlikView several years back, and he learned enough to analyze statistics for his college basketball team. When QlikView introduced its free Personal Edition, he decided to use it at work to track a database of college recruiting prospects. Despite (or because of) his lack of technical background, and without any formal QlikView training, he created a very nice system to find prospects based on different characteristics and create ad hoc statistical summaries.

The centerpiece is a map that displays the number of recruits by state. Because this is QlikView, the map is automatically redrawn each time he makes a selection: so he can see recruits for a certain position, or going to a particular school, or whatever. This is the sort of thing that gets sports people excited. In fact, his colleagues were so pleased that there’s talk of using a version of the map on-air.

The only fly in this ointment was that neither he nor I could find a way to get the map to show the numbers for all the states simultaneously. We could get different sized bubbles reflecting the state counts, and we could see the actual figure for each state by hovering over it. Recognizing my own limits as a QlikView developer, I asked for help on the QlikView user forum and from friend on the QlikView consulting staff. The consultant didn't think it was possible, so we let the matter drop.

Fast-forward one month, to yesterday, when I received a notification that someone had responded to my forum query with a solution. It took a couple of tries, and some additional help from forum members, to get it to work on my son’s map. But you can imagine how pleased we were when we finally saw the map as originally envisioned.

This story illustrates quite a bit about QlikView. Building the original map was easy – my son was able to do it with little help, even though QlikView was doing some very sophisticated processing under the hood. (Specifically, on-the-fly data aggregation along user-defined calculated dimensions, without touching the underlying database). But getting the system to do exactly what he needed did take some special knowledge. (He had to use the number of students by state as his primary dimension, not the X/Y map coordinates.) The adjustment took just a few minutes, but only a QlikView expert would realize that’s how you do it.

To generalize a bit more broadly, then, QlikView really does enable non-technical users to do amazing things, and it really is as powerful as its advocates (myself included) like to claim. But users do need some training to be effective – something that advocates are sometimes reluctant to admit.

The story also illustrates the value of social media. QlikView’s forum is an amazing source of help for users of all skill levels. It works because QlikView has a community of highly engaged advocates who are both expert in the product and willing to help each other.

The forum provides several strategic benefits for QlikView: it helps users become successful (thus driving wider adoption); it lets users succeed even if they don’t receive proper training (which many will not, particularly among users of the free Personal Edition); it reduces the need for paid support staff; and it provides a window into common problems and requirements. It also reinforces the commitment of the engaged users themselves, by publicly rewarding their contributions. Although I’ve never discussed the forum with QlikView management, they obviously understand these benefits well enough to justify their continued investments in it.

This isn’t to say that social media would provide the same value to everyone. QlikView fits several specific conditions – enthusiastic expert users, problems that can be solved fairly easily, etc. – that won’t always apply. But as an example what social media can sometimes accomplish, QlikView is a great case study waiting to be written.

Why Social Media Really Matters

2009-09-09T22:10:00.006-04:00

Summary: marketing has shifted steadily over time from passive to active consumer engagement. Social media is the latest stage in this evolution. Marketers need to master new skills at each stage; as they do, advertising budgets will shift to take advantage of the new medium's increased effectiveness.

Of all that research I mentioned last week, two pairs of facts stood out. One was the disparity between the time people spend on online activities (20% to 30% of total media time) and the share of advertising expenditures spent online (10% to 15%). Although some difference may be justified by the differences in media effectiveness, this still suggests to me that ad spending will continue to shift into online media until the spending is roughly proportional.

The other disparity was that search accounts for 5% of online time but 60% of online ad spending. Some of this may be due to the fact that it’s much easier to buy search advertising (think Google AdWords) than other types of online ads. But I think the primary reason is that search serves as a gateway to other Internet activity—so marketers wishing to drive traffic to their own Web sites need search advertising to make this happen.

The final, related factoid is that social media have grown from virtually nothing to nearly 20% of online time over the past few years. This matters because social media are an alternative gateway to finding Web content: instead of doing a search, I can ask my online community for information or recommendations. Thus, social media present a major threat to search advertising revenues. Although social media currently gather under 3% of online advertising, this will surely change as marketers work to find ways to exploit its potential. If you’ve been wondering why Google should be concerned about Twitter and Facebook, that’s your answer.

These shifts from offline to online advertising and from search to social media suggest a progression through four stages:

1. mass media, or broadcasting: this began in the late 19th century with the emergence of national brands and national print media. Today it is represented primarily by television. You can date TV-dominated era from, say, 1950 to 1985.

2. database marketing, or, more poetically, narrowcasting. This is about direct contact with segmented groups of customers. Date it from 1985 to 1997.

3. search marketing. This is characterized by use of search engines to drive traffic to Web sites. I’m being arbitrary but let's date it from 1998 to 2007.

4. social marketing. This is use of social media to connect with consumers. I’ll date it from 2008, although effective marketing uses of social media are just starting to emerge.

As each new medium has emerged over years, some portion of advertising dollars has shifted from the preexisting media. Of course, the old media don’t go away completely. Indeed, traditional mass media (including radio and print as well as TV) still account for the largest share of advertising spend.

The four media differ along several dimensions. These include:

- consumer engagement. Broadcast is the most passive medium; essentially, it’s yelling at people who may or may not be interested in the message. The audience in database marketing is still passive, but it's targeted at segments that marketers have some reason to believe are interested. With search marketing, the consumer takes a somewhat active role in deciding what to look for, even though the ads themselves are still placed by marketers. With social marketing, control is directly in the hands of consumers, who decide which messages they will receive.

- authority. I find this an intriguing concept. Basically it has to do with how consumers decide which messages they should believe. In the mass media, authority is essentially conferred – people believe things because they are "seen on TV" or have the "Good Housekeeping Seal of Approval". With database marketing, the medium (typically direct mail, more recently email or telephone) doesn’t itself confer much authority, so the message itself must command attention because it’s relevant to the consumer’s needs of the moment. This relevance motivates the recipient to actively explore the marketing offer and assess whether its source is credible.

In search marketing, the source of authority is implicitly based on the group itself: Google PageRank is largely determined by the number of links to a Web site – a version of “wisdom of the crowd”. With social marketing, group-based authority is explicit: consumers can see the number of followers, recommendations, reviews and other ratings provided by group members and decide whether to trust them.

- post-sale relationship. This defines the relationship between the marketer and consumer after the initial purchase. In the mass media world, the relationship barely exists: customers use the product and, hopefully, like it enough to buy it again. At most they ask for service if there’s a problem. With database marketing, post-sales contacts become important for cross-sell, upsell and retention. Indeed, this is where database marketing truly shines because it’s where rich data is available for targeting and relationship building.

Search marketing reaches a new level of engagement because customers can interact directly with the company Web site. This lets them initiate transactions, send messages, and in some cases actually change product configurations such as setting telephone features. With social marketing, consumers take direct control, initiating engagement themselves and, even more important, publicly sharing their engagements with other community members.

- marketing focus. This shows the critical task that marketers must master. With mass media, the primary marketing goal is selecting a message that builds a successful brand. For database marketers, the key skill is effective segmentation. Search marketing is primarily focused on developing content, both to attract traffic via organic search and to meet consumer needs once they appear at the site. For social marketing, the ultimate goal is convincing consumers to become brand advocates. Content is still important, of course, but its nature shifts from information that visitors consume to tools like widgets that empower them to share their enthusiasm with others.

The following table summarizes these dimensions.

medium	consumer engagement	authority	post-sale relationship	marketing focus
mass media (broadcasting)	passively exposed	conferred	service / support	brand message
database marketing (narrowcasting)	targeted	relevance-based	cross sell / upsell / retention	segmentation
search marketing	activity-triggered	implicit group	Web self-service	content
social marketing	consumer-controlled	explicit group	public engagement	empowerment

At the risk of stating the obvious, the table shows a steady increase in consumer empowerment from the passive receipt of mass marketing message to active control in social media. Because this is a fundamental change from traditional mass media marketing, it has several important implications:

- for each new medium, marketers must learn new skills.

- as marketers learn new skills, they will use the new medium more effectively.

- as marketers use the new medium more effectively, it will receive increasing portions of their ad budgets.

- since social media is very new, its share of advertising budgets will continue to grow for some time.

In short, social media matters not because it's cool, but because it offers marketers a new and more effective way to reach their consumers. Marketers who fail to master the required skills will fall behind marketers who do.

Show Me the Numbers: Hard Data on Internet Use and Media Spend

2009-09-03T08:06:00.006-04:00

Summary: Here are links to about twenty studies with statistics on online media consumption and advertising spend. Many are contradictory, but it's clear that marketers need to invest in social media, which might eventually replace search as the primary way that customers find them.

I’m sitting on a panel next week that will discuss long-term marketing trends. Naturally I have plenty of opinions on the topic, but just for fun I decided to scare up a few facts to reinforce them. This led to a highly entertaining, though uncompensated, scavenger hunt through the Web.

You won’t be surprised that there’s plenty of data out there. But I thought I’d share some of sources I found for answers to my basic questions, and perhaps a couple of insights I hadn’t quite considered before.

1. How are people actually spending their time online? And, in particular, are social media as important as industry gurus claim they are?

Probably the most comprehensive study along these lines was Global Faces and Networked Places, released by Neilsen in March 2009. This showed that as of December 2008, search was still the most common Internet activity (used by 85.9% of the online population), compared with just 65.1% for email. Social networks and blogs are the fastest growing application, now exceeding email with a participation rate of 66.8%.

Digging a little deeper within the social media category, the women’s blogger community BlogHer reported in its 2009 Women and Social Media Study that as of March 2009, 75% of women participated in social networks, compared with 55% who read blogs, 40% read message boards or forums, and 16% update status on platforms like Twitter. (The Twitter figures are surely much higher by now.) Nineteen percent actually publish their own blog while 29% comment on blogs. This reinforces (at least for women) the sense that social networks are rapidly emerging as the dominant Web activity.

Netpop Research reinforces this point in Media Shifts to Social, which found that as of September and October 2008, communications (including email, instant messaging, blogs and photo sharing) had risen to 32% of online time from 27% in 2006. Entertainment (games, videos, and “accessing Web sites for fun”) dropped from 49% to 20% in the same period. Sadly, the public materials don’t tell us where the rest of the time went. Netpop agreed with BlogHer’s general participation figures, reporting that 76% of American broadband users participate in social media (105 million of 133 million total).

By contrast, the Pew Internet & American Life Project Survey in December 2008 found only 35% of adult online Americans had a social media profile. Based on the other studies, this seems low – although a social media profile is a more restrictive requirement than the other definitions apply. Pew did find that 65% of American teens had profiles.

One drawback with these studies is that they only look whether people participate in different activities, not how much time they spend. The Online Publishers Association has tracked time since 2003 in conjunction with Nielsen. Its most recent report shows that in the past year, time spent on “community” applications like Facebook and Myspace has more than doubled from 8.8% to 18.5% of the total. (Blogs are also apparently part of “community”, although this isn't stated explicitly.) Since total time online has also expanded, time per visitor has grown even more.

Despite the growth of community, the OPA still shows content (40.6%) and communications (25.2) asl the dominant uses. Commerce (11.0%) and search (4.7%) account for the rest.

Looking at older OPA figures, which are available on MarketingCharts, the biggest change is the reduction in communications, which had a 46% share back in 2003. At that time, social networks were lumped into content, which had a 34% share. Today, the combination of content and community accounts for 59% of users’ time.

The position of blogs is ambiguous because most reports lump them in with other social media. Forrester’s just-published The Broad Reach Of Social Technologies contains a table, available in Josh Bernoff’s Groundswell blog, shows that social media “joiners” rose from 25% to 51% of the online population in the past two years, while content “spectators” (which includes blog readers) grow from 48% to 73%. But that’s pretty much the opposite of the BlogHer ratios mentioned earlier (55% blog readers vs. 75% social media participation). So the jury is still out.

Summary: What does it all mean? Here are my main observations:

- social media are indeed booming, but still account for a minority of online time. So even though marketers need to find ways to use social media for business purposes, they still have time to figure it out.

- everybody uses search, but they don’t spend much time on it. Search still earns the bulk of online advertising fees because it's a gateway to other content, and perhaps because it's the easiest Web advertising to buy and optimize. But its share may erode as social media provide alternative paths to desired content.

- blogs are probably growing more slowly than other social media, but they still account for a substantial portion of online activity. Marketers might be investing in blogs than they are really worth.

2. How does consumption of online media compare with consumption of other media?

Council for Research Excellence’s Video Consumer Mapping Study found more than five hours of TV watching per day (43% of total media time), vs. 80 minutes of Internet usage (10.7%). The Internet figure seems low, but this was a very careful and sophisticated study. These figures may only include the time when a medium had the consumer's primary attention -- so just having an instant message window open on your desktop wouldn't count.

Magazine Publishers Association reported the share of time with different media, although you have to read the table carefully because it reports minutes spent by of “users” of each medium rather than the average across all consumers. But the MPA also points to a study from MRI MediaDay (again published on Marketing Charts) showing the percentage of consumers using each medium. The combined figures show an average consumer spends about four and a half hours of TV per day (47.5% of total time) but only one and half hours of Internet (15.2% of total).

Incidentally, the MPA also argues that time alone isn’t the best measure of advertising value, since some media are more influential with their consumers than others. This is a point worth considering. The MPA bases this on Deloitte's State of the Media Democracy Survey, which unfortunately I couldn't find posted. The MPA provides other, related data in its 92-page guide Magazines: The Medium of Action.

A Forrester chart, posted on CNET shows five years of data on time spent per week with major media. The chart shows that Internet has more than doubled since 2004 and nearly caught up with TV. It reports about two hours per day with TV, accounting for about 34% of total time vs. 33% for Internet.

The Media Audit gives yet another set of statistics on time by medium. It also finds that TV is just slightly ahead of online, at 33% vs. 29% of time respectively. But it pegs TV viewing around three and a half hours per day.

Summary: These are serious conflicts, which I see no way to reconcile. Two studies show TV and Internet each accounting for about one-third of media time, while the other two show TV accounting for about 45% and Internet for 10-15%. The wide variations in estimated total time are also, um, noteworthy.

3. What is the share of ad spending for different media?

PriceWaterhouseCoopers and Wilkofsky Gruen Associates report in their Global Entertainment and Media Outlook: 2009-2013 (via eMarketer) that ad spending will total $170 billion this year, including $62 billion (36%) for TV and $25 billion (15%) for Internet and mobile.

Zenith Optimedia pretty much agrees: its October 2008 report shows U.S. spending at $179 billion for 2008, with a worldwide share of 37.5% for TV and 10.2% for the Internet.

On the other hand, the Direct Marketing Association shows spending at $339 billion total in 2008 including $75.9 billion (22.4%) for TV and $39.4 billion (11.6)%) for “new media and other”, which presumably includes Internet. The DMA also breaks out the portion of each medium used for direct response. It must have a pretty generous definition, since it puts 52.1% of the total in that category.

WPP’s groupm estimates in its Interaction: Addressable, Searchable, Social and Mobile study (via MarketingCharts) that interactive media’s share of total advertising is 14% in North America and 13% worldwide for 2008.

Summary: it’s hard to compare these figures, but everyone agrees that online spending is somewhere between 10-15% of the total, while TV gets 30% or more. Assuming that consumers spend about the same amount of time with both, and that advertising on both is equally effective, online media should get a larger share of ad budgets.

4. Where are marketers moving their budgets?

Forrester and Marketing Profs report B-to-B Marketing in 2009 shows that business marketers most commonly use their company Web site, email, public relations and trade shows. Another table from the same study, referenced by The Event Marketing Insider, shows marketers plan their greatest increases for the company Web site, search marketing, online video and Webinars.

A Forrester chart posted on Mashable shows interactive marketing spend by category, projected from 2009 to 2014. Search marketing accounts for about $15 billion of $25 billion total today and will grow 15% per year vs. 17% for the total. Mobile marketing and social media will grow faster, but will only expand from 4.4% in 2009 to 8% in 2014. Email marketing and display advertising account for the balance.

Online Marketing Blog surveyed marketers about their planned digital marketing channels in 2009. The top three were: blogging (34%), microblogging (Twitter) (29%) and Search engine optimization (28%).

Summary: marketers are moving their budgets online, primarily into the traditional channels (blogging, Web site, search).

4. Which media most affect purchase decisions?

Marketing Sherpa found buyers making complex purchases were relying more heavily on virtual events (Webinars, trade shows), search engines and Web sites, and less heavily on email, face-to-face trade shows, video programming and advertising.

Forrester (via ReadWriteWeb) found emails from friends, consumer reviews and search engines were the most trusted information sources, while personal blogs, company social networking profiles, and company blogs are least trusted.

TNS Media Intelligence in Digital World, Digital Life (via eMarketer) found that recommendations by friends, online news, newspapers and TV news were the most trusted information sources, while user forums, company brochures, free newspapers and private blogs were least trusted. Product comparison sites, industry Web sites and company Web sites were in the middle.

Summary: Marketers may be overspending on blogs and search. Social media could be a better investment -- if we could find a way to use them effectively.

Net-Results Simplifies Demand Generation for Small Business

2009-09-01T15:15:00.009-04:00

Summary: Net-Results is simpler to use than comparable demand generation systems because it applies the same features to many tasks. The system is aimed at small business but offers an interesting design lesson for everyone.

When Net-Results’ showed me their marketing automation system, the demonstration ended so quickly that I wondered what was missing. But on reflection I realized that Net-Results offers a full set of demand generation functions. The demonstration was short because the system uses only a few features to deliver them. In an industry where every competitor is striving for grater ease of use, stand-out simplicity is an impressive achievement.

The key to Net-Results’ approach is to build everything around segments. Email campaigns are targeted at segments; Web visitors are classified into segments; behavior alerts are triggered by segments; lead scores are assigned to segments; leads are sent to the sales system based on segments; reports are run against segments. This simplifies the system in two ways: marketers have fewer features to learn, and they can reuse their work across many functions.

Let’s run through the standard demand generation process to see how this works in practice. This process has five functions: send emails to prospects; capture responses on landing pages; score leads; send qualified leads to sales; and nurture non-qualified leads with multi-step campaigns.

Prospects enter Net-Results from external Web forms (more about that later), file imports, manual data entry, or Salesforce.com synchronization. They’re assigned to campaigns by defining entry conditions for campaign steps, which the system calls “actions”. These conditions are not themselves segments but can be copied from existing segment definitions or built with the standard segment-creation interface.

Campaigns can have multiple actions, each with its own entry conditions. Actions can be arranged hierarchically with several "children" attached to the same "parent". Each lead is assigned to the first "child" action whose entry conditions it meets. This allows leads to follow different paths within the same campaign.

The approach imposes some limits, since different branches cannot be reunited. But it will meet the needs for most marketers. Net-Results plans to remove the limits by allowing actions to send leads directly to other actions, within or across campaigns.

Users can also specify a waiting period between actions, and whether to send alerts when a lead qualifies for an action. The actions themselves can send an email, adjust a lead score, or send the lead to Salesforce.com. Since entry conditions can also accept leads into nurture campaigns, the Net-Results actions by themselves account for four of the five core demand generation functions.

The fifth core function, capturing Web response, is Net-Results’ main deviation from standard demand generation techniques. Nearly all demand generation systems let marketers create and deploy landing pages outside of the company Web site. Net-Results does not. Rather, it copies data captured on existing Web forms and posts it to the Net-Results database. This requires users to add a bit of Javascript to company Web pages.

Loading data from existing Web forms requires mapping the original form fields into the Net-Results databases. Net-Results makes this as simple as possible by reading field names on the existing form and suggesting Net-Results fields that are likely to match. Such mapping may sound a scary to serious technophobes, but it’s less work than building a form from scratch.

Net-Results argues that its approach avoids the “vendor lock-in” that comes from using forms hosted by the demand generation vendor. I guess that’s true, but doubt it’s important to most marketers. On the other hand, the Net-Results approach means marketers cannot create new forms without help from whoever runs the company Web site. This strikes me as a significant drawback, which other demand generation systems are expressly designed to avoid.

I wouldn’t be surprised to see Net-Results add a form builder fairly soon, although they didn’t say they were planning to. The system already has an email authoring tool, which includes a graphical editor and works from user-defined templates. Extending this to build Web forms should be pretty simple.

The Javascript tracking code also allows Net-Results to capture the behavior of Web visitors. This is another standard feature for demand generation systems. Here’s where segments reappear, since Web behavior can be used in segment definitions and system reports are run against segments.

Running reports against segments may not sound too exciting, but it greatly simplifies marketing analysis. Practical applications include reports to salespeople about their own accounts and reports on campaign results. Each report can run and emailed to specified users on a user-specified schedule. Reports include graphs as well as tabular data. The system's main reports all relate to Web behavior: visitors, traffic source, search terms, and pages viewed.

The Web visitor report is particularly impressive: it's almost a separate application, similar to the tools that other demand generation vendors use to give salespeople a view of Web activity. Users start with a list of visitors (within a segment, of course) showing key information including source, name, email address, telephone, company, most recent visit date, pages viewed, and visit duration. They can then select a lead and drill into the details of current and previous visits. They can also take actions including sending the lead to Salesforce.com and issuing an alert. Marketers could easily extend direct access to salespeople, since system security could restrict the salesperson to her own leads. An incremental user costs just $25 per month.

Net-Results can also issue automatic alerts, again based on entrance into a segment. Alerts can be directed to one or more email addresses and are summarized in a periodic report.

So what about building the segments themselves? There’s no truly easy way to define complex selections, but Net-Results does a reasonable job of balancing simplicity with power. Segments can have general attributes including security (specifying which user groups can access the segment), automatic exclusion of known Internet Service Providers (so reports can only show visitors from identifiable companies), automatic inclusion of only known contacts (to report only on previously-identified individuals), and parsing of “get” variables from the incoming Web address (to capture information passed within the URL). Treating these selections as attributes reduces the complexity of the segmentation statement itself.

Users build the segmentation statements by selecting data categories (visit activities, contact attributes, campaigns, lists, Web forms, traffic source) and then choosing attributes relevant to each category. For example, attributes for Web visits include pages visited and duration, while attributes for contacts include name, company and job title. Many vendors use a similar approach, which I consider the best method for helping non-technical users to create complex segmentations.

Users can group multiple criteria into blocks. All conditions within a block must be met for a lead to qualify; a lead must qualify for at least one block to qualify for the segment. (In more technical terms: the system uses "and" conditions within each block, and "or" conditions between blocks.) Although some subtle queries can’t be created with this approach, it should meet the vast majority of marketers’ needs. Few demand generation systems offer more power, and many offer less.

Once a segment is defined, users can view the records it selects to check that it works as intended. They can then save the segment and assign it to alerts or reports.

Is Net-Results really simpler than other demand generation systems? To some extent it depends on your definition. Net-Results supports many marketing functions with relatively few features. This is one type of simplicity. But different features tailored to different functions could, at least in theory, make other systems more efficient at each task. This is another kind of simplicity. In practice, I felt that Net-Results’ shared features were just as efficient as specialized features used in other systems. So, yes, I ultimately think Net-Results will be simpler for most users.

Net-Results’ drive for simplicity is based on its target market of small businesses. Many of its clients have just one marketer on staff. These people don’t have the time or resources to use a complicated system, and may not need the refinements, such as rule-driven dynamic content within emails, that Net-Results doesn't provide.

Pricing is also aimed at small businesses. Fees are based on Web page views and start at $99 per month for up to 1,000 views. Most customers pay $249 per month for up to 50,000 page views. Emails costs are additional and hover around one cent per email based on volume. This is comparable to small business email champion Constant Contact. No contract is required and Net-Results offers a 14 day free trial.

The Net-Results system was launched in April 2009 and the vendor says it now has “hundreds” of clients. Some have converted from a simpler predecessor product that was launched in 2006.

Pedowitz Group's Sweet Suite Builds the Missing Link between Social Media and Marketing Automation

2009-08-23T17:05:00.004-04:00

Summary: Pedowitz Group’s Sweet Suite captures social media comments and forwards them to a company’s primary marketing automation system. It’s a small but critical step towards integrating social media with other marketing programs.

Marketers and the vendors who support them are working feverishly to harvest the opportunities created by social media. The result has been a profusion of single-function products that provide one part of a comprehensive solution. Probably the most common are products that make it easier to post comments or share links via Facebook, LinkedIn, Twitter and other public forums. Many demand generation vendors now offer something along those lines.

But social media are for interactions, not broadcasts. Products to monitor different communities for mentions of a particular topic provide the first step towards starting a dialog. These too are increasingly common, although most still operate outside of the marketing automation suites. Many of the monitoring systems also help users post responses to the messages they find.

But truly integrating social media with other marketing activities requires considerably more. Social media events must be logged within the core marketing system, linked in that system to other information about the same individual, and responded to through standard marketing system campaigns. In other words, social media must be managed like any other marketing medium.*

Sweet Suite, a product from the Pedowitz Group, addresses precisely this need. The system scans Twitter, Facebook and LinkedIn for mentions and can make automated replies when it finds something. It can also generate a “social media score” for each individual, using whatever formula the marketer specifies, and provides a dashboard to track over-all social media results.

But what's really important is that Sweet Suite reads the public profile of the mentioner, extracts key information such as name and number of followers, and sends the data to a demand generation system. From that point, the demand generation system can use the data like any other input, for lead scoring and campaign selections. Thus, the critical connection between social media and "normal" marketing processes is complete.

Sweet Suite currently connects with Eloqua via an API, and is likely to connect with other systems in the future. The Eloqua interface also tries to link the commenter to existing records in the demand generation database, generally by looking for a match on the social media username. Sweet Suite can also match on an email address if it’s captured in a social media form.

Sweet Suite can also receive, parse and reply to text messages, and of course send the resulting data to the demand generation system. Pedowitz is working on a spider to scan blogs and other Web sites and add their data as input.

Suite Sweet is still technically in beta, but the product is in production at four clients. Current pricing is set at $1,000 per month regardless of number of users or data volume. The system is sold as a hosted service.

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*Or perhaps not: some social media evangelists might argue that social media is so radically different from everything else that it can’t be managed in the same way. But while I do think that the details of the treatments will differ, I see no reason they can’t be brought into the standard marketing infrastructure. The advantage of this integration is that the information gleaned from the social media interactions becomes available to guide messaging in all other channels, and vice versa.

Thinking a bit more deeply about social media integration, the closest existing analogy is probably the telephone call center. Like social media interactions, telephone calls currently must be handled by human agents rather than automated replies. This suggests that tools used to enhance phone agents’ effectiveness, such as context-sensitive recommendations and standardized scripts, can also help to guide social media agents.

Social media interactions are somewhat more structured than telephone calls, so it may eventually be easier to automate them fully. But even if human agents remain involved, both the social media system and other channels will benefit from having all their data in the central system—just as today’s marketing systems benefit from incorporating call center histories.

Aprimo Marketing Studio Expands the Scope of Marketing Automation

2009-08-21T17:29:00.013-04:00

Summary: Aprimo Marketing Studio includes traffic generation features missing from nearly all existing marketing automation products. This broader scope should become standard as marketers try to truly integrate their programs.

Aprimo is in the early stages of launching Aprimo Marketing Studio, a new Software-as-a-Service marketing automation suite that is separate from the existing Aprimo product.* The new offering is designed to support all stages of interactive marketing, starting with traffic generation from paid search, Web banner ads and blogging, and continuing with visitor behavior tracking, landing pages and forms, interactive dialogs, multi-step email campaigns, lead scoring and CRM integration. These are supported with Web analytics and extensive marketing operations features including workflow, digital asset management and financial analysis.

If you read that list quickly, it sounds pretty much like every other marketing automation vendor. But in fact it’s a substantially broader scope than I’ve seen in other products.

- Consumer-oriented systems generally limit themselves to outbound email and multi-step campaigns, and sometimes provide real-time recommendations to call centers and Web sites.

- Business-oriented (demand generation) vendors add some Web support through visitor tracking, landing pages and forms, but even they rarely do much with other “inbound marketing” channels including paid search, banner ads, search engine optimization and blogging.

- Both sets of vendors generally do a decent job with asset management, Web analytics and other reporting, although only the consumer-oriented systems tend to offer serious support for planning, workflow and detailed financial analysis.

- Neither group provides tools to build and manage a major corporate Web site (generally called "Web content management", although I've labeled it "Web site management" in the following table). The landing pages, forms and related content management that these systems do provide are only designed to let marketers supplement an existing site. I'm increasingly convinced that effective interactive marketing will eventually require the marketing system to run the Web site.

- Neither group has meaningfully integrated social media monitoring and interactions beyond making it easy to share posts to Twitter and Facebook, although Alterian’s Techrigy acquisition (see my related blog post) and Pedowitz Group’s Sweet Suite (see yesterday's post) are steps in that direction.

I've summarized this in the following table. Of course, I’m generalizing about sets of vendors so there will be individual exceptions.

functionality provided:	consumer marketing automation	business marketing automation (demand generation)
traffic generation:
- paid search management
- banner ad management
- search engine optimization
- blogging
- outbound email	x	x
- social media monitoring, intervention and analysis

relationship management
- Web landing pages and forms		x
- multi-step campaign flows (including trigger, event-driven)	x	x
- real time recommendations to external systems	x
- lead scoring		x
- sales automation integration		x

analytics
- Web visitor tracking (individuals)		x
- Web analytics (aggregate behaviors)	x	x
- general campaign reporting	x	x
- predictive modeling and advanced statistics	x

operations
- marketing planning	x
- content and digital asset management	x	x
- Web site management
- workflow	x
- detailed cost analysis	x

In short: both groups are quite weak when it comes to inbound marketing and social media, and the consumer marketers fall glaringly short when it comes to integrating with Web sites.

The business marketing systems have their own weaknesses, particularly in operational support. But given the obvious and growing need to integrate Web marketing with everything else, the consumer systems’ gap strikes me as more important.

I’m even more concerned because there has been relatively little innovation among the consumer marketing automation vendors in recent years. They have competed mostly by extending and refining existing features than by moving into major new areas. The demand generation vendors have been much more dynamic.

There are good business reasons, or at least explanations, for the consumer marketing vendors' strategy. Number one is probably that their clients haven’t been pushing them to do more. But these gaps in their capabilities ultimately make them vulnerable to new, more comprehensive competitors.

This brings us back to Aprimo Marketing Studio. The new Aprimo product would fill every box on my table except social media, predictive modeling and Web site management. This scope makes it truly different.

Now, promising these features and implementing them effectively are very different things. I can't judge the new Aprimo system because I haven't had a detailed demonstration and the system won't start serving live customer until next month. (The official launch will be in November at the Salesforce.com Dreamforce conference.) But what matters for now is the vision. Even if Aprimo doesn’t execute it immediately, someone else eventually will.

I already mentioned that Marketing Studio is designed as a true Software-as-a-Service system. As discussed in an earlier post, this is unusual for a consumer marketing system – Entiera and Neolane are the only other pure SaaS products I can think of – although it’s standard for demand generation products. Aprimo already serves both types of marketers, so it's a logical candidate to bring SaaS to consumer marketing systems. But other consumer-oriented vendors are also moving in this direction. When you're evaluating those products, the question to ask is whether the vendor has truly reengineered the system to take advantage of SaaS economies, or is simply running its existing software in a hosted mode and sending a monthly bill.

Aprimo Marketing Studio is aimed at mid-size and larger companies. Pricing begins at $4,000 per month for the base version with up to 10 users and 250,000 emails. The marketing operations module adds another $2,500 per month and other modules are priced at $1,500 each. There will also be fees as clients add users and email volume. At the end of the day, Aprimo is expecting the average client to pay $50,000 to $75,000 per year. This is pretty standard territory for consumer marketing systems, but well above the median for demand generation vendors.

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* The new product has its own Web site, which you can reach here. The site offers a free copy of an excellent Forrester Research report on interactive marketing, which is well worth the inevitable Aprimo sales call that will follow.

Unica 8.0 Offers New, More Unified Interface

2009-08-20T18:19:00.003-04:00

Summary: Unica's new release has few functional enhancements but offers better integration of previously separate components.

Unica on Monday officially launched the 8.0 version of its enterprise marketing suite. The main thrust of the new release was visual – a new company Web site and graphics and, more important, a new interface that finally unified the various components the vendor has built and purchased over the years.

I can’t get too excited about the new visuals, which stress the “U” in Unica in phrases like “Discover the U in business”. The unified interface is better news, although it corrects a problem that I feel should have been solved long ago.

The new release does provide some substantive improvements. The most important is a central offer repository linked to cell-level campaign planning. This makes it easier to track the use and performance of standard offers. The planning is also now integrated with actual campaign designs, saving marketers some work as they move from one stage to the next. That’s good, although I think it’s fair to note that it's been two years since Unica purchased its MarketingCentral planning system.

The other major news involves improvements in the company’s eMessage email system. These include a central content repository, conditional text within system-built emails, better response tracking, and deliverability monitoring services from Pivotal Veracity. Integration is still a bit of an issue here – the email content repository is separate from the central offer repository, the conditional text rules engine is separate from the campaign rules builder, and conditional text rules cannot be shared across documents.

On the other hand, Unica has tightly coupled email execution to its campaign suite: in fact, the only way users can send emails via anyone except Unica is to export a file. Previous versions of the system allowed tighter integration with external email services. Unica sees this as simplifying the lives of its clients, although I suspect some may prefer to choose their own provider. The company said that 50 to 100 of its 500-600 campaign clients currently use its email delivery service. The balance will have to convert when they upgrade to Unica 8.0, or resort to the afore-mentioned file exports.

Pricing remains largely the same as previous Unica releases: clients pay for individual modules based primarily on database size. The one substantial change is the email services will now be based on email volume.

Infusionsoft Pushes the Right Buttons for Small Business Marketing

2009-08-06T18:52:00.004-04:00

Summary: Infusionsoft knows exactly how to sell marketing automation to small business: promise more revenue, less work, strong support and a low price. The system is designed for entrepreneurs, not full-time marketers.

Since marketing automation for small business was on my mind last week, I checked in with the good folks at Infusionsoft, whose 15,000 customers make them leaders in the field. I ended up chatting with Scott Martineau, company founder and VP Product Management. It was a helpful conversation for a few reasons.

It solidified my understanding that Infusionsoft is aimed at REALLY small companies – typically four or five employees, and very rarely more than 25. Typical clients are selling business services such as training or consumer services such as landscaping, dry cleaning, legal help and niche publishing. Those companies have no dedicated marketing staff and often no specialized sales person. This makes them significantly smaller than buyers of most of the systems I write about – which is something to bear in mind when looking at how Infusionsoft does things.

It showed that Infusionsoft has mastered the art of a clear, simple value proposition: “Fix Your Follow-up, Double Your Sales. Guaranteed.” Um, any questions? That particular headline is inside their site, but the one on the main page (“One ‘Killer App’ to Grow Your Business Fast”) makes a similar promise about growth.

(As to the guarantee itself, the company Web site says “When you use Infusionsoft to fix your follow-up with prospects and customers, you will double your sales. If after 12 months you have not doubled your sales and you’re not confident with the progress you’re making, you can cancel the software and we’ll refund half of your first year’s subscription fees.” Although there were originally some conditions on the guarantee, the company removed them all last month.)

As Infusionsoft’s main headline reinforces, small businesses want as few systems as possible. Martineau said that Infusionsoft typically replaces separate CRM, email, shopping cart and possibly affiliate tracking systems. But this is where it’s worth remembering that Infusionsoft is working with very small businesses: larger firms might have greater need for separate systems.

Even Infusionsoft doesn’t attempt to do everything. It doesn’t run the company Web site (which most small businesses have someone else do for them) or provide accounting (a market dominated by Intuit QuickBooks).

Nor, more surprisingly, does Infusionsoft provide inbound marketing (search engine optimization, paid search tracking, Web analytics, detailed activity tracking, blogging, etc.) features to help generate initial Web leads. I can think of a few possible explanations: Infusionsoft clients don’t do much inbound marketing, or they let their Webmasters do it for them, or they are happy with free tools like Google Analytics. Marketers at larger companies may be more demanding. Martineau said his main priorities are elsewhere, in better email and general ease of use.

Small businesses need marketing support. Infusionsoft’s original solution was personal set-up assistance funded by a $2,500 to $5,000 implementation fee. But of course the fee itself was a barrier to sales. Infusionsoft has therefore invested heavily in making its system even easier to use and in providing extensive self-help features such as video tutorials. With those in place, it last month stopped charging the set-up fees.

The capstone of Infusionsoft’s self-help is the Campaign Launchpad, which is worth a look no matter where you work. Launchpad leads users from general questions about their marketing goals to specific instructions and materials for predesigned Infusionsoft campaigns. It won't replace a real marketing consultant, since it can’t analyze whether you’ve made sound decisions. But it’s an excellent resource for people who need help in getting started. The Launchpad is open to everyone, not just Infusionsoft users.

Many small businesses will pay for help when the value is clear. For them, Infusionsoft has developed an array of small-ticket service options, such as a $299 “data transition service” to import existing customer lists. This lets business owners purchase exactly what they feel they need. Martineau said he expects about half of Infusionsoft’s new customers will eventually purchase some sort of paid service.

Vertica Announces 3.5 Release

2009-08-05T15:15:00.004-04:00

Summary: the new release of Vertica's columnar database can store several related data elements in a single column. Didn't we used to call that a row-oriented database? Benefits seem limited.

Analytical database vendor Vertica yesterday announced its 3.5 release. The main feature is a new architecture called "Flexstore", which can combine several data elements into a single column. This is done for columns that are commonly used together in the same query, such as the “bid” and “asked” price on a stock transaction or the dimension tables in a star schema (to use the company’s examples).

I was skeptical of this notion when Vertica briefed me two weeks ago, and still am today. Storing multiple elements together is what a row-oriented database does, so it seems fundamentally at odds with Vertica’s column-based model. More concretely, a columnar database scans all entries for each column during a query, so its speed is basically determined by the amount of data. Whether it scans two columns that are one terabyte each or one combined column of two terabytes, it’s still scanning the same two terabytes.

Vertica offered two responses to my doubts. One is that it can better compress the data when the two columns are combined, for example by using delta encoding (storing only the change from one value to the next). I’ll buy that, although I suspect the gains won’t be very large.

The other explanation was that data for each column typically ends in one partially-filled data block, leaving a small amount of empty space that must still be read. It’s something like storing 3 ½ cups of water in 1-cup containers – you need four cups, of which three are completely filled and one holds the remainder. (Vertica confirmed that it generally fills each block except the “last” one for any column.) Combining the columns therefore reduces the number of partly-empty blocks.

But the saving is just one partially-filled block per column. It's a bit more for small columns like dimension lists, several of which might fit into a single block if combined. I can’t see how a few partially-empty data blocks would have much impact on performance when a good size database fills thousands of blocks. (The typical block size, per Vertica, is 1 MB). And if you don’t have a good size database, performance won’t be an issue in the first place.

I was willing to be convinced that I was missing something, but Vertica told me they didn’t have any formal test results available. The best they could offer was that they sometimes saw up to 10% improvement when large tables are involved, mostly from compression. For a system that promises to deliver “query results 50 to 200 times faster than other databases”, a 10% change is immaterial.

The other major component of the Vertica announcement is what it calls “MapReduce integration”, which should definitely not be confused with actually implementing MapReduce within Vertica. (Indeed, the footnotes to Wikipedia’s article on MapReduce show that Vertica CTO Michael Stonebreaker has been publicly skeptical of MapReduce, although the nuances are complicated.)

What Vertica has added is a JDBC connector that makes it relatively easy to move data between separate servers running Vertica and Hadoop (the open source version of MapReduce). Since SQL databases like Vertica are good at different things than MapReduce, this generally makes sense. Still, it's worth noting that other analytical database vendors including Greenplum and Aster Data run MapReduce and SQL on the same hardware.

The 3.5 version of Vertica is scheduled for release this October.

Marketo Offers Guide to Lead Nurturing

2009-08-04T11:06:00.002-04:00

The folks at Marketo have always recognized that they can only succeed if more marketers learn the basics of demand generation. As a result, they’ve invested heavily in educational materials that are not directly related to their particular product.

Their latest contribution is The Definitive Guide to Lead Nurturing, a 38-page workbook that may not quite live up to its ambitious title but certainly gives a good overview of the subject. In particular, it provides details on how to build several types of lead nurturing campaigns (incoming lead processing, stay in touch, accelerator and lead lifecycle) and provides worksheets for matching content to buyer needs and for calculating ROI.

The workbook also includes a half dozen “How Marketo Does It” sidebars that reveal more than you might expect about Marketo’s own programs. I was surprised to see them share so many details, but suspect Marketo would say their competitors all subscribe to those programs anyway, so they have no secrets to begin with. Whatever the reason, it’s a refreshing and laudably mature approach.

In the interest of fairness, I should also point out that other vendors undertake their own market education programs. Nearly every one of them has a “resources” section on their Web site with a collection of useful papers; they also have blogs with helpful advice. Of these, I’d say Eloqua’s Digital Body Language stands out as an especially good source of information. Indeed, it so happens that today’s post on Auditing Your Content Assets covers some of the same ground as the Marketo paper, including a quite similar worksheet for matching content to buyers.

For that matter, Raab Associates itself has what we consider very useful materials on the Raab Guide Web site. We recently made that all available without user registration, although I'm reconsidering that decision – it doesn’t seem to have increased traffic significantly, and we capture many fewer visitor names. Looking at how Marketo does it, they provide some materials without registration but require your name in exchange for premium content. That sounds like a reasonable approach.

Youcalc: On-Demand Analytics Without Stored Data

2009-08-03T20:25:00.004-04:00

Summary: Youcalc is an on-demand analytics vendor with 130 prepackaged applications primarily for sales and marketing reporting. Unlike its competitors, youcalc it reads data directly from other Software-as-a-Service systems rather than loading it into its own database. This saves money and simplifies installation but has some drawbacks too. Still, it's an intriguing alternative to the standard approach.

Youcalc is fundamentally different from other on-demand analytics vendors like Birst, Cloud9 Analytics, Gooddata and Pivotlink: while those vendors all query data stored in their system, youcalc queries the source data directly. That is, youcalc provides analytical applications that read from an existing system, typically a Software-as-a-Service vendor like Salesforce.com or Google AdWords.

Although this sounds like a subtle difference, the implications are huge. It means that youcalc doesn’t need the infrastructure to build and store client databases, thereby reducing its costs dramatically.

It also means that youcalc can to give each new client immediate access to standard applications, since there is no need to adjust for differences in their data. Although this is possible with prebuilt applications at other on-demand analytics vendors, youcalc has made it more central to their business model. In fact, youcalc extends this to related community concepts such as user-contributed enhancements, forums, tagging and rating of popular applications.

I’m intrigued by the youcalc approach but do see some disadvantages. One is that data integration capabilities are limited: the current version of the system can only combine data sources that already share common keys or are linked with an existing cross reference table. I suppose it’s technically possible to allow more sophisticated data matching, but any processing will still be limited by the need to repeat it each time the data is read from its sources and loaded into memory.

A second, more fundamental limitation is that the system can’t access historical data, such as point-in-time snapshots of information which is not retained in operational systems. At best, youcalc could point to an externally-built data warehouse as a source – but now you’re back doing all the database development that youcalc is supposed to avoid. No free lunch here, folks.

Still, there are those cost savings. Youcalc is priced at an astonishingly low $19.95 per user per month, which gives access to 130+ prebuilt applications for products including Salesforce.com, SugarCRM, Google AdWords, Google Analytics, MailChimp and 37Signals’ BaseCamp (project management) and Highrise (contact management). There’s also a free version that is excludes some of the more powerful applications. The full set is available for a 30 day free trial.

Unfortunately, these prices may not last. CEO Rasmus Madsen told me the company plans eventually to charge higher fees for applications linked to higher priced source systems.

None of this would matter if the youcalc applications and underlying technology weren't worth having. But I found them quite impressive.

Applications can contain multiple objects such as charts and lists. They can also contain drop-down selection boxes to filter components and select alternative chart dimensions. A single application can have multiple pages linked by menus. Users can embed images, text notes and external URLs, and have control over style details such as type fonts and background colors. Although the presentation is nowhere near as advanced as products like Tableau or TIBCO Spotfire, it is competitive with other on-demand analytics systems.

Most current youcalc applications display a single chart from a single data source, such as “Time-Day Distribution for Google Analyzer”. But users can change the contents by selecting different dimensions (e.g., date range) and metrics (e.g. visits, new visitors, bounces, etc.). Some applications combine multiple data sources, such as the “AdWords Campaign ROI Overview for Salesforce.com” that compares cost from Google AdWords with revenue from Salesforce.com.

Users can modify these applications or create their own from scratch (although all the existing applications were built by youcalc). Development is done with Java-based desktop software that runs on Windows, Mac or Linux PCs. The interface involves dragging different components onto a whiteboard and then configuring and connecting them. There are two different whiteboards, one to show the actual application and another to display the flows used to construct each object. These flows begin with connection to an external data source and then send the data through functions to apply formulas, convert formats, create summaries, and perform other tasks. Parameters of each function can be edited during the set-up or connected to objects like drop-down menus for end-user interaction. A completed application can be saved as a stand-alone Web page, a mobile phone Web page, embedded within an external page, or deployed as a widget on an iGoogle home page.

None of this requires actual programming, and basic tasks should be easy enough for a skilled spreadsheet jockey. More demanding activities, such as connecting to an in-house data source, take considerable technical understanding. (The system doesn’t query in-house resources directly; rather, it sends a message to a “listener” on the in-house system, which runs the specified query and transmits the results back as an XML data stream.) Connections for standard sources such as Salesforce.com are very simple since they’re prebuilt: users just enter their log-in credentials and the system does the rest.

If youcalc has an Achilles heel, it will turn out to be data volume. The system accesses standard sources (Salesforce.com, AdWords, etc.) through their APIs, which often limit the number of records that can be pulled at once. Youcalc connectors can submit new calls until all the data has been read, but this is still awkward and will probably be slow for large volumes.

In addition, the data must be loaded into system memory during each user session. This also imposes some practical limits—we’re probably talking in the multi-gigabyte range—even though youcalc runs in the Amazon data cloud, which gives it access to very large servers. Madsen says the largest current installation works with data for 150 Salesforce.com users.

Youcalc was launched in its current form at the end of 2008, although the company has been working on its core technologies since 2003. Madsen said that 4,000 accounts were created in the first six months since launch, and there are currently more than 7,000 application sessions per week. Most are from small businesses, which makes sense for any number of reasons including price, functionality and ease of deployment. The company hopes eventually to attract larger firms as well.

Hubspot Offers Small Business Marketers a Big Bundle of Features

2009-07-30T18:59:00.004-04:00

Summary: Hubspot offers a bundle of Web traffic generation and lead management features in one low-cost package. Small businesses willing to invest some effort should be pleased with the results.

Yesterday’s post described one strategy to sell marketing automation to small businesses: provide a specific, turnkey service that requires virtually no skill or effort from the user. But I don’t think that can scale: companies require many different services and will not want to buy and run each one separately. So I believe the future lies with integrated marketing automation systems that combine many different functions while sharing data and processes whenever possible.

Of course, these multi-function systems must still be suited to users with little time and expertise. Marketing automation vendors entering this market are essentially betting that they can make their systems powerful enough to be useful and easy enough for a small business to run. If the vendors fail, the business will go to consultants, ad agencies, and other service firms that do the clients’ marketing for them. That would greatly limit the marketing automation vendors' business.

Hubspot has accepted this challenge. Although Hubspot positions itself as an “inbound marketing system,” it actually does more than the search engine optimization, blogging, social media interactions and related analytics needed to generate Web traffic. The current version also hosts landing pages and Web sites, manages a lead database with profiles and Web activity history, generates lead scores, sends alerts to sales people, and synchronizes data with Salesforce.com.

All that’s missing to be full-blown demand generation system is outbound email and lead nurturing campaigns—which the company has announced it will add.

Implementations of these features are intentionally simple, since ease of use is more important than sophisticated options for small business marketers. But Hubspot also applies automation to improve results without making the user work harder. For example, the blogging system automatically connects the blog to social media sites that help to redistribute content. It also checks posts to ensure they are optimized for search engine rankings. Hubspot provides similar graders for the Web site and individual pages, each generating reports and recommendations for improvement.

(Free versions of these and other graders are available from Hubspot at Grader.com. Most seemed fairly useful when I played with them a bit, although the Web “personality grader” managed to be both inaccurate [“your Internet use primarily consists of emailing family pictures and checking your teenager’s Facebook”] and insulting [“engaging in more meaningful conversations and sharing less about your personal life may improve this grade”]. I'm not sure what to make of that, except to suspect that someone left the programmers unsupervised. [I've since been informed that Personality Grader was an April Fool's joke.])

The scope of Hubspot makes it somewhat difficult to assess. The system’s heart is clearly search engine optimization and the supporting features to generate content (blogs and Web sites), receive the resulting traffic (landing pages) and analyze the results. These components seem well designed, tightly integrated and, at least for the graders, innovative.

The one major missing inbound marketing feature is paid search management, such as Google AdWords integration. Hubspot Marketing VP Mike Volpe said that paid search can be tracked as a source, and that clients have not requested deeper integration – apparently because they’re already happy with the AdWords interface. But I still find this a curious gap, since it leaves the system blind to a major marketing expense. It's part of a general lack in Hubspot of the “campaign” orientation found in most marketing automation systems. Maybe small businesses don't think in campaign terms -- or maybe it's just that search engine optimization isn't organized that way.

Hubspot looks more like a conventional marketing system in its ability to manage a lead database. Leads can be captured on landing pages, imported from lists or added through Salesforce.com synchronization. The system can also create profiles of anonymous visitors, using their IP address to infer geographic location and company. The database can include answers to survey questions and fields imported from Salesforce.com. It also stores Web activity history, captured by the usual methods: tracking scripts on the Web pages (created automatically on Hubspot-built sites) and cookies on the visitor’s PC.

Hubspot originally used its lead database largely for analytics. But it added Salesforce.com integration in 2008, which also meant the leads and their activity history could be shared with sales people. It extended this in 2009 email alerts triggered when user-selected leads visit the Web site. It also now uses Salesforce.com opportunity records to measure the close rates of leads from different sources. Users can also flag the closed leads manually.

Closed leads are also used to build a ranking system that assigns each lead a value between 1 and 100 based on its likelihood to close. This is a good example of the Hubspot philosophy at work: the grading system is simple (just one score), simplistic (formulas can look at the number of page visits, but not particular pages) and fully automated (it develops a custom scoring formula for each client and adjusts it over time without any manual input). Volpe acknowledged it takes a long time to gather enough data to build a reliable formula. But he argued (and I agree) that few small business marketers could build a better formula on their own.

Once Hubspot adds outbound email and nurturing campaigns – which Volpe said should be “relatively soon” -- its lead management features will about match other small business demand generation systems. That’s good enough, though not as impressive as its search optimization capabilities. (Actually, most small business demand generation products also offer a lightweight CRM module for companies that don’t have a separate CRM system. But I consider that optional.)

Hubspot also includes some functions that extend beyond traditional demand generation. These draw from its roots in Web traffic analysis. One is an automated analysis of competitive Web sites, based on Website Grader. This shows traffic from major keywords plus several types of rankings. Other features include automated Web scans to identify changes in keyword rankings and relevant social media articles. The social media features also make it easy to comment on the articles and to measure the reach of the company’s own blogs, Twitter, Facebook and YouTube posts. Although none of these is itself a major innovation, they’re useful tools to assemble in one place.

So now that we’ve taken a look at some of the mechanics of Hubspot, let’s circle back to the original question: is Hubspot powerful enough and easy enough for small businesses marketers?

The system clearly succeeds on the power front: although most of its features are fairly basic, they should be more than adequate for most companies. Even though Hubspot is not quite a complete marketing solution (lacking the paid search management and integrated CRM), it does enough different things to replace many other systems.

I have more doubts about user effort. Hubspot isn't hard to use, but it does seem to require a lot of work from its users. In particular, the Web site and keyword reports all seem to issue alerts and recommendations that the user has to execute separately. Whether it’s adding new keywords to page metadata, changing a bid on a paid search ad, or rewriting copy to be more search engine friendly, Hubspot looks more like a demanding boss than a helpful assistant.

In a small business where people are already stretched to the limit, a system that adds rather than reducing work is not very appealing. Even knowing that the added work is valuable doesn't necessarily solve the problem: the time has to come from some other work that has value of its own.

But maybe that’s just me. Volpe said that users’ biggest problem is finding time to write new content, not making the other changes like tweaking page tags. This is because most of the system’s automated recommendations are specific enough that they’re pretty easy to execute.

Of course, the customers are the ultimate judges of success. Volpe said that 98% of Hubspot users renew each month. That sounds pretty impressive, although it does equate to losing nearly 25% over one year. A less ambiguous statistic is the current customer count of 1,400, which is higher than any other small business demand generation system I’ve seen (though still dwarfed by Infusionsoft’s 15,000 clients).

Even small businesses shouldn't have a problem with Hubspot pricing: a version without Salesforce.com integration costs $250 per month, while one with Salesforce.com integration costs $500 per month. There’s a $500 setup fee for both products, which covers four hours of consulting. There are no additional costs related to volume or anything else, although that might change when email campaigns are added. The smaller system is sold on a month-to-month basis, while the larger version requires an annual contract. The company also offers a seven day free trial.

Helmsman Shows How To Serve Small Business Marketers

2009-07-29T18:27:00.006-04:00

Summary: Helmsman Marketing offers turnkey marketing campaigns for small business. It's a great way to meet their needs, but probably not the model that will ultimately prevail in small business marketing automation.

I’ve spent a lot of time recently talking to marketing automation vendors hoping to sell to small businesses. They all seem to think this market is under-served and therefore open for them to dominate. In one sense they're right: there are millions of small businesses, few of which use serious marketing technology today. But the very fact that I'm talking to so many vendors means there is no lack of competition.

The entrepreneurs starting these marketing automation firms think they have few competitors because they rarely run into them. But that’s because small businesses rarely look for alternative solutions: if they see a system that seems to meet their needs, they’ll buy it and move on to the next project. Small business people just don’t have the time or expertise for elaborate vendor comparisons.

In the short term, this means that plenty of small business-oriented marketing automation vendors will prosper in isolation. Eventually, though, some will grow larger, market themselves more aggressively, and penetrate the awareness of small businesses beyond their immediate circle. That’s when buyers will recognize they have alternatives and be forced to make choices.

At the moment, though, the market is in that delightful early stage where a new vendor with a unique approach pops up every week. Last week it was Helmsman Marketing, a five-month old company focused on helping small businesses run multi-step, multi-channel, outbound customer relationship campaigns.

Ok, that last sentence is a mouthful. But I think it captures the key components of Helmsman:

- multi-step: the system runs campaigns that deliver a sequence of messages. The precise timing of these is adjusted for maximum response through the life of the campaign as Helmsman reports on results such as email opens. The reports are generated automatically and the adjustments are made manually. A typical Helsmark campaign might include five touches over several weeks.

- multi-channel: Helmsman delivers messages via email, automated voice mail recordings, fax, text message (SMS), and printed postcards. These are all managed by the vendor itself. Helmsman can also arrange to ship promotional products. The company stresses multi-channel campaigns because it has found that email isn’t always delivered and different customers will react to different media. Their use of post cards is particularly intriguing because it’s the second or third time I've recently been told that post cards are especially effective for small business marketers.

- outbound: pretty much all Helmsman does is send messages. Results like email opens are recorded within the system, but actual replies would be directed to a company CRM system or elsewhere. The one big exception is that the vendor can build and host Web landing pages and forms.

- customer relationship campaigns: most Helmsman programs are sent to existing customers to remind them of renewals or to schedule service appointments. The system is also be used for prospecting, such as seminar invitations. But the company warns that multiple contacts without an existing relationship can be annoying – particularly with intrusive media such as phone or SMS.

So that’s what Helmsman does. Integrated multi-channel capabilities are unusual, but otherwise the system offers less than most demand generation or consumer marketing automation products. What actually makes Helmsman special is something other than features: it’s a business model that is tailored to small business needs.

Specifically, Helmsman is sold as part of a service package that relieves marketers of the need to set up and execute their campaigns. According to Helmsman CEO and co-founder Tim Haller, he quickly discovered that small businesses lacked the time and skills to run a system like Helmsman for themselves. So the company meets with each new client for an hour or two to understand their goals and marketing messages, and then does the rest: designing the campaign, creating the marketing materials, sending the messages, and analyzing the results. If the customer list needs some data cleansing, Helmsman will do that too.

This approach avoids the time and skill constraints that – even more than direct cost – are greatest barriers to small business marketing automation. It also allows purely project-based pricing, derived from the numbers and types of contacts. This makes it easy for businesses to compare the costs and results of using the system, so they can judge its practical value. In the case of renewal and reminder programs, Helmsman is often fully justified by the savings from not having company staff make phone calls. Actual costs depend on the project (postage in particular is expensive), but have never exceeded $2 per contact. There’s a project minimum of about $750.

Helmsman released its product in April 2009 and currently has about 20 systems in place.

So where does Helmsman fit in the grand scheme of things? More than anything, it illustrates the importance of vendors helping clients to use their systems. Small businesses are the most extreme example of this need, but it applies to other, more sophisticated businesses as well. Helmsman also shows the importance of tying system cost to specific business value, something that its project-based billing structure does just about perfectly. The point about multi-channel contacts in general and post cards in particular is more tactical but still worth noting.

Yet despite these strengths, I don’t think the Helmsman approach will ultimately dominate in small business marketing automation. Specialized systems can be very attractive but companies don’t want too many of them. While Helmsman itself may succeed as a pure service, I expect that small businesses will ultimately adopt general-purpose marketing systems that support many applications in a single integrated environment. These systems might be sold with prebuilt project templates, similar to newsletter and Web site templates already offered by other types of vendors. Small businesses will then be able to pick and choose the projects they wish to execute without needing a separate vendor for each. Simplicity and support will always be essential for success, but the ultimate victors must combine them with flexible, extensible solutions that can grow and change with the business itself.