Commentary

Where Is Marketing Automation Going?

The email industry prides itself on being the early adopter of, and in many cases the founder of, marketing automation. Marketing automation in itself is based on the foundation of data and your ability to take this data and coordinate campaigns and controls that support marketing and customer service activities. In the early stages of email marketing, when there weren't 100 different ESPs on the market, the larger platform companies provided the support systems to very monolithic data environments and had very rudimentary email capabilities.

As the years progressed, email marketing became more than an ordering notification system or a customer service response systems. Many specialty application sprung up. Some came from the data world and had specialized applications supporting very data-intensive needs. Some came from the Web services world and were relatively easy to use for fundamental delivery needs. Some from the software world provided better integration in and out of their systems.

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Warp forward to our world today and we have a wide variety of options to support email marketing and service functions for our companies. I typically categorize these email companies into four categories: small business, specialty applications, enterprise solutions and then marketing automation.

The small business applications are the ones you know and love: cheap, easy to use and all available through hosted systems. While they won't work in a high volume production world and aren't supported well if you have heavy data or integration needs, they will solve problems for 70% of the marketers in the space.

The specialty applications are those that are designed for niche industries such as not-for-profit and call center support. Their value is predicated on wrapping the email automation functionality in a subset of services that support niche needs: fund-raising, managing ecommerce, managing call center inbound/outbound requests, inbox queing, routing.

The enterprise space is the one most on this distribution list know well. They are set up to support larger organization with heavy data needs, providing high volume sending, advanced personalization and more advanced workflow/production environments. They offer both hosted (Saas models as we like to call them) and on-premise solutions (or licensed software).

The marketing automation space is what is most intriguing to me these days. The emergence of the middleware Enterprise Marketing Management (EMM) space is merging to support email operations on both a systematic way (event-driven, lifecycle-driven and workflow-driven), but also opening up their interfaces to support full campaign management controls; cross channels. They are merging into the Interactive space to support the need to rapidly deploy forms and Web pages, manage digital assets and provide campaign control that supports print, mobile and email, along with e many other core functions. These systems rely on heavy data management for targeting and rules-driven programs. They've invested heavily in aggregating data from the Web, commerce, retails systems, third party data and providing real-time analysis (modeling) that helps make marketing decisions.

What's prevented these companies from really making a dent in the enterprise email marketing space is the lack of infrastructures to support deliverability and the lack of a user interface and workflow engine that is intuitive and flexible enough to support a high-production email environment.

Why I get so excited about this space is, these companies are investing in building out these tools and even though they aren't as efficient to use in a production environment, the value they bring in campaign management (cross channels), access to data and multichannel analysis will bridge this production gap over time. There will be no need to have data in dual data environments, no need for various APIs for feeds in and out of third-party delivery systems, and they will ultimately get it right and build scalable delivery networks and services to support deliverability that the email space values so dearly.

I'm excited to see some of these advances. The space began as an enterprise CRM world, and then evolved into what I call a world of point solutions, solving disparate business needs with many applications. All the indicators are there that dictate a shift in the market. Not sure if the Microsofts, SAPs, Unicas, Siebels, Aprimos make the commitment to bridge these gaps or if the Alterians, Eloquas, Neolanes of the world will capitalize to take market share from these enterprise companies, but I do believe it will shift how you look at email tools and platforms in the next few years.

6 comments about "Where Is Marketing Automation Going?".
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  1. Trevin Bensko-Wecks, August 3, 2009 at 11:54 a.m.

    David - do you foresee the EMM offerings of the future being all inclusive solutions provided by individual companies or a mash-up of solutions provided as a service rather than a product?

  2. Felicity Wohltman from Genius.com Inc, August 3, 2009 at 2:45 p.m.

    Very interesting article and agree that, since email marketing really is at the core of marketing automation, vendors must step up to the challenges of email deliverability and high volume. We're very happy to be working with Message Systems and Pivotal Veracity, among other partners, to ensure that email sent with Genius.com solutions is delivered to the in box and in a timely way.

  3. Kristin Hambelton from Neolane, August 4, 2009 at 10:01 a.m.

    David,

    Thanks for your astute observations about the constantly evolving marketing automation industry. Currently, there is certainly a gap between choosing larger enterprise solutions ā€“ which require system integrators, address highly complex processes (yet have siloed channels) and involve on-premise implementations that can last several months ā€“ or choosing more basic point solutions ā€“ which are often email-centric and SaaS-only, address only basic marketing processes and depend on a single CRM system for measurement. As both the marketing automation industry and companiesā€™ internal marketing processes mature, marketing organizations will naturally look for technology that finds middle ground between these groups, by offering the flexibility to chose SaaS or on-premise, as well as the ability to execute campaigns based on a consistent, cross-channel view of the customer (email, web, direct mail, mobile, call center, etc.) by pulling data from multiple CRM systems into a single platform/GUI.

  4. david Baker from RedPill, August 4, 2009 at 10:23 a.m.

    Trevin:

    I do think "services" will link products and platforms, but it does require integration vision that many companies don't have in place. So, some progressive firms will take this on, but I still think the EMM space will compete at the product level for the time being.. That doesn't mean our clients will look for single source options to support CRM and Marketing Automation, it's really too complex a story for a single product to evolve.

    Kristen:

    I wish I had more than 700 words to describe the marketing automation space, but limits the depth we can go into this subject, but I do agree and I'm happy to see the emergence of SaaS solutions and better integration between partners, so I love the direction the space is heading..

  5. Emily Long, August 4, 2009 at 11:53 a.m.

    What I find truly exciting about the marketing automation space is that this type of technology is quickly becoming more readily available to the small-to-medium size business market. In previous years, only enterprises with sizable budgets could afford the luxury of marketing automation tools. However, with the emergence of SMB-focused companies (like the one I just so happen to work for), even the smallest companies can realize value far beyond basic email marketing with effective demand generation and automation services.

  6. Kevin Joyce from Market2Lead, August 27, 2009 at 5:49 p.m.

    David, good post. Some other thoughts on the future of marketing automation. Many of the 70+ products out there own their genesis to SalesForce.com. As a CRM they can apply the Pareto Principal to attack 80% of the market with 20% of the functionality. Then they depend on vendors like the Marketing Automation vendors, to supply the depth of functionality. They encourage these vendors with an open API and create accessible market with every new sale. So the future for marketing automation is wrapped up in what functionality becomes commoditised by the CRMs like SalesForce (watch out the low end Marketing Automation folks), and how specialized they will need to become to continue the co-opetition with the CRMs!
    -Kevin

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