New Wave in Marketing Automation
Henry Ford once said that more than half the money spent on marketing is wasted. Granted, that observation was made more than 50 years ago, but marketing, perhaps more than any other front-office function, has had trouble throwing off its Industrial Age shackles.
Until recently, most marketing campaigns took six to nine months to execute. Response rates hovered around one to three percent because direct mail and mass marketing efforts treated all targets the same. Cross-, up- and resell opportunities fell through the cracks because those customers were approached in scattershot or overkill fashions. Analyses of results were inconclusive because the data available was poor or incomplete. And intelligently applied support from technology was virtually unheard of because conventional wisdom held that "creative" processes could not be automated.
Then, a few years ago, lead management and data warehousing applications started to appear as add-ons to better-established call center and sales force automation systems. These products indicated that marketing departments were finally embracing new informational and technological assets to create competitive advantages. Now, with the emergence of a new class of enterprise applications, marketing is forever shedding its image as an Information Age laggard.
Bringing It Together
Developed by start-ups such as Rubric, MarketFirst, Annuncio and Attune, enterprise marketing automation (EMA) solutions bring together all the essential marketing disciplines of process automation, analysis, campaign management and Internet marketing in one integrated Web-based package. Identified by the Boston-based Aberdeen Group as best-in-class marketing tools, these solutions address both the efficiency and efficacy issues that have long plagued marketing by offering short-term productivity benefits through work-flow automation and long-term strategic value through enhanced customer management.
"Marketing has been one of the most difficult areas to tackle from a technological point of view, but now companies like Rubric are stepping up to the plate and trying to get their hands around it. If companies can really automate the entire marketing aspect, the returns are huge because of the incredible amount of waste in those departments and the incredible lack of knowledge around what happens in marketing. The potential is massive," says Donovan Gow, Aberdeen research analyst.
That potential can translate into double-digit response rates for campaigns that can be planned and executed in as little as an hour and, if done over the Internet, at minimal or no cost, according to Hal steger, co-founder and vice president of marketing for Rubric, the San Mateo, Calif.-based EMA pioneer, which shipped its first product in mid-1998.
As an example of the value these systems can add, steger cites a recent campaign by computer e-tailer Outpost.com. Prior to Rubric, Outpost's online marketing consisted of an electronic newsletter sent to one-third of its 500,000 customers who were targeted simply because they, at one point, said they would like to receive the daily list of specials. Ultimately the approach netted few returns. A Palm Pilot promotion run through Rubric relied on a better-targeted campaign to 1,400 customers who had previously purchased Palm Pilots. Each received a personalized, online newsletter offering an upgraded version. That campaign netted a whopping 43 percent response rate and generated over $100,000 in revenue for Outpost. It was launched from the marketing desktop, took less than an hour and cost Outpost nothing.
Such personalized communications not only lower costs and increase response rates, they also allow marketers to collect additional information about their customers while simultaneously helping to assess the effectiveness of particular campaign templates, according to Didier Moretti, president and CEO of Los Altos, Calif.-based Annuncio Software. Annuncio's customer, Netscape Communications, is using the software to deliver targeted electronic newsletters to 8 million registered users of the Netcenter portal. AnnuncioLive tailors newsletter content to customer profiles and then includes interactive enticers such as contests and reward-based surveys. As customers click through the newsletter, AnnuncioLive collects additional information about them and the aspects of the campaign that were most successful, all of which can be used to develop future marketing programs.
Eliminating Brute Force
What this boils down to, according to Russ Henry, vice president of marketing for MarketFirst Software in Mountain View, Calif., is that Internet EMA is allowing users to treat marketing as an ongoing event as opposed to the static efforts engendered by mass marketing, cold-calling and other old-model techniques.
"Marketing is a process. A process requires interaction. The benefit of interaction is that you learn more about your customers, which allows more granular segmentation in campaigns. By automating the construction and execution of the campaign and workflow elements, our tools take people away from the brute force aspects and let them spend more time on the qualitative questions of increasing rates of response and doing better segmentation and lead distribution," he says.
Rubric, MarketFirst and Annuncio offer similar functionalities and share an enterprise approach that's built around campaign management. In a different approach, newcomer Attune is emphasizing the workflow side of EMA by offering what the company defines as a unique enterprise tool designed to help marketers plan, deliver and analyze their marketing activities.
"While we do offer tools to automate campaigns, we feel the strategic issues for marketing concern optimizing the return on dollars being spent, so we're selling an operating platform to automate and integrate all marketing functions," says Bill Godfrey, co-founder, president and CEO of the Indianapolis, Ind.-based Attune.
At approximately $90,000, Attune's package is less expensive than the $200,000 price tags of the Rubric, MarketFirst and Annuncio software. It appeals to companies trying to plan, implement and measure marketing efforts among large groups of internal staffers as well as marketing supply chain people. For example, EnterCitement is using the software to coordinate the marketing activities associated with the launch of a 510-acre theme park, hotel and conference center in the Midwest. Roger Kurz, senior vice president of sales and marketing for the park said the software offers "a retail approach to marketing," and will provide structure for such disparate activities as event planning, request submissions and tactics analyses.
To grab their respective slices of the market, Rubric, MarketFirst and Annuncio are differentiating themselves through target companies and business approaches. With 20 customers to date, Rubric is targeting large, $100 million enterprises. MarketFirst is also setting its sights on large companies but emphasizes a $7,500-per-month web-hosted offering that brings in more mid-market customers. Of MarketFirst's 20-odd customers, 80 percent have opted for the hosted option instead of licensing outright. Both of these companies offer tools that help customers execute Internet and traditional marketing campaigns, while Annuncio is focusing primarily on Internet marketing.
"We've found that while many large companies are enamored of Internet marketing, 95 percent of marketing is still done the old-fashioned way so we wanted to have a solution that would help them make a transition from the traditional to the e-commerce way," says Rubric's steger.