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Market Watch: Marketing Automation
For the rest of the June 2003 issue of CRM magazine please click here
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With the recent spate of acquisitions, one might conclude it is the beginning of the end for the marketing automation industry. But industry reports and vendor investments tell a different tale. Aside from Unica and Aprimo, analysts will argue there aren't many independent marketing automation vendors left. Most recently, Amdocs purchased Xchange Applications' assets in March, after Xchange went belly up earlier this year. With Pivotal's acquisition of MarketFirst last fall and a slew of other acquisitions over the past few years, including PeopleSoft's acquisition of Annuncio, Chordiant's purchase of Prime Response, and Siebel's acquisition of Paragren Technologies, there is no doubt there are fewer competitors. However, according to a Gartner report called "Outlook for the CRM Software Market: Trends and Forecast," marketing automation is expected to grow 22 percent annually. A large percentage of that growth will likely happen with CRM suite vendors. Pivotal has already integrated and made available in late April MarketFirst's targeted campaign capabilities in Pivotal 5--a significant release for Pivotal as it marks its first full-suite release since February 2000. "Many customers are focusing on cost reduction, but the really smart customers are focused on growing their top line. MarketFirst is a great tool for doing that," says Jesper Andersen, executive vice president of products at Pivotal. Tony Agresta, senior director for Siebel marketing, who came to Siebel Systems as part of the Paragren acquisition, says these acquisition efforts give CRM suite vendors the distinct advantage of helping organizations retain customers, increase return on investment by hitting the right customers with the right messages at the right time, and realize productivity gains by automating various marketing processes. One reason independent marketing automation companies have had it so hard thus far, says Bill Chambers, principle analyst at DocuLabs, is that few customers have been buying marketing automation tools: "I find it amazing, but a lot of companies don't do that much deep analysis of their marketing budgets. They take out a cleaver and hatchet it up to save money when instead they could take one of these marketing automation solutions to clean things up and make marketing initiatives more effective."
Those that are investing in marketing automation, Chambers states, are doing so in three key areas: marketing operations, marketing analytics, and campaign management. Marketing operations, Chambers says, includes reporting, planning, budgeting, and resource planning around marketing campaigns. Running reports, he says, allows marketers to tie marketing goals to a company's key strategic initiatives. One example might be evaluating and improving wallet share per household. Marketing analytics enables organizations to conduct customer behavioral analysis and yield such information as propensity to buy. Campaign management capabilities, he adds, enable organizations to develop, design, schedule, and execute multichannel marketing campaigns like print advertising, direct mail, email, Web, or service center initiatives. Harry Watkins, research director of CRM at Aberdeen Group, expects more organizations to use marketing automation tools to evaluate media investments, such as advertising effectiveness. "If a CEO doesn't know the effectiveness of 50 percent of advertising investments, that's not acceptable," Watkins says. He, too, says the marketing automation industry as a whole will grow for the simple reason that marketing departments are under increasing pressure to be productive, while suffering from shrinking budgets.
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