• July 1, 2006
  • By Colin Beasty, (former) Associate Editor, CRM Magazine

Practical Presto!

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The marketing world is at a crossroads, and technology is to blame. Today, customers have more ways than ever before to contact a company, whether it's via the Web, phone, or mail. On the flip side, organizations can select from an array of marketing mediums to connect with consumers, returning to marketers volumes of transactional, behavioral, and attitudinal information. The downside to all this information is that marketers can get lost in myriad data sets, and so may fail to mine the customer gold within. Campaign management tools help to conjure clear customer data through easy-to-use solutions, and in the process improve campaign effectiveness and response rates. If your company does not own a campaign management tool, then it's certainly in the minority. Forrester Research recently found that almost 100 percent of 300 marketers surveyed said their company owns a campaign management application. Historically, most vendors within this space have focused on campaign management, but have expanded their offerings as customers look for solutions that integrate marketing programs across all channels. The market for these tools continues to expand, both in providers and capabilities, as companies move away from standalone applications to marketing suites that take advantage of multiple channels. It is important to understand three elements of campaign management tools. The first element is how they are used; the second element is what the landscape of the companies providing them is, and the third is how the technology is changing as marketers begin to communicate with younger, tech-savvy consumers--gens X and Y, of which, one analyst bluntly states, marketers "want to take advantage." Defining a Market Campaign management tools fall into the marketing automation category, which also includes marketing resource management (MRM), marketing optimization, and marketing interaction management applications. Knowing the purpose of each of these applications will help determine how to apply them in your organization. MRM software measures the impact marketing activities have across various channels, including finance and budgeting, trade promotion, and public relations efforts. This software is often considered the back-end app of a marketing suite. Interaction management solutions focus on inbound customer interactions and garner information from customers contacting the company through traditional or digital channels. Using analytics, campaign optimization tools let marketers track and evaluate campaigns to increase ROI and maximize effectiveness, while balancing goals against budget constraints. (See July's "Re:Tooling" for some examples of these apps.) This leaves campaign management tools: the applications that segment, select, and target consumers or potential customers for outbound marketing campaigns. Campaign management tools were developed to automate the once arduous process of identifying and selecting specific customers for a campaign. This is becoming more important as marketers continue to inundate (and so lose) customers with ads from traditional and digital channels. Savvy marketers, however, are gaining back consumer mindshare by creating segmentation strategies to communicate to smaller, discrete audiences with more relevant messages. Campaign management tools automate this process, selecting which message goes to which customer via which channel. Campaign management uses data and customer analytics to segment, or "slice and dice," a customer base via demographic, behavioral, and attitudinal information. Functionality typically includes data mining, market basket analysis, link analysis, forecasting and planning, and profiling and behavior analysis. Some of the more advanced solutions allow marketers to conduct response attribution, or tracking a campaign in real time to see which customers are actually responding to emails or telemarketing calls. Campaign management tools also focus on letting marketers track customer life cycles and profitability--a process that includes viewing, tracking, and measuring results to develop and improve future campaigns. "These tools are sequel generators," says Steve Schultz, senior vice president of client services at Quaero. "It's about matching customer information to the right campaign at the right time." The Providers
There are a bevy of campaign management tools to choose from. Product selection is based primarily on the size and complexity of a company's marketing effort. The industries with high-volume direct marketing like financial services and retail rely almost exclusively on best-of-breed applications. The two largest vendors that cater exclusively to marketing departments are Aprimo and Unica, with their enterprise marketing management (EMM) applications. These vendors come from slightly different backgrounds. Aprimo is known for its strength in marketing process and MRM, though its recent acquisition of DoubleClick's Enterprise Marketing Solutions, including SmartPath and Ensemble campaign management products, promises to change that. Unica has always focused on the front end, and its campaign management functionality is second to none. Both of these vendors are currently building campaign management into suites, blurring the line between campaign management and other marketing tools. At the midmarket are players like Alterian and SmartFOCUS, two best-of-breed companies that provide marketing solutions to small enterprises. Due to marketing's heavy reliance on customer data, two long-time data and analytics specialists provide marketing solutions to compete with Aprimo and Unica. SAS Institute is famous for its analytical tools, and first threw its hat into the marketing automation ring in 2001. The company now offers a full marketing suite, though refers to its campaign management solution as marketing automation. Teradata, a division of NCR, is best known for its enterprise data warehouse, but also offers a full complement of campaign management tools. Then there are the CRM suite providers. Four vendors fall into the enterprise segment--Oracle, SAP, Siebel Systems, and SSA Global (which Infor plans to acquire). Each considers marketing to be one of the pillars of a broader CRM suite. In general, their campaign management tools aren't as broad in functionality as the specialty providers. With SSA Global's recent acquisition of Epiphany and Oracle's just-closed acquisition of Siebel, the big advantage with these applications is consolidation into enterprise suites that extend from the front to back office. At the small and midmarket business level companies like FrontRange Solutions, NetSuite, RightNow Technologies, Salesforce.com, Sage Software, and SugarCRM provide campaign management functionality within their CRM suites, though not to the same degree as the enterprise or best-of-breed vendors. Infrastructure, Implementation, and Integration Whether a company is implementing a campaign management solution or a marketing suite, the cost of these tools depends on the company's preexisting customer data structure, and the size and complexity of the organization's marketing campaigns. The more campaigns and customers a marketing department has to organize and run, the bigger the bill. Data is the lifeblood of any marketing solution. Besides data quality, the other issue to keep in mind is data structure, or how the information is formatted and organized. This will affect how well the data warehouse will integrate with the campaign management solution. Because campaign management tools are designed for marketers and not computer programmers, the "rationalization of the underlying data structure needs to be thought through," says Elana Anderson, vice president and research director at Forrester. As part of the continued merging of campaign management with other marketing solutions, nearly all of the best-of-breed providers, and certainly SAS and Teradata, offer strong data mining and analytical solutions as a part of their marketing suite. These solutions can be pricey, to say the least. Leaving the cost of installing and/or overhauling a data mart aside, the cost of implementing a campaign management solution can range from $100,000 to $400,000. That price can double or triple when purchasing a best-of-breed solution for a high-volume enterprise-marketing department that requires heavy integration and customization. The other factor to consider is downtime. Marketing has become a 24/7 job. If an enterprise is sending dozens of ad campaign to millions of consumers a week, chances are its marketing department won't have the time to catch its breath. Companies must hire additional marketers and/or computer programmers while making the move to a new system. "You're paying people to develop everything you already had in an old solution for a new one, all the while keeping the old one humming just a little bit longer," Schultz says. No Degrees of Separation Marketing applications that support campaign management have typically remained siloed from MRM, analytics, and Web-related data, but companies have begun to take notice. When asked what critical customer data was missing from their marketing campaigns, 82 percent of respondents said it was click-stream and Web-related data, according to Forrester Research. Seventy-five percent said they wanted an integrated marketing suite that leverages multichannel data and point solutions. Look for vendors to integrate campaign management with other marketing tools. The continued emergence of the Web as a marketing arena will have the most impact on campaign management. Despite the Internet's increasing importance as a customer touch point, marketers have long grappled with combining demographic and transactional customer data with Web behavior. To do this, marketing suite vendors are bundling Web marketing and analytical tools into their suites. Unica, for example, in May, announced Affinium NetInsight, the company's first Web-analytics solution, as the newest addition to its Affinium EMM marketing suite. These new tools will enable marketers to automate marketing based on Web and other cross-channel knowledge to "close the loop across customer touch points," says Phil Kramer, vice president of marketing automation at Green Beacon. "Companies need to synchronize customer segmentation and understand buyer behavior and purchasing information across all channels." Gartner predicts that by 2007 the Internet, interactive television, and wireless devices will reach mass adoption and will force marketers to work with each other, creating "a multichannel, interactive transaction," says Adam Sarner, principal research analyst at Gartner. Also by that time, 75 percent of Fortune 1000 companies will have increased investments in e-channels, according to Sarner, who says, "It's signaling the end of passive marketing and one-way communication with the consumer, and the end of e-marketing, because the line that separates the online and offline worlds won't be there much longer." Contact Editorial Assistant Colin Beasty at cbeasty@destinationCRM.com
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