Sunday, February 26, 2012

Balihoo Offers "Local Marketing Automation" for Channel Partners

One of first marketing automation systems I ever saw – this would be during the Reagan Presidency – was a custom-built dial-up network to distribute collateral to farm equipment dealers. This and similar seeds have since sprouted into a forest of products that help brand marketers work with dealers, distributors, franchisees, and agents. Some of these channel marketing systems focus on lead distribution, some on locally-customizable promotion materials, and some on campaign management. All must mediate the delicate relationship between relatively sophisticated central marketing departments and their firmly independent channel partners.

These products are part of the marketing automation industry, although their specialized nature places them on the periphery. General purpose marketing automation vendors also compete for this business with what are usually called “distributed marketing” options. I keep a distant eye on the space because it’s relevant but there are too many choices to track it closely. The best I can do is make an occasional visit to see what’s new.

I made my latest foray last week after a briefing request from Balihoo. I accepted partly because Balihoo labels itself as “local marketing automation”, which includes the two magic words that most pique my interest. More important, channel marketing issues have cropped up several times recently in my consulting and are likely to be even more prominent in my work at Left Brain DGA.  So it was worth taking a look.

I’m glad I did. Balihoo is an impressive product that combines localizable (is that a word?) content distribution with pre-packaged campaigns in email, direct mail, mobile, online ads, print, and broadcast media. It also helps local partners set up their own Web sites and social network accounts, register with local directories and search engines, and record telephone as well as online responses. The company says these latter features are unique, and a couple hours of my competitive research seemed to confirm this.

As Balihoo’s tagline suggests, it is designed to provide a marketing automation system for each channel partner. Users set up a “my info” page with contact information, store hours, directions, and other details.  These are then pulled into promotion templates as needed, meaning that much localization is fully automatic.  This saves effort, ensures consistency, and simplifies changes. The system also stores a customer list – owned by and only accessible to the channel partner – which can function as a simple CRM system.

The heart of Balihoo is wizard-driven processes to set up different kinds of marketing campaigns. These can include “negotiated” media such as television, newspaper and radio ads, which are purchased and trafficked by Balihoo on the buyers’ behalf, and "non-negotiated" media, such as printed mailers, email messages, and Web search ads, which local marketers can purchased directly.  In all cases, the campaigns are set up by central marketers as templates that determine which elements, if any, the local marketers can change. Templates can include predefined options, such as a list of standard offers, that give local marketers some choice without allowing them complete freedom. The system can also require central approval before a campaign is released.

In addition to one-off campaigns, local marketers can subscribe to on-going programs such as a recurring “new movers” mailing based on purchased lists. The system supports event-triggered and multi-step campaigns, although Balihoo has found that most local marketers balk at entering the response details needed to maintain them.

Balihoo can automatically apply co-op dollars to locally-selected campaigns, billing local partners only for the net amount due. This is a major benefit by itself, compared with the usual method of having channel partners lay out the funds and then apply for reimbursement. When central marketers feel a particular program is extremely important, they can even fund it fully themselves.
The system also provides detailed response reports, including recordings of telephone responses – which the company has found are much more important for local companies than national marketers. Even though customer data remains with the channel partner, Balihoo inserts tracking codes and captures aggregate response information so it can judge the effectiveness of different programs.

Balihoo is purchased by the central marketing department and delivered on a Software-as-a-Service platform.  Brand marketers can reskin their instance to give it a company identity.  Pricing is based on the number of local marketers who use the system. A typical big company pays $200,000 to $300,000 per year, not including media fees (passed through at cost) and supplemental services such as local registration. These could be paid by either the local partner or the national brand. Balihoo entered the “local marketing automation” business in 2008 and now has more than thirty enterprise clients serving more than 100,000 local businesses. If you’re keeping score at home, it has received $17 million in venture funding.

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Ok folks – what you just read is a perfectly adequate blog post.  I could easily stop here. But remember those several hours of research? I’m not letting them go to waste. Here’s a table that compares features in Balihoo and several competitors.  One big caveat is this is based on what I could glean from company Web sites, which don’t necessarily cover everything.



Analyzing this table is easily worth a post of its own but I doubt I’ll have time to write it. So I'll make do with a few quick observations:


- it's worthwhile to distinguish between distribution and syndication. Distribution refers to making materials available for local marketers to download and customize for themselves.  Syndication refers to sending materials that are already customized with the local company name, address, and contact information but the local marketers cannot change. Syndication gives more central control and saves the local marketers work. It makes particular sense for automatically pushing materials to partner Web sites.

- some systems just do content distribution and/or syndication.  Remember that this is the original function of channel marketing automation.  There are many more products than I listed here with this capability, and it borders on general purpose digital asset management and content management – sectors with literally hundreds of products.

- most vendors also support email and direct campaigns.  This is a distinct step up in complexity, since it requires loading and/or purchasing prospect lists.  It shares borders with several types of general purpose systems, including email, CRM, and marketing automation.

- once you get past basic content distribution and email/direct mail production, features vary more substantially.  This is where buyers will need to pay close attention to their current and future needs. 

- several vendors offer media buying. These may be automated for direct-purchased media or services for media requiring negotiation and trafficking. Either is a big step beyond basic content distribution.

- social media support is hard to find. Only a few vendors offer it and they provide different combinations of setting up social network sites for the local business; providing content to share in social networks; and providing tools to post social messages. This could be an important feature for vendors to add: local businesses need help learning how to make social media work.

- managing co-op funds is surprisingly rare. You’d think this would be a common feature, since it's a logical extension of content distribution. But either the vendors just don’t talk about it on their Web sites (unlikely) or they’ve found that clients have other ways to handle it. I’m dimly aware that there are specialized co-op accounting systems – but that’s a corner of the forest I’ve never explored.

- services vary greatly. From a vendor viewpoint, the purpose of services is to remove roadblocks that prevent clients from using their systems. As a result, services vary depending on the features the vendor is trying to support. The list includes creating marketing materials, buying media, managing data, training users, executing entire programs, and building custom software.








3 comments:

Shane Vaughan said...

David - wow, impressive post. I appreciate the work you've put in here, particularly on the competitive features chart. I know we didn't have time to get into all of it, but I wanted to update you on some of the items that Balihoo offers are aren't indicated in your list:
- Microsites/landing pages
- Promotions calendar
- Image library
- CRM integration
- Campaign execution
- custom integration

Looking forward to seeing the great work you do at Left Brain!

Shane Vaughan
Balihoo
CMO

David Raab said...

Thanks Shane. I updated the graphic. Again, though, I should stress that it probably understates the other vendors' features since it only shows what they list on their Web sites.

Tim Storer said...

David -

I really enjoy reading your research. I happened across this post and thought I would help contribute to your post. Regarding Distribion - the following boxes can be checked:

- Direct mail (print & lists)
- Co- op fund mgt
- List mgt
- local website
- lead scoring
- image libraries
- Creative
- Training & implementation
- CRM integration
- Software development
- Campaign execution
- Prepress assistance
- Data appends
- Custom integration

Would be very interested in a briefing. Thanks again and take care.