Marketo Buys Crowd Factory, Silverpop Buys CoreMotives, and Other News from Pardot, Neolane, Act-On and OfficeAutoPilot

With its usual fanfare, Marketo today announced the acquisition of social marketing campaign company Crowd Factory.

Crowd Factory is a certified cool product, which is probably reason enough for Marketo to buy them.  But what I find intriguing is how little the two businesses overlap.  Marketo is primarily focused on business marketing, and in particular lead generation, nurturing and analytics. Crowd Factory has some B2B clients but is clearly aimed at large-scale consumer marketing. Campaign types listed on its Web site include refer a friend, social sweepstakes, polls and voting, flash deals, group offers, and intelligent share buttons. Few would be considered relevant for most B2B campaigns.

Indeed, Marketo already had a reasonable set of B2B social marketing features. Here’s the chart I built last December in a post comparing social marketing features across the industry.

The yellow boxes represent capabilities added by Crowd Factory (although actual integration of the two products will probably take some time). As you see, Crowd Factory doesn’t fill many gaps. Rather, it adds B2C features that might will enable Marketo to penetrate a new set of accounts.


But it’s not fair to let Marketo get all the attention. Other vendors have also extended their products recently. These include:

Silverpop announced it had purchased CoreMotives, which adds marketing automation capabilities within Microsoft Dynamics CRM.  The company also announced plans to integrate Silverpop’s flagship Engage system with Dynamics CRM. The CoreMotives acquisition is quite interesting, since CoreMotives creates a merger of CRM and marketing automation (which I’ve long predicted) rather than the now-standard model of separate systems for each. The deal might be seen bet-hedging by Silverpop, although I suspect it’s more a way to penetrate accounts too small to buy a separate, sophisticated marketing automation or email product.

Pardot added features for search marketing.  These are keyword monitoring, which tracks the user’s site rank in Google and Bing, and competitor monitoring, which captures metrics such as Google PageRank, inbound links, and indexed pages. Data comes from several sources. This is an important enhancement and part of larger trend for marketing automation vendors to move beyond email and landing pages.

Neolane announced new features to identify anonymous Web visitors based on prior email interactions and to use external catalog data in dynamic offers.  Not as sexy as a social marketing acquisition but useful nevertheless. 

Act-On Software added dynamic content, progressive profiling, new survey components, search engine optimization meta-tags and source tracking, and performance reports. These are mostly catch-up features but the search engine optimization piece again shows the industry’s movement in that direction.

OfficeAutoPilot expanded its professional services offerings – another industry trend – and improved its tools for building forms and creating emails. They also announced the ability to purchase sky banners – you know, those things towed by airplanes – but that was just an April Fool’s joke. Pity.

B2B Email Benchmarks: Answers Vary Widely

One of the things I’m enjoying about my new role as head of analytics at Left Brain DGA is being closer to hands-on marketing than I was as a consultant. This leads to different questions than I used to get, including the ever-popular “what’s a reasonable response rate for our emails?” That one came up last week and led me to review my files on industry benchmarks. Without giving away any deep secrets, I thought I’d share the results.

I found five relevant studies dating back to 2009. Taking the oldest first:


Silverpop International Email Marketing Benchmark Study, 2009


This one doesn’t break out results by mailer type, so it’s probably dominated by business-to- consumer marketers. But it does distinguish gross opens from unique opens, which are significantly different. It also shows median as well as average results, in addition to top and bottom quartiles.  This is a good reminder that there's a very substantial range of variation in different marketers' performance.  The difference between the medians and averages is also something to bear in mind when looking at the other surveys, which only report averages.

Silverpop is also the only study to give both bounce and unsubscribe rates – the others give one or the other.

Here is the U.S. data from the Silverpop report.

MailerMailer Email Marketing Metrics Report, 2011


I just discovered this one and am impressed.  It goes beyond simple reporting to analyze the impact of delivery day and time, number of links, subject line length, and personalization (some surprises here). The repoort breaks out results for several categories, of which the most relevant are probably Computer, Consulting, Large Business and Small Business. (I’ve added a simple average to use later.)

In general, this study shows substantially lower open rates than other studies, somewhat higher click rates, and higher bounce rates. I’ve calculated the click-to-open rate, which isn’t necessarily the result you’d get if you looked at the actual average. But it’s worth having as a point of reference.

Here’s some detail from the study itself (you'll have to click on this to make it legible).  The business categories account for two of the four highest open rates and are all in top half of the click rates. 

Eloqua Marketing Metrics Outlook 2011


You’d expect Eloqua to put out a good study on this topic, and they deliver. The best-in-class, average, and laggard classifications illustrate the huge gap between even average performers and best-in-class. They also reinforce the point, illustrated in the Silverpop data, that medians are significantly below averages because of high-end outliers.  Not to go all stat-geeky on you, but that really matters if you're looking for a benchmark that reflects "typical" performance.

Arguably all Eloqua clients would be relevant to marketing automation users, but the most relevant for true B2B would include Manufacturing, High Tech, and Business Services:

Across all categories, Manufacturing has the highest open rate and is tied for second highest click-through, but the two other "true" B2B categories rank at the bottom.  The combined averages for the three are just slightly below the average for all categories.

Epsilon Email Trends and Benchmarks Q42011


Epsilon is another industry stalwart, publishing regular quarterly reports. But they only provide one category for B2B Products and Services, plus another for Business Publishing. The open rate for that category seems pretty high compared with other studies, although the click rate is largely in line.

Comparing Business Products with other categories, both the open rate and click rate are in the middle of the pack, each ranking sixth highest of 13 categories.

Epsilon also provides an intriguing breakdown within each industry of results by email type (acquisition, editorial, marketing, research, and other).  The figures for marketing emails in the Business Products category (19.2% open rate, 2.7% click rate)  are considerably lower than the category total (27% and 4.4%), but I can’t make sense of the numbers: marketing accounts for 88% of the industry volume, so they just shouldn't be that far apart.  (More formally: if you combine the message type figures in a weighted average, the result does not equal the category total.)  I’ll assume the group totals are more reliable than the detail.

Signup.to The UK Email Marketing Benchmark Report 2012


Finally, we have a study from Signup.to in the UK. I’d question its relevance to the U.S. market, but the 2009 Silverpop study showed similar figures for both. It includes figures for B2B Sales, B2B Service, Industrial/Manufacturing, and IT. These vary pretty widely, especially for open rates.

Compared with other categories, the business emails get somewhat above-average response:

  
What Does It All Mean?

Within each report, open and click rates B2B categories tend to be in the middle or  above average.  But the over-all ranges vary substantially from one report to another: at the extremes, MailerMailer open rates range from 7.1% to 17.6%, while Epsilon ranges from 14.2% to 35.6%.  Without understanding the reasons for these variations, it's hard to select a single reference point as a benchmark.  The best I can suggest is to throw out the outliers, which would leave Eloqua and Signup.to.  I'd also tend to favor the Eloqua figures because they are based on the "average" performers, and therefore are closer to a median rate.  (You'll remember that averages tend to be higher than medians, because a handful of very high performers distort the results).

That said, the table below shows the average figures for each survey (which, you'll remember, themselves hide significant variations within each report). I’ve calculated an average of averages, excluding Silverpop since it didn’t break out B2B from B2C. As it happens, the averages fall somewhere between the Signup.to and Eloqua figures.  So, if you forced me to propose benchmarks for B2B email performance, I'd say those numbers are as good as any.

Infusionsoft Revamps Its Interface, Adds New Campaign Builder, Web Analytics and Lead Scoring

Infusionsoft introduced its latest release earlier this month. This included a full revamp of its customer interface, a new campaign builder and shopping cart, and new capabilities for Web analytics, lead scoring, and lead source reporting.

Stated so plainly, this doesn’t sound like much. But Infusionsoft says it’s the biggest release in company history and I've no reason to doubt.  A new interface and campaign builder are big projects.

Both represent significant improvements over previous Infusionsoft editions. The interface is cleaner, organized around tasks rather than data objects, and lets users customize their menu of top-level functions. The campaign builder now supports branching flows, timers, and multi-step sequences with a smooth drag-and-drop interface. The shopping cart is also significantly more powerful. Lead scoring (nicely executed), Web analytics, and lead source reporting all fill major gaps in the product.

That said, this is still an evolutionary release for Infusionsoft. In part, this is because the company is careful not to overwhelm clients with too many changes. More fundamentally, it reflects Infusionsoft's steady focus on solving the same problem for the same customers: helping businesses with under 25 employees run their marketing, sales and e-commerce more efficiently.  This lets Infusionsoft understand its customers' needs deeply and build systems that meet them.  The company conducted more than 500 interviews in preparing the new release.        

Infusionsoft still has a ways to go.  The new release adds some missing marketing features but doesn’t incorporate social media, blogging, or Web site management. These are common needs for small businesses, so I’d consider them gaps in the product. The system also lacks dynamic content, custom data tables, and sophisticated user rights management – but those are more relevant to larger firms than Infusionsoft’s target customers.  Split testing is also missing – and even though few small businesses do it, I'd argue it belongs in the product, because they should.

Infusionsoft also reported that it continues to grow nicely.  The company now has 8,500 customers, 30,000 users, and expected revenue of $40 million in 2012, up 50% over $26 million in 2011. It is expanding its service offerings, app marketplace, and network of consulting partners – a critical resource for small businesses that often have little in-house marketing talent.  Pricing on the new release remains unchanged, with full-featured versions starting at $299 per month. 

Survey of Surveys: Budgets and Process are Main Barriers to Marketing Technology Success

I recently gave a Web presentation comprised almost entirely of slides from different surveys. This was a bit of an experiment and, sad to say, it didn’t seem terribly successful. I did weave the slides into a nice little story line – marketers know they need better technology, poor data is the root of their problem, and we know how to solve this – but even that wasn’t enough. Pity.

Still, preparing the slides gave me a chance to scan the surveys in my archives, which was entertaining in its own little way. Many surveys ask similar questions, which gave me some choices during my preparation. But I didn’t look carefully at how they compare.

Today I’ll do that. I’ve chosen one of the most popular questions: what are the barriers to marketing technology adoption? I have versions of this from seven different surveys within the past year.

Of course, each survey uses different terms. To make the comparison, I collapsed the various answers into a few reasonably-distinct categories, committing a certain amount of shoe-horning along the way. I then recorded where each answer ranked in each survey, compiled the results, and did a crude ranking with a combination of mathematical wizardly and body english.  (Multiple answers for the same survey indicate I placed several questions into the same category.)

Results are below.  I've shaded the first ranked answers in orange and the second and third ranked answers in yellow.

My first observation was the sheer inconsistency of the answers. Budget issues emerged as a clear number one, but they reached that rank on just four of the seven surveys and ranked quite low on the other two that included them. The second-ranked item (marketing process) was never listed first; it ended where it did because it had the most twos and threes. No other item was ranked first more than once or in the top three more than twice.

Things made a bit more sense when I looked at the survey audiences. Winterberry and Forrester were specifically about online marketing, Gleanster and Marketing Sherpa were B2B surveys, and IBM and the two CMO Council studies were of general marketers. Since most B2B marketing is also online, it makes sense to look at the first four as one group and the other three as another.

Now we see some interesting consistencies:

• Budget isn’t much of an issue for the online and B2B marketers, but dominant for the mixed marketers.

• Marketing process and marketing staff skills are major concerns for online and B2B but rarely mentioned by the mixed marketers.

• Senior management support, and to a lesser extent IT support and technology capabilities, are significant barriers for mixed marketers but don’t slow down the online and B2B groups.

• Metrics, organizational silos, and the economy are cited occasionally by both groups but don’t seem to be major issues for either.

So there’s a fairly coherent picture after all.

• Online and B2B marketers are struggling to keep up with a rapidly changing marketplace, meaning their biggest problems are people and process. The importance of their work is obvious enough that budgets and senior management support are generally available. They have the technical savvy and independence to avoid issues with IT support and organizational silos.

• Mixed marketers, working in traditional channels, still struggle with budgets, metrics, and senior management. They have mature marketing organizations, so process and skills are in place, at least for traditional programs. They do struggle more with IT, technology, and organizational silos, because they lack their own technical skills and have limited clout in the organization.

• Everybody says they care about metrics but it's rarely a top priority.


Or at least that’s my take. I’ve displayed the actual surveys below – if you reach other conclusions or spot any other patterns, let me know.

Kwanzoo Builds Content for Cross-Channel Marketing

I first bumped into Kwanzoo about a year ago at a conference trade show and was frankly puzzled at what they offered. The mechanics were clear: a tool to generate HTML-based forms, surveys, banner ads, and social sharing links that could be used on Web sites or embedded in emails. What puzzled me was the advantage of this over anyone else’s HTML content, including the content that could be generated using standard tools within most marketing automation systems.

Since this particular mystery ranked somewhere between the fate of Amelia Earhardt  and Nacza Lines  in my personal priorities, I didn’t investigate further. But the company reached out to me recently and provided a clearer explanation. Here’s the story.

What makes Kwanzoo special is it creates a sequence of Web pages that can be deployed as a single unit. A typical sequence would be a survey followed by different offers depending on the visitor’s answers. The entire sequence is built in Kwanzoo and deployed as a code snippet which displays the survey and calls the subsequence pages from Kwanzoo when appropriate. The second thing that makes Kwanzoo special is that its pages can be deployed on a client’s own Web site, on external sites and ad networks, embedded in emails, within Facebook, or on a mobile device. Users can also apply Kwanzoo tags to conversion pages to track results.

These capabilities make Kwanzoo substantially more versatile than a conventional marketing automation system, which would rely on campaign flows or manually-embedded links to manage the page sequence and could only deploy on emails or microsites generated by the marketing automation system itself. By contrast, users design the flows by filling out a simple form within Kwanzoo and then receive HTML snippets – simple calls to Kwanzoo-hosted URLS – that can be embedded anywhere. Kwanzoo also provides a powerful editor to build the Web pages and offers.

Data captured by Kwanzoo can be directly posted to Eloqua, Marketo, Constant Contact and Salesforce.com. The Eloqua integration is especially elegant, using an Eloqua Cloud Connector (i.e., a parameterized API call) that makes the Kwanzoo pages available within Eloqua’s own content builder and can read Eloqua cookies in real time to help guide the response selection. Integration is on the way with other marketing automation and CRM systems.

Users can also apply IP-address-based visitor identification to tailor responses to named accounts and different industries.

Kwanzoo says this versatility addresses some critical pain-points for marketers, including needs to create content and capture data across multiple channels and to create more personalized interactions. True enough.  But the system has its limits, most notably that sequences are limited to a couple of steps, a few data inputs, and a handful of actions, and that it doesn't maintain its own marketing database.

In other words, Kwanzoo is more a bridge between different marketing channels than an integrated marketing system. It’s easy to imagine Kwanzoo-captured data making its way back to multiple systems (marketing automation, CRM, Web site, mobile, etc.), which is not the ideal situation. There’s certainly a market today for this approach: Kwanzoo has landed about 25 clients since its launch in 2010 and seems to be growing nicely. Still, you have to wonder whether integrated platforms will eventually add similar capabilities tied directly to their own databases, making Kwanzoo’s external bridge less necessary.

Or, even more directly, will Adobe offer pretty much the same capability?  They already have the dominant tools for content-building (Dreamweaver, etc.) and Web visitor tracking (Omniture), which are the two key pieces of Kwanzoo's offering.  I long ago predicted that Adobe would combine these to create "smart content" that would adjust to customer behavior, although so far Adobe hasn't listened.  But they could.

But that’s Kwanzoo’s problem, not yours or mine, eh? At the moment, it’s worth a look. Pricing is based on number of impressions and starts as low as $499 per month to put Kwanzoo units on Web pages.  It quickly rises to $2,499 to embed units in emails, post data other than basic lead capture, support mobile formats, and use IP-address information for targeting.  

Salesforce.com Announces Site.com Web Site Management: Will Marketing Automation Features Follow?

Salesforce.com yesterday announced the launch of Site.com, an enterprise-class Web site management system. The news didn’t seem to get much attention, perhaps because Salesforce.com itself pretty much buried it. But Salesforce.com VP of Product Management Anshu Sharma did post a detailed explanation of the rationale on a Salesforce.com blog.

My original reaction was “I told you so”, since I’ve been talking about the convergence of CRM and Web site management for years. (Here’s a piece from 2009.)  Sharma’s reaches a similar conclusion although he puts it in a larger context of social media (people expect to interact with a company Web site like they interact on social media), cloud,  and mobile computing (marketers need content that can be presented on all types of devices). So far so good, especially since multi-channel content is another trend I’ve been toying with for some time.  (Not that I'm bragging or anything.)

Just to clarify my argument, the case for convergence between CRM and Web site management boils down to the fact those are the two main systems that companies use to interact with consumers. The move closer as Web sites capture more individual-level information and present more personalized treatments. And, as the two giants converge, the marketing automation industry stands between them like a mushroom, waiting to be crushed or gobbled up (if giants eat mushrooms).

Some of that gobbling has already begun.  Web site management vendor SDL purchased Alterian last November and sales enablement vendor CallidusCloud bought LeadFormix in January. Ironically, speculation about Salesforce.com itself buying a marketing automation system had pretty much died down since last August’s Dreamforce conference, when the firm made it pretty clear they didn’t have plans in that direction (notwithstanding their earlier HubSpot investment).

That’s why I was greatly intrigued by Sharma’s statement that the transformations created by social, cloud and mobile technologies “can only bear long-term fruit and deliver on the full promise of a 'digital marketing platform' when marketing and IT are a true partners.”

 That’s the first Salesforce.com reference I can find to a “digital marketing platform”.  It certainly implies something that includes marketing automation functionality. Maybe the reason Salesforce.com decided not to purchase marketing automation system because they figured same functions would evolve organically from a combination of CRM and Web site management. That’s probably correct, although it would take longer than adding those features directly.

In any event, the combination of CRM and Web site management gives Salesforce.com an integrated database containing all the information needed for effective marketing automation. Building marketing automation features to exploit that information then becomes a lot easier than building a complete marketing automation system.  This applies whether the system providing those features comes from Salesforce.com or an AppExchange partner, and it means the barrier to entry is lower than ever.  In short, the Site.com announcement is big news for the marketing automation industry, whether people recognize it or not.

BI Vendor QlikTech Reveals QlikView Pricing: I Modestly Help to Clarify

Business Intelligence software vendor QlikTech* officially published its price list last month, after years of keeping it a not-very-closely-held secret. I was personally pleased, since people occasionally ask me what QlikView costs.  But then I looked more closely at the list and realized I wasn’t quite certain what it meant. Happily, it didn’t take long to set up a briefing and clarify matters. Just in case anyone else is also confused, here’s what they told me:

- The lowest entry price for a fully functional version is $1,350. Although this is called a “Named User License”, it does NOT require connection to a server—the specific point I wasn’t sure of. What distinguishes this from the free Personal Edition is that the Named User License can read QlikView files created on other machines, while the Personal Edition cannot. Thus, a company could buy two Named User Licenses for $2,700 and those systems could share files back and forth.  Let me state clearly that as a confirmed QlikView fan, I think this is a terrifically low entry price.

- Companies with many infrequent users can purchase a “Concurrent License” that allows one user at a time for $15,000. This figure is so high that I thought it might be a typographic error, but QlikTech assures me it’s correct. In fact, they say it’s a bargain because they’ve found many clients can share more than 11 users on one license. These would be salespeople or other non-analysts who want to occasionally view a report. It seems to me that Murphy’s Law would ensure they all access the system during the same five minutes – presumably the evening before their monthly reports are all due – but I’ll take QlikTech’s word that this isn’t the case. After all, they're the analytical experts, eh?

- Companies who don’t want to spend $1,350 for casual users have some other options. These include a $350 “Document License” for one user for a single document, a $70,000 “Information Access Server” allowing unlimited users to access a single document (usually over a public Web site), and a $3,000 “Extranet Server Concurrent License” that allows one external user at a time to read documents on an $18,000 “Extranet Server”.

There are various other licenses for larger systems and special purposes. The descriptions are more or less self-explanatory, but of course you’d want to talk to QlikTech itself for detailed explanations.

One thing you definitely won’t find is a free or low-cost  “reader” licence that lets users view but not change a QlikView document. This is a disappointment to me personally, since we at Left Brain DGA use similar readers to send reports to our clients today. I can’t see those clients paying for Named User Licenses or Concurrent Licenses. But QlikTech is philosophically opposed to the idea of a limited-function reader, which it argues “goes against the current trend toward the democratization of software — in which line of business users can become as adept with an analytics tool as any business analyst or developer.” I can’t say I agree: QlikView takes considerable effort to learn, and many business users don’t have the time, need, or inclination to bother. They would be perfectly happy to consume existing reports without drilling any deeper, but are unlikely to pay $1,350 for the privilege.

I can’t judge how much business, other than mine, the lack of reader is costing QlikTech. Surely some people end up buying the full Named User License and using it as a reader, which makes up for some of the people who don’t buy at all. QlikView also has a strong argument that their total cost of ownership is lower than competitors, even at current pricing levels. The company grew 40% year-on-year as of its last financial report, so they’re clearly doing just fine with their existing approach.

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* QlikTech is the company, QlikView is the product

SAS Unveils High Performance Analytics Technology

I spent the early part of this week at SAS’s annual analysts conference, where the company reviewed the past year and presented its vision for 2012. The story this year was simple: “big data”, and SAS’s “high performance analytics” approach to taming it.

Of course, “high performance analytics” is what SAS has always done and, like “big data” itself, the term is relative. What SAS specifically presented was a re-engineering of its core analytical procedures to run in “shared nothing” multi-processor environments.  Each data set is split into pieces that are loaded into separate units, processed independently and simultaneously, and then brought together for a result. SAS cited tremendous performance improvements, such as reducing the time to build a loan default model on a billion rows of records from 11 hours to 50 seconds. This obviously makes possible new, tactical applications.

The high performance architecture is becoming available in stages as each SAS procedure is rewritten to support it.  The change from a customer perspective is purposely minimal: existing SAS procedure calls are simply modified by adding a "HP" prefix.  This will make it easy for clients to take advantage of the new capabilities. 

The company revealed a just a few new products at the conference, most notably a Visual Analytics tool that uses in-memory processing to render billion-row data sets in seconds. But the real benefit of high performance will come less from new products than from using it with existing SAS procedures and tools. The SAS product that may benefit most of all is SAS Decision Management, which creates rule-based decision flows that can call on scoring models and other analytics to help guide tactical processes. The product itself isn’t new, but high-performance analytics will let it do new things.

SAS’s “big data” story also included Hadoop integration and expanded cloud deployments. By the end of March (if I understood the roadmap correctly), SAS will be able to read from and write to Hadoop data sets, embed Hadoop commands within SAS scripts, and send SAS metadata to Hadoop. Over the coming year, it will support cloud deployments through a variety of enhancements related to virtualization, open APIs, and eventually an app marketplace. The cloud-based initiatives also support SAS’s own on-demand business, which grew 57% last year to reach more than $100 million.

These are all positive developments for SAS, which must certainly support "big data" to remain relevant.  The new capabilities will also create some business changes as SAS competes more directly with companies like IBM and Oracle to embed analytics within operational processes. SAS itself noted the company is now more involved in architectural discussions of how its systems interact with the rest of the enterprise infrastructure. Other issues may include educating non-technical users and providing technology to protect privacy.  SAS leaders seem to think they can leave those issues to others, but I’m not so sure.

The conference produced little news directly related to marketing systems.  The company reports 38% growth in marketing applications – which it reports under the label of “customer intelligence” – so that is clearly a healthy business.  But the product road maps showed just incremental improvements of existing products, without any major new offerings. Again, high-performance analytics will make new things possible without other changes in the products themselves. The high performance version of marketing optimization is due by the end of the year.

If you want more evidence of how little attention was paid to marketing systems: SAS's biggest recent piece of marketing-related news, last week’s acquisition of online ad server aiMatch, got exactly one mention during the day-long presentation and was positioned as simply filling a small gap in the marketing product line. The company did announce, very casually, that aiMatch would be extended to include ad buying optimization as well as its current ad-selling optimization. That struck me as a pretty big deal, since ad buying is the heart of an already-huge industry that’s clearly the future of marketing. Then again, it’s also an intensely competitive, heavily-funded space that’s crawling with advanced technologies. Although SAS's high performance analytics could have a huge impact on ad serving, that won't happen unless SAS makes a major commitment of people and money.  We’ll see whether they make one.

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.

Quantivo Offers High-Volume Customer Analytics at a Modest Price

These are exciting times in the world of analytical systems. The Web has created new demands to handle unprecedented data volumes and semi-structured data. Cloud-based deployment offers near-infinite hardware scalability and flexibility.  Acquisitions by enterprise software giants have opened opportunities for smaller, more nimble alternatives. The result has been an explosion of companies using new techniques for managing and analyzing huge data volumes. Many, including Vertica, Aster Data, Greenplum, and Netezza, have also been assimilated by enterprise vendors. Others, including Paraccel, Kognitio, SAND Technology, and 1010data, have grown steadily while remaining independent.

Quantivo is part of this latest technical flowering. Its core is a data structure that sits somewhere between columnar – now the most common approach for analytical processing – and hierarchical indexes. Specifically, Quantivo identifies unique pairs of values within incoming records and stores each pair only once. It then builds new pairs by identifying unique combinations of each pair with another element (which might itself be previously-identified pair). For example, the first analysis might find all transactions that involve a specific product on a single date. The second pass might find all transactions with that product/date pair that were made by a given customer. The process repeats, working up a hierarchy of combinations. The system also tracks the number of times each pair occurs and the specific records involved, so the full detail of the original data can always be reconstructed. The system doesn’t build pairs for all possible combinations of data elements, although users can define several hierarchies if they want the same element to be part of several pairs. Indexes also allow analysis across pairs that are not directly built into the data.

Quantivo doesn’t hide the details of its approach, but it doesn’t talk much about them, either. This likely reflects a (correct) judgment that users will care more about the system’s benefits than how it works. Those benefits include data compression (typically 10% of the original volume), fast response, high scalability, flexible schemas, handling unstructured data, and efficient processing of queries that cause problems in standard SQL. The choice of hierarchy also inherently organizes data around “concepts”, which can be different from the physical structures of the inputs. Queries are relatively simple because users see only a flat list of data elements; relationships are managed automatically, behind the scenes.

Yes there are trade-offs. The data must be processed during the load – a computation-intensive task that takes longer than creating a simple columnar database. The schema must be designed, which requires some technical expertise and can lead to slower response for queries outside the expected paths. Non-SQL queries require a Quantivo-built user interface, meaning users cannot stick with their familiar SQL-based business intelligence tools.

Some of these issues are mitigated by Quantivo’s other major differentiator: it was designed from the start as a true multi-tenant cloud-based solution.  This means it can easily spread its workload across multiple servers and replicate data as needed to support higher data volumes (billions of rows), reduce load times (typically one to two hours per day for daily updates), and improve response time. Support for multiple hierarchies and queries across hierarchies also minimize the price of making a bad decision during initial schema design, since even unplanned queries will execute reasonably efficiently. Designing a schema is relatively simple: in fact, Quantivo plans to add self-service data provisioning, including schema design, in the near future.

The Quantivo user interface is purposely designed to look like other business intelligence tools: users get a list of measures and dimensions, which they drag into place to create pivot tables. They can create filters, define calculated values, add summary levels, and drill down to details. There are simple graphics such as bar and pie charts, but no advanced visualization.

The unique power of the system lies within the filters, which can select data that’s outside the standard dimensions. For example, a filter could select all transactions for customers who purchased a specific product – the type of market basket analysis that’s hard with traditional SQL queries. The system also calculates “association metrics” which compare the data across two groups, such as products in the baskets including product A vs. products in baskets including product B.

Quantivo pricing is based on data volume and complexity. A typical client pays $40,000 to $50,000 per year for 100 million to one billion rows of data, making the system remarkably affordable for a product of its type.  Most clients are using the system for customer data analytics, and the vendor has created connectors for SAP, Salesforce.com, Marketo, Responsys, ExactTarget, Omniture, Google Analytics, IBM, Microsoft, and NCR systems. Quantivo launched as a cloud-based service in 2008 and has an undisclosed number of paying clients.

Et Tu, David: Why Raab Associates Became Part of Left Brain DGA

You may have seen yesterday’s announcement that Raab Associates’ marketing technology practice* has become part of LeftBrain DGA, an agency specializing in demand generation strategy and execution.   

My role at Left Brain will be to build the “optimization” practice, which means working on marketing analytics as well as technology.  I’m looking forward to deeper involvement in client marketing programs than the project-oriented work at Raab Associates allowed.  Left Brain and its clients are eager for the optimization work because many of their programs have now passed their initial deployment and need this sort of analysis and tuning. 

Left Brain’s readiness for an optimization practice reflects changes within the larger demand generation industry.  As B2B marketing automation technology worked through its initial deployments, the industry needed best practices to ensure successful implementation.  This meant marketing process definition, marketing/sales alignment, and program strategy.  It’s still important to execute those properly, and always will be.  But we now understand what the issues are and how to solve them.  The next frontier is refining and expanding existing programs, especially at larger organizations (a Left Brain specialty), which have the data volume and resources to support advanced analytics.  That requires new best practices and success histories for optimization.  That’s exactly what I’ll be working on.  It will be fun. 

If you’re wondering about this blog and my other activities as an industry analyst: my current intent is to continue.  My work at Left Brain will still require keeping abreast of technology developments, both for our internal use and at our clients.  It’s likely that my topics will shift a bit as my day job revolves more around analytics and less around vendor selection.  But, as I just suggested, this probably mirrors a shift of focus for the industry itself.  So, if the stars are aligned as I think, my topics will be more relevant than ever.

Regarding my traditional consulting work on vendor selection and technology analysis: I'll probably do less of it as other Left Brain work takes most of my time.  But I’m still here and happy to hear from people who need help in those areas.  If we can’t help you at Left Brain, we’ll recommend someone who can.

Finally, there's our VEST report, which is still available at the Raab Guide Web site.  We just released a new edition of that, so it will be current for at least six months.  What happens after that I can't say: it might vanish, we might continue it under the Left Brain banner, or it might find a new home.  But for now it's still a great resource for companies looking for in-depth information on B2B marketing automation systems, so make use of it while you can.

Incidentally, my new title at Left Brain is Vice President of Optimization, which manages to be both vague and bureaucratic.  I'm thinking I might prefer Lord of Optimization, or maybe just Oracle.  Other suggestions are welcome, so long as they're G-rated enough to put on a business card. Maybe we should have a contest.
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* The rest of Raab Associates, a children's book marketing agency run by my wife, will continue to exist.  See her Web site at www.raabassociates.com.

NurtureHQ Offers "Dead Easy Marketing Automation". Is That Enough?

I don’t know whether to laugh or cry.

New-ish marketing automation vendor NurtureHQ showed me its product recently. It’s really nice. Clean interface, easy to use, all the standard marketing automation features. Particular strengths in:

• split testing (separately for email subject lines and versions)
• lead scoring (automatically reduces scores from older events)
• CRM integration (Highrise, Capsule CRM, Sugar CRM, Salesforce.com, and an open API)
• marketing analysis (users can track multiple outcomes per campaign)
• content management (nice email/form/page builder, user-defined variables can be shared across messages to make changes easy)
• selection, segmentation, and campaign flow based on list tags (highly intuitive)
• low price ($495 per month for up to 20,000 contacts and 10 users with unlimited emails and landing pages and no annual contract)

In other words, this is a worthy alternative to Act-On, SalesFUSION, Net-Results, MakesBridge, Genoo, and other small business systems. Definitely take a look if you’re in that market for that sort of product.

But there’s my problem: “that sort of product” is widely available already. NurtureHQ hopes to differentiate itself as “dead easy marketing automation”, which it arguably is. But is it so much easier than the other products I just listed? I think not.  Regardless of whether it’s the easiest of them all, the difference isn’t likely to be large enough to matter.

Naturally, NurtureHQ disagrees. Before building its system, the company spent six months talking to current marketing automation users.  Many said they never progressed beyond email because the next step was too hard. This led NurtureHQ to believe that an even easier system could find a broader market than current products.

Other vendors have asked the same questions and reached the same conclusions.  But I’m beginning to think those marketers were really saying something else. What they found “too hard” wasn’t the software, but the planning and content creation needed for serious marketing automation. Without a clear understanding of what they wanted to do, they couldn’t figure out how to get the system to do it. That’s not a software problem.  Even a system that could build programs just by reading marketers' minds wouldn’t work if those minds didn't know what they wanted in the first place.

This isn’t a new insight. Marketing automation gurus have long argued that companies need to define their processes in advance of deploying a new system. The case was made yet again this week in an excellent blog post by Joby Blume, describing his former company’s struggles with marketing automation. (Be sure to read the comments). Howard Sewell of Spear Marketing Group made a similar point on his own blog. I reached the same conclusion myself in a post using data from a Gleanster report on marketing automation.

None of this means that “ease of use” is a bad strategy for NurtureHQ and others. On a practical level, ease of use helps sell systems to people who otherwise wouldn’t buy them. But vendors can't succeed if their clients fail – especially they rely on revenue from subscription renewals. So it only makes sense to sell marketing automation to companies without adequate processes, content, and other resources if those companies understand they’ll need to add those resources later. To really ensure success, vendors must actively help their clients through training and, in some cases, services to do the work for them.   Vendors including LeadLife, Genoo, and MakesBridge already offer low-cost service packages for their clients.  Other vendors also have service arms and agency partners to help out on a project basis. Third-party training resources such as the Marketing Automation Institute (where I’m a board member) can also help to fill the gap and benefit from substantial vendor funding.

What does this mean for the software vendors themselves? If the real keys to success are marketers’ skills and processes, does it really matter what’s in the software? To put another way, is marketing automation software already a commodity?

I hate to say it, but, to some degree, yes. There are certainly differences among products, both in capabilities and ease of use. But most marketers can find several systems that will meet their needs. This means vendors are increasingly competing on other dimensions including their own marketing and sales skills, cost structures, supporting services, pricing, and financial resources. As I pointed out last week,  it’s no coincidence that four of the five largest vendors are venture-funded (six of seven, if you include Infusionsoft and HubSpot). Another factoid that makes the point even more clearly: three of the four fastest growing received major new funding in the past year.

Still, I’m not entirely ready to give up on technology as a major differentiator. What’s needed is more radical innovation than a better interface. If the real barriers to success are creating content and identifying appropriate programs, then technology must address those directly. There are some already tools to help generate content, such as systems for news curation  and video posting.  I can't think of any products that recommend the right marketing programs, but proper analytics can identify patterns that reveal opportunities, and it’s perfectly conceivable that a rule-based system could check for known issues and make recommendations. HubSpot’s marketing grader does a something like this although it only examines externally-available information.

Of course, marketers will still have to create content and design programs. But better technology could dramatically reduce the necessary effort and move marketers past the deer-in-the-headlights paralysis of not knowing where to start. Vendors who really want to expand the market beyond the resource-rich few should look in this direction.

Raab VEST Report: Testing, Data Quality and Content Management Still Lag in Marketing Automation Products

My last post looked at data from our just-released B2B Marketing Automation Vendor Selection Tool (VEST) to understand general industry trends and identify the greatest areas of improvement. Today we’ll look at the VEST data to see what’s still hard to find. As before, the charts show three columns: change in feature availability over the past year among core marketing automation vendors; current availability among core vendors; and current availability among enterprise vendors. See the previous post for details on the calculations.

Split Tests: Formal split testing of different content versions or customer treatments is the heart of marketing optimization, but many B2B marketers still don’t have the time or resources to do it. Given the lack of demand, it’s not too surprising that many vendors don’t offer strong testing features.  Still, I feel they have something approaching a moral obligation to provide these features and encourage their use.  Note that splits within lists, the one testing capability that is fairly common, is actually the hardest for marketers to use.  Testing features are much more available among enterprise systems, whose clients are more likely to conduct tests as a matter of course.

Value-Based Selection: This is arguably the next step after dynamic content (see my previous post), since it uses calculated values rather than user-crafted rules to select marketing contents or campaign actions. Like dynamic content, it reduces the complexity of marketing programs while allowing them to be more targeted. It's still much harder to find than dynamic content although it is becoming more available.  Again, enterprise vendors have a substantial lead over the core systems.

Integrate with Direct Mail Printer: This is admittedly a small tactical issue, but it's interesting in its own way.  There’s apparently a resurgence of interest of direct mail generally and post cards in particular as a way to avoid ever-more-cluttered email inboxes and social media channels. This is one of the few features that are more common among micro-business systems than the core group.

Project and Content Management: These features are most important for large marketing departments that need coordinate work of many people. Most core marketing automation systems can track the creation and last change date of an item. But serious administration requires much more detailed control over who makes changes, approvals, and project management. As marketing programs get more complicated at all sizes of companies, these features will become increasingly important.

Data Quality: These are features that give marketers more control over the data that goes into their systems. Like split testing, data quality is widely recognized as important but often ignored. Availability of these features actually went down last year because several new core vendors provided below-average support. Enterprise vendors, with their more sophisticated client base, support these features fully.

Data Management: These features each reflect a certain degree of data management sophistication, although there’s a reasonable case that a separate company table doesn’t matter much in practice. The opportunity table is critical for revenue analysis, and you see here that it’s widely available. Custom tables are needed to extend the marketing database beyond inputs from the CRM system. They used to be fairly rare but are now available in more than half of the core products.   But half full also means half empty, so buyers still need to check carefully to ensure a particular vendor supports their needs.

Reviewing this list of features, only value-based selection is really cutting edge.  The rest have long been standard for consumer marketing automation products and enterprise B2B.  They're missing from core B2B marketing automation systems because most of their clients are smaller, less sophisticated companies who haven't needed them.  This may never change for vendors focused on small marketing departments.  But vendors serving larger companies will add these features as their clients discover they need them.

For more information about the B2B Marketing Automation VEST report, please visit www.raabguide.com/vest.