Online Marketing Systems Are Still Very Fragmented

What with all the recent acquisitions in the digital marketing industry, I thought I’d draw a little diagram of all the components needed for a complete solution. The results were a surprise.

It’s not that I didn’t know what the pieces were. I’ve written about pretty much every variety of online marketing software here or elsewhere and have reviewed dozens of products in depth. But somehow I had assumed that the more integrated vendors had already assembled a fairly complete package. Now that I’m staring at the list of components, I see how far we have to go.

My diagram is divided into two main areas: traffic generation systems that lead visitors to a Web site, and visitor treatment systems that control what happens once people get there. The Web site itself sits in the middle.

The traffic generation side includes:

- email campaign systems like Responsys and Silverpop;
- search engine marketing like Efficient Frontier and Did-It;
- online advertising like Doubleclick and Tacoda;
- search engine optimization like Apex Pacific and SEO Elite; and
- mobile advertising like Knotice and Enpocket

(There are many more vendors in each category; these are just top-of-mind examples, and not necessarily the market leaders. If you’re familiar with these systems, you’ll immediately notice that search engine optimization is a world of $150 PC software, while all the other categories are dominated by large service providers. Not sure why this is, or if I’ve just missed something.)

The visitor treatment side includes:

- behavioral targeting systems like [x + 1] and Certona (this area overlaps heavily with online ad networks, which use similar technology to target ads they place on other people’s Web sites)
- site optimization and personalization like Offermatica and Optimost;
- Web analytics like Coremetrics and Webtrends
- real time interaction management like Infor Epiphany and Chordiant(and, arguably, a slew of online customer service systems)

The Web site that sits in between has its own set of components. These include Web application servers like IBM Websphere, Web development tools like Adobe Dreamweaver, and Web content management tools like Vignette. Although their focus is much broader than just marketing, they certainly support marketing systems and many include marketing functions that compete with the specialized marketing tools.

If you compare this list of applications with the handful of seemingly integrated products, you’ll see that no product comes close to covering all the bases. Demand generation systems like Vtrenz, Eloqua and Manticore combine email with some Web page creation and analytics. Some of the general purpose campaign managers like Unica and SmartFocus combine cross-channel customer management with email, interaction management and analytics. A few of the recent acquisitions (Acxiom Impact / Kefta, Omniture / Touch Clarity, Silverpop / Vtrenz) marry particular pairs of capabilities. Probably the most complete offerings are from platform vendors like Websphere, although those products are so sprawling it’s often hard to understand their full scope.

What this all means is the wave of consolidations among online marketing vendors has just begun. Moreover, online marketing itself is just one piece of marketing in general, so even a complete online marketing system could be trumped by an enterprise marketing suite. Viewed from another angle, online marketing is also just one component of a total online platform. So the enterprise marketing vendors and the Web platform vendors will find themselves competing as well—both for acquisitions and clients.

Interesting days are ahead.