Wednesday, July 28, 2010

Manticore Technology Sees Expertise as Key to Success as a Demand Generation Vendor

Summary: Manticore Technology released some modest enhancements to its demand generation platform today. The company takes a conservative approach to marketing automation, stressing the importance of process over flashy software. I’m not sure this will be enough to thrive as the market develops, but customers will benefit regardless.

Manticore Technology today released the latest version of its marketing automation system. Changes include a drag-and-drop design tool (similar to Microsoft Powerpoint); integration of opportunities and custom objects from; better reporting on Web site visitors; and, real time sales alerts on Web activity.

Each of these makes Manticore a bit more useful but none breaks new ground for the industry. So rather than review them in depth (you can read Manticore’s press release for details), I’ll look at Manticore’s broader business approach as outlined by Marketing Vice President Christopher Doran.

First some background. Manticore launched its B2B marketing automation system in 2003, making it one of the older vendors in the industry. With a $2,000 per month starting price and a solid mix of features, it sits squarely in the middle of the market. The firm has grown steadily but slowly, reaching just under 125 active clients. These include a few very large firms but mostly mid-size businesses and divisions of larger companies. Unlike faster-growing competitors, Manticore has been largely self-funded.

In a stable industry, this would be a comfortably conservative position. But the marketing automation space is changing rapidly. A mid-tier company which is neither growing quickly nor dominating a particular niche could easily be left behind. At least, that's my opinion.

Manticore doesn’t see it this way. According to Doran, the company has found that the real key to success is guiding clients through successful execution of demand generation programs. Manticore wants clients to understand that demand generation is a business process. It positions itself as a "trusted advisor" that sells based on its expertise, not on technology.

Part of this approach is to give clients a methodology. Manticore offers a straightforward one: define the stages in your marketing funnel; benchmark performance at each stage and identify bottlenecks; create transitional content to move prospects into new stages; define nurture programs to reduce bottlenecks; execute the programs; measure the results and compare them with your goals. The product supports this methodology but does not insist on it.

Doran sees Manticore's customer support group as playing a key role in delivering its expertise. Support staff are trained to help clients address their business issues. This fills a key gap between buying the software and hiring an actual marketing consultant. Manticore relies on business partners for such consulting services.

Of course, Manticore recognizes that it cannot succeed unless the product itself remains competitive. As the latest round of enhancements illustrates, Manticore remains focused on the core demand generation features of email, landing pages, lead nurturing and sales integration. The company is avoiding extensive investments in “inbound marketing” technologies such as search engine optimization and paid search advertising. Nor will it expand into marketing resource management features for planning and budgeting. Doran did say he expected to add some social media features and deeper reporting. And the company will continue to stress its traditional message of ease of use – although at this point, most other demand generation vendors make a similar claim.

I remain skeptical about Manticore's approach. It's true that process is more important than technology and that services to new users were the key to success in earlier marketing automation generations. But today there are plenty of consultants and agencies to provide that support, so it's probably not necessary for vendors to do it themselves. As a practical matter, I think most buyers will prefer systems with a broader scope, flashier presentation and more aggressive marketing. But so long as Manticore and similar firms remain financially sound, they can sell to the minority of buyers who understand the value of expert service. Perhaps that's all Manticore really needs.

Thursday, July 22, 2010

Marketing Automation Vendor Consolidation: Lessons from History

Summary: consolidation isn't new among marketing software vendors. When campaign management systems consolidated in the late 1990's and early 2000's, most were bought by enterprise software companies. The pattern will likely repeat itself.

As I wrote in my June 30 post on consolidation among marketing automation vendors, I expect the number of competitors to shrink fairly quickly as new buyers concentrate their purchases among a handful of leading vendors. This is a natural result of a maturing market, as technology-oriented pioneers are replaced by buyers less likely to research their options in depth.

But what, exactly, will the consolidation look like? Will weaker marketing automation vendors merge with each other to establish a larger market presence? Will they merge with complementary firms to offer a broader range of capabilities? Will they specialize in particular industries to establish a small but profitable niche? Or will they simply be crushed as giants from related industries introduce their own products?

Let’s look at a similar consolidation about ten years ago, among the original marketing automation vendors.* These were campaign management systems including Exchange Applications, Recognition Systems/Protagona, Prime Response, Intrinsic, Unica, Aprimo, Decision Software TopDog/MarketWide, Alterian and SmartFocus.

The pattern is quite clear. A handful of vendors managed to survive as independent firms. The big winner has been Unica, which competes successfully among high-end buyers. Decision Software has remained a small company while Aprimo is most successful in B2B marketing resource management. Alterian and SmartFocus are also still independent, but are sold largely via marketing service agencies.

The rest of the competitors, including the original market leaders, were nearly all purchased as line extensions by much larger firms. Exchange Applications went to Amdocs, Prime Response went to Chordiant (itself recently purchased by Pegasystems), Protagona was purchased by DoubleClick (now part of Google), Ceres ended up with Teradata, Intrinsic was bought by SAS, Epiphany became part of Infor, Paragren was bought by Siebel (now Oracle). Other, less successful vendors simply vanished. There were no mergers of equals and no one thrived as a specialist in a particular industry. Although Unica, Alterian and SmartFocus have purchased complementary products, these were extensions around the campaign management core.

Although the world has certainly changed since the late 1990’s, I see no reason to expect a different pattern among demand generation vendors. A few might survive as independents serving the most sophisticated clients. Eloqua and Silverpop are the obvious candidates. Of the remainder, the stronger firms will probably be purchased by companies seeking enter the demand generation space, and the weaker firms will quietly go out of business or be purchased for their client lists.

The more interesting question is who will be the buyers. The obvious candidates are CRM vendors. Of course, Oracle has already made its move by purchasing Market2Lead's intellectual assets. is the big question and no one would be surprised to see them make an acquisition. Enterprise software vendors like SAP and Infor are also likely buyers. Microsoft is another possibility, although its Dynamics CRM is sold mostly to smaller businesses than the typical marketing automation system. Speaking of small business suppliers, Google and Intuit are long-shot contenders.

Email marketing is another obvious adjacent space. Again, there was already one transaction: Silverpop/Vtrenz in 2007. The potential margins from marketing automation probably look relatively attractive to email vendors. The problem here may be that the independent email service providers (ExactTarget, Responsys, Vertical Response) are relatively small companies themselves, so it might be hard for them to make a substantial investment. On the other hand, as the consolidation proceeds, small marketing automation companies may get pretty cheap.

Finally, we come to Web marketing companies. These include content management systems (Autonomy Interwoven, EMC Documentum, OpenText, etc.) and Web analytics (Adobe Omniture, IBM Coremetrics, WebTrends). Note that many of these are already part of larger suites whose owners could easily afford a marketing automation acquisition. A couple of smaller Web content management firms (Marqui, SiteCore) have already moved towards marketing automation. One challenge faced by the smaller Web marketing companies is that their customers (Web site managers and analysts) are generally not the buyers for marketing automation. Even “inbound marketing” (search engine optimization, keyword advertising, Web display ads) is often done by someone other than the marketing automation user. This is less of an issue for larger firms, who have relationships throughout their clients’ organizations.

Incidentally, not everyone agrees that smaller marketing automation vendors must vanish. I had a conversation today with one vendor who argued that success still depends mostly on helping new users get value from their systems. In this view, small vendors can succeed by providing excellent service and support, as well as by linking with marketing agencies and consultancies. This could certainly be a niche – remember that Alterian and SmartFocus survived by working through service providers. Still, I ultimately expect that most mid- and large-size firms will purchase marketing automation as part of a larger software suite, and thus that independent marketing automation vendors will find it increasingly tough to survive.

*Actually, there was a previous class of “database marketing” systems including Customer Insight Company, OKRA Marketing, Harte-Hanks P/CIS, Max$ell and RTMS. These used proprietary, non-SQL database engines. Most were purchased by larger companies and then discarded when adequate systems using standard SQL databases became available. Alterian and SmartFocus, both descended from Brann Viper, still survive.

Friday, July 09, 2010

HiveFire Curata Cuts the Work in Content Aggregation

Summary: HiveFire Curata makes it easy to assemble and republish content on specialized topics, attracting visitors to your company’s Web site.

Here’s an irony for you: the world is awash with content, but marketers struggle to find enough of it. It’s like a sailor dying of thirst.

Of course, sailors really do die of thirst. It happens when they’re surrounded by salt water they can’t drink. Marketers have the same problem: they can’t use most of the content that’s available.

HiveFire Curata aims to solve this problem by making it easier for marketers to extract usable content from the surrounding ocean. In fact, Curata provides a complete system to not just locate the right content but also to organize and present it to the marketer’s target audience. The goal is to make finding and repurposing existing content easier than creating new content on your own.

More specifically, Curata lets marketers build Web sites that republish content on selected topics, such as news of a particular industry. This attracts the marketer’s target customers and positions the marketer’s firm as an authority in the field. Once the audience is assembled, the site can also deliver the company’s own content and advertisements.

The trick to making this work is efficiency. You don’t need a special tool to scan the Internet: a simple Google Alert or Twitter search will do that for free. But you’d still need to read each article, tag it with keywords, and post it to your site. The work adds up so quickly that most marketers can’t afford to do it.

Curata reduces this effort by using natural language processing to automatically identify, classify and tag potential articles. It then presents them for manual review before being posted to a Curata Web site, which automatically adds them to appropriate indexes for future reference. The result is an organized archive that offers real value to someone interested in a topic. Because the search and tagging are highly automated, Curata says a typical client processes 40 to 80 articles each day in about 20 minutes.

Setting up a Curata site requires little technical skill. Users choose a format and then use a page designer to place widgets for articles, blog posts, lists of articles by category, author or entity, news streams, site search, media galleries, subscriptions and user registration. They also define the sources and search terms and exclusions the system will use to find content. Sources can include social media, news feeds, patent registrations and RSS subscriptions. Content on the Web site can also be published through RSS subscriptions, email newsletters, Twitter, Facebook and LinkedIn.

Because the system is hosted by Curata, it can be set up and maintained without help from the corporate IT department or Web team. This is a critical advantage for many marketers who lack priority access to those resources.

This is all good, and many companies should find Curata well worth the $1,500 per month ($1,200 with an annual contract). But I did see a number of features I’d like added. These include:

- screening the selected articles. Currently the system presents the articles in the sequence they are found, without identifying redundancies or even removing exact duplicates. Intelligent screening could remove some articles and present similar ones together, saving considerable labor when large volumes are involved.

- ranking the selected articles. The system currently reports the traffic attracted by each article, but it doesn’t use this to predict the popularity of new articles. Such predictions should be well within the capabilities of the natural language engine. Nor does the system rank articles on other criteria such as the authority of the source. Ranking could let editors review the most important articles first and discard the others once they had reached their daily quota.

- more subscriber information. Visitors register with the system to post comments and subscribe the email newsletters. But the profile cannot be extended beyond name, password and email address. This is missing an obvious opportunity to capture more information about potential leads.

- subscriber behavior tracking. Curata doesn’t report on the behavior of individual visitors, such as which items they view or how often they visit. This is another bundle of information that marketers and salespeople could use to understand visitor interests and to identify hot prospects.

HiveFire was open to these ideas when we discussed them, so I’d expect to see some appear in the future. But it's worth noting that Curata already has about 40 clients, who are presumably satisfied enough the existing features to pay for them. So even in its current state, Curata is worth a look if you want to sail the seas of content aggregation.