Summary: Database and digital marketing are both data-driven. But they differ in plenty of other ways that make it hard for specialists in one to adapt smoothly to the other. Here's a detailed look at the differences.
Yesterday’s long (or merely long-winded?) post described the different mindsets of database and digital marketers but it was pretty short on differences between the two marketing methods themselves. Today I’ll try to be more concrete.
DB or Not DB
Database marketing is built around a marketing database that contains addressable, identifiable individuals. By “addressable”, I mean there is information such as a mailing address or phone number that lets the marketer contact the individual. By “identifiable”, I mean information is available to link data about the same individual from multiple sources. Addresses are the most common identifiable information, although there are also non-address identifiers such as Social Security Number. Addresses and identifiers are both required: a database without addresses couldn’t be used for most marketing, and a set of records that can’t be linked to other sources is just a list.
The consolidated database is the heart of the database marketing concept. Data from multiple sources lets database marketers make more effective predictions about the best treatments for each individual, and treatments across multiple channels are more effective when they are coordinated centrally. The marketing database contains attributes (age, income, location, etc.) and behaviors (promotion responses, purchases, customer service interactions, etc.). It can certainly include digital activities such as Web page views and social media comments, so long as these can be linked back to a known individual.
Digital marketing does not use a database of addressable, identifiable individuals. It may gather information from one source and even track it over time for the same entity. (Example: Web site behavior tied to a browser cookie.) But unless the entity can be linked to other sources through an identifier, the digital marketer can only make treatment decisions based on information captured in the source channel itself. This is far from useless – behavioral and contextual targeting can be quite powerful. But from a database marketing perspective, the data is frustratingly incomplete.
Addressable Media
Database marketing only works in addressable media: that is, where a message can sent to a specific individual. Addressable media include direct mail, email, outbound telemarketing, and customer service interactions. They can also include digital channels such as Web pages, mobile messages, kiosks and ATM machines, but ONLY where the recipient is known before a message is sent. Thus, a Web page that has identified me because I’ve registered and logged in (manually or via a cookie) is addressable; a Web page that I visit anonymously, even if it recognizes me as a previous visitor from a cookie, is not addressable.
Digital marketing includes many non-addressable media, including paid and organic search, Web banner advertising, social media, and anonymous forms of Web sites, kiosks, mobile (e.g., location-based messages), and the rest. These generate plenty of useful data, such as click through rates, search rankings, sentiment analysis, and page views. But this data and related analysis are quite different from what database marketers are used to.
Prediction vs Reaction
Database marketers have the rich information needed to accurately predict which offers are most appropriate for each customer. Combined with their access to customer addresses, this allows them to initiate effective outbound marketing campaigns and to define static rules for interactive dialogs. Note that in most addressable media (mail, email, outbound telemarketing), the offer must be selected before the customer is actually contacted, and making multiple offers often reduces response. So database marketers have strong reasons to work on making highly accurate predictions.
By definition, digital marketers cannot target outbound campaigns at individuals. They do have opportunities to manage interactions, but often know only what has happened during the current interaction itself. This greatly reduces their ability to make predictions. Instead, they present multiple options and react as people respond. Happily, most digital media are inherently interactive, so this is a practical approach. Since rule-based decision flows are less viable as the number of options increases, digital marketers lean more heavily on self-adjusting automated decision engines.
Message Control
Database marketers directly control the messages they send to each customer. This is yet another factor that helps to justify the costs of building a comprehensive database, running sophisticated predictive models and precisely customizing each message.
Digital marketers have vastly less control over who sees what. Much of their messaging is blind to the audience who will see it, or can only be targeted on limited information about behavior or context. Indeed, some of the most effective and intriguing digital marketing techniques, such as viral campaigns and shareable widgets, rely on distribution that's totally beyond the marketer's control. Social media provide even less control, since the messages themselves are composed outside the company. The net result of all this is to reduce the degree of individual targeting that digital marketers can execute.
Response Measurement
Database marketers can typically capture response to a promotion directly, with a coupon, telephone call or Web click. Even when they can’t, their database still ultimately tells them who bought what, so they can correlate the promotions they’ve addressed to an individual with that individual’s subsequent behavior. The ability to do precise response measurement is yet another factor that lets database marketers fine-tune their programs.
Digital marketers can also measure who clicks on a Web ad, and sometimes can track that person further into the buying cycle. But they don’t know what other promotions or social media that person saw, what else they purchased, who else saw the same promotion but didn’t respond, or who responded through some other channel. All these uncertainties leave digital marketers reliant on indirect measures, such as consumer panels and surveys, which are more typical of conventional mass media. These are approaches that most database marketers would find almost laughably imprecise.
What’s It All Mean?
Database marketers and digital marketers both have plenty of data and the good ones are highly analytical. Both can apply advanced statistical techniques and rigorous testing methods. Both can work to integrate their data and their customer strategies across channels. To some extent, they even work with the same media: in particular, a Web site can support both digital (anonymous) and database-driven (addressable) marketing programs.
Yet despite these similarities and interactions, the two groups work in largely different media, use different techniques and have different priorities. Database marketing is inherently more controlled and precise; digital marketing is more fluid. Good marketers will learn to apply both. But individuals who have specialized in any one area will find it hard to adjust to the other. At a minimum, they’ll need to be conscious that the old rules don’t apply.
Adjustment is even harder for organizations, who will have invested in specialized systems, processes and people to support one technique or the other. This, in my opinion, is why the leading database marketing vendors have not been the leading digital marketing vendors. Which, if you’ll recall, was where I started this discussion.
One final point: there's no reason the same organization or individual can't master both database and digital marketing. That is, although there are major differences between the two, there is no fundamental conflict. My point in these articles is simply that it will take conscious effort to address the differences and fill the gaps that they imply.
Showing posts with label database marketing. Show all posts
Showing posts with label database marketing. Show all posts
Wednesday, February 03, 2010
Tuesday, February 02, 2010
Can Database Marketers Learn Digital Tricks?
Summary: Database marketing and digital marketing are more different than it seems. It's hard for experts in one to adjust to the other.
Yesterday’s post touched briefly on what I see as a fundamental transition between database marketing and digital marketing, and in particular on the changes that marketers and their supporting vendors must make to navigate the change successfully. This is an important topic, so I thought I’d return for a closer look.
It’s self-evident that digital marketing (mostly on the Internet, but also mobile, in-game, and eventually interactive TV) is a major change from both traditional mass media and more recent database marketing (mail, email, telemarketing, CRM). What’s less obvious is that the skills and attitudes that have served database marketers well for the past twenty or more years – an entire career for many – don’t transfer to the digital world. It’s true that database and digital marketing are both technology-enabled and thus seem as if they should draw on similar talents. But the similarities are superficial while the differences are profound.
Let’s cut to the core of the matter: the first rule of database marketing is that whoever has the biggest database, wins. Database marketers strive to gather ever-more information about their customers and (to a lesser extent, because less data is available) about their prospects. Their Holy Grail is the ever-receding “360 degree view of the customer,” a phrase I’ve always disliked because (a) it treats the customer as an object and (b) no one can possibly know everything about their customers. Today, at least to my mind, it also conjures up a full-body scan X-ray, an image I hope enough people find so offensive that it will finally put the phrase to rest.
Sorry for the rant. My point is that database marketers’ ideal is a perfectly detailed customer database, which would allow them to target precisely the “right offer to the right customer at the right time.” This attitude leads to highly structured, finely segmented campaigns and carefully-plotted, rules-driven interaction flows which make the best possible use of whatever data is actually available.
Digital marketers have no such illusions about the completeness of the data they could ever hope to assemble. I’m not saying many of them wouldn’t like to identify each person they interact with, just that this is obviously impossible in most situations. Thus, digital marketers start from a premise that they’ll be interacting with people cloaked by varying degrees of anonymity, and look for ways to make the best use of the limited information available. In one case this might a search term they used to reach a Web site; in another it might be a history of movies they and others have rented; in yet another it might be their current physical location. Most innovations in digital marketing involve improving the value extracted from such limited data, rather than attempting to link the data to an identity that can then be enhanced with large volumes of personal information from other sources.
(Caveat: yes, there are some major efforts aimed precisely at providing digital marketers with individual identities. But these run up against both the fundamental difficulty of identifying people in most digital media. Even more important, their value is limited because immediate past data about behavior and context is usually more powerful at predicting immediate future behavior than static personal information from external sources.)
A corollary to the limited and contextual nature of most digital customer data is that marketing programs don’t have enough information to make reliable predictions about the most appropriate treatments. Thus, multi-step marketing campaigns or highly structured interaction dialogs are less useful than simply giving people a variety of choices and letting them guide the process for themselves. Again, this is a matter of degree: deciding which choices to present itself requires predictions about which items the customers will prefer. But presenting multiple choices is quite different from trying to guess in advance which one is best.
In other words, we’re talking about a loss of control over the marketing process. This is still more obvious at the start of the marketing cycle, when companies are first attracting customers into a relationship. Database marketers spend lots of effort acquiring and enhancing prospect lists so they can decide whom to approach and which offers to send them. By contrast, most digital marketing contacts are initiated by the prospects themselves in response to an advertisement or social media message. Certainly digital marketers can select their advertising audiences, but this resembles traditional media buying more than an outbound direct marketing campaign. Even (or, perhaps, especially) with social media interactions, the marketer has very little control over what is communicated to whom.
Indeed, even though database marketers do plenty of acquisition, I think it’s fair to say that they find it relatively frustrating because the available data is generally so limited. Most would probably prefer to work on customer management – cross sell, upsell and retention – where richer data is available. By contrast, digital marketers have happily embraced the notion of “inbound marketing”, which is precisely the art of attracting new people to their products. To speculate still further, the reason that business marketers are adopting marketing automation much more enthusiastically than they ever adopted traditional database marketing may be that business marketing automation is largely being used in acquisition-friendly digital media, and business marketers are more acquisition-oriented (i.e., focused on lead generation) than their consumer marketing brethren.
Control is also a major differentiator when it comes to marketing measurement. Perhaps the proudest claim of database marketers is that all their efforts are highly and precisely measurable. Reality is a bit more messy, but it’s true that database marketing does support proper champion/challenger testing for companies willing to make the investment. Digital marketing also supports such testing. But many digital efforts involve display advertising where at least some of the value comes from exposures that do not prompt immediate, measurable activity. This is another area where digital marketing more closely resembles traditional mass media advertising than anything else. In fact, digital marketers increasingly base their measurements on consumer panels and surveys, almost precisely duplicating the conventional mass media approach. Again, the fundamental point is a difference in attitude: database marketers treat precise measurement as their ideal, even though they realize it isn’t fully attainable. Digital marketing doesn’t permit that illusion, so its practitioners can more easily accept less exact approaches.
By now I’ve probably annoyed many of my friends in both the database and digital marketing industries. Let me make clear that I’m not arguing that database marketing is obsolete or somehow inferior to digital marketing. They do different things and will coexist, just as mass media survived when database marketing appeared. In fact, good marketers will learn to integrate them effectively, letting each do what it does best. Actually, I’d argue that rule- and data-driven Website personalization has more in common with classic database marketing than with most digital marketing methods. In that case, integration between the two types of marketing happens within the Web site itself.
Nor am I arguing that database and digital marketing have nothing in common. Both are, obviously, dependent on technology and both are measurable in their own ways. Both work with customer databases – in fact, as digital marketers get better at capturing and integrating customer data, they will find themselves increasingly reliant on database marketing techniques. And, of course, both ultimately perform the basic marketing tasks of understanding their customers and using that knowledge effectively.
Rather, I’m trying to show that different skills and assumptions are needed for success in the two areas, and to suggest that this makes it difficult for people and organizations to transition from one to the other. This, in my opinion, is why the direct marketing agencies, marketing service providers and marketing software vendors who dominate the database marketing industry have not transferred their leadership to the digital marketing channels. The only new medium they easily adopted was email, but that was essentially database marketing to begin with.
This doesn’t mean that database marketing vendors are inevitably doomed or trapped in a shrinking specialty. But it does mean that those firms must recognize the fundamental differences between their old industry and the new one. They cannot make the easy but false assumption that digital marketing is a natural extension of database marketing techniques. Only the marketers and vendors who aggressively embrace digital marketing in its own terms will be able to lead the new industry.
Yesterday’s post touched briefly on what I see as a fundamental transition between database marketing and digital marketing, and in particular on the changes that marketers and their supporting vendors must make to navigate the change successfully. This is an important topic, so I thought I’d return for a closer look.
It’s self-evident that digital marketing (mostly on the Internet, but also mobile, in-game, and eventually interactive TV) is a major change from both traditional mass media and more recent database marketing (mail, email, telemarketing, CRM). What’s less obvious is that the skills and attitudes that have served database marketers well for the past twenty or more years – an entire career for many – don’t transfer to the digital world. It’s true that database and digital marketing are both technology-enabled and thus seem as if they should draw on similar talents. But the similarities are superficial while the differences are profound.
Let’s cut to the core of the matter: the first rule of database marketing is that whoever has the biggest database, wins. Database marketers strive to gather ever-more information about their customers and (to a lesser extent, because less data is available) about their prospects. Their Holy Grail is the ever-receding “360 degree view of the customer,” a phrase I’ve always disliked because (a) it treats the customer as an object and (b) no one can possibly know everything about their customers. Today, at least to my mind, it also conjures up a full-body scan X-ray, an image I hope enough people find so offensive that it will finally put the phrase to rest.
Sorry for the rant. My point is that database marketers’ ideal is a perfectly detailed customer database, which would allow them to target precisely the “right offer to the right customer at the right time.” This attitude leads to highly structured, finely segmented campaigns and carefully-plotted, rules-driven interaction flows which make the best possible use of whatever data is actually available.
Digital marketers have no such illusions about the completeness of the data they could ever hope to assemble. I’m not saying many of them wouldn’t like to identify each person they interact with, just that this is obviously impossible in most situations. Thus, digital marketers start from a premise that they’ll be interacting with people cloaked by varying degrees of anonymity, and look for ways to make the best use of the limited information available. In one case this might a search term they used to reach a Web site; in another it might be a history of movies they and others have rented; in yet another it might be their current physical location. Most innovations in digital marketing involve improving the value extracted from such limited data, rather than attempting to link the data to an identity that can then be enhanced with large volumes of personal information from other sources.
(Caveat: yes, there are some major efforts aimed precisely at providing digital marketers with individual identities. But these run up against both the fundamental difficulty of identifying people in most digital media. Even more important, their value is limited because immediate past data about behavior and context is usually more powerful at predicting immediate future behavior than static personal information from external sources.)
A corollary to the limited and contextual nature of most digital customer data is that marketing programs don’t have enough information to make reliable predictions about the most appropriate treatments. Thus, multi-step marketing campaigns or highly structured interaction dialogs are less useful than simply giving people a variety of choices and letting them guide the process for themselves. Again, this is a matter of degree: deciding which choices to present itself requires predictions about which items the customers will prefer. But presenting multiple choices is quite different from trying to guess in advance which one is best.
In other words, we’re talking about a loss of control over the marketing process. This is still more obvious at the start of the marketing cycle, when companies are first attracting customers into a relationship. Database marketers spend lots of effort acquiring and enhancing prospect lists so they can decide whom to approach and which offers to send them. By contrast, most digital marketing contacts are initiated by the prospects themselves in response to an advertisement or social media message. Certainly digital marketers can select their advertising audiences, but this resembles traditional media buying more than an outbound direct marketing campaign. Even (or, perhaps, especially) with social media interactions, the marketer has very little control over what is communicated to whom.
Indeed, even though database marketers do plenty of acquisition, I think it’s fair to say that they find it relatively frustrating because the available data is generally so limited. Most would probably prefer to work on customer management – cross sell, upsell and retention – where richer data is available. By contrast, digital marketers have happily embraced the notion of “inbound marketing”, which is precisely the art of attracting new people to their products. To speculate still further, the reason that business marketers are adopting marketing automation much more enthusiastically than they ever adopted traditional database marketing may be that business marketing automation is largely being used in acquisition-friendly digital media, and business marketers are more acquisition-oriented (i.e., focused on lead generation) than their consumer marketing brethren.
Control is also a major differentiator when it comes to marketing measurement. Perhaps the proudest claim of database marketers is that all their efforts are highly and precisely measurable. Reality is a bit more messy, but it’s true that database marketing does support proper champion/challenger testing for companies willing to make the investment. Digital marketing also supports such testing. But many digital efforts involve display advertising where at least some of the value comes from exposures that do not prompt immediate, measurable activity. This is another area where digital marketing more closely resembles traditional mass media advertising than anything else. In fact, digital marketers increasingly base their measurements on consumer panels and surveys, almost precisely duplicating the conventional mass media approach. Again, the fundamental point is a difference in attitude: database marketers treat precise measurement as their ideal, even though they realize it isn’t fully attainable. Digital marketing doesn’t permit that illusion, so its practitioners can more easily accept less exact approaches.
By now I’ve probably annoyed many of my friends in both the database and digital marketing industries. Let me make clear that I’m not arguing that database marketing is obsolete or somehow inferior to digital marketing. They do different things and will coexist, just as mass media survived when database marketing appeared. In fact, good marketers will learn to integrate them effectively, letting each do what it does best. Actually, I’d argue that rule- and data-driven Website personalization has more in common with classic database marketing than with most digital marketing methods. In that case, integration between the two types of marketing happens within the Web site itself.
Nor am I arguing that database and digital marketing have nothing in common. Both are, obviously, dependent on technology and both are measurable in their own ways. Both work with customer databases – in fact, as digital marketers get better at capturing and integrating customer data, they will find themselves increasingly reliant on database marketing techniques. And, of course, both ultimately perform the basic marketing tasks of understanding their customers and using that knowledge effectively.
Rather, I’m trying to show that different skills and assumptions are needed for success in the two areas, and to suggest that this makes it difficult for people and organizations to transition from one to the other. This, in my opinion, is why the direct marketing agencies, marketing service providers and marketing software vendors who dominate the database marketing industry have not transferred their leadership to the digital marketing channels. The only new medium they easily adopted was email, but that was essentially database marketing to begin with.
This doesn’t mean that database marketing vendors are inevitably doomed or trapped in a shrinking specialty. But it does mean that those firms must recognize the fundamental differences between their old industry and the new one. They cannot make the easy but false assumption that digital marketing is a natural extension of database marketing techniques. Only the marketers and vendors who aggressively embrace digital marketing in its own terms will be able to lead the new industry.
Sunday, January 31, 2010
Aprimo Marketing Studio Supports Sophisticated Business Marketers
Summary: Aprimo Marketing Studio offers powerful features in an on-demand system for sophisticated business and consumer marketers. You know who you are.
When I wrote about Aprimo Marketing Studio in a post last August, I was impressed by the scope of the product but reserved judgment because it hadn’t yet been launched. I took a look at the actual product last week. Bottom line: Aprimo delivered what they promised.
Like Aprimo itself, Marketing Studio is a bit of an oddity because it serves both business and consumer marketers. The needs of these two groups don’t necessarily conflict, but they do diverge. This means that a system for both will include several features needed by only one group or the other. Placing them all in the same product adds cost and complexity, which are not a software developer’s friends.
Aprimo has not found a magical solution to this dilemma. Rather, it has conceded the lower tiers of business marketing to simpler systems and aimed Marketing Studio at marketers who need greater sophistication and will accept higher cost and complexity to get it. (For more on vendor classifications, see my list of demand generation vendors from last November.)
In other words, Marketing Studio competes with high-end demand generation systems like Eloqua, Market2Lead and Neolane. Neolane may be the most similar, since it also straddles the business and consumer marketing worlds.
(Small digression: most business marketing systems are designed around data from a sales automation system such as Salesforce.com. But consumer marketers also need inputs from transaction systems. Marketing Studio and Neolane don't have a problem because they can support any data structure. Eloqua and Market2Lead are based on sales automation data, but can incorporate external tables. Other business marketing systems generally cannot.)
As I mentioned earlier, what originally most impressed me about Aprimo Marketing Studio was its scope. This starts with the core functions of any business marketing system: outbound and multi-step email campaigns, landing pages, Web behavior tracking , lead scoring, Salesforce.com integration, reporting and content management.
The system then draws on Aprimo’s heritage in marketing management to add detailed cost tracking, project management, asset workflow including annotation and commenting on PDFs, and a flexible campaign calendar. These are handled crudely, or not at all, in many business marketing products. In Marketing Studio, they are well-implemented with advanced features and an attractive, intuitive interface.
Project management is especially powerful. Project plans include specific tasks assigned to individuals and linked with dependencies. Plans can automatically modify themselves in response to events: for example, if a piece of copy is rejected, the system can add a new set of review and revision steps. This is done by creating the project as a branching flow chart, with rules to determine what takes place at junction. These rules can insert a predefined subflow, such as the review and revision process, which itself is shared across multiple projects. Good stuff.
System scope also extends to inbound marketing. Marketing Studio offers a blog engine tailored to corporate needs: managers can review and approve posts; the system can automatically notify Twitter, LinkedIn and Facebook of new post; and each blog topic is assigned a different URL, which helps with search engine rank. Another module lets marketers create Adobe Flash-based Web ads, while an offer manager module tracks the user of offers across promotions. Paid search campaigns are supported through integration with Omniture SearchCenter.
Of course, the bells and whistles wouldn’t matter if the core features were poor. But Marketing Studio handles these quite nicely as well.
Email campaigns can execute as batch projects or trigger dialogs. The system treats these separately, although they are built with the same drag-and-drop flowchart interface. Batch campaigns include powerful segmentation supported by a sophisticated query builder, splits and merges. Batch flows can also update data attributes, calculate lead scores, create personalized URLs, add and remove names from groups, send email and generate output lists for other media.
Trigger dialogs have most of the same capabilities except for the advanced segmentation. In addition, they support wait periods and can send leads and alerts to the sales system. Unlike many demand generation products, Marketing Studio supports circular and merging flows, which can simplify design of complicated programs.
People enter a campaign by being added to a group. This can happen when a list is imported from an external file or the sales automation system, when people submit a Web form or click on an email or page link, or as a step within a campaign flow. External systems can also add names through the Marketing Studio API. Because either type of campaign flow can itself add a name to a group, the possibilities for controlling campaign entry and movement across campaigns are basically unlimited. Trigger campaigns execute immediately when a new lead is added to their group, allowing real-time interactions.
Other core features are similarly powerful. Users can build HTML emails, Web pages and multi-page microsites. Emails and Web pages can dynamically select content blocks based on rules that read the attributes of each recipient. Web forms and surveys are also content blocks, so the same rule-based selections can manage branching surveys and progressive profiling (i.e., asking different questions based on what is already known about an individual). The same rule-building interface is used for content selection rules, segmentation queries, and lead scoring. This reduces the amount of user training.
Lead scoring supports multiple scores per person, which is typical in high-end demand generation systems. More impressively, Marketing Studio can also apply multiple rule-sets to the same score calculation. For example, it could use different rules for leads from different geographic regions.
The system can capture Web visitor behavior directly or integrate with Omniture SiteCatalyst. One advantage of using Aprimo’s own Web tracking is that results are available in immediately, compared to nightly with Omniture. Marketing Studio can identify the company of anonymous visitors based on their IP address and retain the history of anonymous visitors when they identify themselves by filling out a form.
Salespeole working with Salesforce.com can see a list of their leads with priority ratings. They can then click on a name to see a digital activity profile (emails sent, links clicked, forms completed, Web site visits). This profile can include activity captured within Marketing Studio or imported to the Marketing Studio database from other systems. Users can drill further into each profile to see the underlying details of each activity. Still within the Salesforce.com interface, salespeople can send an email through Marketing Studio, add a lead to a Marketing Studio campaign, and edit, convert, clone, dedupe or remove the lead record. If the administrator chooses, Salesforce.com users can also open a Marketing Studio portal to see the marketing calendar, assets, lead lists, activity requests, content reviews, project tasks and reports.
Speaking of reports: the system includes 150 standard reports, which users can customize or supplement by creating their own with a basic report writer.
Pricing of Marketing Studio is competitive with other high-end business marketing systems. Fees are based on a combination of database size, email activity, number of users and modules deployed. The starting level is about $4,000 per month, which includes the core marketing features for ten users and up to 100,000 contacts or 250,000 emails. Fees including hosting and email execution. The marketing operations module adds $2,500 per month and other modules such as social media, banner ads, Web analytics and Web alerts add $1,500 each.
Aprimo was founded in 1998 and has more than 200 clients on its original marketing system, which offers modules for marketing automation and marketing resource management. Marketing Studio was launched in September 2009 and at this writing has 22 clients, including a mix of business and consumer marketers.
When I wrote about Aprimo Marketing Studio in a post last August, I was impressed by the scope of the product but reserved judgment because it hadn’t yet been launched. I took a look at the actual product last week. Bottom line: Aprimo delivered what they promised.
Like Aprimo itself, Marketing Studio is a bit of an oddity because it serves both business and consumer marketers. The needs of these two groups don’t necessarily conflict, but they do diverge. This means that a system for both will include several features needed by only one group or the other. Placing them all in the same product adds cost and complexity, which are not a software developer’s friends.
Aprimo has not found a magical solution to this dilemma. Rather, it has conceded the lower tiers of business marketing to simpler systems and aimed Marketing Studio at marketers who need greater sophistication and will accept higher cost and complexity to get it. (For more on vendor classifications, see my list of demand generation vendors from last November.)
In other words, Marketing Studio competes with high-end demand generation systems like Eloqua, Market2Lead and Neolane. Neolane may be the most similar, since it also straddles the business and consumer marketing worlds.
(Small digression: most business marketing systems are designed around data from a sales automation system such as Salesforce.com. But consumer marketers also need inputs from transaction systems. Marketing Studio and Neolane don't have a problem because they can support any data structure. Eloqua and Market2Lead are based on sales automation data, but can incorporate external tables. Other business marketing systems generally cannot.)
As I mentioned earlier, what originally most impressed me about Aprimo Marketing Studio was its scope. This starts with the core functions of any business marketing system: outbound and multi-step email campaigns, landing pages, Web behavior tracking , lead scoring, Salesforce.com integration, reporting and content management.
The system then draws on Aprimo’s heritage in marketing management to add detailed cost tracking, project management, asset workflow including annotation and commenting on PDFs, and a flexible campaign calendar. These are handled crudely, or not at all, in many business marketing products. In Marketing Studio, they are well-implemented with advanced features and an attractive, intuitive interface.
Project management is especially powerful. Project plans include specific tasks assigned to individuals and linked with dependencies. Plans can automatically modify themselves in response to events: for example, if a piece of copy is rejected, the system can add a new set of review and revision steps. This is done by creating the project as a branching flow chart, with rules to determine what takes place at junction. These rules can insert a predefined subflow, such as the review and revision process, which itself is shared across multiple projects. Good stuff.
System scope also extends to inbound marketing. Marketing Studio offers a blog engine tailored to corporate needs: managers can review and approve posts; the system can automatically notify Twitter, LinkedIn and Facebook of new post; and each blog topic is assigned a different URL, which helps with search engine rank. Another module lets marketers create Adobe Flash-based Web ads, while an offer manager module tracks the user of offers across promotions. Paid search campaigns are supported through integration with Omniture SearchCenter.
Of course, the bells and whistles wouldn’t matter if the core features were poor. But Marketing Studio handles these quite nicely as well.
Email campaigns can execute as batch projects or trigger dialogs. The system treats these separately, although they are built with the same drag-and-drop flowchart interface. Batch campaigns include powerful segmentation supported by a sophisticated query builder, splits and merges. Batch flows can also update data attributes, calculate lead scores, create personalized URLs, add and remove names from groups, send email and generate output lists for other media.
Trigger dialogs have most of the same capabilities except for the advanced segmentation. In addition, they support wait periods and can send leads and alerts to the sales system. Unlike many demand generation products, Marketing Studio supports circular and merging flows, which can simplify design of complicated programs.
People enter a campaign by being added to a group. This can happen when a list is imported from an external file or the sales automation system, when people submit a Web form or click on an email or page link, or as a step within a campaign flow. External systems can also add names through the Marketing Studio API. Because either type of campaign flow can itself add a name to a group, the possibilities for controlling campaign entry and movement across campaigns are basically unlimited. Trigger campaigns execute immediately when a new lead is added to their group, allowing real-time interactions.
Other core features are similarly powerful. Users can build HTML emails, Web pages and multi-page microsites. Emails and Web pages can dynamically select content blocks based on rules that read the attributes of each recipient. Web forms and surveys are also content blocks, so the same rule-based selections can manage branching surveys and progressive profiling (i.e., asking different questions based on what is already known about an individual). The same rule-building interface is used for content selection rules, segmentation queries, and lead scoring. This reduces the amount of user training.
Lead scoring supports multiple scores per person, which is typical in high-end demand generation systems. More impressively, Marketing Studio can also apply multiple rule-sets to the same score calculation. For example, it could use different rules for leads from different geographic regions.
The system can capture Web visitor behavior directly or integrate with Omniture SiteCatalyst. One advantage of using Aprimo’s own Web tracking is that results are available in immediately, compared to nightly with Omniture. Marketing Studio can identify the company of anonymous visitors based on their IP address and retain the history of anonymous visitors when they identify themselves by filling out a form.
Salespeole working with Salesforce.com can see a list of their leads with priority ratings. They can then click on a name to see a digital activity profile (emails sent, links clicked, forms completed, Web site visits). This profile can include activity captured within Marketing Studio or imported to the Marketing Studio database from other systems. Users can drill further into each profile to see the underlying details of each activity. Still within the Salesforce.com interface, salespeople can send an email through Marketing Studio, add a lead to a Marketing Studio campaign, and edit, convert, clone, dedupe or remove the lead record. If the administrator chooses, Salesforce.com users can also open a Marketing Studio portal to see the marketing calendar, assets, lead lists, activity requests, content reviews, project tasks and reports.
Speaking of reports: the system includes 150 standard reports, which users can customize or supplement by creating their own with a basic report writer.
Pricing of Marketing Studio is competitive with other high-end business marketing systems. Fees are based on a combination of database size, email activity, number of users and modules deployed. The starting level is about $4,000 per month, which includes the core marketing features for ten users and up to 100,000 contacts or 250,000 emails. Fees including hosting and email execution. The marketing operations module adds $2,500 per month and other modules such as social media, banner ads, Web analytics and Web alerts add $1,500 each.
Aprimo was founded in 1998 and has more than 200 clients on its original marketing system, which offers modules for marketing automation and marketing resource management. Marketing Studio was launched in September 2009 and at this writing has 22 clients, including a mix of business and consumer marketers.
Wednesday, September 09, 2009
Why Social Media Really Matters
Summary: marketing has shifted steadily over time from passive to active consumer engagement. Social media is the latest stage in this evolution. Marketers need to master new skills at each stage; as they do, advertising budgets will shift to take advantage of the new medium's increased effectiveness.
Of all that research I mentioned last week, two pairs of facts stood out. One was the disparity between the time people spend on online activities (20% to 30% of total media time) and the share of advertising expenditures spent online (10% to 15%). Although some difference may be justified by the differences in media effectiveness, this still suggests to me that ad spending will continue to shift into online media until the spending is roughly proportional.
The other disparity was that search accounts for 5% of online time but 60% of online ad spending. Some of this may be due to the fact that it’s much easier to buy search advertising (think Google AdWords) than other types of online ads. But I think the primary reason is that search serves as a gateway to other Internet activity—so marketers wishing to drive traffic to their own Web sites need search advertising to make this happen.
The final, related factoid is that social media have grown from virtually nothing to nearly 20% of online time over the past few years. This matters because social media are an alternative gateway to finding Web content: instead of doing a search, I can ask my online community for information or recommendations. Thus, social media present a major threat to search advertising revenues. Although social media currently gather under 3% of online advertising, this will surely change as marketers work to find ways to exploit its potential. If you’ve been wondering why Google should be concerned about Twitter and Facebook, that’s your answer.
These shifts from offline to online advertising and from search to social media suggest a progression through four stages:
1. mass media, or broadcasting: this began in the late 19th century with the emergence of national brands and national print media. Today it is represented primarily by television. You can date TV-dominated era from, say, 1950 to 1985.
2. database marketing, or, more poetically, narrowcasting. This is about direct contact with segmented groups of customers. Date it from 1985 to 1997.
3. search marketing. This is characterized by use of search engines to drive traffic to Web sites. I’m being arbitrary but let's date it from 1998 to 2007.
4. social marketing. This is use of social media to connect with consumers. I’ll date it from 2008, although effective marketing uses of social media are just starting to emerge.
As each new medium has emerged over years, some portion of advertising dollars has shifted from the preexisting media. Of course, the old media don’t go away completely. Indeed, traditional mass media (including radio and print as well as TV) still account for the largest share of advertising spend.
The four media differ along several dimensions. These include:
- consumer engagement. Broadcast is the most passive medium; essentially, it’s yelling at people who may or may not be interested in the message. The audience in database marketing is still passive, but it's targeted at segments that marketers have some reason to believe are interested. With search marketing, the consumer takes a somewhat active role in deciding what to look for, even though the ads themselves are still placed by marketers. With social marketing, control is directly in the hands of consumers, who decide which messages they will receive.
- authority. I find this an intriguing concept. Basically it has to do with how consumers decide which messages they should believe. In the mass media, authority is essentially conferred – people believe things because they are "seen on TV" or have the "Good Housekeeping Seal of Approval". With database marketing, the medium (typically direct mail, more recently email or telephone) doesn’t itself confer much authority, so the message itself must command attention because it’s relevant to the consumer’s needs of the moment. This relevance motivates the recipient to actively explore the marketing offer and assess whether its source is credible.
In search marketing, the source of authority is implicitly based on the group itself: Google PageRank is largely determined by the number of links to a Web site – a version of “wisdom of the crowd”. With social marketing, group-based authority is explicit: consumers can see the number of followers, recommendations, reviews and other ratings provided by group members and decide whether to trust them.
- post-sale relationship. This defines the relationship between the marketer and consumer after the initial purchase. In the mass media world, the relationship barely exists: customers use the product and, hopefully, like it enough to buy it again. At most they ask for service if there’s a problem. With database marketing, post-sales contacts become important for cross-sell, upsell and retention. Indeed, this is where database marketing truly shines because it’s where rich data is available for targeting and relationship building.
Search marketing reaches a new level of engagement because customers can interact directly with the company Web site. This lets them initiate transactions, send messages, and in some cases actually change product configurations such as setting telephone features. With social marketing, consumers take direct control, initiating engagement themselves and, even more important, publicly sharing their engagements with other community members.
- marketing focus. This shows the critical task that marketers must master. With mass media, the primary marketing goal is selecting a message that builds a successful brand. For database marketers, the key skill is effective segmentation. Search marketing is primarily focused on developing content, both to attract traffic via organic search and to meet consumer needs once they appear at the site. For social marketing, the ultimate goal is convincing consumers to become brand advocates. Content is still important, of course, but its nature shifts from information that visitors consume to tools like widgets that empower them to share their enthusiasm with others.
The following table summarizes these dimensions.
At the risk of stating the obvious, the table shows a steady increase in consumer empowerment from the passive receipt of mass marketing message to active control in social media. Because this is a fundamental change from traditional mass media marketing, it has several important implications:
- for each new medium, marketers must learn new skills.
- as marketers learn new skills, they will use the new medium more effectively.
- as marketers use the new medium more effectively, it will receive increasing portions of their ad budgets.
- since social media is very new, its share of advertising budgets will continue to grow for some time.
In short, social media matters not because it's cool, but because it offers marketers a new and more effective way to reach their consumers. Marketers who fail to master the required skills will fall behind marketers who do.
Of all that research I mentioned last week, two pairs of facts stood out. One was the disparity between the time people spend on online activities (20% to 30% of total media time) and the share of advertising expenditures spent online (10% to 15%). Although some difference may be justified by the differences in media effectiveness, this still suggests to me that ad spending will continue to shift into online media until the spending is roughly proportional.
The other disparity was that search accounts for 5% of online time but 60% of online ad spending. Some of this may be due to the fact that it’s much easier to buy search advertising (think Google AdWords) than other types of online ads. But I think the primary reason is that search serves as a gateway to other Internet activity—so marketers wishing to drive traffic to their own Web sites need search advertising to make this happen.
The final, related factoid is that social media have grown from virtually nothing to nearly 20% of online time over the past few years. This matters because social media are an alternative gateway to finding Web content: instead of doing a search, I can ask my online community for information or recommendations. Thus, social media present a major threat to search advertising revenues. Although social media currently gather under 3% of online advertising, this will surely change as marketers work to find ways to exploit its potential. If you’ve been wondering why Google should be concerned about Twitter and Facebook, that’s your answer.
These shifts from offline to online advertising and from search to social media suggest a progression through four stages:
1. mass media, or broadcasting: this began in the late 19th century with the emergence of national brands and national print media. Today it is represented primarily by television. You can date TV-dominated era from, say, 1950 to 1985.
2. database marketing, or, more poetically, narrowcasting. This is about direct contact with segmented groups of customers. Date it from 1985 to 1997.
3. search marketing. This is characterized by use of search engines to drive traffic to Web sites. I’m being arbitrary but let's date it from 1998 to 2007.
4. social marketing. This is use of social media to connect with consumers. I’ll date it from 2008, although effective marketing uses of social media are just starting to emerge.
As each new medium has emerged over years, some portion of advertising dollars has shifted from the preexisting media. Of course, the old media don’t go away completely. Indeed, traditional mass media (including radio and print as well as TV) still account for the largest share of advertising spend.
The four media differ along several dimensions. These include:
- consumer engagement. Broadcast is the most passive medium; essentially, it’s yelling at people who may or may not be interested in the message. The audience in database marketing is still passive, but it's targeted at segments that marketers have some reason to believe are interested. With search marketing, the consumer takes a somewhat active role in deciding what to look for, even though the ads themselves are still placed by marketers. With social marketing, control is directly in the hands of consumers, who decide which messages they will receive.
- authority. I find this an intriguing concept. Basically it has to do with how consumers decide which messages they should believe. In the mass media, authority is essentially conferred – people believe things because they are "seen on TV" or have the "Good Housekeeping Seal of Approval". With database marketing, the medium (typically direct mail, more recently email or telephone) doesn’t itself confer much authority, so the message itself must command attention because it’s relevant to the consumer’s needs of the moment. This relevance motivates the recipient to actively explore the marketing offer and assess whether its source is credible.
In search marketing, the source of authority is implicitly based on the group itself: Google PageRank is largely determined by the number of links to a Web site – a version of “wisdom of the crowd”. With social marketing, group-based authority is explicit: consumers can see the number of followers, recommendations, reviews and other ratings provided by group members and decide whether to trust them.
- post-sale relationship. This defines the relationship between the marketer and consumer after the initial purchase. In the mass media world, the relationship barely exists: customers use the product and, hopefully, like it enough to buy it again. At most they ask for service if there’s a problem. With database marketing, post-sales contacts become important for cross-sell, upsell and retention. Indeed, this is where database marketing truly shines because it’s where rich data is available for targeting and relationship building.
Search marketing reaches a new level of engagement because customers can interact directly with the company Web site. This lets them initiate transactions, send messages, and in some cases actually change product configurations such as setting telephone features. With social marketing, consumers take direct control, initiating engagement themselves and, even more important, publicly sharing their engagements with other community members.
- marketing focus. This shows the critical task that marketers must master. With mass media, the primary marketing goal is selecting a message that builds a successful brand. For database marketers, the key skill is effective segmentation. Search marketing is primarily focused on developing content, both to attract traffic via organic search and to meet consumer needs once they appear at the site. For social marketing, the ultimate goal is convincing consumers to become brand advocates. Content is still important, of course, but its nature shifts from information that visitors consume to tools like widgets that empower them to share their enthusiasm with others.
The following table summarizes these dimensions.
| medium | consumer engagement | authority | post-sale relationship | marketing focus |
| mass media (broadcasting) | passively exposed | conferred | service / support | brand message |
| database marketing (narrowcasting) | targeted | relevance-based | cross sell / upsell / retention | segmentation |
| search marketing | activity-triggered | implicit group | Web self-service | content |
| social marketing | consumer-controlled | explicit group | public engagement | empowerment |
At the risk of stating the obvious, the table shows a steady increase in consumer empowerment from the passive receipt of mass marketing message to active control in social media. Because this is a fundamental change from traditional mass media marketing, it has several important implications:
- for each new medium, marketers must learn new skills.
- as marketers learn new skills, they will use the new medium more effectively.
- as marketers use the new medium more effectively, it will receive increasing portions of their ad budgets.
- since social media is very new, its share of advertising budgets will continue to grow for some time.
In short, social media matters not because it's cool, but because it offers marketers a new and more effective way to reach their consumers. Marketers who fail to master the required skills will fall behind marketers who do.
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