Teradata Integrates Its Marketing Automation Acquisitions for Enterprise Marketers

Last year’s biggest marketing automation acquisitions were products for consumer marketing: ExactTarget by Salesforce.com, Neolane by Adobe, and Responsys by Oracle. But it would be wrong to see these as expanding the industry to a new set of users. Consumer marketers have had their own, highly sophisticated marketing automation systems for years. Products like Unica (now IBM), Teradata Customer Interaction Manager, and SAS Marketing Automation were introduced before the earliest B2B marketing automation systems and B2C email products. They’ve continued to grow their client bases, which are concentrated among large enterprises. As new entrants explore the world of B2C marketing automation, it’s important to recognize that the territory is already occupied.

I recently caught up with the folks at Teradata, which had its own marketing automation system for a decade before it acquired Aprimo marketing automation in 2011 and added Munich-based email vendor eCircle in 2012. The three products overlapped significantly, especially in campaign management, and it took Teradata a while to sort things out. But as of earlier this year, everything is now marketed as part of a Teradata Integrated Marketing Cloud including Marketing Operations (largely Aprimo’s marketing resource management technology), Campaign Management (the Teradata campaign engine with a sprinkling of Aprimo features and new user interface), and Digital Messaging (based on eCircle). The company also offers a suite of analytic applications for database management and predictive modeling.

The new user interface is the most noticeable change in Campaign Management’s latest release, version 7. But, bright colors and curly lines aside, what distinguishes it from other marketing automation systems is that nodes in a campaign flow can feed in customers from different database segments or Web interactions.  Most other systems do this audience definition outside the campaign flow.  The Teradata flows do continue with nodes that move through the program after they enter.  Users can assign separate paths to different treatment outcomes, such as an email bounce, open, or click, and can merge several paths into a subsequent node. Treatment nodes can be linked to data output templates and content templates, which can include dynamic blocks that are populated in real time when the message is rendered. Rules can limit the combined number of messages sent to each customer across all campaigns, with separate limits for messages of different types in different channels. These are advanced features for consumer marketing automation and almost unheard of in B2B systems.

Beyond the campaign interface, Teradata builds on its traditional strengths in data management and analytics.  It provides unified access to digital and offline data, automated predictive modeling, cookie-free Web behavior tracking through an alliance with Celebrus, user-defined response measures, posting of Twitter comments to customer profiles, and “extended” data tables that draw from multiple sources.  Users can create emails and landing pages and preview how they would appear on different devices, although the system-generated contents don't automatically reformat the outputs to fit the viewing platform (a.k.a., "responsive design").  The system can deliver emails and support real time interactions across other channels. Messaging and real-time interaction are software-as-a-service only, while other components can run on-premise or be hosted by the vendor. The system can run on SQL Server as well as Teradata’s own database, and can interact with data stored in Oracle, SQL Server, and Teradata.

The Marketing Operations and Digital Messaging components of Teradata’s Marketing Cloud are similarly advanced. The company this week announced enhancements to both, including new interfaces, collaboration tools, a central repository for marketing assets, and tighter integration with Campaign Manager. The underlying theme is providing a more comprehensive, shared view of customer behaviors across all channels and connecting marketing costs with results to enable more accurate return on investment calculations.

All of this doesn't come cheap: Teradata aims at clients with at least $500 million revenue and sets is prices accordingly.  But large, sophisticated marketing organizations that need a large, sophisticated marketing system should keep Teradata on their list of options.

Marketing Lessons from Chernobyl

I’ll be speaking about optimization this Wednesday at the Online Marketing Summit conference in Santa Clara, CA. Since I’m very comfortable with the actual topic, most of my prep time has been spent looking for pictures for my slides.

One discovery was the image above, which shows is how I think most people imagine optimization: a team of dead-serious revenue engineers carefully tweaking dials and watching gauges until they find the perfect balance among alternative marketing investments. That the real world isn’t quite so rigorous is a sad truth I’ll cover during the conference.

But this picture isn’t just any power plant. It’s the control room at the Chernobyl nuclear reactor which disastrously exploded in 1986. Look closely, and what do you notice?

Yes, those hats. Apparently the Chernobyl plant was being run by pastry chefs. That explains so much.

My theory is this: the Soviets had a little-known tradition that translates roughly as “switch jobs with your friends day”. The year of the accident, a team of bakers decided to change places with their buddies in the Chernobyl control room. The nuclear engineers spent the day calculating the volume of pie tins and optimizing heat convection in the baking ovens. Meanwhile, the pastry chefs were decorating fuel rods with icing and asking, “What if we replace the reactor coolant with meringue?”

This did not end well.

Well, maybe that didn’t happen. But my imaginary pastry chefs sound a lot like stereotypical marketers: experts in a subjective field where decisions are based on taste, feel, and appearance, and progress comes through intuitive experimentation. Those methods work well in the kitchen, but can’t be safely transferred to a nuclear reactor. Nor do they work for marketing optimization.

Like reactor management, marketing optimization programs need to be based on deep knowledge of the underlying process. They rely on precise tracking mechanisms that support long-term monitoring of detailed results. They need to be run by marketing equivalent of nuclear engineers, not pastry chefs.

This doesn’t mean that data geeks should take over marketing. Chances are, things weren’t going very well in the Chernobyl bakery that day, either. The city needed both bakers and scientists. But having them wasn’t enough: they needed each in the right place. Marketing departments are the same.

SAS Acquires AssetLink: Great for Enterprises, But What About the Rest of Us?

Summary: SAS's purchase of AssetLink ensures it's a viable alternative to IBM/Unica and Teradata/Aprimo for integrated marketing management. The real question is whether mid-size firms will be able to afford those systems.

SAS today announced its acquisition of marketing resource management vendor AssetLink. The move makes perfect sense: the other big MRM vendor was Aprimo, and once they were acquired by Teradata, SAS and AssetLink had no alternative partners in the enterprise marketing space.

Let me make clear that when I say “enterprise”, I mean “enterprise”, as in big business. Our friends at Gartner have recently proposed replacing “enterprise marketing management” with “integrated marketing management” as the general term for, um, integrated marketing management. Makes sense. But AssetLink told me their 50+ clients are all big companies. SAS’s marketing systems are also sold mostly to big firms. So we’re really talking about the “enterprise” market here. Once you starting considering mid-size businesses, there are other players, most notably MarketingPilot for MRM and Alterian and Neolane for business-to-consumer marketing automation.

Naturally, SAS and AssetLink don’t intend to limit themselves to enterprise buyers. Like IBM/Unica and Teradata/Aprimo, they hope to sell integrated marketing systems to mid-size firms too. This may be easier for the other two vendors: IBM and Unica certainly have more mid-size marketing clients than SAS and AssetLink, and although Teradata is mostly a big-company vendor, Aprimo has a broader client mix and a relatively new “Marketing Studio On Demand” product that was designed for smaller buyers. Still, we can expect SAS to try.

I'll admit to being skeptical that enterprise-oriented firms like IBM, Teradata, and SAS can successfully sell their products for the mid-market. The transition faces some technical roadblocks, mostly about hiding complexity and reducing the need for customization. But those can be solved. The larger challenges are rooted in corporate culture and require changes in areas like pricing and sales compensation. To put it more bluntly, enterprise firms like to sell big deals.

In fact, I think big deals are exactly what have attracted IBM, Teradata, and SAS to focus on marketing systems. They all seem to have adopted the grand vision of integrated marketing automation as a centrally-managed, analytically-driven process to coordinate customer contacts across all touchpoints. This requires integrating the marketing system with sales, customer service and Web systems. While I also love that vision, I suspect that only a few large firms will have the resources to implement it. This could mean that, in practice, integrated marketing management is limited to enterprise buyers.

This leads to another question: What are Oracle and SAP up to? They’re the other big enterprise software vendors and they’re surely interested in offering integrated marketing automation to their own clients, both to increase revenue and to block account penetration by competitors. Both vendors do have some marketing automation products but these don’t have much of a public presence. If integrated marketing automation really takes off at enterprise accounts, I suspect we’ll see Oracle and SAP pay more attention to this market, either through acquisition or enhancement of existing products.

You’ll notice I haven’t said much here about the SAS/AssetLink deal itself. That’s not due to any lack of enthusiasm: it’s just that the pairing was so obvious that it doesn’t require much explanation. It ensures that SAS’s marketing automation suite remains a viable alternative to IBM and Teradata, by giving it the scope that those other vendors possess. Of course, there are still substantial differences among the products, so buyers who are free to choose any of them will need to dig into the details and match them against their requirements. But I suspect that many companies will have a strong predisposition towards one vendor or another, depending on what other systems they have in place. In that case, there may be fewer truly competitive deals than we saw in the past, when marketing could choose its system without the rest of the company really caring all that much.

My bottom line, then, is that this deal doesn’t reshape the market, but it does clarify its structure and ensure that SAS continues to compete. My real concern is whether mid-size companies will be able to participate or integrated marketing automation will remain the preserve of enterprise marketers.