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Re-casting How We Think About B2B Marketing Automation

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I was analyzing results from our recent B2B Marketing University series, which Silverpop launched this past Fall, and the data seem to point to an eye-popping, potential 'banner year' for marketing automation in 2010.  Without getting into all of the math, responses from 290 of the nearly 600 B2B marketers who attended the event series point to the potential for somewhere in the range of 70 to 75% net increase in total adoption of marketing automation technology in 2010. 

Is this the best projection of market growth -- i.e., is this 'the number' for 2010?  Beats me -- I'm not a full-time industry analyst -- but given this data, plus some other recent insights I've read, it seems as though 2010 is going to be a big year for marketing automation.

Then it occurred to me:  What do all of these B2B marketers (and some B2C marketers) actually mean by marketing automation?  Is their definition the same as mine?  What is it they think they are investing in -- in droves -- in 2010?

And I have had similar thoughts while reading recent blog posts by Jep Castelein (a.k.a., "The Lead Sloth") and David Raab on where marketing automation is headed in 2010.  So I did some thinking about how we define marketing automation.

Strategic Marketing Automation

The problem with definitions is context.  I think many who look at marketing automation lean towards a definition rooted in how marketing automation improves the operational efficiency of a B2B marketing organization.  There is no question that this is a benefit -- a significant one -- and it often is the initial catalyst that gets a given marketing organization thinking about marketing automation.  In fact, it probably was the catalyst for the initial development of the entire marketing automation segment.  But as with any technology advance -- for instance, CRM -- having a holistic platform to tackle the operational obstacles changes things.  It opens up totally new capabilities that were perhaps not fully envisioned at the outset.  This is what is occurring with marketing automation ... and at a key moment.

Operational efficiency is important, but it is not the greatest challenge B2B marketers are facing today. 

B2B marketers' greatest challenge lies in responding to a rapidly-changing B2B buyer.  A Web 2.0 world has fundamentally changed the dynamics of buyer-vendor interaction.  B2B buyers not only have greater access to information than ever before, but increasingly, that information comes from industry peers and third parties, versus coming from their vendors or from traditional media outlets.  Charlene Li and Josh Bernoff wrote about this loss of control in their book, Groundswell, and they noted "[t]he groundswell has changed the balance of power."  Buyers now move forward on their own terms, conducting much of their education on their own (and online) and connecting with a live sales team member later and later in the process.

So given this power shift, B2B marketers must more than ever work to wrap their marketing programs around the B2B buyer -- managing dynamic, anticipatory, buyer-driven campaigns and programs and being in the right channel with the right information in the right voice at the right stage of the buying cycle.  It's a posture that imitates how a live sales person might have engaged with a prospect in a consultative interaction in the past.  But now it's being driven -- out of necessity -- by a B2B marketer.  I think of it as 'mass one-to-one' marketing or 'bottoms-up' marketing, and more than just enabling operational efficiencies, marketing automation is critical to executing against this type of marketing.  In fact, I believe you really can't do mass one-to-one without some sort of underlying marketing automation platform.

"[C]ompanies have to engage differently with prospects," commented Lumension SVP of Worldwide Marketing C. Edward Brice in a recent interview on the Savvy B2B Marketing blog.  "They have to stop focusing on the sales cycle and instead focus on the buying cycle. This ultimately means that companies need to understand prospects and customers to a greater extent, including how that individual wants to buy and what information they need at particular points in the buying cycle."  Marketing automation thus also is critical to observing and understanding the buyer -- keeping track of information consumed and using this to better understand and tune outreach -- and to closing the loop.  This means having insight into buyers' 'implicit' information-seeking behaviors and being able to link these behaviors to purchasing behavior.

This view of marketing automation -- as the key infrastructure for driving buyer-centric, mass one-to-one marketing -- is a different definition of B2B marketing automation.  This is what I view as the strategic definition versus the operational definition.  It recasts how we think about automation and its role in modern B2B marketing, and this is important because I believe it is this new role that is driving the rapid growth of the segment -- the 70-75% (or whatever number) net growth I cited above.

An Expanded Agenda

Here's the other impact of the strategic definition:  Once you are thinking about marketing automation in this strategic context, it then becomes clear why recent and upcoming developments in the marketing automation segment make sense.  And why it is natural that marketing automation will increasingly have an expanded agenda.

These developments are all about extending the platform's ability to deliver buyer-centric, mass one-to-one marketing.  "It’s all about the buyer now," explains Castelein I his 2010 round-up, above.  And so the natural evolution are features and capabilities that reach further upstream into a buyer's decision-making process, strengthen our engagement in the middle of this process and reach further downstream into when that process naturally intersects with our sales organization.

This -- in my mind -- better helps to rationalize the current vector of marketing automation vendors better than any operational definition.

Feedback

How do you define marketing automation?  What are your thoughts on this strategic versus operational view?  And how do you believe B2B marketers will leverage marketing automation platforms and related technology to be more successful in engaging buyers (and in the process, getting their arms around the 'brave new world' of B2B marketing) in 2010? 

I'd love to get your feedback.


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Adam Needles (Twitter: @abneedles) is Silverpop's Director of Field Marketing and B2B Marketing Evangelist. In his Atlanta-based evangelism role, he serves as a key advocate for B2B marketers — learning from, researching and analyzing the critical issues B2B marketers face; participating in dialogue at key marketing conferences and events on behalf of Silverpop; and serving as a key author of best practices documents, including those on the Demand Generation and Propelling Brands blogs, and numerous live and webinar presentations. He also leads the company's global field marketing organization and is applying Field Marketing 2.0 principles to how Silverpop goes to market. Needles has more than a dozen years as a B2B marketing executive and consultant and has advised both growth-stage companies and publicly-traded enterprises. Prior to joining Silverpop he was based in Boston as vice president of marketing for technology-industry analysis firm The 451 Group. He previously co-founded DVG Research, a market-strategy firm, and he was a key team member at Citigate Cunningham, a technology public relations firm, where his accounts included Motorola and Platinum Technology (acquired by CA, Inc.). He holds an MBA in Brand and Product Management from the University of Wisconsin at Madison and a BSFS in Science and Technology in International Affairs from Georgetown University.

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  • by Paul Barsch Thu Jan 21, 2010 via blog

    Hi Adam, 100% agree on need for marketing automation. However, marketers traditionally don't have the budget to "do it right"--and by that I mean not on the cheap with disjointed, haphazard tools and incomplete data sets. Ideas for where the budget comes from??

  • by Jeff Ogden Thu Jan 21, 2010 via blog

    As the head of marketing for a firm shopping for marketing automation, as well as the author of How to Find New Customers, I have a unique perspective on marketing automation. Here are some thoughts:

    1) For the most part, the leaders all look alike. This has serious ramifications on pricing.
    2) The shift to inbound marketing is a threat to the traditional marketing automation vendors.
    3) There are too many vendors on the market. Consolidation is inevitable.
    4) Content has become the lynchpin. Marketing automation vendors should align themselves with content creators.

    Jeff Ogden

  • by Beth Harte Thu Jan 21, 2010 via blog

    Adam, welcome to the Daily Fix! Looking forward to more posts about marketing automation.

    Also, I agree with Paul. Any suggestions for how to overcome budget issues?

  • by Parker Trewin Thu Jan 21, 2010 via blog

    Adam, great post and couldn't agree with you more.

    We've written extensively about aligning with the buying cycle and targeting content to the buyer's stage on the B2B Marketing for Faster Sales blog.

    Recently, David Thompson wrote a great post about Bionic Marketing and how marketing automation empowers sales (We can rebuild him. We can make him stronger, faster, smarter?) to better serve the customer when the customer is ready, It's good and fun stuff: http://www.genius.com/marketinggeniusblog/1800/the-age-of-the-bionic-market...

    We also wrote about the inbound bound being a huge trend for B2B Marketers: http://www.genius.com/marketinggeniusblog/1850/5-big-trends-in-marketing-au...

    As aside, I had a conversation with SiriusDecisions' Jonathan Block and he indicated that marketing automation penetration is only around 20% so the opportunity might even be greater. Good new for all the vendors out there.

  • by Adam Needles Fri Jan 22, 2010 via blog

    @ Paul - Yours is a good call-out, and I'd say that there are two perspectives.

    One, without fail, there is case study after case study available pointing to the ROI of marketing automation -- when implemented in parallel with change management. That ROI is evidenced in terms of increased quality of leads and increased close rates. SiriusDecsions is one firm that can provide this type of benchmarking. So with the ability to say, here's how much our cash flows go up, versus our investment, this is a simple NPV calculation. If it's positive, it's rational to move forward with the investment. But I'll note this argument only speaks to the operational definition I offered above. There is also a strategic impact -- in terms of being more buyer-centric -- that is harder to fully quantify up front, but that will also change how you operate as a firm. And that will add to the net ROI but in sometimes incalculable ways.

    Closely related to this issue is the need to re-organize your marketing team staffing. A hybrid field marketing 2.0 and marketing operations team needs to be put in place to help you take full advantage of marketing automation. (BTW -- I'll be talking about this at the B2B Marketing University this spring.) This will include net increase in headcount, but together with this team and your platform you'll be able to market in more efficient ways, and you'll actually be able to decrease spending in areas such as top-of-the-funnel lead-gen and will be able to reduce headcount of channel-executional marketers. If you more-efficiently manage leads and manage the middle of your funnel -- improving yield -- the less you need to fill the top. So the NPV equation looks like this

    +$ REVENUE INCREASE -$ NEW HEADCOUNT +$ NO LONGER NECESSARY HEADCOUNT +$ NO LONGER NECESSARY TOP-OF-FUNNEL LEAD GEN PROGRAMS -$ COST OF PLATFORM = NPV

    If that's a positive number, Houston you're a go.

    Two -- and I'm not saying this is the correct way to view it -- but this is parallel with the ERP world. (To me ERP is about holistic supply chain management systems, and marketing automation w/ CRM is about building holistic demand chain management systems.) In the early days of the ERP world, there was not budget that existed for ERP, but once it started to prove its chops, it became a line item. So part of me is willing to say that there is a little leap of faith. Does any major company doubt ERP is a good thing today? Marketing automation just needs a line item. Again, not saying this is the best or most convincing argument, but it's a perspective to consider -- especially as it continues to prove its chops. Interestingly enough, we did a joint study with Forrester recently, and in the interviews, ROI was the least-most-imporant issue that came up.

    I recognize you still need to build a case, and I'd ALSO offer that one of the sessions we're going to be covering at B2B Marketing University this year is how to make the case to senior management. In fact, Mac McIntosh will be presenting on that topic on our March 3 event in Washington, DC.

  • by Adam Needles Fri Jan 22, 2010 via blog

    @ Beth - Thanks to you and the gang for a warm welcome. Excited to be part of the blogging team.

  • by Eric Goldman Mon Jan 25, 2010 via blog

    First off, Adam, thanks for an informative post. You asked us to think about the differences between strategic and operational Marketing Automation and to give you our definition of Marketing Automation. Here's my take:
    We (Gossamar Inc) divide the Process of Marketing Automation into 4 distinct phases or sub-processes:
    1) Attract the right visitors (this is done via SEO, SMM (Social Media Marketing) and PPC. You can of course also use traditional media and Outbound Marketing approaches like Trade Shows and Media advertising, but we tend to focus on Inbound Techniques because that's who we are.
    2) Engage the visitors to your site with Content. Great, thought-leading content which convinces your visitors that you are the best in this sphere.
    3) Content which is so desirable that your Visitors Convert (register on site), to get more of it. The process of conversion here yields the visitors' names and email addresses and - by so doing - gives you their permission to market to them. This officially launches the "Buying Cycle".
    4) Qualify and Nurture. This is done through the automation system's Grading and Scoring of the lead's profiles (grade) and digital footprints (behaviour = score), as well as the multi-touch or drip email campaigns and automated business rules.
    Because we work in the Sales and Marketing Automation world, we continue on with the Automation cycle by diving into the world of Customer Relationship Management too, and we would next describe the remainder of the above cycle in terms of what happens to those prospects which achieve a high enough Grade and Score to be fed directly into the CRM (such as Salesforce, for example), and then what happens to these leads as they are assigned to a sales rep and he or she works them further round the buying cycle (which now, for the first time since the lead arrived on site, begins to resemble a more traditional sales cycle).
    Given all the above, I believe Inbound Marketing Automation is both a leap into strategy because it changes the way you your mix of marketing initiatives and the approaches you use to generate leads, and a walk along the operational road because you will have to change all your processes to suit, and also redesign the way your sales and marketing organizations work together.
    And with all that which sounds like (and is) a great deal of work to implement, one had better find the right amount of money with which to to do it all. So to Paul, Jeff, Beth and Parker who are interested in budgets and justifying campaigns, you may find these links (below) interesting. They describe ways to calculate the ROI of social media campaigns, online marketing campaigns, and even your website as a whole. These approaches sacrifice 100% accuracy for simplicity, but they work well enough to use with confidence. The three posts give you the methods and tools you need:
    1) How to calculate the ROMI of your website as a whole: http://bit.ly/6bFSvs
    2) A list of the 10 best free ROI calculators on the web: http://bit.ly/7fwBkF
    3) How to build your own ROI calculator (perhaps for your social media campaign): http://bit.ly/6IGZQh
    Finally, also on our website (just look for it on the blog), is a post aimed at those who want to launch their own SMM campaign but don't know how or where to start. This post, entitled, "How to run a Social Media Campaign," will give you some help.

  • by Paul McKeon Tue Feb 23, 2010 via blog

    Adam, I thought your post was right on in justifying the need for marketing automation as a result of the changing nature of the buying audience. Many of these systems are justified solely on the basis of measurement and ROI. My view with regard to the measurement aspect is encapsulated in a new twist on the old axiom: "I know that half of my marketing dollar is working, I just don't know which half." The new axiom might be: I have 100% visiibility into my marketing program, but it is still only half as a effective as it could be." The usual reason: with all the emphasis on process and measurement, today's marketers often forget about one thing: a good idea.

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