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Marketing Automation Heats Up

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Posted March 8, 2011 By Herman Mehling     Feedback

With big names like IBM and Teradata buying in, the marketing automation market is getting noticed. So how can this technology transform your marketing efforts?

While TV transformed the art of marketing, bringing endless products and services into people's living rooms, the internet with its infinitely superior tool chest has revolutionized marketing in ways TV could never emulate.

The internet enables instant tracking and analytics, personalized ads that reflect your web searches and purchasing history, and provides software that helps businesses automate marketing processes. The result is the very refined art of marketing automation.

Marketing automation software, a subset of CRM, seeks to automate various marketing processes such as customer segmentation, customer data integration, and campaign management.

In the last several months, the market has heated up, following major acquisitions by IBM (NYSE: IBM) and Teradata (NYSE: TDC). Big Blue acquired Coremetrics and Unica, while Teradata bought Aprimo.

"With Unica and Aprimo, the two largest enterprise marketing platform companies, off the block, it's clear that campaign management is attractive technology to acquire," noted Suresh Vittal, an analyst at Forrester Research.

 

Campaign Management Turns Mission-Critical

Why is marketing campaign management so coveted?

Besides being a growth market — one recent forecast estimated that the market is growing at roughly 17 percent annually, while IBM claims the growth rate is much higher — campaign management is also mission-critical, said Vittal.

"It is the fundamental technology that allows marketers to use customer data to develop relevant, multichannel communications," Vittal said. "Simply put, it unlocks the value in customer data. This is particularly timely given the unprecedented growth in data volumes, driven primarily by the popularity of online, social, and mobile channels."

The integration of people, processes and technology to drive ROMI (return on marketing investment) is the true value proposition underlying IMM (integrated marketing management), said Kim Collins, a Gartner analyst.

"By 2014, companies that develop an IMM strategy will deliver a 50 percent higher ROMI than those that don't," she said.

 

Technology Helps Companies Get Close to Customers

For large, especially global companies, customer insight has become a top priority.

Among the highest performing companies globally, 95 percent say that getting closer to customers is key to achieving their business goals, according to a recent IBM study of 1,500 CEOs.

In order to deliver on this priority, businesses must gain a deeper understanding of customer behaviors and preferences, which they can then use to create more effective and relevant marketing communications and customer experiences.

To help its customers get closer to their customers, IBM paid $480 million for Unica. The company did not disclose how much it paid for Coremetrics, a specialist in the area of web analytics relating to product marketing.

Teradata paid $525 million for Aprimo.

Unica's software has helped more than 1,500 organizations better analyze customer preferences and trends, predict customer buying needs and execute and measure relevant cross-channel marketing campaigns.

Unica's customers include Best Buy, eBay, ING, InterContinental Hotels Group, Monster, and US Cellular.

Coremetrics software provides real-time intelligence on what customers say about products, content and services offered to them, while enabling clients to make accurate decisions about marketing expenditures.

But the marketing automation market doesn't end with IBM and Teradata. Most major CRM vendors offer at least some marketing automation functionality, and a number of standalone vendors like Eloqua and Marketo have also developed impressive offerings.

 

Gaining Deeper Customer Insights

As a result of such offerings, marketing teams can gain deeper insights into their customers and present personalized recommendations, promotions, and other sales incentives wherever customers interact — online, on mobile devices, or through social media networks, kiosks, and more traditional channels.

Coremetrics' customers included Bank of America, Holiday Inn, Petco, 1-800 Flowers, Office Depot, Victoria's Secret, and Virgin Atlantic Airways.

The Unica and Coremetrics acquisitions help deliver the customer insights clients demand, along with the measurable results they are seeking across sales channels, said Craig Hayman, general manager of the IBM Industry Solutions Group.

Citing industry estimates, IBM says the enterprise marketing management software market is worth $2.5 billion and doubling in size on an annual basis.

An obvious driver of this growth is the need for chief marketing officers (CMOs) to find technology that will at once bridge the gap between digital and traditional marketing while positioning their brands to maximize opportunities in the digital world.

Top executive marketing challenges include integrating campaigns across proliferating digital and traditional channels and the elimination of data silos that inhibit results analysis and metrics — and proving ROI on marketing, according to a recent survey by Aprimo (Teradata) and the Argyle Group.

Aprimo claims to have resolved these challenges with a fully integrated suite for hundreds of customers, including 36 of the Fortune 100. Among these are Target, Warner Bros., and Nestle.

For ways to use your CRM system to help with marketing, see Ten Things You Can Learn from Your CRM System 

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