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Marketing Automation News from Dreamforce: B2B More Integrated, B2C Stays Separate

David Raab | Nov 22, 2013 329 views 4 Comments

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I spent the early part of this week at Salesforce.com‘s annual Dreamforce conference. Here are my observations.

The big news was for geeks. The main theme of the conference was Salesforce1, a new set of technologies that make it vastly easier to deliver and integrate mobile versions of Salesforce-based applications. It is apparently a major technical accomplishment and at least one of my technical friends was hugely impressed. But I can’t say I personally found it all that exciting. Perhaps we’ve reached the point where we expect technology to do pretty much everything, so the line between what’s already available and what’s new is only visible to experts. Any way you slice it, focusing on platform technology is much less exciting than last year’s vision of “social enterprise”.

The bad news was for B2B marketing automation. Conference presentations confirmed that Pardot, the B2B marketing automation system that Salesforce acquired as part of its ExactTarget acquisition, has been separated from the rest of ExactTarget and made part of the Sales cloud. There, Pardot is described only as providing lead scoring and nurture programs, which is a subset of what B2B marketing automation usually offers. In terms of infrastructure, Pardot will eventually work directly from the CRM data objects, rather than maintaining its own synchronized database. (Data outside the CRM structure, such as detailed Web behaviors, will remain separate.)

What this means is that Salesforce sees B2B marketing automation as just an appendage of sales automation. This is pretty much the same constricted view of marketing automation that Salesforce management has held all along. The logical consequence is to make lead scoring and nurture campaigns standard features within the Sales offering and discard Pardot as a separate product. I should stress that no one at Salesforce said this was their plan, but it seems inevitable. If and when that does happen, only the most demanding companies will purchase a separate B2B marketing automation product.

To put a more optimistic spin on the same news: Salesforce will continue to let independent B2B marketing automation apps synch with Sales. If Salesforce does merge Pardot features into its core Sales product, then marketers who have a more expansive view of B2B marketing automation functions (or who simply want a system of their own) will be forced to buy from someone else.

The interesting news was that B2C marketing automation remains separate. Salesforce’s list of business groups includes the Sales Cloud, Service Cloud, and ExactTarget Marketing Cloud. Did you notice that just one of these has its own brand? As this suggests, and conference presentations confirm, Salesforce has kept B2C marketing distinct from its Sales and Service businesses, most importantly at the data and platform levels. The ExactTarget Marketing Cloud does now include Salesforce’s previously-purchased social marketing components, Radian6 social monitoring and Social.com social advertising. It also includes the iGoDigital predictive personalization technology that came along with the ExactTarget acquisition.

Salesforce did announce some plans to integrate the Marketing cloud with Sales and Service, but they are pretty much arm’s length: Marketing can receive alerts about changes in Sales (and I assume Service) data, even though that data remains separate; Sales and Service can send emails through the ExactTarget engine; Sales and Service can receive content recommendations from the Marketing predictive modeling tool. As near as I can tell, this is the same type of API-level integration available with any third-party system. For what it’s worth, the ExactTarget Marketing Cloud APIs are also part of Salesforce1, but don’t confuse that with sharing the same underlying platform.They don’t.

The good news is the B2C marketing vision. It’s not really surprising that Salesforce kept its B2C platform separate, since Salesforce’s core technology isn’t engineered for the massive data volumes and analytical processing needed for B2C in general and consumer Web marketing in particular. Happily, this technical necessity is accompanied by what strikes me as a sound vision for customer management. ExactTarget framed this around three goals: single view of the customer; managing the customer journey; and personalized content across all channels and devices. It described major features for each of these: a unified metadata layer to access (and optionally import) data from all sources; a “customer journey” engine to manage multi-step, branching flows; and predictive modeling to select the best offers and contents across email and Web messages.

This felt like a more coherent approach than Salesforce described for the Sales cloud, where external data and predictive modeling in particular were barely mentioned (or, more precisely, are still being left to App Exchange partners). The ExactTarget cloud still lacks tools to associate customer identities across email, phone, postal, social, and other systems, although there are plenty of partners to provide them. I didn’t get a close look at the details of the ExactTarget functions, which will really determine how well it competes with other customer management platforms. But the general approach makes sense.

News of the revolution may be exaggerated. Salesforce argued during the AppExchange Partner keynote that the AppExchange and Salesforce platform have created a “golden age of enterprise apps” by enabling small software developers to sell to big enterprises. One part of the argument is that the platform itself lets small vendors break through the credibility and scalability barriers that have historically protected large enterprise software vendors. The other is that end-users can purchase and deploy apps without involving the traditional gatekeepers in enterprise IT departments. A corollary to this is that end-users have different priorities than IT buyers – in particular, end users care more about ease of use – so successful software will be different.

Of course, this is exactly what the AppExchange partners wanted to hear and exactly the strategy behind Salesforce’s platform approach in the first place. But that doesn’t necessarily make it untrue: and, if correct, it would indeed be a revolution in the enterprise software industry.

But some revolutions are bigger than others. Even in an app-based world, individual users won’t be making personal decisions about how to run core business processes. Rather, systems will be chosen at the department level because companies can more or less safely assume that whatever the department chooses will integrate smoothly with the corporate backbone. That’s certainly a change but bear in mind that departmental buyers will have the same preference as corporate IT groups for working with the smallest possible number of vendors. This means there will still be the familiar tendency for individual vendors to add more functions over time. So industry dynamics may change less than you’d expect.

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4 Responses to Marketing Automation News from Dreamforce: B2B More Integrated, B2C Stays Separate

  1. Bob Thompson November 23, 2013 at 1:01 am (875 comments) #

    Nice analysis, David.

    As time goes on, it seems that Salesforce.com is looking more like Oracle — buying up other (increasingly large) cloud solutions in a search for growth. And then trying to make it look like part of an integrated solution.

    The Pardot strategy makes sense for a company that is B2B sales-centric. As you say, B2B marketing is just an appendage. My theory is that is it’s all about revenue and seats. B2B marketing is not a very big market, so why put a lot of focus there? Oracle is taking a different route, however, where Eloqua is the center of its marketing cloud offering.

    Rolling ExactTarget and the social stuff together makes sense. But it will be interesting to see if Salesforce can succeed in the more marketing-centric B2C realm, when the DNA of the founder is B2B sales.

  2. Kyle @ Marketing Automation November 23, 2013 at 4:24 pm (1 comment) #

    Thanks David for sharing your thoughts on sales force and their direction.

    I believe SalesForce is one of the biggest players in the marketing automation community. Especially sense they have been purchasing so many good platforms. I think it can be dangerous for a companies growth strategy to be based on purchasing other smaller niche companies in order to find a revenue bump.

    The question I have is: Who is going to really lead out on what marketing automation is? Who is going to be the innovator and leader of the field? Especially sense the market innovators are being bought up and forced into a salesforce direction.

  3. David Raab November 24, 2013 at 11:10 am (27 comments) #

    Hi Kyle. I think we are entering a new phase of marketing automation, with the scope expanding beyond traditional data-driven messaging (primarily email) to include other customer contacts including Web personalization and display advertising (including traditional broadcast and print as well as Web ads). This is most apparent in the B2C space, where the scope has always been broader than B2B. I also think this broader scope will result in a clearer division between the underlying “customer data platform” and the execution systems that use the data in that platform. So we may actually see companies use multiple special-purpose marketing automation execution systems, rather than a single all-channel execution system.

    In B2B, the “customer data platform” may end up being Salesforce or another CRM system that also offers execution features; in B2C, I think it’s more likely that the database and execution will remain more separate, although the central database will likely be supplemented by a central recommendation or decision facility that will coordinate treatments across the different execution channels. In other words, to answer your question more directly, the innovation will continue to come from small execution vendors, on top of a relatively stable, open customer data platform.

    The other place I see innovation is in gathering of social and other public data, to supplement data a company gathers from its customers directly. This data is an input to the customer data platform, although currently many of the vendors who gather such data (Lattice Engines, Mintigo, Infer, Reachforce, etc.) also build the customer database simply because clients can’t do that for themselves.

  4. Brian Hansford November 24, 2013 at 2:31 pm (1 comment) #

    Nice post, as always David.

    So much of the Marketing Automation world has centered around Salesforce with players like Eloqua, Marketo, Pardot, et al. extending the functionality from the CRM hub quite nicely. It only makes sense for Salesforce to bring more of the commodity features on MA into their platform. The upstart MA vendors that offer lead scoring and basic nurturing will have to evolve and innovate are be forced to compete purely on price. (Bloodbath)

    I am not convinced that Salesforce will be able to innovate and implement B2B MA into their platform to the level customers expect. How many years has the SFDC Campaign Object been left incomplete now? What a joke. Salesforce should focus less on buying companies and innovating what they have. I’ll wait to see how they actually execute.

    I’m afraid Pardot will get lost in the fold and become a simple feature set within Salesforce. That feature set will service some SFDC users just fine. Other enterprises require much more.

    Oracle and Marketo need to both push innovation in new areas. Oracle’s vision for a CMO Stack is very compelling with MA only a commodity sliver of what’s offered. Marketo is independent (so far) and can lead with interesting innovations. Time will tell.

    Brian Hansford

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