Future of Marketing Automation: Grow or Die


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Tis the season for industry predictions. I’ve already fielded a couple of requests for my thoughts, which usually requires some pondering before I reply. But this time I was able to answer right away because I’ve just finished a white paper on the future of B2B marketing automation, sponsored by Leadformix and available here for free download.

The question answered by the paper is “What will marketing automation vendors do next?” This is different from the perhaps-more-important question of “What will marketers do next?” I don’t claim any particularly deep insights into the latter: they’ll continue to adapt to new media and buying habits, I guess. Like everyone else, I’m seeing greater use of social, mobile, and video; more cross-channel campaigns; closer cooperation between marketing and sales; and expanded use of analytics. If I had to predict one thing that isn’t utterly obvious, it’s that B2B marketers will be more involved with managing customer relationships after the initial sale. The reason is that post-sales interactions are increasingly automated and marketers have the best tools to manage automated interactions effectively. The task is really the same as a sophisticated lead nurturing campaign: to monitor customer behavior and respond appropriately.

While my vision of future marketing may be rather broad, I think I see the future of marketing automation in clearer detail. This is what’s covered in the white paper. To summarize the argument:

  • marketing automation vendors must grow or die. Today’s B2B marketing automation systems are used primarily for lead nurturing. This means they don’t help other marketers who do lead acquisition and marketing administration (planning, budgeting, project management, etc.). They also have limited interactions with sales and service departments, who own the post-sales customer relationship. Marketing automation vendors who want to expand their business need to service these other groups or risk some other system becoming the central platform for marketing management. If that happens, the other systems will slowly encroach on marketing automation functionality and eventually replace it.
  • marketing automation can expand in either direction along the customer path: backward to acquisition or forward to sales and service. Most expansion to date has been towards sales, in the form of add-ons that give salespeople access to information about behavior of their leads. But CRM systems are deeply embedded in sales departments, so they block growth in that direction. I therefore expect marketing automation vendors to instead shift toward features for acquisition marketers. These would include not just “inbound marketing” through social media and search engine optimization, but also purchasing media such as online and offline advertising.
  • marketing automation can also be divided into layers of delivery systems, campaign management, and platform functions. Delivery systems manage touchpoints such as Web sites, email, and social media publishing. Campaign management is the rules and models to select names for promotions. Platform functions are supporting technologies such as the marketing database, planning and budgeting, content management, analytics, and security. Current marketing automation systems do all three to the degree needed for lead nurture campaigns. Extending to other users will require more powerful platform functions in particular. Whoever controls the platform can best expand throughout the marketing department.
  • marketing automation vendors will increasingly fall into two groups: a handful of big platform vendors and larger number of small specialists. The platform vendors will offer a broad range of functions internally and further extend their range by exposing their platforms to third party developers through “app markets”. The specialists will have narrower scope but be very good at serving companies with specific needs such as low cost, marketing services, or industry editions (for sports, investments, franchises, etc.) Both types of companies can succeed although the platform vendors will tend to dominate over time.
  • new competition will come from outside the industry, especially from delivery systems. This seems counter-intuitive: delivery systems are by definition channel-specific and function-generic (a term I just invented to mean they serve all functions within marketing, sales and service). This means they are in the strategically weak position of selling commodity products without strong ties to any particular set of users. But the delivery vendors recognize this weakness and can afford to overcome it by investing in campaign engines and platform features. This is exactly what’s happening when email vendor ExactTarget purchases Pardot or Web content management vendor SiteCore adds email campaigns and a database. It (almost) goes without saying that CRM vendors are also potential competitors: they already have the platform features; what they mostly lack are campaign engines.

These trends have specific implications for marketers who are selecting a marketing automation system. You’ll need to download the white paper to find out what they are.

Republished with author's permission from original post.


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