0 Why Put Another $25 Million Into Marketo?

So...our friends at Marketo announced today that they've received another $25 million in venture funding. As one of their competitors snippily commented on Twitter, "Does that make the total $50M or $60M? I lost track."

I've lost track too, but it doesn't really matter. Marketo's strategy has been clear from the start: spend heavily to establish a strong position despite a relatively late start in the market. Of course, it wasn't just a matter of spending (Microsoft Zune, anyone?); they needed a solid product and good marketing as well. On all fronts, Mission Accomplished.

But the question is, what happens now? Obviously Marketo has a plan in mind and has convinced some pretty savvy investors that it makes sense. Presumably they've demonstrated a highly scalable business model that will allow them to take the latest funding and reliably transform it into growth and, eventually, into profits.

I find it a bit surprising that anyone can be $25-million-worth-of-certain about anything in such a young and volatile market, particularly because I still think B2B marketing automation will eventually be absorbed by larger CRM and/or Web content management suites. Certainly Marketo could be acquired by one of those companies but I don't think the price would be high enough to make the VCs happy. And surely they're still some time away from an IPO given what must be seriously money-losing financials to date.

I'm mostly writing this post in the hopes of seeing some helpful comments from others in the industry. Where does this all lead, both for Marketo and its competitors?

0 Eloqua10 Offers a Much-Improved Interface and Revenue Reporting

Summary: Eloqua10 provides much-needed update to Eloqua's user interface and a new reporting infrastructure for “revenue performance management”. Neither change is revolutionary but both substantially improve the company’s competitive position within the crowded B2B marketing automation industry.

Eloqua is slated to officially release its long-promised Eloqua10 system on November 21. The main changes are an updated user interface and a new foundation for what the company calls "revenue performance management".

Let’s start with the interface. Previous versions of Eloqua were very powerful but notoriously difficult to learn and use. The company took this criticism to heart and began work more than two years ago on a new approach. The primary goal was to speed and simplify user navigation, which its research found was the root cause of 70% of user problems.

The new interface is a huge improvement. Users start on a customizable home page, which they populate from a pool of widgets for recently accessed items, favorite reports, upcoming campaigns and other information. System functions are access through tabs that align with typical user roles: campaigns for program designers, assets for content creators, contacts for segmentation managers, insight for managers and analysts, and setup for administrators.

Campaign design has been wholly revamped. The old system used a classic Visio-style diagram that only an engineer could love. Users now drag campaign components into a blank canvas, and then connect and configure them. The esthetics are carefully thought out, with components grouped and color-coded by type:

- audience (segment members)
- assets (email, e-form, landing page)
- decisions (a mix of lead behaviors [clicked email, opened email, submitted form, visited Web site] and attributes [compare contact fields, shared list member, sent email])
- actions (add to campaign, add to program, move to campaign, move to program, wait)

The components are connected with squiggly lines, which probably makes no actual difference but definitely seems more friendly.


More substantively, multiple users can work on the same design simultaneously and the designs can be saved as reusable templates. It’s worth noting that the “move to campaign” action can send leads to a specific step within another campaign – not a new feature but still rare within the industry.

Users can open up assets within the campaign flow and then create or edit them. Eloqua10 introduces a Powerpoint-style design interface that lets users drag objects into place and see the changes rendered immediately. These Powerpoint-style interfaces are increasingly common among marketing automation systems, replacing the older approach of editing blocks within predefined templates. The objects can be text, images, data fields, hyperlinks or dynamic content blocks.

Eloqua10 uses the new interface to create emails, forms and landing pages – an improvement over the older version, which had different design tools for different asset types. One downside of the change is that some assets built in previous Eloqua editions will need to be modified, as will some reports.

However, old campaigns and data should transfer to the new format automatically. This reflects the fact that, once you get beneath the interface, the functionality and data structures are largely unchanged from Eloqua9.

The big exception on the data front is what Eloqua calls “revenue performance management” (RPM), which uses a new analytical database that tracks the movement of leads through stages within the buying process. This database is updated in near-real-time with operational transactions and can also receive opportunity outcomes from sales automation or other external systems.

Unfortunately, Eloqua hasn’t released the actual reports that will be provided for RPM. It does say there’s a list of sixteen, of which some already exist. Reports they’ve mentioned include: the number and ages of leads at each stage in the funnel; relation of leads delivered to sales capacity at local levels; and revenue projections based on existing leads and stage-to-stage conversion rates. I don’t know which of these are already available.

There’s also a “two way revenue attribution” report that shows revenue allocated both by “first touch” and “all touch” methods. Although I’ve previously made clear my objections to revenue attribution in general, I think this approach is relatively sensible. “First touch” reporting is useful for acquisition programs, while “all touch” shows which programs are reaching buyers even if it doesn’t show the programs’ actual influence. With apologies for damning with faint praise, I’ll say Eloqua's approach is better than the illusion of precision created by fractional attribution.

Other enhancements planned for future releases include:

- benchmark reports that let marketers compare their company’s performance with averages for similar firms

- enterprise-level security enhancements such as global log-in across multiple Eloqua instances and item-level asset security

- user interface versions in languages other than English

- a new lead scoring interface and analytics to help build more accurate scoring rules

- Webinar management

- fax, SMS and print-on-demand outputs

Eloqua has a dozen or two customers already running Eloqua10. Other clients will be converted to the system over time to ensure users are ready for the new interface and have converted whatever assets and reports are needed. The company has a suite of new training materials in place and will not charge extra for the conversion.

0 Rapid Insight Provides Low-Cost Options for Desktop Data Transformation and Predictive Modeling

Summary: Rapid Insight offers low-cost desktop tools for data transformation and automated regression modeling. They're a good choice for companies that need something simple yet powerful.

Predictive modeling is widely used by consumer marketers to select names for mailing lists and to decide which products to offer existing customers. These models are typically built by statisticians with tools like SAS and SPSS. In other cases, marketers can build them for themselves with automated tools like KXEN that are tightly integrated with the marketing automation system.

But most marketers still don’t have a marketing automation system or even an integrated marketing database. Nor do they have the skills to use a product like SAS. This group needs stand-alone tools to do two key things: assemble data from multiple sources, and build and execute the models themselves. (Okay, three things.)

Rapid Insight offers exactly those two (or three) capabilities in a reasonably priced package.

Veera is the data assembly tool. It lets users connect to most standard data sources and then define a processing flow to filter, merge, aggregate, transform and otherwise manhandle data into a form that makes it useful. Veera also provides some basic analytics including descriptive statistics (mean, median, value frequencies, etc.), cross tabs and graphing. The flow is set up as a sequence of icons with a drag-and-drop interface, which means users don’t have to learn a scripting language. Rather than go into more details, I'll just point you to the vendor's on-demand demo.


The predictive modeling tool, prosaically named Analytics, builds logistic and least squares regression models. (Logistic models predict yes/no outcomes such as whether someone will respond to a promotion; least squares models predict continuous numeric outcomes such as lifetime value.) The Analytics interface is more sequential than Veera: users get a set of tabs that lead them through the steps of loading data, selecting variables, building the model itself, assessing the results, and scoring an audience. At each step along the way, users can make their own decisions or allow the system to choose for them.

I’ve seen quite a few automated modeling systems over the years, and was impressed at how well Analytics provides users with information to understand what's happening and take control when desired. This should let the system satisfy knowledgeable statisticians looking for a productivity enhancer, as well as novices who want to rely on the system's choices. Analytics also has a good online demo.


Veera and Analytics both run in client/server or desktop configurations. They load data into system memory (RAM), which means very large projects could be problematic. The vendor says a half-million rows with a couple hundred variables is a reasonable universe to model.

The two products are sold separately. This makes sense: many companies could use a generic data assembly tool like Veera for purposes other than modeling. For example, marketers might use it to construct a multi-source marketing database for promotions or analytics.

Pricing is $3,000 for the first Veera user and $5,000 for Analytics, with discounts for additional licenses. This is quite reasonable compared with other automated modeling systems, although other products often provide more than just regression models. Annual maintenance for each product is $1,750 per license. Rapid Insights has been selling its products since 2005 and has more than 150 clients with over 200 licenses.

0 Right On Interactive Offers Lifecycle Reporting

Summary: Right On Interactive has added great life stage reporting to the data integration and output generation features of its earlier 5Buckets product. It could supplement a traditional marketing automation system or perhaps replace one. Either way, it’s worth a look to see what you’re missing.

When I reviewed Right On Interactive in a July 2009 post, the company was selling its 5Buckets marketing software as a multi-channel output generation tool that complemented conventional marketing automation systems. Since then, Right On has expanded its functions, dropped the 5Buckets name, and repositioned itself as a marketing automation alternative focused on “customer lifecycle marketing”. It’s tempting to discuss the business strategy behind this, but I assume that you Dear Reader are a marketer and therefore it's not your problem So let’s look at what the system actually does.

We'll start with the standard marketing automation functions. These are what you need if Right On is really to substitute for one of the better-known products:

• data management: Right On can import files from any source, placing the data into standard structures or custom tables. Users can link the imported data to any other table, allowing complex data structures. They can also load data to the system API. This is more powerful than many marketing automation products, which are largely limited to a company, contact and activity history files.

• segmentation: users can define segments using a step-by-step query builder or by writing SQL. The query builder supports complex relationships. This is competitive with or better than standard marketing automation systems.

• campaign design: users can define campaigns with multiple “tactics” . Each tactic has its own action, schedule, metrics, documents, and start and end dates. Contacts can enter a tactic from an assigned segment or flow from a previous tactic based on their response and a user-specified waiting period. These features let Right On support multi-step campaigns although complex designs would be a challenge.

• create emails and forms: Right On uses ExactTarget for email and form creation. The integration is fairly smooth since the editing features are accessed within the Right On interface. A native solution is under development but the current approach should work for unless you have a particular aversion to ExactTarget.

• campaign actions: each tactic can execute one action. These include sending an email via Salesforce.com or ExactTarget, creating a Salesforce.com task, generating an output file, and sending emails to Foursquare friends. This covers the basic needs, although most other products also offer options such as changing data and adding a contact to a list or campaign.

• CRM integration: Right On can synchronize data with Salesforce.com and Microsoft CRM on a regular basis. It can also pull file segments and Salesforce.com campaign members as lists. This makes it roughly equivalent to other products. Right On also has a connector with location-based social network Foursquare.

• campaign reporting: users can manually enter campaign costs, target revenue, and actual revenue. The system will capture responses and use the results for response reporting, cost per response and return on investment. This is pretty standard stuff, although many other systems can also import opportunity revenue automatically from Salesforce.com – a feature still in Right On’s future.

• lead scoring: users can define separate scores for customer fit and activities. Customer fit is based on static attributes such as title while activity score is based on events such as email opens or Twitter posts. There’s also an engagement index that compares the actual activity score with the maximum possible score had the contact responded to every promotion. The scoring rules are built in the usual fashion, by assigning to points to different attribute values or different events, although the interface is nicer than most. Contacts are rescored nightly. The scores are stored on the customer record and can trigger an action to send the contact to Salesforce.com. This is on par with other products.

In other words, when you just look at standard features, Right On is no better than adequate. But that's not the whole picture. There's also "customer lifecycle marketing".

What that means in practice is users can assign contacts to lifecycle stages. This lets the system track contacts as they move through the buying, on-boarding and retention processes. Specifically, it generates reports on the number of contacts in each stage, stage-to-stage conversion rates, and average time spent in each stage. It stores each contact’s stage and score histories so it can report on trends in these metrics as well.

Digging a bit deeper: users define the stages by creating segmentation rules similar to standard queries. The system checks each contact against the rules, assigning the contact to the latest stage for which they qualify. The actual stages can be whatever the user wants. Right On's default set holds two lead stages (investigate and evaluate) and two customer stages (value and advocate).

But there's more. Right On creates scatter plots of contacts in each stage, using customer fit and activity scores as dimensions. The resulting “lifecycle map” is a graphic representation of the shape and quality of the company's contact inventories. The plots are interactive: users can select a group on the plot to create a new segment and can drill down to see the details of the individual contacts. They can view reports and maps for all contacts or selected segments.



Right On recognizes that its data could be used to project future business and to correlate stage changes with marketing campaigns, although it hasn’t yet built these features. Once it does, the system will go a long way to providing the stage-based marketing measurement that I’ve been arguing marketers really need. (You can also view my Marketo-sponsored Webinar on the topic.)

So where does this leave us?

I’m lukewarm about Right On as a primary marketing automation system but see great value in its lifecycle reporting. Pricing is relatively modest – starting at just under $1,700 per month for up to 50,000 contacts – so larger firms may be able to use both Right On and a conventional marketing automation product. Smaller companies will probably have to choose one or the other.

0 Oracle Buys ATG: Bad News for Marketing Automation?

So…Oracle bought ATG today for $6.00 per share or, as the press release puts it with charming nonchalance, “approximately $1.0 billion”. I can’t exactly say I told you so, since this particular pairing never crossed my mind. But if you look back at my “doughnuts and pizza slices” post on software acquisitions, it does make perfect sense. ATG is a specialist in e-commerce (the ERM doughnut in the online operations pizza slice), an area where Oracle’s traditional ERM products are weak. As my model suggests it should, ATG also encompasses online CRM and online marketing, where Oracle’s Siebel line is also a little thin.

Since Oracle is already strong in offline ERM and offline analytics, ATG leaves Oracle just one slice short of a pie. In other words, Oracle needs a Web analytics product. With Omniture, CoreMetrics and Unica already gone, only Webtrends is an option…unless Oracle gobbles up Adobe. ‘nuff said.

So much for the obvious. What I really care about is the implications for marketing systems. I’d say the ATG purchase lessens the odds of Oracle buying a marketing automation vendor. The logic is this: buying ATG suggests that Oracle, like IBM (which put Unica in its WebSphere organization), is focusing on online marketing rather than marketing automation in general. Since ATG itself provides substantial online marketing functionality, there’s a smaller gap for Oracle to fill with a separate marketing automation purchase. Nor have I forgotten that Oracle already bought marketing automation vendor Market2Lead, plugging a different set of holes.

If anything, Oracle (and IBM) need to strengthen their position in online advertising. I'd look for them to buy tools to manage banner ads, search ads, and search engine optimization. This in turn could point towards investments in content management and digital asset management systems. That also leads further away from standard marketing automation.

The day-to-day impact of all this on marketers is slight. They still need marketing automation tools to do their jobs. If anything, they’re better served by having some marketing automation vendors remain independent, since this keeps prices down and encourages competitive innovation. A less-helpful result may be to further isolate digital marketing from other channels, when what we need is to integrate them more closely. Perhaps digital marketing systems will grow to the point that they take over offline marketing as well. I hadn't expected such a role reversal, but it’s certainly possible. Just ask Oedipus. Not that that turned out so well.