0 Et Tu, David: Why Raab Associates Became Part of Left Brain DGA

You may have seen yesterday’s announcement that Raab Associates’ marketing technology practice* has become part of LeftBrain DGA, an agency specializing in demand generation strategy and execution.   

My role at Left Brain will be to build the “optimization” practice, which means working on marketing analytics as well as technology.  I’m looking forward to deeper involvement in client marketing programs than the project-oriented work at Raab Associates allowed.  Left Brain and its clients are eager for the optimization work because many of their programs have now passed their initial deployment and need this sort of analysis and tuning. 

Left Brain’s readiness for an optimization practice reflects changes within the larger demand generation industry.  As B2B marketing automation technology worked through its initial deployments, the industry needed best practices to ensure successful implementation.  This meant marketing process definition, marketing/sales alignment, and program strategy.  It’s still important to execute those properly, and always will be.  But we now understand what the issues are and how to solve them.  The next frontier is refining and expanding existing programs, especially at larger organizations (a Left Brain specialty), which have the data volume and resources to support advanced analytics.  That requires new best practices and success histories for optimization.  That’s exactly what I’ll be working on.  It will be fun. 

If you’re wondering about this blog and my other activities as an industry analyst: my current intent is to continue.  My work at Left Brain will still require keeping abreast of technology developments, both for our internal use and at our clients.  It’s likely that my topics will shift a bit as my day job revolves more around analytics and less around vendor selection.  But, as I just suggested, this probably mirrors a shift of focus for the industry itself.  So, if the stars are aligned as I think, my topics will be more relevant than ever.

Regarding my traditional consulting work on vendor selection and technology analysis: I'll probably do less of it as other Left Brain work takes most of my time.  But I’m still here and happy to hear from people who need help in those areas.  If we can’t help you at Left Brain, we’ll recommend someone who can.

Finally, there's our VEST report, which is still available at the Raab Guide Web site.  We just released a new edition of that, so it will be current for at least six months.  What happens after that I can't say: it might vanish, we might continue it under the Left Brain banner, or it might find a new home.  But for now it's still a great resource for companies looking for in-depth information on B2B marketing automation systems, so make use of it while you can.

Incidentally, my new title at Left Brain is Vice President of Optimization, which manages to be both vague and bureaucratic.  I'm thinking I might prefer Lord of Optimization, or maybe just Oracle.  Other suggestions are welcome, so long as they're G-rated enough to put on a business card. Maybe we should have a contest.
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* The rest of Raab Associates, a children's book marketing agency run by my wife, will continue to exist.  See her Web site at www.raabassociates.com.

0 NurtureHQ Offers "Dead Easy Marketing Automation". Is That Enough?

I don’t know whether to laugh or cry.

New-ish marketing automation vendor NurtureHQ showed me its product recently. It’s really nice. Clean interface, easy to use, all the standard marketing automation features. Particular strengths in:

• split testing (separately for email subject lines and versions)
• lead scoring (automatically reduces scores from older events)
• CRM integration (Highrise, Capsule CRM, Sugar CRM, Salesforce.com, and an open API)
• marketing analysis (users can track multiple outcomes per campaign)
• content management (nice email/form/page builder, user-defined variables can be shared across messages to make changes easy)
• selection, segmentation, and campaign flow based on list tags (highly intuitive)
• low price ($495 per month for up to 20,000 contacts and 10 users with unlimited emails and landing pages and no annual contract)

In other words, this is a worthy alternative to Act-On, SalesFUSION, Net-Results, MakesBridge, Genoo, and other small business systems. Definitely take a look if you’re in that market for that sort of product.

But there’s my problem: “that sort of product” is widely available already. NurtureHQ hopes to differentiate itself as “dead easy marketing automation”, which it arguably is. But is it so much easier than the other products I just listed? I think not.  Regardless of whether it’s the easiest of them all, the difference isn’t likely to be large enough to matter.

Naturally, NurtureHQ disagrees. Before building its system, the company spent six months talking to current marketing automation users.  Many said they never progressed beyond email because the next step was too hard. This led NurtureHQ to believe that an even easier system could find a broader market than current products.

Other vendors have asked the same questions and reached the same conclusions.  But I’m beginning to think those marketers were really saying something else. What they found “too hard” wasn’t the software, but the planning and content creation needed for serious marketing automation. Without a clear understanding of what they wanted to do, they couldn’t figure out how to get the system to do it. That’s not a software problem.  Even a system that could build programs just by reading marketers' minds wouldn’t work if those minds didn't know what they wanted in the first place.

This isn’t a new insight. Marketing automation gurus have long argued that companies need to define their processes in advance of deploying a new system. The case was made yet again this week in an excellent blog post by Joby Blume, describing his former company’s struggles with marketing automation. (Be sure to read the comments). Howard Sewell of Spear Marketing Group made a similar point on his own blog. I reached the same conclusion myself in a post using data from a Gleanster report on marketing automation.

None of this means that “ease of use” is a bad strategy for NurtureHQ and others. On a practical level, ease of use helps sell systems to people who otherwise wouldn’t buy them. But vendors can't succeed if their clients fail – especially they rely on revenue from subscription renewals. So it only makes sense to sell marketing automation to companies without adequate processes, content, and other resources if those companies understand they’ll need to add those resources later. To really ensure success, vendors must actively help their clients through training and, in some cases, services to do the work for them.   Vendors including LeadLife, Genoo, and MakesBridge already offer low-cost service packages for their clients.  Other vendors also have service arms and agency partners to help out on a project basis. Third-party training resources such as the Marketing Automation Institute (where I’m a board member) can also help to fill the gap and benefit from substantial vendor funding.

What does this mean for the software vendors themselves? If the real keys to success are marketers’ skills and processes, does it really matter what’s in the software? To put another way, is marketing automation software already a commodity?

I hate to say it, but, to some degree, yes. There are certainly differences among products, both in capabilities and ease of use. But most marketers can find several systems that will meet their needs. This means vendors are increasingly competing on other dimensions including their own marketing and sales skills, cost structures, supporting services, pricing, and financial resources. As I pointed out last week,  it’s no coincidence that four of the five largest vendors are venture-funded (six of seven, if you include Infusionsoft and HubSpot). Another factoid that makes the point even more clearly: three of the four fastest growing received major new funding in the past year.

Still, I’m not entirely ready to give up on technology as a major differentiator. What’s needed is more radical innovation than a better interface. If the real barriers to success are creating content and identifying appropriate programs, then technology must address those directly. There are some already tools to help generate content, such as systems for news curation  and video posting.  I can't think of any products that recommend the right marketing programs, but proper analytics can identify patterns that reveal opportunities, and it’s perfectly conceivable that a rule-based system could check for known issues and make recommendations. HubSpot’s marketing grader does a something like this although it only examines externally-available information.

Of course, marketers will still have to create content and design programs. But better technology could dramatically reduce the necessary effort and move marketers past the deer-in-the-headlights paralysis of not knowing where to start. Vendors who really want to expand the market beyond the resource-rich few should look in this direction.

0 Raab VEST Report: Testing, Data Quality and Content Management Still Lag in Marketing Automation Products

My last post looked at data from our just-released B2B Marketing Automation Vendor Selection Tool (VEST) to understand general industry trends and identify the greatest areas of improvement. Today we’ll look at the VEST data to see what’s still hard to find. As before, the charts show three columns: change in feature availability over the past year among core marketing automation vendors; current availability among core vendors; and current availability among enterprise vendors. See the previous post for details on the calculations.

Split Tests: Formal split testing of different content versions or customer treatments is the heart of marketing optimization, but many B2B marketers still don’t have the time or resources to do it. Given the lack of demand, it’s not too surprising that many vendors don’t offer strong testing features.  Still, I feel they have something approaching a moral obligation to provide these features and encourage their use.  Note that splits within lists, the one testing capability that is fairly common, is actually the hardest for marketers to use.  Testing features are much more available among enterprise systems, whose clients are more likely to conduct tests as a matter of course.

Value-Based Selection: This is arguably the next step after dynamic content (see my previous post), since it uses calculated values rather than user-crafted rules to select marketing contents or campaign actions. Like dynamic content, it reduces the complexity of marketing programs while allowing them to be more targeted. It's still much harder to find than dynamic content although it is becoming more available.  Again, enterprise vendors have a substantial lead over the core systems.

Integrate with Direct Mail Printer: This is admittedly a small tactical issue, but it's interesting in its own way.  There’s apparently a resurgence of interest of direct mail generally and post cards in particular as a way to avoid ever-more-cluttered email inboxes and social media channels. This is one of the few features that are more common among micro-business systems than the core group.

Project and Content Management: These features are most important for large marketing departments that need coordinate work of many people. Most core marketing automation systems can track the creation and last change date of an item. But serious administration requires much more detailed control over who makes changes, approvals, and project management. As marketing programs get more complicated at all sizes of companies, these features will become increasingly important.

Data Quality: These are features that give marketers more control over the data that goes into their systems. Like split testing, data quality is widely recognized as important but often ignored. Availability of these features actually went down last year because several new core vendors provided below-average support. Enterprise vendors, with their more sophisticated client base, support these features fully.

Data Management: These features each reflect a certain degree of data management sophistication, although there’s a reasonable case that a separate company table doesn’t matter much in practice. The opportunity table is critical for revenue analysis, and you see here that it’s widely available. Custom tables are needed to extend the marketing database beyond inputs from the CRM system. They used to be fairly rare but are now available in more than half of the core products.   But half full also means half empty, so buyers still need to check carefully to ensure a particular vendor supports their needs.

Reviewing this list of features, only value-based selection is really cutting edge.  The rest have long been standard for consumer marketing automation products and enterprise B2B.  They're missing from core B2B marketing automation systems because most of their clients are smaller, less sophisticated companies who haven't needed them.  This may never change for vendors focused on small marketing departments.  But vendors serving larger companies will add these features as their clients discover they need them.

For more information about the B2B Marketing Automation VEST report, please visit www.raabguide.com/vest.

0 Raab VEST Report: Marketing Automation Vendors Added Webinars, Social Media, and Dynamic Content in 2011

Last week's post took a horse race approach to data from our newly available  B2B Marketing Automation Vendor Selection Tool (VEST): who’s ahead, who’s behind, and who is coming on strong. But that’s more important to industry insiders than the marketers who actually use these systems. Real marketers care about what the systems can do.

The VEST survey, covering nearly 200 items per vendor, answers that question in glorious detail. You need to examine the report itself to see answers for individual products. But aggregate data provides important context for understanding where the industry stands and where it’s headed.

Let’s start with the basics. I group vendors into three categories depending on their primary customers.

• “micro” vendors sell largely to businesses under $5 million in revenue.  These include Infusionsoft, HubSpot, and OfficeAutoPilot.
• “core” vendors sell to B2B companies with $5 to $500 million in revenue.  These include LeadFormix, Marketo, Genius,MakesBridge, Act-On Software, Right-On Interactive, SalesFUSION, Net-Results, LeadLife, Pardot, Silverpop, TreeHouse Interactive, Eloqua, Manticore Technology, and eTrigue.
• “enterprise” vendors sell mostly to companies over $500 million revenue. These include Aprimo, Neolane, and Oracle.

As you might expect, products for larger companies have more features available.

(In this and following charts, “feature availability” is the ratio the actual vendor scores to the highest possible scores. The scores are on a scale of 0 to 2, where 0 means a feature is missing, 1 means it is partly available, and 2 means it is fully available. Having a “partly available” option introduces some dangerous wiggle room for aggressive self-scoring, but it doesn’t seem to have been used abused too badly: just 14% of the scores are 1, compared with 21% at 0, and 65% at 2.)


Remember, though: more features is not always better. A feature important to a large enterprise can make a system less suitable for a small company where the feature won’t be used but still adds cost and complexity. The VEST addresses this by providing different weighting schemes for the three types of customers. These weights reflect the most important features for each category and sometimes apply negative values to features that make a system less suitable for the target group. Scores calculated with those weights show that the core and enterprise vendors do about equally well at serving their target markets. The micro vendors have a little more room for improvement.

Speaking of improvement, we can also see how the industry has changed by comparing the new VEST with scores from one year ago.  This brings considerable good news: the micro and core vendors are indeed adding features, especially in lead generation, campaign management, and reporting. Enterprise systems are already so powerful that new features don’t matter much.

(The decline in “scoring and distribution” for the enterprise category is a bit of a fluke: one vendor was replaced by another with weaker scoring and distribution features. Because there are only three vendors in the group, this has a large impact on the total.).

The change in weighted scores shows roughly the same story – so, for the most part, vendors are adding features that matter.

But enough generalities. What really matters is specific features. Today I’ll look at the areas of greatest improvement. A later post will list key features that remain hard to find.

I’ll focus on the core vendors, since those are the systems that most B2B marketers will purchase. Each chart below has three columns:

• “change”: the change in feature availability among core vendors, compared with the January 2011 VEST.
• “core”: the feature availability for core vendors in the January 2012 VEST
• “enterprise”: the feature availability for enterprise vendors in the January 2012 VEST.

Let’s start with three areas that gained a lot of industry attention last year: Webinars, social media, and revenue management.

Webinar Integration: Webinars are an increasingly important marketing tool, but traditionally systems like Webex had their own registration forms and result tracking. Moving the information into marketing automation required time-consuming file extractions and imports. Last year, the Webinar vendors began to expose APIs to allow automated integration with the marketing automation systems, and the marketing automation vendors leapt on the opportunity. As a result, availability of Webinar integration grew rapidly. This is a rare area where the core vendors outscore the enterprise vendors, perhaps because the enterprise vendors are less narrowly focused on B2B needs and/or because they tend to move more slowly at enhancing their products.

Social Media: It’s no news that social media is a hot topic among marketers, so it’s no surprise that vendors are adding features to support it. But even after last year’s improvements, anything beyond basic sharing and tracking remains hard to find. This is another area where the enterprise vendors are lagging. For a more nuanced analysis, see my blog post Social Media Features in Marketing Automation Systems: Who Does What? from last December.

Revenue Management: We heard plenty last year from marketing automation vendors about revenue management. The good news is that they’ve backed up their words with features. In fact, it’s surprising how widely many key revenue management requirements are available – many industry leaders can walk this walk, even though a few do most of the talking. Note also that the enterprise vendors do most of this as a matter of course.

Okay, those were interesting but expected.  What else were vendors working on last year? Several things, it turns out.


Reporting: Enterprise vendors have long had better reporting than the core marketing automation systems.  They still do but the gap is closing. A separate analytical database is especially important for advanced analytics in general and for revenue management reports in particular. Again, it’s more widely available than you might think.

Dynamic Content: This refers to embedding content selection rules within an email, Web form, or landing page. It’s not just personalization, which simply plucks information from a database field, and it’s not segmentation, which uses rules to select different content objects within the campaign flow. Dynamic content lets one email or Web form serve different segments, so marketers don’t have to create and keep track of so many separate versions. As you’d expect, it was traditionally used in enterprise systems where complexity is a more pressing challenge. Core marketing automation vendors didn’t talk about it much last year, but quite a few seem to have added it.

Cross-Campaign Coordination: This encompasses several features to help coordinate customer treatments across campaigns. As with dynamic content, these become important when companies are running complicated marketing programs and need to keep things under control. It’s another area where core marketing automation systems are closing the gap with enterprise vendors, although some distance still remains.

Lead Scoring: remember that old Sesame Street song, “One of these things is not like the others”? You wouldn’t expect lead scoring on a list of most-improved marketing automation features, since it’s been a key marketing automation capability all along. But last year did see substantial rise in systems that provide multiple scores per lead, and a smaller rise in the ability to recalculate leads on a schedule (as opposed to when a trigger event occurs). Both are markers of advanced systems.  We may see lead scoring on next year’s most-improved list too: plenty of vendors still lack other advanced lead scoring features. (If you’re wondering about the negative changes, they happened because several new vendors entered the core group with limited scoring features.)

So that's the good news: changes in areas the vendors talked about plus some changes they didn't necessarily trumpet.  Look for my next post to learn where they still need to strengthen their products.

Of course, the only thing more exciting than reading my analysis is to make your own.  For more information about the VEST report or to order your own copy, visit the RaabGuide Web site.

0 New Marketing Automation Report: Venture Funding is Key to Success

I released the 2012 edition of our B2B Marketing Automation Vendor Selection Tool (VEST) report today, an event that deserves more hoopla that I’ve given it. The VEST provides by far the most detailed, objective information available on industry vendors. It includes nearly 200 data points on 21 products, thumbnail sketches of each vendor’s strengths and weaknesses, and three industry quadrants showing leaders in different market segments. It’s also interactive: you can change the weights assigned to different items and watch the vendors zoom around the quadrant as a result. For those of us who don’t get out much, that’s downright exciting.

Although the VEST is primarily intended to help people who are buying a marketing automation system, its database also provides a statistical portrait of the industry. After rooting around in the numbers like pig hunting truffles, here’s what I dug up:

Core marketing automation is growing fastest. We classify industry vendors into four groups:
- micro business vendors (Infusionsoft and OfficeAutoPilot)
- HubSpot (a category of its own because it’s not quite standard marketing automation and is big enough to treat separately)
- enterprise vendors (Neolane, Aprimo, Silverpop, and Oracle)
- core B2B marketing automation (everybody else: Eloqua, Marketo, Pardot, Genius, Act-On, et, al.)

The enterprise vendors don’t release meaningful installation counts – some refuse to provide any data and others don’t distinguish B2B from B2C clients. So we’ll exclude them from further analysis. The table below shows growth for the remaining groups:

As you see, core vendors grew almost twice as fast as the micro-business group and considerably faster than HubSpot. There was some speculation last year that the micro-business vendors were growing the fastest. Myth busted.

Revenue grew faster than installation counts. The previous table shows that combined growth across all categories is 46%. But that doesn’t mean much because the selling prices are so different. Adjusting for revenue per client, I estimate that industry revenue grew about 55% last year.  I could show you my calculations, but then I'd have to...well, you know.

New leaders can still emerge, but venture funding is required. A year ago, the three largest core vendors were Eloqua, Marketo, and Genius, and Act-On was an also-ran. Today, the Marketo has more clients than Eloqua (although not more revenue), Pardot has replaced Genius in the third position, and Act-On is coming up fast.

It's no mystery why the market remains fluid: venture capital lets new entrants shoulder their way to the top. Of the five top-ranked core vendors, all but Pardot has substantial venture funding. None of the remaining ten core vendors do – and their average growth is much slower. Self-funded firms can survive but it’s unlikely they will become leaders.

Specialization is increasing. We ask vendors for client counts in four segments: micro-business (under $5 million revenue); small business ($5 to $20 million revenue), mid-size business ($20-$500 million revenue) and big business ($500 million and higher). Most gave us answers, although Act-On was a prominent hold-out.

It’s no surprise that the micro vendors sell almost exclusively to micro clients. HubSpot’s base is much more diverse, although the micro and small sectors still account for 75% of its base. Of the core vendors, Marketo and Genius are the most small business oriented, with the two smallest categories accounting for over half of their customers. Pardot is tightly focused on small and mid-size clients, reflecting their disciplined sales approach. Eloqua has by far the most big-business clients of any core vendor, a proportion that has grown dramatically since the first VEST report one year ago.

For more information on the new VEST report, visit www.raabguide.com/vest.