0 DataMentors Offers Low-Cost Marketing Database

Summary: DataMentors has launched a low-cost marketing database product with limited functionality. It's an interesting test of what marketers really want.

Marketing database software and service vendor DataMentors last week tossed its hat into the ever-more-crowded ring of marketing automation for small(ish) businesses. The new product, DataPoint, is a limited version of the company’s flagship PinPoint system. Like PinPoint, it combines DataMentor’s DataFuse data cleansing and matching software with a private-label version of SmartFocus campaign management and analysis. The difference is that PinPoint scales to tens of millions of customer records, while DataPoint is limited to 100,000 customers, one million prospects, fifty data fields and quarterly file updates. Pricing is $2,000 per month, probably less than half what most marketing automation vendors charge for a 100,000 name installation.

Wait. Back up. Did I just write quarterly updates? Fifty fields? Warm up the eight track and fluff out my mullet, modern marketing automation products don’t have those types of limits. Nor does DataMentor’s own PinPoint. What's going on here?

Even though DataPoint includes the quite sophisticated campaign management features of SmartFocus, it’s really less a marketing system than a tool for data analysis. Marketers without any access to their customer data will be happy to load their files into DataPoint and do all the cool slicing and dicing that the SmartFocus engine makes easy. They might produce some outbound campaigns as well, but lack of fresh data means these are going to be pretty generic.

It’s tempting to relate this old-school approach to the origins of DataMentors itself: it was co-founded by industry veteran Bob Orf , the “O” is OKRA Marketing, a pioneer marketing database vendor founded in 1987 when small records and infrequent updates were the rule. But DataMentors has kept up with the times: Orf says that most PinPoint systems are updated daily or weekly, and the company even offers real-time, Web service access to its data quality system. And of course DataPoint users can upgrade to a more powerful version if they’re willing to pay.

That being the case, it’s probably more useful to think of DataPoint as part of the market for on-demand business intelligence – competing in some ways with companies like Birst, PivotLink and Oco. Although those systems are more flexible than DataPoint, they share its low deployment cost and focus on analytics rather than marketing execution.

One key advantage DataPoint has over those systems is integration with DataFuse, a highly sophisticated matching engine that was DataMentor’s original product and remains the cornerstone of its business. Another difference is that DataMentors has recently licensed consumer and business databases for its clients to use as prospect lists or to enhance their own files. DataFuse users can access these for an extra $1,000 per month – another highly competitive rate. DataPoint clients will also benefit from the deep expertise of DataMentors staff, particularly in the banking industry.

A configuration like DataPoint is not something I would have expected in today’s market, where continuous updates, flexible data models and near-real-time customer interactions are standard operating procedure. But I have tremendous respect for the DataMentors team and trust them to know their market. It will certainly be interesting to see how well DataPoint works out for them.

0 LeadForce1 Adds Mind Reading to Marketing Automation

Summary: LeadForce1 infers Web visitors' intent and sales stage from the contents they read. It combines this with standard B2B marketing automation features to provide better-qualified leads to sales people.

The B2B marketing automation industry has reached the stage where product features are similar and companies compete primarily on business and marketing savvy. This intrigues me in its own way although it's not as much fun as looking at cool new technologies. Of course, if you’re a vendor offering a cool new technology, the stakes are higher.

Such is my take on LeadForce1. The company’s product touches the standard marketing automation bases: outbound email, landing pages and forms, lead nurturing, scoring and integration with Salesforce.com. It adds some less typical features for telephone lead qualification, which makes sense for reasons we’ll get to later. But its most intriguing claim is that it supplements the usual Web behavior tracking with reports on visitors’ intent and sales stages.

LeadForce1 does this by capturing the text that visitors hover over, click on, highlight or copy, and comparing it with keywords that indicate intent and sales stage. The system starts with a standard list of keywords which clients can modify to match their business. “Intent” is usually related to customer interests, such as a particular problem or product line. “Sales stage” uses a standard progression of research, consideration, trial and purchase, which clients can change if they wish. Because B2B purchases are often made by a team of specialists, the system assigns interests separately to each individual but assigns a single sales stage to everyone from the same company.

Intent and sales stage reporting are not merely random cool features. They help rank leads and send alerts as part of a larger focus on delivering qualified names to sales people. Related capabilities include reverse IP lookup of the company of anonymous visitors, connections to Jigsaw to provide contact names of those companies, and the aforementioned telephone lead qualification. In fact, LeadForce1 is targeted in part at Web publishers who collect leads and resell them to other businesses. Its ability to enhance these leads with intent and sales stage makes them more targeted and, thus, more valuable. This is why LeadForce1 sometimes refers to itself as being in the “lead exchange” business, although it currently seems to prefer the label “marketing automation 2.0”.

Sales people would certainly benefit from knowing the intent and sales stage of their leads. Of course, you do have to wonder about the accuracy of the information. LeadForce1 currently does some response tracking but mostly relies on clients to decide for themselves which keywords are effective. It does plan to add more rigorous analysis using the data it already collects. The same data will also be used to measure the impact of marketing contacts on changes in intent and sales stage and to forecast movement of leads from one stage to the next. The results will be interesting and, assuming the system proves reasonably accurate, should be quite valuable.

LeadForce1 was launched about two years ago and currently has 224 customers. Pricing is based on the modules purchased, number of users and number of leads. Monthly cost can be as low as $500 although a typical clients spends about $3,000 per month.

With so many customers, and growing quickly, LeadForce1 may survive the marketing automation industry consolidation as an independent firm. If not, its technology is useful enough that there's a good chance it will find its way into other systems.

0 IBM Buys Unica: Will Acquisitions Now Shift to B2B Marketing Automation?

IBM announced this morning that it was purchasing enterprise marketing automation leader Unica for $480 million, more than double the company’s current stock market valuation. This is wholly unsurprising: as the last and only big independent left in its space, Unica was obvious acquisition bait. It was also a motivated seller, since it faced an increasingly impossible struggle to fund the product enhancements necessary to compete with the likes of SAS, Teradata and Siebel / Oracle. Conversely, IBM is on a customer intelligence acquisition spree that has already included Coremetrics Web analytics, Sterling Commerce B2B integration and Cognos and SPSS business analytics.

There’s been some comment (I’m looking at you, Jonathan Block of SiriusDecisions) relating the IBM/Unica deal to consolidation with the B2B marketing automation industry. Sorry, but I don’t see a connection. As I discussed in my own post on industry consolidation, Unica belongs to the class of marketing systems that serve consumer marketers. Its acquisition is basically the completion of the consolidation of that space, not the start of consolidation among B2B marketing automation vendors. (I’m overstating a bit: there are a couple of B2C vendors left including Neolane, Alterian and SmartFocus, although the latter two use proprietary database engines that would make them difficult to integrate into a larger enterprise suite. Probably the most prominent survivor is Aprimo, but they’re more B2B.)

If there’s any connection at all, it’s that this acquisition may spur Web content management vendors to accelerate their own acquisition of marketing automation capabilities. I discussed this a bit in my post on Adobe’s acquisition of Day Software and in the industry consolidation post. Given that there are so few B2C marketing automation vendors left, the Web content management players are almost forced to consider buying a B2B marketing automation system. (The other option would be email vendors like ExactTarget and Responsys.)

This isn’t really a bad thing: the B2B marketing automation products have pretty much all the capabilities of the B2C systems and then some. On the other hand, most B2B systems are designed for smaller data volumes and have less flexible data structures.

The bottom line is probably that the upper tier B2B marketing automation vendors (Eloqua, Silverpop, Aprimo, possibly Marketbright) are next in line to be bought. But you already knew that.

0 Genius.com Offers Free Edition: How Much Does It Lower True Cost of Entry?

Summary: Genius.com has added a free version of its system. But I think its strategy of offering an intermediate product between email marketing and full marketing automation may actually be more useful in attracting new customers.

On Monday, Genius.com announced “the first free, instant-on demand generation solution”, a description carefully crafted to distinguish their offering from the free version announced by LoopFuse in June. The key term here is “instant-on”, which Genius defines to mean “instantly integrated website tracking, email marketing and social media campaign tracking” along with fully automated integration with Salesforce.com, including custom fields in standard objects. LoopFuse also provides automated Salesforce.com integration, but doesn’t have Genius’s Web tracking technology.

Since Genius has highlighted the issue, let's dive into its Web tracking. How it works it this: Genius creates URLs that send visitors to a proxy server, which in turn forwards their page calls to the client’s actual Web site. The proxy server continues as an intermediary through the entire visit, so it can track all pages the visitor sees. The same method is used in Web advertising, email links and linked embedded within social media messages. Because the tracking is done by the proxy server, there’s no need to make changes (i.e., add a tracking tag) to the Web site itself. This is what makes the tracking truly “instant”.

So far so good, but let’s be clear: the proxy server only captures visits that begin with a Genius-generated URL. So if I respond to a Genius-generated email, all the details of my initial visit are captured. But if I come back later by typing www.genius.com into my browser or searching for Genius on Google, the proxy server isn’t involved and Genius won’t know about me unless a traditional tag has been added to the Web pages. Genius does support such tags but now we’re beyond the realm of “instant on” and, indeed, of the free Genius system.

Genius' tracking technology is clever and unique enough that they’ve been able to patent it. But conventional marketing automation systems automatically track their own emails, landing pages and Web forms, also without touching the corporate Web site. This is not quite as powerful (or cool) as the Genius approach, but does reduce practical difference.

I wouldn’t have gotten into this had Genius not made “first free, instant-on” the focus of its announcement. What really matters is that they have a free offering, which implies two things about the system itself:

- they can provide fully automated, instant provisioning, which means their technology is sophisticated and their operating costs are low.

- the system is easy enough that new clients can use it with a minimum of support. Genius Marketing Vice President Scott Mersy told me yesterday that the company expects most users will learn what they need from a sequence of educational emails and online materials. He did add – and this and this is important – that limited phone support will be available to free users.

What does the free offering mean from an industry standpoint? I discussed this at some length in my June post on the Loopfuse’s free product. Bottom line: a free version will gain vendors some customers they wouldn’t get otherwise, but probably not create a huge difference in their market share or growth of the market itself. A marketing automation system is a highly considered purchase. Buyers recognize they will make a substantial investment in time and materials, so an extended free trial (which is what most free versions boil down to) is just one of many factors they weigh in selecting a starter system. Free systems may also attract companies so small that the free system is all they need. But those companies will never be a source of much revenue, even if the vendors manage to sell them some additional services.

In other words, the true purpose of a free system is to lower buyers' full cost of entry enough to attract a large number of new customers. This cost includes not just the software, but also the time spent to learn and operate the system, to develop new campaigns, and to design new business processes. This is why automated provisioning and self-service support really matter: they imply time savings for the users as well as the vendor.

In terms of entry costs, it's significant that Genius’ free version is based on their “Demand Generation” system, which occupies a middle ground between their “Email Marketing” and “Marketing Automation” products. The company provides a handy comparison table which shows that Demand Generation includes social media and Web tracking, triggered actions, Web forms and progressive profiling, but not drip campaigns, automated lead nurturing, lead scoring and landing pages. That is, it captures and tracks leads but doesn’t do sophisticated lead nurturing. This greatly lowers entry costs by asking users to start with a smaller, simpler set of tasks.

Although competitors will no doubt cite the limits of Genius Demand Generation as a weakness of Genius’ free offering, Mersy said the company will actually make the full Marketing Automation version available to free users who want it. He said they chose to start free users on the simpler system only to simplify their initial deployment.

That’s probably a very clever move – as is offering the Demand Generation version. Many marketing automation vendors have a “lite” system that is similar to the Genius Email Marketing, which includes Web behavior tracking and Salesforce.com integration as well as outbound email. But the next leap is typically to full marketing automation. An intermediate product provides a smoother growth path for marketers who want to start small and slowly expand their marketing automation efforts. This addresses two key obstacles to first-time purchase:

- it lets Genius offer a substantially lower entry price than competitors, without dropping the price of its full system. Starting price of Demand Generation is around $800 per month, slightly higher than the $600 per month of Email Marketing but significantly below $1,100 per month for Marketing Automation.

- it lets marketers grow into the complete system at their own pace, rather than purchasing something that requires extensive campaign development and process redesign to use fully. Of course, marketers could also just not deploy these features in another system, but the psychology of that is quite negative.

It remains to be seen whether having an intermediate Demand Generation product really gives Genius a substantial competitive advantage. If it does, it won't last long because the approach could be easily copied. Still, Demand Generation represents a creative approach to a fundamental challenge in the market. For that reason alone, it’s worth watching.

0 Day Software Acquisition Adds Some Marketing Features to Adobe, But Gaps Remain

Summary: Adobe added Web content management, digital asset management and social media features to its arsenal when it purchased Day Software last month. But it still lacks key pieces of a complete marketing solution.

Last month, Adobe announced their $240 million acquisition of Web content management vendor Day Software. Adobe was already a major force in Web development through its Dreamweaver, Flash and ColdFusion products, not to mention Omniture for Web analytics. But Day fills out its line by adding enterprise-class content management, digital asset management and social (blog, Wiki, etc.) publishing. In fact, the fit is so obvious that it doesn’t seem to have generated much comment, at least among the marketing gurus I read.

But the significance to marketers may be greater than they think. Back in February, Day released its 5.3 version, which specifically aimed at letting marketers manage their Web promotions without help from technical specialists. Of course, this is a goal shared by so many vendors that it verges on cliché. In particular, it’s also one of the main benefits offered by the landing page, Web form and microsite features of marketing automation systems.

Still, as I’ve argued many times, it ultimately makes more sense for marketers to build their pages in the company’s core content management system than in separate marketing automation tools. This can only happen if the content management system provides the features that marketers need to do their jobs.

Day’s 5.3 release attempted to do this by adding targeting capabilities, including segmentation and segment-driven personalization. Segments can be based on anonymous visitor characteristics such as referring site, search keywords and geolocation; on history captured in a registered visitor’s profile; and on attributes of the pages viewed. Profiles can also be enhanced with non-Web data, such as purchase history.

As you might expect, Day does a particularly good job of tracking visitor activities within the Web site. The system uses Javascript on each page to track cursor movements and capture the details of what each visitors has looked at within the page. It can also read the visitor’s browser cache to check for visits to specified external sites, a technique that’s legal although many privacy advocates think it shouldn’t be. The system also supports multi-variate content testing, which can be related to customer segments or operate independently. Tests are judged on click-throughs, which are captured within the system.

Are these features really enough to replace a dedicated marketing automation system? Surely not: marketers still need to maintain a marketing database, send emails, respond to trigger events, score leads, and integrate with CRM. In fact, Day itself expects clients to integrate with marketing automation products for campaign execution. The system does have connectors that let marketers create their emails and Web pages within Day and use an external system to deliver them.

Day’s Chief Marketing Officer Kevin Cochrane told me yesterday that he sees marketing automation as separate from Day’s business of building “customer facing solutions”. But companies that want to integrate all their online (and ultimately offine) marketing will want to combine both sets of features. Although Adobe already owns many tools used in marketing departments, it lacks the campaign management features at the heart of marketing automation. I expect that Adobe and other major Web content management leaders will eventually acquire email and/or marketing automation vendors to fill the remaining gaps.