“Marketing automation” is one of those seductively vague labels that seem to promise greater benefits than any software can really deliver. Taken broadly, the term appears to imply automation of the entire marketing process, from product development through to sales and service. While this might indeed describe the ambitions of some marketing automation vendors, their products have been considerably more limited. Specifically, most marketing automation systems have focused on the primary operational responsibility of a traditional business-to-business marketing department: lead generation.

In the past, lead generation involved running various kinds of promotion campaigns, including direct mail, print advertising, trade shows, and seminars. Prospect names gathered through these efforts would be sent fulfillment materials, qualified using survey responses or external data, and then sent to sales for telephone or personal follow-up. Some marketing groups also placed the prospect names on a mailing list that received sporadic promotional mailings or, in a few cases, a well-thought-out sequence of follow-on messages. But most contact with prospects was the responsibility of sales, not marketing.

Today’s marketing departments still perform the traditional functions–and marketing automation software is designed to support them all. But business marketing has also been deeply affected by the Internet. Marketing often runs a large portion of the company Web site, replies to email inquiries, and engages in long-term dialogues with prospects. This gives marketers a new set of quasi-operational responsibilities that require more constant attention and faster turnaround than traditional lead generation efforts. Help in keeping up with the increased workload is a key reason for marketers to buy a marketing automation system.

The functional capabilities of marketing automation systems closely mirror their users’ business activities. These capabilities fall into three intertwined groups: marketing administration, campaign execution, and Internet interactions.

• – marketing administration includes scheduling, budgeting, forecasting results, gaining approvals, and managing the execution of marketing projects. This focus on administration is unusual among marketing systems, but makes sense in the context of a marketing department: since it is often difficult to correlate marketing activities with specific revenues, managers must focus instead on execution costs and efficiency. After all, marketing is typically a cost center, not a profit center.

Administration often revolves around an integrated promotion calendar, which shows all marketing activities by time period, medium, product group and, sometimes, market segment. The calendar is usually presented in a Gantt chart format, allowing online users to “drill down” within the chart by clicking on the bar representing a particular activity and viewing its detail. Rubric (www.rubricsoft.com) and MarketFirst (www.marketfirst.com) are marketing automation vendors with especially strong calendar functions.

Approvals and project management are integrated with workflow functions that let the user assign tasks to individuals, track completion of tasks, and record approvals of key project components. Approvals may cover everything from the initial proposal and budget to specific pieces of copy. A good system will also provide a database to manage the promotion materials themselves, with information on both electronic components such as HTML snippets or telemarketing scripts, as well as physical items such as printed brochures and letters. Some products go further to include a database of vendors and internal resources. Ideally this would link to external databases such as email directories and accounts payable files, although such links are rare.

Specialized facilities for tasks such as trade show management, event registration and dealer certification programs are more common, although they vary from system to system. Most products let users create task lists and schedules for specific types of projects, and then store and reuse these as templates. Attune (www.attuneinc.com) has a particularly comprehensive set of marketing administration functions.

• – campaign execution involves sending a sequence of messages to prospects and customers. Marketing automation systems generally offer a flow chart interface that lets users set up the campaign sequence with no programming. A typical campaign builder lets users specify the promotion materials sent at each step in a campaign sequence, define the interval between the steps, and create branching conditions that treat different prospects differently. These branches might be based on responses to a survey or on actions after the campaign is under way. Some marketing automation tools can also perform random splits within a sequence, usually to allow testing of different marketing treatments. But this sort of testing is more common in consumer than business marketing, so not many vendors have thought to include it. One exception is Annuncio (www.annuncio.com), which is more oriented to consumer marketing than most marketing automation vendors.

Most marketing automation products do provide separate tables to store business and individual data, a structure that is common in business marketing but many consumer systems do not offer. Marketing automation systems also offer automated scheduling capabilities so that multi-step campaigns can run unattended–another function missing in some consumer-oriented campaign management tools. A few marketing automation systems include sophisticated query and segmentation functions, but most are limited to simple and/or selection logic or just assume that records for each campaign will be imported from an external list. Similarly, only a few marketing automation systems can identify duplicates between an imported list and the existing database. Like conventional campaign managers, marketing automation systems automatically keep track of the promotions sent to each prospect and make this history available for queries, selections and analysis.

The same campaign functions are generally used both for initial lead processing and for subsequent contact programs. Despite the importance of lead generation to business marketing departments, most marketing automation products do not extend to lead distribution and management capabilities such as allocation based on territories or product specialization, charge-backs for leads sold to salespeople or dealers, lead acceptance and disposition tracking, and rules to handle capacity constraints. This sort of fine-grained lead processing is generally the responsibility of the sales organization, not marketing, and thus beyond the scope of a marketing tool. Sales organizations obtain these functions either within their sales automation system, or through specialized systems for lead management (such as Saligent or MarketSoft) or channel relationship management (such as ChannelWave, Partnerware, or Webridge). The standard functions of most marketing automation products could be applied to provide basic lead distribution capabilities if necessary.

• – Internet management is the third major area supported by marketing automation products. As with campaign execution, the goal is not to compete with the most powerful dedicated tools, but rather to provide an adequate set of capabilities that the marketers can use without technical support and are tightly integrated with other marketing functions. All marketing automation can generate personalized emails containing unique URLs and/or customer codes to track response. Most can also let users set up survey forms, either as HTML forms that are sent via email or as Web pages that the user is directed to. These systems can automatically post the survey replies to the underlying marketing database, and then use the answers to help generate appropriate replies.

Because email response generation needs to be done in near-real-time, it usually requires a more active technology–such as an application server that constantly scans the email inbox for new messages–than the batch update used in conventional campaign management systems. This is one of the major distinctions between the two sets of products.

Although most marketing automation products can generate personalized HTML pages, they generally do not attempt to provide full-scale Web site creation. One exception is Imparto (www.imparto.com), which lets users link content to Web page templates, thereby allowing marketers to update their Web site with little technical assistance.

The initial marketing automation products appeared about two years ago, and the more mature ones are now on their second or third release. Technically they tend to look like campaign management systems, with batch feeds from external systems and detailed historical databases. But most also allow at least limited direct updates to support posting of survey results and near-real-time email response. Another distinction is that marketing automation systems nearly all use their own data models, while most modern campaign management systems are built to map to any external data structure.

Nearly all of these systems were built on Windows NT and SQL Server, although a few support Unix and other enterprise relational databases. The NT/SQL Server combination is might raise some scalability concerns, but should be adequate for the relatively small volumes of most business marketers. Although these products are offered for purchase with conventional software licenses, nearly all of the vendors also offer a hosted or application service provider option to reduce investment and speed initial deployment.

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Copyright 2000 Raab Associates, Inc.. Contact: info@raabassociates.com

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