It is not uncommon for large enterprises to spend $300m or more per year just on marketing (e.g., $10bn in sales, 3% marketing budget). The bulk of that money is typically spent on lead generation (i.e., driving interest in the company’s products and services), vs. high level awareness. Is that money well spent? Three facts suggest not:
- Our own interviews with 100+ Sales & Marketing executives confirm that 85-90% of leads generated by Marketing are never followed up by Sales
- The average tenure of US enterprise CMOs is 18-24 months. CMOs are the C-level function with the highest turnover
- Third party studies (e.g., www.cmocouncil.org) regularly point to marketing performance optimization as a top 3 marketing pain point
Web analytics is top of mind with many marketers but it only addresses a small part of the problem. While a growing proportion of spend – currently averaging 7-9% in the US – goes into online marketing (vs. offline), online marketing itself requires optimization and orchestration across about a half a dozen channels. And offline, we have another half dozen channels. Thus currently, marketers have to contend with a plethora of disparate solutions covering all the touch points with customers and prospects:
- Web analytics
- Search engine optimization and marketing
- Display advertising
- Campaign management (incl. email, direct mail)
- Marketing resource management
- Trade promotions management and MDF
- E-commerce and service
We argue that enterprises need to look for a solution that achieves 2 objectives by linking marketing strategy to execution across the dozen or so disparate online and offline channels
- Increase program spend effectiveness, i.e., determine which dollars spent where promise the highest return on marketing investment (ROMI). Today, this is difficult because marketers lack a unified view of revenue attribution across channels
- Establish end-to-end visibility into the entire lead to opportunity funnel, i.e., determine spend levels and funnel size required from marketing today in order to hit future sales targets
Unfortunately, there is no silver bullet today since no single solution addresses all channels. The good news though is that…
- The web analytics players, led by Omniture with about 60% market share, clearly are expanding their scope to cover a greater number of (mostly online) channels. We suspect their end game is to leverage large data volumes across channels to build a marketing database of record
- Solutions for spend optimization are starting to become available, which is a departure from the traditional focus on spend administration (the latter is often called marketing resource management)
- A new class of player is emerging to focus specifically on ‘relationship optimization’. This is software that allows marketing managers to optimize the funnel by orchestrating lead acquisition, nurturing, scoring and routing. Our research shows that this drastically increases the proportion of leads that are useful to the sales function. Leading players in this category are Marketo and Eloqua
So what is the takeaway for enterprises? What should your company’s specific requirements be for marketing optimization? Which of about 15 leading vendors we evaluated might best serve your requirements? What should you look for in a vendor in terms of forward compatibility with your aspirations, e.g., supporting an end-to-end view of the customer?
Naturally, the nature of your business has a large bearing on what the right answers are.
- Does your product require a complex sale or a high-volume sale? Complex sales motions (in both B2B as well as high-ASP B2C situations) are those that benefit most from relationship optimization solutions provided by the likes of Eloqua or Marketo
- Is your product a considered purchase or an impulse purchase? For considered purchases, consider augmenting web sites and ecommerce storefronts with search engine marketing, search engine optimization, and content testing functionality from web analytics vendors such as Omniture, Coremetrics, or Webtrends. In addition, consider Eloqua or Marketo to increase sales productivity by enabling high-touch sales to focus on high-quality leads only. Finally, evaluate enterprise marketing management vendors such as Unica or Aprimo for segmenting markets and designing, testing, and tracking responses to personalized offers, delivered most typically with email and direct mail campaigns
- Does your company have many campaigns and/or large campaign budgets? For managing marketing resources, consider augmenting desktop project and financial management tools with Aprimo if your primary focus is on managing the budget across all campaigns. Consider Unica if your primary focus is on managing the production aspects such as resources and schedules of a large number of campaigns. Either vendor can manage the digital creative assets that are frequently scattered across the enterprise and that need to be centrally managed to address issues such as versioning and localization
Finally, what questions should you ask your potential marketing software vendor?
For web Analytics vendors such as Omniture, Coremetrics, Webtrends:
- Is the product able to keep track of visitors who come to the site from anonymous channels such as search engines, display ads, offline media while only later identifying themselves through channels such as e-mail opt-in or registration forms?
- Does the product make it easy to integrate visitor profiles with business intelligence products such as Business Objects or Cognos?
- Is integration with CRM and ERP products easy and repeatable or does it require manual extracts and complex joins?
For Relationship Optimization vendors such Eloqua and Marketo:
- Does the product handle a sufficient number of marketing channels such as search engine marketing, display ads, landing pages, email, direct mail, etc.?
- How much training does it take to set up lead acquisition, nurturing, scoring, and routing programs?
- Does the vendor have templates, best practices, and content experts to accelerate implementation?
- How well does the vendor support your custom business processes?
- How well does the vendor support large deployments (e.g., multiple languages, scale, latency, massive transaction volumes)?
For Enterprise Marketing Management vendors such as Unica and Aprimo:
- Can they actually manage and orchestrate the full marketing mix including both online and offline channels while coexisting with web Analytics vendors and track leads from acquisition through routing and conversion?