Trends for 2016
The Future of Marketing Automation
To get a sense of what's currently underway in the space, we talked with Marketing Automation experts and vendors about some of this year's hot topics. Not everyone is in agreement about where Marketing Automation is headed, but they're on the same page in terms of what will be important. These trends and predictions are influencing product development, branding and the direction of the MA market right now:
1. New products, more vendors, more integrations: niche and best-fit solutions vs. one-size-fits-all
We already mentioned the macro trend towards consolidation (acquisitions, clouds, ecosystems and broad offerings) in the Marketing Automation space. But recently, the one-size-fits-all approach has been countered by vendors and products that cater to businesses of a specific size or industry. Some are all-in-one toolkits; for example, they might be optimized for eCommerce, including a shopping cart and payment system. Others are designed to connect to third-party software—like Spokal, specifically for teams of 1-5 to use with WordPress. Many vendors are reacting to the changing landscape by offering more and better integrations so that buyers can add integrations as new products spring up. Niche and best-fit solutions are rapidly becoming popular, but it remains to be seen whether diversification or consolidation will shape the market's long-term future.
“I don't believe consolidation in this category is at an end, and one or two major transactions are still likely, but more generally, I do feel that the marketing technology space is becoming more fractured. There are so many point solutions coming into the market—predictive analytics, account-based marketing, programmatic advertising, et al—that users are more likely to adopt a “best of breed” approach vs. looking for one, “all in” solution. In my view, the Marketing Automation vendors who adopt an open platform approach, and facilitate integration with other point solutions, will be more successful in the long run.”
“As Marketing Automation continues to evolve into a mainstay in all types of marketing departments, providers will make their solutions more robust and appealing for marketing teams of all sizes and types. The more sophisticated providers will continue to make enhancements that make their tools more scalable, and that also includes industry-specific functionalities. As the technology becomes more sophisticated and marketing departments become more powerful, marketers will be incorporating more, and all types of, data into their automation platform—delivering truly targeted and relevant messages across channels.”
“That's right, there has been a lot of consolidation. But how much are customers really benefitting? […] That's why this whole open marketing ecosystem is very important to us. It's the lynchpin of our strategy. You, Mr. Marketer, you need to have the flexibility to go buy anything that you want. There are so many new marketing technologies coming out, things that new entrepreneurs are creating. Our approach is: hey, marketers need to have the flexibility to go get anything they think works best. And they don't have to get it all from Act-On. We want to focus on a best-of-breed Marketing Automation system, so we're not going to try to build everything.”
“There's been a lot of M&A in the space, but we have not seen any of that M&A really affect our sales process. So, we haven't seen a whole lot of changes because of Pardot being part of Salesforce, or Eloqua being part of Oracle. We still have lots of people signing up for HubSpot that use Salesforce as a CRM, for instance. They really are a platform company, and they want to allow customers to choose the best solution. So we haven't really seen any of those developments change the landscape a ton.”
“With the rapid proliferation of marketing technology, the concept of one suite providing everything a marketer needs is pretty impractical. We're committed to offering an open marketing automation platform coupled with a robust partner ecosystem that enables companies to create a complete, flexible marketing solution.”
2. Pricing pressure is making Marketing Automation more affordable.
In the past price has been an issue for Marketing Automation, especially for uptake in the SMB sector. But, recent analyst reports suggest that most users think Marketing Automation is ultimately worth the price tag, and on average that cost has been declining over the past ten years. Driving factors include: the emergence of new vendors and new tools, a market focus on solutions for smaller and mid-sized companies, and users' self-awareness about specific needs as they become more mature MA-wise. These combined forces are causing vendors to deliver a better value for the cost. In some cases, this means smaller price tags or basic package options. In other cases, it means more features per dollar.
“With SMBs realizing the importance of Marketing Automation, more players are joining the market with lower-cost solutions to fit the increasing need… Lower-cost solutions are beginning to cause enough disruption that the bigger players are starting to rethink their pricing models, or including a lower tier of pricing in order to remain competitive.”
“Two simple facts are driving increased pricing pressure on MA vendors: 1) more solutions in the marketplace competing for the same customers (especially in the mid-market), and 2) a transition from selling to early adopters (who are generally less price-sensitive) to the broader market. Costs will continue to decline, in my view—if not on the pricing sheet, then at least in the actual costs that customers are able to negotiate. In turn, MA vendors will look to derive additional revenue from professional services and add-on products.”
“Overall pricing has decreased, but buyers need to remain vigilant to vendors that opt for onerous upcharges and add-on pricing in order to make the systems useful.”
“People are willing to pay for value, and you don't have wide discrepancies in pricing anymore. The user experience is a lot more geared toward marketers. From our perspective it's been great! Over time the price point of the Act-On system has gone up and it will continue to as we add more value. That's our experience. Someone else has “paid the price,” and I think it's those over-priced solutions that were hugely expensive during the early days of the market.”
“Marketers from growth companies don't seek solutions that use price alone as a main differentiator. They look for solutions that provide the most value for the price they paid—solutions that maximize their external engagement, internal efficiencies, and drive rapid growth.”
3. Design is becoming more friendly, convenient and focused on user experience.
Usability has become crucial for Marketing Automation vendors who want to stay competitive. For example, new adopters are less willing to put up with confusing UIs and non-visual campaign management tools, and they're less willing to jump through hoops during implementation, which has been a pain point in the category. This is clear from ratings and reviews, as well as product development initiatives. As adoption in mid- and down-market sectors takes off, vendors and experts are recognizing the importance of cutting out implementation and integration headaches. Some say the expectation for users to rely on IT support or even MA administrators is becoming outdated, since many SMBs don't have those kind of internal resources. However, for larger and more complex companies, customization needs compete with user-friendly experience, especially in terms of implementation. Up-market tools may find it more difficult to find a balance between convenience and sophistication.
“I definitely foresee the emergence of SMB solutions that are more plug and play and don't require the kind of implementation required for more full-featured products. But therein lies the trade-off: implementing technology of any sophistication will always require some degree of implementation.”
“The more traditional Marketing Automation vendors, particularly the big ones, have approached this as an IT problem. If you don't approach this as an IT problem you say, ‘I want to enable people to point-and-click integrate.’ If something is needed throughout the platform, why not embed it in so that people don't have to worry about integration? It just walks you through a little wizard that tells you what fields you want to synchronize, and there you are! We have to do that, with the market we go after.”
“My guess is that people will talk about integration needing to improve until the end of time. My goal [with Pardot and Salesforce] is that someone doesn't know where one product starts and the other ends.”
4. The buzz about predictive analytics
Some say the new wave in Marketing Automation is predictive analytics: tools that use statistical modeling and machine learning to automatically personalize content and optimize campaign decisions. Others say that (so far) only high-end companies are ready for predictive analytics; it's a cutting-edge technology that's still too advanced for most marketing teams. This split is partly driven by confusion about what the term actually means. Does it refer to technology that uses third-party predictors, or are predictions based only on data collected within the Marketing Automation platform? Is the technology visible and actively operated by users, or does it work behind-the-scenes to provide actionable tips? Depending on the answers, predictive capabilities could make things simpler and easier by cutting out the guesswork, or it could open a rabbit-hole of data insight, valuable only for users who can interpret the data themselves. So be excited and beware, because vendors and experts may have very different visions of what “Predictive Analytics” does and how it works.
“Amongst our client base, mainly high-tech companies, we find that most B2B marketers aren't yet mature enough in their demand generation processes to where predictive analytics makes sense. However, there are situations— for example, where a company is generating a volume of leads well beyond what the sales team can effectively process—where predictive is a great fit. More generally, however, many more companies just aren't there yet. For example, in lead scoring—where predictive can add an entirely new level of sophistication—many companies are functioning with lead scoring models that are barely beyond a very basic structure. Those companies can do much more with their existing MA solutions before it makes sense to add predictive to the mix.”
“‘Predictive’ and ‘cognitive’ analytics capabilities are very exciting technologies, however marketers need to be careful not to get tricked into thinking they represent an ‘easy out’. For marketers to be successful with these powerful analytics tools, they need to be layered on top of good, sophisticated automated programs. Before a marketing team implements predictive or cognitive analytics, they really need to think through and map out customer journeys, define buyer personas and examine all of the technologies they already have in place. The key to marketing success is to take things one step at a time—and always keeping the customer and what's most essential to business goals at the center of marketing efforts.”
“Our approach to Predictive Analytics is to build it into our system. The way we see it is: well, I want to have better ways to understand what's happening with my information, and I want to find better ways for the system to be able to tell me what to do better, but I don't want to know about all that technology underneath there. […] At some level it will be useful for all our customers. […] We would fail if we don't make these types of technologies available to all marketers who use our system, versus only the high end of them. Obviously the higher-end customers may have more specific requirements. They may have more reasons to try to tune things. They may want to input data from other places. And those are all valid needs, but some version of this technology needs to go into our entire system.”
“I think what the mid-market customers are ready for and interested in is something that makes lead scoring simpler, not necessarily something that adds a bunch of whiz-bang technology behind the scenes. We see interest in that more advanced predictive lead scoring with maybe the top third of our customer base. For those folks, we have the partnership with Infer.
But there is a lot of buzz and a lot of chatter about it. To be honest, it's still less about company size and more about whether they're a technology company with venture capital financing or not. But I'm not sure that stuff has really jumped out of the Silicon Valley bubble very much.”
5. Social and mobile expectations
Social media networks integrations and mobile functionality haven't traditionally been considered core Marketing Automation functionalities. But a growing number of vendors offer these features, and users are starting to expect more in the way of social and mobile. For example, some products have SMS messaging and Facebook integrations for capturing leads, while others have more advanced features for publishing and reporting on content across Facebook, blogs, Twitter, LinkedIn, etc. Globalization is contributing to the interest in mobile, as some sectors of the global market have a primarily mobile online presence. Global marketers may be interested in features like testing and optimization for mobile website views, forms, and landing pages, etc. Products geared towards global marketing, sharing engagement data across departments (with Sales and Customer Services, for example), and/or cross-channel campaigns are developing mobile marketing apps and adding social media management features. Vendors like HubSpot address social natively, while others, like Marketo, integrate with social media management tools like Sprinklr and Hootsuite.
“Another [trend] that's interesting is globalization. It's been hot for a while, but with Google incorporating mobile ranking as an algorithm, we're seeing more customer traction with people who have used other systems and are now realizing that their landing pages are not mobile-optimized. To get a mobile-optimized landing page with a lot of other Marketing Automation systems is actually quite hard. With them it can require a lot of custom coding, whereas all of our content tools, including email templates, are mobile-optimized from the ground up. Mobile traffic has been growing a lot B2B, and especially with the bigger impact of the deal right now a lot of people have started to worry about it more, and rightfully so.”
“Mobile is [now] a given and is core to inbound landing page and email usability. It's critical to know how users reach you and consume information, and to optimize accordingly.
The interest in social features is maturing. Paid placements are overtaking organic. Customers want integration with highly-capable social solutions and tools from specialists, rather than ‘almost-useful’ tools. Despite over-hyping of social for the B2B world, social networks are finding their rightful places as additional channels. Each channel has its own unique capabilities, which changes and falls in and out of fashion. The specialists are able to keep their main focus on keeping the tools current and valuable.”
6. B2B and B2C marketing tactics are converging
B2C marketers are starting to utilize the relationship marketing tactics long employed by B2B marketers. Relationship marketing, or engagement marketing, involves strategic multi-touch engagement with contacts. Whereas in the past B2C has tended to rely more on batch-and-blast email marketing, B2C marketers are now utilizing rule-based email logic and multi-channel campaign features to more effectively build relationships with consumers. Accordingly, vendors are developing marketing automation tools aimed at B2C marketers, although the foundations of the tools and direction of development differ. For example, Salesforce purchased ExactTarget, a B2C email marketing tool, and has integrated the tool into the Salesforce Marketing Cloud; it is now called Salesforce Marketing Cloud Email, and includes more complex marketing automation features to enable relationship marketing to consumers. Meanwhile, Marketo, a leader in B2B marketing automation, is currently focused on expanding its B2C customer base. As B2C marketers adopt engagement marketing from B2B, so too are B2B marketers learning from B2C. B2B marketers are beginning to utilize ad serving & retargeting software in order to intelligently advertise to leads and accounts as part of their cross-channel engagement campaigns (particularly with the rise of Account-based Marketing). They are taking cues from B2C marketers, who already have advanced strategies and technologies in place for targeting ads to consumers. Although the convergence of B2B and B2C tactics is a larger trend across MarTech, it has big implications for marketing automation. We expect to see vendors developing more features for B2C use cases, as well as features or integrations to address targeted advertising (paid media) as part of B2B marketing campaigns.
“Marketing is shifting from a world where brands are talking at people to a world where brands are engaging each person in a deep personalized relationship. We are seeing a rapid trend in convergence of consumer and enterprise best practices to build these relationships in a meaningful way. Simply put, the future of marketing is not about B2B or B2C, it's about B2H—Business to Human.”
“[In terms of the convergence of ad tech with marketing automation,] it definitely makes sense for the two to get closer together. Advertising feeds into the B2B marketing process. You now see interesting ways that it's being used in B2B. Some are similar to B2C, and some are more effective for B2B, e.g. clever uses of re-targeting, based upon a prospect browsing certain sections of site. We have an amazing advertising product called Active Audiences. It's part of the Marketing Cloud. Active Audiences is the best way to manage, segment, and synchronize your CRM in real-time with powerful advertising across Facebook, Twitter, and the mobile app ecosystem with Facebook Audience Network. We are tracking if someone came from an ad for ROI analysis, but we're not publishing [ads] as of yets.”
7. Account-based Marketing
Traditionally, marketing automation platforms have been built around the lead object. But increasingly, as marketers are implementing account-based marketing (ABM) strategies—which have been shown to have very high ROI, according to surveys conducted by ITSMA—marketing automation vendors will need to become flexible enough to support automation around account objects. Some vendors, like Engagio, Demandbase, and Terminus, are already offering solutions designed for account-based marketing. Engagio provides an ABM layer on top of marketing automation; Demandbase provides lead management and ad targeting with an account-based perspective; Terminus provides connectors to marketing automation, CRM, and ad serving to simplify and track account-based marketing initiatives.
“I think the next phase for marketing automation is to be able to support account based marketing which they are not good at today, but the market is moving in that direction.”