What are/will be the biggest impediments to the marketing automation market reaching its potential?

One of the biggest challenges facing the industry is organizations and vendors putting the technology in the right perspective. Buyers and vendors alike need to understand that while robust, the technology alone cannot deliver on the promises or expectations that are being discussed in the market - i.e. ROI on marketing, lead management, increased response rates, etc.

To many organizations are buying into the "technology savior promise" and many vendors are still promoting the technology as THE answer to marketers problems. This is seen in the vendors messages which focus solely on the ease of their solution or giving it away as if it is a plug-and-play type of solution. It is refreshing to see some of the top vendors change this and begin educating their prospects that it takes more than technology to be successful.

The buyers also bear some of the responsibility in this market reaching their potential. If we are honest (and whether it is deserved or not) the traditional view of marketing in most organizations is not very high. However, the expectation being put on marketing has changed as the buyer has transformed their process of purchasing. The burden is now on marketing to engage with the buyer in a dialogue, deliver highly qualified leads to sales and help propel deals through the pipeline. Technology can enable these areas, but as mentioned above, it cannot solve them. As marketers adopt these solutions, it is paramount they succeed and show true value from their investment, lest the legacy reputation about marketing be proven correct.

Marketers who are looking to automation must ensure they are developing the right process, content and people in order for the technology to truly deliver the expected value. This takes time, collaboration with sales and other departments and is not an overnight fix. However, when done it will increase the value exponentially as seen in the recent study by Sirius Decisions - http://www.facebook.com/note.php?note_id=462986932853

Organizations need to understand what it will take to get the full value from their automation solutions and commit to doing it. At the same time vendors need to educate their prospects that it is more than just technology (some already are taking these steps). As this begins to occur the full potential of marketing automation will be realized. The new alignment: Customer and Vendor Alignment

Carlos Hidalgo
The Annuitas Group
@cahidalgo

In no particular order:

- it's still too hard to get value from these systems. Not because the systems are hard to use, but because marketers lack the grander vision of how to put together programs that make sense. Many vendors are working very hard to educate them and provide templates to work from, but I still think many potential users throw up their hands in frustration. We really need things to be radically simpler -- think Google AdWords simple. That requires a higher degree of automation than we see now.

- lack of content. Ok, Marcus just said this. But he's still right (or at least I agree with him). The fear of needing tons of content is a big deterrent to even starting a marketing automation project, I think. We need technology to make it easier to get move value from existing content by recycling it in different formats. But I also think we need to reconsider whether so much new content is really necessary. I'd bet the same few pages (features, pricing, etc.) are visited over and over, but most new content is about something else entirely. Maybe we're scaring ourselves for no reason.

- better analytics. Darn, Marcus said that too. The point here is that marketers don't know what's working or whether they're getting value without analytical resources. This is a bit of a chicken-and-egg, since you can't do good analysis without decent systems, and you can't justify the cost of decent systems without good analysis.

- quality data. This hasn't been high on my list of concerns but it did come up as a surprising top-of-mind issue with a bunch of marketers at a recent conference. I'm talking about getting quality lead names, not getting good information from Sales (although that's important too). Marketing automation is great but without new names as fuel, the engine will sputter to a halt.

Hi Everybody,

I always seem to be arriving at these discussions late, after many of the points have already been made. At the same time, though, it gives me a chance to roll up what many of you have said and offer a differing perspective.

When I read Craig’s question and look at the responses, it seems that MA is following the well-trodden path of virtually any new technology with issues around (in no particular order) pricing, resourcing, data, content, adoption, integration, expectations, benefits, measurement, and services, among others.

Frankly, I don’t see any reason to believe that the MA markets will be any different than those for other technologies; namely, the market will work out all of these issues, with those who best accommodate the market’s directions succeeding the most, etc. As an example, the MA markets have already provided direction regarding the proliferation of MA firms, and narrowed the field to a number of major players we all know.

To Craig’s question about the MA markets reaching their potential, however, there are 2 major threats that no amount of market maturity will be able to fix.

Steve Gershik talked about the first: Will MA markets be able to resist being swallowed up by other markets such as CRM, ERP, database, and agency companies? The early indications don’t seem too encouraging vis a vis Unica, Market2Lead and Aprimo. And with the continuing growth of technology super-vendors (IBM, Oracle, etc.), this will be a continuing threat. In addition, the venture funding of many of the MA players may also build in a bias to roll up MA with other “more established” markets as means of exiting successfully.

The other issue that permanently threatens independent, self-supporting MA markets is the requirement for a type of marketer which exists only in very small numbers; namely, marketers with equally developed left-brains and right-brains. Using these terms as shorthand for process and creative talents, MA currently favors strong left-brain marketers which builds in a risk of marketing that may not be as effective as it could be. Traditionally marketing has favored strong right-brain people to produce the strongest marketing, and we’ve all paid the price for the lack of process, accountability, and revenue focus this has entailed.

I’m not sure how this impasse between left- and right-brain marketing requirements can be resolved. I know from firsthand experience that some strong right-brain marketers have avoided getting too involved in MA because they’ve felt it’s not what they were hired for. On the other hand, the stronger left-brain marketers I’ve dealt with tend to be further down in the organizational ranks, and are often tasked with “running MA” without the kind of direction that can exploit the potential MA has to offer.

As a final note, I’m not sure this is an ease-of-use issue. From what I’ve observed, it’s a mismatch of mindsets. Maybe this where the consultants need to come in???

Agreed with Carlos. To elaborate on one of his points, I think we're in the midst of a sea change in how marketers view their roles and their need for skills. Specifically the analytic, operational, process, and data skills are moving from niche to mainstream in most B2B organizations. If this trend continues, growth in marketing automation, as an enabling technology, will grow with it. If there is a reversal in growth of those skills, the market for marketing automation will not grow to its full potential.

1. Pricing. Historically, I believe this was the major impediment, as it was extremely expensive to justify MA in a marketing budget - it was not a well-known technology with clear benefits. The market today offers many low-cost alternatives, and the higher cost alternatives are doing a good job of proving value with additions to their products like Revenue Performance Management (ROI Reporting). I don't believe the impression of MA being expensive to buy and implement has been cured yet, so I would cite it as continuing to be a determining factor.

2. Consultants. Yep, I said it, go ahead and mod me down. ;-) As long as consultants continue to drive the marketing automation message, that is, that marketers are incapable of understanding MA on their own without a $300/hr hand-holder, growth will be crippled. (See issue #1 above, as this directly affects pricing). No one argues that many companies can benefit from best-practice advice when it comes to MA. The problem I see in the industry is that consultants create the impression that marketers will fail without the wizardry a consultant can bring to the table. So now a marketing automation platform costing $5000/yr becomes a $20,000/yr affair, making it a non-starter for MOST companies.

From my perspective, there is a chain effect of issues...

Is starts with:

1.) Demonstrable impact on a companies ability to close more deals. This is definitely going to be top of mind. If the tools can't show how they are impacting the needle everything else is for not.

Which is dependent upon:

2.) Having the analytic fire power within the marketing team to make the tools do what they are capable of (+1 to both Carlos and Steve's points).

Which is itself tied to the quality of available data:

3.) Managing the sales and marketing relationship so BOTH parties are committed to making sure the process works and provides what each side needs. Accomplishing this likely requires executive sponsorship and likely modifications to comp plans and performance evaluation.

Now, there are certainly other risk factors impacting the successful implementation of a marketing automation tool, but the inability to address these 3 is the kiss of death.

********************

Another issue I believe is the disconnect between sales vision and the marketer's reality. I don't think it is so much "snake oil" salesmanship, but the shear difficulty in executing the vision. Principally this revolves around the need for "Content Marketing". Yes, around nurturing and potential impact of marketing automation this gets lumped in there, but creating mounds of good content (thank you Hubspot) is far from an easy proposition. Where and how the role of content in the function of marketing automation is a gap in tool functionality and the vision being sold.

In reviewing responses there are a few points that bear repeating, including the importance of marketing automation vendors not only selling technology, but, in some cases equally as important is ‘selling’ best practices – best practices related to processes, workflows and campaign strategy. Best practices related to closing the gap with sales, expanding skill sets, experimentation with new communications channels, and B2B marketers incorporating lessons from their B2C peers. In short, to sell marketing technology, we believe that in many ways you must be a marketer *first* and a vendor second. Only by using our own tools can we put ourselves in our customers’ shoes, only then do we realize the possible limitations – or more optimistically - the great opportunities afforded by the technology.

Along those lines, many respondents have addressed the topic of traditional approaches to pricing/selling as a possible impediment. This goes back to vendors thinking like their customers: There can’t be a ‘one size fits all’ approach to marketing automation deployments. For some, an on-site deployment works best, for others it’s a SaaS model, for others, it’s a hybrid of the two. You must give customers a choice, and present thorough, thoughtful recommendations on what option best suits their marketing and business needs today, and into the future. Whether on our own or through partnerships with valued MSPs, we must help marketers future-proof their business by providing them with the innovation, vision and methodologies they need to succeed. These are partnerships, not just sales deals.

As a marketer who has purchased and deployed a MA system, let me offer a different perspective. MA is a tool used to deliver a PLAN. For our B2B niche company, a content rich, customer-centric PLAN. The price was a challenge only because the entire concept of content marketing as a way to generate leads was (and still is) so very foreign to our upper management. (I developed a comprehensive, detailed content marketing/lead nurturing/lead scoring plan utilizing a MA tool integrated with Salesforce. At the end of my presentation the response was, "This is all fine and good but how are you going to generate leads for sales?")

You can't blame the MA vendor. The buyer has to understand that the infrastructure has to be in place to maximize the technology's potential. The infrastructure includes people who understand how to use the technology and other people who can create content...left brain-right brain dichotomy as Prugh suggested. Throwing warm bodies at the problem is a recipe for failure. I never felt that I needed a consultant to launch the product...the vendor was excellent every step of the way. I concede, though, that I'm lucky to be a left-brain and right-brain thinker.

In summary, I contend that the problem with MA technology has more to do with shifting marketing and lead gen strategies away from mass communications to value-driven, customer centric inbound marketing methods that respect the B2B buyer's intelligence and needs.

Brian +1 on the functional existence. Firmly agree that marketer's need to rediscover how to sell, not just push paper. It's about outcomes, not "activity". In a B2B world there is no excuse for not having revenue drive marketing. Get's a little trickier in B2C, and B2B2C, but still doable.

Lots of great points here by everyone. I particularly resonate with:

* Carlos' points about the "technology savior promise"
* Steve W connecting the the growth potential of marketing automation to mainstream adoption of analytic, operational, process and data skills in organizations

Roy brought up an interesting point about the additional expense of Marketing Automation incurred by using consultants. I think the Total Cost of Ownership of Marketing Automation is underestimated in many different ways, not just the use of consultants (which I think is more an issue of over-dependency and mis-management than whether a consultant provides real value or not)

Consider just a few of the hidden got ya's:

1.Most Marketing Automation investments are accompanied by an increase in dedicated headcount to administrate and manage the system
2. Even if an MA system provides what a company needs out-of-the-box today, this is likely to change as the marketing function and company scale
3. Most MA implementations live inside organizations with many disparate systems. To get the most out of an MA system, it will need to interface with these other systems, adding to the cost
4. If additional investments aren't considered for training, an organization will end up with an over-dependency on the few (often 1-2) employees who know how to use the system. What happens when they leave?
5. Gaps in data, process, agreed-upon taxonomy, clear metrics that define what success looks like, etc. are also likely to cause the MA system to be sub-optimized and under-utilized, leading to further costs to address those issues

Organizations need to think clearly about what objectives the MA system is going to help them achieve and then get real about what it's going to take investment-wise to achieve those objectives. Focusing on just the dollar cost of the system or the dollar cost of the consulting help or the dollar cost of the new headcount only reveals part of the story.

This is great discussion that has been bubbling to the surface throughout 2010. So here's my take on what ails the MA market:
1. Lack of adoption across industry verticals - It seems that high tech and software dominate the early adopters while huge vertical segments in manufacturing (process and discrete), transportation, pharma, health care and financial services are still stuck in with processes supported by a hodge podge of discrete and non-integrated inbound/outbound tools and programs.

2. Its still too complicated (this point was made before) There is a big gap between the concepts and practices needed to drive MA success and the skill sets of marketing professionals. This "know-how" gap reminds me of the gaps that existed in the 70's and 80's with MRP/Manufacturing Planning and the 90's and last decade with supply chain and LEAN manufacturing.practices. The concepts, practices and supporting technology preceded wider spread adoption and competency by decades. Which leads me to my 3rd point.

3. Lack of Education and Industry Certification Programs - The MA industry has barely touched the educational needs of the market it is trying to sell. Until the professional and continuing education programs that address the needs of TODAY'S B2B marketers goes main stream, the skills gap will be wide open. MRP had APICS, supply chain management had Council of Logistics Managment and now CSCMP; manufacturing has LEAN, and 6 Sigma. What will we see for marketing?

4. Too many MA players - It seems that almost everyday, another MA player emerges with another un-differentiated system. Until the issues of vertical market expansion, complexity/skills gap and education are addressed adequately, the MA market will not realize its full potential.

It's interesting that this discussion has homed in on marketer education as the critical barrier. Think of the decades-long, wrenching change it took for companies to adopt MRP and 6 Sigma. That happened only because of severe business pressure and with the highest level of management sponsorship.

I don't see the same magnitude of forces at work in today's marketing world, although perhaps the transition to digital will do that. I suppose it's what IBM and Teradata are betting on with their big acquisitions, which seem based on the fundamental proposition that marketing will become profoundly analytical, presumably because it will all be digital. (With the big caveat that IBM and Teradata are more interested in B2C than B2B marketing.)

For this transition to happen, the advantages of the analytical/digital approach would need to be overwhelmingly obvious: which, in practical terms, means companies that do it would have to be clearly taking away a great deal of business from companies that don't. This is what motivates major change on the scale of MRP and 6 Sigma: companies literally feel their survival is at stake. I don't see that yet in terms of market results. Nor is it clear that the analytical/digital approach will truly deliver such a huge improvement over previous methods. (Is it heresy to say that?)

As an aside, I'd note that many of the agencies and consultants don't really have deep analytical and (especially) digital skills, either. So it's not clear they can really lead the way.

As a second aside, the successful vendors in the previous waves of marketing automation (the original MCIF systems in the early 1990's, and the original B2C campaign managers in the late 1990's and early 2000's) were companies that had large professional services staff to assist clients in deploying and using their systems. I'm seeing that at the low end of marketing automation business today, where companies like Infusionsoft and HubSpot are also investing heavily in such services (through both internal staff and programs to train business partners). I guess history is about to repeat itself -- which vendors will make the staff investment to succeed?

David, I'm glad we are of a mind! Another point around the data quality is getting the sales buy-in to make sure they are closing the loop on opportunities. If a lead is generated, but sales never associates or updates the opportunity a lot of critical data is lost about the value of the lead and which activities netted it.

These discussions are always fantastic.

I would like to reiterate a few points I've made in other discussions here. In my opinion the #1 challenge customers have is building and implementing a solid demand generation process. Marketing Automation platforms are plug-and-play where a switch is thrown and leads flow in. Marketing Automation platforms enable processes and process design involves lots of planning with process design, politics, training and systems integration.

I firmly believe the "easier" marketing automation vendors make process implementation and administration, adoption AND utilization (mot important in my book) will increase.

I agree with Steve Woods that new skill sets must develop. These new marketing skills will combine the best of worlds in process implementation and operation as well as campaign strategy.

Finally, I believe marketing execs in the B2B world MUST move away from functional existence to strategic behavior that focuses on revenue generation. For far too long marketing execs with fancy titles have behaved functionally and measured themselves with meaningless activity-based metrics that have no correlation to revenue. Marketing Automation systems can enable an organization to build customer relationships and grow revenue. As the expectations move toward measuring marketing on revenue generation, more organizations will utilize these tools.

Brian Hansford
http://www.Zephyr47.com

Great "discussion" on Marketing Automation. I think most of the points have been covered.

I come to this from an email-focused perspective and agree with Steve that traditionally, a lot of B2B MA users thought email marketing was key to MA. Today it has to be about an integrated approach across all channels, thus adding another level (or two) of complexity.

This brings me to what I believe is the single biggest impediment to MA market growth: internal resources.

Internal resources are the MA user's own people who can create and articulate a vision that includes all the channels, understand what to measure and how to create ROI models (results will dictate if MA keeps getting funded) and build out the processes/flows that will properly automate things that can/should be automated.

These people are rare, esp. if you want marketing experience with the analytical skills required. And as stated in this thread, external consultants boost the costs significantly.

Finally, what is Marketing Automation....really? For many of the companies I deal with it is small steps to automate parts of the process rather than going "whole hog" and developing a complex multi-channel program operating lights out".

Maybe the solution to help the market grow is allowing lower-cost entry points without the requirement that everything be automated. I think there are some good, low-cost solutions that help do this with some CRM solutions like Salesforce.com, etc. And if these can offer some "templated" programs, and you don't need a $20-30k consultant to make a $15-20k MA investment work, the industry will grow nicely.

I think some of the vendors need to understand that they simply cannot just sell the platform. They need to support the implementation. Oftentimes, companies will run into bandwidth issues or lack of appropriate skill sets to implement which leads to improper use of the tools and/or no true implementation. Or, it comes down to consultants for support who then charge and arm and leg so budget becomes a factor.

Finally, the products needs to be more attune or flexible based on the needs of the organization. Too many limitations or customization leads to companies having a tool that is not a good match. You either get the "cadillac" version or the "pinto" version. Not much inbetween which applies to most organizations.

The biggest barrier I face with clients entering the automation process is that very few value the data trail /biz Intel. Therefore they do not collect and capture properly. When it comes time to convert it is an expensive tumultuous process

Usability. Historically marketers have been good at buying things at bad at using them. Another way of saying this is that marketing departments are long on budget and short on people. The adoption of marketing automation is no exception to this rule. Today's marketing automation solutions are non-trivial to use. Implementation cycles can extend because of the time required to incorporate business logic into the system (and that business logic is the real lifeblood of a marketing automation solution). And once implemented, the application is difficult to use with lots of poor UX somehow having found its way into these products.

Combine this with the fact that most marketing organizations are not staffed with sophisticated technologists and that marketing tends to sit the farthest away from engineering and IT and you have the makings of a serious trough of disillusionment.

Excellent summary Henry.

Part of the problem is that people are selling technology rather than methodology.

I'm not sure it is verticals as much as horizontals which causes the non-adoption. There are two types of B2B - mass B2B and targeted B2B. The first is typified by technology vendors who use mass techniques to reach a lot of companies. They's seen the need for MA to prioritise leads and make sure everyone gets something.

In a targeted B2B company they have a much more closely defined market and often number their prospects in thousands, not millions as in mass B2B. Their problem is not getting something out there, but engaging more closely with a smaller number of potential buyers.

These vendors need a product which helps them to identify which lead is in their target market, which delivers the names of the key individuals who will probably be involved in the buying decision and which delivers some intelligence on why they might want your solution, what criteria they will use and who is involved in that buying decision.

You can actually deliver a lot of that using MA, but not by using the techniques which suit the mass B2B vendors. Thus most vendors are applying the wrong solution and the buyers in this segment of the market don't identify with the hype and solutions they are offering. If MA is to move into this sector it needs a new story and a new ROI. It also needs much greater education on benefits and techniques.

There is an opportunity here. As an SaaS product, there is an opportunity to open up a regular monthly discussion with customers. The MA product should be seen as the entry into that customer, not an end in itself. Once established it forms a backbone onto which a number of marketing and lead engagement initiatives can be pinned to suit the needs of the business.

This requires a different mindset and it is why we at LeadFormix in the UK actively recruit marketing agencies and sales consultants as vendors - they can provide the ongoing expertise which technology vendors lack and they close out competing agencies and consultants by using the MA platform to deliver their services. Along the way, this also solves your education point.

Lastly, I wholeheartedly agree with point 4. Some of the vendors who solely sell on price simply encourage a rush to the bottom and are building up a base of people who think "Well I tried the free version and don't think MA is right for me". But there is another reason for people joining in and that is that the major players are arrogantly doing it wrong. They are applying B2C and mass B2B techniques blindly and trying to steamroller flawed methods through to become "Best Practice" via marketing clout.

A classic example is the idea of nurturing only the person who has made the enquiry. In B2C you have no choice. In targeted B2B, things are quite different. If you know that you need the CIO, CFO and COO involved in a buying decision, what are you doing nurturing someone in another role in the organisation without keeping these people in the loop?

I used to have a ringside seat at the IT v department fisticuffs in Business Intelligence and in CRM. Occasionally it still comes up on CRM discussions - who should own it, Sales or IT. The IT people point out that the sales people don't have the right analytical skills. The sales people say "whose job are we trying to assist, anyway".

Believing that the technology vendors know better than the client is the cart leading the horse. The marketing and sales people know their customer and prospect relationships and the steps needed to engage. We need to listen more to clients and their customers and map processes to what we find, rather than trying to map clients to our processes. That's actually why Hubspot is punching well above its weight - it is in tune with what clients want and providing those, rather than being high minded and telling those clients what to think.

The more IT becomes an enabler and seamlessly embed MA procedures and intelligence into marketing and sales engagement programs which give clients the benefits without the pain, the better the take up of these programs will be. MA vendors need to learn to speak client.

Here is a different perspective on the original question, written with tongue resting somewhat comfortably in my cheek.

As a marketer and competitive business person, as well as a fan and exploiter of marketing automation, I really do not care whether the "market" reaches its potential. These are powerful tools and I am always thinking of different ways to use them, as well as to improve the way I use them.

The longer is takes for other marketers (my competitors) and the competitors of my clients to figure it out, the happier I am. The people buying the service are responsible for knowing which (if any) system is best for their organization and whether it can pay for itself.

Buying MA is not that different from buying a car. Unless you know how to drive or have a driver who's there every time you need to go somewhere, you shouldn't buy it. And, if you buy a particular car for the wrong reason or pay more than you can afford, it's not the sales person's fault. His job is to sell cars. Your job is to make smart purchases and know exactly what you need to go from here to there.

John Ribbler
http://media-proinc.com

Today's Dilbert (21 Jan) (www.Dilbert.com) lays bare most Marketing Automation company's strategy.

The truth is that MA has gone through the early adopter and early majority phases and is now over the top of the bell curve.

You can always tell this when major players have to reinvent their marketing weasel words - as has now happened with Revenue Performance Management. The battle has moved from who has the best product to who has the biggest marketing budget.

Newer technologies such as customer intelligence are taking demand generation and engagement (lead nurturing as we know it is discredited) to new levels of capability. Welcome to Marketing Automation 2.0.

Excellent piece, Prugh.

One of the key problems is that marketers are new to the lead generation table. Hundreds of years of building expertise for salespeople has been thrown out of the window amid a determination that everything sales is wrong and we have to start again.

That is leading to naive ideas such as that the person who makes the enquiry is the person who needs to be nurtured - a lot of companies are using MA to respond to that form fill, without thinking about the company and the people in it who are likely to be involved in the purchase decision.

MA suffers from being over-hyped. It is a fairly basic set of tools which, in the right hands, can help ensure a much more ordered and effective buyer engagement process.

But in the wrong hands it is about as useful as those telephone messages which tell you to press 1 for this and 2 for that then put you in a loop. For example I'm on the list of one major MA vendor and every week they send me an email saying - we can see you are interested, let me know when would be a good time to talk. Every week I tell them that I'm a consultant and an gathering information so that I can recommend it to others - they don't have an answer for that. But next week, the same email.

If that is what major industry players are doing, imagine their poor clients.

It doesn't really work. The ROI comes from looking at how you market, not from automation itself. Here are 14 good reasons why ...
1. Marketing Automation is built on the old-fashioned push model of marketing.
2. MA is based on the discredited “Marketing makes leads for Sales” ideology.
3. MA is designed for enterprise corporations, not mid-market B2B companies.
4. Email is no longer a powerful prospecting tool.
5. MA doesn’t integrate social media.
6. Few web visitors fill out a form – and most form fillers are not the decision maker.
7. Most B2B deals have multiple decision makers – MA finds only one.
8. Lead nurturing relies on too rigid a decision making model.
9. Lead scoring is an inaccurate view of buyer intent.
10. MA doesn’t collect data from buyers, and wastes what it finds.
11. MA ends up running the marketing department, rather than being a tool for it.
12. MA doesn’t show you how to improve and integrate all of your marketing programmes.
13. MA doesn’t give you the reporting you require to show marketing ROI in the boardroom.
14. MA separates marketing from sales as they look at different data.

For more details go here...
http://www.marketingpipeline.co.uk/downloads/LeadFormix_move_on_from_MA.pdf
You might also find this interesting as it blows nurturing apart:
http://www.marketingpipeline.co.uk/when-is-a-lead-really-a-lead/