THE ROAD AHEAD FOR CHALLENGES, OPPORTUNITIES AND KEY PRIORITIES FOR B2B MARKETERS
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1 Marketing Technology THE ROAD AHEAD FOR 2013 CHALLENGES, OPPORTUNITIES AND KEY PRIORITIES FOR B2B MARKETERS
2 Table of Contents Fast-paced change is a fact of life for today s B2B marketing organizations. That s especially true when it comes to the tools and technology that marketers increasingly rely on to engage with buyers, plan campaigns and track their results. The Demand Gen Report team reached out to more than a dozen of the industry s leading visionaries to understand how marketing technology will continue to evolve during The following essays offer a fascinating mix of predictions, opportunities and challenges for B2B marketers. Clearly, the road ahead will have some twists and turns, and it s likely to be a bumpy ride at times. But if there s agreement on one thing in these pages, it s that 2013 will be an interesting year for the industry. Enjoy the contributions from this all-star cast, and have a happy and successful New Year! Henry Bruce, Marketing Automation Needs A Game Changer Joe Cordo, Realizing The Revenue Potential Of Big Data Tom Crosby, Shop-Hopping Slams The Demand Gen Process Bryan Ehrenfreund, The Plan For 2013: Putting People And Process First Jay Famico, A Growing Role For Advanced Lead Scoring Malcom Friedberg, Analytics Drives A B2B Marketing Renaissance Justin Gray, Marketing Automation Comes Into Its Own As A Platform Carlos Hidalgo, Marketing Automation Demands A Strategic Context Jim Lenskold, Marketing Automation s Tracking Trap David Lewis, New Reporting Tools Drive New Compensation Models Debbie Qaqish, Predictive Analytics Take Center Stage David Raab, 3 Keys For 2013: Advertising, Analytics, Administration Jon Russo, Great Expectations For Marketing ROI About Demand Gen Report 2
3 Marketing Automation Needs A Game Changer When I reflect on the state of marketing automation, three stats paint a very ominous picture: 70% of the buy cycle is complete before sales engages with buyers; Only 50% of a typical sales team achieves quota; Only 10%-15% of new leads are considered sales ready. These numbers illustrate the importance of fixing the disconnect between our inbound and outbound marketing automation tools. They also suggest the need to rethink how we target and engage with buyers. How do we do this? We need a game changer one that taps into the power of Google and applies very focused and targeted analytics around buyer behavior. An example of this approach might look like this: Henry Bruce President and Founder, The Rock Annand Group Henry Bruce is a passionate B2B sales and marketing strategist who brings over 30 years of executive and operational software experience to his engagements. The Rock Annand Group is a client acquisition strategy firm focused on the B2B software industry. Perform a keyword analysis similar to a typical SEO gig but much more involved; Analyze Google search engine traffic against targeted audience segments that are searching for problems/solutions they already solve/have; Filter against the criteria for ideal client, profitability, salability and which competitors are already going after those targets; Apply your marketing automation engine to optimize inbound and outbound programs for targets that represent low-hanging fruit in terms of what competitors are doing and sales-ready/not sales-ready criteria. The secret to changing the game lies in our ability to use analytics and target segments of likely buyers. I believe 2013 will be the year when someone cracks the code to make this sort of targeting a reality and to give marketers the return they expect on their marketing automation investments. 3 We need a game changer one that taps into the power of Google and applies very focused and targeted analytics around buyer behavior.
4 Realizing The Revenue Potential Of Big Data It doesn t matter what industry you are in, Big Data will create a big revenue opportunity this year. Over the past five years, the amount of business data grew by nearly 1000% and that data is just waiting to be monetized. Social media and the growth of mobile communications will compound the challenges surrounding this data growth, but organizations that don t exploit this opportunity will be at a serious disadvantage. Big Data, with its links to the social and mobile world, is inextricably linked to real-time capabilities. That s why realtime will continue to move from hype to reality this year. Tools that support unstructured data in real-time situations will give marketers greater visibility into customer behavior, and they will realize the goal of true 1:1 marketing. Marketers will also begin to implement and create integrated marketing campaigns based on insights from Big Data. In fact, truly integrated marketing campaigns those that involve , mobile, social, display advertising, SEO/ SEM and chat are impossible without marketing technology platforms that can support and exploit unstructured data. This means bringing together the transactional and behavioral interactions of customers, which in turn gives marketers a form of 360-degree visibility they never had in the past. Joe Cordo CMO, Extraprise Joe Cordo is CMO of Extraprise, a leader in right time revenue optimization for B2B and B2C enterprises, providing database marketing and demand generation services. For more information, contact the author at joe.cordo@extraprise.com, visit or call +1(888)-i2iMKTG. Ultimately, these changes will enable marketers to conduct integrated digital marketing campaigns that are totally personalized and contextualized. We re going to optimize revenue at every stage of the customer lifecycle and generate a lot more revenue in the process. Tools that support unstructured data in real-time situations will give marketers greater visibility into customer behavior. 4
5 Shop-Hopping Slams The Demand Gen Process Shop-hopping. Employee churn. Turnover. Whatever you call it, it wreaks havoc on a carefully planned demand gen strategy. And it s going to get worse during Here s a typical example, as we see it: A business buys Salesforce.com and Marketo marketing automation, and it puts a huge effort into planning the software adoption and processes to maximize the benefits of marketing automation on CRM. It forms a Demand Gen team, and sales and marketing are praised for playing well together. The Demand Gen team plans the software implementations, studies the sales cycle process and sales alignment. They re-architect the lead capture process. The team gets Marketo running on Salesforce and plans nurtures for all those gathered leads. Tom Crosby Content and Creative Strategist, BlueBird Strategies Tom Crosby is a Content and Creative Strategist for BlueBird Strategies, a demand generation firm that optimizes marketing automation to drive buyer interest. That s when the Salesforce or Marketo analyst gets poached by another company. Everything stops to search for a replacement. Data piles up, leads go un-nurtured, salespeople go back to their personal networks and executive sponsorship turns to denial. BlueBird sees demand gen at a lot of businesses fall into jeopardy for many different reasons. Many of them are just adopting marketing automation and struggling to understand their demand generation processes. Marketing automation takes time to implement and learn. Database management, training and process re-engineering take more time than businesses expect. But retaining staff with hot skillsets presents one of the biggest challenges. For a business with a sudden hole in its demand gen program, the cost of a departing employee throwing everything into limbo can be high. Fortunately, there s a clear fix: Gauge the job satisfaction of your demand gen team members. Data piles up, leads go un-nurtured, salespeople go back to their personal networks and executive sponsorship turns to denial. 5
6 The Plan For 2013: Putting People And Process First Nearly every piece of recent research I ve seen indicates that adoption of marketing automation during 2013 will continue to expand and move well beyond the technology sector the source of most early adopters up to this point. There s a long way to go from the estimated 20% adoption rate today, but as this footprint expands, we need to pay attention to one big question: Are marketers in other industries ready? Based on the discussions I had during 2012 with many CXOs who are still looking to achieve the ROI results they were promised from marketing automation technology, the answer has to be a resounding no. Fortunately, there s a common theme that emerges when we try to understand this problem. It s often a matter of readiness, or lack thereof. Many executives I speak with (especially in enterprise organizations) confide that they underestimated the change management and transformation requirements necessary to take full advantage of marketing automation. The funny thing is that I observed the same trend when these companies adopted CRM tools in the late 1990s. Companies didn t plan properly for CRM, nor did they have the right people or training processes in place when they implemented the technology. Have we learned anything from that experience? I m not so sure. In fact, many organizations compound the problem by adopting marketing automation before they map out a well-defined marketing process. Clearly, companies that want to succeed with marketing automation during 2013 will have to address these people and process issues. Bryan Ehrenfreund Vice President of Digital Strategies, Televerde Bryan Ehrenfreund serves as Vice President of Digital Strategies at Demand Generation Agency Televerde. He s responsible for the strategic leadership, development, growth and implementation of Televerde s digital marketing automation practice. Follow Bryan on Call Televerde at Many organizations compound the problem by adopting marketing automation before they map out a welldefined marketing process. 6
7 A Growing Role For Advanced Lead Scoring The marketing automation space is a dynamic market, and not just as it relates to the technology and vendor landscape. It also has to do with how marketing automation platforms are used. Based on our research and client interactions, we see many marketing organizations increasing their use of marketing automation beyond traditional use cases. Two specific trends we have identified for 2013 are: Advanced scoring. Only a handful of B2B companies use a statistical approach to lead scoring. Most still create a scoring model from an experience-based, assumption-driven process. However, organizations with strong marketing and sales alignment, and with the ability to apply advanced statistics (e.g. curvilinear regression), are now creating more rigorous scoring models. These statistical techniques increase a scoring model s precision and reduce false-positive or false-negative leads. This trend will continue, given a sharper focus on data capture, data management and data utilization in B2B marketing organizations. Jay Famico Research Analyst, Marketing Operations Strategies, SiriusDecisions Jay Famico is a Research Analyst covering Marketing Operations Strategies at SiriusDecisions. He is a thought leader focused on helping companies gain maximum value from their investments in marketing programs and technology. Customer marketing. Only 8% of B2B organizations leverage their marketing automation investments to drive customer marketing. During 2013, however, we expect to see more firms apply this technology beyond net-new demand generation. A marketing automation platform can be used throughout the customer lifecycle, from the delivery of training materials during onboarding to maintaining service levels, monitoring customer satisfaction and driving cross-sell/upsell opportunities. Keep one thing in mind: When using marketing automation in this way, it s vital to align your marketing organization with your other customer-facing departments, such as sales and support, and to connect with their business processes and data sources. A marketing automation platform can be used throughout the customer lifecycle. 7
8 Analytics Drives A B2B Marketing Renaissance Until very recently, B2B marketing was a lead gen-focused, brand-based craft where top line revenue was the gold standard. Today, it s a data-driven juggernaut requiring a technological infrastructure to support an analytics-based practice. The application of technology is rebirthing marketing and, quite literally, shaking our discipline to its core. New expertise. New agencies. New approaches. Sure, some of the same skills still apply, but there s a complementary set that s now essential. And while brand may not be dead, it certainly has a new, left brain-focused partner in crime: marketing analytics. The marketing analytics revolution promises to help B2B marketers achieve new levels of professional excellence. Yet this endless horizon also has the potential to derail a whole generation of marketers. The proliferation of technology is expanding so rapidly that it s impossible to keep up with every niche product. The best marketers won t necessarily be the ones with the best strategy or most skillful execution. Success will hinge on something much more pragmatic: understanding technology and how to apply it. Malcolm Friedberg CEO, LeftBrain DGA Malcolm Friedberg, CEO of LeftBrain DGA, has 20+ years of B2B marketing experience. In addition to running marketing departments, Friedberg is a published author, Emmy Award nominee and winner of several national advertising awards. In the midst of this growing challenge, however, one thing is absolutely assured: The requirement for analytics-based decision making is here to stay. No matter which set of tools marketers use, we must continue to embrace this new standard. The renaissance of marketing is about measurement, accountability and ROI. And marketers that become skillful at extracting marketing intelligence from this watershed of integrated data will become tomorrow s marketing leaders. The rebirth of marketing is about measurement, accountability and ROI. 8
9 Marketing Automation Comes Into Its Own As A Platform The main twist that I see for the future of marketing automation during 2013 is its growth into something far more complex and potentially more valuable than just a software product. We re getting to a point where marketers, and the organizations they serve, won t tolerate segmentation, discord and a lack of integration between their systems. In that sense, marketing automation in its current form (mostly standalone software applications) has gone about as far as it can go. That s why the next big move will involve marketing automation as a technology platform. What s involved in this evolutionary process? First, marketing automation tools will have to provide a complete ecosystem for marketers, where they can achieve synergies between all of their activities and integrate oncedisparate tools and systems. Second, marketing automation will build upon one of its major existing strengths: initiating conversations and collaboration. I m not just talking in terms of social media or collaborative content, although that s an important part of the solution. But marketing automation will also have to prove its ability to collect, integrate, analyze and present data from a wide variety of enterprise sources. Everywhere you look, you see evidence of these trends at work. Marketing automation vendors are acquiring, or being acquired by, vendors that help them build out their ecosystems. They re focusing on systems integration capabilities, delivering richer analytics and exploring the potential of Big Data applications. We re really just beginning this process, but I m encouraged at the progress the industry is making. Justin Gray CEO, LeadMD Justin Gray is the CEO of LeadMD. He founded the company in 2009 with the vision of transforming traditional grassroots marketing efforts through the use of marketing automation and CRM solutions. He can be reached at jgray@leadmd.com. Marketing automation will have to prove its ability to collect, integrate, analyze and present data from a wide variety of enterprise sources. 9
10 Marketing Automation Demands A Strategic Context I ll start off with three predictions for 2013: First, marketing automation will expand rapidly into verticals like manufacturing, services and healthcare as these organizations recognize the value of this technology. Second, Marketo will finally go public. It has been planning this for a while, but 2013 will finally be its year. Finally, vendors will respond to the impact mobile technology is having on B2B marketing, both in terms of usability and impact on end users. Having said this, the biggest challenge vendors will face is how best to ensure the success of their customers. Many vendors and consultants, as well as the organizations that employ them, are focusing on marketing automation as an end unto itself. In the process, they re missing the opportunity to have a wider impact on the business and drive meaningful buyer dialogues. Carlos Hidalgo CEO, Annuitas Carlos Hidalgo brings over 20 years experience as a B2B marketing thought leader, known for his vision on Demand Process, Demand Transformation and marketing automation. As ANNUITAS CEO, Carlos drives strategy and leads ANNUITAS core practice teams to Transform Demand for clients. Vendors need to step up and deliver a clear message to their customers: Marketing automation exists to enable two-way dialogue with buyers. This will demand a focus on developing buyer-centric demand strategies where marketing and sales both make vital contributions. Technology is a vital piece of this puzzle, and that s not going to change. But taking a tactical approach to implementing the technology doesn t benefit anyone and it certainly doesn t benefit the organizations using it. Finally, if we ve learned anything about the marketing automation industry, it s that we can always expect surprises especially as long as Salesforce.com and Oracle are around to keep things interesting. 10 Vendors need to step up and deliver a clear message to their customers: Marketing automation exists to enable two-way dialogue with buyers.
11 Marketing Automation s Tracking Trap The adoption of marketing automation, integrated with sales automation, has blessed marketers with an abundance of rich data sources. Tracking metrics enable marketers to optimize click-throughs, analyze response rates at the tactical level and perform many other tasks. This is a positive step forward, but marketers must recognize that tracked data alone provides a very isolated view of marketing outcomes. Many organizations still struggle to assess incremental contributions, optimize the total marketing mix and align the series of contacts necessary to guide a buyer s journey. Relying on easily available tracking metrics creates a tracking trap that emphasizes tactical optimization. The priority must now shift to leveraging this data to guide strategic decision-making activities. Optimization And Strategic Support In 2013 In our recent research, 46% of respondents said that their marketing automation investments have helped to increase marketing s revenue contributions. However, that means 54% are falling short. So it s no surprise that lead gen marketers are now focusing on advanced analytics to drive results. They must measure incremental impact, improve forecasting and optimize engagement across multiple contacts. These efforts are more strategic and, once implemented, help attract CMO-level support and improve sales alignment. Technology providers are responding to this trend. We ll see more reporting and analytics functions built into or as a complement to automation tools although it s important to recognize that some dashboard tools deliver more flash than substance. High quality tools must provide insights to support strategic decision making and enable marketing data to create financial and competitive advantages from marketing contribution. 11 Jim Lenskold President and Founder, Lenskold Group Jim Lenskold is President and Founder of Lenskold Group, a consulting organization helping global clients improve marketing effectiveness through strategic measurements, ROI tools and decision support dashboards. Lenskold Group offers research, articles and interactive tools at Reach Jim at jlenskold@lenskold.com. Our priority must shift to leveraging marketing analytics to guide strategic decision-making activities.
12 New Reporting Tools Drive New Compensation Models I see four major changes ahead for 2013: Greater ease of use. Marketing automation systems will continue to provide more intuitive and insightful reporting capabilities. This will include standardized reporting based on common metrics and reports similar to the standardized reports used by accountants and financial organizations. We ll also see progress in terms of designing and integrating lead scoring, nurturing and the demand funnel into lead management methodologies. These tools will adjust programs based on what works best, using historical sales and marketing data to develop predictive scoring and nurturing models. More out-of-the-box functionality. Leading marketing automation vendors will emphasize the out-of-the-box experience. This is absolutely necessary to expand into markets that demand instant gratification when they adopt new technology. Salesforce.com is a good example of this approach: When a small or midsized business buys Salesforce, they can use it effectively almost from the moment they begin. Marketing automation vendors can take a similar approach with tools like template libraries for , landing pages, scoring and nurturing programs. Expanded service offerings. Marketing automation vendors will broaden the services and capabilities they provide marketers. This will include offerings for activities like content management, campaign planning and project management. New compensation models. Finally, I think the improved quality of reporting tools will drive marketing teams to move toward a variable compensation model tied closely to revenue. After all, now that marketers can demonstrate their contribution to revenue, why wouldn t they seek to increase their total compensation with a variable portion tied to revenue contribution? 12 David Lewis Founder and CEO, DemandGen International, Inc. David Lewis is the founder of DemandGen International, Inc., a global consulting firm helping companies deploy and utilize marketing automation and CRM systems. He is a frequent speaker on the topics of lead management, lead scoring, nurturing, and sales/ marketing alignment. The improved quality of reporting tools will drive marketing teams to move toward a compensation model tied closely to revenue.
13 Predictive Analytics Take Center Stage The first trend I see in 2013 will be applying predictive analytics in revenue marketing. The last two years have seen a big transition in marketing from a cost center to a revenue center, and many companies are deploying marketing automation to help fuel this change. This top part of the market is beginning to mature; today, just reporting on marketing-influenced revenue in the rear-view mirror is no longer good enough. Today s CMO is reminiscent of a VP of Sales in terms of the need to forecast the marketing organization s revenue impact in upcoming periods. The second trend I see is the attention enterprise CMOs will pay to digital marketing. What I mean by this is that a lot of enterprise CMOs focus more on branding and other, more traditional, marketing activities. They may view digital as part of their responsibilities, but many still do not incorporate it into their strategic discussions often because they aren t as well-educated in this area. Given the rise of the digital economy and the resulting importance of the buyer s journey, enterprise CMOs can no longer plead ignorance or inexperience and push this part of the strategic discussion down to a lower level within their organizations. We already see this change happening in companies and we see the consequences CMOs face when they fail to embrace digital as central to their strategies. As a result, we will also see more executive-level educational offerings to help CMOs get up to speed. Debbie Qaqish Principal Partner and Chief Strategy Officer, The Pedowitz Group Debbie Qaqish is Principal Partner and Chief Strategy Officer for The Pedowitz Group, the authority in Revenue Marketing Transformation. Debbie has over 30 years of experience helping organizations connect revenue to marketing. Contact her at Debbie@pedowitzgroup.com. Today s CMO is reminiscent of a VP of Sales in terms of the need to forecast marketing s revenue impact in upcoming periods. 13
14 3 Keys For 2013: Advertising, Analytics, Administration The biggest change I see coming for 2013 will be large marketing automation vendors expanding the scope of their products to support functions beyond lead nurturing. Most vendors would argue they ve already done this, but in reality their focus is still primarily on multi-step campaigns, landing pages and forms to capture campaign responses, lead scoring and CRM integration. Even mobile and social media are still used mostly to interact with existing leads. For marketing automation vendors to continue to grow, they need to support a host of other marketing-related activities. I think it s especially important for them to focus on three areas: Advertising, including brand advertising, requires support for media planning, ad placement and optimization. This will also demand closer integration with paid search and display ad systems, ad buying systems and data marketing platforms. Deeper analytics, including better lead attribution techniques, better matching of leads to sales, and advanced algorithmic techniques to uncover and correlate useful account-level intelligence. Vendors will also turn to predictive modeling for lead scoring, content recommendations and offer selection. David Raab Owner, Raab Associates David Raab is a Principal at Raab Associates, Inc., a consultancy specializing in marketing technology and analytics. He is author of the B2B Marketing Automation Vendor Selection Tool (VEST), an in-depth guide to marketing automation products. Comprehensive administrative tools required for planning, budgeting, project management, approval workflows and content control. This also includes better tools for assigning and managing role-based access to marketing automation functions. Marketing automation vendors will have to move quickly to expand their reach, because they re going to face an increasingly difficult competitive environment. I expect to see CRM, web content management, services, social and web advertising vendors all making incursions into the marketing automation space. 14 Marketing automation vendors will have to move quickly to expand their reach, because they re going to face an increasingly difficult competitive environment.
15 Great Expectations For Marketing ROI During 2013, organizations will demand significantly more revenue value out of their existing sales and marketing ecosystem investments and non-marketing executives at these firms will demand greater accountability for return on these investments. As a result, marketers will need the ability to execute campaigns with surgical precision and to tie their marketing investments explicitly to ROI. This includes: Generating more qualified leads. Successful marketers can and should claim the lion s share of leads that close to revenue within their organizations. Focus here on the details: Standardizing data fields within CRM and marketing automation systems, for example, is critical to proper segmentation and targeting. Data-driven segmentation is especially critical to executing targeted campaigns and increasing ROI. Optimizing business processes. Many companies use less than 10% of their marketing automation capabilities because they haven t deployed these tools effectively. That s why it s so important to map every aspect of your customer acquisition and onboarding process from inquiry to close and beyond to CRM and marketing automation tools. Jon Russo Founder, B2B Fusion Group Jon Russo is a three-time B2B CMO at a former division of General Electric as well as successful Silicon Valley start-ups. He currently runs B2B Fusion, a vendor-neutral consulting business focused on connecting marketing investment to new revenue. Connecting marketing activity to revenue. An entire industry has evolved around the ability to measure marketing-sourced and marketing-influenced revenue and to extend these analytics far beyond what s available from an out-of-the-box CRM or marketing automation system. It s hard to overstate the importance of these tools; their power lies in their ability to give executives one view of the truth for reporting sales and marketing ROI. Organizations that put together these pieces and execute a revenue-driven marketing strategy will have a far more successful 2013 than those that don t. 15 Successful marketers can and should claim the lion s share of leads that close to revenue within their organizations.
16 About Demand Gen Report Demand Gen Report is a targeted e-media publication spotlighting the strategies and solutions that help companies better align their sales and marketing organizations, and ultimately, drive growth. A key component of the publication s editorial coverage focuses on the sales and marketing automation tools that enable companies to better measure and manage their multi-channel demand generation efforts. 411 Rt. 17 South, Suite 410 Hasbrouck Heights, NJ P: F: info@demandgenreport.com 16
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