by James Lawson.

Marketing automation came late to b2b, with the first on-demand tools slowly appearing around the millennium. Ten years on and it’s a very different story. This sector is booming, with over 20 vendors helping all sorts of client companies to gather more leads, nurture them and convert them into customers. Is now the right time to buy into marketing automation for the midmarket?

Packaged tools

Marketing automation vendors can thank the likes of Oracle, Microsoft and salesforce for creating much of their market for them. Midmarket, on-demand CRM packages have seen huge uptake by sales and service, but their lack of decent marketing tools forces marketers to go elsewhere for the functions they need.

“People get disappointed when they don’t get the expected returns from their CRM systems,” states Jeff Barnes, director at Pardot Europe. “The big majority of our customers use our application with a CRM package. It gives them a way to manage and rank their leads, and it also promotes marketing and sales collaboration.”

With modern web services technology and on-demand software, bolting on a marketing package to a CRM tool takes very little time indeed. According to Stuart Wheldon, customer services director at Eloqua, “SaaS has been a big factor in the growth of marketing automation. The entry price point is lower, there’s less risk and you can get the tools up and running very quickly.”

Wheldon also cites the other factors crucial to this sector’s growth, such as the need for reliable metrics to prove ROI, process automation and the overall need to “operationalise” marketing. “Only been bits and pieces were available before and there was historic use of service providers,” he says.

B2b and b2c marketing automation tools are roughly comparable in their outline functions, particularly on the email marketing side, but differ greatly in other ways. One of the big differences is the way B2b takes much more interest in the individual customer journey – or rather the (typically far longer) business sales cycle – in order to inform the sales team when a lead is ready to buy; interactive lead nurturing and development lies at the heart of these applications, with web and email the key channels.

“It’s about winnowing out the buyers amongst all the web visitors and timewasters,” explains Barnes. “Companies want a better way to handle this.”

Lead scoring is the way these tools measure where the prospect is in the cycle, putting a number on their readiness to buy. Scoring in this case means monitoring email and web-related behaviour and assigning points based on criteria the user sets. For example, one client might download a white paper, visit a trade show, look at the site again then check out the pricing page for a product or service. The score will go up each time, with the final action prompting contact from sales just as the lead is cooked to perfection.

Rather than using multivariate predictive models to generate scores that reflect the likelihood of a certain behaviour as is often the case in b2c, deciding how many points to hand out for each sort of behaviour and then how they should be weighted and combined is very much a seat-of-the-pants affair in b2b. With more and more detail available on lead behaviour, increasing accuracy in predicting buying propensity and ranking leads looks likely to lead to more rigorous statistical and other methods. How this can be done while keeping the applications relatively simple to use remains to be seen.

Good b2c marketing suites are built to handle large outbound campaigns to potentially vast target audiences and so have more sophisticated scoring and selection capabilities – or at least the ability to import and use them effectively. They tend also to be proper multichannel solutions, as capable of dealing with large direct mail campaigns as email or any other direct channel.

However, you do get a lot for your money with b2b tools, which tend to wrap up many functions that would require separate applications or extra suite modules in b2c apps: budgeting and planning, workflow and approval, the marketing calendar, internal collaboration tools plus digital asset creation and management to name just a few.

Then there’s project management, workflow automation, basic web analytics, email marketing, campaign management, analysis and reporting. Phew. These functions tend to be “good enough” rather than highly specified, reflecting the small and midmarket clients most of them are intended for.

Although the vendors do have service partners, b2b marketing automation tends to be a purer software sell, with vendor consultancy more of the day rate variety rather than an outsourced option for support tasks such as data cleansing or campaign planning. This contrasts sharply with b2c where marketing service providers are not only vital to many companies’ ongoing data-based customer management programmes, but also resell various software applications, notably Apteco and Alterian.

Clicksquared is one company that bucks this trend, putting services at the heart of its proposition. “The enterprise level is well served but the midmarket is underserved,” states European Marketing Director Shane Cough. “A high level of resource is needed for conventional best of breed technology and we wanted to offer an end-to-end solution.”

The company is extremely rare in offering its own b2b-focused Click 3G marketing automation software alongside a combination of creative agency and data bureau services like database building and management, campaign planning, creative development, multichannel message delivery and analysis. Specialist, in-house-developed agency software was common many years ago but most have long since adopted industry-standard products – Entiera is one of the few others taking this approach.

“Suppliers should focus on the business challenges before and after implementation,” says Cough. “Data integration is the prime reason our clients come to us. If you sell marketing technology you need to hold the client’s hand and get them up and running, or the technology won’t get used.”

Market Developer, a trailblazer in the field of on-demand marketing software, is another midmarket supplier that combines services with its software. For example, it can regularly cleanse a client database behind the scenes. This application predated most of the current b2b pack in its use of SaaS technology and in emphasising the need for consistent, trackable metrics, according to Simon Davis, Managing Director at MarketDeveloper.

“On-demand makes a huge difference to system utility and cost,” he says. “The aspect of proving investment has also come of age, the ROI argument is now well established.”

Davis also firmly believes in the need to support marketing users in their work. “We are now doing more and more fully managed services. Clients who used to have 15 people in their marketing departments are now getting by with four.”

That’s not to say that b2b vendors ignore MSPs altogether. “We have an ecosystem of partners, from boutique service providers up to the Big 5 consultancies,” says Eloqua’s Wheldon, “though the trend in the market is towards self-service.” His company’s UK roster spans familiar b2c names like Harte Hanks through to b2b marketing automation specialists like agency Clevertouch.

Only time will tell how many companies opt for low-cost self service via on-demand, and exclude comfortable handholding from MSPs. The two traditionally go together and a good MSP can take up the slack during peak marketing seasons; in-house budget, skills and confidence will be the deciding factors along with the scale of marketing operations.

These SaaS systems are soon to have a competitor from one of b2c marketing automation’s best-known vendors, and services will also be part of the package. To be launched in Q3 this year, Smartfocus’s package – provisionally named Arjuna – is inspired by the success of the same vendor’s MAXX SaaS solution developed for the news media sector and ticks many of the packaged marketing automation boxes: social media monitoring, campaign management and workflow automation, though there does not appear to be any lead management or nurturing functionality at present. Partners will offer services such as data, fulfilment, creative and email marketing, and there will also be an on-premise option – something the b2b competition rarely offers.

The package will initially be aimed at b2c prospects such as online retailers, but b2b will also be a key target sector in future. Paul Creamer, the company’s CTO, is bullish about the new package’s prospects, citing web access, SaaS technology and pre-configured vertical versions as key advantages. Apparently salesforce integration is in the development roadmap.

“These three things bring the cost right down,” he says. “Arjuna is for midmarket use and we will compete directly with b2b marketing automation vendors in future.”

According to Creamer, his company’s deep experience of marketing analytics gives it an edge over the b2b-focused vendors. “They have no proper analysis system and very basic selection processes,” he says. “They will find it harder to satisfy clients as marketers get more sophisticated.”

However, how sophisticated the vast majority of b2b clients will ever become is a moot point. More complex applications that suck up staff time may dissuade poorly-resourced smaller businesses from adopting them. For example, Eloqua’s recent interface revamp is at least partly aimed at attracting smaller clients that can’t afford dedicated operators for the software.

“The biggest challenge for b2b buyers is identifying the solution that is the best fit for their business,” states Richard Evans, Director of Marketing, EMEA at Silverpop. “Buyers’ aspirations for marketing automation technology generally exceed their ability to fully leverage the features available within the platforms. If not careful, buyers will find themselves tied to a system that exceeds their capabilities and needs, and often, their budgets.”

The various vendors target certain parts of the market, though there is plenty of overlap. Eloqua tends to be the corporate choice with Marketo also going for the corporate market, though both also target smaller businesses. As the client company sizes decrease, so the number of vendors targeting them increases, with Manticore, Pardot, Genius, Loopfuse and many others going after the loosely-defined SMB market.

This sector is booming and highly competitive, and there is still plenty of untapped market out there to go at. But as most vendors provide quite similar features, it’s tough to make the right choice. Beyond standard RFP criteria, key features as include the availability of email delivery services, support for double opt-in, a comprehensive API and other Euro-friendly features including multiple languages.

“While an open platform is desirable and the presence of expansive APIs is an indication of an advanced marketing automation system,” says Evans. “I don’t think the average midmarket buyer is looking for APIs and custom integration as much as they are looking for out-of-the box, UI-driven integrations with CRM and web analytics systems.”

Given that this market is still very much in the growth phase, picking a stable vendor that won’t go belly up is another key point for buyers. Market consolidation comes next, though that still looks some way off.

More competition

How else might this sector develop? The entry of salesforce and Microsoft as direct competitors has long been b2b marketing automation vendors’ worst nightmare; they exist at least partly because current SaaS CRM products don’t give marketers what they need. If packaged CRM vendors finally bother to add decent marketing to their products, it could change everything.

That may be starting to happen. Last month, both salesforce and Google invested in b2b automation vendor HubSpot. Much work will be needed to bring HubSpot’s capabilities in line with the likes of Eloqua but then salesforce isn’t exactly low on cash – or warm leads to sell marketing automation tools to. Could this sector’s greatest benefactor turn out to be its nemesis?