Is Marketing Automation a Fad?
Jul 20, 2015
Much to the chagrin of less tech-savvy marketers, marketing automation isn’t going anywhere.
Marketing automation occupies the sweet spot of reducing marketing costs while increasing campaign efficacy, and it is a win-win for the companies that have implemented it effectively. While the adoption rate of marketing automation systems (like Pardot, Marketo, Eloqua, Hubspot, etc.) has doubled every year, the industry is only a few years old – and there is still tons of room to grow.[i]
The current distribution of marketing automation platform users is skewed heavily towards the B2B SAAS industry. This isn’t surprising – as marketing automation platforms are, themselves, cloud software offerings, so they’ve been tailored to the customer lifecycle and business needs of that industry. As companies outside the tech sector recognize the benefits of marketing automation (or hire marketing executives from companies that previously relied on automation platforms), the industry adoption rates will normalize across all B2B sectors with similar sales/marketing processes. For example, almost 77% of prospective marketing automation buyers in 2014 were in industries outside of technology, with especially high growth rates in consulting, manufacturing, and financial services.[ii]
Most companies are already using some facets of marketing automation, even if they don’t unite those features under a single platform. In a Software-Advice survey[iii], researchers found that ¾ of all respondents were using multiple vendors to manage lead histories, email automation, landing page creation, and marketing reports, suggesting that there is a huge ecosystem of companies that could benefit from “single provider” solutions but haven’t yet made the business-process changes necessary to streamline their marketing activity management under one roof. Using a single marketing automation platform, rather than relying on connections between disparate systems, will increase overall data quality, marketing efficiency, and sales performance.
The future of marketing automation platforms in the B2C world is less certain. While many companies have had great success with elements of marketing automation, including email nurture programs, automated retargeting[iv], and dynamically-generated website content, they rarely need the full suite of features that are offered by the top platform vendors. For example, four out of the ten features most requested in a marketing automation platform are specific to B2B companies with long sales cycles and account-based marketing.[v] B2C companies that use marketing automation platforms are usually in high-margin industries with long sales processes; auto-makers, luxury appliances, real estate sales, and legal services.[vi] B2C marketing presents a unique challenge and opportunity for marketing automation platforms – how to increase interaction volume and content relevancy while respecting consumer privacy and laws that restrict unsolicited email communication? As marketing automation matures, expect more platforms to offer variants of their systems that are specifically targeted towards the B2C customer lifecycle.[vii]
In my opinion, the best indicator that marketing automation isn’t just a fad is the pace of mergers and acquisitions in the industry. Major cloud providers like Salesforce, Oracle, IBM, and Microsoft have all bolstered their offerings with marketing automation suites, and the 220+ companies in the marketing automation ecosystem are gradually being whittled down to a few comprehensive market leaders. To me, this is a sign that industry-specific platforms, or platforms with limited functionality meant to augment other solutions, are being swallowed up by broader offerings; expanding the reach of marketing automation to companies and industries that previously relied on in-house or niche systems.
So where do we go from here? As automation gives marketers the ability to measure programs, segment leads, and accelerate content production, will brands struggle to create a ‘personal’ connection with their audiences?
I think that increases in artificial intelligence and natural language processing will start to change the face of customer interaction in the near future, allowing companies to individualize the experience that their customers have both on and offline. For example, an artificial intelligence platform could interact directly with a consumer – accessing that consumer’s entire purchase and interaction history, and real-time data gleaned from social networks and third-party sources. Instead of receiving an experience roughly targeted towards one’s demographic segment, a consumer would receive a completely individual brand experience – subtly changed to reflect their personality, buying habits, and their responses to previous interactions.
Netflix already makes content recommendations based on previous ratings, but what if Netflix knew if you had a bad day at work, and you wanted to be cheered up? What if Netflix knew how excited you were about an upcoming Ghostbusters remake? Is this level of personalization creepy? Maybe a little bit – but humans already use the same contextual data when they interact with each other, and marketers will have to find a way to make these automated interactions seem genuine and natural.
In the present, marketing automation is clearly here to stay – and companies that use marketing automation systems consistently outperform their peers.[viii] If you’re already using software programs to manage your email sends, your nurture programs, and your marketing reports, then the transition to full-fledged marketing automation will be an easy one. This isn’t an innovation that you can afford to ignore, it’s a profound change (and improvement) to the way marketers interact with their audience, and the way they justify themselves within their organizations.