Marketing Automation: More Popular Than Ever?

John Wanamaker would have liked marketing automation.

Loved it, in fact.

Wanamaker, the revolutionary 19th-century merchant, is famously credited with declaring: "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Today, money is still being wasted in advertising and marketing — and a good deal of time along with it. Which amounts to roughly the same thing if you hold that time is money.

The capacity for saving both is the core reason automation platforms have climbed to the top of so many marketers' technical wish lists. Lead nurturing, audience segmentation, CRM integration, real-time analytics, and drip/trigger campaign capabilities are just a few of the features that have fuelled the popularity of solutions like InfusionSoft, Act-On, Marketo, and HubSpot.

With that kind of value proposition, it's no surprise that the number of organizations implementing marketing automation has increased exponentially since 2011, and the range of available options has exploded alongside that adoption.

And yet, despite this rapid growth, there remains vast room for expansion. Overall market penetration for marketing automation solutions stays stubbornly low — barely above 10% even among enterprises with yearly revenue over $5 billion — and is even lower among small- and medium-sized businesses.

So what's going on?

Efficiency Gains for Everyone

Marketing automation platforms offer genuine opportunities for improving efficiency, which is particularly valuable for small businesses operating with limited resources, tighter budgets, and less margin for unproductive marketing efforts — though the benefits aren't theirs alone.

Most major players on the automation landscape offer solutions for streamlining repetitive tasks and accelerating processes, especially around email campaigns. The core capabilities typically include:

• CRM integration to personalize email messaging
• A/B testing for continuous optimization
• Drip/trigger campaigns that push email and content at defined intervals, based on customer behaviour or prior actions

Add content creation and publishing tools (blogs, landing pages) and SEO support, and it's easy to see why all-in-one platforms like HubSpot and Marketo have become popular for inbound marketing with small and medium businesses.

Where things get more complicated is in the more advanced territory of lead management and analytics.

Exploiting Customer Engagement

Far beyond streamlining repetitive work, automation platforms offer complex lead management capabilities that have proven highly effective for increasing sales opportunities:

• Lead tracking: charting a lead's reaction to content at various stages of the marketing funnel and identifying points of disengagement
• Lead nurturing: personalizing drip/trigger campaigns based on prior behaviour and optimizing the customer experience throughout their journey
• Lead scoring: measuring a lead's readiness and providing built-in alerts when leads advance through the funnel

Combined with real-time analytics to measure content and advertising effectiveness, these capabilities hold significant potential for boosting customer engagement.

Conversion attribution adds another layer of value — giving both marketing and sales teams a clear picture of which content influences leads and helping them concentrate effort on the areas delivering the best ROI.

Rather than pushing mass content with little effect on potential customers, teams can increase engagement and capitalize on up-selling opportunities while avoiding wasted cycles on leads unlikely to convert. Lead management also improves co-ordination between sales and marketing, with automatic alerts enabling leads to pass seamlessly from the marketing funnel into the sales pipeline.

So with efficiency and effectiveness that would have made Wanamaker envious, marketing automation platforms would seem to be an obvious choice. What's holding things back?

The Promise and Problem of Segmentation

The answer comes down to one concept: segmentation.

A major selling point of popular platforms like Marketo, ActOn, Oracle's Eloqua, and others is that they allow marketers to manage everything in one place — content creation, landing pages, blogging, social media campaigns, and lead management. The appeal of total control and smooth utility is obvious.

And yet a significant number of marketers who have already implemented automated solutions report that they aren't getting enough out of their platforms.

Much of this stems from a lack of integration among marketing technologies within companies — data and platforms becoming siloed in ways that prevent full marketing mobilization across the organization. This reflects findings from industry research showing that customer data remains unaligned and unaggregated, limiting its usefulness in generating revenue.

In theory, automation should solve this — making it easier for marketers to leverage data gathered from multiple sources to better engage and convert potential customers.

This kind of segmentation — using real-time analytics to divide potential customers into distinct categories and target them with more individualized messaging — is arguably the single most valuable method for improving conversion rates.

For larger enterprises, the challenge is integrating cumbersome legacy technologies that have left marketing, sales, and customer relations holding siloed data that's difficult to activate. For smaller companies, a frequent lack of technical expertise means many use only the basic functions of their platforms without fully harnessing their potential. This dynamic helps explain why automated solutions have only a 3% adoption rate among non-tech-related companies.

An Open-Ended Future

Will marketing automation continue to expand despite these obstacles?

If historical trajectory is any guide, the answer is yes. The potential revenue at stake for vendors — over $1.5 billion in 2015 — and the genuine value these platforms deliver, combined with the sheer volume of businesses that have yet to implement any automated solution, all point in the same direction.

Value is at the heart of what marketing automation offers. Time and money saved translates to improved ROI, and that's difficult to ignore regardless of company size.

There will likely be further consolidation among vendors, continuing a pattern already established — Adobe's acquisition of Neolane and Oracle's purchase of Eloqua and Responsys being prominent examples. But as demand grows across business sectors and companies seek to integrate current technologies with platforms suited to their specific needs, the overall market will keep expanding. Marketing agencies will also play a role, incorporating automation capabilities as they diversify their service offerings.

Predictive Marketing on the Rise

One area certain to fuel greater automation expansion is predictive marketing.

This directly addresses a gap highlighted in industry research: only 5 percent of marketers feel confident enough to clearly predict the customer journey and determine which actions will deliver maximum value.

More companies are recognizing the value of predictive technology, and as demand grows so will the market. Its growth will be tied closely to the ability to gather and analyze customer data, driving further demand for the integration of data management platforms (DMPs) and tag management systems — such as the open-source solution 7tag — to make predictive capabilities effective in practice.

Progress is already underway. Adobe's Analytics platform offers features including anomaly detection for trend tracking, audience clustering to aid segmentation, and customer propensity modeling to maximize campaign value. Lattice Engines represents another approach, providing predictive modeling favoured by major enterprises such as VMware and PayPal.

A Maturing Discipline

As marketing and marketing automation move deeper into the new millennium, the range of options keeps growing — as do the challenges. No one ever claimed it would be straightforward.

More than a century after Wanamaker identified the fundamental problem of advertising waste, technology is closer than ever to delivering the answers and solutions marketers need to save time, reduce waste, and improve returns.

The tools are increasingly there. The question is whether organizations will commit to using them fully.