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I had a chance to review the results of an interesting new global study of chief marketing officers (CMOs) by IBM, and I want to comment on some of its findings. Adding to the pressures facing the CMO today are new challenges in brand promotion and the growing impact of consumer sentiment expressed in several channels, including social media. The research found these to be the top two concerns in marketing and that 65 percent of organizations are not prepared to deal with them. My investigations lead me to agree with these findings.

Most of all, CMOs in 71 percent of organizations are unprepared for the current data explosion. Our own benchmark research on business analytics reached a similar conclusion, showing that organizations are still spending the majority of their time in preparing data instead of analyzing it. In a keynote at the recent IBM Information On-Demand conference, Jeff Jonas, chief scientist of the IBM Entity Analytics group, talked about “enterprise amnesia” and how companies are getting dumber, not smarter, with the proliferation of data. Our research over the last decade leads me to a more subtle view on this issue; in general organizations are taking steps forward in their management and use of information, but they are doing so inconsistently. We certainly find room for improvement in organizations worldwide.

As a long-time research analyst I have to admit I was pleased to see that IBM’s CMO study identified market research as the most important source in 82 percent of organizations for influencing strategy decisions, followed by corporate strategy (81%), competitive benchmarking (80%) and customer analytics (74%). For a decade we have been doing market research on issues, buyers and technology to provide benchmarks that organizations can use to compare their efforts to those of their peers and industry. For example, our benchmark on marketing analytics found that only 21 percent of organizations are innovative in the use of analytics; the bulk of marketing organizations still rely on spreadsheets – and not coincidentally, more than half are not satisfied with their analytic processes.

In addition our recent research on customer analytics shows that dedicated technology can help companies generate and understand the right information in this critical area. Our research found that 89 percent of organizations want their analytic processes to be simpler and that critical metrics include customer satisfaction and external metrics – areas where the right tool can resolve issues. The CMO research found that 80 percent of organizations will use technology to deal with the ever larger volumes of data produced by social media, customer analytics, CRM and mobile applications. Our research into big data similarly found exploding volumes of data and the need for new applications for analytics and insights. Looking ahead, CMOs in the IBM study said the most important measures of marketing success will be ROI on marketing spend, the customer experience and conversion rates for new customers.

This research by IBM provides significant validation of our firm’s independent and objective voice. I do not often comment on market research done by other firms since it is hard to validate their methodology and quality review. One indicator of whether quality controls are applied to market research is if the final report does not specify how many qualified respondents and organizations are included in the research compared to all those who participated. IBM interviewed marketing executives personally, so I doubt this is an issue here. Its survey provides some findings that any CMO should reflect upon. My own research relevant to CMOs covers other areas not addressed here, including demand generation, digital automation of inbound and outbound promotion of brands, and promotion of products and services across the Internet. Considering that IBM acquired Unica as I assessed to address some of this area, I was surprised not to see much on this marketing area of focus in the research, along with aspects of managing customer feedback across multiple channels including live and digital ones.

Despite these gaps, the IBM research has some thought-provoking data points on the pressures consumers and customers are exerting on CMOs. More than ever they must consider how to keep the public engaged and be timely in their organization’s actions to promote brands, increase awareness and create opportunities for their company’s products and services across multiple channels, including social media, as the volumes of data keep steadily increasing. All this – and the new methods for accessing information and giving feedback via smartphones and tablets – will keep CMOs on their toes for years to come.

Regards,

Mark Smith – CEO & Chief Research Officer

The largest cloud computing conference, Dreamforce 2011, operated by Salesforce.com, is now upon us. This year attendance is estimated to be over 40,000, and there will be more technology- and developer-focused attendees and dialogue than marketing material. Unlike past years, I expect marketing professionals to be a small percentage of attendees, so I thought I would offer them a guide through the circus of activities at the conference.

As we all know, Salesforce.com delivers sales force automation (SFA) in the cloud computing environment. It defines this approach as customer relationship management (CRM), as is evident by its stock ticker symbol (NASDAQ:CRM), and has been slowly adding more CRM functions for customer service and marketing departments. In 2010 the company announced advancements that focused mostly on meeting the needs of IT and providing cloud computing. Improvements in collaboration, content management, websites and contact augmentation are good, but more important is the way they come together to help automate marketing processes.

Marketing as a discipline has been going through a renaissance of sorts, with new enhancements in marketing automation to support drip marketing and lead nurturing along with marketing on social media channels, and with a heavy focus on marketing analytics, which our benchmark research shows as an opportunity for improvement. Having been a CMO and head of marketing multiple times in my career, I’m happy to see these advancements and especially the adoption of marketing automation.

As marketing professionals know, Salesforce.com is not a platform for marketing automation but an integration point to interact with a sales organization. In past years, Salesforce has announced its Sales Cloud, Service Cloud and clouds for almost everything – except marketing. I do not expect significant progress toward a marketing cloud this week, because performing true inbound/outbound marketing automation is best done outside of the Salesforce environment. To have an impact in this market will require it to make an acquisition, most likely of one of its partners, but Salesforce has been hesitant to tinker with the core of its original focus in CRM with sales and make acquisitions of substantively sized partners and their applications.

Against this background, here are my suggestions for what marketing professionals should do and see at Dreamforce. First, don’t get distracted by the heavy emphasis on IT-centric technology and cloud computing. Stay focused on the specific sessions for marketing and the customer and Salesforce partner sessions to get the most value. Among all the sessions, the only advanced one for marketing professionals is Advanced Campaign Management. A handful of sessions at the Intermediate level are relevant, including a couple on marketing automation and a couple on social media. In addition, I recommend Top Tips to Improve Email Marketing (Tuesday at 5 p.m.) with Matt Cumello from comScore and Paul Leary from Blackbird Vineyards. There are others, but plan your path to ensure you are not corralled into the wrong sessions or areas of the massive conference.

Also don’t get drawn off into the Dreamforce product tracks. Scheduled sessions on Force.com, Heroku, Radian6, Database.com, RemedyForce and AppExchange are definitely not for marketing. The JigSaw track to acquire more contacts and augment your marketing database could be useful if you are looking for help in specific campaigns or helping your sales team with prospecting. You might look at Chatter to collaborate more across the marketing team, or maybe go to the Sales Cloud track to see what you can do to support sales.

The partner side of the conference will feature the latest capabilities for marketing automation both inbound and outbound. I think it will be a chore to find any relevant vendors on the huge exhibit floor, since Salesforce doesn’t structure the exhibitors by role and department focus. I have reviewed most of the providers throughout the last year and will finish up assessing a couple more this year, as many of you marketing professionals will be, too. I have noticed a lack of the kind of balanced evaluation of marketing automation companies and products that we do in our Value Index assessments, covering not just functionality and TCO but usability, manageability, reliability and adaptability across marketing and sales systems. I have seen  recently some misleading research that does not help ferret out the unique elements of providers or evaluate them properly. But when you have analyst firms that focus exclusively on IT organizations, whose analysts have not worked in marketing, I’m not sure you can expect more. Stay tuned as we prepare to develop a Value Index on Marketing Automation to help marketing professionals do effective assessments and RFPs for new investments.

Back at Dreamforce, it is apparent that booth space and sponsorships are costly. Some providers will have a gigantic presence and others will pay for less, but both kinds may have interesting advances that you might see or ask for from your existing provider in the future. Here is my preview of interesting vendors, based on exhibitors’ level of sponsorship and booth size. Since it is easier to find the larger booths, I’ll review them in reverse order:

At the Bronze level, eTrigue is one of the newer providers in marketing automation for outbound email marketing and sales level prospect marketing. Aprimo is also a Bronze sponsor, but now that its acquisition by Teradata is complete, expect a bit of a transition as its people work on integrating with the key player in information management and analytics technologies.

At the Silver Level, ExactTarget has for years offered interactive and cross-channel marketing application and technologies.

At the Gold level, Act-On is a newer provider focused on keeping it simple, advancing the ability to market and interact with prospects on Twitter. iContact, the other sponsor at this level, offers a new generation of email marketing, integrating social media aspects at an affordable price.

At the Platinum level, HubSpot products focus on the flow inbound from search and social media with a lead-tracking approach. Pardot prides itself on having the best functionality for the price in its TCO, along with no hassles and no long-term contract required. Silverpop focuses on a large-scale e-mail marketing platform that has advanced into social media and offers access to data for analytics from Microsoft Excel.

At the top Titanium level, Eloqua and Marketo will be promoting themselves heavily. Eloqua recently announced it will go public, spawning a lot of talk about who might be next. Marketo is one of the fastest-growing players in the market, with executive experience from the former Epiphany, which is now part of Infor. Most important is its expansion to new applications to give sales direct access to leads and focus on specialized analytics for revenue optimization.

A company you will not see at Dreamforce is Unica, which was acquired by IBM and is being integrated into that company’s portfolio and focused more on the business-to-consumer side of marketing, for which Salesforce is not widely used in aligned marketing and sales organizational efforts. You also won’t see Manticore Technology, which has a powerful outbound marketing automation platform but decided to conserve its funds for other marketing activities.  

I might have missed some vendors, but these are the major ones that are worth your time as a marketing professional. Visit their exhibits to see the latest in marketing software. Make sure you talk with someone who understands your role in marketing, as I have seen a lot of providers not engage the best of their talent with marketing professionals. If you say you are a CMO, you will get their attention – just kidding, but you know what I mean.

I hope to see Salesforce in the future put more focus on integrating marketing solutions and organize a place where marketing people can hang out on the show floor or in a large collaboration area. Otherwise, it may not be worth your time and attention next year.

Ask your peers in the marketing sessions and the marketing application vendors on Tuesday where their social gatherings and parties will be, so you can meet other marketing professionals and collaborate as early as possible in the week. If you are in town early and a marketing professional, RSVP and attend this exclusive meet and greet on Monday night with BlueBird Strategies, a specialized marketing automation consulting firm.   I will be working on our marketing automation value index research this week, so I plan to be in some of the same booths, sessions and mixers as you. If you want to find me, follow me on Twitter, and we can meet up.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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