Friday, March 30, 2012

Marketing Automation and Big Data


Venture capitalists are looking at marketing automation as among the next fruitful areas of investment, a clear indication that both marketing analytics, marketing data mining and content marketing are viewed as key growth areas. Such investments would represent a huge shift in investing priorities among institutional investors and marketers alike.


In the late 1970s and 1980s, enterprise software was applied to back-office functions such as finance, human relations and manufacturing. In the 1980s enterprise resource planning got more attention.


But marketing automation generally has lagged behind (with some salient exceptions, such as Omniture, Siebel and Trilogy).

Age of ‘big data’ marks change


But some investors seem to believe that is about to change. Ajay Agarwal, Bain Capital Ventures managing director, thinks marketing automation now will get serious attention, and the “big data” trend is the reason.


McKinsey & Company points out that in 2009, most firms with more than 1,000 employees had at least an average of 200 terabytes of stored data (twice the size of US retailer Wal-Mart’s data warehouse in 1999).


A retailer using big data could increase its operating margin by more than 60 percent, McKinsey estimates, by making information transparent and usable and increasing the ability to see patterns in real time and adjust operations accordingly. In other cases, data itself can lead to development of the next generation of products and services such as after-sales service offerings. 


Historically, marketing automation is that it has always been about “process,” not about the “data” itself. And that is about to change, many would argue.


Until recently, it has been difficult or impossible to collect structured data on marketing prospects who were not customers. But social media and the web represent new potential, allowing automated systems to make inferences when a user checks a price, looks at an image, reads a review or conducts a detailed search query, for example.


The implications for understanding of return on investment are huge. The argument is that, for the first time, marketers can link spending on customer acquisition directly to a set of downstream customer actions.

Budgets grow to match interest in analytics and automation


For such reasons, Gartner analyst Laura McLellan has predicted that by 2017, chief marketing officers will spend more on information technology than the chief information officers.
In 2011 B2B and B2C marketing budgets as a percentage of revenue were almost three times as high (10 percent) as IT budgets (3.6 percent), according to Gartner.


Gartner also said 2012 IT budgets are expected to grow 4.7 percent, while all marketing budgets, in general, are predicted to grow nine percent, and high tech marketing budgets, more specifically, are expected to increase 11 percent.

About the Author: Gary Kim has been a communications industry analyst and journalist for more than 25 years, and currently writes mostly about end user behavior, mobile applications, mobile payments, mobile banking and business models in the broadband ecosystem. He recently was cited as a global "Power Mobile Influencer" by Forbes; ranked second in the world for strategic coverage of the mobile business. He writes for several online content sites, including Carrier Evolution, IP Carrier, Mobile Marketing & Technology, Content Marketing Institute and TMCnet. He also contributes to Razorsight and Accedian blogs. Follow him on Twitter@garykim.


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