Database marketing has grown in popularity among marketers that continue to clamor for marketing methods they can track. But while database marketing technology has vastly improved—arming marketers with powerful and accessible ways to examine the data that will help them reach customers—the proliferation of media channels makes that job increasingly complex to manage.
"Technology has gotten to a stage where marketers can use it," said Dave Frankland, a senior analyst at Forrester Research who focuses on the direct marketing industry. "You don't have to be able to write code to be able to use analytics now," he said, adding that costs have come down and visualization technologies have improved by leaps and bounds.
"As a result, people are beginning to understand more and more the power of what's available to them," Frankland said.
Richard Tooker, VP-solutions architect at KnowledgeBase Marketing, agreed the price to build and maintain databases, particularly prospecting databases, has decreased significantly.
"For years, it wasn't efficient [to build an acquisition database]," he said. "The price is still not cheap, but it's not as high as it used to be."
Bernice Grossman, president of DMRS Group, a database marketing consultancy, said marketing database tools have gotten more flexible and the technology has gotten more sophisticated.
"The marketer is now getting to see more than just a response analysis," Grossman said. Marketers are able to better track behavioral data through vast improvements in analytics tools and can then upload all that information into the marketing database, she said.
Competition drives data
The compulsion to use all of this customer information can be attributed to increased competition.
"We continue to see a movement of clients into more sophisticated b2b marketing strategies as a response to the increasingly competitive b2b market," said Denise Hopkins, senior director of business marketing solutions at Experian.
"There are more companies today targeting businesses for products and services, requiring that marketers be more strategic to maintain their campaign and direct marketing ROI," she said. "The b2b database marketing landscape is reflecting this through the increased use of segmentation systems, modeling and analytics, and advanced data management strategies."
Those strategies, though, can be a challenge to implement when there are so many media channels that a marketer can employ to reach customers and prospects.
One reason for that is the difficulty involved in centralizing that information.
"[Marketers] consider it to be solved once they integrate their email with their direct mail," Frankland said. "Integrated is not just communicating in two or more channels but doing so in a systematic and programmatic process that supplies mechanisms for the customer to interact with you [and capture those data in one place]."
Frankland added, "There are plenty of marketers who haven't integrated those two." And beyond snail mail and email, there is search marketing data, he said. "It's hard to normalize the data across these channels."
Phil Gibson, VP-technical sales and Web tools at National Semiconductor Corp., one of the largest semiconductor manufacturers of analog devices and subsystems, said integration is a challenge.
"It's very hard," he said. "The only place where it's easy to do that is for [customers who are already] online and you have an electronic communications relationship with them. That's kind of what's driving this whole shift to Google," Gibson said. "It's so specific and so measurable, whereas with other advertising, you can correlate things and see a trend; but you can't guarantee that that person who came to your transaction form looked at the advertising."
Hopkins said marketers need to take several steps with their data in order to integrate efforts and effectively allocate marketing spending.
This includes integrating their off-line and online data for improved targeting through all channels, such as using offline customer data to "target real-time, online marketing activities," she said. "They will also need to improve their measurement of campaign performance through sophisticated response analysis, such as tracking purchases across multiple marketing campaigns. Finally, they will need to implement more sophisticated tools and strategies to optimize contact strategy, like scoring customers based on attitudes and behaviors, and using contact optimization solutions to allocate marketing investments."
Gibson said he is using analysis to tweak his search efforts at National Semiconductor.
"We're doing a lot more of folding the learnings back into the original marketing materials and content on the Web site so they organically show up appropriately in search results." He said, for example, someone using the search term "low noise low quiescent voltage regulator" might be more inclined to make a purchase than someone using the more general "voltage regulator" search term. If that is the case, Gibson said, "you go back to your original documentation," such as product specs on the Web site and edit that.
The upside of channel proliferation is the ability for b2b marketers to stay connected to customers through the buying cycle.
"Marketing tactics such as banner ads, paid search, email and Web site optimization offer significant opportunities for marketers to increase visibility into campaign performance and target customers when they are closer to the purchasing decision," Hopkins said.
Measured response to tech
One database executive cautioned against getting swept away by advanced database technologies.
"The challenge for database marketing is you can't get caught up in the technology and look at the technology as the be-all and end-all of your marketing plan," said Roger Marcus, senior analytic consultant at data giant Acxiom Corp.
"There's lots of business intelligence products on the market that can aid the analytics, [but] the tool doesn't make the decision for you," he said. "You need to have knowledge and business intelligence behind it to tell the machine what decision to make under what scenario; and it often needs to be done in real time."
"You can go through all the gyrations and analytics you want," Marcus added. "If it doesn't get leveraged in the marketing message, it's just going to waste."