Marketing automation is making inroads at many b2b companies, with 46% currently using marketing technologies in some form and another 20% evaluating platforms to adopt, according to a new study by BtoB.
“We are seeing the marketing equivalent of the transition from horseless carriage to modern automobile, and the ramifications are equally profound in the marketing space,” said John DiStefano, BtoB research director.
Among those marketers currently using marketing technology, 62% said they are “strong” or “full” adopters, compared with 40% who said they were as committed in 2012. For 2014, this figure is projected to jump to 81%, according to BtoB's “Marketing Automation: Best Practices for the Management of B2B Digital Marketing Campaigns.” The study is based on an online survey conducted in April that drew 204 marketer respondents.
“Marketing automation is on the threshold of a quantum leap, moving from merely a marketing productivity tool to a means of real marketing innovation,” DiStefano said.
Marketers are clear about the tasks marketing automation can address. Seventy-eight percent of survey respondents cited online lead generation as a major goal when implementing a marketing automation solution, followed by tracking website visitors (77%), managing marketing campaigns and tracking lead activity (70% each), lead scoring and qualification (69%) and automated lead nurturing (62%).
The top benefit marketers expect from a marketing automation solution is improved conversion rates, followed by increased email click-throughs and Web traffic, better email opens, and reductions in email and website bounces.
Despite these expectations, only 40% of marketers using marketing automation platforms attempt to measure the ROI of their investment, according to the study. Among these, 33% are measuring the cost per customer acquisition as well as marketing-qualified leads generated through lead nurturing. Other metrics, such as opens, clicks and unsubscribes, were also cited as important.
“Today, measurement has become a significant factor in seeing what works,” said Raghu Raghavan, founder and CEO of marketing automation platform Act-On Software. “Marketers demand to know the things they did that helped cause anonymous visitors to a website to become customers. Did they download a white paper, click on a webinar, consent to come to a trade show? These are the sequences marketers are expecting to see.”
Beyond measuring marketing activities, marketers see automation as a way to assess their impact on bottom-line business results. Forty-five percent of respondents said they are measuring such factors as revenue generated from marketing automation as well as close rates on marketing-sourced leads.
“We have a software customer whose clients fill out a form to try the product for free,” said Shashi Upadhyay, founder and CEO of predictive analytics company Lattice Engines. “They're signing up 1 million to 2 million users per month, but only 1% to 2% convert to buying customers.
“So many companies are like this, focused on the top of the funnel but with very small conversion rates and no bandwidth to address what's in between. That's where marketing automation can figure out customer segmentation to identify where marketing can put in a full effort toward conversions.”
When asked which obstacles prevent them from using marketing automation more effectively, 33% of respondents to BtoB's survey cited budget constraints.
Still, marketers are finding that the payoff can be worth the expense.
“We're a $6 billion company, but our marketing spend is closer to a company a quarter of our size,” said Corey Livingston, senior director-marketing operations at Level 3 Communications, a global telecommunications and Internet service provider. “We're scrappy. We have to make good choices, and there aren't many opportunities to fail.
“But our ability to create with a closed-loop system and have visibility into our marketing efforts [through marketing automation] have been unprecedented. When we look at the velocity in the funnel, we really are making better decisions.”
Other challenges that tend to restrict the use of marketing automation include poor integration with sales and marketing initiatives (cited by 32% of survey respondents), inadequate data collection infrastructure (30%) and the complexity of marketing automation software.
Even as budgets remain tight, 42% of respondents said they plan to seek new sources of funding to support their purchase of marketing automation platforms. Thirty-four percent said they'd try to reallocate money from their digital marketing budgets in order to implement marketing technologies, 31% would shift funds from email or direct marketing, 18% would divert budget allocations from events and 16% would draw upon money earmarked for print advertising.
Despite general budget concerns, platform price is not a major consideration for marketers, according to the study. When evaluating marketing automation vendors and their solutions, marketers place the highest value on dashboards and clearly understandable reports.
Also well ahead of price considerations in assessing platforms are ease of use; technical support; integration with CRM and social marketing platforms; an ability to scale the platform as the company's needs grow; and customization.
Of the 204 respondents to BtoB's marketing automation survey, 53% were from companies with less than $100 million in annual revenue. Technology companies predominated, at 45% of all respondents.