Unica and Alterian Lead Database Marketers to the Digital Promised Land

Here are some quick thoughts on two items: Unica’s acquisition of paid search bid management system MakeMeTop (now mercifully renamed Unica Search) and Alterian’s recently-released and excellent annual marketing survey.

The connection is that these both support my feeling that many members of the old-line database marketing community have failed to adapt to the new world of digital marketing. I’ve been talking about this a lot with consulting clients but don’t think I’ve written about it at length in this blog.

The gist of the argument is that traditional direct marketing agencies, marketing automation software vendors and marketing services providers have mostly remained focused on outbound campaigns. They did move from direct mail to email, but those are pretty much the same thing. The really cool digital marketing stuff, including Web site development, Web advertising and most recently social media, has been executed by a different set of digital marketing agencies, specialist software vendors, and, ironically, media buyers at traditional ad agencies.

The fundamental reason is that the main skill of database marketers is building a customer database, while the core of digital marketing is responding to the behaviors of anonymous individuals. Of course I’m oversimplifying – much digital marketing does deal with people who have identified themselves – but there’s still a fundamental shift from targeting outbound campaigns at known individuals to managing interactions with anyone willing to engage.

Both Unica and Alterian have been exceptionally forward-thinking among marketing automation vendors in preparing for this transition. Unica’s latest acquisition is particularly interesting because search bid management has almost nothing to do with reaching known individuals. (I say “almost” only because Unica seems to intend to link search click-throughs to a traditional marketing database.) It follows Unica’s acquisition last month of email deliverability expert Pivotal Veracity, which I found less impressive because email is part of the old database marketing world.

Alterian has already made big bets in social media and Web content management, which are also well beyond the scope of traditional database marketing. Its survey provides strong support for the notion that marketers are “moving from a campaign-centric direct marketing model towards multi-channel customer engagement”: in fact, 51% said they were expending a fair or significant amount of effort on exactly that. Related factoids include:

- 61% of marketers do not integrate Web analytics with other customer data.

- 66% of respondents (which included quite a few agencies and marketing services providers, in addition to marketers) plan to invest in social media marketing in 2010

- 36% of respondents plan to invest in social media monitoring in 2010 (a discrepancy that Alterian finds “worrying”, although I’ve previously seen similar data. My take is that many marketers see social media as a way to generate business directly, and look at monitoring as a secondary aim.)

- 38% said coordinating digital and direct marketing agencies was somewhat or very difficult. No surprise there, although I don't necessarily agree with Alterian's contention that this will lead to a unification between the two sets of agencies.

- 35% of marketers expect to move more than 20% of their direct marketing budget into digital channels next year.

In short, the Alterian survey shows that marketers are eagerly moving from classic direct marketing to digital, interactive and social marketing, but still lack the skills and resources to do it effectively. Industry vendors who support them will thrive. Those who don't will quickly be left behind.