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Wednesday, 17 October 2012

Microsoft Buys Marketing Automation Vendor MarketingPilot: Start of Something Big?

Posted on 16:51 by Unknown

Microsoft today announced the acquisition of marketing management system vendor MarketingPilot, which will become part of its Dynamics CRM group. Financial terms were not disclosed.

MarketingPilot is best described as integrated marketing management for mid-tier companies. It has a pretty low profile in the B2B marketing automation world, partly because it serves a mix of B2C and B2B clients but mostly because it started as a marketing operations management system. It only recently added standard B2B marketing automation features including a customer-level marketing database, outbound email, landing pages, lead scoring, Web behavior tracking, reporting, and Salesforce.com integration. Still, with more than 500 clients, including many ad agencies, MarketingPilot is a significant player in the larger marketing software universe. (I profiled them in a February 2011 post.)

The acquisition is significant on several levels. Most obviously, it’s another example of an adjacent vendor finding the marketing automation attractive: following Pardot’s acquisition last week by email vendor ExactTarget, and earlier acquisitions of Leadformix by CallidusCloud (sales effectiveness), Alterian by SDL (Web content), SmartFocus by Emailvision (email), and Demandforce by Intuit (small business accounting). More specifically, it’s a major acquisition by a CRM vendor, helping to fulfill everyone's favorite prophecy that marketing automation and CRM will eventually merge. I still doubt Salesforce.com will get the message any time soon, but maybe they'll listen a little more closely.

But the real significance may be greater. It’s no coincidence that MarketingPilot, like three of the five other deals I just listed, involves a B2C rather than B2B marketing automation product. The B2C products are generally built on a more powerful foundation than B2B systems, in terms of having a more flexible database structure, deeper marketing operations support, and more powerful analytics. B2B systems strengths are concentrated in execution capabilities like email design, landing pages, multi-step campaigns, and social messaging.

The stronger foundations of the B2C systems make them easier to extend throughout the marketing department, which would benefit from tightly integrated collaboration, planning, analytics, and database management. There’s less value to sharing B2B strengths in execution, since each group builds and deploys programs independently. (In other words: acquisition and nurture campaigns are built by separate groups that create their own emails and landing pages, but do want common planning systems, customer data, and analytics.)

This foundation technology matters because it’s pretty clear that the future of marketing systems is to have a shared platform – think Salesforce.com AppExchange, or the similar marts created by Eloqua, Marketo, HubSpot, and indeed Microsoft Dynamics itself – supporting a variety of plug-and-play applications. B2B marketing automation systems are built for lead nurturing and provide a foundation adequate for that purpose. But marketing departments also need acquisition (or, if you prefer, inbound marketing) and customer support (or whatever comes after a lead is handed off to sales). A B2C platform can support those other functions. Even a good B2B platform might not.

I’m not saying that a B2C platform could extend all the way to running CRM. This might be possible but so far it seems that marketing and sales still need separate physical databases for adequate performance. But I can imagine a marketing platform that provides some services to a CRM system, such as predictive modeling, data enhancement, and reporting. Like users throughout marketing,  users in both sales and marketing would benefit from sharing them. So, at least for now, that is the degree of marketing automation / CRM consolidation I expect.

Fulfilling even this somewhat limited vision will take a lot of resources. B2B marketing automation vendors will need to rearchitect their systems on the more sophisticated platform. They’ll also need to significantly enhance their execution layer to take advantage of the platform’s greater power. I discussed some of this in last month’s post on ways to dominate the marketing automation industry: my preferred strategy, of radically easier execution, specifically depends on better analytics to make the systems automatically do more of the work in campaign design, execution, and optimization. That Microsoft of all companies will create a revolutionary advance in simplicity is a bit hard to imagine (snark alert!), but they do have the resources.  Even the potential for that result may encourage other deep-pocketed vendors to try the same thing. That could be the greatest significance of all.



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