Marketing Automation: Hot or Not?

While analyzing record second quarter earnings for Salesforce.com a few weeks ago, CEO Marc Benioff gave partial credit for a 30% revenue bump to the company’s addition of ExactTarget — and specifically its Pardot marketing automation arm — to its Marketing Cloud. Salesforce had just acquired the company in June. Could it really have made a difference that quickly? Or was Benioff justifying the whopping $2.5 billion price tag to shareholders? It nagged at me to get on the phone with people who know better (than me, that is) to answer the overwhelming question: What’s the magic behind marketing automation and why are companies like Salesforce and Oracle shelling out a billion bucks and more to add it to their arsenals?

I recently hosted a webcast featuring a company called Demandbase. Its approach is to use data to help B2B players sell the most stuff to the most appropriate prospects while breezing by the tire-kickers. That sounded a lot like the promise of marketing automation to me, so I asked Demandbase CMO Greg Ott if marketing automation was living up to its notices.

“Companies are spending a lot of money on marketing, and marketers are spending a lot on technology, but what kind of technology you buy depends on your type of business,” he said. “The fact is that most marketing automation is used by B2B companies in concert with their email marketing programs. ExactTarget was first and foremost an email marketing company when it bought Pardot, and that turned out to be one of ExactTarget’s most astute business moves. They paid about a hundred million for it and it accounted for about a billion dollars worth of the Salesforce deal.”

Ott’s ultimate point is that marketing automation is but one layer in the marketing tech stack. He ticks off several significant new methods being used by marketers that are untouched by marketing automation: content marketing, customer engagement enhancement, and testing and optimization.