Crain Research Insights

June 2012

Inbound Real-time Marketing Solutions:

The Right Message at the Right Time

TABLE OF CONTENTS

1. The Opportunity in Real-Time Inbound Marketing 2. The State of The Art

3. The Landscape for Real-time Inbound Marketing 4. The Growing Value of Real-time Inbound Marketing 5. Marketing in a Multi-Channel Environment

6. The Solution: Key Drivers to Real-time Inbound Marketing 7. Future Outlook

8. Appendix 4 Methodology 4 List of contributors

4 About Crain Communications Inc.

NOTES & RESOURCES

Advertising Age and BtoB conducted an extensive online survey in March 2012 of 453

marketers about their views on real-time inbound marketing and how they can improve their efforts in this growing area. This white paper presents the findings, as well as suggestions for the future. See the Appendix for further details on the methodology.

THE OPPORTUNITY IN REAL-TIME INBOUND MARKETING

For years companies were conditioned to deploying traditional marketing vehicles such as telemarketing, advertising and promotion. Such channels served marketers well and made for relatively easy consumer targeting. But the dramatic and ongoing changes in consumer behavior have rendered traditional marketing less valuable. Ad buys, promos and road shows, which are all forms of so-called “outbound marketing,” still play a significant role in marketing communications. Yet their margins are getting thinner.

With traditional marketing on the wane, a new marketing platform is fast emerging: real-time inbound marketing. Real-time inbound marketing is defined as targeting customers during marketing communications when the customer reaches out to the enterprise —whether through call center or clicking on a display advertisement on a website, and the enterprise responds with presenting a perfectly timed and perfectly appropriate offer. The foundation of that response is the decisioning process— the robust data mining, heuristics, and rule-based algorithms that suggest the ideal solution discussion based on creating the highest value to the customer. As consumers engage the call center or “pull” content from the Web, marketers need to have the decisioning protocols at the ready, depending on which channel, stage, and value configuration that the prospect is engaged in the customer journey.

The use of underlying technologies is the key for marketers who are eager to capitalize on real-time inbound marketing and enhance their ability to locate new customers. Use of all data about prospects and customers, including current interaction and historical data, along with self-learning algorithms and rules, enable real-time delivery of the right message at the right time. The essential opportunity in real-time inbound marketing is the application of real-time decisioning. In fact, this decisioning is the foundation of delivering exceptional value to the customer.

In this white paper we will explore the growth of real-time inbound marketing, the underlying reasons that are driving this type of marketing, and the key technologies needed to produce and a sustain a successful inbound marketing program.

THE STATE OF THE ART

There are three interconnected trends that have pushed real-time inbound marketing to the core of marketing communications. The first trend is the rise of digital marketing and online clutter; the second trend is the decline in outbound marketing techniques; and the third trend is the growing pressure on marketers to achieve better ROI. But the new equation has made it tougher for marketers to cultivate new prospects and grow new revenue. Here’s why: The ongoing rise in digital marketing channels and the decline in outbound marketing tools have conspired to create a fragmented marketplace, where companies face a growing amount of disintermediation between marketing their messages and reaching the right prospects at the right time. What’s more, the challenge marketers now face in

locating the right customers is compounded by sharper calls from the c-suite for more accountability, while, at the same time, budgets are being reduced. The sweet spot in the new equation is creating an effective inbound marketing strategy. Real-time inbound marketing solutions refer to those digital optimized technologies used in an inbound setting that anticipate a customers’ needs (i.e., decisioning) and proactively offers (i.e., delivery) the appropriate solution or content. Here is a typical scenario. A customer engages a financial call center to explore a mortgage payment acceleration. In real time, the technology offers decisioning based on the context of the current conversation. The technology examines “ Why is the customer calling?” The real-time inbound technology then suggests, using rule-based algorithms, perhaps a secondary product –such as a home equity loan. Decisioning --plus delivery.

Today’s Marketing Setting—What’s the Sweet Spot?

Inbound Marketing More Effective by Wide Margin

As the Web continues to upend traditional marketing strategies, a growing number of marketers are starting to recognize the value of inbound marketing techniques. According to the survey, 59% of the respondents reported that they viewed inbound marketing more effective than outbound marketing, compared with 39% of the

Rise of Digital Marketing/ Increase Clutter Decline of Outbound Marketing/Channel Fragmentation Budget Constraints/ Culture of Metrics

?

respondents who reported that outbound marketing was a more effective marketing vehicle in driving sales. Interesting the preference gap (59% vs. 39%) in favor of inbound marketing far outweighs outbound marketing.

Inbound marketing is the new conduit to sales

Question: Please rate the effectiveness of inbound marketing vs. outbound

marketing to sell to your company’s customers. Rate on a scale of 1 to 5 where 1 is Not Very Effective and 5 is Very Effective.

N=453

Source: Advertising Age/BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

THE LANDSCAPE FOR REAL-TIME INBOUND MARKETING

As digital marketing moves closer to the core of marketing, companies are starting to appreciate the need for online tools that can specifically cater to whichever channel the customer may be engaging the brand.

The growing recognition of real-time inbound marketing coincides with the

explosion in digital marketing channels, ranging from conventional email marketing to social marketing via Facebook, Tumblr and Twitter. A majority of marketers (63%) reported that the growing use of digital channels (i.e. email, search, display advertising, social media) is fueling the interest in inbound marketing that uses real-time customer solutions, the survey said.

25% 50% 75%

Effectiveness of Outbound vs. Inbound Marketing

Outbound Marketing Effectiveness Inbound Marketing Effectiveness 39% 59%

Digital Channels Driving Real-time Inbound Marketing

Question: Please rate to what extent digital channels (e.g. email, search, display, advertising, social media, etc.) are contributing to your interest in inbound marketing that uses real-time customer solutions. Rate on a scale of 1 to 5 where 1 is Low and 5 is High. N/A indicates Not Applicable.

N=453

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

According to the survey, 37% the respondents reported that they have not integrated real-time marketing technologies with their sales and marketing units. While this finding at first analysis appears to be indicating a nascent market, it is important to examine the market context for this emerging technology. Interestingly, 22% reported at least moderate integration of real-time inbound solutions into the sales-and-marketing mix. This combined with the research findings that inbound marketing is almost twice as effective as outbound marketing (59% vs. 39%) suggests that the upside potential on the adoption curve for real-time inbound solutions is indeed very high. It is not uncommon for an emerging technology to score moderate to low on the adoption curve. However, when examining the stimuli to the technology we find the true potential. These stimuli manifest the customer pain –as is the case with real-time inbound marketing.

Extent Digital Channel Driving Use

Real-Time Inbound Marketing Solutions

63%

25% 50% 75% Percent shown for 4 or greater

Adoption of Real-time Inbound Marketing

Question: Please select which stage your company is at in reference to using Real-Time Inbound Marketing technology to improve your sales and marketing effectiveness or initiatives.

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

THE GROWING VALUE OF REAL-TIME INBOUND MARKETING

More than a third of the respondents reported the effectiveness of outbound

marketing helps to drive or influence their consideration of supplementing outbound marketing with real-time inbound marketing solutions.

Outbound marketing tools may have lost their luster, but they’re still part of the typical marketing arsenal. The opportunity for marketers is to take depleted marketing vehicles, such as telemarketing and advertising, and harness them for customers and prospects that create their own purchasing cycles online.

Stage One: No integration. We do not use Real-Time Inbound Marketing technology in our organization’s sales and marketing.

Stage Two: Somewhat integrated (i.e. 2 or more channels integrated) Stage Three: Moderately integrated (i.e. 3 or more channels integrated) Stage Four: Very integrated (i.e. 4 or more channels integrated) Stage Five: Fully integrated. We fully integrate Real-Time Inbound Marketing technology

into our sales and marketing initiatives. (i.e. all channels integrated) 25%

50%

Stage of Adoption: Real Time Inbound Marketing Solutions

37%

40%

16%

Weakening Outbound Driving Real-time Inbound Marketing

Question: Within your marketing department, how does the effectiveness of outbound marketing drive or influence your consideration of supplementing outbound with inbound marketing through Real-Time Inbound Marketing technology? Please rate on a scale of 1 to 5 where 1 is “No influence” and 5 is “Very significant influence.”

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

Appeal of Value Proposition

With customers increasingly in control of the purchasing process, the onus is growing on marketers to deploy real-time inbound marketing technologies. The software can help put their brands in front of the ideal customer in the most effective fashion and communicate to customers and prospects on their own terms. Indeed, the value of proposition of real time inbound marketing is starting to resonate in the marketplace.

In considering a real-time inbound marketing technology, developing a universal message and multi-channel deployment to the customer life cycle touch points were the two most important elements to achieving sales and marketing goals. However, respondents cited several marketing areas in which real-time inbound marketing technologies can play a positive role, such as the ability to integrate with CRM (58%), provide a continuous self-learning feedback loop (54%) and align the sales opportunity with the real-time voice of the customer (51%).

Effectiveness of Outbound Marketing on

Increasing Consideration of Inbound Marketing

25% 50% 75%

34%

Value Proposition of Real Time Inbound Marketing

Resonates in Marketplace

Question: In considering a Real-Time Inbound Marketing technology, please choose how important the following element is to achieve your sales and marketing goals. Please rate on a scale of 1 to 5 where 1 is “Not at all important” and 5 is “Very important.”

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

MULTI-CHANNEL ENVIRONMENT

Selling in a multi-channel environment presents its own challenges, of course. Let’s take a closer look at the major challenges facing marketers in the next 12 months and how real-time inbound marketing technology can be a major remedy to those challenges.

According to the survey, 54% of the respondents reported that engaging the customer was the biggest challenge, followed by competing for the customer’s attention (52%) and grappling with all of the emerging digital platforms (38%). A fragmented purchasing process across selling channels and more influences affecting the purchasing decision were also cited by a significant number of respondents. Universal Message/ Communication Database Multichannel Deployment to Customer Life Cycle Touch points Ability to Integrate with CRM Continuous Self-Learning Feedback Loop Real-time Voice of the Customer

Appeal of Value Proposition

25% 50% 75% 60% 58% 58% 54% 51% Percent shown for 4 or greater

Competing for Customer Attention

Question: In the next 12 months, what are the broad challenges that you face as a marketer in a multi-channel environment? Please check three most important. N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

Channel Proliferation Stymies Marketing Message

The top three channels that customers are engaging with prior to making a purchase are the Web (71%), one-to-one selling and email, both at 62%. The multitude of channels — all competing for the user’s time and attention — reduces the ability among marketers to get their messages to the right prospects. At the same time, marketers need to deploy more and more of their messages through digital platforms. This presents an opportunity for inbound marketing through call centers, online channels and social media. Rather than cancelling out certain channels consumers are using myriad channels before making purchases, which adds to the pressure among marketers to adopt real-time inbound marketing solutions and supporting technologies.

Engaging the customer Competition for the customer’s attention (i.e. increased noise) Emerging digital platforms (e.g. mobile, social media, etc.) Fragmented purchase process across selling channels More influences affecting the decision More complex products to sell Generation Y (18-35) abandoning the traditional Channels Increased emphasis on technical specifications

Challenges in Multi-Channel Setting

25% 50% 75% 54% 52% 38% 26% 24% 22% 21% 11%

Channels Involved in Purchasing

Question: Typically, which of the following channels do your customers engage with before making a purchase? (Check all that apply)

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

THE SOLUTION: KEY DRIVERS TO REAL-TIME INBOUND MARKETING

Several of the key drivers of real-time inbound marketing technology play into many of the challenges faced by marketers as they transition to a digital age. The top two priorities are the need to create the right message at the right time in the customer life cycle (46%) and operating with fewer resources (35%). But there are other compelling reasons driving marketers’ involvement in evaluating real-time marketing technology, including the need to achieve faster and more relevant touch points in the marketplace (33%), the difficulty tracking users that have provided their contact information in multiple channels (29%), and the erosion in outbound marketing (22%). Web One-to-one Selling Email Social Media Events Call Center Mobile

Channels Used Before Purchase

25% 50% 75% 51% 71% 62% 62% 36% 33% 29% 21%

Key Drivers to Real-time Inbound Marketing Technology

Question: Within your marketing department, which of the following reasons are driving your involvement or would you consider when evaluating Real-Time Inbound Marketing technology? Please select up to three.

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

Real-time inbound marketing technology as the foundation for

‘right-message, right time’ mindset

Let’s summarize some of the major elements of this research.

Real-time inbound marketing technology is designed to help marketers to align their messages with customers and prospects as they wend their way through the sales cycle. But the benefits of real-time inbound marketing technology go beyond getting closer to customers and enhancing lead generation.

The technology affords marketers with a “right-message, right time” mindset that is so crucial in adapting to how consumers purchase products and services online. Indeed, “right message, right time” may now be the baseline for marketers who need to monetize their digital marketing channels.

Need to create the right message atthe right time in the customer life cycle Reduced resources (i.e. budget and staff) Need to achieve faster and more relevant touch points in the market Difficulty tracking multi-channel contact history Limitations in justifying marketing budgets Weakening effectiveness of outbound marketing Inability of our current solution to provide meaningful analytics Increased difficulty to make offer and timing of offer specific to the customer Interest in managing closed-loop marketing costs Inability to customize offer based on higher order business rules (e.g. likelihood of acceptance, spend amount, loyalty value, contact history, etc.)

Key Drivers

According to the survey, 58% of the respondents reported that “the right message and the right time” is the best tag line to explain real-time inbound marketing technology while only 17% reported that “the power of context” is the best tag line to communicate its benefits and 9% reported that “true message: every where, every time” would be a suitable tag line.

The Right Message at the Right Time—58%

Question: In thinking about a tag line to explain Real-Time Inbound Marketing technology, which description below fits best? (Select Only One)

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

The Differentiating Factor in Effective Inbound Marketing

From the ability to integrate the program with existing CRM systems to managing communications databases, real-time inbound helps marketers differentiate their products, services and messaging from the competitors.

The technology understands that consumers no longer advance from Point A to Point B when they’re in purchasing mode, but, demand different types of content (e.g. advertising, email) as they travel along the path to purchase. The technology is able to harness of all of the emerging digital channels, such as search and social marketing, and communicate a universal message.

Tag Line

4%

9%

12%

17%

58%

■ True message: every where, every time

■ 100% Real-time offer— first time, every time

■ The power of context

■The right message at the right time

Real-time inbound marketing software also helps to re-energize outbound marketing channels so they don’t deteriorate. Perhaps most important, the technology enables marketers to get in front of their customers and respond more proactively to their interests, regardless of the channel they’re using.

Real-time Inbound Marketing Solutions Value Proposition

N=341

Source: Advertising Age/ BtoB magazine: Inbound Real-time Marketing Solutions, June 2012

FUTURE OUTLOOK

Real-time inbound marketing technology is very likely a game changer. As the conversational Web transforms into the social Web, the technology is helping marketers to transition their marketing efforts to engage with customers and prospects on whichever marketing channel they may be accessing, with the right message at the right time. Similar to email, search, and social media, real-time inbound marketing technology is playing an integral role in the emerging online advertising infrastructure. For marketers looking to the future, real-time inbound marketing technology will enjoy a valued position in their portfolio.

Differentiators

Table stakes Right

message at the right time

Universal Message Communication Database Real-time Voice of Customer

Multi-Channel Contact History Ability to Integrate with CRM Variable Start-up Costs

APPENDIX

Methodology

“Inbound Real-time Marketing Solutions: The Right Message at the Right Time,” by

Advertising Age and BtoB, is based on an online survey conducted in March 2012 of

453 marketers.

Among industry sectors, financial services (including accounting, banking and insurance) represented by 24% of all respondents, with technology companies (20%), retail/retail distribution (9%) and publishing/media (9%) also well represented. Nearly a third of the respondents (27%) were senior level marketers, including directors and managers of marketing, product development and/or communications, while 13% of the respondents were CEOs, president, owners and partners of their companies. The titles CMO, EVP, SVP were also represented.

CONTRIBUTORS

4 John DiStefano, Research Director, BtoB: Magazine and BtoBonline.com [email protected]

4 Matthew Schwartz, Contributing Writer, BtoB: Magazine and BtoBonline.com [email protected]

4 Wes Moore, VP of Solutions Marketing, Aprimo, [email protected]

ABOUT CRAIN COMMUNICATIONS INC.

Crain Communications inc. was founded in 1916 in Louisville, Kentucky by G.D. Crain, Jr. An industry leader, Crain Communications Inc. Is one of the largest privately owned business media companies with 30 leading business, trade and consumer brands in North America, Europe and Asia. The company’s 850 employees in 11 locations produce exciting publications, digital products, events, marketing services, custom publishing, lead generation and research and data products to help its millions of readers and clients succeed.

4 Bob Felsenthal, Publisher BtoB Magazine and BtoBonline.com — 711 Third Avenue, 3rd Floor, New York, NY 10017 | 212-210-0100 | www.btobonline.com |

[email protected]

4 John Obrecht, Editor, BtoB Magazine and BtoBonline.com — 150 N. Michigan Ave., Chicago, IL 60601 | 312-649-5200 | www.btobonline.com | [email protected]

ABOUT APRIMO

Aprimo supports a real-time environment with the latest inbound marketing technology. The Aprimo Real-Time Interaction Manager helps marketers deliver relevant, timely communications in direct response to current customer engagement.

Aprimo is a leading provider of software and services that advance the productivity and performance of marketing organizations. We enable marketers to engage, lead and perform by empowering conversations on new engagement channels, enhancing internal collaboration, and improving marketing performance and accountability. Aprimo’s modular and on demand Integrated Marketing Management (IMM) solutions provide a global, integrated marketing platform that can be broadly adopted across an organization, letting companies balance creativity with a data-driven approach and simplify the complexity of a rapidly changing marketing environment. Hundreds of thousands of marketers trust Aprimo to revolutionize their marketing, including over one third of Fortune 100 companies and nearly one quarter of Global 100 companies.

Aprimo, a Teradata company, is headquartered in Indianapolis, Indiana, with offices worldwide

Corporate headquarters—900 East 96th Street, Suite 400, Indianapolis, IN 46240 | 317-814-6465 | www.aprimo.com | [email protected]

Teradata Corp. (NYSE: TDC) | 10000 Innovation Drive, Dayton, OH 45342 | 866-548-8348 U.S./Canada | 937 242-4030 international | www.teradata.com