Sunday, December 21, 2008

Interesting Times in The Demand Generation Space

I spent a bit of time this weekend reading (okay, more like skimming, I admit) a report on our recent SAS-70 audit. I would be lying to call it an interesting read; detailed descriptions of our process controls, policies, and operations as a software company. But, it did get me thinking about the ongoing evolution of the Demand Generation space.

It's an interesting space, and it has been evolving very rapidly. When we started Eloqua back at the end of 1999, Google was still 10 months away from launching adwords, blogs only existed in primitive form as frequently updated web pages, and most B2B websites were barely more than brochure-ware.

Now, 9 years later, finishing a SAS-70 audit is one of those moments that makes one take a moment to reflect on the space, where it came from, and where it's going (I guess it's a bit like that first grey hair; a sign of age and wisdom, they say, but also a moment to reflect on times past). After a few years in which us early Demand Generation vendors stumbled around unsure of our own identities, the space has taken on a somewhat clear identity (*nowhere near as clear as the identity of spaces like CRM, but Demand Gen is a lot newer of a space than CRM).

Demand Generation essentially entails, at its core, the use of web analytics to understand prospect behaviour and intent (what we call Digital Body Language). Based on that understanding, marketers then:

  • Personalize the targeting, timing, and content of messages to prospects based on their interest area and interest level

  • Determine which leads are ready for sales through lead scoring and lead routing, while nurturing the leads that are not

  • Analyze the success of their campaigns based on how they facilitate prospects' buying processes

  • Continue to grow their understanding of each prospect's Digital Body Language through management and enhancing of their marketing data

So, that leads to a fairly defined set of functionality; email, web analytics, search tracking, landing pages, form capture, lead scoring, marketing automation, lead routing, CRM integration, basic data management, and analytics. As we close out 2008, that's where the core capabilities are in the space.

As we've had the good fortune to work with a wide variety of clients over the years, the directions in which they are hoping to see the space evolve are not always identical, and the SAS-70 audit process made that point quite clear. This is an audit that larger organizations (especially public companies) are seeking, whereas smaller organizations often do not have the same requirements.

The next few years will show an interesting evolution in the Demand Generation space as this is just one aspect of its continuing evolution. Here's what we're seeing if I use a way-too-broad brush to show the trends:

Larger organizations: as they shift their marketing efforts more towards demand generation and inbound marketing and away from outbound marketing, they are looking for ways to manage 100s of marketers, 1000s of campaigns, and 10s of 1000s of marketing assets around the world. Campaign planning, calendaring, and approvals are of interest. Similarly, the need to communicate with millions of contacts and score leads across multiple geographies and product lines makes data management a key area of focus for them.

Smaller organizations: often more nimble and innovative in their approach, and more aggressively adopting social media tools for demand generation, such as search engine optimization, blogs, Twitter, etc. This drives an increased need for cross-media integration, embedding of RSS content, and social media awareness.

So, we're at an interesting cross-roads as an industry, because although I have bucketed each of these needs by size of company, both groups benefit from each other's investment. It's an excellent benefit of the SaaS model. Even things like the work that was done in preparation for our SAS-70 audit, although not required by the smaller organizations we work with, will benefit them in terms of process management and organization, in the same way that the investments we have been making over the past while in simplicity and usability are also benefiting our larger clients.

It will be interesting to see how the Demand Generation industry evolves over the next 5 - 10 years. Will it evolve into very different and distinct solutions for small organizations and large, as we see in the difference between accounting and ERP software? Or will small and large organizations use shared aspects of a common platform as is the model with SaaS CRM?

Looking forward to the next few years, and I'm very interested in your comments.
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
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