The online environment should, in theory, make for perfect campaign management. As well as being an inexpensive medium, it also yields voluminous quantities of information for the automatic analysis of e-mail delivery and opening rates, click-through rates, and even conversion rates for calculating returns directly and in real time. Little wonder then that, according to Forrester Research, the marketing automation applications market will become the fastest-growing CRM segment by 2007, driving revenues of as much as $928m.
When companies are conscious of costs, as they usually are, marketing comes under threat and both companies and agencies need to justify their expenditure and demonstrate that they have a tight hold on project management. Mat Atkinson, chief executive of Mtivity, a technology company that tracks marketing projects and budgets, says that this has not always been easy to do: "Traditionally, the fragmented nature of the marketing industry and the complexity of the workflow processes involved mean that automation tools have never been widely adopted," he explains. "In addition, many businesses have regarded marketing as a function that doesn't justify expensive technology investment."
Now, both large and small companies are taking advantage of the tools on offer. British Airways, for example, has used campaign management tools from Teradata, a data warehousing company, to enhance marketing activities and communicate with customers during recent disputes. In July 2003, during industrial action by check-in staff at Heathrow Airport, all e-mailable UK customers received three separate communications within four days of the action. The technology meant that customers were easily segmented by route, date and value so they could be contacted with an appropriate apology and/or reassurance. In total, 800,000 e-mails were sent with a relevant and targeted message, and 25,000 telephone calls were made to customers directly affected by the disruption.
These large campaigns are impressive for their complexity, speed of execution and scale. But small companies also stand to gain from similar communications sophistication. Brookstone, a US online retailer, used to be swamped by the demands of online campaign management. "Delivering e-mail campaigns to hundreds of thousands of customers used to require marketers to make a choice between staying at work late to send e-mail over internal servers with the help of IT staff or handing over direct control of the campaign delivery to an outside agency," explains Donna Edgar, marketing promotions manager for Brookstone. Using an online service from VerticalResponse, a direct marketing company, Edgar reports that Brookstone can affordably create and send HTML e-mail campaigns over the internet in minutes.
Another VerticalResponse customer, Personal Creations, has also found it is able to respond far more quickly to sales trends by distributing e-mails at very short notice. "We've been able to segment our mailing list better and target our e-mail messages based on buying preferences and past response," says Geoffrey Smith, president of e-commerce and new business development for Personal Creations. "Since using VerticalResponse, we've reduced our e-mail marketing costs by more than 50 per cent and increased e-mail sales by about 70 per cent per year."
However, for all the success of online campaign management tools, questions are being asked as to their efficacy. In particular, spam is a major issue. According to Jupiter Research, 71 per cent of companies running e-mail marketing campaigns say that spam filtering by ISPs has reduced the effectiveness of their activities, notably by preventing e-mails from reaching their targets. In addition, companies must comply with ongoing international developments in anti-spam legislation if they are to maintain their reputations.
Tools providers contest the scale of the spam issue. "Although we regard it as inevitable that there will be further anti-spam legislation, this will not have a dramatic effect on direct response campaigns via e-mail marketing, voice broadcast and SMS broadcast," says Colin Clare, European vice-president of sales for EasyLink, a marketing broadcast services company. "Reputable companies will maintain their customer databases and keep them up-to-date. This will allow them to continue their marketing. Additionally, given the move towards unified, sequential and interactive messaging, such organisations will allow customers to receive the right type of message at the right time. Indeed, by forcing organisations to improve their databases, tighter regulation will, we argue, invariably make the customer experience a happier one, thus driving up response."
Another challenge is that for all the sophistication of campaign management tools, they are only as good as the data that is put in, which in the online environment points a finger at the quality of e-mail databases. These are notoriously difficult to keep up-to-date because people change e-mails far more regularly than other points of contact, such as postal addresses or telephone numbers.
Neil Miller, a partner in Accenture's CRM practice, adds that if campaign management tools are only as good as the data, they are also only as good as the processes they are managing. ‘They can be viewed as an execution tool on the back end of a process,' he says.
Mr Clare believes that e-mail campaigns will have to become far more integrated with other media to cut through the direct marketing clutter. "We will begin to see unified messaging platforms, with e-mail, voice and SMS being used in a sequential manner," he says. This will increasingly allow organisations to ensure they don't overburden their customers and potential customers with multiple hits of the same message. "Unified platforms allow messages to be sent sequentially, in varying formats [e-mail, telephone, SMS and so on]. If the message is delivered by one means, then they won't get it in another."
Similarly, Mr Miller adds, using tools to support more frequent campaigns comprised of fewer but more targeted names is key to enhancing returns.