2004 Dec 01
Marketing Management Systems
David M. Raab
DM Review
December 2004 – February 2005

Marketing administration, marketing resource management, enterprise marketing management, marketing operations management: whatever you call it, the notion of specialized software to help run marketing departments is increasingly popular. But, as typically happens with a new software category, the actual functions are unclear to many people. Vendors, of course, push for definitions that mirror the capabilities of their products. But users too are still trying to decide where to draw the boundaries between marketing management and other, overlapping systems.

The final answer will vary for different organizations and most likely continue to evolve over time. But a close look at more than a dozen of the most prominent marketing management products at least gives a picture of what the vendors themselves feel is included. The functions turn out to include five reasonably distinct applications. In rough order of frequency, these include:

– project management. This is probably the most fundamental feature of marketing management systems. The basic goal, after all, is to help marketers do their jobs more effectively, and most of a marketer’s job is driven by projects. Typical capabilities include setting up project teams; defining, assigning and monitoring completion of project tasks; and specifying workflow for reviews and approvals. Most systems also provide collaboration tools such as shared workspaces, document folders, bulletin boards, online conferences, and messaging. Some extend to resource definition, vendor management, time and cost tracking. A few include sophisticated scheduling functions such as task dependencies, critical path analysis, and automatic adjustment for missed deadlines.

This list of features will sound familiar to anyone who has looked at project management and collaboration systems in general. Indeed, there are scores of such products available, mostly focused on workgroups but some with departmental and enterprise scope. Although marketers do have a few specialized needs in these areas, the project management and collaboration components of marketing management systems are very similar to the features of general purpose products.

– content, document and digital asset management. Purists would argue that these categories are quite distinct. In fact, they do usually refer to somewhat different things. Broadly speaking, content management deals with components that may be assembled and reused in different ways, such as pages within Web sites. Document management mostly relates to complete documents, rather than components, and includes specialized workflow applications to process masses of similar documents such as insurance claims forms. Digital asset management encompasses non-text files such as video and graphics images. It is sometimes focused on specialized applications for controlled distribution of marketing content such as brand logos and advertisements.

But all of these applications share basic functions to import, store, share, modify, review, approve, distribute and otherwise control the life cycle of digital materials. True, there are some capabilities that make sense in only some contexts: for example, viewing of thumbnails is mostly relevant to images. Conversely, automated extraction of document meaning can only apply to text. Still, these applications have enough in common that the distinctions between the categories are vanishing as vendors extend their products to cover them all. For simplicity, this article will refer to the whole set as content management.

As with project management and collaboration, there is a huge number of content management systems on the market. The count is literally in the hundreds, although most are aimed at Web site development. Marketers do have several specialized needs that make it somewhat easier to distinguish marketing management products from generic systems. In particular, marketers often must combine wide access to materials–among corporate departments, overseas offices, ad agencies, dealers, field agents, and others–with precise control over who can see each item and what they can do with it. Marketers also sometimes need specialized applications to automatically create different versions of the same basic materials, such as different size advertisements, using rule-based systems to ensure brand design standards are maintained. Marketers have additional needs for sophisticated document review, revisions, version control, approvals, deployment and expiration. But sophisticated users in other areas have basically the same requirements. So these capabilities are not unique to marketing management systems.

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Project management and content management are themselves closely related. Marketing projects nearly always involve creation, review and sharing of multiple documents. In many cases, such as advertising development, the output of the project is itself a piece of “content”. So it’s no surprise that nearly all marketing management systems provide both sets of functions and have them tightly integrated with each other. This tight integration is one of the reasons companies might choose to purchase a specialized marketing management system even though they already have general purpose project and content management systems in place.

Unlike project and content management, the remaining three marketing management applications are found in a minority of marketing management systems. We’ll look at those next month.

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Last month’s column discussed the two most common applications found within marketing management systems: project management and content management. Nearly every product positioning itself as marketing management software provides these capabilities.

But some marketing management systems offer additional functions. These fall into three categories:

– marketing planning. This encompasses the process of setting marketing strategies, defining goals and tactics related to those strategies, specifying revenue and expense budgets, and linking these to specific marketing projects. In large organizations, the planning process may be very clearly, even rigidly defined. It typically involves assembling information about markets, competitors, products, objectives, strategies and tactics in standard formats, and then reviewing and refining these at different levels of the organization. Plans are then converted into detailed budgets and promotion schedules. Smaller organizations do roughly the same thing but are usually less formal about it.

Functionally, marketing planning is a combination of document and database management. The basic information gathering and review follows a document life cycle similar to other kinds of content management, with functions to control distribution, track versions, share comments and gather approvals. But the information itself is often part of a database rather than simple text or spreadsheets. This allows automated checking for consistency between, say, strategic goals and specific promotions or between total budgets and allocations to projects. Marketing planning applications may also extend to recording revenues and actual expenses as these occur, allowing reconciliation with budgets. Some permit tight integration with corporate accounting systems, both to send and receive data. Because marketers often structure their data differently from the corporate accounting system, such integration allows marketers to work in their preferred structure while the marketing management system automatically translates between the marketing and carport charts of accounts.

Only a handful of the marketing management systems provide a full set of planning functions. A somewhat larger group, but still less than half, provide budgeting capabilities without the other planning components.

– execution. Just as marketing planning feeds into the core marketing management applications of project and content management, the core applications themselves feed into execution. The most demanding execution application is campaign management: a true campaign manager, complete with customer database, segmentation and selection tools, and contact history tracking, is so large that it would dwarf the other components of a typical marketing management system. But this sort of execution capability is very rare in marketing management products. What’s a bit more common is campaign planning, which tracks the details of promotion campaigns such as target audiences, start and stop dates, media and components used, budgets, and results. This sort of planning can include campaigns in many different media: broadcast, print, online, events (e.g. trade shows), mail, telephone, and business partners (dealers, distributors, field agents, etc.)

Much of the campaign planning process involves creation and tracking of documents with key information. But, as with marketing planning, the information in these documents in placed in a database for easy access, analysis and reuse. This is what distinguishes the execution component of a marketing management system from the content management features.

In addition, several marketing management systems provide specialized features to support the purchasing process. These maintain databases of vendors, job specifications, and past performance. They also include a workflow component that generates requests for bids, receives vendor proposals, issues purchase orders, and tracks physical materials such as layouts, mechanicals, data files, proofs, and finished goods. They are sometimes extended to track inventory levels, issue alerts when stocks are low, and charge final recipients for materials they consume.

– evaluation. The final component of marketing management is evaluating results of marketing efforts. This requires integration of sales data from order processing and financial systems. But such data is often not adequate to measure the results of marketing efforts, either because specific sales cannot be directly attributed to specific promotions, or because the marketing effort had some other objective such as product awareness, customer satisfaction or lead generation. Thus additional sources are often required. These may draw on internal resources such as a CRM system, or external data vendors like Nielsen or IRI.

Simply gathering such data is rarely enough. Evaluation almost always requires sophisticated business models to identify, or at least convincingly estimate, the relationship between specific marketing efforts and observed results. Precisely two marketing management vendors (Veridiem and Sitaro Group) offer a truly sophisticated version of this analysis, and they are such a distinct breed that they do not also provide the core marketing management functions of project and content management. Building the required business models requires so much customized analytical work that they could be considered more as service firms than software vendors. They do overlap with the other software vendors in providing marketing planning, however.

Other marketing management vendors do provide some evaluation capabilities. These include various types of reports on the activities managed within their systems, simpler types of results analysis, and scorecards with customized metrics. Every system with a marketing planning function provides at least basic evaluation functions.

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Let’s circle back to the question posed at the start of this series: what defines a marketing management system? As we’ve seen, there are five reasonably distinct applications: project management and content management, which are included in nearly every system claiming the marketing management label; and marketing planning, execution and evaluation, which are much less common. What’s intriguing is that most of these applications are specialized versions of systems used throughout an organization. Certainly there are many generic project and content management systems, and the marketing planning process is not so different from planning for other departments or an entire organization. The simpler forms of evaluation, using things like scorecards and key performance indicators, are also basically the same as general business performance measurement. Similarly, some elements of execution are essentially purchasing management software. Only the more advanced evaluation and execution functions seem truly unique to marketing.

This leaves both vendors and users to struggle with determining when it makes sense to deploy a specialized marketing management system, and when generic corporate systems will suffice. One benefit of marketing management systems is that they closely integrate functions that are performed by separate, largely unintegrated corporate systems. Another is that the marketing management systems are already tuned to the special needs of marketing departments. In both cases, this means less customization to gain a advanced capabilities. Since large, sophisticated marketing departments have the greatest need for these capabilities, and can most easily afford them, they are one prime market.

Ironically, companies at the other end of the spectrum–those so unsophisticated that they lack even generic project or content management systems—are strong candidates as well. In their case, the marketing management system has no existing competitor, so it can easily be purchased for stand-alone departmental use, assuming the price is reasonable.

Between these extremes lies a much grayer area. Marketing departments will need to carefully assess the cost of adopting existing corporate systems to their needs, and compare that with the cost of purchasing a separate marketing management product. Their analysis must also include the cost of isolating marketing from the rest of the company, or of forcing marketers to work with separate departmental and corporate systems for things like planning and project management. It goes without saying that corporate politics will play a role as well.

In the long run, it seems unlikely that marketing management systems will find many buyers in this middle ground. Competitive pressures will lead general purpose project and content management vendors to build in support for marketers’ unique needs as these become more clearly defined. General technology trends are making it easier for separate systems to work together, so the tight internal integration of marketing management components will be a less compelling advantage. And ever-broader adoption of project and content management systems will mean fewer and fewer marketing departments lack an existing corporate standard as an alternative solution.

At the same time, vendors already providing systems to marketing departments will find marketing management a natural add-on to their products. It gives them something new to sell existing clients, a way to attract new clients, and a point of differentiation from competitors. Most of the major campaign management vendors have already added some degree of marketing management for exactly these reasons. Vendors of customer relationship management systems, which already offer a broad range of functions, may find it even easier to add marketing management to their mix.

In other words, marketing management is classic example of a young software market. There are many small, pioneer vendors providing specialized solutions. They are finding initial success selling to firms with desperate needs for their particular capabilities. But the industry will consolidate as larger vendors buy the specialized products to extend their product lines, or simply add features to their existing products by learning from the specialists. Some of the specialists themselves may grow big enough quickly enough to compete in the larger market as general purpose suppliers. Others will successfully retreat to niches at the high or low end. Most will quietly vanish through mergers, acquisitions and the occasional outright collapse.

Since this is a classic young market, all of the standard recommendations apply. Be willing to grab early advantage by using these products, but expect rapid change. Make sure to choose vendors you are confident will be around in the future, or whose products you can support yourself should they be orphaned. Pay close attention to product quality, since competitive pressure may lead some vendors to release products before they are fully tested. Be sure the current release is adequate to your needs, since future enhancements may never actually appear. Find out whether your existing software suppliers plan to expand into this area, and assess whether their initial release is likely to be good enough and soon enough for your needs. Dress warmly.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.

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