Marketing automation is not a new concept, according to the Google Ngram Viewer, the term was first used in 1980, and then started to gain traction in the late 1990s, peaking around 2004. The term then started to decline in usage, reaching a low point in 2007 before slowly rising again. Today its back up near the 2004 peak. What is the history? And why has marketing automation suddenly come into the spotlight?
As a our new video The Dawn of Marketing Automation states, “In a primitive world, marketers were forced to dig up leads, a miserable job at best. Finding the most unqualified leads at the bottom of the barrel. How could they be qualified? They couldn’t. And sales just had to deal…sucks to be sales”.
For decades marketing and sales have struggled to remain aligned, and marketing has struggled to tie revenue directly to marketing programs. With modern business changing the marketing profession so rapidly, marketing automation has come to the forefront as a solution to help plan, execute, scale, and measure marketing transactions with more precision. But what are the trends driving an explosion in the marketing automation space?
Trend #1: Changing buyer behaviors forced companies to change how they market and sell.
Before the internet and social networks, buyers had limited ways to obtain the purchase information they needed, so the seller controlled the buying process. But then buyers moved into the power position. They could access the information they wanted on their own online, anywhere and at any time. And they could delay engaging with selling representatives until they knew as much (or more) than the salesperson did.
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To address the challenge, Marketing started to play a larger role in the revenue process. They nurtured relationships with early-stage prospects until they became ready. But this solution posed a challenge of its own: the problem of scale. How do you manage individual dialogues with hundreds of thousands, even millions, of potential customers?
This is precisely why having a marketing automation platform became so critical in the mid-2000s. There literally wasn’t any other way to keep up with the demands of modern marketing. Attempts to implement such massive processes without the right systems quickly create colossal messes and lost opportunities.
Trend #2: The 2008 recession permanently altered how companies approach revenue generation and measurement
No business completely escaped the impact of the economy in 2008. But while some organizations hunkered down to weather the recession, cutting resources and headcount, leading companies recognized that growth was their ticket not only to survive – but also thrive. So they reorganized their processes to increase revenue effectiveness. They refused to tolerate traditional dysfunctions between marketing and sales departments, and those associated with measurement tools like spreadsheets. Instead, they invested in technology that automated and streamlined critical revenue processes.
At the same time, budget cuts made it more important than ever to measure the effectiveness of their marketing investments, even as new highly measurable digital channels raised the expectation for measurement across all channels. Empowered with these new tools, companies determined what was working and what wasn’t, and then scientifically re-allocated their resources to operate more strategically.
Trend #3: A new software delivery model unlocked new sales opportunities
Unlike prior generations of marketing automation, today’s leading companies provide their solutions using “software as a service” (SaaS) – meaning marketers could access the tools in a browser with little or no IT support. Also, these solutions are sold as a recurring subscription, so marketers can buy them using operating budgets instead of making capital investments.
These two factors are critical. Marketing is unfortunately seen as a cost center at most companies. This made it a challenge for marketing to get the capital investment and IT support needed by traditional solutions. But at the same time, marketers have large discretionary operating budgets that they easily spend on marketing programs such as tradeshows, online advertising, and agency services. By enabling companies to buy marketing software like any of these services, the SaaS-based marketing automation vendors removed the largest impediment to marketing automation–adoption.
Luckily, in this modern world, you don’t have to worry. In this world, we have marketing automation. Be sure to check out our newest video to learn more about how marketing automation changed the lives of many marketers in The Dawn of Marketing Automation.