Companies that continually tune their customer marketing efforts are increasingly turning to marketing-automation tools to assist in acquiring and retaining customers and generating new sources of revenue. Marketing-automation systems perform critical, real-time market analysis that lets business managers gauge the effectiveness of marketing initiatives.

Marketing-automation applications let companies build, execute, and measure their marketing campaigns. These products also update information on customer segments and profiles based on the constant input of new data. This information can come from clickstream analysis of customer behavior on a Web site or from response patterns across multiple campaigns, such as direct mail, conferences, and training initiatives.

The marketing-automation technology segment is new enough that vendors offer several approaches. As the market matures, there will likely be fewer vendors and more consistency across competing products. Some marketing-automation vendors focus exclusively in this area. Others, such as the makers of integrated customer-relationship management suites, are adding marketing-automation capabilities through internal development or acquisition.

When selecting a marketing-automation product, it's best to first identify marketing goals and business needs. Once those goals are identified, business and IT professionals can assess the various technology options.

Reviewing the many product choices is daunting. In this article, Doculabs assesses market trends and highlights its experience with marketing-automation tools from Chordiant Software, E.piphany, Protagona, and Unica.

A number of CRM vendors offer marketing automation as part of larger offerings that may include sales-force automation or customer-service capabilities. For example, marketing-automation vendor E.piphany acquired Octane Software for its customer-service capabilities. In a similar fashion, Broadbase acquired Servicesoft last year to add sophisticated E-mail-response management, Web chat, and customer self-service capabilities to its marketing-automation package. More recently, Broadbase and Kana Communications merged to become Kana Inc., offering a set of capabilities that's more comprehensive than either company could have developed on its own.

The challenge these vendors face is integrating their disparate technologies into seamless systems that are easy for customers to use.

Vendors with a data warehouse or data-mining heritage are adding marketing-automation software to their core competencies. For example, SAS Institute Inc. is drawing on its advanced marketing-analytic capabilities to offer new components to manage marketing campaigns.

This points to a major challenge in the marketing-automation space. No matter what the vendors' heritage, relatively few provide a "closed-loop" system in which marketing analytics and campaign management are seamlessly integrated. Although companies such as Kana and E.piphany have customer-service offerings as part of their product suites, such capabilities aren't always tightly integrated with the marketing-analytic components to provide a comprehensive view of marketing plans or a seamless workflow across business functions.

Most marketing-automation applications let users design, schedule, execute, and evaluate multichannel marketing campaigns. Beyond that, not all products are created equal. In general, there are two areas to consider when evaluating marketing automation products.

Marketing analytics is an important bellwether. Some products let users run their own data models and proprietary algorithms, which is good for companies that already have a sophisticated data-management infrastructure. But companies that are new to data analytics might want a marketing-automation tool that can generate data models.

Some companies will want to cull large amounts of customer data from multiple sources, including online registries or directories, customer databases, other line-of-business systems, and outside customer lists. Many will have existing data warehouses and data-mining tools. Others might want a data warehouse included as part of the marketing-automation product.

Large companies that have sizable customer databases will need sophisticated querying capabilities, such as true random and conditional sampling and multidimensional and statistical analysis. Other sophisticated features include customer segmentation and real-time data capture.

The other key piece of marketing automation is campaign management. In this area, look for support for campaign design, scheduling, and execution capabilities across multiple channels, including direct mail, E-mail, Web, phone, fax, and events.

Real-time decision support is another marketing-automation feature that will help marketing managers track a campaign and make tweaks on the fly in response to customer activities.

Other features include learning algorithms that track and predict customer behavior. Some products come with pre-set business rules, while others let users design their own rules based on how their business is structured. Finally, response management and reporting let business managers review the results of their campaigns.

Here's a look at the capabilities that some of the leading marketing-automation vendors offer.

Chordiant's Marketing Director version 3.2 is a strategic system for companies with demanding and complex customer-relationship needs in the financial services, telecommunications, and consumer direct markets. Marketing Director isn't a statistical analysis tool--it leverages data from a company's data model, warehouse, and mining environment. However, it offers a variety of campaign-management capabilities, such as marketing analytics, that leverage the customer's existing data model. The product doesn't include a default data model to do modeling and segmentation, and its data-capture capabilities are limited to Web, E-mail header information, and phone data. In addition, the product uses an Excel worksheet for data mapping to relational databases.Marketing Director has strong campaign-management capabilities, including campaign design planning, synchronization, and collateral sharing that extends across the multiple channels mentioned above. It has a graphical tool for campaign design, and users can build, save, and reuse campaign templates. In addition, users can write SQL scripts within campaign steps that can call external processes or programs.Marketing Director doesn't include a real-time environment for data capture or analytics. Its functionality is limited to making recommendations based on predefined business rules.E.piphany's E.5 is an option for companies that need to deploy marketing campaigns rapidly but have limited marketing-analytics staff and no statisticians or modelers. E.5 offers a comprehensive set of easy-to-use marketing-analysis capabilities for business users focused on getting analytical results.E.5 excels in basic campaign design across multiple channels with its scalable E-mail server, real-time data capture, analysis, and decision-support capabilities. E.piphany also has adapters to content-management and E-commerce applications from Art Technology Group, BroadVision, and Vignette.E.5 provides its own data model, which customers must use for marketing analytics. While this may seem like a limitation, the data model is very robust and provides superior marketing-analysis capabilities.E.5's strengths are in basic campaign design. It lets users plan campaigns, synchronize offers, and share collateral across E-mail, Web, and postal channels. E.5 supports segmentation and classification of customers based on real-time data captured during campaign execution using learning algorithms.E.5 also lets users create predictive models that calculate the likelihood of a particular customer action for use in real time and create conditional rules that govern responses and offers. E5's Real Time Personalization component provides a dashboard, visualization tools, and performance and accuracy monitoring, but it doesn't support real-time monitoring alarms. E.5 selects from multiple offers or campaigns for real-time decision making and includes a mechanism to synchronize real-time offers across channels.Protagona's Ensemble 5.0 is a marketing-automation suite for companies with open-system architectures in the financial services, insurance, retail, telecommunications, travel and leisure, and high-tech industries. Ensemble is well-suited to large companies that have their own data model, warehousing, and mining environments but are looking for comprehensive marketing-analysis tools and multichannel campaign-management capabilities.Protagona's marketing analytics provides a comprehensive set of functions. Ensemble doesn't include a default data model, but it has an architecture flexible enough to rely on the customer's data model and multiple customer data-bases. Protagona also has worked with marketing database vendors Acxiom, Cedar Group, and Fiserv to accommodate industry-specific data models.The strength of Ensemble is in the campaign-design area, where planning, synchronization of offers, and sharing of collateral is made possible within an easy-to-use but full-featured environment. The product can manage multichannel campaigns and is particularly strong in the E-mail channel using technology licensed from Delano Technology Corp.Ensemble doesn't offer real-time decision support, but it does offer predefined business rules that can be executed in real time. Ensemble lets users create predictive models that calculate the likelihood of a particular action for use in real time. The feature is dependent on the timeliness of database updates.Unica's Affinium suite offers a rich set of marketing-analysis capabilities for companies that want to maximize customer relationships. Affinium has a variety of sophisticated marketing analytics and campaign-management and-design tools. In addition, the product's flexible architecture adapts to the customer's environment and can read data from any available database.Affinium has a complete set of analytic capabilities, with multiple channel data capture, analysis, and decision support. The suite addresses the needs of business users, statisticians, and modelers with equal facility, and its analytic capabilities enable all three types of users to perform campaign and customer analysis and modeling. The product also provides tools to test and optimize models before they're deployed and can construct templates that hide the models' complexity from business users.Its campaign component has a graphical tool with wizards to walk users through the design process, and templates can be built and saved for later reuse. It has a calendar interface to view overall campaigns and promotions, and it executes promotions and offers on specific dates and at specific times. In addition, it supports several types of event-based triggers such as customer behavioral changes. Affinium also lets users build campaign steps that call external processes or programs.The Affinium suite offers a real-time environment for analysis and decision making. It supports dynamic scoring, segmentation and classification of customers based on real-time data during campaign execution. The product's real-time engine can query external relational data sources for customer information, without first importing the information. Affinium provides performance and accuracy monitoring via a real-time dashboard, visualization tools, alarms, and triggers.Customers looking for out-of-the-box marketing-automation products with real-time customer data capture and campaign updates may be disappointed with the crop of tools now on the market. While some vendors are making strides in this direction, we expect to see much more integration in the future between real-time customer analytics and campaign management.As customer demand for end-to-end or closed-loop marketing continues to grow, expect to see an increasing number of suites that offer marketing analytics and campaign management in an integrated suite. The importance of real-time analytics for capturing, analyzing, and updating customer profiles for use in marketing campaigns will be a major driver in the broader CRM market.Systems that focus on analyzing customer data are adding Web data capture to conventional internal and external data sources to drive Web-based marketing campaigns. In addition, CRM marketing-automation components are merging with personalization and campaign-management components to drive integrated marketing campaigns. IWBill Chambers, Gaurav Verma, and Kelley West are analysts and Bob Anders is an editor at Doculabs (http://www.doculabs.com), an industry analyst and advisory firm. They can be reached at [email protected].