What is marketing automation?

A marketing automation strategy streamlines how organizations accomplish marketing tasks and segment content and experiences for people they want to influence across the customer journey. It is a critical component of both B2C and B2B marketing campaigns.

Marketing campaigns increasingly use automated technology, which is enhanced with employee expertise on the marketing team. While marketing automation is not new, present-day advances in artificial intelligence (AI), natural language processing (NLP), and machine learning (ML) create more functions for automation technology. Companies incorporate these automation features into marketing processes and automated workflows to drive even more value.

There are several benefits of marketing automation, including improving lead generation activities, driving positive customer experiences through digital marketing, and freeing up employees to focus on more critical tasks. Used well, marketing automation optimization can cut costs and increase marketing return on investment (ROI), which in turn improves the company’s bottom line.

The rise of the internet brought an increasing need to create new digital marketing tools to reach audiences who were spending more time online. The modern e-commerce sales funnel now includes stages that are centered on awareness, consideration, purchase, and loyalty. It required companies to have always-on marketing and sales operations.

As demand increased, more companies offered bespoke tools that focused on one aspect of the marketing tech stack. Today, Forrester predicts marketing technology expenditure to reach USD 148 billion by the end of 2024.¹

Marketers are under great pressure to demonstrate value to their executives and boards. They need to remove as much friction as possible in their marketing activities and avoid overhiring marketing employees. Organizations are looking to automate repetitive processes so employees can focus on customer loyalty by building stronger relationships with high-value customers.

• Produces A/B testing: Marketing automation enables organizations to test out different assets in multiple contexts, such as landing pages and emails. As an example, organizations can use marketing automation software to show some users headline A on a home page while others see headline B.
  
  The system gathers data on clicks or conversions to determine which version performed the best. Over time, the automation platform can suggest improved refinements. It’s especially helpful in inbound marketing, when companies can’t predict when or where prospects interact with marketing content.
  
  
• Drives actions based on triggers: Marketing automation workflows help organizations take the right marketing action based on specific customer behaviors. For example, a potential customer starts an order but then abandons the shopping cart. An automation workflow might send them a follow-up email reminding them to finish their order or offering an incentive to make the purchase.
  
  Other customer engagements that can trigger actions include website visits, webinar registrations and subscription changes; each of these actions can trigger an automated workflow. Triggered actions are a key component of any lead management campaign.
  
  
• Eliminates repetitive tasks: Automation tools are a huge asset for marketing and sales teams, removing the need to handle many manual and laborious tasks. Marketing activities such as sending emails or SMSs, providing additional information to new customers, collecting insights or adding customer information to a database.
  
  
• Brings to life omnichannel campaigns: The customer journey is more complicated these days, as consumers jump from channel to channel. Marketing automation systems can track customers across channels and offer them personalized and customized messages in real-time across multiple touchpoints. Thus, they can proactively market to their customers and handle any in-bound omnichannel customer service requests.
  
  
• Improves data efficiency: Companies can use automated tools to improve their ability to collect and analyze metrics. It can take demographic and psychographic information and build visualizations around the data, helping employees to understand the efficacy of their campaigns.
  
  
• Lead nurturing and lead scoring: Finding qualified leads can be a costly and time-consuming process. Companies can use automation to identify inbound Leads, prioritize based on a scoring system, and create custom messages to sway them.
  
  
• Process mining: This refers to using AI and automation software to review processes along the marketing funnel to identify ways to improve efficiency and effectiveness. It is especially powerful in campaign management, identifying whether an organization’s channel strategy is optimized or not.

Some companies offer all-in-one marketing automation platforms that provide all services.

Companies like Siebel and Salesforce pioneered customer relationship management (CRM) tools that allowed companies to track their target audiences and engagements across the customer lifecycle. Soon companies like Pardot, HubSpot, and Marketo began to offer all-in-one, comprehensive tools that might power all marketing campaign management activities.

The largest all-encompassing marketing automation platforms today include Salesforce Marketing Cloud, Oracle Marketing Cloud, and Adobe Experience Cloud.

Others focus on one aspect and offer that. Marketing automation services can improve the efficacy of all marketing channels, especially for small businesses that can have few marketing employees.

• Content management platforms: Companies can use automation to select the right content to reach the right audience at the optimal time. They can also create various iterations of a specific piece of content—such as headline and image choices—to test which one is most effective. Adobe Workfront is a good example of am end-to-end product that creates an intelligent content supply chain.
  
  
• CRM: Customer data is an important part of any modern marketing strategy. Companies collect data from many different areas, and often need to append additional information to get a complete view of their customers and prospects. They often either synchronize with email marketing platforms or are subsets of them to automate sending emails to specific groups of audiences. Examples of CRM providers include HubSpot, Salesforce and Zoho.
  
  
• Email marketing platforms: Organizations cannot afford to send every person in their database the same marketing message without catering to their interests. Automated email campaigns can help organizations reach more of their target audiences with relevant content and personalized messages more efficiently. Companies like Mailchimp, Constant Contact and HubSpot all provide these services.
  
  
• Programmatic advertising: Most advertising today revolves around software programs on the buy side communicating with software programs on the sell side. Organizations would not be able to buy and sell advertising without automated bidding that is provided by companies like The Trade Desk, PubMatic, and Criteo. These algorithms determine which bid gets selected, so curated ads immediately display to the person who sees a specific webpage.
  
  
• Social media platforms: Companies looking to reach their audiences through social media networks benefit greatly from marketing automation tools. Companies can schedule and automate template posts about their brands or individual products. They can also tap into social media APIs to listen to conversations about the brand and route them to appropriate customer service representatives, who can respond with preselected messages. Companies like Sprinklr, Hootsuite, and Sprout Social specialize in providing these social media products.
  
  
• Chatbots: Companies can use chatbots and virtual agents to handle incoming customer requests regardless of time, improving customer experience and retention. Improvements that are driven by generative AI mean chatbots can handle most initial requests, freeing up customer care representatives to focus on higher-level issues. IBM®, Intercom, and Drift are all investing in providing advanced chatbot services.

McKinsey predicts that generative AI will increase marketing productivity by up to 15% of total marketing expenditure, estimated to be about USD 463 billion annually.² AI—particularly generative AI—can supercharge many existing marketing automation processes.

More than three out of four CMOs say that generative AI will change the way marketing operates, according to The IBM Institute for Business Value. The report establishes three important takeaways for all leaders looking to embrace generative AI:

1. Marketing should lead adoption of enterprise-wide generative AI: Marketers have experience with using tools that help them do their jobs more effectively. Generative AI can help spur creativity while minimizing manual tasks that don’t add much value.
2. It decreases the number of overwhelmed content creators: Generative AI can produce countless versions of a type of content, helping marketers focus on perfecting specific content by using the tool to iterate.
3. Generative AI makes hyperpersonalization a reality: Now, the cost of altering copy to appeal to specific individuals approaches zero. Campaigns can get incredibly granular for relatively the same cost as sending one message to everyone.

For example, generative AI can take foundational pieces of content and personalize them down to an individual level to appeal to a specific person. It can also serve as a copilot on marketing strategy, generating ideas that individual employees and executives can build upon to find the right approach.

It can also surface insights from customer data quicker and at scale by identifying patterns that humans might miss. Other forms of AI can take existing customer data and complete gaps, like the individual’s home city, email address and purchase preferences. Many marketing automation tools are also embedding generative AI into their dashboard to help employees draft emails, social media copy, and potential website copy.

1. Champion marketing as a generative AI leader
2. Use integrated data to establish 360-degree customer profiles
3. Encourage a world of creative ideation

Marketing automation solutions create several important benefits for organizations.

• Frees up humans to do more meaningful work: Marketing automation can handle many menial tasks that can overwhelm employees and distract them from the work that matters. A company that uses automation frees up its employees to work directly with customers and suppliers and to spend valuable time brainstorming and enhancing marketing strategy. A secondary benefit to this is better employee retention, as workers that are less distracted by menial tasks are more likely to stay at their employer.
  
  
• Eliminates costly mistakes: Employees who do need to do repetitive tasks like data aggregation or sending multiple emails to different databases are more likely than an automation platform to make a mistake. Marketing automation based on rules and workflows will likely eliminate unnecessary mistakes.
  
  
• Increases customer value delivery: Marketing automation can use segmentation and personalization to deliver meaningful and customized messages to individual customers. That helps so they are overwhelmed and annoyed by mass emails that include offers that do not appeal to them. Also, those personalized messages can provide specific offers that encourage the individual to make a purchase.
  
  
• Improves intradepartment collaborations: Marketing automation makes it easy for multiple departments to share a single pane-of-glass view of business insights. That improves communication because everyone is looking at the same data. In addition, it’s easier to share notes and ideas through automated tools.