Marketo rolls out customer engagement tools as Salesforce.com threat looms

Marketo CEO: We've 'never been that good of friends' with Salesforce.com

Marketo says it has created tools that put it far ahead of rival marketing automation software vendors by making it much easier to run targeted campaigns, and more effective ones to boot.

The new capabilities go into general availability Friday in two versions, a basic version at no additional charge to existing customers and a paid edition for power users, Marketo CEO Phil Fernandez said in an interview prior to Tuesday's announcement.

Until now, marketing automation software allowed users to build a degree of sophistication into their ad campaigns by setting up a series of rules, Fernandez said. For example, a gaming company could decide to send out an emailed loyalty offer to all male customers in their early to mid-twenties who have bought at least three games in the past year, according to Fernandez.

The problem has been difficulty in taking the targeting down to a more individual level. This requires increasingly complex rule sets and just doesn't scale up well as marketers try to reach more people individually, Fernandez said.

Marketo's new customer engagement technology, some 18 months in the making, seeks to automate the prioritisation and delivery of marketing content, by applying proprietary algorithms to a massive database of its clients' customer data.

In turn, marketing staffers using Marketo focus on building out "content streams" for a given campaign, which may consist of a variety of emails, Twitter messages, Web pages and other types of communications, Fernandez said.

Meanwhile, through cookies, clickable buttons in emails and other means, Marketo's technology keeps track of which pieces of content a particular user may have already viewed, and stops the campaign from sending a duplicate message.

The paid version of the customer engagement toolset allows for more sophisticated scenarios, such as by introducing elements of real-time targeting. For example, rather than send an email to all of those gamers at the same time, the system could instead send a loyalty offer to a particular customer moments after they reach a specific number of purchases, Fernandez said.

Marketo isn't promising customers it has created magic, however. "We don't make the claim that this product is delivering exactly the right message at any time or that nobody ever seems the same message twice," Fernandez said. But internal testing against Marketo's previous-generation software showed targeting precision had gone up by a factor of three, he added.

"It's way better," he said. Over time, Marketo's "way better" advantage will get "squeezed out and it will be a battle of inches," he added. "Right now, it's a battle of football fields."

Meanwhile, Marketo is about to face a fresh wave of competition from a company that it's been a close partner with for some time, Salesforce.com. Marketo relies heavily on Salesforce.com's CRM (customer relationship management) software customer base, which uses the two products in conjunction.

But this week, Salesforce.com announced it would purchase Marketo competitor ExactTarget for US$2.5 billion, a move that surprised some observers since it was long rumored Marketo itself would get snapped up by Salesforce.com.

Fernandez declined to relate the details of any talks his company had with Salesforce.com. Marketo, which recently underwent a successful IPO, may be better off on its own, according to Fernandez. "We've been very clear with the market that we think the world is moving toward best-of-breed independent leaders," he said.

He expressed no concern that Salesforce.com would make it more difficult for companies like Marketo to do business, saying the vendor has made it "really clear" it will keep its systems open to third parties.

That said, "we have never been that good of friends," Fernandez said. "The number of leads that have come to us from Salesforce.com in our history is minimal."

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