Automated Advertising Next Generation of CRM?

Is Automated Advertising the next-generation Customer Relationship Management (CRM)? I often describe the similarities between what the automated advertising industry is doing and how CRM developed. Let’s start with the first form of CRM.

CRM companies like Salesforce.com used to refer to themselves as Sales Force Automation (SFA) companies. SFA essentially replaced an old system of spreadsheets for contact management, forecasting, sales pipeline organization and sales management. It later expanded into customer service management, marketing, etc. and transformed the category into CRM. SFA had many of the same adoption challenges as those that the advertising market is facing today: management wanted to use it because it simplified and standardized sales force management; it offered one dashboard, one place to view metrics on the organization and one place to store critical customer information.

Sales reps, however, were resistant. They didn’t want to be “automated”—they felt it created extra work that they had to learn something new. They felt like it was an impediment. Today, while some of those residual feelings may exist, it’s clear that SFA and CRM have become critical and strategic business systems and processes for companies. This has given companies a competitive advantage, allowing sales reps to be acutely aware of their customers needs and increase their responsiveness.

“The benefit of automation is that it reduces the burden of data management on the marketer. Real-time data dramatically expands the customer profile, enabling businesses to reduce customer response time and increase Life Time Value.”

Now, let’s look at Automated Advertising. We’ve come in and created specialized systems that automate the sales process, centralize reporting, and put standards and rules management around the sales process (for both direct and indirect sales)—all in real time using massive amounts of data. At the same time our systems process the associated financial transactions and exchange the money between the buyer and seller. While the market has grown rapidly and automation has become top of mind for even the largest publishers (like News Corp.) and agencies (like Omnicom), it’s clearly generating efficiencies for organizations by reducing costs of sales and associated business processes, driving revenue and expanding revenue potential.

However, I still hear people saying things such as “automation may drive down rates” or “automation will replace people” or “this is confusing.” While I will admit that it is confusing—and the industry has made it more confusing than it needs to be with the use of unnecessary acronyms and terms like “programmatic”—the reality is that we’re just talking about automation. The benefit of automation is that it reduces the burden of data management on the marketer. Real-time data dramatically expands the customer profile, enabling businesses to reduce customer response time and increase Life Time Value. The benefits are clear. Automation allows businesses to rapidly implement new and larger data sets into the sales process.

Automation needs people, and people need automation—just like we have seen with SFA and CRM. The difference is that this may be the next generation—where it combines managing the workflow and business processes, enables real-time, data-driven decision-making and processes the transaction. What if Salesforce.com merged with Visa or MasterCard? What if every company who uses Salesforce.com to manage their sales operations to sell products was able to directly connect with every customer of Salesforce.com who buys products? They’d use their CRM application to do business and Salesforce.com could process the transaction itself. Sound familiar? That’s exactly what’s happening in automated advertising—both for auctions and direct orders.