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Unica Marketing Innovation Summit: The future for marketing

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7th Oct 2009
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In an exclusive interview with MyCustomer.com, Unica co-founder and CEO Yuchun Lee discusses the challenges of going it alone as a pure-play, best-of-breed suite vendor, the relative merits of on-premise and on-demand solutions - and why his firm celebrated Adobe's recent purchase of Omniture.

Unica co-founder and CEO Yuchun Lee has a simple vision for the marketing and web analytics software provider: “We want to be the full end-to-end provider for marketing automation,” he said, “with a single back end to support both on-premise and software as a service [SaaS].”

Lee was speaking in an exclusive interview with MyCustomer.com at Unica's Marketing Innovation Summit 2009 in Paris this week, an event that saw the suite provider pull in 50% more customers than its Barcelona summit one year ago.

Although Unica is positioned as both an on-premise and on-demand player, Lee seemed sanguine about the reality of on-demand usage patterns, and suggested that for many companies it has been a temporary solution encouraged by the downturn.

“The 2009 downturn means that IT staff have been under more pressure. Projects that businesses want to deliver are affected and some of the decisions they make to use on-premise have been driven into the wall.”

Lee explained that although Unica On-Demand and Unica Enterprise (on-premise) are similar, on-premise solutions have greater depth and subtlety than the more “commodity” approach of on-premise. On-demand services are growing fast from their 10% share, he said, but will never completely replace on-premise. He foresees a five-year horizon of a peaceful 50:50 co-existence for the two models.

“You should not use on-demand for its own sake,” he added. “There are many companies who are using on-demand as a way around IT, but the companies who don't have IT involved in their marketing are the ones who don't know about security. IT has to be involved [in on-demand]. It's a bad model not to. Business going around IT is not good for anybody. But that means IT needs to move beyond being a roadblock to SaaS.”

There are also technical challenges with some on-demand models, he suggested. “Companies that are basing their business on Google or Amazon on-demand infrastructures will face an integration challenge in two years. We are completely portable.”

Industry sea change

The last 12 months have represented a sea change within the industry, said Lee, both for Unica, the software marketplace, and for customers. “Marketing is going through a big change. The downturn has accelerated the shift to online marketing, and online and offline are coverging,” he said. “For Unica, in the last 12 months we've added 200 customers and about 80% of our overall business is in telecoms, financial services, retail and hospitality.” One growth hotspot is in online gambling, he added, with several big-name wins, including Israeli gaming giant 888.

Of course, the marketing software space has also been converging – most notably with the recent purchase of web analytics specialist Omniture by Adobe. Has this made Lee nervous about Unica's ability to survive as an independent pure play? “We had a celebration when Adobe bought Omniture,” said Lee. “Companies want marketing software providers to be a strategic decision. Being bought by Adobe is almost an exit for Omniture, but at least they quit at the top and made some money out of it.

“Half of Adobe's business is consumer technologies and less than 10% of its business is recurring. I think Adobe's CEO must have been pressurised by the board to increase the recurring revenue stream, so that's why they bought Omniture.” So it was an accounting decision, not a technology strategy one? “Yes. There's no synergy. We've already win one customer from them because of the takeover. In the web analytics space, Google is eating Omniture's lunch at the bottom end and they're losing more than half at the top end to Unica.”

Going it alone

Elsewhere at the conference, the firm set out a future of going it alone as a pure-play, best-of-breed suite vendor under its recently unveiled 'U' branding, for 'you the customer' – a logo form that has less meaning in France, perhaps, than in the UK and US.

Lee unveiled a series of analyst endorsements for its NetInsight offering that place Unica in the vanguard of web analytics.  Web analytics, he said, is no longer about visitor numbers but about mining visitor preferences. “Web analytics is moving beyond traffic to analysing customer behaviour,” he explained.

Lee's keynote message addressed what he called the “interactive marketers” within the enterprise, people who are working towards a fully converged view of the customer around every channel to market. “Marketing organisations are struggling to be heard,” said Lee from the conference stage, and also spoke of “the difficulty of focusing on strategic IT with more systems to deploy and data to integrate” as budgets were trimmed back.

As for on-demand, Lee told delegates that for many enterprises that there were challenges involved.  “SaaS reduces IT involvement in commodity activities, but does not resolve the integration problem. SaaS applies best to commodity activities versus strategic,” he said.

His advice to enterprises striving to come out of the downturn was simple: “Embrace the best-of-breed suite. It makes no sense for marketing departments to deal with point solutions. Embrace on-demand options if they are consistent with your strategy. And simplify marketing technology. Move towards a suite and leave integration to the vendor.”

Functionality and integration

A number of enterprise customers attended and spoke at the event, including telecoms provider Orange UK, and Groupe Aeroplan, the company behind the Nectar loyalty scheme.

Mike Cooper, CRM manager of Orange UK, offered his insight into the real challenge of achieving the single intergrated view of the customer that organisations strive for. The problem for some enterprises, he suggested, is the piecemeal approach and different staff incentives that underlie some web projects outside of an integrated marketing strategy. 

In other words, achieving a single view of the customer across all communications channels is predicated on CMOs having a single, integrated view of their own organisations first.” Six years ago we were looking for a best-of-breed approach,” he said. “It's changed. Now it's more about functionality and how well solutions integrate.”

For Groupe Aeroplan's Roger Sniezek the challenge is one of automation and data control: “We have the single view,” he said, “but we have a vast number of campaigns – for example, 800 within Nectar alone. If we send a statement to eight million households, then five million of those will contain unique offers.

Data is our business,” he continued, “and we want that data on-premise. On-demand is valuable for smaller enterprises with smaller volumes of data.” Asked about whether on-demand offered a smoother upgrade path to new technologies, he said that Groupe Aeroplan is evaluating Unica 8 and that although version upgrades are a challenge in relationship, “in relative terms to budget it's small”.

Sniezek explained that the next stage is to “sweat the asset” of the Unica relationship and to drive more and more functionality from the technology, so it seems that Unica's numbers are good but that its own relationship with its customers will be key to its future success.

Reporting by Chris Middleton.

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