With many forecasts beginning to predict a bottom of sorts in the ad-supported content market, can an ad recovery be too far behind? It's a question that is probably harder to answer than ever, given the rise of social media tools as an increasingly important platform for marketing influence and insight. Yes, we're bound to see increases in ad spending as the economy improves, but while the ads were away, companies have been learning how to listen to their clients more effectively through public social media channels and their own online forums and customer support platforms to influence markets cost-effectively. One of the leaders in helping organizations to listen and to respond to their markets effectively is Lithium Technologies, which provides both community forum tools and social media monitoring tools that integrate with popular CRM platforms such as Salesforce.com. To some, tools such as Lithium may seem like stuff down in the bowels of product management efforts rather than marketing efforts. But in fact, it turns out that investments in social media gathering and monitoring are having measurable effects on marketing efforts.

As noted in a recent Lithium white paper, a Harvard business review study recorded a 56 percent increase in sales for an online auction site for people participating in the site's online community features. Similar results were seen at one Lithium customer, which reported $41 million dollars in increased sales from their online community members along with $8 million in reduced support costs. In other words, companies are learning that customers generating millions of page views on their own Web sites and social media portals learning from other customers and their own staffs are becoming powerful channels for revenue generation and brand management, as well as reducing support overhead. Of equal importance, though, is the ability of tools such as Lithium's "Social CRM" suite to monitor feedback and discussions in forums and social media outlets that can be channels to support staff and sales and marketing teams in ways that enable them to respond to market opportunties and threats expressed in social media even as they are emerging online.

Labels: advertising, CRM, economy, lithium technologies, sales and marketing, Social Media

I heard from a colleague yesterday who mentioned that TrueAdvantage, one of the early leaders in advanced sales lead generation tools, is in the process of being dissolved. No callback yet from TrueAdvantage or one of its key investors, but it sounds as if this is probably one that's for real. If so then it's not good news for the dozens of content and technology companies that have been focused on providing value-add tools for sales and marketing automation. TrueAdvantage's focus seemed to be spot-on: analysis of a wide variety of published and enterprise content sources to identify companies that are highly likely prospects for very specific types of products and services. With nearly seven years of refinement you'd think that this would be a strong winning formula for a subscription service.

But there are two factors that may have been putting extra pressure on TrueAdvantage: rapidly evolving content technologies and an increasingly crowded marketplace for value-add sales and marketing tools. Tools such as Generate are providing a higher level of semantic analysis of content to not only filter general characteristics of companies and products but as well specific analysis of content to identify where a company is in the overall acquisition process. At the same time there is a widening array of major business information vendors that are building far more sophisticated filtering tools themselves: what was a sophisticated, advanced tool for business information a few years ago is becoming an expected filtering feature for standard business information databases.

Which brings us back to an all-too-familiar theme for many content technology companies: if what your company is building is a feature in search of a marketplace you're in a deadly race against the clock to turn that feature into a real product. Many patient private investors hope that through careful cultivation they can build their sales base to the point where a feature can survive on its own as a product but without raising the fundamental question of whether there is a broad enough business problem being solved to justify this optimism. Content technology companies need to think more like electronic publishers from the start and to look beyond their software expertise to the business problems that need to be solved first and foremost. At the same time, though, publishers need to foster the entrepreneurial spirit of new content technology companies and learn how to experiment with new capabilities that might indicate an opportunity for new products and services.

But even with all of the right buttons being pushed we may be reaching a saturation point for value-add sales and marketing tools. Return-on-investment arguments premised on sales efficiency don't always add up collectively: that is, if you have ten solutions that promise a 25 percent improvement in sales efficiency, purchasing all ten of them is not likely to improve your sales efficiency 250 percent! Content technology companies need to focus more on 10x-scale solutions that will change dramatically to make any sort of major impact in a market for sales productivity tools that's facing a softening economy. Good solutions will continue to do well in this environment, but investors should be prepared to challenge the speed with which deals can be closed and expect pilot programs to play out longer as customers try to milk advanced technologies for as long as they can on the cheap before considering full-blown commitments.

Labels: Business Information, Business Intelligence, sales and marketing, trueadvantage