Understanding Contact Optimization Technology

Yesterday was a banner day for me in my young career as a Forrester analyst - my first research piece was published. It's a marketing technology brief titled "Understanding Contact Optimization technology." So what is contact optimization? We define it as a mathematical approach to determining the best mix of messages for each customer in order to maximize marketing objectives while satisfying business constraints. Put simply - this technology is for high volume direct marketers intent on transforming themselves from a product centric organization to one that emphasizes customer need.

Here is the executive summary -

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Email provider lands funding?

A little over a month ago VC firm Greylock Partners led a funding round raising $15 million for Constant Contact, an email marketing vendor that targets small businesses and nonprofit organizations.   Huh?  Why would Greylock invest a sizable chunk of change in a space that is becoming increasingly commoditized and has low switching costs and barriers to entry?  Greylock is an extremely smart VC, right?  I mean they successfully invested in Doubleclick, Epsilon, and Red Hat among others.

My theory is this - Greylock invested in Constant Contact because -
• Small business is a hugely underserved market and small businesses are traditionally technology adoption laggards.
• Sinking disproportionate amounts of money in a market that traditionally grows organically allows them to “buy” accounts and build “value” rapidly.
• Email is just the first in a whole slew of services that the $15 million can build, package and provide small businesses.
• Once Constant Contact gains sufficient momentum it becomes a great merger or acquisition target yielding a nice return on investment for the VCs (Greylock!) who backed it.

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Digging into CGM data

As the new guy on the team I get to introduce myself to you and spout off.  All in the same post!!  In any case, I recently joined Forrester from SPSS  and will be focusing on enterprise marketing technology platforms, customer analytics, and emerging market technologies.

The proliferation of Consumer Generated Media (CGM) presents organizations with a virtual treasure trove of unstructured data.  However, as witnessed by the debate on the Online Spin blog, measuring CGM is not a foregone conclusion.  Measurement aside, what purpose does CGM serve and how can the data be leveraged?  Text mining vendors like SAS, ClearForest, SPSS, and Inxight offer algorithms and techniques to identify and extract the key concepts from unstructured data.   These insights can drive innovation, product development, search, and brand monitoring.  Marketers should initially focus on blogs and service center transcripts as the primary sources for unstructured data. 

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