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Database service providers evolve

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Database marketing service providers have evolved far beyond their traditional role as data service providers to become strategic partners to their clients. Historically, building and managing databases—including data integration, data cleansing and data sourcing—was the main focus. Today, a fast-changing marketing environment requires database marketers to beef up capabilities in areas such as analytics, strategic consulting and proactive services.

Some do it better than others, according to Forrester Research in its "Forrester Wave: Database Marketing Service Providers" report published last month. It evaluated 12 leading database marketing companies across 143 criteria through vendor surveys and executive interviews, which included 205 online surveys and 65 phone conversations with vendor-supplied references.

Managing projects a problem

One area where database marketing providers seem to fall short is in managing projects for clients. "The project management element is the one area where everyone falls down," said Dave Frankland, an analyst at Forrester. "There's a lot of process that goes into building and managing a database. Most organizations have that part down. It's somewhat repeatable. It's making sure that everyone is aligned on the project management side" that is the challenge.

Frankland said that as database marketing service providers have progressed from being process- to being strategy-driven, it can be "hard to keep the plate spinning. Some of it is about how the world of marketing is changing faster than they can put process in place," but he indicated several providers are investing in those areas.

For example, Acxiom Corp. and Experian are two database providers investing heavily in project management, including training programs for managers.

"It's recognized as an area that needs improvement in most of these companies." Frankland said.

In addition, database providers are offering more services today, and they have a tendency to acquire those capabilities rather than develop them organically. Consequently, different services offered by a single company can be disjointed.

"It is troublesome dealing with database marketing vendors who have had a lot of consolidation," said John Smits, director of database marketing at EMC Corp., an infrastructure and information technology marketer.

He said the result is "multiple invoices, large account teams and relatively few consolidated service offerings," which requires more time and work for EMC.

"When you are working with a marketing service provider that offers multiple services, it can feel like you are working with multiple companies," Frankland said. "[Marketers] need one person to insulate them from all the `sausage-making' that goes on within the provider."

Another challenge for marketers is coordinating information on a global basis.

"We have many [database marketing] vendors across our operations globally," Smits said. "All of our vendors really struggle to deliver a global view; they tend to be geocentric. As a global company, we're still challenged to find a single vendor in the space who can deal with telemarketing, database marketing, data acquisition, e-mail marketing and campaign execution on a global basis in multiple languages," he said. "That is probably my No. 1 disconnect."

Proactive service required

Marketers today also look to their database service providers to provide higher-value services such as analytics and strategic consulting, as well as proactive service.

Richard Long, manager of database and interactive marketing at USG Corp., a manufacturer of building and construction equipment, said his database provider does a good job on that front.

The relationship with Automated Resources Group, its database service provider, is a little more than a year old. Automated Resources and USG together spent last fall and the early part of this year building a marketing database, cleaning data and creating data capture standards across the organization. Then the database was launched in May.

"We've built it and we've gotten the data in shape, so we need to look more closely at how to use that data," Long said. He said that will be a priority for USG in 2008.

"Now that our database is up and running, I just look for a continued partner and adviser at this database stage of our working relationship, with a provider that is proactive and always looking at how we can together add value to what our marketing database can provide USG, rather than them waiting for me to suggest ideas."

Merkle, Targetbase, KnowledgeBase Marketing, Allant Group and Epsilon are identified as the leaders in the Forrester evaluation. That is due to a combination of integrated delivery, advanced analytics and favorable client feedback, Frankland said.

Those leaders are challenged by two groups of so-called "strong performers:" niche players such as ChoicePoint Precision Marketing, Equifax Database Services and Fair Isaac; and providers working on integrating a variety of services, such as Acxiom Corp., Experian Marketing Services, Harte-Hanks and infoUSA.

Some companies are better performers depending on the size and nature of a client's business.

For example, infoUSA is best suited for midmarket retailers and b-to-b marketers, according to the evaluation. That strength is attributed in part to its global b-to-b data sources, as well as its SalesGenie Pro Marketing technology tool.

However, the company is weak when it comes to strategy, analytics and integrated delivery, according to the report.

"The company [infoUSA] provides limited strategy and analytics within its core solution and has struggled in the past with database delivery and customer service," Frankland wrote. "But most clients are seeing some improvement, and one applauded a 180-degree turnaround."

About 35% of infoUSA's data-base clients are b-to-b marketers, representing the largest concentration of b-to-b clients of the 12 vendors evaluated.

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