Marketing Analytics and Accountability
 

Marketing Analytics and Accountability

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    Marketing Analytics and Accountability Marketing Analytics and Accountability Presentation Transcript

    • AMA Marketing Effectiveness Online Seminar Series Anna Carbonara American Marketing Association
    • Check out the AMA website
    • Marketing Analytics Helping
You
Stay
Accountable,
Op5mize
Revenue
and
Sleep
 at
Night
    • Agenda 1. Marke5ng
is
changing‐
where
are
we
today? 2. Outcome
based
measurement 3. Performance
driven
marke5ng 4. Key
analy5c
processes 5. Case
study:
how
Marketo
measures
marke5ng
 performance © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Marketing has an Image Problem Faddish Missing
the
broad
perspec5ve The
group
that
makes
“color
 brochures” Metrics
that
don’t
(directly)
 impact
the
business
–
awareness,
 leads,
and
coverage Cost
center Fundamental
problem:
other
CXOs
don’t
understand
the
role
 of
marke5ng,
and
marke5ng
doesn’t
communicate
it © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • The Changing Role of the CMO Strategic
and
financial
 leadership
to
the
organiza5on Customer
focus Excep5onal
measurement
and
 analy5cal
capabili5es Rigorous
financial
and
budget
 management Hard
financial
metrics
like
 revenue
and
cash
flow
(“the
 financial
language
of
 business”) © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Earn a Seat at the Revenue Table Who
Owns
Revenue? Sales
owns
 Marke>ng
owns
 “in‐period”
 “out‐of‐period”
 revenue revenue Lessons
learned
from
Sales: Defined
process
and
methodology Measure
outcomes,
not
inputs Forecast
results,
not
spending Use
automa5on
technology © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Introduction to Marketo More
than
300
mid‐market
 …
Marketo
Lead
Management
 ...to
change
the
way
marke>ng
 and
enterprise
companies
use… and
Marketo
Sales
Insight… and
sales
work
together…  Priori5ze
and
deliver
high
 quality
leads
with
less
effort  Understand
and
interact
with
 the
hofest
leads  Close
more
business
faster  Achieve
smarter
selling
and
 higher
win
rates • ‘Best
Marke5ng
Automa5on’
app
 • Uncompromising
solu5ons
for
 • Lowers
risk
and
total
cost
of
 by
Salesforce
customers marke5ng
and
sales
effec5veness ownership …and
ignite
explosive
revenue
growth. “In
our
second
year
of
using
Marketo,
we
now
drive
significantly
more
sales
 opportuni5es
with
the
same
budget
and
have
increased
sales‐ready
leads
by
400%.“ 



































‐
John
WaEon,
ShipServ
VP
Marke5ng
and
B2B
Magazine
2009
Marketer
of
the
Year © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • VisionEdge Marketing: Experienced Practitioners Founded
in
1999
and
headquartered
in
Aus5n,
TX,
VisionEdge
Marke5ng,
Inc.
 serves
more
than
100
customers,
and
coun5ng. VisionEdge
Marke5ng,
Inc.
is
a
data‐driven
and
metrics‐focused
marke5ng
firm
that
 specializes
in
improving
marke>ng
performance
and
crea>ng
compe>>ve
 advantage
designed
to
afract,
secure
and
retain
profitable
customers.
 Services
include:  Marke5ng
performance
 management  Marke5ng
and
sales
alignment  Product
and
strategic
marke5ng  Pipeline
re‐engineering  Professional
development © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • The State of Marketing Budgets Marke5ng
budgets
were
cut
over
20%
on
average
in
2009
vs.
levels
in
2007/2008 According
to
B‐to‐B
Magazine
2010
Outlook:
Marke5ng
Priori5es
and
Plans”
survey,
 “in
2009
nearly
60%
of
marketers
cut
their
marke5ng
budgets
in
response
to
the
 recession.” The
number
of
companies
that
cut
marke5ng
budgets
in
2009
is
25%
higher
than
 predicted
in
January
2009 In
one
survey
(Forrester)
less
than
20%
of
companies
are
expec5ng
marke5ng
 budget
increases
while
over
40%
are
expec5ng
further
reduc5ons
in

2010. © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • A Never Ending Cycle The
problem
faced
by
many
marke5ng
 professionals
is
that,
tradi5onally:
 marke5ng
budgets
are
based
on
a
 percentage
of
last
year's
revenues
or
 budget which
ignores
the
rela5onship
 between
marke5ng
spending
to
 effec5veness
and
 has
a
short‐term
focus
leading
to
 limited
success.
 Op5mizing
the
marke5ng
budget
is
a
 valuable
strategic
tool
 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Show Me the Money •Where
is
the
money? •What
is
the
business
impact? VEM
MPM
Study
2009 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Why Companies Invest in Marketing Understand
the
market
and
customers Develop
and
execute
a
strategy
to
create
preference
and
 considera>on
that
enables
the
organiza5on
to:  Acquire
more
of
something  Acquire
it
faster  Acquire
it
cheaper Otherwise,
you
might
as
well
just
put
more
feet
on
the
street Need
to
demonstrate
we
are
“geqng
the
job
done” © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Customers Connect Marketing to the Business of Business “The
purpose
of
a
business
is
to
 create
a
customer.”
 ‐
Peter
Drucker
 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Marketing’s Three Primary Roles: Find
Profitable
Customers/Consumers  The
process
of
acquisi5on  New
customer
acquisi5on
–
net
new
business
 Keep
Profitable
Customers/Consumers  The
process
of
reten5on/renewals Grow
Profitable
Customers/Consumer  The
process
of
increasing
the
value
of
your
customer
 franchise
and
brand
‐
Cross‐selling © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Our 3 Roles Enable Us to Move 3 Business Needles Find/Secure Grow Keep Profitable Customer Customers Customers Value Acquisi>on Penetra>on Mone>za>on Brand/ Market
Share Life>me
Value Customer
Equity © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • The Impact of a Job Well Done •
Enjoy
Economies
of
Scale Acquisi>on Market Share •
Maintain
Greater
Profitability •
More
Leverage
with
Suppliers Life>me •
Higher
referral
rate Penetra>on Value •
Less
cost
to
serve •
Less
price
pressure Brand/ •
Less
vulnerable
to
compe55on Mone>za>on Customer •
Befer
success
rate Equity •
Higher
prices © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Our Objectives Aren’t Aligned with the Business © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • And Neither Are Our Budgets A
hypothe5cal

but
all
too
common
marke5ng
budget: © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • As A Result, We Have Trouble Demonstrating Our Value 
Less
than
20%
of
C‐Suite
give
Marke>ng
an
“A”
vs.
nearly
50%
of
CMO/VP VEM MPM Study 2009; n=232 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Time for a new approach and a new way to budget •
Build
Ini5a5ves
Around
 Business
Outcomes
 •
Align
budget
and
measure
 our
impact,
value
and
ROI
on
 what
mafers
to
the
C‐Suite © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Performance Management …the
process
of
 measuring
 progress
toward
 achieving
key
  “The
top
challenge
for
marketers
remains
to
 outcomes
and
 beEer
quan>fy
and
measure
the
value
of
 marke>ng
programs,"
in
spite
of
improvements
 objec5ves
in
 in
accountability
over
previous
years. order
to
op5mize
 individual,
group
 or
organiza5onal
 performance. CMO
Council's
2008
Marke4ng
Outlook © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Performance Management Best Practices Measurement
 Analy>cs
and
 More
Strategic
 BeEer
Tools
and
 Competence Skills
 Metrics Process “Pressure
has
mounted
 “Lack
employees
with
 Nearly
everyone
says
business
 “Shockingly
low
investments
 on
marketers
to
 specific
marke5ng
 with
exis5ng
customers
is
 in
marke5ng
technology
and
 accurately
predict,
 analy5cs
 important,
few
use
metrics
such
 s5ll
immature
 as
length
of
customer
tenure,
 measure,
and
op5mize
 exper5se”
(Forrester
 processes”
(IDC
Dec
2008) purchase
frequency
and
recency,
 results”
(Marke5ng
 2008) value
of
the
overall
customer
 Sherpa
2009) base,
customer
life5me
value
 “Real
success
will
come
from
 “Less
than
half
of
 and
share
of
wallet being
smarter
and
more
 respondents
use
 •Other
than
leads
to
conversion,
 strategic
in
opera5ons”
(B‐to‐ analy5cs”
(Alterian
 track
lifle
else.

(VEM
2009)
 B
2009) 2009) © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Requires Performance-Based Marketing Have
a
set
of
measurable
 performance
standards,
a
pointed
 focus
on
outcomes
and
clear
lines
of
 accountability
‐
all
of
which
are
 important
if
a
marke4ng
organiza4on
 wants
to
prove
its
value. © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Measurement Competency See
measurement
and
 metrics
at
power
enabling
 marke5ng  Influence
decisions  Communicate
impact  Demonstrate
accountability  Recommend
ac5on  Play
a
strategic
role Take
an
outcome‐based
 approach Use
Performance
Target
 Seqng
for
con5nuous
 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • It all Starts with Business Outcomes Name Descrip5on/Defini5on Examples Outcome A
consequence,
result,
effect 
Ranked
#1
in
the
region
for
my
age How
the
organiza5on
will
measure
success Achieve
#1
market
share
in
XYZ
market Measurable
 States
what
is
to
be
achieved
and
when
results
 Accumulate
the
most
points
per
race
in
my
 Objec5ve are
to
be
accomplished
 age
group
 Increase
preference
for
AB
product
among
top
 What
you
will
do
to
move
the
needle? share
determiners
in
XYZ
markets Key
Performance
 The
only
difference
between
a
metric
and
a
KPI
 
Race
Wins Indicator
(KPI) is
that
a
KPI
embodies
a
strategic
objec5ve
and
 
Share
of
preference measures
performance
against
that

objec5ve
 
Product

Adop5on
Rate and/or
outcome. Performance
 A
commitment
to
achieve
a
specific
and
befer
 
Pace
(miles/hour,
mins/mile) Target quality
or
level
of
performance
over
a
specified
 
#
Share
Determiner
Qualified
Leads 5me
frame. 
#
Share
Determiner
RFPs Used
to
evaluate
performance
achieved
 compared
to
performance
expected © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • A Vital Relationship: Outcomes and Objectives Outcomes Objec5ves Tie
marke5ng
to
the
business
 Establish
measurable
 outcomes
at
the
outset objec5ves
and
strategies
5ed
 Understand
what
your
 to
customer‐centric
 company
is
trying
to
do
and
 Outcomes which
of
those
things
you
 Your
analysis
serves
as
the
 can
directly
and
indirectly
 basis
for
seqng
performance
 impact targets
for
your
objec5ves
 Aim
for
customer‐centric
 and
strategies outcomes  Finding  Keeping
  Growing
the
value
of
 customers © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Performance Based Marketing Objectives Increase referral rate of Establish
performance
 existing customers by targets
that
are: 40% by YE2009  Realis5c
 25% of existing customers will adopt  Measurable new XYZ product within 6 mos. of launch at  Time
specific launch price $A  Aligned
and
consistent
 Contribute 25% of with
 the qualified new the
organiza5on’s
 opportunities to the priori5es pipeline quarterly Improve customer advocacy score by 10% by YE2009 © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • What
Would
The
Shi`
Look
Like:
 FROM
Measuring
Ac>vity TO
Linking
to
Outcomes • Run
six
half‐page
ads
in
all
Tier
one
 • Add
7‐8
new
strategic
accounts
to
support
NA
 trade
publica5ons Market
Penetra5on • Exhibit
at
the
primary
tradeshow
for
 • Increase
customer
life5me
value
from
X
to
Y each
ver5cal • Grow
share
of
wallet
among
our
top
customers
 • Create
product
brochure
for
new
 from
A
to
B product • Increase
Tier
one
customers
purchase
to
2
or
 • Revise
online
demo more
products
from
the
Y
Family • Generate
500
leads • Add
3
new
VARs
in
each
of
three
primary
 • Implement
a
promo5on
with
two
 ver5cals
 distributors • Add
one
new
channel
partner
in
each
region • Distribute
newslefer
6
5mes • Grow
Tier
one
distributors
sales
by
X% • Send
email
blasts
to
prospects
monthly • Grow
our
product
category
by
X% • Conduct
customer
sa5sfac5on
survey • Increase
penetra5on
of
ABC
product
in
Tier
 • Research
customer
product
 one
customers
by
15% requirements • Improve
our
NAS
from
10.2
to
16 • Change
our
MVI
from
<100
to
>100 How
does
this
change
the
budget
process
and
conversa>on? © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Adopt a Metrics Framework: Tactical Strategic Predic>ve Likelihood
 Leading‐ of
Outcome Indicators Share
of
Wallet Rate
of
Growth:
 Market Business
Outcomes Brand
Preference Outcome‐
 Market
Share Based Category
Ownership Life5me
Value Efficiency Adop5on
Rates Opera>onal Lead/Rep Lead
Aging Campaign
ROI Coun>ng Program:
People
Ra5o Ac>vity‐ Media
Men5ons Cost/Billing
Dollar Based
 Program
spend/headcount Trade
show
leads Program/Total
Spend Click
Through
Rates Awareness:
Demand
Ra5o Site
Registra5ons Demo
Downloads © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Illustrating the Importance of Selecting the Right Metric: Measuring
Ac5vity
vs.
Outcomes Lose
20
lbs.
by
the
end
of
 the
year Finish
a
5K
in
under
28
 minutes Different
outcomes
mean
 different
metrics
of
success,
 even
though
may
use
the
 same
tac>c
for
each What’s
the
metric
for
the:
  Lose
weight
outcome?  Finish
5K
outcome? Calories
or
Pace
vs.
Running
5x/week © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Outcome-Based Measurement Characteris5cs
of
Effec5ve
 Connect
Marke>ng
Investments
and
 Metrics
 Metrics
to
the
Business 

Accurate
and
Precise 1. Begin
with
business
outcomes 

Reliable 2. Iden5fy
most
important
measures
 

Relevant of
success 

Aligned 3. Define
performance
indicators
 connected
with
these
measures 

Owned 4. Determine
which
data
provides
 

Predic5ve necessary
informa5on 

Ac5onable 5. Focus
on
the
most
relevant,
 

Easy
to
understand

 essen5al,
&
valuable
ac5ons 

Transforma5ve 6. Analyze
&
report 

Standardized © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Select Outcome-Based Metrics Based on Marketing’s Job Business
Outcomes
and
Marke5ng
Objec5ves
Provide
Insight
into
Metric Certain
Facets
of
Performance Move
Needles
for
Each
Gauge 5
Market
Share
Indicators 4
Life>me
Value
Indicators 5
Customer/Brand
Equity
 • Share
of
Preference • Purchase
Frequency Indicators • Share
of
Voice • Share
of
Wallet • Price
Premium • Share
of
Distribu>on • Advocacy/Loyalty • Net
Advocate
Score • Rate
of
Customer
 • Tenure • Customer
Franchise
 Value Acquisi>on • New
Product
 • Rate
of
Growth:Market Acceptance/
Adop>on
 Rates • Product
Margins © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Tie the Budget Back to the Business 1. Engage

‐

the
leadership
team
to
 6. Allocate

‐
the
dollars
based
on
the
 understand
the
organiza5on’s
 model emphasis
in
terms
of
resources
on
 7. Monitor
 find,
keep
and
grow
to
create
an
 Monitor
how
well
the
programs
 alloca5on
model performed
against
your
commifed
 2. Establish

‐
measurable
marke5ng
 targets
and
budget objec5ves
around
customer
 Track
and
measure
the
impact
of
 acquisi5on,
reten5on
and
value
 marke5ng
programs
 growth. Track
and
measure
the
execu5on
of
a
 marke5ng
program. 3. Develop
‐
programs
to
support
each
 Track

all
the
people
both
internal
and
 objec5ve
and
link
every
program
to
 external,
and
all
the
steps,
including
 one
of
these
objec5ves. approvals,
to
understand
the
total
cost
 4. Iden>fy
‐
every
element
in
the
 of
program
execu5on marke5ng
mix
and
its
associated
 8. Report
‐
effec5veness,
impact,
 dollars
for
each
program.
 efficiency,
value

for
the
money 5. Tally
‐
the
investment
needed
for
 each
program,
objec5ve
and
outcome © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Measurement is the Foundation to ROI But …It
isn’t
the
only
factor 1. Design
and
select
metrics
that
measure
 marke5ng’s
impact
on
the
business 2. Use
metrics
that
measure
efficiency,
 effec>veness
and
payback
 3. Create
a
measurement
management
 system
and
consistently
use
it 4. Capture
performance
metrics
as
quickly
as
 possible
in
order
to
ins5gate
immediate
 change
in
execu5on
 5. Report
results
and
performance
in
real
 5me © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Analy>cs
and
the
Performance‐Driven
 Marke>ng
Organiza>on Analy5cs:
 The
ability
to
drive
ac5onable
 insights
from
data Cri5cal
to
facilita5ng
befer
and
 faster
fact‐based
decisions © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Data and the Performance-Driven Marketing Organization Performance
Driven‐Marke5ng
 Organiza5ons  Embrace
data
‐
See
data
as
the
 founda5on
for
success  Get
the
best
data
possible
and
use
it
 in
a
pre‐defined,
unbiased
way  Install
and
use
a
data
management
 system  Create
and
maintain
a
data
inventory © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Three Additional Critical Success Factors: Culture Create,
reward
and
live a
measurement
culture
 Processes,
Systems,
 Tools Skills
&
Training Solu5ons
to
the
problems
 of
marke5ng
accountability
 and
crea5ng
a
ROMI
 culture
begin
with
training
 (ISBM) © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Four Key Processes: Establish
a
process
that
 Do
you
have
these
processes? enables
the
organiza5on
to
  Data
collec5on
and
 make
adjustments
in
real
5me
 analysis
process –
rather
than
looking
in
the
  Program
performance
target
 rear‐view
mirror seqng
process Leverage
industry
best
  Metrics
and
measurement
 prac5ces
and
company
insights
 process for
con5nuous
improvement
  Repor5ng
and
dashboard
 opportuni5es process Deploy
processes
that
allow
 you
to
modify
metrics
and
the
 dashboard
design
as
needed © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Take Your Accountability to the Next Level Create
a
performance
measurement
system
based
on
 data
and
analy5cs
 Adopt
a
framework
that
iden5fies
metrics
that
impact
 organiza5on’s
economic
performance
and
strengths
 Link

marke5ng

and
the
budget
to
business
outcomes Embrace
a
culture
of
accountability Add
the
right
skills,
systems
and
tools © 2009 VisionEdge Marketing VisionEdge Marketing Proprietary and Confidential Page
    • Marketo Demand Generation Funnel Awareness Inquiry Pending Prospect Lead Oppor‐ Cust‐ tunity omer Recycled Nurturing
 Database Anony‐ Name
&
 Sales‐Ready Sales
 In‐Profile mous Email /
Score>65 Active © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Demand Generation Model New
Customers ($5,166) 30% 25‐30
Opps.
from: Opportuni5es ‐
Sales
Outbound ($1,550) 12.6%
of
leads
/
 52%
of
prospects
eventually
 1.4
leads
per
opty become
a
lead 
=
9%
lead
to
opty Leads ($140) 4.0%
/
month 75% 29% Paid
 30% Ac5ve
Prospect
 75% Inquiries Database ($33) New
Prospects Free
 ($72) 71% 25% 7.2% Inac5ve Inquiries 50% ($0) © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Demand Gen Metrics Dashboard Prospect Lead Opportunity Win All
numbers
three
month
averages
 © 2009 Marketo, Inc. Marketo Proprietary and Confidential (except
Opportunity
Sources) Page
    • Demand Generation Forecast Prospects Q2 2009 Q3 2009 Q4 2009 Aug 1,824 2,500 3,050 Sep 2,668 4,250 Oct 4,500 Nov 5,200 Leads Jun Jul Aug Sep Oct Nov Dec Jan Feb Jun 403 450 470 500 Jul 462 470 500 530 Aug 475 500 530 600 Sep 521 530 600 625 Oct 557 600 625 800 Nov 782 650 800 825 Opps Jul Aug Sep Oct Nov Dec Jan Feb Jul 61 63 66 70 72 Aug 65 67 70 72 Sep 69 72 74 80 Oct 74 74 83 85 Nov 81 83 85 90 Forecast Actual © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Lessons Learned Today’s
marketers
must
earn
a
seat
at
the
revenue
 table Marke5ng
objec5ves
and
budgets
must
align
with
 business
objec5ves Metrics
should
be
based
on
outcomes,
not
ac5vi5es Put
the
right
processes
in
place
to
capture
metrics
and
 outcomes Tie
budget
back
to
the
business © 2009 Marketo, Inc. Marketo Proprietary and Confidential Page
    • Question and Answer Laura
PaEerson President
&
Author laurap@visionedgemarke5ng.com
 Jon
Miller VP
of
Marke5ng jon@marketo.com ©
2009
Marketo,
Inc.
 
 Marketo
Proprietary
and
Confiden5al Page
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