Wednesday, February 01, 2012

New Marketing Automation Report: Venture Funding is Key to Success

I released the 2012 edition of our B2B Marketing Automation Vendor Selection Tool (VEST) report today, an event that deserves more hoopla that I’ve given it. The VEST provides by far the most detailed, objective information available on industry vendors. It includes nearly 200 data points on 21 products, thumbnail sketches of each vendor’s strengths and weaknesses, and three industry quadrants showing leaders in different market segments. It’s also interactive: you can change the weights assigned to different items and watch the vendors zoom around the quadrant as a result. For those of us who don’t get out much, that’s downright exciting.

Although the VEST is primarily intended to help people who are buying a marketing automation system, its database also provides a statistical portrait of the industry. After rooting around in the numbers like pig hunting truffles, here’s what I dug up:

Core marketing automation is growing fastest. We classify industry vendors into four groups:
- micro business vendors (Infusionsoft and OfficeAutoPilot)
- HubSpot (a category of its own because it’s not quite standard marketing automation and is big enough to treat separately)
- enterprise vendors (Neolane, Aprimo, Silverpop, and Oracle)
- core B2B marketing automation (everybody else: Eloqua, Marketo, Pardot, Genius, Act-On, et, al.)

The enterprise vendors don’t release meaningful installation counts – some refuse to provide any data and others don’t distinguish B2B from B2C clients. So we’ll exclude them from further analysis. The table below shows growth for the remaining groups:

As you see, core vendors grew almost twice as fast as the micro-business group and considerably faster than HubSpot. There was some speculation last year that the micro-business vendors were growing the fastest. Myth busted.

Revenue grew faster than installation counts. The previous table shows that combined growth across all categories is 46%. But that doesn’t mean much because the selling prices are so different. Adjusting for revenue per client, I estimate that industry revenue grew about 55% last year.  I could show you my calculations, but then I'd have to...well, you know.

New leaders can still emerge, but venture funding is required. A year ago, the three largest core vendors were Eloqua, Marketo, and Genius, and Act-On was an also-ran. Today, the Marketo has more clients than Eloqua (although not more revenue), Pardot has replaced Genius in the third position, and Act-On is coming up fast.

It's no mystery why the market remains fluid: venture capital lets new entrants shoulder their way to the top. Of the five top-ranked core vendors, all but Pardot has substantial venture funding. None of the remaining ten core vendors do – and their average growth is much slower. Self-funded firms can survive but it’s unlikely they will become leaders.

Specialization is increasing. We ask vendors for client counts in four segments: micro-business (under $5 million revenue); small business ($5 to $20 million revenue), mid-size business ($20-$500 million revenue) and big business ($500 million and higher). Most gave us answers, although Act-On was a prominent hold-out.

It’s no surprise that the micro vendors sell almost exclusively to micro clients. HubSpot’s base is much more diverse, although the micro and small sectors still account for 75% of its base. Of the core vendors, Marketo and Genius are the most small business oriented, with the two smallest categories accounting for over half of their customers. Pardot is tightly focused on small and mid-size clients, reflecting their disciplined sales approach. Eloqua has by far the most big-business clients of any core vendor, a proportion that has grown dramatically since the first VEST report one year ago.

For more information on the new VEST report, visit


Unknown said...

David, I disagree with your decision to exclude Silverpop from your analysis. The 4,000 brands currently benefiting from Silverpop’s marketing automation technology represent B2B companies, B2C companies and companies that market to both—in fact this is an area of tremendous growth, significantly contributing to our 25% growth in 2011.

B2B? B2C? Today, it’s difficult to tell the difference. In fact, we don’t even track our customers this way. Think about it. (a Silverpop customer), helps anyone looking for a job or hoping for a promotion (B2C). also maintains close relationships with human resources departments evaluating compensation (B2B). YouSendIt (another Silverpop customer), has 30 million users both individuals and corporate accounts. Still not clicking? Think about Google. To stay in business, they need businesses to buy ads and consumers to click on them. So, B2B vs. B2C? It’s hard to tell—and I have a feeling all the vendors in this space who keep a close eye on their customer list would agree. The real question is: does it even matter? At the end of the day, regardless of who these companies are reaching and when—they are all reaching individuals who are in and out of multiple channels, multiple times each day. They want you less, but expect you to give them more. You have no choice but to be automated.

We’re not shy about our numbers, we just want people to see the big picture. Regardless of the audiences they serve, nearly ALL of our customers are now using marketing automation features. The demand for these services is growing rapidly. And we believe that Silverpop is ahead of the market by enabling both B2B and B2C capabilities at a scale that makes us one of the largest marketing automation vendors in your analysis. To exclude us, is to exclude the direction of the marketplace.

Is marketing automation a great tool to improve sales and marketing alignment? Absolutely. And we make that possible through key features such as multiple lead scoring models and progressive profiling. Does marketing automation provide clear and key insight into the buying cycle? Of course it does. Our customers take full advantage of the revenue reporting tools we provide them—designed to report on the full picture, from first inquiry all the way to the final sale. But marketing automation can do so much more. It improves the buyer experience by allowing companies to reach their audience where they are, all the time. It also helps improve the efficiency of the marketing department (regardless of what or to whom they are selling)—and who doesn’t want that!

Does this philosophy mean Silverpop isn’t focused on marketing automation? Nothing could be further from the truth.

Bryan Brown @GetVision
Director Product Strategy

David Raab said...

To be clear, Silverpop is in the report. I excluded it and other 'enterprise' vendors from the blog analysis because the focus is on the B2B marketing automation segment.

Anonymous said...

Hi David,

I don't believe we (ClickDimensions) are in your guide but, in the Microsoft CRM market, we are doing very well due to the fact that we are built into the Dynamics CRM solution as an xRM solution. Several hundred organizations use us including Microsoft, Volvo, Boston Red Sox, MTV Europe, Avanade, GAF, Children's Miracle Network and Australian Catholic University. Because we leverage the worldwide Microsoft CRM channel, nearly half our revenues come from outside the USA.

We sell into what you refer to as the 'core' market and we were recently funded by Canal partners. We have doubled our employee count in the last 4 months. We're also the top ranked solution of any type (i.e. not just marketing) on Microsoft’s Dynamics Marketplace (i.e. their app exchange).

I realize that as a Microsoft-only solution we may not seem to meet your guide’s criteria at this time. However, we are confident in the growth of the Microsoft CRM market and in our ability to continue to lead there. I look forward to staying in touch with you. Thanks,

John Gravely

David Raab said...
This comment has been removed by the author.
David Raab said...

Hi John. We don't list ClickDimensions because it is more of an add-on than a separate product. The specific difference is that it doesn't maintain its own marketing database but works directly from the Microsoft CRM files. That's not a bad thing, but just puts it in a different class of system. I did review ClickDimensions in my blog -- see

Anonymous said...

Hi Mr. Raab,

Very interesting analysis of Marketing Automation vendors.

This gives readers an un-bias look into the ranking of vendors.

Thanks for all the information and I am sure businesses in the market will find this data most useful.

Kareem Ghanie