Another Estimate of B2B Marketing Automation Revenue

Summary: Here's a closer look at revenue per employee and marketing automation revenue in general. I get the same answers as before but now have more detail to back it up.

Some of the comments on last week’s post on the size of the B2B marketing automation industry led me to dig a bit more deeply into the question of revenue per employee. Looking through my files and asking a few questions, here are vendors for whom I have reasonably reliable information:


This gives an average of $171,000 per employee. Given that these are fast-growing companies and the employee counts were based on figures for September or later, the average headcount through the course of the year was lower, meaning the revenue per full-time-equivalent employee would be higher – probably not so far from my $200,000 figure. Indeed, the figure for the three slowest-growing companies (Unica, Aprimo and Alterian) comes to $194,000. That’s pretty darn close to my $200,000 standard. Cool.

These figures also shine more light on the original question of industry size. I don’t know the B2B fraction of Unica, Alterian or Neolane’s revenues, but it’s probably quite low: let's guess 15%. Aprimo has stated they are 40% B2B, and the rest of those vendors are 100% B2B. Doing that math, you get $160 million total:


But what about everyone else? The other big players in enterprise marketing automation are SAS, Teradata and SmartFocus, but they are almost entirely B2C so far I know. So maybe let’s credit them with $10 million.

This leaves all the other B2B marketing automation vendors. The survey for my up-coming report has employee counts, client counts and minimum prices for quite a few: OfficeAutoPilot, True Influence, Pardot, LoopFuse, Net Results, Manticore, Silverpop, Genius, LeadFormix,TreeHouse Interactive, SalesFUSION, and Marketbright. I can use that to prepare two estimates: one based on number of employees x revenue per employee, and another based on number of clients x minimum revenue per client.

- total employees comes to about 470 (I have to make guesses for a couple of small vendors and reduce the Silverpop total to account for its large B2C business). Since these are also fast-growing firms, let’s use a figure of $120,000 per employee, which happens to be the average for Neolane, HubSpot, Marketo and Infusionsoft. That yields $56 million.

- clients x minimum price is calculated separately for each vendor, of course. You’ll have to trust me that the total comes to $37 million. But that’s a very crude figure: it’s certainly low in the sense that many average revenue per client is higher than the minimum price. On the other hand, we have the growth effect again – those client counts were towards the end of the year, so companies weren’t getting a full revenue year from everyone. For sake of argument, let’s assume the two factors cancel each other out.

So we have one estimate of $56 million and another of $37 million. The good news is that they’re in the same ballpark. Let’s split the difference and figure $45 million in revenue for this group.

Finally, there are a number of other B2B marketing automation vendors who weren’t covered in my survey. These include ActiveConversion, Act-On Software, Genoo, LeadLife, eTrigue, Marqui, and others. I do have client counts and pricing for most of them; some rough calculations yield a figure of $10 million.

Add these up, and you get a total B2B marketing automation revenues for 2010 of $225 million:


Maybe I’ll adjust my original $200 million estimate and maybe I won’t bother. Either way, I do feel more confident that it’s close to right.

How Big Is the B2B Marketing Automation Industry?

Summary: Here are my estimates for the size of the B2B marketing automation industry, broken down by customer segments. Enjoy.

I've been working madly on my new report on B2B marketing automation vendors. One of the things this has forced me to do is come up with an estimate of industry size that I'm willing to defend in print. I based my figures on several approaches: revenues for the few vendors who release their figures; the number of vendor-reported clients multiplied by an estimated revenue per client; and the number of vendor-reported employees multiplied by industry-average revenue per employee.

These methods all yield similar figures -- around a $200 million in revenue for 2010. Bear in mind that the industry nearly doubled last year, so the current run rate is much higher. Also remember that I've excluded:

- the big enterprise marketing automation vendors (Unica, SAS, Teradata), who sell primarily to B2C marketers;

- B2C portions of Aprimo and Neolane; and,

- vendors who work mostly through marketing service providers (Alterian and SmartFocus).

Including those vendors would at least double the total figure. Services are also excluded.

That said, here's an excerpt from the report:

Revenues for B2B marketing automation systems (excluding related services) were $200 million in 2010, according to Raab Associates estimates. The industry can be divided into three segments serving different types of clients:

• Small business (under $20 million revenue). These are unsophisticated marketing departments whose primary interests are outbound email, landing pages, and simple lead nurturing through email autoresponders. Many are very small companies with just one or two marketing automation users. They often do not integrate with a separate sales automation system, either not using one at all or relying on a CRM option offered by the marketing automation vendor itself. The fastest growing industry segment, this group tripled to 12,000 clients and $60 million revenue in 2010. Many small business marketing departments use only email systems (which also provide landing pages and simple nurture campaigns) instead of marketing automation.

• Mid-size business ($20 million to $500 million revenue). This segment covers a broad range of marketing users with widely varied needs. Most require the full range of marketing automation functions, but apply them in relatively simple ways. They have three to fifteen marketing automation users. This segment is the heart of the marketing automation industry, supporting the largest number of competitors and accounting for approximately $100 million in 2010 revenue across 3,000 clients.

• Big business ($500 million revenue and higher). These are large marketing departments that may manage hundreds of campaigns for multiple products in different locations. They need special features for automated content selection, project management, complex lead scores, and tight limits on the rights granted to individual users. This group had about 500 clients generating $40 million revenue in 2010. Although it has been growing less quickly than other segments, adoption will accelerate as the value of B2B marketing automation is more widely recognized, existing B2B systems add more large-company features, and big software vendors enter the field.