Landscape of MarTech Vendor Directories

I'm making a presentation on marketing technology selection at B2BLeadsCon in New York next week, and had thought to start with the usual Oh-My-God-There-Are-So-Many-Vendors slide to get everybody's attention.  This would ordinarily be Scott Brinker's popular Chief MarTech Landscape but I've recently seen so many variations on the theme that I put together a composite slide instead.  This includes Scott's slide plus versions from Luma Partners, Gartner, MarTech Advisor, Terminus/FlipMyFunnel, and Growthverse.

I considered labeling this a "landscape of landscapes" but quickly realized that (a) it's not all that witty and (b) six vendors isn't enough.  But on further reflection, I recognized that these landscapes are really a type of directory that helps marketers find available products.  This led me to consider other types of online directories, of which there are many.  So I did end up producing a landscape that still isn't as crowded as Scott's but does show the number of information sources available.

As you see, this contains four sets of products: the original six landscapes, divided between the static images and the two interactive options (both very cool).  In addition, there are two directories with analyst ratings, from Gleanster and TopAlternatives.  But the biggest category is the community review sites, of which the best known among marketers are probably G2 Crowd, TrustRadius, and Software Advice.  Because the purpose here is to list tools that help marketers find systems to purchase, I didn't extend the landscape to business directories like Crunchbase, VentureBeat's VB Profiles and Owler.

I did look at every vendor shown in the graphic and can affirm that each includes at least some marketing systems.  There are some interesting differences in approach but, like any good landscape creator, I'll simply give you a set of logos and let you research from there. Again following the tradition of landscape publishers, I make no claims about the completeness of my list or the quality of any of the companies listed.  But I will make your life a bit easier by listing all the links below.  Enjoy!

AlternativeTo
AppAppeal
BestVendor
Chief MarTech
Cloudswave
Credii
DiscoverCloud
GetApp
G2 Crowd
Gartner
Gleanster
Growthverse
Luma Partners 
MarTech Advisor
Osalt
IT Central Station
Serchen
Social Compare
Software Advice
Software Insider (formerly FindTheBest)
Terminus
TopAlternatives
TrustRadius

Raab Report: Financial Comparison of B2B Marketing Automation Vendors

I’ve been so busy analyzing the new VEST data that I missed the announcement that Eloqua’s would make its initial stock offering today. The valuation was a bit disappointing – $368 million, or just over four times revenue trailing 12-month revenue – but certainly a good return on its backers’ investment of about $41 million. And the stock did rise 12% on the first day. Good for them, and congratulations.

Coincidentally, I was already planning to write today about industry financials. I’ve been creeping in that direction with the previous two posts about revenues, growth rates, and market share. Now let’s plunge in with some more substantial analysis.

For companies like Eloqua and its competitors, there are really two big financial questions: how fast can they grow, and how can they become profitable? In a young industry like B2B marketing automation, the primary focus is growth, and I published some figures on that yesterday  (repeated below). As we saw, Eloqua’s client count is growing considerably slower* than all major competitors except Infusionsoft. This may be one reason the stock market gave it a relatively conservative valuation.

Revenue figures tell a similar story, as does revenue per client. We looked at those in Tuesday’s post;  I’ll repeat the caveat that figures for Eloqua and HubSpot are my own estimates based largely on client growth and (for HubSpot) changes in client mix. The standout performer in all these tables is Marketo, but bear in mind that they’ve also taken much more investment than any of the others ($107.5 million) and the $70 million in 2012 revenue hasn’t happened yet. Still, this suggests that Marketo might be able to fetch a higher price than Eloqua.

What about profitability? I’ll repeat that the financial markets care much less about profits than growth for early stage companies. Still, profits will have to matter eventually.  So they're worth a look.

Eloqua is the only company in this group with published financial statements, so any profitability analysis has to be speculative. One useful measure is employee counts, which are a reasonable proxy for expenses and operating efficiency. The table below presents clients, employees, and clients-per-employee ratios.

The first thing you’ll notice is the broad range in clients-per-employee ratios: from 40:1 for Infusionsoft to less than 4:1 for Eloqua. The main reason is the size of each company’s clients – Infusionsoft serves small businesses that take much less effort per client than the mid-size and large companies who buy Eloqua.

Still, Marketo, Pardot, SalesFusion and Net-Results all serve primarily mid-size companies, so they are somewhat comparable. (Act-On tends a bit smaller.) Given that assumption, the figures suggest that Pardot, Net-Results and SalesFusion are more efficient than the others. That’s probably true, perhaps because they are all self-funded. Net-Results also markets primarily through resellers, which also lowers its costs.  Act-On’s ratio is notably low, probably reflecting aggressive staffing as it prepares for rapid growth.

The second thing you’ll notice is the year-on-year trend. Infusionsoft, HubSpot, Act-On, and Net-Results all show a drop in the clients-per-employee ratio since last year, meaning they have become less efficient. We can probably attribute that to gearing up for growth. By contrast, Eloqua, Pardot and SalesFusion have become substantially more efficient. Eloqua’s gain is particularly impressive since it has the largest client base and relatively low growth – suggesting the company has been working hard to keep costs down in preparation for its public offering. It looks like Marketo has become just slightly more efficient, but we'll revise that opinion in a moment.

Since we do have revenue figures for the top four vendors, we can also look at their revenue per employee. This is a standard efficiency metric and more directly comparable across companies.  Here's that data, along with revenue per client.

These figures put the client-per-employee ratios in deeper perspective. They confirm that Eloqua has improved efficiency, and by far the highest revenue per employee in the industry.  The figures may be be overstated (see footnote) but even more conservative values would leave Eloqua in first place.  The figures also confirm that Infusionsoft’s cost structure is pretty much stable.

The news is better for HubSpot, whose apparent productivity decrease (measured in clients-per-employee) vanishes when you measure revenue per employee instead. The difference is the growth in revenue per client (which, I’ll remind you again, is only my personal estimate).

The story is even more dramatic for Marketo, whose 6% improvement in clients per employee becomes a 23% gain in revenue per employee, boosted by a 16% increase in revenue per client.  Impressive, but let's hold the applause until we see the actual results.


Whew, that’s a lot of numbers. Maybe only industry insiders will find them as interesting as I do. But other marketers should also find them helpful as they try to understand each vendor's business situation and determine how well it matches the marketer's own needs.

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* And that's using Eloqua-provided figures of 900 clients as of mid-2011 and 1,375 for mid-2012, which yield a 53% year-on-year growth rate.  The revised S-1 published in mid-July showed 42% year-on-year revenue growth.  A 42% growth rate would yield 2012 revenue of $101 million vs. my estimate of $110 million, and a 7% drop in revenue per customer to $73,455.  Ouch!  On the plus side, even the adjusted $288,571 revenue per employee is higher than anyone else, and a 16% improvement over 2011.

Raab VEST Report: Testing, Data Quality and Content Management Still Lag in Marketing Automation Products

My last post looked at data from our just-released B2B Marketing Automation Vendor Selection Tool (VEST) to understand general industry trends and identify the greatest areas of improvement. Today we’ll look at the VEST data to see what’s still hard to find. As before, the charts show three columns: change in feature availability over the past year among core marketing automation vendors; current availability among core vendors; and current availability among enterprise vendors. See the previous post for details on the calculations.

Split Tests: Formal split testing of different content versions or customer treatments is the heart of marketing optimization, but many B2B marketers still don’t have the time or resources to do it. Given the lack of demand, it’s not too surprising that many vendors don’t offer strong testing features.  Still, I feel they have something approaching a moral obligation to provide these features and encourage their use.  Note that splits within lists, the one testing capability that is fairly common, is actually the hardest for marketers to use.  Testing features are much more available among enterprise systems, whose clients are more likely to conduct tests as a matter of course.

Value-Based Selection: This is arguably the next step after dynamic content (see my previous post), since it uses calculated values rather than user-crafted rules to select marketing contents or campaign actions. Like dynamic content, it reduces the complexity of marketing programs while allowing them to be more targeted. It's still much harder to find than dynamic content although it is becoming more available.  Again, enterprise vendors have a substantial lead over the core systems.

Integrate with Direct Mail Printer: This is admittedly a small tactical issue, but it's interesting in its own way.  There’s apparently a resurgence of interest of direct mail generally and post cards in particular as a way to avoid ever-more-cluttered email inboxes and social media channels. This is one of the few features that are more common among micro-business systems than the core group.

Project and Content Management: These features are most important for large marketing departments that need coordinate work of many people. Most core marketing automation systems can track the creation and last change date of an item. But serious administration requires much more detailed control over who makes changes, approvals, and project management. As marketing programs get more complicated at all sizes of companies, these features will become increasingly important.

Data Quality: These are features that give marketers more control over the data that goes into their systems. Like split testing, data quality is widely recognized as important but often ignored. Availability of these features actually went down last year because several new core vendors provided below-average support. Enterprise vendors, with their more sophisticated client base, support these features fully.

Data Management: These features each reflect a certain degree of data management sophistication, although there’s a reasonable case that a separate company table doesn’t matter much in practice. The opportunity table is critical for revenue analysis, and you see here that it’s widely available. Custom tables are needed to extend the marketing database beyond inputs from the CRM system. They used to be fairly rare but are now available in more than half of the core products.   But half full also means half empty, so buyers still need to check carefully to ensure a particular vendor supports their needs.

Reviewing this list of features, only value-based selection is really cutting edge.  The rest have long been standard for consumer marketing automation products and enterprise B2B.  They're missing from core B2B marketing automation systems because most of their clients are smaller, less sophisticated companies who haven't needed them.  This may never change for vendors focused on small marketing departments.  But vendors serving larger companies will add these features as their clients discover they need them.

For more information about the B2B Marketing Automation VEST report, please visit www.raabguide.com/vest.