Market Consolidation

The last few years have seen very high levels of acquisition activity in the Marketing Automation space. Most of the acquisitions have been large enterprise software companies acquiring pure-play Marketing Automation providers. However, some Marketing Automation providers like Marketo have also been acquisitive. The following is a list of acquisitions that have occurred in the last few years:

• 2010: IBM acquired Unica for $480 million
• 2011: Teradata acquired Aprimo for $525 million
• 2011: Act-On acquired the assets of Marketbright
• 2011: HubSpot acquired Performable
• 2012: Marketo acquired CrowdFactory, a social campaign platform.
• 2012: Microsoft acquired MarketingPilot
• 2012: Oracle acquired Eloqua for $810 million
• 2013: ExactTarget acquired Pardot for $95 million
• 2013: Salesforce acquired ExactTarget for $2.5 billion
• 2013: Adobe acquired Neolane for $600 million
• 2013: Marketo acquired Insightera for $20 million
• 2013: Oracle acquired Responsys for $1.5 billion
• 2013: Infusionsoft acquired GroSocial
• 2014: Callidus Cloud acquired LeadRocket (formerly Genius)
• 2014: IBM acquired Silverpop for an estimated $270 million

There have also been a number of new entrants in the last few years, though none have yet risen to become substantial companies. Among the many new entrants are Bislr (2011), inBoundio (2013), INBOX25 (2009) for Sugar CRM, WhatsNexx (2008), Leadsberry (2010), Leadsius (2009), Target360 (for Microsoft Dynamics 2012), ClickDimensions (for Microsoft Dynamics 2010) or Prospecteer which blends content marketing with Marketing Automation capabilities.

Increasing Product Breadth

“I don't think any solution, certainly not today, does it all. We have many clients who use Marketo and HubSpot side-by-side, for example. Or take a newer solution like Captora, who very specifically position themselves as feeding the top of the lead funnel at the same time that they trumpet their integration with more traditional marketing automation systems. I'd be very skeptical of any solution that claims to be an 'all-in-one' marketing system. And with today's cloud-based software and open architectures, there's little reason not to pursue a best-of-breed strategy.”

Howard J. Sewell — President, Spear Marketing Group

As previously mentioned, small business-oriented Marketing Automation tools typically include inbound capabilities for blogging, SEO and social media publishing. Marketing Automation tools designed for larger organizations are also expanding their range of capabilities through product development, integration or acquisition. Here are some examples:

• Web Conferencing: The ability to manage leads coming in from webinars makes these integrations essential. Marketo, Pardot, Eloqua, HubSpot and others achieve these integrations by partnering with 3rd-party vendors like ReadyTalk to build connectors that allow for invitations, registration tracking, reminders, etc. Act-On has built its own connectors to both WebEx and GoToWebinar.
• Dynamic Website/ Progressive Profiling: Understanding who is visiting the website without requiring the visitor to fill out a form is critically important to improve conversion rates. Once something is known about a visitor, the web browsing experience can be tailored with that information to provide a more customized experience. Silverpop, as a vendor with a large proportion of B2C customers, has recently developed “Visitor Insight” which does exactly that; Neolane and HubSpot both offer something similar, as well. Eloqua partners with Demandbase and Get Smart Content to offer this capability. Marketo acquired Insightera in December 2013 to add this increasingly important capability to its arsenal of tools.
• Marketing Resource Management: These capabilities that have always been associated with high-end tools like Unica and Teradata (formerly Aprimo), are now starting to get some attention from other vendors, too. Marketo, for example, recently introduced Financial Management, which is designed for managing marketing budgets across marketing teams.
• Social Media Management: Marketing Automation products have traditionally been focused on email, but the ability to include social capabilities within the workflow has become almost a given. Almost all vendors have made some progress in integrating social capabilities into their platforms. Silverpop does particularly well here with “Publish-to-Social”, which allows marketers to send email and social updates at the same time. HubSpot also has strong capabilities in the social arena, offering both listening and publishing tools. Marketo acquired social marketing company Crowd Factory in 2012 to add social campaign capabilities to the platform.

Some vendors have decided to solve the problem of escalating breadth requirements by building partner ecosystems inspired by the Salesforce AppExchange. Best-of-breed point tools sometimes provide much better functionality than what can be built in-house. Marketo started LaunchPoint in 2012 and it currently has 200 participating partner companies. Similarly, Eloqua has the App Cloud and Act-On has the Partner Exchange (APEX).

“The more open you can be to have other companies plugged in, the better you'll serve the needs of your customers.”

Jon Miller — Co-founder and VP Marketing, Marketo

Emergence of Enterprise Marketing Offerings

The large enterprise software companies like IBM, Oracle, Salesforce and Adobe have all made acquisitions of Marketing Automation platforms (Unica and Silverpop, Eloqua and Responsys, ExactTarget and Neolane respectively) as part of a larger vision to create enterprise marketing cloud offerings. These vendors are focused on building enterprise marketing cloud suites where Marketing Automation is just one component of a full suite of modern digital marketing tools. For example, Adobe's marketing cloud also includes web analytics, A/B testing, social listening, publishing & analytics and ad management.

Oracle's Kevin Akeroyd, GM of the Oracle Marketing Cloud, segments buyers into two tiers: 1) those looking solely for marketing automation solutions, and 2) those seeking a broader enterprise marketing offering. He states, “today tier one is 75% of the market, but the 25% of the market represented by marketing cloud solutions is growing much faster.”

It is important to note that Salesforce is integrating Pardot (formerly ExactTarget) into the Marketing Cloud. Pardot has classically served B2C customers and has been more of a high-volume, advanced email marketing platform vs. a Marketing Automation tool oriented for B2B-style campaign management. Pardot is becoming part of the SalesCloud.

Marketing Database of Record & CRM Integration

Historically, many enterprises have considered their CRM the database of record. Increasingly, marketing functions consider their Marketing Automation system their database of record - it contains all the data relating to lead generation and lead nurturing campaigns, customer communications and data across channels like social.

Moreover, many contacts (leads) in the marketing database have typically not yet reached the threshold where they become SQLs (Sales Qualified Leads) and are ready for a salesperson to follow up — the logical point to pass them to the CRM system. This typically occurs via a data sync between the two systems. The difficulty is that data syncs are inherently complex and are frequently a cause of customer dissatisfaction, as is attested to by the attention given to this topic in reviews of these products. More and more, customers want the integration between these systems to be real-time — sales wants the leads immediately with no waiting. In addition to sending leads to the CRM when they hit a pre-determined score, other data sync requirements are also becoming more common, making the process more complex. For example, the Marketing Automation application is required to send alerts to salespeople when a prospect performs an action such as visiting a web page, or leads must be automatically assigned to the right sales rep through territory mapping rules.

Some vendors like Marketo and HubSpot have addressed this problem by building applications that are native to platforms like Salesforce.com. Salesforce itself plans to solve this problem by porting Pardot to the same underlying CRM database so that, effectively, Marketing Automation becomes an extension of Salesforce automation and the whole notion of a data sync is eliminated.