The marketing automation super-collider of 2014

Marketing Automation Vendors

I started working on a new version of a marketing landscape that will be released early next month. The last one I did was back in 2012, and a lot has happened since then.

One thing in particular that has surprised me in my research is how much the marketing automation category has expanded. While I’ve expected the overall marketing technology space to expand, I’ve largely subscribed to the narrative that the marketing automation category within it is consolidating. (My belief is that marketing automation systems will evolve to be more open platforms that accelerate the growth of diverse marketing apps at the next layer up.)

Indeed, there have been some major acquisitions — Oracle acquired Eloqua, Salesforce.com acquired ExactTarget and Pardot, Adobe acquired Neolane. Marketo had a successful IPO, and its stock has risen by 42% this year to a $1.2 billion market cap. And more M&A and IPOs are likely in the year ahead. That is the narrative of consolidation.

UPDATE: Just as I posted this, the news came out that Oracle had acquired Responsys. HT to Brian Bachofner for alerting me to this.

But several counter-narratives have emerged too.

A new wave of vendors have launched in this space — the second-generation of marketing automation: Bislr, Leadsius, inBoundio, Whatsnexx, Intercom, Inbox25, and more.

Not all of these fit the mold as defined by the first generation of marketing automation. You could argue that products like Intercom are more of an alternative to marketing automation. The SMB segment of the market is particularly diverse with products that cross boundaries from traditional labels.

I’ll have more — a lot more — to rant say about categories and labels when I release the new landscape. However, labels aside, these products are all largely playing in the same pool. So while acknowledging that “marketing automation / integrated marketing” is a big and fuzzy designation, this cluster of vendors is largely competitive with each other.

Which leads to another important counter-narrative. Another major category of marketing software — what started out as web content management (WCM) but is evolving into web experience management (WEM) — is increasingly overlapping with the capabilities of products in the marketing automation space (and vice versa). You could argue that the long-term effect of this may be consolidation, but there’s no doubt that the short-term effect is an expansion of choices in the space.

I expect we’ll see a lot more cross-category competition among these vendors in 2014:

WCM/WEM Vendors

MRM/PRM Vendors

And there’s yet another counter-narrative, with more specialized kinds of marketing automation receiving more attention — in particular, marketing automation designed for channel and partner marketing, companies such as TreeHouse, Marketing Advocate, Zift Solutions, and others.

In turn, this emerging channel marketing automation category is intertwining with many marketing resource management (MRM) vendors. Meanwhile, some marketing automation providers like Marketo are making a strong push to incorporate MRM capabilities into their platforms.

It’s looking like a red ocean.

But the truth is, despite all this competition, the market for marketing automation solutions — if we use that label loosely — is large and growing larger. As David Cummings wrote earlier this year, the numbers suggest that we’re just at the beginning of the coming wave of marketing automation adoption.

As David points out, the math would suggest that we’ve only seen about 5% adoption of the potential market. This means that the pie can grow tremendously, even as more contenders seek to have a slice. Those economics can support a diverse field of competitors for quite some time.

Which is why I believe we’re going to see a super-collider effect of marketing automation in 2014. It will be spectacular, and I expect there will be many new discoveries.

In the meantime, I have two recommendations:

Read this post from Jay Famico of SiriusDecisions on How Marketing Automation Has Evolved in 2013. It’s a terrific summary of how much has changed in the past 12 months.

Read everything from this past year on David Raab‘s Customer Experience Matrix blog. In my opinion, David is one of the best authorities on marketing automation (and related categories), and he’s extremely generous in the depth of his analysis that he provides for free on his blog.

With any luck, this is my last post for 2013. Thank you for reading this year. I hope you have happy holidays and that your New Year kicks off to a great start.

P.S. If you feel I missed a company that should be represented in one of the categories above, please let me know in the comments. No promises, but I’ll be working on the big jigsaw puzzle of the landscape over the holidays — it’s odd that I find that pleasantly relaxing — and will try to squeeze in whomever I can before the final release in January.

Comments

  1. Hi Scott

    A negative side effect of the overlaps between WEM and Marketing Automation platforms is the confusion it will create for marketers who need to select software.

    In my experience marketers are often buying platforms for an element of the total functionality offered (e.g. the CMS or the ability to send emails). It’s going to become more important for them to understand the depth of functionality being offered by each part of the product to ensure that the solution is adequate and cost effective.

    Look forward to seeing the completed marketing landscape.

    Kind regards

    David

    • Yes, I agree — the cornucopia of choice has downsides too. I didn’t mention in the post above, but to make matters better/worse, the CRM space seems to be converging into this bazaar as well.

      On the whole, I believe the positives will outweigh the negatives: more innovation, more price competition, more specialization to better suit different kinds of businesses, and more incentive for open APIs, especially around customer data records.

      But confusion is definitely going to be a negative for the near future.

  2. Hey Scott–

    Not sure where you’d think to have Kapost located? I could see us in both WCM & MRM. What do you think?

    • Hi, Toby.

      I’ll have a category for Content Marketing, in which you guys are clearly one of the stars.

      One of the difficulties is that it’s really hard to categorize folks, since there’s so much overlap and many innovative ways of tackling the space that defy simple labels. I actually think that’s a good thing for the creative energy of how things are evolving. But it pretty much guarantees that any attempt at categorization is approximate at best.

  3. Scott, Have you taken a look at Evergage http://www.evergage.com We are a real-time web personalization platform being used by an increasing number of large brands like Publisher’s Clearing House, the Palms, Gardener’s Supply ecommerce, Millward Brown.

    So we would sit in between marketing automation and WEM.

  4. Hi Scott
    Thanks for your postings. If you haven’t already, take a look at MatchCraft (http://www.matchcraft.com). We provide search/ppc, display and social marketing automation at scale. Our clients are typically large resellers such as Yellow Page or newspaper companies around the world. Thanks.

    • Hi, Dorab. Thanks for letting me know about MatchCraft. I’ll have categories for search and social advertising and marketing — still experimenting with different ways to do those groupings — and it seems like you’d be a great fit somewhere in there. Does that seem right to you?

      • Hi Scott

        Yes, the MatchCraft platform would fit in at the intersection of those categories, currently biased towards the search/ppc segment. Our specialty is providing automated and scalable solutions for our large reseller clients.

        Having been around since 1998, and always having considered ourselves as a technology company that understands marketing well, we have witnessed the inception and growth of our corner of the martec ecosystem. We also see the same consolidation/expansion trends in our segment of the market that you are seeing in the overall marketing technology platforms. There is the consolidation or services and data in horizontals, and expansion and specialization in verticals.

  5. Scott- This is a really solid write up and we are definitely seeing the same thing- an explosion of “marketing automation” companies that we are partnering with. One of the reasons I think this is happening is that it is impossible to be “everything to everyone” so increasingly specialization is taking place in the automation category. Companies are customizing their approach to the market to solve more specific pains for specific kinds of customers and then of course working to expand horizontally or vertically. The only thing happening faster than the rapid M&A contraction of marketing software is dwarfing growth of the whole market. Certainly a good thing.

    • Thanks, Seth. Glad to hear that this jives with what you’re seeing too. Will be very interesting to see how this space evolves over the next year. Certainly making me re-think some of the possible ways that an equilibrium could be reached — and on what time scale that might be.

  6. Hi Scott,

    First, let me express my gratitude for what you are doing for our sector. The extra insight you provide helps to accelerate that 5% adoption rate fast.
    We have placed ourselves (VEMT, http://www.vemt.com) in the Persuasion Marketing block, but I don’t think that is one you use in your overview. Automated marketing responses based on personalization and loyalty rewards would describe what we do better, so I’m curious to see where you would position us.

    Let me know if you want some more information, or any support in mapping more European companies in the sector.

    Regards,

    Jeroen Nas

  7. Hey Scott,
    Please add my ‘thank you’ to the earlier replies for your insightful blog posts this year, as well as your leadership role in creating engaging, thought provoking conversation in the MarTech space.

    Your ‘super-collider’ title got me to thinking about the term and its use in scientific discovery; to uncover things we believe are there but can’t quite see otherwise. While the MarTech space is starting to consolidate around known and accepted practices (email, web analytics, content), the pace of ‘new discovery’ is far outstripping the pace of consolidation. So while like you, I believe there will be a continued consolidation (Salesforce-Pardot, Oracle-Eloqua, etc), the pace of new innovation will be exciting to watch. Just capturing, categorizing and posting all the logos must be a near full time job! Thanks for that!

    Don Nanneman

  8. Scott,

    Glad to here you are working on an updated marketing landscape. Here at Kwanzoo (http://www.kwanzoo.com) as you know, we currently work with marketing automation (MAP) customers to accelerate their demand generation programs. We make it really simple for them to build and launch rich media re-targeting, email, and display campaigns to boost top of funnel leads and accelerate their pipeline. It’s been an interesting challenge for us to both understand, and then explain where we fit, given we uniquely integrate display advertising into MAP/CRM (from capturing leads and digital body language into MAP/CRM, to personalizing display ads based on MAP data).

    In terms of any market categorization, the closest we have found is that we are Terry Kawaja’s Display Ad Tech Lumascape (http://www.lumapartners.com/lumascapes/display-ad-tech-lumascape/) meets his Marketing Tech Lumascape (http://www.lumapartners.com/lumascapes/marketing-technology-lumascape/). So it would be interesting to see if you will have a better category recommendation for us.

    I completely agree with your comments re: what’s going on between the MAP, WCM and CRM platform ecosystems. I see it as the “Battle for the Customer (Experience) Profile”. The platform that owns all of the prospect and customer profile, and the interaction data that is generated at every touch point regardless of digital channel, by integrating with the broadest set of third party marketing platforms and tools, stands to reap huge rewards.

    Our own theses is that no one Marketing Cloud (Oracle, Salesforce, IBM, Adobe, others to come to the party) will dominate, it will be a world of multiple marketing, sales, ad tech and other customer facing platforms and tools in each enterprise. And there is a critical role for one or more platforms and tools that specialize in “marketing technology integration”. Marketers will need lots of help to ensure the seamless flow of marketing process, data, and content across their systems so they deliver a superior customer experience on each touch. We see ourselves trying to solve the integration challenge in a small way, specifically in the demand generation and lead management phase of the customer life cycle.

    Looking forward to more discussions in the new year. Happy Holidays!

    Mani Iyer

  9. Alexandru Rada says:

    Hello Scott,

    Thank you for your post. It reviews marketing automation in it’s pure form. Personally, I believe that Marketing Automation will be divided in multiple ways: customer type, industry, size, business domain. You might want to consider these.

    I founded a few years ago Vibetrace (http://vibetrace.com), which is a marketing automation solution for ecommerce. Please have a look, it fits perfectly your landscape and will be proud to be considered.

    Thank you!

  10. Hi Scott -

    Thank you for inviting additions to your marketing landscape. Please consider Content Dialog. We create an instant ‘mini engagement’ wherein marketers demonstrate their expertise — and qualify the leads — in personalized assessments of a user’s specific situation from their responses to short questions. I’d consider us to be a hybrid interactive content management tool / expert system and look forward to how categorize us

    Thank you!

  11. Hey Scott, great service to the broader marketing and tech community. There are so many new categories as CMOs and marketing orgs automate using technology. As both a CMO practitioner and a CMO of a marketing tech company – Integrate, it is nearly impossible to get your arms around! I have some ideas on how CMOs and their teams can develop a “blueprint” that I use as a CMO to help develop a logical marketing tech plan. I will drop you a note that may be helpful to your community.

    For our CMO customers, Integrate is a SaaS-based marketing tech platform that automates and connects media investment and all the corresponding data to marketing systems and processes. Another category to keep an eye on.

    Keep up the great work!
    -scott

  12. Thanks for including mention of Marketing Advocate in your review, Scott. For those interested, we have a library of ROI case studies that demonstrate our platform success and also forward-thinking annual reports that we sponsor. Feel free to download at http://www.marketingadvocate.com/resources. (And be sure to watch the animated video on the homepage. It will make you smile.) ;)

    Thanks again, looking forward to keeping abreast of your updates in this arena,
    C

  13. BTW, great article – 2014: The Year Agile Marketing Takes Off! To that end I hope you’ve had a chance to check out http://LeanKit.com. In the spirit of full disclosure, I work for LeanKit and have been working on agile marketing teams for 5+ years.

    If you’re not familiar with LeanKit it’s an agile marketing tool built for teams looking to get started with agile or experienced agile marketing teams looking to scale their initiatives. The flexibility of the tool is where it shines.

    LeanKit was built with the thought that teams should approach moving to agile marketing from an evolution not revolution mindset … since it requires a shift in thinking (Scott’s multiple blog posts on the topic are outstanding). The shift in habits required to be successful takes most people/teams a bit of time. We’ve found that starting with your current marketing processes and evolving them over time (as you become more agile) is a big key to success. Definitely don’t throw out your current process(es) on Friday and cut over to an all agile “by the book” process on Monday, many teams have tried and failed using that approach. To that end the LeanKit tool helps you model YOUR current not so “agile” processes and easily evolve them over time as your team becomes more agile. There’s a free version so there’s no risk in giving it a try.

  14. Very true. There are so many MA platforms that are cropping up, the change in adoption rate still doesn’t make a big difference. That said it’s definitely a good trend to see so many companies adopting MA. Marketing automation is no longer aimed only at enterprises. Small businesses are very rapidly getting automation for themselves. However, it’s a little off putting that many automation services are still centered around email and offer little to no cross channeling. At Agile CRM, we take social media and cross channel marketing automation seriously. Our MA lets users send out automated and relevant tweets and linkedin messages. I expect to see at least a 10% increase in the MA product space in the market this year.

  15. Hi Scott,

    Great article, and I love the final landscape you recently released. Have you considered carving out a separate category for “Marketing Acceleration” and including companies that sit on top of, and plug into, other systems to make various marketing programs easier/faster to get results from?

    Specifically, I’m thinking of companies like Sailthru, Movable Ink, Monetate, etc. These companies aren’t necessarily replacements of the others in their category, but rather can function as an extension of the other’s capabilities.

    From a marketer’s standpoint, I think the distinction is an important one because “rip and replace” is always a different beast compared to an enhancement layer.

    Adam

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