- The six most prominent vendors hold more than 60% of the market share.
- Only 30 companies are controlling the market with about 75% of the shares.
- The remaining 25% is shared between all the others; the specialized and smaller companies.
- On 14 companies evaluated in 2018, the analyst firm Gartner has named the following four vendors as market leaders: Oracle, Marketo, IBM, and Salesforce.
- Forrester informs that the six most significant Marketing Automation platforms are Act-On Software, bpm’online, Marketo, Oracle, Salesforce, and SAP.
Table of Contents
A long tail distribution of vendors
Essentially, the marketing automation market is a “long tail” distribution of vendors:
- A few 1+ Billion USD giants
- 10 to 25 leaders with 100 Million USD or more in revenue
- The rest of smaller firms — from 1–3 person micro-SaaS companies to substantial firms with millions in revenue.
The diagram below represents the global marketing technology market distribution. (However, the marketing automation industry landscape follows the same trend.)
267 companies are selling Marketing Automation software in 2019. How to deal with this?
To have a better understanding of the competitors’ landscape, let’s cut the cake in smaller pieces and make three segments:
- The Giants
- The Leaders
- The Followers
Naturally, for each segment, the companies offer Marketing Automation, but in a slightly different way: They target different customers and offer different pricing model.
Segment 1: The Giants
Companies from this segment can be considered the Giants of the marketing automation industry: The Kings of marketing automation.
These companies are the big ones. You see them every year at the top positions in the Gartner, or Forrester reports. They have the majority of the revenue market share and are serving large enterprises.
These companies, you all know them. They are IBM, Salesforce, Adobe, SAP, and Oracle.
They all have a long history in the software business in common, and they all built their success over the last 20–30 years.
These companies generate Billions of revenue per year just with their marketing software (and we are not speaking about the other stuff they can sell).
For example, Adobe achieved record annual revenue of 1,6 Billion EUR in the fiscal year 2016 with its marketing tools.
Thanks to many acquisitions they built software suites also called “Marketing Cloud”.
A Marketing Cloud provides an offer that is not only limited to marketing automation but goes beyond it and includes other pieces of software such as Content Management, E-commerce, CRM, Analytics and more.
The software suite approach gives a robust commercial advantage as the vendor can knock at the customer’s door and enter it with one of its solutions. Their long-term goal is to sell the full suite of products and lock the customer into their solution.
Regarding the strict marketing automation aspect, the Giants have an offering delivering the majority of the functionality expected by a marketing department of large companies.
One downside is that their tools are often complicated. A large number of features make it more difficult for marketing teams to apprehend.
Another aspect, the marketing automation solution is coming from an acquisition. It could happen that the tool is not seamlessly integrated into the whole suite.
IBM proved that merging software in its portfolio is not an easy task by selling its marketing solution.
However, the vendors put some efforts in unifying the final users’ experiences.
Here an overview at the history of the various acquisitions from the big ones:
- IBM acquired Unica in 2010 (now IBM Unica)
- Oracle acquired Eloqua in 2012 (now Oracle Eloqua part of Oracle Marketing Cloud)
- Salesforce acquired ExactTarget in 2013 (now part of Salesforce Marketing Cloud)
- Before this, ExactTarget acquired the B2B Marketing Automation Pardot (now Salesforce Pardot)
- Adobe acquired Neolane in 2013 (now Adobe Campaign part of Adobe Marketing Cloud)
- SAP acquired Hybris in 2013 (now SAP Marketing Cloud)
- Oracle acquired Responsys in 2013 (now Oracle Responsys)
- IBM acquire Silverpop in 2014 (now IBM Digital Marketing part of Watson Marketing — The marketing cloud of IBM)
- In 2018, Adobe acquired Marketo, the leader of B2B Marketing Automation (I guess the brand Marketo will remain in 2019, and later)
- IBM has sold its digital marketing and commerce solutions to two different companies. HCL Technologies acquired IBM Unica (and other software in a deal close to 1.8 Billion), and Centerbridge Partners, a private equity firm got the “IBM Watson marketing” portfolio (including Silverpop).
To note: Almost each of them can offer two marketing automation systems, one for B2B, one for B2C.
Easy to follow. Isn’t it?
Here how the marketing automation offerings from the Giants will look like in 2019:
We can foresee additional acquisitions coming in the field of predictive marketing or conversational marketing in a near future.
Despite the goal to sell their full Marketing Cloud, every single software from the suite can be purchased individually. It means you could acquire only the marketing automation solution.
Usually, in their offering, you find several pricing plans. The plans are based on the features, the number of contacts or even the number of users.
They are not all transparent about their pricing. Salesforce Pardot is one of the rare exception showing pricing.
Usually, when you need, information contact the company, and a helpful salesperson will indicate that the premium package is the one you need to reach your goal and ROI.
Also, in case you didn’t succeed with your strategy, I’m sure they have another tool in their suite that might help you.
Despite the lack of transparency, you could expect to pay between 100’000 USD and 200’000 USD per year in license cost.
Also, the cost of the implementation cannot be ignored. These projects are often complex and require time and resources that only large enterprises could support.
Double the first year cost and you have your project implemented!
Their primary targets are large enterprises from financial players to healthcare, such as PNB Paribas or Bayer.
These large enterprises have many complex requirements and integration constraints within their existing sales and marketing ecosystem.
Their online communication and their website tell us that they have many products to sell. Maybe too much!
When you understand where to look, their communication for marketing people is all about the latest trend such as Personalised Customer Journey and Intelligent Marketing.
The last two years were the years of the rise of Artificial Intelligence. Numerous articles and press releases were published to brag about the excellent capabilities of machine learning engines such as Watson for IBM and Einstein for Salesforce.
The communication tries to educate the marketers and explain that this new artificial intelligence powered solutions built on top of their software suite are helping them. Marketers will save resources and time as these new technologies will be able to provide guidance and advices on how to automate marketing journeys effectively.
Some caution from major analytics firm: Gartner mentioned, in its Magic Quadrant for Digital Marketing Hubs published in February 2017, a “Hazy positioning of artificial intelligence” for Salesforces and that “some users may object to Einstein’s marketing focus on simplicity over transparency. Although Einstein offers programmable features (some of which existed before), its personified branding and vague marketing description are unlikely to instill confidence in data scientists.”
Why you should look at the Giants?
Consider one of the Giants if you know what are doing. If it is your first marketing automation project, maybe it is wise to start looking in another segment.
Keep in mind, that the investment is significant, and then it is not over. You need the capacity to execute correctly. You need a mature team of digital marketers with clearly defined roles and responsibilities to execute your marketing campaigns and generate significant ROI.
Segment 2: The Leaders
Companies from this segment provide a single product, meaning “only” a marketing automation platform and are usually on the market for 10+ years. There is no additional software in their offering (to some extent some vendors provide additional software but nothing to compare with the software suite vendors).
The Leaders are (but not only) Hubspot, Act-On Software, bpm’online, ActiveCampaign, Infusionsoft.
Even if these companies are smaller than the big ones described previously in the first segment, they stay and are big companies and often compete against Oracle, Adobe, IBM or Salesforce.
These vendors have at least 300 customers using their product and generate revenues of at least 25 Million EUR per year. In some market, they are even leader, in front of the Giants.
Together with the first segment, the number of companies are about 30 and hold about 75% of the market based on revenue.
Their marketing automation system, is robust and answer most of the requirements of marketers, such as:
- Lead management
- Email marketing
- Automation and workflow
- Blog and Landing page
- Dashboard and analytics
Marketers with complex lead nurturing and management requirements find that the product wasn’t designed for them.
Even if the system is easy to use, it seems that the automation features are poorly designed, and complex email workflow is difficult to set up or not appropriate for larger organizations, it is what Gartner says about Hubspot.
As these vendors usually do not provide a full suite, they have built connectors to connect their system with third-party E-commerce, CMS or CRM.
These companies provide a Software as a Service and charge a monthly fee for the usage of its services.
They offer a tiered pricing model. You can start with a modest entry price (even sometimes you get a free trial), and then upgrade your package for additional fees. The mechanic is always the same.
Do you need more contacts, more features or more users? Pay more!
Indeed if you become successful, they want their contribution.
Take care, even if some vendors offer a starter kit for only 200 USD/month, the small or medium size company with decent marketing requirements could see its annual bill exploding to 30’000 USD or more.
The target is large enterprises with medium to the small marketing team and also SMB. They are fighting for the same customers than the Marketing Cloud.
They have fewer enterprise customers and more SMB. In term of customer market share, they beat the giant ones. Lowest entry price allows them to acquire more customers. As an example, Hubspot is a successful company with more than 30’000 customers.
Digital marketing practices drive their communications. They aim to educate marketers about new marketing strategy and develop their tool to support those strategies.
For example, Hubspot introduced “Inbound Sales and Marketing” when others surf on the “Account-Based Marketing” wave.
Hubspot has mastered the Inbound Approach in content marketing by offering great resources like blog posts, webinars, and other tools. They have a great academy where people can take free certification courses based on their inbound sales and marketing inbound techniques.
All their competitors follow this exact same content strategy.
Why you should look at the Leaders?
If you are a large enterprise testing a pilot or a medium-sized company with a modest budget, one of these vendors might be interesting.
Their products are relatively easy to set up without substantial investment. The onboarding process could take between 4 to 12 weeks based on your velocity.
They are quite cheap to start with, but based on your usage the price can go up smoothly.
Choose wisely based on the most appropriate pricing plan, and look at the future to not have a billing shock.
Also, put some effort in analyzing the integration you might need. Vendors do not provide the same set of integrations, and it could save you time in custom development.
Segment 3: The Followers
In this segment, you find companies serving more than 14+ Million of customers and generating more than 200 Million, such as MailChimp, next to recent start-up such as the 3-years-old Leadfox.
Their aggressive pricing targets SMB. Try for free and start paying when your business grow. That’s the motto.
These vendors do not compete with the companies mentioned previously on the enterprise level. Their automation features are quite limited but fulfill the needs of small businesses. Their initial focus was solely on providing an email marketing solution. Also, small businesses do not require advanced and sophisticated marketing campaigns.
Don’t get me wrong, their products deliver enough features to implement a digital marketing strategy, and on the paper, they could have more feature than companies mentioned previously. (Here a comparison between Hubspot and MailChimp).
Though, complex scenarios are more difficult to set-up.
They provide as well many integrations with other systems such as popular CMS like WordPress or Drupal, or popular CRM such as SugarCRM or Zoho CRM.
The pricing perfectly suits expectation from small businesses. It is cheap. Very cheap.
It is possible to start an email campaign for free if the target audience is limited. Then when the needs of emails are increasing, offerings between 10 USD/month and 100 USD/month are available.
As an example, MailChimp is very “generous” with small businesses because with MailChimp’s free plan you can send up to 12’000 emails and have up to 2’000 subscribers per month. The only ‘payment’ here is to display the MailChimp logo on all of the sent broadcasts.
MailChimp provides other plans to help growing businesses. The annual bill could reach about of 3’000 USD for 50’000 subscribers.
Their target is small businesses, less than 50 employees such as bloggers, agencies, and small to midsized E-commerce companies.
Small businesses expect systems that are easy to use and ready to use. Resources and times are minimal for small entrepreneurs, and they don’t have time to implement advanced scenarios. They could deal with a workaround.
A favorite target within the small companies is E-commerce companies and for an apparent reason. They are more likely to generate revenue and see their audience growing. That’s why particular features answering specific needs of E-commerce are available in those solutions.
Their communication is all about helping businesses to develop. “Grow your business” for GetResponse, “Powerful tools designed to accelerate your growth” for Leadfox.
They communicate a lot about the number of users they have and their worldwide presence.
Free and competitive pricing is as well a prominent message.
Regarding the latest trends in artificial intelligence such as predictive analytics or any other machine learning based functions, they are quite behind.
Why you should look at the Followers?
You are a solo-entrepreneur or work in a small company and want to become more efficient with your online sales.
Alternatively, you are in a larger group and only want to try out marketing automation. Here you go.
Set your channel, pick the right tool
You should focus on products delivering features empowering your primary communication channel.
If you plan to blog, find the right product to help you automate some activities in this area. Other products are better in direct emailing or for reaching an audience on social networks.
Primary sources for this article: