Is Marketing Automation "Floundering"?

This happens in a lot of new markets.
A lot of people buy into the vision right away but the actual deployments lag behind.
This feels like a disappointment when in reality it has been quite dramatic growth -- just not 100% penetration yet.

The marketing world has been saying that '200X is the year of mobile' for over a decade.
In truth, whole markets don't go through this kind of change in a year.

We're on the up slope, without a doubt (Europe is lagging the US quite a bit but will catch on this year, I'd wager).

Marketing Automation is not "floundering" just going through business software "growing pains". A couple months ago, I was negative. I was hearing about too many stories about failed implementations, limited usage (email only), and disappointment. But Brian Kardon in the Focus Roundtable on Marketing Automation (http://www.focus.com/events/marketing/focus-marketing-automation-roundtable-l...) really helped me put things in perspective:

Kardon said among other things: "I can only speak for our own growth, but I have a feeling that my peers are also growing incredibly fast. I worked in other industries, and they're very envious of marketing automation. This category is growing incredibly fast. You know, is it quintupling in a year? No. But most competitors that I see in the space are growing, you know, 40 to 60 to 80 percent a year. And so there's incredible growth that's happening."

There is ALOT of work to do, but the reality is: the market is hot.

By the way, comparing marketing automation to CRM is not going to be fair. Marketing automation will never be as big as the CRM market, as a matter of fact, it will likely become part of the CRM market.

Jeff's points in the article referred to in this string are REALLY good. I just don't think that means the market is floundering, instead, I think these are learnings in a market that is growing.

As Adam points out, it’s not the marketing automation market that’s floundering, but marketers’ skills. In a more historical context, marketing automation seems to be reaching a point that happens in many technology markets; namely, the technology has currently outstripped the abilities of its intended users to use it.

As users try to close the gap between their skills and the technology’s capabilities, this comes across as a “cooling off” of what has been a hot space. In fact, I would suggest it’s more a case of the market settling down.

This is already happening on the technology side as the market is clustering around a roster of well-known players. Sure, there are tons of organizations still to select a marketing automation solution, which will be the engine of continued sales growth; but the major players are pretty much set. Which means that the “gold rush” feeling of lots of new players joining in will be abating.

Now the action has moved to the “know-how” side of marketing automation. Unfortunately, this won’t be nearly as public or as breath-taking as the passing game of technology sales and development. Rather it will be more of a ground game. Marketers will have to work out what they can do and what they can’t on a play-by-play basis, with lots of trial and error.

We’ll hear the case studies of the successes, but they’ll be only the tip of the iceberg. There’ll be lots of skill-building going on behind the scenes as marketing automation technology is assimilated into how marketers do their jobs going forward, and becomes just another part of the technology infrastructure that organizations need in order to compete successfully.

After all, when was the last time we talked about the CRM market this way?

Thanks for raising the issue Carlos. Jeff's article makes some really good points, but I wouldn't say that marketing automation is floundering. Could it be better? Is Jeff right about the targets being off and the lack of verticalization? Absolutely!

But, let's take a look at what's going on out there. Marketo recently raised $25MM, right after raising $10MM. IBM bought Unica for $480MM. Hubspot recently raised $33.5MM and there are rumors of more stuff going on there.

If anything, it seems that marketing automation has a few strong years of growth ahead. There's a lot of education needed, but it appears many investors are willing to fund that education. With that education happening, there will be a trickle-down effect to small business (in the same way that CRM has trickled down). Once it hits small business, growth explodes.

At Infusionsoft we're selling marketing automation in the small business space and there's definitely an appetite for it (they just don't call it marketing automation yet).

Overall, I'd says the space is heating up, not floundering.

Jeff is certainly right that there are plenty of obstacles facing marketing automation. I'd further note that original generation of B2C vendors (Unica, Aprimo, SAS, Teradata, Siebel Marketing, Decision Software, Alterian, SmartFocus plus many that no longer exist) never exceeded a couple hundreds million in revenue. But the B2B market has many more potential customers and the small business market, mentioned by both Tyler and Nick, is vastly larger still. Success will be challenging for both the vendors and their customers, but I think the growth will accelerate.

It's funny timing to be having this discussion. In the past six year, we've seen these news items from the marketing automation industry:

- Oracle to acquire Market2Lead
- Aprimo acquired for more than half a billion dollars
- Eloqua's revenue surpassed $50MM (on the way to a 2013 IPO)
- Marketo secures $25MM in additional funding

and last, but not least

- "The Pedowitz Group Surpasses 200th Marketo Customer Implementation"

Now I'm not an expert in floundering, or any other fish-related verbs for that matter, but to me, this sounds like a pretty vibrant, growing industry. Normal, healthy consolidations are happening, revenue is growing, consultants are getting wealthy, analysts are gaining in importance, and more fresh customers are coming into the ecosystem every day.

Yes, perhaps the hockey stick has taken longer to arrive than it did for other industries (although, think of how many search engine companies there were before Google), but right now seems to be the time to double down on confidence in marketing automation as a concept and the MA technology industry as a whole.

I’m not sure that looking at the combined revenue of the participating software companies is an accurate barometer of the health of the industry. There is no question that B2B marketers spent a lot of money on marketing automation projects in 2011 and will spend considerably more in 2012. I will be surprised if this growth doesn’t continue for the next several years. This is a healthy market that is far from floundering.

I think the more pertinent question is what percentage of the spending will be on services vs. software? And, will software companies be able to capture enough of the spend such that one or more significant software companies emerge? A number of barriers have been discussed, but I think there are a couple more:

- Marketing automation means different things to different people. Virtually every customer implementation is unique, not only in the technical aspects such as web-site and CRM integration, but more importantly in the marketing/sales processes that drive usage. Until there is a consistent use case, it will be difficult for software vendors to simplify the product to the point that adoption becomes quick and easy. Vertical solutions will help, but it is also possible that even within a specific vertical the variability is high enough that a single vendor may not be able to do more than a few verticals well.
- Lead nurturing throughout the sales process is one of the key benefits (and more effective ways to demonstrate ROI) of marketing automation. But for effective automated lead nurturing you need really good content marketing. While marketing automation platforms are great for delivering the content, you still need to be able to create, target, and repurpose compelling content on a consistent basis. B2B marketers have not proven to be good at this and until they are, full adoption of marketing automation will be limited.

Marketing automation is thriving and healthy. Most of the vendors we talk to are experiencing double or triple digit revenue growth and are re-investing those revenues back into product development. With vendors competing fiercely with one another and millions of dollars being spent on innovation, customers are benefiting through better products at lower prices. These are the tell tale signs of a healthy, thriving market.

Jeff's questions don't point to a fundamental problem with the marketing automation software industry per se and the same questions can be raised about many industries.

Doug,
Your comment on Europe lagging behind the US is interesting, and raises the point that Marketing Automation(MA) has its own peculiar challenges by region.

We are Europe based and agree that MA is on the up-take here too, but some Marketing Automation features/practices have restrictions when used in Europe.

For example, we see some US market automation practices - such as acquiring email addresses from B2B databases like Jigsaw - as almost unworkable in Europe, not only because email privacy laws are stricter in Europe than the USA, but also because these B2B databases are very US focused, providing little information about organizations outside North America.

For more on how Europe differs from the USA - you might find our article "Top 10 ways to improve sales – Europe and USA compared" of interest at:
http://www.webleadsb2b.com/2010/08/so-did-the-call-to-your-prospect-work/

I admit this example is not representative of the core strengths of MA tools, but still is of relevance when trying to use MA software.

Richard - WebleadsB2B

Carlos,

That was a great article, thanks for sharing it!

My company Performable (http://www.performable.com/) is trying to fix many of the issues that Jeff mentioned in his article.

Specifically:
* We are marrying Multi-channel analytics with Marketing Automation to provide Marketers, Sales, Developers and Designers with "Air Traffic Control for their Marketing".
* We are focused on bring our software to verticals outside of B2B lead gen, including eCommerce, SaaS, Media and Product companies.

Looking forward to seeing this space mature and grow.

Thanks again for starting the conversation.

I think marketing automation is alive and better than ever. Especially as marketing automation solutions find their way to market in small business-friendly packages with low and predictable pricing delivered via a SaaS model. Small businesses can now "act big" by leveraging marketing tools that were only accessible by larger companies before.

Through marketing automation a small business can use a single platform to send pre-designed emails and bring leads in through personalized URLs, track those leads in a hosted platform and deliver them to sales for follow-through, all while keeping a clear view of the entire sales funnel through a single hosted CRM interface. Add to that the fact that a single marketing automation platform can also give you access to Google SEM campaigns and can enable integration of your social networking tools...and you have all kinds of reasons to believe that marketing automation going to be in the picture for a while..

Anyone have a working link to the original article? The one here doesn't seem to work.

Dharmesh-here's the link:

http://www.marketingautomationsoftware.com/blog/why-the-marketing-automation-...

Thanks for sharing the article, Carlos. Good comments from everyone. IMO, Jeff's piece frames the problematic issues around marketing automation quite well. His solutions, however, are what truly require the attention of all MA stake holders:

1) Use an enterprise sales approach (most marketers get it; the C-suite not so much).
2) Increase vertical specialization. Years ago, as a Senior Editor at VAR Business Magazine, I witnessed the market-making power of gifted value-added resellers who bundle solutions for the specialized needs of unique business sectors. Like TPG.
3) Evangelize, educate, and "grow the pie." Ironically, this is a content marketing issue first and foremost; a smack-talking competitive snarl second (or third).
4) Make adoption easier. This remains a big hurdle. Jeff mentions standardization in his article. There's a reason that Google Docs looks and acts like MS Office. Observers have long said that "Internet-savvy generalists" are the ultimate end-users of SaaS sales & marketing tools. Vendors must develop for non-technical marketers.
5) Get people using the software first, and onboard them properly. Companies will pay faster when they see revenue contribution from a well-implemented MA solution.

Of course, above, I meant to say "six months," not "six years."

Yes, I concur with others that this is a great thread, but two points.

First, I am puzzled that MA is distinguished from CRM. I would argue it is not. Many objectives of MA have always been woven into CRM projects that we have worked on since 1987...before CRM and certainly MA were in the business lexicon. Granted the technology may not have been as mature, but the spirit of "MA" has been around for awhile.

Two, I would caution the burgeoning MA "market" about only emphasizing the people-process-technology thought process. This has been a mainstay of discussions across multiple business systems for the past ten years. CRM, ERP, BI and whatnot have all rallied around the people-process-technology theme. If MA flounders, it will be because "data", especially data quality and data integration/synchronization, have not been separately...and equally included in the magical people-process-technology equation...as it is now in other business initiatives. www.Perera-Group.com

Marketing automation floundering?????
This is a technology that is to date, except in consumer advertising, is beyond the strategic, content and human resource capabilities for most companies to implement. Additionally, the first group of technology providers out of the gate has been difficult, not intuitive and expensive. The next batch of systems, like The MMI Edge from MMI Solutions are more customizable, with modules that address specific industry sectors with features unique to their needs as well as a simplified sales portal to focus only on the important sale follow up actions. I think it is an extraordinary time in our industry.
The MA pie is still baking let alone ready to be cut up!
Steven Amiel
CEO of MMI Solutions