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Socially-Driven Tools, SMB Adoption Drive Marketing Automation Growth In Q3

Marketing automation vendors reported another healthy quarter of growth in revenue and new customers in Q3 2011. Driven largely by the increased adoption among SMB organizations, the category continues to grow and industry analysts point to more telling developments in the space.

 “We’re still seeing strength in the market; vendors are announcing Q3 quarter sales rates similar to second quarter,” noted David Raab, Principal, Raab Associates, Inc. “The market is beginning to stratify more clearly by client segment: microbusiness vendors (Infusionsoft, OfficeAutoPilot, Genoo, MakesBridge) have more clearly separated themselves from SMB systems (Pardot, Act-On, Net Results, SalesFusion) and from Enterprise vendors (Eloqua, Aprimo, Neolane).  HubSpot and Marketo are straddling: still largely SMB but looking to penetrate the Enterprise. I’m not sure they can serve both.”

Act-On, which targets the SMB market, saw a 20% increase in revenue from Q2 to Q3. The company also experienced a 400% increase in revenue compared to the same time last year. The company, which acquired the assets on Marketbright in July 2011, also added 154 new customers in Q3 (up from 137 in Q2). 

Also serving the SMB segment, Pardot exceeded internal expectations in both Q2 and Q3 2011. “Pardot’s focus area is and always has been the SMB market, and we are still seeing steady grown in that segment,” noted Adam Blitzer, Co-Founder & COO, Pardot. “We were the first cloud marketing automation vendor to target this market specifically. Marketing automation is becoming more mainstream, and word is spreading about what this technology can do for resource-strapped small businesses.”

SalesFUSION reported its best quarters in company history during Q2 and Q3 2011, largely driven by its CRM integrations with Sage, Sugar and Microsoft, according to EVP Marketing Kevin Miller. “These markets are showing high demand and budget for our $450, $950 and $1500 per month tiers,” he said.

SalesFUSION added 60 new customers in Q3 2011, including BioClinica a provider of clinical trial management services and Silgan Plastics. 

“Our growth focus and targets are on SMB/mid-market for companies that have installed CRM systems,” Miller noted. “This is a very large market and we have seen no slowdown.”

Manticore, which focuses on serving BtoB organizations with revenues between $20 million and $100 million, also reported solid growth in Q3. “We do know that we typically compete against four other primary vendors and a number of secondary vendors,” said Jeff Erramouspe, President, Manticore. “Given that we win about one in every three opportunities we bid on, it is safe to assume we’re gaining share against at least some of those competitors. However, it is also possible that they are in many deals we are not, just because of our relative sizes.”

The emergence of Revenue Performance Management (RPM) solutions gave way to more sophisticated usage of automation technology among enterprise-level companies, but it’s clear that the playing field is being leveled for smaller marketing organizations to optimize these tools as well.

“We also saw an opportunity to address the core needs of the SMB market separately from those of the enterprise,” noted Jon Miller, CMO, Marketo. “That is why we launched Spark by Marketo, a new brand of marketing automation tailored specifically for small businesses — the fastest-growing and largest segment of today’s economy.”

Focused on helping fuel the campaign efforts of smaller organizations, Spark is designed to empower marketers with automation technology and marketing expertise to help run their businesses. According to Miller, Marketo added more than 150 customers in Q3 and the company claims to be growing more rapidly than its prime competitor Eloqua, which recently announced its plans to go public.

Since its IPO filing, Eloqua cannot disclose specific sales or revenue figures, but CMO Brian Kardon emphasized the continued momentum the company experienced in Q3 2011.

“We’re seeing adoption across both [enterprise and SMB] levels,” Kardon noted. “Marketing automation adoption is not necessarily enterprise versus SMB, but it has to do with the sophistication level of the company, specifically the marketing department. A large customer segment for Eloqua has traditionally been software and technology companies, but we continue to see growth in other markets such as telecommunications. Other popular market segments for Eloqua include financial services, healthcare, education and business services.”

In Q3 Eloqua launched Revenue Suite, a set of applications and services designed to help businesses increase revenue and more accurately predict future growth. Additionally, the company announced its Social Media Suite, which consists of Klout segmentation, social sign-on, Twitter for sales and social sharing tools.

The BtoB Social Surge
Vendors across the board made social-specific announcements in the last quarter, indicating that the BtoB industry is slowly but surely cracking the social code.

“We’ve incorporated tracking for social network activity,” said Tony Tissot, Sr. Director Marketing, eTrigue. Tissot said in Q2, the pipeline for interest among new adopters actually appears to be increasing, but the translation to revenue remains to be seen. “But if our rations remain consistent, that points to a potential increase in expectations,” he said.

The Act-On platform features Twitter Prospector, a tool designed to enable marketers to use Twitter and other social media properties as both a lead source and for reputation management. Twitter Prospector helps users find an audience that is likely to respond to a company’s specific message.

Pardot has recently added a number of socially focused features. The biggest announcements have been social profiling — the ability to pull in information about a prospect’s public social profiles – and social posting, which will allow users to post updates to Facebook, Twitter and LinkedIn from Pardot.

“We’re actually surprised that it has taken this long for other companies to integrate social media into their software,” noted Andy Pitre, Product Evangelist, HubSpot, which reported its best quarter in history, adding more than 650 new customers in Q3.That said, we are mindful of the effect that automation can have on social media marketing as a whole. Social media has become a popular outlet for businesses to reach their audiences because it has proven to be a reliable, scalable communications channel that gives consumers an easy way to interact with companies in a meaningful way.”

In Q3 HubSpot also announced the acquisition of social media marketing company, oneforty, which, according to Pitre, will help encourage third-party social media apps to build integrations on HubSpot’s marketing platform.

Treehouse Interactive, which reported a 15% year-over-year increase in Q3 revenue, as well as a 10% increase in customer wins, integrated social media efforts into emails and landing pages several years ago. In 2010, the company introduced the ability to create Facebook forms from within its marketing automation tool. “While customers are positively disposed to this functionality, our customers this year seem much more interested in using our web analytics automation, web lead alerts and integrations with tools like Jigsaw, to replace products like Lead Lander,” noted Erich Flynn, CEO, Treehouse Interactive.

Silverpop, which reported double-digit quarterly growth, added a Social Connect collection of products and features.  “We believe that to be successful, marketers need to be where the people in their target markets are,” said Bryan Brown, Director of Product Strategy, Silverpop.  “And increasingly they are spending time on social networks such as Facebook, LinkedIn, Foursquare and Twitter and are using these channels to research purchase decisions.”