Spikes In Sales, Pipeline Activity Point To 2010 Emerging As Breakout Year
- Written by Andrew Gaffney
- Published in Feature Articles
Last month we published an article predicting adoption of demand generation and marketing automation solutions was poised for a growth surge in 2010. However, the fourth quarter sales growth reported by several vendors, combined with a significant uptick in pipeline activity during the first few weeks of the New Year, point to 2010 emerging as a breakout year for the category.
“I believe we will see more companies adopt marketing automation solutions over the next 18 months than we have in the technology’s history,” predicted David Lewis, Founder and President of DemandGen International, a leading consultancy in marketing automation and lead management based in the Bay Area. “We are seeing much more widespread adoption and expect 2010 will be the biggest year for the category by far.”
Jeff Pedowitz, President and CEO marketing consultancy The Pedowitz Group, echoed that aggressive outlook. “I predict that more than 1000 B2B organizations will adopt marketing automation solutions this year,” Pedowitz said. “The space continues to find acceptance and the top vendors are getting considerable traction. It is a greenfield market.”
Ian Michiels, Practice Leader for Customer Management Technology at Aberdeen Group will be publishing a report later this month titled “Crossing the Chasm with Automated Lead Management,” which will evaluate adoption rates as well as the business impact automation tools have had for leading companies. “In my opinion these technologies will be critical to competing effectively in the future. They enable timely, relevant, personalized interactions with the market which result in superior customer experiences. There are very few barriers to entry and these tools are becoming a bit of a commodity in terms of feature-function,” Michiels said. “The vendors who are doing well have captured market-share through best practices and thought leadership.This is new for everyone, so the vocal, intelligent solution providers tend to capture the lion’s share of those individuals who are starting to warm up to the idea of lead management, but don’t know how to fully leverage the technology.”
The Carry Over
The online marketing category began picking up steam in Q4 of 2009, judging by the results of a few vendors. Marketo reported 110 new customers in Q4 alone, and claimed to close more new business “than all our competitors combined.” Responsys, a provider of on-demand email and cross-channel marketing solutions, announced 30% worldwide growth for the second half of 2009, adding brands such as Newegg and iPay Technologies to its client roster.
Both Marketo and Responsys are projecting their record-setting growth will continue in 2010. "Despite the challenging economy, 2009 was a watershed year for B2B marketing, with more and more companies adopting marketing automation and lead management to improve their demand generation strategies," said Phil Fernandez, President and CEO, Marketo. "The marketing automation category has reached a key inflection point -- moving from 'nice to have' to 'must have' -- as organizations worldwide realize its potential to impact both the top and bottom lines of an organization. 2010 will be a year of explosive growth for the category and for Marketo in particular."
Scott Olrich, Chief Marketing and Sales Officer for Responsys, said a transformation from old media to new media is driving the spike among both BtoB and BtoC marketers. “Marketing has changed forever. The killer outbound channels for marketing campaigns used to be direct mail, print, radio, and television,” said Olrich. “In 2010, marketer’s will increasingly turn to email, mobile, and social in an effort to drive more cost effective revenue lift, customer engagement, and marketing efficiencies. This all bodes well for us.”
Although most other vendors were reluctant to share specific sales performance figures, several indicated that momentum for the category has picked up significantly. “Sales velocity has really increased over the past two quarters and we aren't seeing any signs of that letting up. Last quarter we signed up more than one new client every other day,” said Adam Blitzer, Executive VP with Pardot. “We are on a similar pace so far in January.”
Based on the turnout and feedback from attendees at the B2B Marketing University series held in four major markets last fall, Silverpop Engage is expecting this to be a watershed year for marketing automation. Adam Needles, Director of Field Marketing for Silverpop B2B Engage, said more than 550 executives attended the four different seminars and the polling conducted by the company indicated many were planning to adopt a marketing automation solution in the next 12 months.
“Granted this was a controlled sample, but our polling results correlated to a 72% increase in adoption,” Needles said. “Depending on the numbers you look at, adoption rates are somewhere between 10% and 15%, so year over year I think we are poised for substantial growth.”
Needles suggested the huge growth is being driven by two different client groups. The first group made up of first-time buyers who want to use automation to map their marketing to match the changing BtoB buyer. The second group consists of more sophisticated users who are ready to step up more sophisticated features such as inbound marketing and sales enablement tools. “We are already seeing an expansion of the marketing automation agenda. I believe two to three years from now, we are going to see a lot of new features and expansion of the way marketers use these tools to address buyers further up and further down the funnel,” Needles predicted.
Lewis of Demand Gen International agreed the landscape will continue to evolve in the coming years as experience with these tools catches up to their capabilities. “Over the next 5 years, every corporate marketing team will adopt marketing automation in some fashion. It’s like the early 90’s when marketing teams were realizing that a website was not just a ‘cool thing’ but that websites would become the hub of all things marketing,” Lewis said. “What we are seeing is that adoption for marketing automation appears to be limited right now by the availability of skilled marketing automation experts. You could say the market keeps growing to the size of the tank.”
Malcolm Friedberg, Principal of Left Brain Marketing was a little more conservative in his assessment of the category’s, but agreed demand generation is becoming a must. “It’s a bit too early in the year to tell whether 2010 or 2011 will be the break-out year for marketing automation. But as I’ve been saying for quite some time, if you’re a CMO running a B2B shop and you’re not planning on implementing automation, you might want to reconsider (or start hitting the job boards). The clock is ticking.”