Raab Report: B2B Marketing Automation To Reach $750 Million In 2013

Published: February 8, 2013

Revenues of B2B marketing automation vendors will grow 50% to reach $750 million in 2013, according to Raab Associates‘ just-released B2B Marketing Automation Vendor Selection Tool (VEST). While the growth rate is slightly lower than the 2012 rate of 54%, the dollar increase – $250 million vs. $175 million – is substantial.

“B2B marketing automation continues to grow at a very healthy pace,” said VEST author David M. Raab. “But some of the larger firms are reporting a lower growth rate, and, unlike previous years, we haven’t seen enough growth by industry challengers to raise the industry total.”

Raab said among most interesting finding of the report was that the biggest companies appear to be increasing their share of the industry. The top four vendors – HubSpot, Infusionsoft, Marketo and Eloqua – grew their employee counts by 49%, while the rest of the industry combined grew by just 21%.  “Employee count is probably the most reliable measure we have of company size, since many firms don’t provide precise client counts or revenue,” he said. “Our client and revenue figures also show higher growth for the top four, although the difference is less pronounced,” adding that the top four already account for more than 60% of industry revenue.

The biggest firms also have about 20% higher revenue per employee, which he said is a key indicator of profitability. “This suggests that smaller firms, who have less access to outside funding, will need to find specialized niches to survive as the big firms increase their dominance,” he explained. “We see evidence of this already, in firms with unusual approaches such as full marketing services and industry specialization.”

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The revenue estimates include sales by B2B marketing automation specialists and sales to B2B marketers by other marketing automation systems. Raab Associates estimates that the specialist vendors account for $525 million revenue, or 70% of the total, while non-specialists account for $225 million. The top four specialist vendors are projected to account for $380 million, or just over half, of all revenues.

Systems covered in the VEST report are used by companies of all sizes. The report defines four market sectors, each with different needs. Some B2B marketing automation systems are used across all sectors, but most vendors specialize in a particular type of client.

Information in the VEST report was gathered in December 2012 and January 2013.

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