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How the Silverpop $25 Million Funding is seen at Lead Liaison

Silverpop FundingHow is the Silverpop $25 million funding round seen at Lead Liaison? One of our worthy marketing automation competitors, Silverpop, recently announced it raised $25 million in funding. It is good to see industry leaders like Silverpop, Eloqua, and Marketo achieve the financial backing they have over the past few years. This shows to us that the marketing automation space is proving itself to be a hugely potent vehicle. The financing those giants are receiving will surely help lift the marketing automation industry to new heights.

With the funding that Silverpop has achieved, our Lead Liaison team is confident that their technology – like ours (which delivers error-free, robust lead generation and lead management functions) – will become more powerful to marketers. They intend to devote mass amounts of money to improving  functionality, integration, and customization of marketing automation platforms. Their developments will be good for all of us.

But we’re here to tell you that having all that money doesn’t necessarily lead to better customer experiences in the marketing automation space. In fact, our products, like the user-friendly Lead Management Automation™ platform, perform marketing automation and lead management functions better than more costly platforms available* today, and we provide customer-centric support that sometimes gets lost as companies like Silverpop get big and focus on investor returns. Our boots- to-the-ground mentality means that we focus an entire team around solutions that fit your company. And It doesn’t take $25 million dollars to provide you with a quality marketing automation company.

The playing field in the marketing automation industry, from a product development standpoint, is fairly level. Lead Liaison has some of the best program developers and coders in the world developing our SaaS products. We applaud Silverpop in its impressive funding accomplishments. We just don’t think you should have to pay more for their products because of their financing successes.

To learn more about marketing automation and lead management visit our Revenue Generation blog or contact a Lead Liaison team member today.

*According to customer feedback in Q1 2013

Marketing Automation Market

Marketing Automation MarketLast month we wrote an article on the size of the marketing automation market. A couple weeks after writing the article we picked up David Raab’s article on “B2B Marketing Automation Industry Size and Segments”. David’s post presented some interesting data on the marketing automation market worth summarizing as a follow up to our last post on the industry.

The report shed some light on how many clients per company type are using marketing automation. Company type was split up into four categories using revenue ranges, defined below:

  • Micro business: Under $5M in revenue
  • Small business: $5M – $20M in revenue
  • Mid-size business: $20M – $500M in revenue
  • Large business: $500M+ in revenue

The report then estimates annual revenue of the marketing automation market for each segment, yielding $257.5M in annual revenue, which comes very close to our estimate of $200M in last month’s post. David’s estimate does not include smaller marketing automation vendors as well as B2C marketing automation vendors. When these vendors are included, the marketing automation market is around $325M in annual revenue.

Here’s a breakdown of estimated revenue per company type:

Company TypeCustomersRevenue/Client/YrAnnual Revenue% Total
Micro business11,917$3,600$42.9M17%
Small business2,848$12,000$34.2M13%
Mid-size business3,609$30,000$108.3M42%
Large business1,203$60,000$72.2M28%
Total19,557$26,400 (Average)$257.5M100%

Experts typically estimate about 2% to 5% of all businesses use marketing automation technology. Interestingly, actual penetration may be lower than that – particularly very small businesses (<$20M in revenue). It’s estimated that less than 1% of all micro and small businesses use marketing automation technology, which presents a huge opportunity for these businesses to grow and gain a competitive advantage in the market place. Using data from Manta about the number of companies in each revenue range we can estimate approximately half of all businesses are a candidate/fit for marketing automation. Based on this data we can estimate the footprint of the marketing automation market relative to the TAM (total available market).

SegmentCompaniesTAMCustomers% Total
Micro business2,991,6271,500,00011,9170.8%
Small business645,121320,0002,8480.9%
Mid-size business237,130120,0003,6093.0%
Large business9,2454,5001,20326.7%

Growth potential in the marketing automation market is huge. Micro and small businesses outside the manufacturing and high tech industries (current adopters) stand to gain the most.  Lead Liaison uses marketing automation technology as part of our Revenue Generation Software. If you’re a business looking to adopt marketing automation below are a few additional resources to help:

  • Risk of not using revenue generation software
  • Revenue generation for marketers
  • Revenue generation for sales

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Marketing Automation Market Size

Marketing Automation Market SizeConsidering more than 60,000 companies have deployed CRM solutions, yet less than 4,000 are using marketing automation tools (7%), the marketing automation market size is poised for growth. Venture capitalists realize this opportunity as they’ve invested over $396 million in marketing automation vendors since 1998.

Although marketing automation is ripe for growth, two factors impede the marketing automation market size from exploding – awareness and confusion. For example, the term “marketing automation” alone is confusing. Marketing automation is really just a small feature that’s part of a broader revenue generation platform. It’s a disservice to businesses to name a solution after a feature. What marketer wants to automate their job? If they did, there would be no reason for the market to have a job in the first place! Another challenge is the level of feature adoption. Some companies claim to use marketing automation when in actuality they’re only using email marketing or landing page optimization features. As evidenced by the 7% figure above, lack of awareness also stunts growth. Limited adoption and confusion over what marketing automation really is makes it difficult to gauge exactly how big the marketing automation market size is.

Despite all the confusion, we can focus on a few simple facts to better understand the marketing automation market size.

Here are the data points that serve as the foundation for our calculation:

  • Experts estimate 2% to 5% of all B2B firms use marketing automation
  • Top four vendors (less Aprimo and Unica) attribute $141M in sales.

Forrester estimates 2 to 5% of all business to business firms use marketing automation. Conversely, Jonathan Block of Sirius Decisions estimated adoption of marketing automation platforms at about 18%. In our experiences, we find this estimate bold and a bit aggressive. It’s realistic to believe Jonathan is referring to an 18% growth rate, which might be a wash with the number of new business startups added to the calculation. Since Forrester’s estimate represents market penetration, not growth, we’ll use their data to calculate marketing automation market size.

Using a penetration rate of 5% means 95% of all business to business companies do not have a solution. To calculate market size, let’s go a level deeper and look at historical sales of marketing automation software. Last year the top six companies in the industry made $321M in sales. Two of the six companies are Aprimo and Unica, both of which have been acquired by large enterprises (Teradata and IBM respectively). Removing Teradata and IBM from the marketing automation market size calculation gives us $141M in sales from the top four companies. Approximately another 20 companies round up the space. Let’s conservatively estimate that each of these 20 vendors generate $3M in revenue. That’s another $60M in sales, totaling $200M in sales of marketing automation software.

In summary, we can conclude the marketing automation market size is about $200M in revenue comprised of about 25 vendors.

With the marketing automation market size at $200M with 5% penetration (best case) there’s plenty of growth opportunity for vendors and businesses.

Opportunity for Vendors

To calculate the marketing automation market potential for vendors we can assume there’s $3.8B in available revenue (5% x $4B = $200M) worldwide.

Opportunity for Businesses

For businesses, marketing automation platforms enable a well planned lead generation and lead management process that helps them connect with customers at the right point in buying process. The net benefit is higher quality leads sent to sales while sales cycles are accelerated – driving more revenue for the business.

However, implementing workflow and business process tools require a time investment. Proper strategic planning and organizational alignment will enhance the value of marketing automation. Avoid making the mistake of using a marketing automation platform purely as an expensive e-mail marketing system.

See how you can prepare your people and process for marketing automation capabilities by creating a Service Level Agreement (SLA). Click the link to get started.

How big do you think the marketing automation market size is? What barriers stand in the way of accelerated growth of marketing automation?

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