B2B Marketing Automation Report Is Now Available Online. Thanks, OfficeAutoPilot

Thanks to the heroic efforts of my friends at OfficeAutoPilot, the new B2B Marketing Automation Vendor Selection Tool (VEST) is finally available for online sales. You can click here to access the new landing page and order forms.

There's a long story behind this, with many lessons that reinforce and illuminate the basic premise behind marketing automation: that is, marketers need a system that makes it easy to do their jobs. I don't have the energy to write that at the moment, however. But I will point you to the animated video on the OfficeAutoPilot home page, which is laugh-out-loud funny (to me, at least) and makes the fundamental case quite clearly.

I'll qualify this a bit by pointing out that OfficeAutoPilot is one of the systems aimed at small businesses, which means it includes the CRM and e-commerce components you don't find in products aimed at larger organizations. This is what made it perfect for Raab Associates' own needs, since the specific roadblock to selling the VEST on the existing Raab Guide Web site was that the e-commerce bit wasn't working.

Even more important, OfficeAutoPilot (again like other small business specialists) has recognized that its clients need a great deal of help in setting up their systems and has organized accordingly. The OfficeAutoPilot staff spent nearly two full days working to get me running, drawing on best practices to create a much more sophisticated process than I would have started with by myself. More to the point, they did this without charging a penny -- which I'm pretty sure is what they do for all their clients, not just industry analysts like me. In fact, although OfficeAutoPilot owner Landon Ray did give me a free subscription to the system (full disclosure), the staff who worked on my project didn't seem to have any particular sense of what I do.

This gets to the heart of the marketing automation deployment challenge, which is helping marketers get real value from their systems from the start. Industry gurus, myself included, rant about this endlessly. So I wasn't particularly surprised to find myself living it, but I was pleasantly surprised to find that OfficeAutoPilot really works to solve it in the most direct way possible: by just doing the stuff for clients who need help. I fully recognize that life isn't so simple at bigger organizations, but it's still an important example to hold up as one type of ideal.

Ok, I guess I wrote a little more about this than I had planned--it's my way of winding down after an intense several weeks of first getting the VEST created and then finally putting it into the market. The job isn't really done: I need to toss the old Joomla-based Raab Guide site and create a new one in WordPress that I can maintain personally. And at some point I still need to do a more detailed review of OfficeAutoPilot itself, which I'll say in general I'm finding quite satisfactory. But for now the real story is just to say thanks to the folks at OfficeAutoPilot who took such good care of me, and I am quite certain will continue to do so in the future.

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B2B Marketing Automation Report Is Ready...My Web Site, Not So Much

The good news is, my new B2B Marketing Automation report (more formally: the Vendor Selection Tool, or VEST) is now available. The bad news is I can't actually sell it online, despite the best efforts of Web masters on two continents. But the good news is I'm more than happy to take credit card orders directly if you send me an email or give me a call. Email is info@raabguide.com.

To recap a bit, the new report is based on a survey of 18 vendors, who answered nearly 200 questions about their products and companies. Most answers were scored from 0, 1 or 2, indicating whether a particular feature was available fully, partly, or not at all. I translated other answers such as starting price or number of employees into similar 0-2 ranges so I could combine everything in a scoring formula. See my posts over the past few weeks for details on that.

The final result was three sets of scores for each vendor. The sets represent fitness for small, mid-size and large businesses, and each set contains a product fit score and vendor fit score. The idea was to simulate the type of scoring that a typical business in each category might do in its own vendor evaluation. Of course, no one's business is truly typical, so the interactive version of the tool also lets you create your own custom scoring weights.

The core of the new report, therefore, contains two sections: scatter diagrams plotting all the vendors in a typical "industry matrix" style and individual vendor profiles.

The industry matrix puts leads at the top right, where God and Gartner evidently intended them to be, and cleverly named other groups everywhere else. The clever part is giving names that are descriptive without being insulting. I settled on:

- "alternatives" (strong product fit but weak vendor fit)
- "anomalies" (weak product but strong vendor fit)
- "long shots" (weak product fit and weak vendor fit)

The vendor profiles give more detail about each vendor, including showing the scores for components within the product fit (7 components) and vendor fit (2 components). This gives some good insight into where the rankings came from.

So far so good. As I hinted before, there's both an interactive version and non-interactive version of the report. This is partly because I don't think everyone will want to pay for the full price for the interactive version and partly because some people have had problems running the interactive version, which uses Adobe Flash within a PDF. The non-interactive version, which I'm tactfully referring to as "basic", has an introductory section with industry explanations, recommendations on a selection process, etc., plus the three industry matrix charts (for small, mid-size and large) and individual profiles on each vendor. The profiles offer some narrative and scores for the components within the larger scores: 7 components within the profit fit (lead generation, campaign management, scoring, etc.) and two within the vendor fit (company strength and sector expertise). These give some insight into where the sales came from. This is priced at $295.

The interactive version has all those elements, which are made interactive by the fact that users can change the weights assigned to the different components within the profit and vendor fit scores. You've seen some of this is the same PDFs I posted over the past few weeks. It's great fun: there are little sliders for the weights and the vendors zoom around on the chart as you move them. A wonderful feeling of power.

The interactive edition also contains three more sections:

- Item Detail, which lets you see the 200-ish individual items used in the scoring, including their definitions and the weights assigned in each of the three scoring schemes.

- Custom Weights, which lets you set your own scoring weights for the individual items. You can start with the existing small, mid-size, or large weights as a base.

- Compare (my personal favorite), which lets you pick any three vendors and see how their scores compare in any of the weighting sets (small, mid-size, large, or custom). You can see bar charts with overviews and then drill into the item-by-item details for each category. This is where you see the specific differences between vendors.

Price for the interactive edition is $795.

I'll be presenting some additional analysis based on what's in the reports over the next few weeks, and of course will make a formal announcement once the e-commerce bugs are worked out. Again, though, you're welcome to send me a note to get your copy at once.

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B2B Marketing Automation Vendor Comparisons: New Report Next Week and The Coolest Sample Yet

I suspect you may be getting tired of reading about the features in my new report comparing B2B marketing automation vendors, and want some actual information. Soon, I promise: the final data is all ready and only some light editing stands between you and a completed report. Well, that and the fact that the e-commerce features of the www.raabguide.com Website need some work. Either way, the report will come out next week -- even if I have to take credit card orders by phone.

But I finished the final interactive component of the report yesterday and I think it's exciting enough to be worth sharing. It lets you do what I think most buyers really want, which is to compare selected vendors side by side on their specific features. You can also compare their scores, which, since you can change the weights applied to different inputs, means you can get your very own, custom comparative ranking. If that's not fun, what is?

But there's more: you get to see the results in colorful graphs. Here's a screenshot:


You can also download an interactive sample. (This is scrambled data and vendor names are replaced by sports teams. Beware that the document uses Adobe Flash; Mac users in particular may need to use Adobe Reader rather than their usual viewer. And, alas, it won't work on your iPad.)

As you can see, the screen lets you pick up three vendors, a weight set (small, mid-size or large), and the type of data to view: a summary or the individual items within each category. For each item, you see the actual input values (2, 1 or 0 depending on whether the vendor complies fully, partly, or not at all) and the scores calculated once the weights are applied. You can change the category weights (by adjusting the figures in the little gray boxes at the right) and watch the scores themselves change as the individual weights are adjusted proportionately. The graphs also adjust immediately as you make changes.

My purpose in all this is to help buyers look beneath the scores themselves to understand where the scores came from. This lets them judge whether they really care about the factors that are driving the relative rankings. Similarly, making it easy to change the weights raises the question of which weights really are appropriate. Thinking about this should lead buyers to a better decision.

The screenshot above illustrates the importance of the weights. Look at Technology: there are pretty big differences between the different "vendors", but the category as a whole has such a low weight that these make little difference in the final rankings. This reflects a judgment on my part that small business buyers don't really care much about technology and that their technology needs are pretty simple.

If you squint hard enough, you'll also notice that the middle vendor has the highest total input value for Technology, but the lowest weighted score. That's pretty common because the weights do vary substantially from one item to the next. In this instance, the main reason is that small business scores apply negative weights to many advanced features, on the theory that they detract from value by adding complexity. You'll recall that I wrote about that in an earlier post.

The downloadable sample only has descriptions under all the other tabs, but everything else is actually ready. I'll make a formal announcement next week about price and availability of the new report.

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B2B Marketing Automation Vendor Comparison -- Here's a Sample

I’ve been having way too much fun working on my new industry report. I decided to make it an interactive document that lets users (viewers? readers? The Chosen?) set their own weights for the different scoring categories and do detailed, side-by-side comparisons of vendors they select. This gives the document vastly more play value than a simple report. Much more important, it reinforces the point that I keep stressing, which is that every evaluation must be based on the buyer’s unique needs. Having three different sets of scores was a step in that direction, and making things interactive goes still further.

Click here to download a sample of the format. (Beware that it's a big file and can take several minutes to load.) Vendor names have been replaced with football teams and the specific details are excluded. But you can see the results of the different scoring schemes and also get a list of the specific items with their weights and definitions. The sample also contains draft versions of the introductory materials, which need some reformatting. (Note to Mac users: this is an Adobe Flash document; you'll have to use Adobe Reader to view it.)

In case it’s not obvious, you can move the little sliders on the “Sector Chart” tab to see how the different vendors move around depending on how you weight different categories of attributes. The final report will show directly how much each category contributes to each vendor’s score. You can also adjust the category weights on the grid within the “Scoring Weights” tab, which shows the detailed items. You have to mouse over the numbers in the grids – not the most convenient method, but the one allowed by the software I’m using (SAP Business Objects’ Xcelsius).

I actually did work up a version of the report that lets users set their own weights for the individual items. Unfortunately, that seems to overtax the software, so I’ll have to leave that out of the final product. I might put it out as a separate product or upgrade to the base report.

Please take a look and let me know what you think. The report itself should be ready for distribution within a few days, and of course I'll announce it here first.

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Another Estimate of B2B Marketing Automation Revenue

Summary: Here's a closer look at revenue per employee and marketing automation revenue in general. I get the same answers as before but now have more detail to back it up.

Some of the comments on last week’s post on the size of the B2B marketing automation industry led me to dig a bit more deeply into the question of revenue per employee. Looking through my files and asking a few questions, here are vendors for whom I have reasonably reliable information:


This gives an average of $171,000 per employee. Given that these are fast-growing companies and the employee counts were based on figures for September or later, the average headcount through the course of the year was lower, meaning the revenue per full-time-equivalent employee would be higher – probably not so far from my $200,000 figure. Indeed, the figure for the three slowest-growing companies (Unica, Aprimo and Alterian) comes to $194,000. That’s pretty darn close to my $200,000 standard. Cool.

These figures also shine more light on the original question of industry size. I don’t know the B2B fraction of Unica, Alterian or Neolane’s revenues, but it’s probably quite low: let's guess 15%. Aprimo has stated they are 40% B2B, and the rest of those vendors are 100% B2B. Doing that math, you get $160 million total:


But what about everyone else? The other big players in enterprise marketing automation are SAS, Teradata and SmartFocus, but they are almost entirely B2C so far I know. So maybe let’s credit them with $10 million.

This leaves all the other B2B marketing automation vendors. The survey for my up-coming report has employee counts, client counts and minimum prices for quite a few: OfficeAutoPilot, True Influence, Pardot, LoopFuse, Net Results, Manticore, Silverpop, Genius, LeadFormix,TreeHouse Interactive, SalesFUSION, and Marketbright. I can use that to prepare two estimates: one based on number of employees x revenue per employee, and another based on number of clients x minimum revenue per client.

- total employees comes to about 470 (I have to make guesses for a couple of small vendors and reduce the Silverpop total to account for its large B2C business). Since these are also fast-growing firms, let’s use a figure of $120,000 per employee, which happens to be the average for Neolane, HubSpot, Marketo and Infusionsoft. That yields $56 million.

- clients x minimum price is calculated separately for each vendor, of course. You’ll have to trust me that the total comes to $37 million. But that’s a very crude figure: it’s certainly low in the sense that many average revenue per client is higher than the minimum price. On the other hand, we have the growth effect again – those client counts were towards the end of the year, so companies weren’t getting a full revenue year from everyone. For sake of argument, let’s assume the two factors cancel each other out.

So we have one estimate of $56 million and another of $37 million. The good news is that they’re in the same ballpark. Let’s split the difference and figure $45 million in revenue for this group.

Finally, there are a number of other B2B marketing automation vendors who weren’t covered in my survey. These include ActiveConversion, Act-On Software, Genoo, LeadLife, eTrigue, Marqui, and others. I do have client counts and pricing for most of them; some rough calculations yield a figure of $10 million.

Add these up, and you get a total B2B marketing automation revenues for 2010 of $225 million:


Maybe I’ll adjust my original $200 million estimate and maybe I won’t bother. Either way, I do feel more confident that it’s close to right.

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How Big Is the B2B Marketing Automation Industry?

Summary: Here are my estimates for the size of the B2B marketing automation industry, broken down by customer segments. Enjoy.

I've been working madly on my new report on B2B marketing automation vendors. One of the things this has forced me to do is come up with an estimate of industry size that I'm willing to defend in print. I based my figures on several approaches: revenues for the few vendors who release their figures; the number of vendor-reported clients multiplied by an estimated revenue per client; and the number of vendor-reported employees multiplied by industry-average revenue per employee.

These methods all yield similar figures -- around a $200 million in revenue for 2010. Bear in mind that the industry nearly doubled last year, so the current run rate is much higher. Also remember that I've excluded:

- the big enterprise marketing automation vendors (Unica, SAS, Teradata), who sell primarily to B2C marketers;

- B2C portions of Aprimo and Neolane; and,

- vendors who work mostly through marketing service providers (Alterian and SmartFocus).

Including those vendors would at least double the total figure. Services are also excluded.

That said, here's an excerpt from the report:

Revenues for B2B marketing automation systems (excluding related services) were $200 million in 2010, according to Raab Associates estimates. The industry can be divided into three segments serving different types of clients:

• Small business (under $20 million revenue). These are unsophisticated marketing departments whose primary interests are outbound email, landing pages, and simple lead nurturing through email autoresponders. Many are very small companies with just one or two marketing automation users. They often do not integrate with a separate sales automation system, either not using one at all or relying on a CRM option offered by the marketing automation vendor itself. The fastest growing industry segment, this group tripled to 12,000 clients and $60 million revenue in 2010. Many small business marketing departments use only email systems (which also provide landing pages and simple nurture campaigns) instead of marketing automation.

• Mid-size business ($20 million to $500 million revenue). This segment covers a broad range of marketing users with widely varied needs. Most require the full range of marketing automation functions, but apply them in relatively simple ways. They have three to fifteen marketing automation users. This segment is the heart of the marketing automation industry, supporting the largest number of competitors and accounting for approximately $100 million in 2010 revenue across 3,000 clients.

• Big business ($500 million revenue and higher). These are large marketing departments that may manage hundreds of campaigns for multiple products in different locations. They need special features for automated content selection, project management, complex lead scores, and tight limits on the rights granted to individual users. This group had about 500 clients generating $40 million revenue in 2010. Although it has been growing less quickly than other segments, adoption will accelerate as the value of B2B marketing automation is more widely recognized, existing B2B systems add more large-company features, and big software vendors enter the field.

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