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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