The marketing automation vendors of today will consolidate into a couple of brands with a winner take all stakes game unfolding today. Marketing Automation Software Guide published an article that provides some analysis and insight into the revenue and funding of today’s players. It’s great analysis for seeing who has taken money and what the market share is.
Our Take
Marketing automation is still in the cult stage. When you say it to people, you have to explain it. The term has not circulated substantially like “CRM” or “CAD” software. When a term proliferates for common understanding then the respective saturation will have an associated brand. Today, “CRM” connotes Salesforce.com and “CAD” means AutoCad.
The information age creates a brutal existence for brands. Books means Amazon. Classifieds means Craigslist. Facebook does not have a serious competitor. The second brand is inconsequential. In our past lives, they mattered because we wanted to temper the power of the first brand from a distribution control setup. Pepsi existed to allow an alternative to Coke’s dominance and negotiation with retailers.
With the internet, we go straight to the manufacturer. As the brand category for marketing automation becomes common because everyone recognizes the problem then there will be an associated winner, likely with two categories.
Kevin Maney explained in his book Trade-Off that brands succeed because they are either high fidelity – the overall experience of a product or service – or high convenience – the ease of acquiring a product or service. Being neither dooms you to failure. Being committed to one allows you to be the winner.
Thus, there will likely be a high fidelity marketing automation offering and a high convenience vendor which will dominate the market. The breakdown of the two players will be broken down by price and brand awareness. Spending $28K per year for a marketing automation solution like Marketo attracts a high fidelity buyer.
Having the freemium model like Loopfuse OneView gets you going immediately via a try without a buy model. There are two different categories of buyers served.
We believe that as marketing automation as a category expands to become a common shorthand, then the best branded companies in the high fidelity and high convenience subcategories will dominate.
The category has not yet been mainstream, thus, the branding war is still going. The winner will take all.
The 8 Ball
While it may be entertaining to see the millions thrown at funding the companies seeking the crown, the noise of marketing clouds what matters. It’s not a features and benefit battle.
While it may not be completely true, assume parity among the vendors for the main required features to be required as marketing automation. Here’s why people pick the Apple iPod or Salesforce.com and why they will eventually pick the marketing automation vendor winner:
- Ecosystem: All the accessories such as community, support, add-ons, integrations, etc. are built up easily for the winner by third-parties.
- Leadership: We like picking the winner. It reduces perceived risk, regardless of actual functionality.
- Congruence: Content which talks about how to solve your problem rather than sell software will drive connection. Does the company drink their own Kool-Aid? Do they market with content and nurture? Or is it just a bunch of developers that are two steps removed from how people actually buy.
- Positioning: Who makes their name synonymous with “marketing automation” as a brand in our minds? It will show up in the conversations we have.
Sadly, many of the vendors just don’t get it. On the cover, they look like they help you convert leads. Under the hood, they are just a software company. The market rewards the companies that get it.
Keep your eye on the 8 ball in all the analysis and market hype:
- It’s much more about your marketing than your software. We can interchange software with the nurturing campaigns we implement.
- It may be a few years before marketing automation becomes mainstream. In the meantime, there is not a clear winner. Consolidation will occur over time and your strategies and campaigns should be portable if a vendor folds.
- Michael Dell said, “Over time all technologies commoditize.” It’s a tool at the end of the day. Noone will ask you what marketing automation software you used to win them as a customer. It’s like asking who we host our website with. Does it really matter?
Whether there is an IPO for a marketing automation vendor in the near future or a buyout by Salesforce.com or Google, the products are enablers to get a result – more converted leads. Watch the branding leader emerge and make your pick accordingly.
What are your thoughts on marketing automation software today in the market?
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