More than 10 Billion in the next 10 years! Why does the Marketing Automation market grow at such speed?
In this the second article from my series about Marketing Automation, we will discuss the facts and figures of this industry and try to understand how it could reach more than 10 Billion in revenue in the next 10 years.
And if you want to know what happened previously on “My Journey in Marketing Automation”. Click here! (But wait, first read this one).
Growing, Growing, Growing
- The B2B marketing automation industry will reach $325 million in revenue by the end of 2011. (source: Hubspot)
- The global Multichannel Marketing Automation Software Market size was USD 3.65 billion in 2014. (source: Markets and Markets)
- Marketing automation software market revenue would amount to 8.6 billion U.S. dollars in 2021, up from 5.8 billion in 2016. (source: Statista)
- The global marketing automation software market is expected to reach USD 7.63 billion by 2025. (source: Grand View Research)
With an industry revenue of about 200 Million EUR in 2010, the market has grown by 30 the last 6–7 years and was estimated at around 6 Billion EUR in 2016. Some forecasts expect to see the Marketing Automation Software market to grow at around 9% to 12% over the next five years.
Obviously, all the forecasts don’t say exactly the same thing. Anyway, the key takeaway is that the market is growing. We could easily assume that in 10 years it will reach 10 Billion (and even more).
If these predictions are accurate, the industry could double its size within the next decade!
And this growth is a good news for software vendors, and also (even more) for the service providers. My tip (or call it a prediction): marketing people will need more and more expertise on how to handle large amount of data, analyze them and understand the next best actions to take. But let’s keep this for another post.
Every year more Marketing Automation
Marketing Automation Software is one of the leading industry in the marketing software business. Based on the information from the well known “Marketing Technology Landscape Supergraphic” (see picture below), the number of companies categorized as “Marketing Automation & Campaign/Lead Management” product were about 200 in 2017.
Let’s be fancy and include companies providing also email marketing then the number of vendors goes up to 350 in 2017.
As a comparison with 2016, the number of companies providing Marketing Automation was exactly 161.
Companies providing Marketing Automation has increased from 26% between 2016 and 2017.
This is really impressive. And we will see later what could explain such growth!
Only one company over two is using Marketing Automation
Marketing Automation has grown at such a speed that as of 2016, a reported 49% of companies are using this technology in their marketing strategies. And for B2B companies, this figure rises to 55%.
But from where do we come! Since 2011, almost 10 times more companies are using automation in their marketing strategy. (Since the big ones started to build up their marketing cloud).
And this growth is only set to continue as ONLY 50% of companies are still not familiar with Marketing Automation.
Let’s have a closer look.
Indeed larger companies are more mature regarding digitalization and the way they engage with their customers. They adopted the first Marketing Automation practice.
But like everything, this technology is getting more affordable (and as well easier to use), and the trend is that smaller companies will follow. It is still in its early stages as evidenced by penetration at less than 10% among the SMB and micro-segments.
Let me try another prediction. More and more marketing solution tailored to the micro and small segments of the market will emerge. Solutions answering specific needs of a specific niche.
But why? Let’s try to understand the reasons for this growth.
Reason #1: Who has the budget?
This is something we all hear for the last several years. But still, it is important to note it.
In 2016, Marketing budgets were continuing to rise, according to a survey of marketing executives by Gartner. Fifty-seven percent of marketing leaders surveyed expected their budgets to increase by more than 12% in 2017.
And now, in 2018, a more recent study from by Gartner indicates that after three consecutive years of increases, marketing budget growth stalled in 2017–2018.
Despite this last study, we can be confident in more investment in the Marketing Automation industry, and moreover on the digital marketing.
Reason #2: Marketing is the new Sales
(I might have lost 50% of my “Sales Rep” audience after this).
It seems obvious that companies (especially in the B2B) invest more and more in the digital. Digital transformation is all about changing the way a company is engaging with prospects and customers. It is all about enabling new processes by technology.
There is a new channel to generate revenue and it is online. (Please stop cold-calling me). We speak now about lead generation, nurturing processes, inbound sales, and marketing. And Marketing Automation is core in these processes.
Marketing is now responsible for the growth of the company, and that’s why more budget has been allocated to digital marketing activities. The money goes to the people generating the revenue, and marketers are the new salespeople.
Reason #3: Every day more data
All the information available or collected about people are becoming so important that human or even simple systems cannot process all of them, cannot understand them anymore.
The multiplication of touchpoints such as mobile, social network, smart TV, connected devices (IoT) is an aggravating factor to the big data. The total amount of data in the world was 4.4 zettabytes in 2013. That is set to rise steeply to 44 zettabytes by 2020.
In marketing, this amount of data is pure gold. Pure gold.
(Look at you, greedy marketer).
The analysis of all these customer’s data could tell a company what prospect will most likely become a customer. Or what next piece of content should be used to nurture the prospect in order to make him a “better-qualified” lead.
Basically, analysis is crucial to make better decisions. Marketing Automation systems are helping with the processing of thousands and thousands of user information. And finally you will get better leads, leading to higher sales rates.
You need Marketing Automation to let you understand your customer’s data.
Reason #4: Marketing Automation for the solo-entrepreneur to the large enterprise
The Marketing Automation platforms were initially created to answers the needs of large enterprises. The penetration rates of marketing software for the small to very small businesses is still very low. There is a market to take.
Also, the competition among small companies is also very high. And getting higher. To some extent, SMB will have to embrace as well as digital marketing practice and will as well automate partially marketing activities.
Niche marketing software and easier to use software will be developed in order to answer their needs.
Marketing Automation for everyone.
Reason #5: New capabilities generating more demand
New technologies will enable new capabilities and offer a new way of doing digital marketing. Technology is generating demand and the current AI revolution is just an example.
When yesterday automation initially focused on tasks such as sending emails or automated marketing campaign workflows. Tomorrow Marketing Automation will help you to understand what prospect to focus on, what is the next marketing or sales move to do.
In a nutshell, Marketing Automation will continue to rise for the next decade and it will be incorporated in every company from the smallest to the largest.
The main factors are that digital marketing practice will be used more and more (for its efficiency and cost-effectiveness), and at the same time technologies will offer new perspectives and therefore generate even more demands.
It’s time to invest in Marketing Automation!
(You can as well get my ebook about Marketing Automation by clicking the link at the bottom. No email required!)
Until next time.