News Analysis
Demandbase’s acquisition of Engagio last week in the Account-Based Marketing (ABM) space signals what could be the start of what analysts call a “collision course” between ABM and marketing automation software.
What kind of collision course? A competitive one? Or harmonious, which is the case with some vendors today? Analysts say it could be competitive where ABM software players add more marketing automation-like capabilities. ABM vendors are already doubling down on marketing automation-like functionality such as native email, landing page and form functionality, engagement programs, native databases and creating demand generation/prospecting use cases, according to analysts from Forrester and Gartner.
The Goal: Replace Marketing Automation Platforms
Reality check: Not many would say the relatively immature ABM players are ready to take on the veteran, well-established marketing automation vendors. However, Engagio is deeply-rooted in marketing automation, and Demandbase is one of the largest pure-play ABM providers, signaling at least the start of a potential technology convergence where ABMs attempt to act independently. Several ABM companies expressed a "strategy of increasing marginalization: appropriating budget from MAPs (marketing automation platforms) with the goal of ultimately replacing them," according to research in the Forrester New Wave: ABM Platforms, Q2, 2020 published June 9.
“We have not been able to put a date on when that collision between marketing automation and ABM is going to happen, but we assume it is going to happen at some point,” said Todd Berkowitz, practice vice president for the tech product marketing team at Gartner. “And the Demandbase-Engagio acquisition may have accelerated this a little bit. You kind of can see that in their press release. (Marketing automation and ABM) could potentially merge together as some kind of a unified platform.”
ABM and Marketing Automation Defined
To help understand a potential convergence with these marketing technology software markets it’s helpful to take a look at what they offer:
What Is Account-Based Marketing (ABM) Software?
Account-based marketing software helps B2B marketers identify and target the accounts (rather than individuals) and coordinate with sales. The foundational thinking is “accounts” drive sales in the B2B world, and account-based data and technology in ABM programs help marketers identify, attract, engage, convert, close and then measure progress against customers and prospects, according to Demandbase officials. Examples include: Demandbase, Engagio, Terminus, RollWorks, 6Sense, etc..
What Is Marketing Automation?
Marketing automation is the process of using software to complete repetitive marketing tasks designed to nurture sales leads, personalize marketing messages and content and in the process, save marketers’ time and effort. By automating many of these tasks, users can more effectively send the right message, to the right user at the right time. Example vendors include: Adobe/Marketo, HubSpot, Oracle Eloqua, Salesforce Pardot, etc..
A common scenario for marketers using ABM software is to identify the B2B accounts ripe for sales, but use a marketing automation tool for sending campaigns and messages. As a customer told Forrester researchers in this month’s Forrester Wave on ABMs: “Engagio is the ‘brain’ of many of our programs and the marketing automation platform is just the ‘send’ engine.”
Related Article: Marketing Automation, Beyond the First Hello
Shot Across the Marketing Automation Bow?
However, Steven Casey, author of that ABM Wave for Forrester and principal analyst serving B2B professionals, told CMSWire in an interview that three ABM vendors in the Wave rolled out native email functionality. And four more have it on their roadmap for the next 12 to 18 months, meaning half of the vendors in the Wave could have native email functionality within a year. “I would characterize that as a shot across the bow of the marketing automation platform vendor,” Casey said.
The reality may be, however, those marketing automation vendors see that shot as nothing but a harmless small arrow that barely scrapes their large vessel that’s been sailing for decades. ABM vendors, meanwhile, are still what Gartner calls “relatively immature” in its December 2019 “Market Guide for Account-Based Marketing Platforms."
Revenue-wise, it’s surely not a fair fight. Gartner estimated that total ABM platform revenue for 2019 was $450 million, a year over year increase of 30%. Marketing automation software will reach $8.42 billion by 2027 at a CAGR of 9.8% from 2020 to 2027, according to a March study conducted by Grand View Research. “We don't expect the marketing automation vendors to just stay on the sidelines and let this happen,” Berkowitz said, referring to his proposed “collision course” of ABM and marketing automation software.
ABM vendors aren't sitting still, either. IDG, a B2B publishing company whose brands include ComputerWorld, CIO.com and others, acquired ABM provider Triblio, just a week after Demandbase acquired Engagio. And, true to the forecast of the convergence between ABM and marketing automation, IDG CEO Mohamad Ali said in the June 23 press release announcing the acquisition that his company is building Marketing Automation 2.0:“... We immediately add our global reach and scale, together with premium content and first-party data to accelerate our journey to the next generation of SaaS marketing automation."
Reimagining B2B Martech Landscape
So why does Demandbase’s acquisition of Engagio serve as a potential first step, no matter how small, in the convergence of marketing automation and ABM? Because for starters, Engagio feels it has deeper marketing automation roots than its ABM brethren.
Jon Miller, who co-founded Engagio in 2015, is one of the founders of the prominent B2B marketing automation players, Marketo, acquired by Adobe for $4.75 billion in 2018. Although seen as a pure-play ABM player, Engagio and Miller have touted the software suite’s marketing automation capabilities. “The acquisition accelerates everything I wanted to create in an ABM platform. We will combine Demandbase’s strong go-to-market function and technological expertise with Engagio’s deep marketing automation and CRM expertise,” Miller said in the press release on the acquisition. “But it’s our shared vision for reimagining both the ABM and B2B martech landscapes that gets me truly excited for the future.”
Gabe Rogol, CEO of Demandbase, told CMSWire that Miller’s history and Engagio’s history is “steeped in marketing automation,” and their ability to integrate with first party data — data from CRM and from marketing automation emails and calendar items — combines with Demandbase’s third party proprietary data, such as IP identification of accounts in real time and understanding buying intent.
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While Miller nor Rogol outright said they’re gunning to take down the marketing automation software market, Miller’s vision with Engagio is to build the next generation marketing automation platform, according to Forrester’s Casey. “In some ways, you could say, with the potential for replacing the existing marketing automation platform,” Casey said. “In the Wave I've been looking for signs where there had been sort of a complementary relationship where the ABM platform was designed to add onto the marketing automation platform but where eventually they might sort of compete for budget and client resources.”
Casey said a "significant number” of ABM vendors were “really gunning for the marketing automation platforms.” “They think," he added, “there's a shift underway from kind of an email, lead-centric engagement model to one that is truly account centric. And one that involves channels other than email. That’s why I think this deal is significant for the marketplace. To date, Demandbase has been one of the leaders in the ABM marketplace. And they've had a partnership angle with other marketing automation platforms. Now with Engagio they now foresee it’s going to be more of a competitive environment.”
Related Article: Has Account-Based Marketing Made Sales Development Reps Obsolete?ABM, Marketing Automation Friends for Now
Despite forecasts of competition, the ABM and marketing automation market currently is harmonious. Adobe (Marketo), Oracle Eloqua and Salesforce Pardot have continued to invest in their ABM functionality and marketing automation vendors, SAP and Microsoft have all partnered with ABM platform vendors. Further, Salesforce Ventures invested in 6sense and Demandbase, according to research from Gartner in its December 2019 Market Guide.
However, most of the marketing automation vendors have not really made significant investments in ABM, according to Berkowitz. “There is an opening potentially for the ABM platform to sort of have a fighting chance to take over and add some capabilities like email or landing pages and they already kind of do the segmentation," he added. "That martech convergence could happen more easily with something like Demandbase and Engagio together. Demandbase has really been talking more about being a pure ABM whereas Jon (Miller) had tried to position Engagio as a little bit more than that, as the B2B platform and not just the ABM platform, so there is a possibility here that this accelerates that collision.”
First Party Meets Third Party Data
As for the acquisition itself, Demandbase and Engagio officials said the combined technologies will combine Demandbase’s advertising intent data, personalization and ability to identify third-party data on accounts with Engagio’s first-party data insights, connections between sales and marketing and Engagio’s “really amazing UI,” according to Rogol, Demandbase’s CEO.
Miller said Engagio customers will get to realize the strength of Demandbase’s B2B advertising platform and its Demand Side Platform (DSP) that has been purpose-built for accounts and B2B. Machine learning and account selection, and the predictive models that tell you which are best accounts is another key functionally Demandbase brings, Miller said. Native intent data through machine learning identifies accounts that show engagement around keywords and these topics.
Engagio Customer: Intent Data's Appealing
Molly Walsh, CMP, director of marketing at CodeScience, has been an Engagio customer since 2017 and uses it for aggregating activities to the account level to track all of the touchpoints of the customer journey and orchestrate the handoff between marketing and sales. One challenge they had was around data syncing seamlessly between systems and usability. Her teams started this process with a marketing automation vendor in addition to Salesforce and Engagio. “The data flow just couldn't be resolved,” she said, so the teams switched marketing automation vendors. “With regard to usability, Engagio has incredible depth. I call it the layers of an onion,” Walsh said. "You can create any kind of report, across objects, which is very powerful. That said, the documentation and training were thin at the beginning and that was a challenge our team had to push through.”
Her teams at CodeScience are not currently Demandbase customers but is contemplating the use of intent data that Demandbase offers. “In addition, we focus on verticals including healthcare life sciences, financial services and consumer goods, and the personalized web experience that Demandbase offers could be really helpful to grow even faster than what we are doing today,” Walsh said. “So to summarize, we're excited to see this combination and the potential it represents."
Related Article: What Is Marketing Automation and How Does it Help Marketers?
Customers Calling on Integrations
Jon Russo, CMO and founder of B2B Fusion, which has done ABM strategy and implementations involving the Demandbase and Engagio platforms, said customers were already asking for the Enagio/Demandbase integrations. “I'd call it months vs. quarters before customers see synergies of the products pulled together based on what we've experienced,” Russo said.
“It makes tremendous sense to combine Engagio's ABM reporting, multi-channel orchestration, and sales enablement capabilities to complement Demandbases' vast web insights, intent data and advertising media capabilities,” Russo added. “Based on over 100 ABM strategic and tactical experiences with Engagio clients, we see clients recently refreshing their second half of 2020 play strategy, focusing on the very top prospect accounts with personalized content to speed their funnel process. Demandbase customers can expect enhanced Engagio sales enablement insights to complement the web insights of the Demandbase platform while Engagio customers can expect new intent and advertising options once they fully integrate.”
