The company’s market capitalization is about $724 million, not including additional optional shares available to purchase for underwriters. Not bad for a company that has never turned a profit .

In the past three years, Marketo has seen its revenue rise from $13.5 million to $29.8 million to $52.8 million, but the company’s net loss has also increased every year, growing from $11.8 million in 2010 to $34.4 million in 2012.

“As long as we keep adding customers and keep having them pay the bills, you can’t do any math that doesn’t ultimately get to profitability,” said Phil Fernandez.

Marketo’s competitors include Eloqua, which was recently acquired by Oracle ORCL, Pardot which was acquired by ExactTarget, HubSpot and Act-On.  The San Mateo, Calif. company raised close to $100 million in funding from InterWest Partners (33.3% prior to the IPO), Storm Ventures (17.4%), Mayfield Fund (14.2%), Institutional Venture Partners (12.8%) and Battery Ventures (7.2%).

Related articles

Marketo Files for IPO: Will Hight Growth Outweigh High Losses

Eloqua Purchased by Oracle

ExactTarget Purchases Pardot for $95 Million

Gartner Magic Quadrant for Lead Management 2013

Gartner has published their annual Magic Quandrant for CRM Lead Management and new vendors include CallidusCloud (LeadFormix), ExactTarget and Silverpop.  As is often the case with this report, there were some key marketing automation vendors missing like Hubspot and Act-On. Gartner’s inclusion criteria requires revenue for  lead management to have been a minimum of $20 million during the past four quarters.

That’s why we found it strange that LeadFormix was included in the mix given that less than 10% of CallidusCloud 2012 revenue came  from the LeadFormix product. CallidusCloud generated $95M in 2012 so that would be under $10M for LeadFormix which does not qualify for Gartner’s inclusion criteria.

Also confusing is the mix of pure play CRM vendors like Salesforce.com and SAP with marketing automation vendors like Marketo.  Here is how Gartner spins it in the report:

Lead management integrates business process and technology to close the loop between marketing and direct or indirect sales channels, and to drive higher-value opportunities through improved demand creation, execution and opportunity management. Lead management processes include unqualified contacts and opportunities from various sources, such as Web registration pages and campaigns, direct mail campaigns, email marketing, multichannel campaigns, database marketing and third-party leased lists, social CRM and social networking sites, and tradeshows. The output of lead management processes — qualified, scored, nurtured, augmented and prioritized selling opportunities — are handed off to direct, indirect or e-commerce sales channels for action and closure.

This type of inconsistency is opening the doors for new market research providers like G2 Crowd which sells access to its crowdsourced data and provides comparison tools that customers can use.

Gartner Magic Quadrant for Lead Management – 2012

Click here to download an abridged copy of the Gartner Magic Quadrant for CRM Lead Management.

I priced each platform out and wished there were an easier way.

Until one day …

Enter The All-In-One CRM

After taking a webinar from Hubspot, I realized there was an easier way. And even though Hubspot was more than happy to provide it for me, my penny-pinching partner really wanted me to shop around.

So, for four months I did. I looked at Bronto, Marketo, Hubspot, and Infusionsoft just to name a few.

It finally came down to: Hubspot, Marketo and Infusionsoft.

Enter Tip #1: DO YOUR HOMEWORK

Though any of the software platforms that made it to the final three would have worked for us, Infusionsoft worked best because it literally had everything we needed: CRM, E-Commerce, accounting, marketing automation, sales and lead generation reporting, lead scoring, landing page creation, newsletter and mailing tools, etc.

Tip #2: Think ahead, not NOW.

We ended up with a slew of items we weren’t quite ready for, but knew we’d grow into. Why have the pain of adding something later when you can have it all now?

Tip #3: Cough it up (aka: There’s no such thing as a cheap lunch with GOOD automation)

Deposits run in the thousands and then there are monthly fees. Have more than a few users? Be prepared to pay extra.  Know what your budget is and don’t be shy conveying that to your sales rep. They usually have “wiggle room” to make the deal.

Tip#4: Have a plan

Most of the all-in-one CRMs come with training (called a “Success Coach with Infusionsoft). You get a limited amount of time to “train” with this person.

Don’t go in blind. Have a set plan for each training call and know want you want to achieve (i.e.: automated newsletter campaign or landing page design).

Tip #5: Set time aside

Even after your coach or training, there will be a thousand little things you didn’t learn. And it’s no secret that Infusionsoft is very robust and therefore not an overnight “read.”

Make sure you set time aside daily, or at least weekly, to learn ALL of the ins and outs of your software. Read the blog (if they have one).  Infusionsoft is nice enough to have weekly webinars and other free training for customers. Sign up for those and DON’T MISS!

Tip #6: Use the Buddy System

Find someone in your circles, your entrepreneur group, or your LinkedIn Groups who uses the same system. Partner up; learn from each other and share ideas.

Picking your CRM or marketing automation software should not be a quick decision. Take your time, do your homework, know what you need and how much you’re willing to spend to get it.

About the author

Silverpop has raised $25 million in venture debt, which could mean the company is thinking about an IPO.  The funding was led by Escalate Capital Partners and Silicon Valley Bank. Including this new round of funding, Silverpop has raised more than $50 million, including a $15 million round from D.E. Shaw and Draper Fisher Jurvetson in 2008.

Silverpop claims to have more than 1,800 customers representing 5,000 brands and ended 2012 with 40 percent revenue growth year-over-year and added 380 new customers. 60 percent of those new customers signed up to help learn about and target specific buyer behaviors.

Silverpop CEO Bill Nussey said his company’s solution lets marketers reach out to consumers and prospects as individuals, which gives it an edge on the competitors like Marketo and Eloqua.

“The world of marketing is undergoing a fundamental shift with customers now more discerning, more educated and more selective than ever before and no longer willing to be part of an audience or locked into a single channel,” Nussey said in a statement. “In 2012, we dramatically stepped up our investment in sales and marketing and drove record-setting growth. This new funding allows us to invest even more aggressively in 2013 and beyond, giving an ever wider set of marketers access to our game-changing solution.”

Click here to read more Marketing Automation VC funding news.

Over the past 70 days or so, I’ve said some less than flattering comments about my former employer, the revenue marketing firm, The Pedowitz Group, a relationship which ended on January 30th. Unfortunately, I allowed frustration and disappointment to cloud my judgement.

I would like to take this opportunity to publicly apologize to the leadership of that company for my egregious behavior – especially I wish to apologize to Jeff Pedowitz.  There’s no excuse for my behavior. I assure you it will never happen again. I withdraw any comments I made in anger. I know they read this blog, so I want to make this public.

Click here to read the entire apology.

One can only assume the apology was a result of a lawsuit filed on March 15, 2013 by  The Pedowitz Group  against Jeff Ogden (Ogden) and Find New Customers (FNC).  The complaint includes multiple counts of common law trademark infringement, unfair competition, breach of contract, breach of confidentiality agreement, tortious interference with contract, and defamation – seeking injunctive relief and damages, as well as enhanced damages.

TPG alleges that it interviewed Ogden for a Senior Account Manager position in December 2012 and entered into an employement contract with Ogden on December 14, with his employment commencing on January 2, 2013.  According to the complaint, Ogden’s contract included a one-year non-compete provision, and upon reporting to work he gained access to confidential information, trade secrets, and other proprietary information of TPG.

The Ogden relationship terminated on January 29, 2013, and through FNC, according to the complaint, Ogden began making “false and libelous statements” regarding plaintiffs on FNC website and using TPG marks.  A cease and desist demand letter of February 21, 2013 drew no response, FNC states.

According to our industry sources, this is not the first time that Ogden has had choice words for others in the industry.

Marketo made good this week on its promise to file for an initial public offering (IPO). Congratulations to them for reaching this step. It’s a major accomplishment.

The S-1 registration statement gives considerable new information about Marketo’s business. Revenue for 2012 is reported at $58.4 million, an impressive 80% growth rate vs. 2011 although not quite the doubling that the company had forecast earlier.

More significant, the company continues to have huge losses – it lost $34.4 million in 2012, or 59% of revenue. By comparison, Eloqua lost just 7% of revenue in the year before its IPO, and even Salesforce.com, the benchmark for all Software as a Service (Saas) start-ups, lost just 20% of revenue in its final year as a private company.

A loss that big is pretty scary. Part is due to heavy spending on sales and marketing – 65% of revenue – but that’s not the whole story: Salesforce.com had also spent 65% on marketing before its IPO (although Eloqua spent just 40%).

The difference is that cost of revenue (costs of delivering service to clients, including subscription, support, professional services, and other) was 42% for Marketo, vs. 20% for Salesforce.com and 32% for Eloqua. That figure hasn’t changed in recent years, suggesting economies of scale have yet to appear. A high cost of revenue makes it hard for a company to become profitable even as it grows, since much of the new revenue is spent on the new customers. SaaS economics aren’t supposed to work that way.

Marketo’s other operating costs (research and development and general and administrative) are also high – 52% of revenue, compared with 35% for Salesforce.com and 33% for Eloqua. That percentage has also been pretty much stable for the past three years – again suggesting that expected scale economies haven’t appeared yet.

Another way to look at it is this: Marketo would earn just 6% profit even if its sales and marketing costs were zero. So its losses aren’t simply due to high investment in new customers. The comparable figures for Eloqua and Salesforce were 39% and 45%, respecitvely.

The S-1 also reports the company had 339 employees as of December 2012. Of course, the average for the year was much lower but, ignoring that, this still yields a perfectly respectable $172,000 revenue per employee. But it also means expenses are $273,000 per employee – much higher than the $200,000 rule of thumb. I know everyone at Marketo works incredibly hard, but something is clearly out of line in their cost structure.

Perhaps stock investors will look only at Marketo’s growth rate. There is certainly an argument that the company will eventually become profitable as it spreads its fixed costs over more revenue. On the other hand, as I argued recently in DemandGen Report, it may not be possible for any large marketing automation firm to thrive as an independent. If that’s correct, then Marketo’s growth will never happen and the investors’ only hope will be a buy-out by a larger firm. Let’s hope the stock market sees hope somewhere in all this: otherwise, Marketo stock will be much harder to sell than its software.

About the Author: David Raab is consultant specializing in marketing technology and analytics. He is Principal at Raab Associates Inc., which publishes theB2B Marketing Automation Vendor Selection Tool.

InfusionCon 2013 Entrance

Marketed as ‘The Sales and Marketing Event for Small Business”, Infusionsoft hosted their annual InfusionCon 2013 conference on March 27 – 29 in Scottsdale, Arizona at the Westin Kierland hotel and resort.

“Our first event was September 2006 and we had 30 people in a room above our offices,” said Infusionsoft CEO Clate Mask.  “This year we have over 2,000 people and I see this small business celebration getting larger as there is something bigger than Infusionsoft that is happening in entrepreneurship today.”

It’s All About The Customer

Casey Graham Founder of The Rocket Company and Ultimate Marketer winner

A consistent show theme was how much Infusionsoft has changed the lives of it’s customers.  This was displayed in a contest called ‘The Ultimate Marketer’ that featured 3 Infusionsoft customers and their performance after using the software.  Some of the metrics evaluated were ‘annual revenue’, ‘leads/list size’, and ‘customers’.  Our favorite metric was ‘vacation days per year’ which shows the unique personal perspective of the small business market that they serve.

The Rocket Company from Cumming, GA took first prize in the Ultimate Marketer Event after seeing annual revenue jump from $220K to $2.1M during a 2 year period of time.  “The software helped us automate, Infusionsoft (the company) helped us dominate,” said The Rocket Company founder Casey Graham.  “Their coaching on top of the software is more valuable than just the software.  We don’t look at them as a software company.  We look at Infusionsoft as a small business success company.”

Another Ultimate Marker finalist, Dustin S. Burleson D.D.S., had the same experience with his Kansas City, MO Burleson Orthodontics practice.  “Our growth has been 600% since we started using Infusionsoft in 2009 and patient to patient referrals have quadrupled,” said Dr. Burleson.  “There is nothing we have asked for that cannot be done.  If we want every kid in our practice to get a caramel apple after their braces come off and have it automatically ship to their house, we can do that with Infusionsoft.”

Ironically many customers recommended and cited using an Infusionsoft Certified Partner for implementation.  This seems like a bit of a contradiction since Infusionsoft prides its software as ‘easy to use’.   These partners were recognized at a Partner Event dinner where a VAR called Information Street won a new Camero after selling over 100 licenses in a sales contest.

This was the first year for a Battle of the Apps Contest and AppointmentCore won for best app.  AppointmentCore helps to automate the scheduling process and provides realtime availability from Infusionsoft calendar, Google Calendar, and soon, Outook.  Other nominees included Zapier, PlusThis, and Maven Analytics.

Feature Enhancements in the Spring Release

Chief product officer Richard Tripp unveiled the the Spring Release which proved to be  more evolutionary versus revolutionary but should make the app easier to use.  Highlights included:

• ‘My Day’ sales productivity tool to make it easier to organize tasks, create quotes and manage sales activities.
• GroSocial social campaigns on Facebook.  This can now be accessed via Infusionsoft’s Campaign Builder
• ‘Marketplace’ that includes a library of free, pre-built marketing campaigns.  This may be one of the best ideas shown and Instead of starting from scratch; customers can download a campaign to their Infusionsoft app, personalize it and publish.
• New Interactive Training and Tutorials

Some customers were hoping a better Quickbooks integration would be announced but that was not the case.  ”We have tried a couple of times before but have not delivered it well,” said Clate Mask in an interview Marketing Automation Times.  ”It is growing in frustration in my mind (and our customers)  that we have not done it yet and I know it will come.  I believe it may get solved in our App Community but if that does not happen this year then I see us doing it in 2014.

Speaker Highlights

Jay Baer speaks at InfusionCon 2013

Speakers include Daymond John, founder of FUBU and investor on ABC’s Shark Tank, and David Allen, author of the bestseller Getting Things Done.  Daymond John’s presentation featured a DJ spinning hits from his past and present to help tell the story of his rags to riches story.  David Allen’s presentation was a disappointment for anyone that has already read his book, Getting Things Done, as it felt like we were watching Cliffs Notes on stage.

While John and Allen may be more well known, the most interesting and value packed speech was given by Jay Baer, President of Convince & Convert and co-Author of The NOW Revolution.  His presentation focused on how good content can create customers. “We need more information because we have more information.  All the info you need to make a good decision are in the palm of your hands,” said Baer.

Baer gave frank advice and appealed to the audience to ‘worry less about selling better and worry more about teaching better’.  Great real life content examples backed up his points that were pitch perfect for small biz owners. Baer reminded the audience, ‘Content is fire, social media is gasoline’.

A memorable part of the show took place at a private after hours party where some Infusionsoft Executive Team members formed a ‘garage band’ and played music for the guests.  During the show the ‘InfusoBand’ was joined by a special guest, Jason Scheff, lead singer for Chicago.  Scheff is a loyal Infusionsoft customer and gave a nice plug for his love of the product which was sweet music to the ears of everyone in the room.

Matt is a 20-year sales, marketing and operational leader who cut his teeth in internet technologies back in the early 90′s. He has built and run several software organizations throughout his career, and he continues to look for ways that technology can improve sales and marketing efficiencies.

This interview covers the following topics:

• How Net-Results got into the marketing automation.
• Why Net-Results decided not to have a large direct salesforce.
• How the needs of agencies and other third party partners differ than those of individual companies.
• The growing wave of large consolidations (i.e. Pardot, Eloqua) and the impact on smaller marketing automation players.

Step 1: What are your goals?

As any good marketer knows, you always have to start with a goal. Getting into marketing automation is no different. I’ve worked with too many companies who hear “marketing automation” and “300% ROI” and jump right in without defining their goals. They buy a tool first and then ask their provider second about how they can use the tool to accomplish their goals. I beg you, please don’t do this!

Start by getting a grip on your current marketing situation.  Start very high level. What are your goals for marketing? Do you want to generate more leads? Do you use PPC? Do you leverage SEO?

From there, get more granular around techniques and mediums. Outlining your goals will help you to see what your real needs are so that you can pick tools which help you accomplish those goals. Don’t buy a tool because other people use it; buy a tool because it will help you accomplish your goals best. To do this you must know what your goals are before you buy.

Step 2: What are your current processes?

Analyze why you do the things you currently do. You likely have many processes which can be eliminated with new technology. If you recognize why your processes are in place this will help you identify your real needs. If you skip this step you are likely to buy new technology, only to find yourself bogged down by workarounds to maintain your status quo. This would be the equivalent of buying your first car, and building your new car a feed trough because your horse had one.

Knowing why you do things and understanding which processes can be eliminated will help you correctly leverage marketing automation. Otherwise you are likely to spend a lot of money automating horrible work flows.

Step 3: What are your ideas?

Ideas are important at this stage. The first two steps are more about looking at the current state of affairs. This step is all about looking into the future.

What are your plans for the future? What type of goals are you trying to accomplish, and how do you want to accomplish them? What are the crazy ideas you want to try, and how do you plan on marketing in the future?

You should ask yourself these questions while imagining yourself in a perfect world where everything is possible. Write all of these items down and refer to them while you are assessing features of different tools.

Step 4: Forget everything.

This is a very odd thing for someone to tell you, but follow along.  I’ll use ROI as an example.

ROI has been the standard marketing metric for years. We answer to our bosses this number saying how well we did with the money they gave us. It’s that simple. In the new world of marketing automation ROI can’t be calculated for many campaigns, nor should it be.

Before marketing automation you had leads and you had sales-ready leads. It was very hard for you to have any other levels in between because you couldn’t track where they were. We used ROI to track when leads became sales-ready, and used ROI to identify those campaigns. This is an okay way of reporting when you only have two lead stages, leads and sales-ready leads.

Now with behavioral based tracking and lead scoring we can see exactly how close leads are to sales-ready, allowing us to make our marketing more targeted. Now we have campaigns designed to take someone from ‘lead’ to ‘lead stage 1’ and so on. When the immediate goal of a campaign isn’t to end in a purchase but to nurture someone to a new stage, ROI for the campaign is a failed metric. There is no money exchanged when the prospect gets one step closer to sales-ready. But that doesn’t mean the campaign didn’t create value.

When building out your marketing automation plan you need to have a solid idea of how to nurture leads and also how to report on those campaigns.

Step 5: Start Slow.  

This is the best advice I can give you, and I stole it from a Turtle.

In the old story of the rabbit and the turtle we all know that “slow and steady” is the way to go. When building your plan, start slow. Pick your top 3 things that you want to accomplish and work on those. Then slowly work on other items. If you try to redo your whole marketing department all at once, you will end up with a mess, you will lose all of your hair, and you will go crazy. I’d advise against this.

Use these five steps to help you build out your marketing automation plan. I would also suggest reading as much as you can on modern best practices so you can open your eyes to better ways of doing things. Remember marketing automation is not just a tool, it’s an entirely new way of marketing.

About the author: Mathew Sweezey is a Marketingspecializes in B2B marketing research with an emphasis on Marketing Automation. He currently speaks on Marketing Automation and has spoken at Salesforce’s Dreamforce, SugarCRM’s User Conference, and also writes for ClickZ.com. You can follow Mathew on Twitter @msweezey.

Why did you start G2 Crowd?

We wanted to build a trusted site for business software reviews.  We wanted to disrupt the traditional way that analyst world works today.  Gartner is an example of an organization that was a good model in the 1980’s but it no longer works.

We want to consumerize the buyer experience and Tech Crunch has called us the Yelp for enterprise software.

Before this company I was SVP of Business Software for BigMachines.   I would sell projects to large customers like GE and Symantec and they struggled with the decision process.  It would take 3 months to get a short list of vendors and even more time to make decision.  Often times there would be 5 – 10 people involved in the decision process.

Contrast that to the consumer evaluation experience that takes place on sites like Yelp and TripAdvisor.  We believe this going to happen in the business application space.

Why is the current model broken?

Look at Gartner, they have tremendous relationships with the vendors that they cover.  We know that there is a correlation between the Magic Quadrant and the data presented.  Customers are beginning to doubt the data and small businesses can’t afford to access to the research.

As an analyst you cannot keep track of all the technology.  The biggest flaw is that they don’t use the software on a day to day basis.  We think there are some good analysts out there but even with the best intentions they cannot keep up.

How do you rank the solutions?

The G2 Grid which is based on product strength and vendor strength.

Product strength is 80% based on peer reviews and our goal is to make sure they are authentic, unbiased, and transparent.  LinkedIn integration shows their profile.  Anonymous posts are known by G2 but private.  There is an incentive to show a public profile an logic built into system prevents competitor and employee from posting.

Vendor strength is inputs that come up from social networks like howmany employees you have on LinkedIn and Google Trend Analytics on the products you sell.

We don’t take money from vendors and anyone is welcome to enter the database.

What do you have to say to the marketing automation space?

I believe that we can accelerate the buying cycle for customers.  Often times companies start with a CRM and we can help the decision making process.

The MA market is unique in that it depends on the application and the vendor.  There is not just one way to set these systems up and our experience model helps to measure if they provide good service.    New entrants are coming on and sometimes it can be hard to see what will upset the market.

What makes you qualified to be the trusted source for business software reviews?

We put $2M of our own money in this company.  I was a part owner of Big Machines and grew it to 275 people and we have a great team that we have pulled together.

This is a $2 trillion industry and if we can make 10% of the industry more productive that is $200 billion in revenue.  Gartner gets $2 billion of it alone.

We started in July 2012 and launched our public beta on February 20th, 2013.  In that short of time we have 10,000 reviews and 2,000 users.  We look forward to growing our base of reviews and becoming more relevant every day.

Click here to see what G2 Crowd has to say about marketing automation.

Are you using using Marketing Automation?  Submit your review on G2 Crowd.

Maria Pergolino recently joined Apttus as Vice President of Marketing, after almost four years with the marketing automation company, Marketo.   As a key leader and early stage member of the Marketo Marketing team, Maria brings to Apttus deep domain expertise in marketing automation, campaign optimization, inbound and social media marketing.  She has won numerous awards for her work, including a Stevie Award for Women in Business and has been named to both the Top 50 Most Influential People in Sales Lead Management and 20 Women to Watch in Sales Lead Management lists.

The interview covers the following topics:

• After working 3 years at Marketo, Maria discusses what changes she has observed in the marketing automation software space.
• Advice for marketers that are in charge of lead generation.
• How to educate your management team on marketing automation.
• What challenges are similar and different at both Apttus and Marketo.
• Why Maria uses Marketo for the Apttus marketing automation platform.

Click here to read more articles about Marketo.

What happened to Spark?

Spark is still alive inside Marketo but we decided not to have it be it’s own independent brand.  If you go to our pricing page you see we sell Spark, Standard and Select editions.  What was happening which was challenging is that a small business buyer would hear about Marketo and go to our website and not see an entry level price point that was appropriate for them and they would leave.  I think it is great that we have a product that is as affordable as anybody in the market but now it is marketed better.

We believe the Marketo solution is viable for both small businesses and the large enterprise.  We are not a solution for the corner coffee store but any business that does enough marketing to warrant a dedicated marketing person is appropriate.  We think the shape of our customer pyramid is very similar to Salesforce.com where we have large, recognizable global brands that make up 1/3 of our business but 1/3 of our business come from businesses with less than 100 employees.

That is one of the things that makes Marketo unique which is that we are easy enough, fast enough, and affordable enough to compete against Pardot and Hubspot on the low end and we get people live in hours and working with their first campaign in days.  But we also have the depth to scale up to serve the word’s most complicated global enterprises.  I think that is better for a small business because it me means they can buy us as fast, easy and affordable as anybody but they are never going to outgrow us.

On the Enterpise side, we have always had the advantage of being a faster, more nimble solution.  Other people have used the analogy that Eloqua is to Siebel as Marketo is to Salesforce.  Marketo is a more modern solution that delivers faster time to value.  At Dreamforce we are doing  what we call the competitive challenge.  Let’s take a webinar that we did last week and clone it and update it for this week’s webinar.  We are giving people stopwatches and we will show it to you in Marketo, or 12 other things that marketers do every day, and go have Eloqua show you how long it takes to do it.  What we are finding is that many things that people can do in Marketo are taking 9 times longer to get done in Eloqua.  That matters.  So we have the depth of functionality without the complexity.  Eloqua recently launched Eloqua 10 to respond but their out is that anyone doing anything with any sophistication need to be doing it on Eloqua.

Where do you see the marketing automation space today are when are you going public? 

We are still seeing a category that is less than 10% penetrated.  Salesforce.com has 120,000 customers and Marketo has the most customers of anybody and we only have 2,000.  So there is still a long ways to go.  What I find exciting is that the customers we are selling to today, its not just Silicon Valley startups, we are taking to mature businesses and global enterprises.  I think we are far from crossing the chasm but all the things are lined up right for that to happen and the is going to cause a shakeup.  There are still a lot of vendors in the space.

Just look at what has happened over the last couple of years.  Genius went away, Manticore went away, Market2Lead went away.  I don’t think we are looking at the final seven vendors.

Regarding an IPO, the reality is we don’t need the cash.  We have close to $50 million still in the bank and what that means is we get to choose the time of when we want to do that based when it makes sense for the business.  What we are doing is doing everything we need to do to be ready to do it.  And then we will make the right decision for the business.

What is Marketo’s social strategy?

When we were looking at the social space, we asked what is going to be our plan.  I initially thought it would be a listening platform.  Because when you could listen to social and bring that back into your marketing automation platform you can use it for scoring, change nurture tracks, and better segmentation.  And then we realized that there are many good listening products in the marketplace and that we did not need to own that.  We needed to work really well with Radian6 and the other systems that are out there.  So we did not buy a listening company.

Then we thought about one of these campaign companies like a Hootsuite or an Argyle Social software to run campaigns.  Then we realized there are a lot of good solutions out there and people don’t really need that from us.

The reason that we bought Crowd Factory is that they were doing something that we thought was really good fit for what we do and was different from anything else out there.   Marketo is all about listening, responding and publishing which is good important stuff.  The real power of social is getting people to talk to people.  People don’t see movies because there is an ad on Facebook, they see it because their friend said go see the movie.  How do we let marketers take advantage of that to amplify all the marketing campaigns that they are already doing.

So if I am running a webinar, you are going to register for it.  If I can get you to share ‘Hey I just registered for this webinar!” and I get 5 more registrations I have now boosted my campaign by using social.  It provides social amplification for all the marketing campaigns you are already doing.  Crowd Factory gives you the ability to run programs that give a currency to the share.  So if you share something with 5 people we can give you a T-shirt.  One of our customers, Warner Brothers, are trying to drive their catalog of movies.  So they are have done things if you Tweet this out then you will get this Harry Potter book.  Jive Software used it for their User Conference, where if you got 3 people to register you got $200 off your registration.  You can do flash deals, sweepstakes, and things that encourage that.

The other thing the product does is it makes things trackable.  Before marketing automation, Google Analytics would tell you how many people went to your website but with marketing automation you know that Jason went to your website and what pages he went to.  Today most of what we know about sharing is that 500 people tweeted that but with Crowd Factory you know Jason tweeted it.  It gives you the tracking so that you can start to see who is sharing in your ecosystem and more importantly who is driving the things you care about.

If Jason drives the most conversions then all of sudden he has a high crowd score for Marketo and I want to know that and track that and deal with him differently.  And because I can measure the lift of all these sharing I can run A/B tests to see if the sweepstakes offer does better than the flash deal.  This allows you to make a science out of this social amplification tool.

The Crowd Factory platform is sold as Social Boost and Social Promotion.  Social Boost is included in Standard Edition and both come in the Select Edition.

So we see this as very complimentary to Radian6 and Buddy Media.  I think the broader message of the Marketing Cloud is that for the first time it elevates marketing to an equal status to Sales and Service.  Marketing used to be the ugly stepchild that was swept under the Sales Cloud.  Now Salesforce is saying that Marketing is a 1st Class Function that deserves 1st Class Technology.

Click here to read other articles about Marketo.

Nearstream uses social networks like Twitter, LinkedIn, and Facebook to identify and engage based on buyer intent.   LoopFuse provides traditional marketing automation services like website visitor tracking, email lead nurturing, lead scoring, CRM integration, and conversion analysis.

Nearstream is based in Seattle, Washington and LoopFuse operations will continue in Atlanta, Georgia with the products being offered under their respective brands with further integration planned.  Robert Pease will lead the company as CEO along with CTO Bradley Young. LoopFuse CEO Sean Dwyer joins the Nearstream board of directors.

“Social media is an increasingly important part of B2B marketing, ” said Sean Dwyer, CEO of LoopFuse.  “Combining LoopFuse’s marketing automation platform with Nearstream’s social engagement capabilities gives marketers a true end-to-end marketing system for today and the future.”

“Nearstream helps find someone that is signaling for help on social media and drives them to landing page for lead capture,” said Robert Pease, CEO of Nearstream.  ”Social media engagement solutions started with brand or sentiment analysis and that evolved to social for support.  We now see that people are going social for sales which is more difficult to track and manage. ”

Nearstream is designed to score signals that are the best possible candidates for demand.  Unlike traditional social marketing programs, Nearstream helps to find people that are actually interested in beginning a conversation.  It starts with a social campaign and intent or demand expressions.  As the user sees results they take actions on the results which helps to teach the software as content and context of message is revealed.

“Marketo purchased Crowd Factory which allows you to push stuff out there to bring you back.  Let’s do a contest on Facebook and bring them back to our marketing automation platform,” said Robert Pease. “Nearstream is not about quantity but quality.  This is not about sending thousand of messages a day.”

“We are proud to have Goldman as a financing partner as they are aligned with our vision to develop a true sales and marketing solution for small businesses,” said VP of Marketing Greg Head.  ”This funding is intended to help grow our sales and marketing engine, increase education and improve the product.”

“Infusionsoft is a proven partner in working with small businesses and Goldman Sachs is pleased to be an investor in this highly innovative and unique company in the software as a service industry,” says Raheel Zia, managing director for Goldman Sachs Group.

The $54 million investment from Goldman Sachs, with participation from Arthur Ventures, will help fund Infusionsoft’s future growth plans. To date, Infusionsoft has received a total of $71 million in funding. Goldman Sachs joins Mohr Davidow Ventures and Signal Peak as investors in Infusionsoft.

Infusionsoft employs 350 people and recently moved into new headquarters in Chandler, Ariz., where it plans to grow to 1,000 employees in just three years.

Combined with the acquisitions of Taleo, a human-resources management service, and service manager RightNow Technologies, the Eloqua deal gives Oracle a full suite of cloud-based software.

Salesforce.com has rapidly expanded its cloud into all those areas, helping bolster demand for its core customer-relationship management software and making it a one-stop shop for companies seeking ways to integrate marketing, sales and service.

The Oracle/Eloqua deal might spur Salesforce into action on the acquisition front after already making significant acquisitions of Radian6 and Buddy Media in the last two years.  Two privately held cloud-based marketing automation companies that Salesforce may consider are Marketo and Hubspot.    Hubspot has raised $101 million and Salesforce had invetested in earlier rounds.

Pardot might have also been a good fit had they not been purchased by ExactTarget for $95M earlier this year.

Richard’s experience as a marketing executive spans over 20 years at start-ups, early stage and established companies in the security, storage, software, networking hardware, and computer industries.  Prior to working at AG Salesworks, Richard held VP of Marketing roles at companies like COPAN Systems (who were an AG Salesworks client), Permessa Corp., Ipswitch, and Cyber-Ark Software (also an AG Salesworks client).

The interview covers the following topics:

• How to find the right person or people to talk with in the early stage lead qualification process.
• His user experience of both Act-On and Hubspot.
• Best practices for lead nurturing campaigns.
• Common telemarketing mistakes.

At Dreamforce 2012 we caught up with Zach Bailey, VP of Product Engineering at Pardot.  This interview was conducted before the public announcement that ExactTarget had purchased Pardot for $95 million:

Some of our competitors go after the Fortune 500 and we are more interested in small to medium businesses.  We really go after anyone with a marketing team that wants to do more with less.  They are strapped for time, strapped for budget, and we provide value to help them be more efficient, help them be more effective, and show them where they can improve as well.

As far as competitors, Hubspot is starting to come into our space a little more.  Initially they focused more on top of the funnel (SEO, SEM, blogging) where as we focus on the middle of the funnel.  Sometimes we run up against Act-On but really a lot of the deals we are in are not competitive.  The space is very new and the tools we are displacing are things like email marketing tools like Constant Contact or MailChimp.  Companies are looking to do more than just email marketing and tie together the existing tools they are using into a single platform.

A lot of what we are focusing on is continuing our platform vision. In the past 6 months we have done integrations with leading webinar providers like ReadyTalk, WebEx, and GoToWebinar.  We are doing offline events with Eventbright.  We are working on an integration with Wistia which is a B2B video provider and we are going to do an integration with YouTube.  It goes back to marketers have so many tools they feel like they have to manage and we want to help them get that into one place and report on it all in one place.  We want them to be able to show the value of all those tools that they are using to the C-level executives so that they can justify their budgets, justify hiring more people, and justify the growth.

Content marketing is huge right now and we are taking a look at how we can make the content management experience a lot better.  We have a new landing page builder that launched recently and we launched a new email editor and campaign management tools earlier this year.  We are continuing to refine and add more depth to those content features as well.

Our biggest strengths are providing value of time and money for the marketing team that is using our product.  When you look at a tools like Marketo or even Act-On, a lot of what we are hearing is that you need to bring on an expert and go through a lengthy implementation process to get the most out of the tool.  We focus on our Solutions Team to be like a member of your marketing team and help you get the tool set up in 2 – 4 weeks.  We want them to teach you how to use the tool, teach you how to get the most out of it and hand it off to you.  We are not interested in lengthy client services engagements.  We really want people to get up and running with the tool as quickly as possible.

The Salesforce Marketing Cloud is interesting.  Salesforce is focusing on the social side.  They want to go after larger enterprises that are going social and that makes sense. On the B2B side we are seeing a slight lag in that people are still trying to marry social and B2B.   I think that where this is all headed is there is definitely going to be a convergence and consolidation in the marketing automation space.  Luckily we are in a great spot to take advantage of that in that we are one of the top 3 vendors.  We are excited what the future holds.

When I was CMO at Polycom we needed to demonstrate the value that Marketing was providing to the organization and I could not do that in a credible fashion without a marketing automation platform like Eloqua.  During our evaluation process there were a couple things that were important to me.

First it had to be a solution that would integrate with our existing CRM platform.

The next piece was not about the software but it was about the services, it was about the education, it was about the best practices to ensure that we were doing it right. Having been in software for a long time I know how important that expertise is because companies that just buy software and don’t look at the underlying business practices and processes are not successful. You have low adoption rates, you have frustration, you have gaps in a seamless process between Sales and Marketing.

The final thing was I needed a solution that could be rolled out in a distributed global environment.  A complex organization liked Polycom required a robust tool and what we found was that Eloqua had the capability we needed in order to rollout for a global implementation.  I needed to be able to manage it in Europe, North America and Asia. It also needed to have the functionality to be able to go through the channels.  97% of our revenue came through the channel.  That meant 2 and 3 tier distribution in some cases and that our leads were passed to channel partners and I needed to get them back in order to do any closed loop reporting.  That is hard.

For complex organizations Eloqua has the depth and functionality to handle their challenges but I would also say it is not just about the software.   Support, services and best practices are important for their success for both big and small companies.   If you get the software in fast and nobody uses it, does it matter?  In a globally distributed environment we have the depth of functionality that allows CMOs to do what they need to in a complex organization.

Strict Mode is a good example of how we help complex organizations succeed.  In some countries the way that information is used is different.  Germany has some of the strictest privacy laws on the planet.  If you have a business process that is set up to take information from other sources, there are different privacy laws in every single country.

Today we are processing 10 billion transactions per day.  So we have very high performance, availability, reliability for organizations that are scaling and growing and need to process a large number of transactions.

One of the things that the Eloqua had done a good job of was feeling bigger than we were at the time.  Part of the identity system developed prior to our new logo was to connote a strong, stable, reliable, big company.  As we have grown we are now a publically traded company with $100 million in revenue and 1,000 customers.  We no longer have to say that we are ‘big’.  What we can do is let some of our personality, passions and enthusiasm come through.

I had a monumental experience in London at our Eloqua Experience Conference where I watched Joe Payne and Paul Teshima speak in front of an audience with passion and energy and I looked around at the image we were projecting (the signage, logo, graphics) and I saw a huge disconnect.  The image that we were projecting was not consistent with our personality and enthusiasm.  There was a bit of ‘cool’ factor that we were missing.  We are cool company and we needed to reflect this in the market so we made the decision to launch the new brand at Dreamforce 2012.

It’s not just about the logo it is about the story.  It’s about modern marketing expertise and it’s a story that we have not been telling. We tell a story about lead scoring and lead nurturing which is a part of modern marketing.  We tell the RPM story which is critical to modern marketing.  But how do you tie those two things together and how do you make it relevant when you are sitting across the table from a Chief Sales Officer or Chief Marketing Officer?  It’s really about how modern marketing works.

Marketing automation is coming into it’s own.  It is the growth area for which customers are gaining a competitive advantage.  We integrate tightly with Salesforce.com, Radian6, BuddyMedia and Data.com so they are cloud partners of ours.  So think of Salesforce.com’s Marketing Cloud as being part of the social engine that connects into the Eloqua platform and delivers demand out through the field.

According to Microsoft  ”the acquisition will accelerate our ability to better meet the needs of CMO’s through rich business intelligence, and better enable marketers to successfully plan, execute, monitor, and optimize customer interactions across digital, social and traditional channels, and measure ROI.”

Pardot started in 2007 and quickly became a marketing automation favorite for small to medium sized businesses.  Now at 1,000 customers, Pardot’s clients include  Restaurant.com, comScore and twilio.

“Pardot has emerged as the leading provider of marketing automation for clients in the small business and mid-market,” said Adam Blitzer, Pardot co-founder and chief operating officer. “Now as a part of the ExactTarget family, we can provide our clients with even greater capabilities, as we leverage ExactTarget’s substantial resources and industry leading cross-channel messaging platform. Our goal remains the same – to redefine marketing automation and help marketers around the globe achieve even greater results.”

“Marketers around the world are hungry for a lead nurturing solution that integrates with their broader marketing efforts and transcends the current offerings available from point solution providers,” said Scott Dorsey, ExactTarget co-founder and chief executive officer. “With the addition of Pardot to the ExactTarget suite, we will redefine marketing automation and deliver the most scalable, comprehensive automation solution that helps both B-to-B and B-to-C marketers leverage the power of data to connect with customers across email, mobile, social media and the Web.”

This acquisition follows many others in the space that include Radian6 & Buddy Media (now part of Salesforce),  Aprimo, Inc. (now part of Teradata), CheetahMail Inc. (part of Experian Group), e-Dialog Inc. (a subsidiary of eBay Inc.).  Eloqua went public in earlier this year and Marketo is rumored to launch IPO.

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