At Dreamforce 2012 we caught up with Jon Miller, VP of Marketing Content and Strategy at Marketo. This interview was conducted before the public announcement that Oracle had purchased Eloqua for $871 million and ExactTarget had purchased Pardot for $95 million.
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.
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