Marketing Automation Solutions Market India Increasing Enterprise Digital Marketing Initiatives Drive Growth at a CAGR of 25% by 2020
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1 Marketing Automation Solutions Market India Increasing Enterprise Digital Marketing Initiatives Drive Growth at a CAGR of 25% by 2020 P82F-70 December 2014
2 Contents Section Slide Number Executive Summary 3 Market Overview 8 Ecosystem and Distribution Channel Discussion 19 Total MAS Market - External Challenges: Drivers and Restraints 23 Forecasts and Trends 38 Market Share and Competitive Analysis 55 Product Analysis 62 Demand-side Analysis 65 Technology and Market Trends 86 The Last Word 89 Appendix 93 P82F-70 2
3 Executive Summary Digital marketing is becoming a must-have strategy globally for enterprises and advertising agencies. Evolving out of an experimental phase, marketers are shifting a higher percentage of their marketing budgets to digital methods, processes, platforms, and media. About % of organizations in India spend % to % of their total marketing budgets on digital marketing in The business service vertical spends the highest on digital marketing and plans on increasing its average spend from % to % in the next two-to-three years. Rising broadband penetration in India, especially through mobile media, has increased the potential of lead generation, maintenance, support and campaign reach out using digital platforms. Increasing consumer engagement on digital media and exchange of opinions through community sites are having a impact on the way customer experience can be tracked and leveraged for marketing. However, while many enterprises in India are exposed to digital marketing and its benefits, several are unaware of tools, such as marketing automation software (MAS), that can help them build a workflow and streamline all the processes around their marketing-sales cycle. These trends are changing gradually. The ecommerce market in India, which is estimated to grow at an annual growth rate of at least %, drives high adoption for MAS in India. Apart from ecommerce, other segments within Information and Communication Technologies (ICT), such as software and high tech, are also driving adoption. There are about vendors in the Indian MAS market, but the top three competitors constitute nearly % in market share by revenue. The market continues to see an increasing number of vendors with innovative and attractive kick-starter packages, especially for the SMB segment. The India MAS market earned $4.1 million in 2013 and comprises less than % of the global market. This market is expected to grow at a CAGR of % from 2013 to P82F-70 4
4 Executive Summary (continued) A significant challenge for the market is that many organizations have developed in-house tools to monitor customer databases and use these side-by-side their legacy CRM, thereby inducing an inertia to adopt MAS. The other challenge that the market faces is that manual labor for reach out tasks such as bulk mailing or bulk SMS, is relatively cheap and hence, many companies are slow to switch to automated solutions that require a significant investment. While nearly half of the market share is held by an international vendor Adobe, there are several Indian firms such as Capillary Technologies, LeadSquared, RR Marketing among others that provide a host of solutions. Frost & Sullivan finds that though the revenue from MAS in India appears low, thousands of companies are using MAS in some form. Many of them comprise regional offices of multinational corporations using licenses acquired from their headquarters in another country. In India, Web sites, s, and social media are the most preferred channels leveraged for digital marketing, especially to generate leads. Rise in channel-specific automation service providers is likely to boost MAS adoption in the short term. However, customers will gradually move to multichannel interaction as the penetration of smart phones and Internet continues to increase. An intelligent tool like MAS is essential for customer retention, because it can help facilitate relevant and personalized customer engagement. P82F-70 5
5 Market Engineering Measurements Market Overview Total MAS Market: Market Engineering Measurements, India, 2013 Market Stage Market Revenue Market Units/Volume Average Price Per Unit Market Size for Last Year of Study Period Nascent $ M M $ $ M (2013) (2013) (2020) Compound Annual Growth Rate Customer Price Sensitivity Degree of Technical Change Market Concentration % % (CAGR, ) (scale:1 [low] to 10 [high]) (scale:1 [low] to 10 [high]) (market share held by top 3 companies) Decreasing Stable Increasing For a tabular version, click here. Note: All figures are rounded. The base year is P82F-70 6
6 Executive Summary CEO s Perspective 1 Targeted marketing through various digital channels, integration with CRM, and end-user behavior analytics are the key features that make MAS attractive in India. 2 The top three vendors comprise nearly % of the market revenue today, but the penetration is driven equally strongly by some key Indian participants. 3 The Indian government s Digital India initiative resonates across all industries, thereby encouraging companies to explore digital solutions. 4 Retail, and ICT are the key verticals driving adoption. Growing adoption in other sectors hinges on proactive education about digital marketing automation. P82F-70 7
7 Market Overview Marketing Automation Terms and phrases relevant to the market are defined below. Digital Marketing: Digital marketing is a form of marketing that makes use of electronic devices such as computers, tablets, smartphones, cellphones, digital billboards, and game consoles to engage with consumers and other business partners through real-time or usage of software solutions. Vendor: Providers of MAS solutions either in the pure form or as part of an integrated set of solutions are referred to as Vendors in this study. Company/Licensee/Subscriber/End User: These terms refer to any individual or business that purchases an MAS license from a vendor. Customer: When a subscriber or licensee uses MAS to connect with an audience, customer refers to their clientele, patron, buyer, or consumer. Visitor: A visitor is anyone who views content on an end user s Web site or through any other online form of collateral information. Prospect: A prospect is a visitor who engages with the end user s content in some way. Lead: A lead is a qualified prospect that shows potential interest in buying a product or a service from the end user (e.g., downloading a white paper or registering on the Web site). Buyer Lifecycle: This is the path followed by a customer from product/service inquiry to purchase. SMB/Enterprise: Organizations incurring a revenue of $ million are considered to be enterprises. All organizations incurring lesser than $ million are considered to fall under the SMB segment. P82F-70 9
8 Market Overview Marketing Automation Definition MAS Market: MAS is defined as a set of solutions that automate marketing and sales activities to drive revenue growth and empower organizations to make data-driven decisions. These solutions have emerged to align with the evolving customer engagement lifecycle. A customer engagement lifecycle is viewed as a funnel that generates interactive content through multiple channels to create awareness of a company s offerings to acquire, engage, and retain customers, eventually enabling them to become advocates and/or influencers of a brand. MAS constitutes or more of the functions shown in the exhibit and discussed in detail in the following slides. Lead Management: Lead management is the heart of MAS, as it helps a marketer with fundamental marketing activities of lead generation and nurturing. Total MAS Market: MAS Functions, India, 2013 Content Marketing Enablement Sales Enablement MAS Lead Management Marketing Analytics and Measurement MAS enables marketers to view activities of prospective or existing customers, extract information about their interaction with the company, create profiles, and manage marketing campaigns. Profile information helps marketers with lead segmentation while the execution of campaigns facilitates lead generation and lead nurturing. In addition, MAS has metrics that educate the marketer about the success of a campaign and help modify it based on audience response. P82F-70 10
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