Here’s an excerpt from my recently published Market Insight: What the Eloqua IPO Means to Marketing Automation.
“After years of anticipation and speculation, it’s finally happened: The first initial public offering in the marketing automation space. Eloqua went public on the NASDAQ (ELOQ) with 8 million shares issued at an opening price of $11.50. That translates into a market cap of about $360 million. So, what does this IPO mean for the future of Eloqua? More importantly, how will it impact the existing landscape of marketing automation providers? This Analyst Perspective examines the impact of the first marketing automation IPO and the likely repercussions for Eloqua and the competitive landscape as a whole.
Let’s face it: marketing automation has been a challenging business for companies like Eloqua, not so much because the value of the technology is difficult to measure, but because marketing automation requires a fundamental change in the way organizations operate. Effective use of the technology is largely dependent on organizational change. A decade of research proves that top performing organizations are, in fact, getting superior results from their marketing automation investments (see the Gleanster benchmark report Marketing Automation). But nine times out of ten, marketing automation requires organizations to completely re-think how the marketing and sales functions work together.
U.S. companies that are currently using marketing automation solutions probably number no more than 3-4 thousand. That means fertile ground for Eloqua to continue growing in the U.S. A market cap on the IPO at four and a half times revenue seems low given its global growth potential. Europe, Asia and other emerging markets are still uncharted territory for marketing automation. In fact, research suggests these markets are presently akin to the landscape Eloqua faced 5-7 years ago in the U.S. The company certainly has the thought leadership assets and experience to venture into new markets if it chooses to do so.
The Road Ahead for Marketing Automation
Now that Eloqua has completed its IPO, are other marketing automation companies likely to follow suit? Most companies use the capital to expand geographically or enhance the product offering. The question is, what kind of growth makes an IPO attractive for other marketing automation providers? For Eloqua, global expansion makes sense. In terms of future growth, simply driving global adoption with the existing platform and could prove to be extremely lucrative, even with no new innovations added to the platform.
But here’s the problem. As a platform, marketing automation still doesn’t fully address some of the big challenges CMOs are facing. The largest of those challenges lies in tracking messages across channels and managing the holistic customer experience, both online and offline. This is something that marketing automation should be good at. To date, marketing automation solutions have largely consolidated web analytics, email marketing, landing page hosting, and to a lesser extent social media marketing, into an integrated platform. The benefits are enormous. . At the same time, however, other so-called “marketing technology providers” are starting to incorporate marketing automation capabilities into their own products, leaving marketers scratching their heads to figure out how many different technologies should be supporting marketing with the same capabilities. For example, web content management solutions have incorporated lead scoring, email marketing, and analytics as native capabilities. Email marketing providers are increasingly adding lead scoring, trigger campaigns, and more robust CRM integration. So, how could Eloqua invest in the platform to position for growth? Does acquisition or ancillary capabilities make sense for maintaining future market share and alleviating some of the competitive pressures?”
Read more about possible platform enhancements including Big Data Analytics, Web Content Management, Marketing Operations, Social Media, and more in the full 6 page Market Insight report.
To download the full report (no registration required) go to http://www.gleanster.com/reports/reports/what-the-eloqua-ipo-means-for-marketing-automation
