Act-On Software Review

Act-On Marketing Software Review—An Independent Marketing Software Analysis

 By Chuck Schaeffer

Founded in 2008 and headquartered in Beaverton, Oregon, Act-On Software is one of the more recent marketing software upstarts. The company released its first beta version in June 2008 and began selling marketing automation software in October of the same year. However, the product release in early 2011 became the flagship product that fueled accelerated company growth.

The business idea for Act-On was spawned by founder Raghu Raghavan and Subrah Iyar, the founder of WebEx. The two believed that webinars were critical online marketing tools however were not integrated with the current mix of email marketing and marketing automation software systems. Raghu then recruited engineering colleagues from his days at Responsys and built a prototype that integrated an online marketing platform with WebEx and Salesforce.com. Cisco, which had acquired WebEx, and Iyar initially funded the new venture, and the company began its journey.

Fast forward three years. Following a Series B venture funding, the company delivered its most impressive marketing software release. Shortly after in May 2011, the company opened its first non-US location in the UK. To facilitate the expansion, the company granted partner Pipedream Marketing exclusive reseller rights in the region. Pipedream provides day-to-day management and customer support for the UK and European customer base. The company is also charged with recruiting a broader European channel network across Europe, the Middle East and Africa.

In July 2011, Act-On acquired the assets of Marketbright, an early marketing automation software provider that failed to get recognized and whose business and product subsequently deteriorated. Despite being an asset purchase, the Act-On and Marketbright software applications were developed on different technologies and Marketbright code was not merged into Act-On. The acquisition was much more about acquiring Marketbright know-how and customers.

In 2012, the company began to hit its stride. For Q1, Act-On Software revenue grew approximately 350 percent year over year while the company increased its employee count by over 200 percent to 105 staff. In Q2, the company reported 220 percent growht and in August 2012, Act-On acquired its 1,000th customer.

Act-On Market Positioning

Act-On Software straddles two overlapping market segments—email marketing and marketing automation software. Both markets continue to show growth, but while many focus on the much higher growth of marketing automation systems, Raghavan is not lost on the relative sizing among the two. Act-On says that according to Forrester research, it is playing in a $4+ billion market, with e-mail marketing contributing $4 billion and marketing automation another $250 million.

In terms of identifying the customer market, Act-On casts a very wide net in stating that its target market is the Fortune 5 million. In reality, the company positions its solutions for small and midsize businesses (SMBs) as well as departments or divisions of larger enterprises. In more precise qualification terms, the company seeks prospects with 1 to 10 staff in the marketing department.

While the company does boast a few enterprise customers (namely IBM, Motorola and Siemens), the vast majority of customers are small businesses. And unlike many popular marketing automation software vendors whose customers tend to coalesce in the technology sector, Act-On customers include more diverse industries, including B2C markets, such as financial services, insurance, retail, healthcare, and education.

According to Raghavan, the company aspires to begin the commoditization of marketing automation, and if successful, believes their efforts will make marketing automation software available and affordable for all.

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