Salesforce recently announced Marketing Cloud Growth Edition, the first glimpse of what a marketing app built in alignment with Salesforce’s core platform looks like. This is targeted at B2B, SMB (small-medium) organizations based on the available functionality, with notable potential to address B2C marketing use cases too, judging by its flexibility.
When considering marketing automation choices, the B2B SMB segments of the market are saturated by numerous vendors. A few stand out, having gained impressive market share; Salesforce’s Marketing Cloud Account Engagement (formerly Pardot) is often pitted against HubSpot during evaluation.
You may believe that there’s enough pie to go around. According to one source, the marketing automation software market is expected to reach $6.85 billion in 2024 – and grow at an annual growth rate (CAGR) of 17.54%. That equates to $15.36 billion by 2029.
However, in the bullish market of SaaS software, the major players are not interested in sharing. One could argue that Salesforce has launched Marketing Cloud Growth Edition to take market share from HubSpot. Could this be the case, and what else does Salesforce have ‘up their sleeve’?
How Did HubSpot and Salesforce Become CRM Powerhouses?
Attempting to compare two vendors in a feature-by-feature way has always occurred to me as a futile exercise. After all, product features change frequently, and there’s the risk of the review becoming subjective (i.e. one person prefers something based on personal preference). Instead, let’s take a look back in time to how these players established themselves in the market, and grew into the brand names we now know.
HubSpot started out life as a marketing automation tool, then branched into CRM, with a sales and service suite. Their ‘land and expand’ strategy encourages any marketing automation customers to gain very competitively priced CRM functionality to complete the picture. HubSpot also gives away features for unlimited free use, such as their chatbot feature. This wouldn’t be a fair assessment if HubSpot’s G2 success weren’t noted – having come top in their leaderboard.
On the other hand, Salesforce’s marketing automation products were not organically grown, but instead were the result of successful acquisitions. Account Engagement (formerly Pardot) was acquired by ExactTarget in 2012, and a year later, ExactTarget was acquired by Salesforce. You could compare this to the medium-sized fish swallows the small fish, then the larger fish swallows the medium fish.
These are only a couple of examples in their plethora of acquisitions in the marketing tooling space. To be fair to Salesforce, they have innovated plenty with these products, and have continuously strived to bring Account Engagement (Pardot) closer to the core CRM platform, for example, with object alignment (i.e. using the same objects in the data model, as opposed to passing data via integrations).
According to one presentation given by Salesforce Marketing Cloud executives in 2019, in the first 6 years of Salesforce ownership, Marketing Cloud experienced 6x growth and Account Engagement (Pardot) saw a formidable 20x growth.
Salesforce attracts customers with its flagship product (Sales Cloud), then upsells into marketing automation. While the quote below was likely to have been said with good intentions, it could be interpreted as a dig at Salesforce.
“HubSpot’s company and culture are a lot like our product. They’re crafted, not cobbled, for a delightful experience.” HubSpot, “About Us”
In terms of numbers, it’s been challenging to find a consensus on market share statistics.
HubSpot has 205,000 customers across 135+ countries, with 2023 revenue reported at $2.17 bill. Salesforce claims 150,000+ customers, with revenues of $31.4 bill in 2023, up 18% year over year.
What is striking from the revenue numbers shared above, is Salesforce’s wider platform offering. Breaking down Salesforce’s subscription and support revenues, $4.5 bill was sourced from marketing and commerce – that’s 15.5% of the total $29 bill (source).
Note: There wasn’t a definitive disclosure about whether these are paying customers.
Why Launch Marketing Cloud Growth Edition?
With the rise of GPT technology throughout 2023, it was interesting to see how various vendors rushed to bake generative AI into their products.
For marketers, HubSpot AI and Salesforce Einstein cater to email content creation use cases. I asked HubSpot’s own chatbot “How is HubSpot AI different from Salesforce Einstein for marketers?”. I thought I was being ‘tongue and cheek’, however (surprisingly) the response was informative, and more importantly, unbiased:
“HubSpot AI is primarily focused on assisting marketers in generating effective and engaging subject lines for marketing emails, allowing users to concentrate on refining and optimizing the content of the email campaign itself.
Salesforce Einstein, on the other hand, offers a wide range of AI-powered features and capabilities, including predictive lead scoring, personalized recommendations, automated data enrichment, and AI-driven insights to help marketers make data-driven decisions and enhance their marketing strategies.
The primary difference lies in the specific functionalities and focus areas of each AI tool, with HubSpot AI concentrating on email subject line generation and Salesforce Einstein offering a broader set of AI-powered marketing capabilities.”
What you can see by checking out HubSpot’s AI roadmap is that they’re giving Salesforce a run for its money.
One I wish to pick out is their built-in AI image generation. Salesforce promoted their partnership with Typeface through the second half of 2023, enabling their mutual customers to generate content (images and layouts) specific to their brand guidelines. It’s a highly innovative tool where marketers can interrogate Typeface in natural language to create some very impressive assets.
What’s HubSpot Got?
Having worked in the marketing automation space for a number of years, you hear anecdotes about what one vendor does better than another. I have also used HubSpot hands-on. These are observations from others, and myself, personally.
HubSpot is praised for its inbound marketing strengths. It’s also relatively ‘light-weight’ to work with (i.e. less of a learning curve for new users), and has superior email, form, and landing page builders compared to Salesforce’s marketing products.
What’s Marketing Cloud Growth Edition Got?
While HubSpot is powerful and user-friendly, you wouldn’t be wrong to assume that this is what Salesforce has been working towards in their Marketing Cloud Growth Edition.
- Simplified setup: A guided setup process takes the marketer through the steps to get up and running.
- Email and form builder: New builders have a focus on modular, drag-and-drop functionality, avoiding the ‘faff’ their oftentimes temperamental/quirky predecessors had.
- Collective content repository: The new builders are built on top of Salesforce CMS, which is a shared repository for assets across the whole Salesforce platform (i.e. any other products your organization has invested in).
- Condensed-down automation: The marketer goes step by step through an interface with collapsible steps to show where one began (e.g. defining the audience), and the current stage (e.g. generating the email copy with Einstein) – again, all in one screen, so no, or minimal, switching between pages.
Money, Money, Money (and Your Limits)
Let’s touch on how much it will set you back when as a customer of either of these vendors.
HubSpot Marketing Hub starts at approx. $10.6k per year. This includes 2000 contacts, and any additional contacts need to be purchased in blocks of 5000 (priced at approx. $2k per year). In other words, for a 10,000-contact database, you’d be looking to spend $14k per year. There are no limits on email sends.
Marketing Cloud Growth Edition comes in at $18,000 per year. This includes 180k email sends with the option to purchase more, at an additional cost, and credits for Data Cloud (we’ll revisit what this means).
While writing this, it struck me that there’s no contact-based pricing involved with Marketing Cloud Growth Edition. From first-hand experience, I’ve witnessed how a growing database can bite you in terms of storage costs. Both HubSpot and Account Engagement (Pardot) operate on blocks of contacts in your database, whereas it seems that Marketing Cloud Growth Edition doesn’t (you’re just using the same contact records in Salesforce CRM, so your CRM storage is the only limit you would need to consider).
Whether the number of emails sends, or the number of contacts is your concern, it’s a notable comparison to make.
Is There More to Salesforce’s ‘Secret Sauce’?
In Salesforce’s marketing messaging, you will hear the trifecta of CRM + AI + Data mentioned time again.
We’ve already covered how Salesforce focuses on their ‘core’ CRM platform, which arguably outshines every other vendor in the market. Salesforce has not been shy about wanting to become a one-stop-shop in enterprise SaaS technology. Their 60+ acquisitions, including best of breed tools, have paved the way for very profitable parallel business lines (Slack, Tableau, MuleSoft, to name a few). This means that Salesforce can cater to organizations of any size, fulfilling the needs of large organizations’ integrations, analytics, data residency requirements, etc.
Advances in generative AI took the world by storm, both in positive and negative ways. Salesforce appeared to take a measured approach by launching the Einstein Trust Layer alongside its generative AI announcements. This addresses the concerns over how customer data (that should be kept private) is at risk of being spread to AI models – in other words, keep GenAI outputs contextual to your organization’s data, without sending that data outside of your trusted boundary.
Then there’s Data Cloud, which has become Salesforce’s prized possession over the past two years. Data Cloud could be described as the ‘Holy Grail of CRM’, meaning that the data problem that’s existed since the infancy of CRM is now finally solvable. It handles large volumes of data to produce unified profiles of individuals from the data streaming in from disparate data sources.
I’ve mentioned that Marketing Cloud Growth Edition comes with credits for Data Cloud. There are disparate phases of data management in Data Cloud – unification, segmentation, and activation, are the ones relating to Marketing Cloud Growth Edition.
To explain this briefly, unification is compiling records together to render a ‘golden record’ for an individual customer, regardless of variations across other platforms in your tech stack. Segmentation is the process of making groups of profiles that share certain demographic or behavioral characteristics. Activation is pushing segments to another platform, such as Marketing Cloud, ready to be communicated with.
Salesforce has, for many years, strived towards gearing CRM to different industries. Organizations from different industries need specific data models to function. Seeing the opportunity, Salesforce jumped to launch Industry “cloud” products that come with objects and relationships that cater to most organizations in that industry. Take, for example, Financial Services Cloud or Health Cloud. Industry Clouds have been significant for Salesforce.
The one-stop ‘platform’ for the enterprise, generative AI embedded with ‘trust’, Data Cloud and industry-specific CRM – these are all key ingredients in Salesforce’s ‘secret sauce’.
Summary
Salesforce’s recent introduction of the Marketing Cloud Growth Edition represents a pivotal evolution, aligning seamlessly with its core platform to target B2B and SMB organizations.
With the marketing automation software market expected to balloon to $6.85 billion by 2024, Salesforce’s strategic maneuver is not just about coexistence but dominance. This launch not only challenges HubSpot’s position but also hints at Salesforce’s aggressive roadmap for future innovations in the SaaS battleground.