Partners at Green Square, Corporate Finance Advisors to the media and marketing sector, cast their eyes over the latest industry deals and look ahead to the next tranche of acquisitions.
We’ve often written in The Drum over the past year or so about non-marcomms companies getting in on the marcomms game, be they the likes of news and magazine distributor John Menzies, or the big consultancies and auditors like Grant Thornton and McKinsey.
But for the established marketing communications groups, there is a perhaps still more deadly competitor – the tech giant. I’m not talking about the likes of Facebook or Twitter here, but about long-established software behemoths such as Adobe and Oracle.
Last summer, Adobe (best known for programs such as Photoshop, InDesign and Illustrator) shelled out $600m (just under £400m) in cash for the “marketing automation” company Neolane. French-owned Neolane provides “conversational marketing” technology, allowing brands to automate a one-to-one dialogue with customers. The platform integrates data from multiple on and offline channels and then sends customised, targeted messages across the web, email, social, mobile, call centre, direct mail, and point of sale.
It was an interesting acquisition, because Neolane was quickly integrated into the Adobe Marketing Cloud (AMC), along with its Analytics, Target, Social, Experience Manager, and Media Optimizer offerings. In the same way that Adobe’s Creative Suite is the best-selling software for artists, publishers, designers, photographers and the like, so Adobe clearly has ambitions to carve out a similar market-leading wedge for itself in the digital marketing space with AMC. And in the process Adobe also got its hands on Neolane’s client book, which included Canon, Ikea, Sony, Samsung and Dior.
The Neolane deal was just the most recent in a string of quiet Adobe acquisitions of digital marketing startups, including Omniture in 2009, Day Software in 2010, Demdex and Auditude in 2011, and Efficient Frontier in 2012.
But Adobe hasn’t been alone – Oracle, the world’s second-biggest software company, spent $871m (£519m) on acquiring cloud marketing company Eloqua in 2012; while in the same year, CRM giant Salesforce.com bought email and data specialist ExactData for a staggering £1.6bn. Then at the end of 2013, Oracle upped the ante again by buying cross-channel relationship marketer Responsys for a cool $1.6bn.
But the latest deal, finalised last week, was potentially the most interesting and far reaching, if not the largest. IBM acquired the privately-owned email and marketing automation specialist Silverpop, in a deal estimated to be worth up to $300m (£179m). This follows on from its $100m (£60m) investment last month to expand its data-driven capabilities and consulting strategy.
According to a media statement from IBM, the combination of its own enterprise marketing portfolio with Silverpop’s real-time personalisation technology will create “a complete and advanced customer engagement solution for businesses of all sizes and scenarios”.
“The acquisition of Silverpop turbocharges IBM’s ability to put the customer at the center of any organization,” said Craig Hayman, cloud services general manager at IBM. “Now, nearly any marketing, commerce, or customer service professional from any business will have the ability to deliver the kinds of personalized customer experiences that make a measurable impact on the brand experience and the bottom line.”
What that business-speak actually and ultimately means is this: IBM wants to rule the increasingly important field of permission-based automated marketing and social CRM, and is determined that Oracle, Adobe and Salesforce.com don’t.
IBM has considerable and growing expertise in personalised digital messaging, primarily via email, but also social and mobile campaign capabilities. Silverpop’s offering slightly overlaps with what IBM already has (thanks to its acquisition of companies like Unica, Coremetrics, Tealeaf, and Xtify), but IBM’s own overall offering is now considerably strengthened – making it more attractive to medium-sized and smaller companies and B2B operators.
Factor in IBM’s enormous analytics ability, and its cloud and SaaS (software as a service) experience, plus the enormous reach of its partner ecosystem – and, let’s not forget, the enormous equity of the IBM brand itself – and you have a potentially world-beating offering. For example, IBM could create a series of targeted email (or mobile or social network) messages for a client based around that client’s customers’ web habits and their past interactions with the client in question.
Ray Wang, boss of researcher Constellation, put in nicely earlier this week when he said: “While IBM has an army of assets in play for marketing [and marketers], the reality is that you need mass personalisation at scale to deliver on relevancy and context. Silverpop brings this and their ability to effectively keep identities in context regardless of how that individual is engaging inside a brand and potentially with other brands. The benefit of Silverpop is that it's not limited to just B2B or B2C. It's been effective for customers across all types of companies.”
This will make troubling reading not just for Big Blue’s rivals, but the big digital marketing and CRM agencies, who will now not only have to compete with each other for clients, but the daddy of all tech giants.
The Silverpop acquisition, if approved by regulators, is expected to be finalised by the end of the summer, and the company will be incorporated into IBM’s enterprise marketing suites.
Andrew Moss is a partner at Green Square, corporate finance advisors to the media and marketing sector.
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