The ever-expanding marketing technology scene has seen a wave of consolidation lately, driven by the big players like Adobe, Salesforce and Oracle. Now Marketo, one of the major MarTech vendors, will become part of Adobe’s MarTech Suite. What does this mean for the industry and marketers?
Let’s first take a look at the events leading to this moment. Since Vista bought Marketo in 2016, it’s been pretty evident that Marketo’s fate was to become part of a bigger cloud. Yet, there have been many contestants for Marketo over the years. A hacked Salesforce board meeting document listed Marketo as one of the acquisition targets (among Adobe!). Lately, the heavy influx of former SAP executives to Marketo indicated that something might be cooking up with the German company. Moreover, Microsoft’s lack of its own marketing suite has caused some rumours, as well as Marketo’s strategic partnership with Google.
Why does it make sense for Adobe to be the new home for Marketo?
While Adobe has its own marketing cloud and marketing automation product Adobe Campaign (formerly Neolane), have not had a robust lead management product, and it has been aimed more at enterprise clients, rather than SMB. Linking Adobe’s strength in marketing directly to consumers with Marketo’s key capabilities in marketing to customers inside companies fills a gap that causes a lot of frustration and challenges across the market
Looking at Adobe’s installed base, they are already quite strong in B2B enterprise segment with AEM and Analytics (and of course with the Creative Cloud). Naturally, this creates a huge opportunity to build the marketing stack further with Marketo as the lead management and customer engagement solution.
Adobe Campaign will continue to serve as the leading solution for multichannel campaign management (read: B2C), but now Adobe does not need to tweak Campaign to look like it could be a lead management solution too.
From technical perspective Marketo will bring lot of integrations that will hopefully spread to rest of Adobe products, and there seems to be lot of synergies in Marketo AI and Adobe’s Sensei services.
Adobe has faced increasing competition from Salesforce with Salesforce challenging existing Adobe Campaign installations with Salesforce’s Marketing cloud. Especially for companies operating in both in B2C and B2B, Salesforce’s sales pitch has been attractive. Now from a marketer’s perspective, Adobe suddenly has the full breadth in its offering to cater for all verticals and customer lifecycle stages, and so far only claimed by Salesforce. As many companies stand on parallel legs in both B2C and B2B, building a coherent tech stack is often challenging to say the least. Now with both Adobe and Salesforce significantly strengthening their capabilities in serving the needs of B2B business they open up a lucrative opportunity for their customers to extend and improve their marketing capabilities in B2B.
A noteworthy aspect of the acquisition is also the fact that it is not about Adobe swallowing its competition. There is hardly direct overlap in the Adobe and Marketo offering. In other words, Adobe acquiring Marketo is essentially about complementing the offering to cover and better serve the overlap in both companies’ customers’ needs.
Also it doesn’t hurt that this will bring thousands of new customers into Adobe Marketing Cloud, offering good cross sell opportunities.
Why does it make sense for Marketo to be part of Adobe?
One thing is evident – Marketo has had a clear push towards enterprise and away from SMB. This shift does not happen overnight and requires totally different kind of sales organization. In EMEA, Marketo has only recently started to build its enterprise sales organization. They have relied heavily on partners to build pipeline, but now with Adobe’s own enterprise sales organization, Marketo will have the opportunity to expand its sales muscle way beyond current reach. But not only that, it should also allow Marketo to beef up their customer support by building on Adobe’s existing capacity in this field.
From a competitive perspective, Salesforce Pardot has been taking market lately by being part of SFMC Sales Cloud and by having lucrative pricing. However, the product still lacks many enterprise capabilities that large organizations need such as the possibility to create separate workspaces for regions and business units. Oracle Eloqua still is the leader in lead management space for large organizations, but it lacks the analytics and content offering Adobe has.
Of course, it will take time to integrate Marketo to the existing Adobe products, but this is not a major factor. Adobe has an excellent track record of integrating its acquisitions into user interface that remains marketing user friendly. Compared to CRM integration, CMS and analytics integration does not require as heavy configuration and many joint customers of Adobe and Marketo already have the stack integrated.
From CRM perspective, Adobe does not have anything to offer itself, but has built a strong relationship with Microsoft. As Marketo also already offers an out-of-the-box integration with Dynamics CRM, it’s natural to develop this relationship further.
The next battlefronts in integration space will be DAM, DMP and integration itself. Adobe is well equipped with DAM offering, but time will tell how quickly Marketo can benefit from a tighter integration to Adobe’s DAM. DMP has been all the rave recently, but it will not be hugely important for B2B customers in the immediate future (the majority of B2B companies are not doing display advertising at that scale).
The integration offering, especially iPaaS solutions, are highly interesting. Salesforce recently bought Mulesoft for 6 billion dollars, signifying the importance of data activation. Currently, neither Marketo nor Adobe have a similar offering, but it wouldn’t be surprising if Adobe buys one of the iPaaS vendors next.
What does this mean then for the MarTech industry? With the recent acquisitions, it’s clear that major MarTech vendors have understood the importance of a multi-cloud solution for customer engagement. We will see more and more companies adopting solutions like Marketo for lead management, while solutions like Adobe Campaign will be used for their customer lifecycle management. Eventually, everyone saves time and money (just ask people who have built a lead scoring model using Adobe Campaign or Salesforce Marketing Cloud, then ask people who have done it with Marketo or Pardot). For sure, the role of iPaaS solution as the connecting piece will grow..
With ever growing amount of MarTech services available, it’s clear that the big players will keep their ecosystems up to date with continued acquisitions. There are benefits of cherry picking solutions, but going with one enterprise marketing suite doesn’t seem like bad idea at all. The gravitational pull of Adobe, Salesforce, IBM, Oracle, SAP and SAS seems to be just getting bigger.
So what’s next?
In the near term there will be no concrete changes to Marketo’s platform or service offering according to Steve Lucas, Marketo’s CEO in an email to Marketo’s customers. Over time there is certain to be serious development, however. In a blog post announcing the acquisition Lucas states that:
The combination of Marketo and Adobe’s Experience Cloud will form the definitive system of engagement for B2C and B2B enterprise marketers. Marketo’s exceptional lead management, account-level data, and multi-channel marketing capabilities will combine with Adobe’s rich behavioral dataset to create the most advanced, unified view of the customer at both an individual and account level.
Given Marketo’s initiatives in developing AI, much hyped at the Marketo summit earlier this year (see more here), Adobe’s behavioural dataset will most certainly be a boon in developing Marketo’s AI to help marketers proactively tweak their content and campaigns for improved relevancy and engagement.
All in all the acquisition is another step in a bigger movement towards serving the B2B segment in the MarTech landscape. This certainly will not be the last acquisition we see in the foreseeable future! These are all indications that the marketing technology industry is maturing – large enterprises and their executives have understood that CRM tool is not enough for customer engagement management in the digital age, regardless of industry. “As a strategic partner of both Marketo and Adobe, Avaus welcomes this exciting move with open arms”, says Tuukka Valkeasuo, Avaus CTO, “this strategic acquisition will bring benefits to the customers, and for a customer centric company such as Avaus, this is at the core of what we do”.
Henri Syvänen, Head of B2B
Sami Korhonen, Chief Technologist
Erik Stenberg, Senior Consultant