Adobe today announced that it has entered into a definitive agreement to acquire Neolane, a privately held “conversational marketing provider” (i.e. campaign management, i.e. marketing automation, i.e. database marketing) headquartered in France, for approximately $600 million in cash. Earlier this month, Salesforce.com announced the acquisition of ExactTarget for $2.5 billion. The market for Enterprise class customer engagement platforms is on fire, and for good reason. It’s not easy managing and executing millions of campaigns each year, and Enterprise marketing communications strategies are taxing on technologies. Successfully managing the high volume of multi-channel (email, mobile, landing pages, social, etc.) Enterprise marketing communications is such an advantage that it afforded companies like ExactTarget a competitive edge for years. In truth, there are only a handful of independent “Enterprise” muti-channel campaign management providers left that haven’t been acquired; this includes companies like Responsys, BlueHornet, and ClickSquared to name a few. To some, Neolane would probably be considered a lesser known brand, at least in the United States. Neolane boasts 400 customers worldwide, the vast majority of which are mid-to-large enterprise. But in this case it’s really what’s under the hood that counts, and Adobe just bought a Ferrari.
Adobe desperately needed to fill the campaign management hole in the Marketing Cloud offering. Frankly, Adobe was smart to walk away from the competitive $2.5 billion bid for ExactTarget, since what they really needed was the technology, not the customers. I think the attraction for Salesforce.com (and the reason they were willing to pay that much for ExactTarget) can be explained by two factors:
- Salesforce.com has been eyeing Enterprise B2C companies for years, and they bought a rolodex full of them with ExactTarget; and
- Salesforce.com wanted Pardot, the marketing automation platform ExactTarget acquired in late 2012. Two birds with one stone.
Adobe, on the other hand, has a strong customer base but a gaping hole in what would otherwise be the industry’s most robust and comprehensive soup-to-nuts digital marketing platform offering (Adobe Marketing Cloud). Filling this hole gives the Adobe Marketing Cloud a competitive edge, especially for customers who are looking to consolidate the burgeoning array of fragmented technologies that support marketing. According to Gleanster Research, the average enterprise organization maintains 3-5 technologies to support marketing.
Purely from a suite standpoint, Adobe is simply unmatched with respect to supporting the marketing value chain. From creative to execution to measurement, the Marketing Cloud is a very competitive offering – expensive, but competitive. Historically, Adobe has done a fairly good job pulling acquisitions into the stack and aligning them under the Marketing Cloud vision. Neolane brings a true cross-channel (online and offline) database marketing platform to the table, which is essentially capable of pulling in data from other Adobe Marketing Cloud offerings and making it actionable across ANY channel. For the last few years, Neolane has been touting this capability as an evolution of cross-channel marketing to what they call “conversational marketing.” It’s true, the future of customer engagement must be about intimacy, relevance, and relationships. In theory a conversational marketing platform should support customer experiences that exceed customer expectations across any channel based on customer preferences. It’s pretty hard to manage that outside of a centralized communication platform, which is exactly what Neolane provides. From that perspective, Adobe will now be well positioned with the most robust offering and can land-and-expand with any product in the Adobe Marketing Cloud.
But there are of course two sides to every argument, and I would be remiss if I didn’t point out some of the challenges Adobe is likely facing, even now. It’s not always easy to sell a “suite.” According to Gleanster Research, 89% of all respondents to the Q2 2013 survey on multi-channel marketing said the top challenge with respect to multi-channel marketing was fragmented technologies, which led to the second top challenge of fragmented customer data.
Plans to address this challenge are on average 1-2 years out. In an enterprise environment, it’s very difficult to change processes and divest of legacy solutions, especially when they have been customized to meet the unique needs of the business. Just because Adobe has a leading robust platform doesn’t mean enterprises are going to line up for the sometimes painful process and change management involved in replacing legacy marketing activities and technologies. That said, there’s something to be said for trying to establish an early mover advantage, and Adobe has filled a gaping void in the competitive stack with the Neolane acquisition.
For more information about marketing automation, multi-channel campaign management, or any of the technology solution providers mentioned in this blog post visit: Gleanster: Marketing Research
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