What to Make of Adobe’s $4.75 Billion Acquisition of Marketo

What to Make of Adobe’s $4.75 Billion Acquisition of Marketo

My first thought is the value. This is a lot of cash to jump into another cloud that is crowded by B2B marketing solutions. But then I think that many of them have yet to integrate such a solution across the marketer and advertiser experience (I am talking to you Oracle).

Below I enumerate why this deal makes sense from my market analyst point of view. To be clear, I am not, nor does The Relevancy Group (TRG) provide a financial analyst perspective. That is, we are not offering investment advice.

1) Adobe is a winner, they have a process to satisfy clients. In our most recent ESP Buyer’s Guide – Enterprise edition they received client satisfaction awards in deliverability support, technical services, and omnichannel marketing. Customers we spoke with had high praise for the Adobe technical teams and remarked that “implementation has been a ten out of ten,” and that they “anticipate [our] needs ahead of time.” Marketo clients you are going to be fine. The company that has a cloud called “experience” respects, embraces this client-oriented culture. The experience will likely be an upgrade for you.

2) Adobe does acquisition and integration better than most. Earlier this year they jumped into the commerce cloud with the $1.7 billion purchase of Magneto in May. This commerce platform is ripe for the Adobe Sensei framework and every element of the Adobe Experience Cloud. Integration is coming. I can’t say what I saw, but I can say it was impressive.

3) It is not about B2B and B2C but is about what B2B is Missing. If you have read my book, seen me speak or just overall – I see everyone as a client and we all have journeys, events, experiences and things that could trigger us. Some like Eloqua and Responsys did an awful job of competing internally as to who had the best automation. I realize there is a true B2B element, I am talking about Account Based Marketing, but this is just a way to say that we are all as an industry moving to individualization. As people, we don’t have different buying or online expectations as a consumer or a business operator. We have the same respect for relevant experiences. Adobe’s win here will be if they can utilize the best aspect of that platform – but the real value upside is to sell all those 5K plus Marketo B2B clients all the other elements in Document, Creative and Experience Clouds. I believe Adobe can do this better, certainly in comparison to Oracle.

4) For the Buyer, This Completes the Adobe Cloud Picture. Adobe can now tick the front office, traditional CRM off the capabilities that they used to rely on partners. They have always done well in Financial Services and industries where capabilities that define Marketo are necessary, but they did so through a tapestry of partners. This will combat vendors such as Oracle when they pitch and throw in their email capabilities (formerly Responsys) for free to sway a deal. Adobe’s more robust offering will have new implications for their partners, some of which that go to market with a blended bag of partners. It will be most interesting on how this is received in their partner and agency channels.

Congratulations to Adobe and Marketo, as stated we believe that this is an upgrade that will benefit Marketo and Adobe clients alike.

Until next time,
David

A Week With Adobe

I had a great week at Adobe Summit, where I was joined by 12,000 marketing executives.  Summit The theme this year was Experience.  Adobe pointed out that businesses that are experience driven have higher net promoter scores and revenue than those that do not have an experience focus.  They defined Experience as the sum total of interactions with a brand. This aligns with The Relevancy Group research, most particularly findings in our latest consumer research, Handle with Care – Consumer Email Marketing Behaviors.

They went on to define an Experience business as one that 1) knows and respects the customer 2) speaks in one voice 3) the technology is transparent 4) is focused on customer delight

The big announcement was the introduction of Adobe Experience Cloud, an overarching cloud platform that ties together, their Creative, Document, Marketing, Analytics and Advertising Clouds.  This unifies the data structure, user interface and includes a number of enhancements to share information across the previously disparate clouds.

Machines Everywhere

They discussed the value of real-time data and their machine learning AI framework Sensei took center stage.  Almost every part of their clouds is now or will be benefiting from the Sensei framework. IBM had their event at the same time and similarly was discussing the same things their Watson tool, which TRG’s Nick Einstein writes about here.  Adobe Sensei is built into the platform, harvests data across the cloud, compares patterns; creativity, intelligence, content.  It also creates a virtual analyst, provides automated anomaly detection and alerting.  The Sensei demos were impressive. In one demo in store ads changed based on facial recognition, different offers were displayed based on gender. It was something out of the film The Minority Report.

More Adobe Summit announcements included:

  • New, Adobe Advertising Cloud, combines the Media Optimizer products along with recently-acquired TubeMogul offering.
  • Experience data model is a common language across their cloud and provides for an open ecosystem, utilizing Adobe I/O.
  • Adobe introduced Launch, their next gen tag management system, fast connections at the experience layer.  Launch, Adobe’s tag management partners include Facebook, Twitter, Zendesk and more, it offers fantastic reach.  This data will also feed into their Adobe Cross Device Co-Op  to enhance their Identity Management solution.
  • Adobe Cross Device Co-Op growth, Information on 850 million devices are now in the co-op which was announced at the 2016 Adobe summit. That is big year-over-year growth.
  • Adobe Analytics now includes a virtual analyst that can spot and analyze anomalies and bring audiences, behaviors & ad data together.  Lots of powerful analytics and insights in one place, on one canvas.  That’s impressive.  The text alerts for anomaly also provides likely root causes.  These are smart alerts and this is something that TRG has been advocating for some time.  It is great to see this in production.
  • Their Advertising Cloud is integrated with the rest of experience cloud, same measures and audiences for re-targeting and on stage, they suggested that they deliver higher match rates.
  • They demo’d ability to use first party customer data in a linear TV buying with one click.  This is a first and impressive.  While this has existed for digital and OTT TV, but never has linear TV buying been so easy to combine with first party data. The targeting potential is enormous.
  • New Marketing Cloud: Fluid experiences using fragments content. Snippets that can be used across screens and channels.  This should improve the marketer’s ability to test and create more personalized messages and experiences.
  • New to Marketing Cloud: Adobe Dreamweaver integrated into Adobe Campaign, one click content dropping, this is a big efficiency gain for email marketers.
  • Expanded Adobe and Microsoft partnership, including new integrations with Dynamics CRM, Azure and Power BI.

Sneaks

Their annual summit favorite, Sneaks did not disappoint.  Hosted by SNL’s Kate McKinnon it was an entertaining way for Adobe to sneak preview some of the items they currently have in development.  The item that seemed to capture everyone’s attention was the ability to inject advertising into VR experiences. Interesting stuff but, future forward for sure.

As always it was great to catch-up with the Adobe team, partners and mutual clients. Thanks to the Adobe AR and Marketing Cloud team for making me feel so welcome.

You can watch the Adobe keynotes and presentations here.

Until next time,

 

 

David

Adobe Summit 2016: A Fantastic Experience

Adobe SummitAs an industry analyst I have been going to large vendor events for decades.  I am happy to report that the Adobe Summit last week in Las Vegas was one of the best, if not the best events of this type that I have ever attended.

The summit came just after Adobe’s impressive financial results, which certainly added to the positive buzz at the event.  They did a handful of things very well.

  1. They introduced a slew of new products, but the demos and product intros did not come across as a Sales pitch, but instead as mechanisms to enrich the experience and assist marketers.  This was in part to do with the presenters themselves as well as their ability to demo live software when it was needed.
  2. It is hard to get clients to come forward and speak about their challenges and wins, but even harder to find a clients that are also great speakers. Here they did a fantastic job of recruiting client speakers that had great stories but were also expert story tellers. Some notable examples are Richard Dickson of Mattel, Giles Richardson of RBS and Deborah Wahl of McDonalds to name a few. Watch their sessions to see if you agree.
  3. Often these Marketing Cloud providers focus too far into the future.  While Adobe did have the obligatory Tesla drive on stage to show digital app integration to improve drive through ordering, much of the focus was on practical examples for the here and now. Instead of boring interviews with services partners on how these innovations manifested, they demo’d them in mock store fronts and simply gave a tip of the hat to the partners. As they continued to push the importance of the client experience, they actually delivered a very fine experience.
  4. Just enough celebrity to inspire and provide laughs.  Soccer star Abby Wambach, spoke of the need for equality in all things; George Clooney brilliantly and hilariously discussed the pros and cons of Social Media and his passion projects; Donny Osmond didn’t seem to age but was on hand to inspire through singing his song and lastly Thomas Middleditch provided his edgy comedy flare to Adobe’s Sneaks session where they demo future products. Sneaks was certainly _the_ crowd favorite.
  5. Content pacing and the venue.  I have been in the same venue for other vendors (a similar vendor just a year ago); but Adobe seemed to use the space better than others. They leveraged the vendor expo space well to drive traffic to the all important sponsors. Adobe utilized clever attractions such as an oxygen bar, a soccer field, chess board, professional social media head-shots and several other ideas to keep the crowd pacing through the vendor expo.  And there was plenty of comfortable seating for the foot worn pacing that happens at these casino venues (wear comfortable shoes).  Lastly, the content – the vast number of breakouts offered something for everyone.  My session on the email marketing maturity model was well attended with just over 200 participants, which was great showing for the last session of day 1 just before the cocktail party.

Some Facts And Takeaways

  • There were 10,000 people at the event, more streamed the event online.
  • 83% of their Marketing Cloud clients utilize 3 or more solutions in their cloud.
  • 49% of their analytical transactions are originating on mobile devices.
  • The theme was all about “The Experience Era” and positioned that “great experiences start with great content” and that “great experiences are powered by data.”
  • Fireworks CultureRoyal Bank of Scotland discussed the need for organization change to get omnichannel marketing done.  They transformed the organization and previously had said that previously they had a “firework culture.”  See the slide (left) that hilariously discusses that culture, which is what _not_ to do.  They succeed in gaining control, assigning specific journeys to individuals and create specific individual dashboards, shared the learnings across the organization, and implement more testing to drive optimization.   Watch his (Giles Richardson) talk “Becoming an Experience Business”, it is a great recipe on how to get an organization on the same page. And it was rather entertaining.
  • Adobe Campaign introduced subject line optimization, which utilizes, past behavior, natural language processing (machine learning) to suggest the most effective subject lines. Learn more about it here.
  • The big news was around their new device co-op to better identify devices as people.  To date there are five “major brands” that have participated in the beta and at Summit, Adobe opened it up to all participants.  There will be a single consumer opt-out to opt-out of the entire co-op and not individual brands.  Check out the press release.
  • There were many Analytics improvements noted, from better understanding App downloads, to improving content analytics as well as attribution.  There is much to digest and this press release summarizes it well.
  • TV, partnerships and the new frontier of TV Networks and Over The Top (OTT).  Adobe is well entrenched in TV and film, and announced a new comScore measurement partnership but new TV targeting capabilities in the Marketing Cloud. Read more.

CirqueAll and all, it was a great event where I got to catch-up with clients, partners, strike new relationships and catch-up with old industry friends. This not to mention a Adobe Campaign/Merkle small party where we got to see Cirque Du Soleil performances up and close (photo left).

It is conference season, next I am off to the Email Evolution Conference in New Orleans and hope to see you there, or at some show this year.   Until then, all the best,  David … be sure to follow me on Twitter for the latest real-time updates.