It might not be the sexiest topic, but it is – hands down – one of the hottest sectors in tech right now: marketing automation. Major IT vendors, the Oracles and Adobes and Salesforces of the world, are snapping up marketing automation software tools in an arms race that continues to escalate.
There have been a flurry of recent deals. Last year, Salesforce purchased ExactTarget, a tool for marketing and analytics, for a cool $2.5 billion, complementing previous acquisitions of Buddy Media ($745 million) and Radian6 ($326 million). Oracle has lately padded its arsenal with a pair of cutting-edge tools, Responsys ($1.5 billion) and Eloqua ($871 million), after snatching up Facebook ad platform Vitrue ($300 million) back in 2012. Adobe and SAP are on similar spending sprees.
In one of the most recent acquisitions, IBM paid an undisclosed (but presumably nine-figure) sum for Silverpop, a handy tool that pools data from multiple sources and builds a “universal customer profile” that can be used for campaigns via email, text or other means.
So why the sudden splurge on marketing automation? First: changing consumer habits. Social media ushered in a new era of intimate, personalized marketing. Not surprisingly, consumers have grown less receptive to traditional “spray and pray” mass marketing. (Case in point: When 61,000 people were surveyed earlier this year by Forrester, fewer than a quarter said they trust email from companies.) To this end, the latest generation of marketing automation software is finding creative ways to bridge the gap: applying the intimacy, personalization and insights gained from social media on a mass scale.
In addition, corporate software spending has undergone a profound shift. IT budgets have been tightened, while more and more spending authority is going to marketing teams and CMOs. Accordingly, big software vendors are putting increased emphasis on their marketing offerings, especially user-friendly, cloud-based subscription software (i.e. software as a service or SaaS).
The combination of these two forces working together is behind the flurry of acquisitions and consolidations. But there’s a deeper question: Do these giant, proprietary marketing clouds that IBM, Salesforce and others are assembling actually benefit the businesses that buy into them? The answer isn’t easy. On the one hand, the appeal of a one-stop solution is obvious. A large enterprise can tap into the Salesforce cloud, for instance, and ostensibly find all the tools needed to handle its digital marketing efforts in one place. But these kind of “omnibus” marketing products can also come with drawbacks.
The “ultimate marketing suite” is always going to have weak links. No single vendor can hope to offer best-in-class social media tools, data analytics, customer relationship management, marketing automation, etc. all in a single package. The technology is simply too fluid and the scope too vast for any one suite to represent a definitive solution. Some pieces of the suite will be strong; others will be weak. But you’re stuck with them all.
There’s also the small matter of all the existing software that businesses have already invested money and time in. If a company currently uses Marketo, for instance, for its marketing automation, it makes little sense to sign onto IBM’s cloud and have to learn Silverpop, training team members all over again and redesigning processes to accommodate the new software. But the all-or-nothing approach of many vendors doesn’t leave a lot of choice in the matter.
An alternative approach – the one I’ve built my company around – is the idea of an open platform. HootSuite is the core of an ecosystem that integrates with dozens (soon to be hundreds) of leading marketing, social media and productivity apps. Clients aren’t locked into a single, defined suite of services; instead, they can incorporate the tools they are already using and familiar with into the HootSuite platform. This includes everything from Marketo’s marketing automation tool and customer experience apps from Nimble and SugarCRM to project management software like Trello, analytics utilities like Statigram, social networks like YouTube and Instagram, and more. The ecosystem is exhaustive, not exclusive: If there’s a best-of-class tool out there, HootSuite finds a way to work with it.
As social media matures, the rush to acquire marketing automation tools will only intensify. And, as the spate of recent acquisitions shows, big IT is placing its bets on a range of competing products and offerings. Which technologies will prove useful in the long run and which will end up on history’s scrap heap no one can say. And that’s exactly my point. Clients who opt for all-in-one clouds or suites are bound to end up with a few clunkers in the mix. In this environment, the few remaining open platforms – which provide an ecosystem where different tools can compete and rise to the top – are the best bet of all.
Why Marketing Automation is Hot (and Open Ecosystems are Hotter)