Adobe Buys Marketo, Gains Instant Credibility in B2B
Adobe and Marketo have put the week-long rumors to bed, announcing an agreement for Adobe to acquire "the market leading cloud platform for B2B marketing engagement" for $4.75 billion. With it, Adobe gets Marketo's 5,000 customers, 500 partners and "an engaged marketing community with over 65,000 members" that puts it on a collision course with Salesforce.
Top B2B Marketing Automation Platform
Marketo is one of the companies (along with Hubspot and others) that taught brands the term "marketing automation" and what this category of tools — which pre-date marketing clouds — could do in the hands of a capable demand generation team. It's considered one of the best marketing automation platforms available, including being named a leader in Gartner's 2017 Magic Quadrant Report on CRM Lead Management and 2018 Magic Quadrant Report on Multichannel Marketing Hubs.
Adobe Marketing Cloud already has its own respected engagement automation tool in Adobe Campaign, which was built on its 2013 acquisition of Neolane. But that tool, and the Adobe Marketing Cloud in general, hasn't gained traction in the B2B space. Marketo is arguably the favorite marketing automation tool for B2B marketers, and in G2Crowd's analysis of 2018 marketing automation platforms, it came in second only to Hubspot.
"Adobe has had a gap in B2B marketing automation and lead scoring that Marketo fills perfectly," says David Skinner, SVP, head of strategic alliances and partnerships, at Merkle. "This will allow Adobe to sell the experience cloud to B2B marketers as they have with B2C."
Jason Holmes, COO of Showpad and former COO of Marketo, says the acquisition "firmly puts Adobe up against Oracle and Salesforce for marketing solutions, and gets Adobe into more than 2,000 Salesforce customers [who are also Marketo users] on day one. It’s a smart buy that extends Adobe much more seriously into the B2B world."
Marketo Gets Scale, Platform Stability and AI
Marketo and its customers stand to benefit nearly as much as Adobe. The tool gains access to a potential customer base and technical support — like access to Adobe's Sensei AI tool Suite — it never would have had as an independent firm.
Says Skinner, "Access to Adobe's enterprise accounts and large field sales force will enable Marketo to scale quickly. "
"For Marketo customers," says Holmes, "this will mean their investment in Marketo is safe and will have massive marketing stack integration and investment into future innovation and scale. The data-centric Artificial Intelligence possibilities are endless here."
That positions Marketo to get to the next level as a marketing technology as well. Its new home is one of the most technologically progressive firms in martech, so there should be no worries that Marketo is going to stagnate under Adobe's stewardship.
Opening the MarTech Consolidation Floodgates?
A lot of chatter about this deal since rumors started flying last week has centered around what it could mean for the marketing technology space as a whole. After all, Marketo may be the most recent and most expensive acquisition Adobe's made, but it also just acquired the Magento e-commerce platform over the summer.
Those are some bold moves, and they're right in the face of Salesforce, which has a strong presence in B2B e-commerce and acquired its own marketing automation superstars a couple years ago in Exact Target and Pardot. Its Dreamforce convention will take over San Francisco next week, and founder Mark Benioff generally likes to dominate the news cycle during the big event. Could we see another major acquisition announced before Q4? We shall see.
Tech blogger Neil Hughes had this to add:
Contrary to popular opinion, 2018 will not be remembered as the year of AI, machine learning and blockchain. The last 12 months have been about strategic acquisitions.
Big players such as Microsoft and Adobe are leveraging new technologies to create a brand-new category and industry to make marketing fit for a digital age. In this modern game of chess, all eyes will now be on Salesforce and Oracle to see how they play their next move.
Vista Equity Partners purchased Marketo in May 2016 for $1.8Bin cash. In just two years and they have secured $2.95B in profit to be the big winners. The biggest news today is that acquisitions are big business and there will be many more to come.
Even if this does lead to a heavy round of martech consolidation, with more than 6,000 marketing technologies on the market, some vigorous M&A activity wouldn't be such a bad thing. There is a lot of innovation in the space, which is great, but I think marketers as a whole could use some simplification in the near future.