For the last three years, there has been consolidation in all types of marketing application markets such as IBM acquiring Unica, Teradata acquiring Aprimo, SAS acquiring Assetlink, Microsoft acquiring MarketingPilot, Infor acquiring Orbis, Salesforce acquiring Radian6, Buddymedia, and ExactTarget (which included Pardot), Oracle purchasing Eloqua and Adobe buying Neolane (not finalized), just to name a few. We believe that further M&A activity, particularly focused in digital marketing functionality, such as content management and agencies, social marketing , mobile marketing, e-mail marketing, digital analytics and ad technology and will continue to accelerate over the next three years.
Who are the buyers? There are at least six competing sources of consolidation:
- The software megavendors: IBM, Oracle, Adobe, Salesforce, Teradata, SAP, and so forth. For them, the digital marketing opportunity is the next frontier in software and big data, and they’re the most visible and voracious of the bunch.
- The internet media giants: Google, Yahoo, AOL, Facebook (which bought Microsoft’s ad server technology), Baidu…for them, providing marketing tools assures their media will always have a marketplace.
- The agency holding companies: WPP, Omnicom, Publicis, Interpublic, Dentsu, along with incumbent marketing firms like Acxiom and Merkle to name but a few…for them, marketing technology is both an opportunity and a threat…
- The mainstream media conglomerates: Hearst, Gannett, Tribune, etc….like the agencies, for them marketing technology is both an opportunity and a threat…some of them (like Hearst) are even buying agencies to go along with their marketing tech acquisitions
- A few diversified global companies, such as Singtel, SDL, Rakuten, Sony, Nokia and others who see digital marketing as a global investment, and
- A small collection of newcomers who are developing the scale and going public to become buyers themselves: Velti, OpenX, RocketFuel, Turn, AppNexus, Rubicon, YuMe, [X+1], etc…these newbies are looking for diversification and a chance to become megavendors themselves.
Adding to this growing interest and future investment in marketing technology comes not only the complex story of cost, viability concerns, potential redundancy, future maintenance, customer support and vendor roadmap vs. your future plans, is the overall picture of how (and even which) marketing applications should come together.
Assuming the plan is for marketing to create scalable, integrated and orchestrated interactions, relevant offers and customer experiences across all channels and media (armed with multiple levels of analytics and attribution metrics supporting all this), what we end up with is a multitude of approaches: A combination of platforms, suites and hubs with a continuing flow of new and evolving point solutions.
The implications of these accelerating changes in the market will be both wide reaching and ongoing, affecting the future of marketing organizations overall. For the the week of July 22, our Gartner For Marketing Leaders research (clients only) focuses on examples, causes and consequences of marketing’s M&A activity and what it means to your Digital Marketing plans.