Adobe’s $4.75 billion acquisition of Marketo could trigger a takeover spree at Salesforce and Oracle

Shantanu
Narayen, president and chief executive officer of Adobe Systems
Inc., speaks during the launch of Adobe Creative Cloud and CS6 in
San Francisco, California, U.S., on Monday, April 23,
2012.
David Paul Morris/Bloomberg via
Getty Images

• Marketers view Adobe’s $4.75 billion acquisition of
  Marketo as a harbinger of a string of big
  acquisitions.
• Adobe will get access to a lot more of Marketo’s nearly
  5,000 business-to-business customers.
• Google is also in the mix with its Google Marketing
  Cloud, and has an advertising business that could wipe out
  others.

Adobe is
buying Marketo for $4.75 billion, making it one of the
largest marketing-tech acquisitions in recent years and Adobe’s
largest acquisition ever.

Adobe, Salesforce and Oracle are the three big marketing cloud
companies and are in stiff competition with each other to build
out tech stacks that promise marketers the ability to store and
handle all of their data needs.

But unless you’re well-versed in mar-tech jargon, you’d be
forgiven for asking, “Wait, what does Marketo do? And how is it
different from what I already pay Adobe to do?”

“Unless you go into a little bit of the details and the weeds,
you won’t know [the difference] on the surface level — it all
seems like the same stuff,” said Quantcast’s CMO Steven Wolfe
Pereira. 

The move is the latest evidence of consolidation in the marketing
and technology industry. Marketing clouds are aggressively
chasing the same tools and expertise to win over brands.

“It’s a sign that we’re going to see continued consolidation,”
said Andrew Frank, an analyst at Gartner Marketing Leaders. “I
think that a lot of clients are wrestling with this idea of
whether they can get a complete solution from a single vendor —
there’s not too many things that marketing clouds can’t do that
you would need from another provider.”

In other words, if someone works with Oracle, Adobe and
Salesforce — and maybe even Google — there’s a good chance they
may kill one or two of those partnerships soon.

Marketo focuses on B2B brands while Adobe focuses on B2C

Specifically, the race is on for marketing clouds to own
automation tools that handle all of a brand’s campaigns and
marketing without them doing any work.

Marketo pulls together all of a brand’s data and can run
campaigns that feed into a CRM system like Adobe or another
marketing cloud. In one example, Pereira said that a brand
wanting to market a new product uses Marketo to handle campaign
management. Leads from those emails are then vetted and exported
into a marketing cloud. Marketo is also squarely focused on the
business-to-business (B2B) space with nearly 5,000 customers
while Adobe works with business-to-consumer (B2C) brands.

“Marketo’s client base gives Adobe ample upsell and consolidation
opportunities,” said Milicevic.

Adobe’s acquisition of Marketo gives it comparable tools that
both Oracle and Salesforce already offer, Pereira said. Oracle
purchased marketing automation company Eloqua in 2012 and
Salesforce paid $2.5 billion for ExactTarget in 2013 and
also owns Pardot.

In terms of Marketo’s high price tag, Pereira said “these things
are very sticky.”

Of course, there will be challenges. Ana Milicevic,
principal and cofounder of Sparrow Advisers, a consultancy that
works with ad-tech and media companies, said that the cost
of switching marketing automation vendors isn’t trivial.

“Given that the client base is mostly large B2B global companies,
there’s bound to be ample complexity in figuring out the right
account management and sales approach going forward so you don’t
have a whole bus of different Adobe product reps rolling into a
prospect or client meeting.”

Google could end up giving everyone a run for their money

At the same time that marketing clouds are battling each other,
Google is quietly assembling its own marketing suite that could
wipe out others, Frank said. The tech giant recently
revamped its marketing business to put advertising and
analytics together.

Of course, marketers are already wary of the
duopoly of Facebook and Google, so it’s possible some
marketers may not want to fork over even more data to Google.

“Google is now another name in the marketing cloud soup and it’s
interesting that not too many of the other marketing clouds have
what Google has, which is the advertising side,” Frank said.
“Marketo has worked for a long time to integrate with DMPs and
DSPs to incorporate advertising into its full journey model and
now with Adobe, it gets its own ad-tech ad cloud.”

Oracle and Salesforce also have data-management platforms through
the acquisitions of BlueKai and Krux, but they do not have deeper
tools to pull the levers of digital advertising.

Salesforce does however have
an elaborate partnership with Google Analytics, which Frank
said is one partnership “to keep our eye on. At some point, it
seems like there’s an overlap between the direction that Google
is going and the direction that Salesforce may be going.”

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