Just over two years ago, I kicked off my analyst career with a blog post on Vista Equity’s acquisition of Marketo. It is befitting to share my thoughts now on the Adobe-Marketo union as I recently exited the analyst world for a CMO role.
First let’s talk the deal, $4.75 billion - this is the largest transaction in the MarTech space and Vista Equity made a healthy flip from the $1.79b purchase just over two years ago. Bottom line, I’m a fan of the Adobe-Marketo marriage, and if you’re an Adobe or Marketo customer, let me explain why this deal is positive news for you.
- Why Adobe needed Marketo? A foothold into the B2B market and customers - Adobe is a marketing powerhouse with big consumer brands and a full suite of solutions from creative to AI, but glaring missing was a share of the B2B market. Despite the acquisition of Neolane which subsequently became Adobe Campaign, Adobe did not have a voice in the B2B world. In many conversations and briefings with Adobe executives, I often pushed on their lack of B2B capabilities and customers. Marketo brings a solid base of B2B customers including CA, Verizon, GE, and Microsoft (which I’ll get to later in this post), which immediately provides a wealth of cross-sale opportunities to Adobe Experience Cloud. It’s not just about the big enterprise brands though, Marketo has a firm hold on the mid-size B2B customers, those companies in the $20m-$500m in revenue range that can help expand Adobe’s customer base further into mid-market - perfect for future up-sell. Ultimately, the Marketo acquisition provides the ability for Adobe to compete with Salesforce and Oracle in the enterprise CX market.
- Why Marketo needed Adobe? It’s no longer about MarTech, but CX suites - The walls between marketing, sales, and service are coming down, and clients I worked with at Constellation all expressed frustration with the sheer amount of technologies they were managing. My research survey showed companies were using an average of 29 different technologies in the customer experience stack. Not only is it a pain to integrate and manage so many different solutions, but a tremendous drain on talent. Marketing ops team members specialized in 1-2 solutions, and if they left the organization, well the stack then started to show cracks. Salesforce, Oracle, Microsoft, SAP, and Adobe understand that customers are looking for applications that bring the data from marketing, sales, and service into one and provide a simplified user experience with one CX suite versus 29 point-solutions. This is why consolidation is happening rapidly. Marketo was one of the last remaining independent MarTech providers and to stitch together a CX story on their own would be an uphill battle. Salesforce and Oracle aggressively sell suites, and many CFOs are attracted to the bundled deals which cut the price of the Marketing automation. Then there’s Microsoft. The partnership between Adobe and Microsoft which has gained solid momentum with customers such as 24Hour Fitness creates the CX suite with Microsoft augmenting the Sales Force Automation side of the equation with Dynamics 365. Microsoft is also a customer of Marketo, so some instant synergy on this front.
- Why is this deal great for Adobe and Marketo customers? For Adobe customers, they’ll have access to more sophisticated customer engagement marketing features including drip-nurture, content management, and account-based marketing features from Marketo. Here is my speculative example, an Adobe customer such as Coca-Cola primarily on Adobe Experience Cloud and the ad platform for consumer marketing can leverage Marketo capabilities for their B2B distribution and retail outlet marketing. For Marketo customers, Adobe's vibrant community of creatives and brand marketers will provide much of the sizzle to inspire B2B campaigns. Marketo customers had to work with many outside partners for ad technology, analytics, and CMS. Being a part of Adobe provides Marketo customers access (and future tighter integration) to Adobe Experience Cloud CMS, Advertising Cloud, and Analytics cloud. The story here is really about better end-customer insight.
So what’s next? Both Adobe and Marketo were clients of mine and some suggestions I have while they talk about integration:
- This is an excellent story on the convergence of Marketing and AdTech. B2B Marketers are growing ad-spend, and Adobe’s Advertising Cloud has solid cross-sell potential with Marketo customers. Think about pricing and have a solution for the mid-market Marketo customers.
- Let Marketo be the replacement strategy for Adobe Campaign.
- Analytics and attribution is key. Marketo made a smart acquisition of Bizible for Marketing Attribution back in April. Bizible has excellent customer references, and it would be wise to expand its use and incorporate the technology within Adobe Analytics and Attribution IQ.
- Prioritize the integration of more Creative Cloud to Experience Cloud capabilities. I look forward to marketers having the ability to design emails in Photoshop/Illustrator using Adobe Stock imagery or Dreamweaver to design and format landing pages.
Adobe Summit and Marketo Marketing Nation are two of my favorite conferences, and I look forward to seeing splashes of purple at the next one.