3rd Pick in the 2013 Marketing Cloud Acquisition Draft Is …

Tick-tock. Tick-tock. Gosh, it is almost getting boring around here waiting to see where the next selection will go. Salesforce grabbing up ExactTarget with the first selection was the first big surprise. Not so much the ExactTarget side, because there had been rumors for some time that ET was on the market.

Tick-tock. Tick-tock. Gosh, it is almost getting boring around here waiting to see where the next selection will go.

Salesforce grabbing up ExactTarget with the first selection was the first big surprise. Not so much the ExactTarget side, because there had been rumors for some time that ET was on the market. The surprise was more about Salesforce jumping into the fray. Oh, they definitely needed this acquisition or one like it. For all the great tools that Salesforce has for gathering, organizing, prioritizing and listening to your contacts and gathering data, what they have never had is a robust and efficient way to segment and actually reach those valuable contacts. ExactTarget gives them that one big missing capability through the ET campaign management platform, along with many fresh concepts and ideas in social opportunities.

The other gem in what Salesforce picked up in this acquisition, and what likely drove the total price of ExactTarget so high, is ET’s recent purchase of Pardot to strengthen their own marketing automation growth plans. Even the Salesforce CEO gushed about the inclusion of Pardot in his Twitter post around the purchase, thrilled that the transaction included: “The fastest-growing marketing automation and lead nurturing company for Salesforce users.”

But that price. Wow—$2.5 billion. Worth it? Yes, most likely, in the long term. But in the short term, it is a real drain on the cash flow for Salesforce; probably severely limiting other expansion plans or possibilities. It seems painful enough that now, just a month later, they have had to take out a $300 million loan to carry the cost. I have to believe that Salesforce is certain that the long-term cross-sell and integration possibilities for both companies will make it all worthwhile.

Then a few weeks later, an even bigger shock when Adobe slips in to scoop up Neolane. Another big matchup that fits the overall strategy needs of both organizations. While I hadn’t heard of any open shopping of Neolane, it makes sense that they would be eventually in the crosshairs of a larger enterprise. A strong set of campaign management tools, a top-line roster of satisfied clients, a steady string of industry honors and awards during the last four or five years, and continuous innovation of the product line toward achieving “visionary” ranking across three separate areas in Gartner’s “Magic Quadrant” reports and named a “leader” in Forrester’s “Wave” report. There was a whole lot of upside potential waiting there for the right suitor. Like Salesforce just a little earlier and Oracle in 2012, before the Eloqua acquisition, Adobe was the big man on campus in its primary business, but has stumbled about in efforts to build a suite of contact management and execution tools that would translate to the market segments outside of its solid base of agency clients drawn in by its creative leadership. Neolane will certainly be able do that and bring powerful new strategic offerings to the Adobe table.

So the 2013 first- and second-round picks have been completed. Where do the prognosticators think the next two or three picks will fall? Silverpop, which had also flirted with Salesforce in the past, seems primed. But who trades up to get them? SAS maybe? Or are they completely satisfied with their own marketing automation tool? They might jump in to keep up with the Joneses in finding a way to up the game on their existing marketing automation capabilities. Or maybe SAS goes for top-gun Marketo, which is always talked about in merger potential conversations, but never seems to work out the final details of a deal. How about Microsoft? Do they take their time, because they had the last move in 2012 when they picked up Marketing Pilot, or do they decide to make the bigger splash with one of the big dog free agents—either before SAS moves, or will they wait for one of the other choices? There are plenty of potentially available independents out there ready and willing to be courted. And there is never a shortage of companies looking to add a ready-to-serve subsidiary to their arsenal.

So who do you think will be the next CRM/Marketing Automation data darlings to join forces toward World Marketing Domination? Take a guess, email it to me, and I will dig up a special prize for the first one—or ones—to get it right.

Wanted: Data-Driven, Digital CMOs

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

Well, suffice it to say that those days are over—marketing in today’s multichannel environment is about much more than just cute creatives and killer copy. Today’s marketing is increasingly digital and data-centric. A recent article appearing in Ad Age explained that “real-time data-driven decisions, enabled by technology, have made the marketer’s job much more measureable and accountable.” Interestingly, the same article also points out that the average tenure of a CMO is a meager 28 months. No coincidence.

What it boils down to is that today’s CMO is expected, de rigueur, to be a pro when it comes to all things digital. We have two important trends to thank for this fact. The first one of these trends is the general transition to digital. Look, it’s no secret that over the past few years there’s been an incredible shift of marketing spend from traditional over to digital media. It’s the scale and speed of this transition that’s so breathtaking.

According to a June 2012 survey by RSW/U.S., 44 percent of marketers report that they are now spending at least half of their budgets on social and digital media. This represents a 42 percent increase from 2009 alone! And this is not the end of the process. I think it’s safe to say now that the proverbial tipping point has been reached—this trend will only accelerate in coming years.

Anyone who’s worked in the digital marketing arena knows that success in the space all really boils down to data: Impressions, clicks, conversions, opens—this is the vocabulary of the digital world. Well, guess what? Today’s CMO needs to have a deep understanding of these terms, what they mean and how the underlying technologies work—at least on a high level—and be generally comfortable playing in the digital space. Think about it: without a significant digital background, how on Earth can a CMO possibly be expected to run a marketing machine where at least half of the marketing dollars are being spent in the digital space? Not happening.

The other major trend is the inexorable fragmentation of the IT infrastructure within enterprise firms. Basically, what’s happening is that because technology has evolved radically over the past 10 years, it’s giving different stakeholders at companies the ability to purchase and use technology outside of their organization’s firewall, and often without IT’s involvement. Very often, in fact, IT is even without IT’s knowledge!

This is huge shift. Just a few short years ago, mind you, software was what you ran on your computer or on the company mainframe, and it was pretty much always purchased and managed by IT. Well, those days are most definitely over. What’s happened is that the emergence of the SaaS/Cloud model of software delivery has turned that world on its head.

Today, any marketer with a credit card can sign up for, say, a CRM tool or a marketing automation tool and be off to the races in seconds flat. Ask any marketer and they’ll explain how this has been a huge boon to their departments, liberating them forever from the clutches of IT.

Now, of course, a big reason for this excitement is the oftentimes frosty relationship between marketing and IT. Personality types side, in its essence this rocky relationship actually has a lot to do with conflicting mandates. It’s the IT department’s mandate to act as the stewards of the firm’s information and technology infrastructure. Essentially, it’s their job to keep internal systems running and make sure they’re secure. That’s about it. No, it’s not their job to build you a new landing page, or set up a new email campaign for this fall’s reactivation campaign.

Today’s marketing department, on the other hand, is much more focused on operations than anything else. Today marketing is about creating, testing and launching numerous marketing campaigns across various channels using different tools, and evaluating their performance using real-time analytics. And running an operationally focused marketing team requires the ability to build, dispatch and analyze lots of campaigns in rapid succession. Until recently, this heaped loads of pressure on the IT folks, who groaned under the strain. So you can see why marketers have cheered and embraced the emergence of Web-based SaaS marketing tools.

Okay, I got a little sidetracked there, so I’ll get back to the central point, which is that because marketing is rapidly becoming the de facto owners of their own IT infrastructure, this mean that they now control the technology itself and the data contained therein. It’s a big responsibility, requiring marketers to manage and safeguard this vital corporate infrastructure and information, taking on the dual roles of chief marketing technologist and data steward. But with this responsibility comes great power—to use these awesome tools and information to really, truly understand who customers and prospects are, and send out highly personalized and effective marketing campaigns with demonstrable ROI.

But evaluating performance in this environment means not only using new marketing tools and digging through mountains of data. Just as importantly, it also means understanding what it all means. In other words, just because you’re a CMO does not mean you don’t need to know how many opt-ins you have in your company database, or how many fans on Facebook.

And guess what? It’s hard to be comfortable with digital if you’ve never played in the space. But how many CMOs are also digital pros? Not too many. So not surprisingly, firms are finding that it’s incredibly difficult to find leaders with the hard-to-find combination of senior management leadership and digital marketing experience. Given this reality, it’s not too surprising to discover that many companies are running through CMOs in a conveyor belt-like fashion.

Do you know any data-driven digital pros with senior marketing leadership experience?? If so, bet your bottom dollar these executives will be cashing in big time in coming years.

—Rio