October 12, 2012

ExactTarget's Pardot acqusition reflects maturing market

ExactTarget, a provider of email marketing solutions, jumped on the marketing automation bandwagon with its acquisition Pardot, paying $85.5 million in cash and $10 million in equity. The company also bolstered its e-commerce capabilities with the acquisition of iGoDigital, a provider of product recommendation tools, for $14.7 million in cash and $6.3 million in equity.

Marketing automation has been a hot product, particularly among B2B marketers. Research firm IDC expects marketing automation to jump to $4.8 billion in 2015, from $3.2 billion in 2010, said ExactTarget cofounder and CEO Scott Dorsey. In a Thursday conference call to announce the acquisition, Dorsey also cited a July Forrester Research report that claimed that, combined, lead origination and lead nurturing account for 21% of the B2B marketing technology budget.

Atri Chatterjee, CMO at rival marketing automation provider Act-On said in an email statement that ExactTarget's acquisition of Pardot was unsurprising, and that it validates the trend of email solutions providers needing enhanced marketing capabilities.

Indeed, Silverpop—most well-known as a provider of email solutions—has in recent years bolstered its marketing automation capabilities. In a study released last July, the company noted that the two solutions are complementary. “Click-through rates have risen as a direct result of the simultaneous rise in marketing automation solutions, which enable you to create engaging campaigns that automatically respond to customer and prospect behaviors and lifecycle segments,” Silverpop product evangelist Dave Walters told Direct Marketing News at the time.

Similarly, marketing automation provider HubSpot enhanced its email capabilities in May.

The acquisition of Pardot will also help brands interested in both marketing automation and email marketing to move away from best-of-breed buys, ExactTarget's Dorseysaid. He added that the acquisition will help eliminate data silos, “transcending point solutions to provide one platform for marketers to implement audience-based, consumer-based, and now business-based marketing automation to drive revenue and business results.”