Who is winning the Marketing Cloud wars?
December 2015: Our updated look at five big players in the marketing cloud space can be found here.
IBM thought of it first, but Adobe got there before them. Salesforce caught up quickly, HP's right behind, and Oracle's buying its way to the party.
Welcome to the digital marketing cloud wars, where five legacy software companies take each other on in the battle to win the hearts and minds of CMOs across the land. While each company has its own strengths and is at a different stage in the journey, the destination is the same - to be the first to offer a completely integrated suite of marketing tools that provide an end-to-end solution for the increasingly digitally oriented CMO. The question is: who will get there first?
The growing demand for the digital marketing cloud
Recent years have seen explosive growth in the marketing technology sector, causing research firm Gartner to famously predict that CMOs would outspend CIOs on IT by the year 2017. With the rise of the connected consumer, and the importance of search and social media in their decision making, the traditional path to purchase has been obliterated. It's now much more difficult to engage consumers in their journey from “see product” to “buy product,” since it takes place on so many different channels. This includes search engines, web pages, blogs, social media, digital ads, and email.
As the complexity of reaching customers across a swath of digital options increases, brands are more willing to spend money on technology that will take some of the guesswork off their hands, automating their marketing across different channels, engaging customers on social, and using analytics to be more efficient in their targeting. They could buy a platform to do each of those things. Or they could get one vendor to give them all the solutions they need for their digital marketing strategy.
That's the gold standard that Salesforce, IBM, Adobe, Oracle, and HP are striving for. There's plenty of money to be made in being the single provider for all digital marketing solutions. The margins are high and customers are less likely to shift to other platforms once they've put all their eggs in one basket.
The quickest way to scale up to offering that complete solution is through acquisitions. All five companies have snapped up smaller software firms to make them part of their digital marketing arsenal. However, the real challenge has been getting all those parts to work with each other, which is where the true value of a digital marketing hub can be realized.
“Vendors with more than one piece are trying to demonstrate multiplied value, instead of additive,” says Forrester analyst Cory Munchbach. “They're saying that, by buying five solutions that work together in a unique way, it can provide far more value than if you had these five components working separately.”
However, the promise of these digital marketing cloud solutions is yet to be realized, as a lot of the acquisitions were made fairly recently and the integrations aren't quite mature enough. So what does each marketing cloud offer, and how far are they along the journey to complete integration?
What makes a digital marketing cloud?
There are at least 4 components that every digital marketing cloud should be offering:
1) Multi-channel marketing automation – For publishing and promoting content that helps marketers engage customers across several different channels, particularly mobile and social. It also needs automation for the intelligent algorithms that sequence how that engagement happens.
2) Content management tools – To create and manage the content and engagement tools that can be deployed across different channels.
3) Social media tools – For listening to and engaging with social media networks to tap into consumer conversations, responding with custom content, or social media advertising.
4) Analytics platform – To create profiles of consumers based on their online behavior, and evaluate which marketing campaigns are working and which aren't.
Each of the five companies offers these components to varying degrees, which makes it difficult to compare their individual applications to each other. However, using this benchmark, we can evaluate the company's offerings as a whole, identifying their strengths, as well as the gaps they're trying to fill.
Analysts are wary of calling it the leader in this space, but Adobe does have the distinction of being the first company to announce its intention to build an integrated digital marketing hub.
“Adobe was definitely the first,” says Yvonne Genovese, who heads Gartner's Marketing Leaders research team. “They came out and said ‘We are the digital marketing company' four years ago, which caused the market to pause.” The move took IBM by surprise, says Genovese, since up until then it had been the one making announcements about creating digital marketing solutions.
Adobe made its foray into digital marketing with its acquisition in 2009 of the popular analytics platform Omniture. Omniture, which now functions as Adobe Analytics, is at the core of Adobe's digital marketing solutions. Analytics is a powerful big data tool that enables marketers to not just see who's visiting their website and consuming their content, but also to segment those visitors into very specific groups, based on their demographics as well as online behavior.
Adobe Analytics snapshot
Adobe's other programs are built to take advantage of integration with Analytics:
Adobe Social: This is Adobe's social media tool, built on the back of its acquisition of Context Optional/ Efficient Frontier in 2012. Social allows for conversation listening across networks including Facebook, Twitter, Pinterest, Google+ and blogs, creating targeted ads, identifying influencers, and moderating discussions from a single hub.
Adobe Experience Manager: Used for creating owned properties such as websites, forums, and other digital assets.
Adobe Media Optimizer: For creating and optimizing advertising across different channels.
Adobe Campaign: For planning and executing campaigns across all channels, as well as automating targeted promotions and offers to specific customer groups. This is Adobe's multi-channel marketing automation program, built on its acquisition of Neolane, which in 2013 was named a “Visionary” in Gartner's Magic Quadrant for CRM lead management. Neolane received the same title in two other Gartner report categories in 2012, including Integrated Marketing Management, and CRM Multichannel Campaign Management.
Adobe Target: For testing and targeting content and experiences for specific groups.
Adobe is positioning its core strengths around data and design. Through its Creative Cloud, it is already the premier solution for content creation for many marketers, which gives it a pretty big advantage when it comes to the other marketing hubs. Ad agencies and creatives who are already using Adobe solutions to edit video, images, and design digital assets will find it easier to get on board with the marketing solutions as well. Adobe's strength has always been its association with creativity, which, it says, makes it part of the “marketer's DNA.” It was named a leader in Gartner's 2013 Magic Quadrant report for Web Content Management.
Adobe's strategy is to integrate all its digital marketing offerings on top of Analytics, so each application has access to that valuable cache of information. And, given how early it got into the game, Adobe's got its nose slightly ahead in getting its applications to talk to each other. The tight integration allows for different departments of a brand's marketing function to seamlessly share reports with each other, and coordinate efforts by acting on the same data.
While you can buy each program separately, there's a pretty big incentive for marketers to buy Analytics as well, to identify customer groups, evaluate the effectiveness of campaigns, and directly tie the numbers to revenue.
Unlike Salesforce and Oracle, Adobe's offerings are focused purely on marketers, and not so much on the sales side of businesses. That means plenty of content creation and analytics, but less of a CRM focus, since that hasn't been its historical strength. “Adobe lacks a link to CRM, which brings all the marketing efforts back to measurable results,” says Rebecca Wetteman, analyst at Nucleus Research. “Having that CRM piece is becoming more and more critical in closing that loop to find out what type of campaigns are working.”
Currently, Adobe allows the integration of its digital marketing solutions to a company's existing CRM platform, but it would not be a surprise if it built out existing CRM capabilities in both Campaign and Analytics in the future.
Salesforce's historical strength has always been in its CRM capabilities, especially with Sales Cloud. However, with a string of big-name acquisitions, it has announced itself as a major player in the digital marketing space.
At last year's Dreamforce conference, CEO Marc Benioff formally introduced the newly integrated Salesforce ExactTarget Marketing Cloud, now organized around Salesforce's blockbuster acquisition of multi-channel marketing platform ExactTarget for $2.5 billion earlier in 2013. Crucially, the deal also gave Benioff ownership of the B2B marketing automation platform Pardot, which had been acquired by ExactTarget a year earlier.
Benioff has also invested heavily in the social marketing side of the cloud, making three high-profile acquisitions that all serve a different part of the social media engagement process.
Radian6: Social media listening and monitoring, acquired for $326 million in 2011.
Buddy Media: Social media content publishing and management, acquired for $745 million in 2012.
Social.com: Social media advertising, formerly Brighter Option, acquired by Buddy Media earlier in 2012.
ExactTarget may be the flagship application for Salesforce's Marketing Cloud, but the real stars of the production are its social products, Radian6 and Buddy Media. In Q2 2012, Radian6 was named as a leader in Forrester Wave's Enterprise Listening Platforms report, receiving special praise for the comprehensive features in its dashboard, as well as its established market footprint. Buddy Media regularly makes it to the top of Gartner client shortlists for social media marketing. Coupled with Social.com, the three make up an impressive array of social marketing tools.
Even though Salesforce.com has had an easier time with the integration process (since a lot of its acquired companies were already partners,) it still has a long way to go. While its individual products are top notch, their value as a whole is still below its potential. In the latest Forrester Wave report on social media marketing, Salesforce missed out on the top spot, with analyst Zachary Reiss-Davis writing "Buddy Media and Radian6 have not been integrated with Social.com onto one single marketing cloud and, as a result, [the] Salesforce.com tool is just not reaching its full potential yet."
In addition, Salesforce currently lacks a content creation offering, instead allowing its platform to be integrated with the client's existing content solution.Oracle
Oracle might be late to the game, but it's making up by aggressively buying its way into the competition. Traditionally, Oracle's strength has been on the commerce side, especially with databases. Like Salesforce, it has also historically focused on CRM solutions, and with its digital marketing cloud it is looking to create a completely unified experience that includes a major sales and service component.
The centerpiece of Oracle's marketing cloud is Eloqua, a B2B marketing automation platform it acquired for $871 million in December 2012. Exactly one year later, Oracle bought another marketing automation platform, the B2C-focused Responsys, for $1.5 billion. Although the Responsys deal is yet to be finalized, the integration of the two platforms theoretically gives Oracle a very powerful offering for multi-channel marketing automation. Responsys was deemed a “Visionary” in Gartner's 2013 Magic Quadrant for Multi-Channel Campaign Management, while Eloqua was named a “Leader” in Gartner's corresponding report on CRM Lead Management.
Another high-profile purchase was its February acquisition of customer analytics provider BlueKai. That too has yet to be finalized, but it gives Oracle a huge boost in customer data management, especially since BlueKai also provides third-party consumer data.
Oracle's offerings are rounded out by:
Compendium: A content creation platform.
Social Relationship Management (SRM): A mini-cloud built from three components, Social Engagement and Monitoring (for listening,) Social Marketing Cloud (for publishing and management,) and Social Network (for internal communication.)
Update: Oracle recently announced that it would integrate its SRM solutions with leading social media advertising platforms Kenshoo, Nanigans and SHIFT to provide its customers with a social media advertising and analytics component.
Oracle's biggest asset is its digital marketing war chest, which has allowed it to establish an impressive arsenal of marketing solutions in a relatively short amount of time. Both Responsys and Eloqua are top-rated products within their niches, and by providing multi-channel marketing solutions for both B2B and B2C marketers, Oracle has an opportunity to grow its business very quickly.
Although it still has a way to go in the pure marketing space, Oracle is very strongly positioned for a broader integration with its service and commerce solutions, which, if deployed correctly would make it very attractive for customers to never leave the Oracle ecosystem for all its business workflows.
Much like its approach to cloud computing in general (which CEO Larry Ellison famously called “complete gibberish” in 2008), Oracle was late to the marketing cloud party, and is playing catch-up. Even though it rapidly purchased some very powerful products, it is still finalizing all the acquisitions and, more importantly, integrating them. In addition, much like Salesforce, Oracle lacks an ad tech solution and a web analytics platform.IBM
Big Blue gets credit for being the first company to think about creating a unified digital marketing hub. In 2011, it conducted an ambitious first-ever CMO survey, but then it dropped the ball. “There was a disconnect between the CMO survey and [IBM's] acquisition activity,” says Gartner's Genovese.
Since that time, IBM has had a much more measured approach to creating a digital marketing hub, especially as its focus has been on integrating old-school marketing with the digital era. “IBM started with traditional marketing, with its integrated marketing management solutions, not necessarily digital marketing,” says Genovese. “They start by looking at the CMO in the traditional space, then adding the digital pieces around it.”
This means IBM's solutions look at the entire commerce chain, all the way from supply to customer fulfillment, not just focusing on marketing. It isn't as neatly comparable to the offerings from other digital marketing clouds, but here's what it has so far:
Marketing Center: The all-in-one starting point that includes website personalization, analytics, and A/B testing. This is where custom campaigns can be created and tested.
Unica: IBM's answer to multi-channel marketing automation, but really its core strength is email marketing.
Coremetrics: A collection of comprehensive analytics offerings, which include web analytics, customer profiles, campaign measurement, and social media analytics.
IBM Marketing Center screenshot
IBM is a leader in Gartner's Magic Quadrant reports for CRM services, Digital Marketing Agencies (for IBM Interactive,) Business Intelligence and Multi-Channel Marketing Optimization (for Unica.) Its solutions routinely top the lists for data, technology and e-commerce, so it would be foolish to count it out even if it's catching up on the integration of them. Plus, IBM's huge global reach makes it an extremely viable player in the field.
With its heavy focus on commerce, IBM still has one foot firmly planted on the traditional marketing side, which means it is taking longer to integrate the offerings on the digital side. This means that while it could potentially have the most comprehensive marketing, sales, and commerce solution in a few years, it is currently lagging behind.
The other marketing clouds have multi-channel automation at the core of their service, but while IBM has built its hub around Unica it “doesn't address the full breadth of digital engagement,” says Gartner analyst Jake Sorofman.HP
HP is very much the up-and-comer in this field, basing its digital marketing cloud around its stunning $11.3 billion acquisition of British software company Autonomy. It's a move that has come back to haunt HP in a big way, after it was forced to admit it overpaid for the company by nearly 80%, claiming it had been misled by Autonomy's accounting fraud. Despite shareholders demanding blood, HP is doubling down on its investment, reiterating its commitment to Autonomy.
In terms of its offerings, HP has a much more data-centric approach. Its core product is its Digital Marketing Hub, which offers real-time analytics to marketers. “HP is really focused on this notion of adaptive personalization,” says Gartner's Sorofman. “This means developing models using machine learning to reach customers, analyzing where content and engagement tactics perform, and where they fail.”
The Digital Marketing Hub's added value is its ability to integrate with several preferred partner vendors, which include independent market leaders such as BlueKai, Marketo, ExactTarget, and Kenshoo.
HP's other marketing products include:
TeamSite: A multi-channel content management and delivery system.
Mediabin: For digital asset management.
Optimost: For optimizing and testing content as well as paid efforts.
Explore/Media Aggregation Service: For social media listening and analytics.
HP Explore screenshot
HP has a heavy focus on Big Data, specializing in recognizing, and crafting real-time responses to targeted customers. “When you think of how difficult it is to predict buyer behavior and engage them at the right time, HP's focus on big data and analytics really allows it to create personalization that adapts to what's being observed, serving up offers and experiences that are really tuned in to customers' behavior at a point in time,” says Sorofman.
It is still early days for HP's software offerings compared to its competition, which includes the titans of the software industry, which have been creating business solutions - especially for the cloud - far longer.
Who's winning the marketing cloud wars?
Here's a chart showing all the different marketing solutions being offered by each company in their digital marketing clouds:
It would be fair to say Adobe currently has its nose slightly ahead of its competitors, simply because it started the earliest, and is further along the integration process. It is also dominant in what Gartner analysts believe will be the most important marketing strategy this year, which is content marketing. With so much focus on multi-channel marketing automation, Gartner's Sorofman says people are forgetting the most crucial part of the mix. “People are signing up for social, putting automation into place, thinking of which channels to activate, and then they realize they have very little to say,” he adds. “Content is a tremendous area of growth - we'll see a lot of that in 2014.”
The longer, more accurate answer is that it's too early to declare a leader. As this infographic below from Gartner illustrates, the digital marketing war is more of a digital marketing race, with all the different companies originating from different specializations and striving to get to the same destination, which is the completely integrated, all-encompassing hub for all digital marketing solutions. But nobody is quite there yet.
Since they can't offer all the solutions at once, each company has made a different bet on what it will focus on. Adobe is playing to its historical strength of content creation and data; Salesforce is all about social and CRM integration. Oracle has two great platforms for multi-channel marketing; IBM has overall dominance in commerce; and HP is placing its bets on Big Data.
In an ideal world, a marketer might be inclined to pick the top product from each marketing cloud and create a dream team. In fact, that's a strategy many are adopting. But if the products don't work seamlessly with each other, owning the best-in-breed solutions for each category counts for little.
In a head-to-head comparison, some of the individual offerings might be better than others. But if any of them achieve the Holy Grail of complete integration, the much-vaunted Marketing Cloud has the potential to provide far more value to the CMO than merely the sum of its parts.