Last month, Adobe made big headlines when it agreed to purchase Marketo for $4.75B. This was yet another bold chess move by a big software company looking to bolster its suite of offerings and improve its competitive positioning. Adobe, Salesforce and Oracle have all made a series of acquisitions over the past few years to build out their marketing cloud solutions.
Adobe has purchased Neolane (cross-channel campaign management), Livefyre (community engagement), TubeMogul (AdTech), and Magento (e-commerce). Salesforce has purchased ExactTarget (cross-channel orchestration and execution), Radian6 (social publishing and listening), Krux (DMP), Buddy Media (AdTech) and Datorama (analytics). Oracle has purchased Eloqua (cross-channel campaign management), BlueKai (DMP), Responsys (ESP), Maxymiser (testing and performance optimization), Datalogix (data broker and digital marketing), AddThis (media web-tracking), and Moat (digital advertising measurement).
With all of this consolidation, CEOs and CMOs are once again faced with the age-old dilemma – should an organization buy a suite or best-of-breed marketing solution?
Questions Determine Direction
The answer: It depends. Way too much marketing technology (MarTech) and advertising technology (AdTech) exists on the market today for even the most sophisticated marketing organization to consume. While no one can argue the massive shift to digital and the growing power of the distributed buyer, not everything needs a technical solution. Every marketing organization should have four main components to their stack – CRM, content management, an execution platform and analytics.
From here, what you buy and how you integrate it is based on a series of questions: What is the size of your target market and to whom are you selling? What are the stages of your customer buying cycle and what are their needs? How can you use your current technology to not only drive the top of the funnel, but service customer expansion (onboarding, adoption, value delivery, loyalty and advocacy)? What channels are the most effective for reaching your customer? What is your overall customer acquisition cost? What is the lifetime value of your customer? What percentage of your business comes from existing customers? What is your business model and pricing strategy?
Leverage Your Investment
In addition to these questions, your CMO should also be asking: What technology is available or emerging? What would give us a competitive advantage? How will we implement this and who will own it? How do we drive adoption? How do we manage the vendors and contracts to maximize performance and ROI? What KPIs will we put in place to guide our decision making? Just buying the technology is not enough – there must be an investment in personnel, either internal or external, to manage the technology effectively.
If you are selling to a niche market with under 1,000 total potential customers, your stack needs should be very specific and limited overall. If you are marketing to tens of thousands, then your stack is going to look very different. If you are spending under $100K/month on paid media, you likely don’t need a DMP. If you are marketing to consumers, you may need broadband integration with AdTech. The big suite providers will always sell the value of a complete solution and encourage you to start with the modules you need and then grow over time. If you can build a business and use case on how you would use the additional functionality, then a suite approach could be a good business decision. If you only need some modules of the suite, or if there are best-of-breed alternatives with good integration options, then you may want to consider an alternative path. Sometimes you may need both the suite and additional software that they don’t provide.
Ultimately, less is more. Don’t overbuy. Develop a three-year plan and force your team to drive adoption and show a healthy return on investment before you purchase the next technology. Centralize the decision-making and the operational aspects of technology management. This will in itself reduce redundant spend and inefficiencies around your organization. Hold your vendors and your team accountable for performance and you will be on your way to building a thriving Revenue Marketing organization.