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To Fuel Growth, Fill Your Gaps: Adobe Buys Marketo

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There’s been an awakening. Have you felt it? I’m pretty sure every MarTech “Jedi” just felt a tremor in The Force…Adobe is purchasing Marketo for $4.7bn.

Let that sink in.

In a string of acquisitions in the last five years, nothing has come close to this price. SAP bought Hybris for $1.5bn. Salesforce purchased ExactTarget for $2.5 bn. Both in 2013. Salesforce acquired DemandWare for $2.8bn in 2016. Add to the fact that Adobe was in the running for at least two of those companies themselves…it was time to make a statement. And a statement they have made. The mic has been dropped.

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In a world where everyone is racing to create experiences, you need amazing software and practitioners to do it. You can either assemble a hodgepodge of solutions, or go with entire platforms (integrated or not). You can tell your IT dept you are going SaaS or IT can tell you that you need to go “On Prem.” You could decide to build the solutions yourself. In any scenario there are pros and cons. For every company, a decision on how you assemble your “stack” is very individual. There is no shortage of options for any company to use. The MarTech space is very, VERY crowded.

Over the last decade Adobe has been making changes and moves to assemble a suite of creative solutions and now marketing solutions. No other company can take you through the entire lifecycle of content creation to production to marketing to analysis than Adobe. No small feat. Not with out it’s own set of challenges. With any acquisition, integrating technologies takes planning, time, and sometimes hard work. When you are looking for growth, you need to identify where your gaps are and determine where you can acquire those skills or technology. You can either build, or buy. Adobe has done both.

Fill Your Gaps – Don’t Mind Them

I’ve been in several discussions when news broke last week that Adobe was in talks with Marketo. These sidebar conversations ranged from “Whoa, that’s interesting!” to “Doesn’t Marketo compete with Adobe Campaign?” Worthy conversations to say the least. It was a little bit of a head scratcher once the shock of name dropping of the two companies in the same sentence with the word “acquire” in there wore off. What will Adobe do with Marketo and why did they buy them? The answer is “fill gaps.” Yes, Adobe purchased Neolane in 2013 and has since rebranded it Adobe Campaign and has two versions of it. One is a grown version of the legacy Neolane product and the other is a rebuilt, rewritten version of Neolane in the cloud. Both versions do compete with Marketo to a degree. But, Marketo has features Campaign doesn’t, namely lead management (scoring, etc), account based marketing features, marketing attribution, data management and more. If you are a marketer in 2018, these are core tools in your current and future strategies. If you don’t have them implemented, they should be in your roadmap. Adobe Campaign lacks these features and I’m sure it was noticed.

When it comes to building, Adobe has their “Marketing Cloud Platform” which is a set of services, APIs, and other connective tissue beneath the surface of the larger solutions. There is no shortage of innovation going on there, which is where Adobe Sensei was born, their AI solution.

Building an Empire Means Always Evolving

Just over a week ago Forbes published the article “Why $128 Billion Adobe Is Running Scared“. Wait, what? Running scared? They are on top of every possible category as a leader for their technology. Why in the world are they running scared? Well, when you’re on top, everyone is coming for you. As Peter Carbonara wrote in that article:

The explanation for the expensive expansionism: In the rapidly changing world of software, small pieces of turf are hard to defend. There is always the risk that some larger company will either wrap a competing product into a larger suite you don’t offer or, worse, give away for free what you’re selling.

The target can’t be bigger for Adobe on their back. While it might not be advised to make two major acquisitions in the same year, let alone within four months, sometimes you need to evolve to keep pushing and leading the pack. There are few gaps left Adobe has to fill. They bolstered their marketing automation solutions today, and lack of commerce a few months ago with the purchase of Magento. Now integrating these solutions into the Experience Cloud is where Adobe can shine, bring value add, and give their customers a robust suite of solutions to connect with their customers.

65,000 Users Can’t Be Wrong

If you thought Adobe had an ecosystem of users, partners, and advocates, well…Marketo does too. The Marketing Nation conference is one of the marketing conferences to go to every year. Their customers are invested in their platform because it is such an essential tool to their “stack”. If you are going beyond basic email marketing and beyond a SMB, there are few tools to graduate to. It’s Hubspot, Marketo, CheetahDigital, and maybe a few more. To say that the Marketo Nation will fit in with the Adobe Marketing Nation is probably an understatement. I also think many, many Marketo customers use Adobe Experience Cloud solutions as well. So there is probably a more natural fit than one might think.

So, What’s Left to Buy?

So what’s left? In my opinion, CRM. One could argue that Marketo helps fill that hole, and it does a little. It buys them time, but I still think CRM is still a gap. Another gap is going to be where experiences traverse into voice, IoT, and AR/VR. While I know they have made some small purchases here, and they are indeed innovating, it has yet to be seen where it really shapes up and makes a mark. Could a DAM purchase be in their future? Adobe assets has become a solid solution, but it still has some features it lacks. That is also a byproduct of the state of content strategy, headless CMS, and where an “asset” isn’t just a document or picture. Finally, data visualization and other front-office tools. For now, their strategic relationship with Microsoft fills those holes.

So now we sit and wait. How will Oracle, Salesforce, SAP, and others respond to this news? Who knows. All I know is that Adobe Summit is going to be one hell of a time in March 2019.

Disclaimer: My employer, ICF, is a Premier Adobe Solutions Partner. The thoughts and opinions conveyed here are of my own. I do not have access to road maps or acquisition information.

This article was first published on LinkedIn.  

Adobe Buys Magento: A Good Fit or the Best of What’s Left?

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Disclosure: I work for a company that is a Premier partner of Adobe and have partnerships with other vendors mentioned in this article. I do not have access to technical or product roadmaps or have any insights into M&A for any of them. The following is purely my thoughts and opinions and do not represent my employer’s opinion.

Last week Adobe announced that they were purchasing Magento, an eCommerce platform for $1.67Bn. The company has been bought and sold twice previously. eBay bought Magento for $180M, then sold it as part of their enterprise commerce platform to private equity firm Primera. We’ve had a week to digest what this acquisition means for Adobe and their overall Experience Cloud Solutions and what it means for Magento customers, who are primarily not enterprise. Let’s dig in.

The Need for Owning a Commerce Solution

It’s no secret that Adobe needed to do something around a commerce solution. While they have been filling out the other parts of their Experience Cloud with solutions such as voice with Sayspring, video advertising with TubeMogul and user-generated content with LiveFyre, commerce was a place they have flirted with in the past, but never got over the finish line. With a focus on the enterprise market, Adobe over the last decade only had a few options to really pursue — DemandWare, and Hybris. I can only assume Adobe did explore those options but as we know, Salesforce nabbed DemandWare two years ago and Hybris went to SAP five years ago. With those two companies off the market, a big hole was left in the marketplace from an M&A perspective.

Since then, Adobe seemed to focus on the remaining commerce platforms with what appeared to be more integration partnerships while they figured out their next steps. ElasticPath had a run at it, but have now appeared to be strategically aligned to BloomReach. If you look at the Adobe Exchange for their Experience Cloud, you will see there are plenty of commerce vendors that integrate with Adobe Experience Manager (AEM) such as Digital River, Elastic Path, IBM WebSphere Commerce, SAP Hybris, CloudCraze, Agility Multichannel (a PIM system), commercetools, and yes, Magento. So to say that creating commerce experiences within the Adobe Experience Cloud couldn’t be done before is clearly not the case. In fact, companies had options one way or another.

With all of those solutions out there already integrating with the Experience Cloud, why did they need to purchase one? I think there are a few reasons.

  1. It is always better to be in the driver’s seat of any major component of an ecosystem you are either building out or supporting. Many of Adobe’s customers have a commerce component to their Marketing Technology stacks and integration at times only goes so far.
  2. Products and commerce complement each other but are indeed different. While many companies can put product information into AEM and use taxonomies and other metadata to manage the assets, it’s not really built for commerce. It’s meant for content. But when you have product pages and search results, AEM shines. So like peanut butter and jelly, they need to go together.
  3. Their customers were asking for it. There are plenty of Adobe customers who own the entire Experience Cloud, but when it came to this part of their needs, customers had to go elsewhere. While that isn’t always the case and not everyone needs commerce, at the enterprise level which is where they play the most, many do.
  4. More revenue. At the end of the day, it is a missing piece of revenue from a subscription model for their software. So grab that last piece of the pie.

Looking at these tools above who are already integrating into the Experience Cloud, really only one tool could have been viable for an acquisition, and that was Magento. The acquisition does still raise a few eyebrows for a few reasons, but none that haven’t already been overcome by Adobe in the past.

PHP or Java or Cloud or What?

When we first heard about the acquisition in our office some of the first reactions were, “well isn’t Magento PHP based?” And it is. Even Forrester analyst Ted Schadler raised the question on Twitter.

Adobe finally found a commerce platform to buy. I like that it’s plugging a hole, particularly for manufacturers just starting out in commerce. But tell me how PHP/cloud Magento and Java/to-the-datacenter-born AEM are going to integrate? – @TedSchadler

So the short answer that I think all of us are responding with is clearly it will be API based….for now. There is a precedence at Adobe to purchase non-Java based solutions and spend the time and energy to rebuild them in Java and the most recent and still dual code-based solution is Adobe Campaign. When Adobe bought Neolane years ago it was a .NET solution and a fat client even. What is now Adobe Campaign “Classic” is still this .NET solution. The new Adobe Campaign Standard is the rebuilt Java/cloud-based solution that is working towards seamless integration with the rest of the Experience Cloud. (Also, again one of those situations where Adobe didn’t have a lot of choices after other email campaign tools such as ExactTarget and SilverPop were picked up by other companies). Whether Adobe decides to rebuild Magento into a Java/Cloud solution is yet to be seen. It could if it wanted to.

Headless is the New Black

Notice I didn’t say eCommerce above, but just commerce. That’s because as we look at the future of experiences, it’s not always going to be about the traditional “e” solutions. In fact, we are hearing more and more about the headless experience. That actually is more of where Adobe is now headed when you think of AEM anyway, as a headless content management system. So to purchase a commerce solution that can power any experience from web to mobile to in-store to voice to AR and VR, it’s not going to be about just one channel. So be on the lookout for where this goes. I expect to hear more about “commerce” as the integration discussion, not eCommerce.

Taking Advantage of Sensei

AI be damned that it isn’t the biggest buzzword and probably misunderstood in the industry right now. That being said, Adobe sure has a gem on their hands with Sensei. Content, commerce, and data are the three biggest assets in building out smart AI and Machine Learning to build personalized experiences. It won’t just be about upselling/cross-selling. This is about delivering personalization at scale down to the individual. The “segment of one.” Sensei is already doing a lot in the Cloud for Adobe. Adding commerce data (products, pricing, attributes, etc) will just empower marketers and merchandisers to do more.

So…Good Buy or Best of the Rest?

Missing out on the larger, enterprise platforms like DemandWare and Hybris were stingers, for sure. However, those were big, hairy platforms and integrating enterprise to enterprise is no walk in the park. Going for something smaller, in a different market segment like mid-market might not be all that bad. There are only so many enterprise clients out there and three major experience platforms all vying for their attention. So maybe mid-market won’t be a bad move.

Adobe also has a history of purchasing solutions that have deep open source roots. Day Software, what is now AEM, was built on open source standards like JCR and OSGi. There is still a very deep developer community around AEM and having a deep community supporting Magento could be very good.

I think time will tell, but as we’ve seen with Adobe, there are very few instances where an acquisition doesn’t end up paying off for them. It will take some time to get the Magento platform integrated deeper into the Experience Cloud. It will take time to grow into enterprise clients more holistically. It will take time for the strategy to really come to fruition. In any case, Adobe needed to do something, and Magento is as good of a purchase as any other.

NOTE: A version of this was originally published on LinkedIn.

My Love-Hate Relationship with Facebook

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Unless you’ve been under a rock the last few days, you probably know about the recent Facebook news about the data breach/violation via Cambridge Analytica.  I had a brief discussion with my friend Ross Quintana on Facebook Live the other night too, but I, unfortunately, didn’t have time to really dig into the topics that have been on my mind around this whole incident.  I’m not going to lie, I struggle with Facebook.  We have a love/hate relationship and this incident with Cambridge Analytica is just the tip of the iceberg when it comes to things like data privacy, internet companies revenue models, the ignorance of “free” services, and possible regulation of the Internet.  Just to name a few.

I have drafted a post that I never published citing that I uninstalled the Facebook app from my phone about a month ago.  And I did.  But, I reinstalled it during a recent business trip where I wanted to share more content with my friends and family while gone and Facebook was the medium to do it.  And frankly, that pissed me off.

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Facebook Stopped Being Relevant

You see, Facebook has become a place where I don’t like to spend time, but I need to spend time for some valid reasons.  Let’s start with why I deleted the app a month ago.

I used to really enjoy catching up on activities my friends, co-workers, and family were doing.  We used Facebook as a platform to connect.  Wow, I feel like I could be an employee right now.  “We are here to connect the world.”

What it has turned into today, with algorithm changes, ads, friends and family publishing the most inane, irrelevant crap (I don’t care which answer you picked on this “thing from my childhood that isn’t around anymore” posts) it drives me insane.  It is an endless scroll of just junk.  I’ve clearly clicked “Like” on too many pages of interest (Runners World, please….you don’t need to post 18 times a day, I promise) where if it isn’t crap from my friends and family, it is just published content from these pages.  My thumb is getting cramps just flipping through irrelevant stuff to find the one or two pieces of gold that I care about.

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I’m pretty sure my friends and family are indeed publishing stuff I care about.  Facebook just doesn’t seem to want to show it to me anymore.

Why I Can’t Just “Quit”

I really wish I could.  Just export all my data and “let go” of Facebook.  However, I can’t.  I can’t because there are valuable reasons and tools that Facebook offers to connect communities together.  Specifically, I run a private running group and I’m a leader/contributor to my son’s Cub Scout Pack and we use Facebook Groups and Pages to communicate and recruit.  In addition to all of that, my company has several pages where I need to be an admin.  If I were to quit I’d be taking myself out of some key responsibilities that I’m currently assigned to.

To be fair, these tools work.  We have the engagement we want and it continues to grow, so we are getting value.  It is a positive thing.

We’ve Created Our Own Mess

If we want to put a blame on why Facebook has become so important to many of us (and as a Nation) we have no further to look than in the mirror.  As a culture and society, we are creatures of habit, greed, narcissism, empathy, and followers (and leaders).  Facebook started as something exclusive.  Then it grew to be where all the “cool kids” hung out.  They opened up the walled garden because they know they could profit with more users, more data, more opportunity for advertising.  Then the people came and we ate it up like a hot fudge sundae.  We got the dopamine hits when we got a “like”.  Then we got “love, laugh, ha ha, WOW!” and more.  We just can’t stop.  It’s “free”, so, share with the world and maybe we will go “viral” and get more attention.

Look, folks, Facebook is a melting pot of all that is good and bad with the world.  It connects communities, it profits from our “licensing” of our data and information so they can create hyper-targeted ads for companies.  We are feeding the beast because we can’t quit.  Sigh.

I’m Going to Stop Here

So this is where I’m going to stop.  I have several other thoughts on all of this, with the topics mentioned above.  However, I’m going to try to record some of these thoughts with video and then publish those as my medium of discussion.  What are your thoughts?  Let’s discuss below.

 

 

Mining for Personalization: How Far is Too Far?

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How far are companies willing to go with technology to mine data and gain insights to deliver personalization to us?

I was in a conversation last week at work and somehow we got on the topic of voice and other “creepy” examples we see or interpret that leads to ads appearing on our devices. One example given was a co-worker was in her office with our summer intern at the time and was discussing a purchase she made on her computer on Amazon. The next day our intern stated that she started seeing ads for that same item on her Facebook feed. Two different users, different devices, not even an item the intern would have purchased, but ads are showing up now on her computer.  This wasn’t the first time I had a conversation like this where ads would start to appear based on verbal conversations.

The conversation went further with someone else stating that they read Facebook was experimenting with analyzing the dust patterns on your photos from your cell phone lens to match people who are or are not connected and other data mining like Geo, proximity to each other, behavior patterns, etc. Now, Facebook isn’t actually doing this, but the idea that using location data or even dust to identify people who may show up in the “you may know” area, it does get creepy when you think about it.  (NOTE: Facebook does neither, but not without admitted experimentation. See link above.)

We’ve heard the stories of apps using the microphone to listen in on conversations and TV shows for ad targeting. How far are tech companies willing to go to mine your data, behavior, and other attributes to deliver personalized, content, experiences, or in many cases just ad targeting?  Farther than many of us realize.

Let’s be clear, if the dust analyzing freaks you out, you are uploading photos to a “free” service in which I’m confident somewhere in their Terms of Use states they can do this. You agree to those terms every time you use the app or website. A nice reminder of what “free” means in the age of the Internet. So when we are willingly providing data to a third party, how can we not expect them to mine this data to experiment and possibly deliver more value to you?  It’s a fine line of value vs. trust.

Even as a marketer, I myself feel there is a limit we need to adhere to. I’m right there with the next marketer who wants as targeted of an audience as possible. We all want the Segment of One. To get there, it will take a lot of technology and analyzing data points. But dust specs on a smartphone lens from a photo that was uploaded? Seems a little too far to me.

So how far are we willing to go?  How desperately do we need data, attributes, behaviors to map to get that customer?  Are we willing to play the “everyone just clicks accept” to get the app or use the site?  How much are we willing to build then break trust with our customers to get to the segment of one?

Read some of my other thoughts and perspectives. A Little Less Recent