Adobe’s Marketo Acquisition: A Shark Tank Perspective

October 01, 2018

By Kirsten Oelrich

Adobe has finally confirmed its decision to acquire Marketo, the leading B2B marketing engagement platform. If market reports are anything to go by, the run up to this deal was nothing short of predatory, marked by a series of aggressive pitches by multiple competitors. The announcement ended over a week of speculation with the confirmation of a $4.75 billion purchase of business-to-business software marketing specialist Marketo, a transaction that boosts Adobe’s experience cloud and brings Adobe increasingly in competition with Salesforce Marketing Cloud.

The deal is the biggest in Adobe’s history, followed closely by its recent acquisition of Magento for $1.7 billion in May.

Adobe is already going through what could be called its ‘purple patch’. The company reported revenues of $2.3 billion for the third quarter of 2018 last week when its Experience Cloud generated $614 million to the overall amount. The combination of Adobe Experience Cloud’s analytics, content, personalization, advertising and commerce capabilities and Marketo’s lead management, account-based marketing and attribution technology will bolster its offering and value to all customers, across both B2C to B2B. Enterprises of all sizes across industries rely on Marketo’s marketing applications to drive engagement and customer loyalty. This creates even more opportunity for Adobe and our partners to help a broader range of customers deliver relevant, personalized customer experiences at scale.

Industry pundits are still speculating why Adobe pulled out all stops to sign on the dotted line. Is there more to it than meets the eye? We believe there are three big things Adobe has achieved through this acquisition:

A grand foray into the B2B marketing automation market

Although Adobe has had B2B customers, it was definitely at the fringes of B2B marketing automation. To participate in the market for B2B marketing automation, Adobe needed the functionality that Marketo brings. That’s why the decision to acquire Marketo makes complete business sense. According to a survey, 66% marketers plan to increase their technology spend in the upcoming year. Also, global B2B marketers are now spending more than one-fifth of their marketing budget on technology — it’s evident that the marketing automation space is heating up. Marketo was Adobe’s best bet, and with this acquisition, experts predict a seismic shift in the marketing automation market.

A lion’s share of the B2C marketing automation market

Direct-to-consumer B2C and digital marketing has historically been Adobe’s forte. Buying Marketo has given them access to two B2C markets that were not well addressed previously ─ the considered purchase market i.e. consumer purchases with lengthy and complicated buying processes, and consumer sales where there is a physical seller or distributor. Despite the announcement being focused on the B2B market, this purchase will play a significant role in the B2C space.

A boost to Adobe’s customer experience credentials

The acquisition of Marketo has strengthened Adobe’s position as the leader in the digital marketing space with the biggest enterprise marketing software suite in the industry. Adobe Experience Cloud primarily focuses on the marketing buyer and has certain shortcomings like sales automation, and ecommerce capabilities. Adobe’s partnership with Microsoft enables it to address broader front-office requirements for certain markets. However, the extensive integrations of Marketo with CRM systems will augment the ability of Adobe to compete in CX driven avenues.

Impact on the global marketing platform landscape

According to evaluations by Forrester, Adobe is already at the forefront among digital marketing, digital analytics, and digital experience platforms. Further, it is well established and prominent among B2C focused firms and Marketo provides additional avenues for this expertise. Nevertheless, Adobe has cemented itself so well that this does not modify its trajectory or future outlook.

For consumers and retailers of B2B marketing technology, the Marketo acquisition has reset the competitive landscape. Due to previous missteps, Adobe was rendered an incompetent vendor for the B2B marketers. This didn’t imply Adobe was previously incapable of catering to B2B or B2B2C marketing companies. Now, however, it is eligible to compete in the B2B marketing cloud business against established players like Salesforce, Oracle, and SAP.

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