Salesforce and ExactTarget … It’s Not About You

Salesforce Purchases ExactTargetIt’s interesting that most of the press and opinion that I have seen about the recent acquisition of ExactTarget by Salesforce.com has focused on their entrance into the marketing automation space via the Pardot portion of the portfolio. This obsession with marketing automation is not, of course, an isolated phenomenon … ask a B2B marketer to name a marketing technology and odds are they will shout out the name Marketo or Eloqua.

Consider, though, that this is far from the first marketing technology that Salesforce has acquired. Starting with Kieden back in 2006 (which became Salesforce for Google AdWords), a string of marketing acquisitions consciously avoided email marketing or marketing automation. In fact, Salesforce.com executives often called upon the decline of internal email (with tools like Chatter) and the obsolescence of external email in favor of social media (with the acquisitions of Radian6 and Buddy Media). And email is, of course, the very backbone of marketing automation as it is the primary delivery mechanism for branded messages and offers in their celebrated nurture or “drip” marketing campaigns.

So what changed? Was it the Oracle acquisition of Eloqua that led Salesforce.com to respond in kind? Was it Marketo going public? Or was it not about marketing automation at all? At least not primarily so…

It seems like our first instinct as B2B marketers is to make this about the Pardot portion of the acquisition, but it is far more likely that this is more about email than it is about MAS, with Salesforce.com finally addressing the shortcomings in its own mass email offering which include sending limits, deliverability issues associated with shared IP addresses, performance reporting, personalization and more. It is partially a play designed to appeal to the B2B companies that are looking to invest in marketing automation, but it seems more like an effort to gain traction in the B2C email market which is still going strong alongside (or in spite of) the rise of social media.

In a recent DemandGen Report article on the acquisition (The Salesforce.com-ExactTarget Mega-Deal), David Raab, Principal of Raab Associates  stated that “It is a brilliant move for [Salesforce.com] that gives entry into B2C markets, addresses a critical functional weakness in their own system, and gives them Pardot marketing automation for free.”

As Salesforce.com tries to grow its reach into B2C (last year’s Dreamforce keynote guests were exclusively B2C speakers from Rossignal, Commonwealth Bank, Facebook, Virgin, Coca-Cola and Activision), the ExactTarget acquisition addresses the email service missing link and could potentially land some marquee B2C clients to the core platform. There is a lot more to the marketing technology stack than just MAS, and while Pardot is an extremely strong platform in the marketing automation space I would give the accolades here to ExactTarget for having the foresight to acquire them late last year.

In the same DemandGen Report article, ANNUITAS Chief Strategy Officer Adam Needles does take note of the impact a strong marketing automation platform on the predominantly B2B customer base that Salesforce.com already has. “We see some companies that are CRM-centric, but we also see plenty of clients where marketing automation has an opportunity to be, or is already serving as, a real centralized system,” says Needles. “Only one platform can track the entire customer lifecycle, and that is marketing automation.”

Very true.

There is no doubt that this was a great acquisition for Salesforce.com on both fronts … Email Service for B2C and Marketing Automation for B2B. The interesting thing is that, as B2B marketers, we always seem to assume that it is about marketing automation. Probably not this time, despite any competition between Marc and Larry. This is likely more of a play to get even greater penetration into the B2C space that has long eluded traditional CRM platforms.

Not that Saleforce.com could ever be accused of being traditional.

So what does it mean for Marketing Automation? I don’t think we need to look at this as some sort of validation of the market, as MAS has already established itself as the tool people think of when they hear “marketing technology.”  Does it mean that Salesforce.com’s customers will migrate from their current providers to the Pardot platform? Possibly, but I would bet that the attrition rates of competitive solutions will remain pretty stable, and any churn in their customer base will likely stay true to what it has been. I would actually hazard to say that other recent acquisitions and movements will have had more of an impact on churn in marketing automation (and also how MAS relates to CRM) than this transaction will.

I think that more large companies that are shopping for marketing automation will place Pardot/ExactTarget/Salesforce.com on their short lists, but as long as all of these tools ultimately integrate with Salesforce.com (recent fluctuations aside) the trend to watch will likely be more B2C companies signing up for CRM.

 

About the author:

Jason_StewartJason Stewart leads Demand Generation and content strategy efforts at ANNUITAS, and has more than 14 years experience in B2B marketing at both private and public companies.  Prior to ANNUITAS, Jason was Director of Marketing for Demandbase, where he was named one of marketing automation’s key influencers in Marketo’s Definitive Guide to Marketing Automation, was one of the inaugural nominees for the Content Marketing Institute Awards for content marketing excellence and was a winner of DemandGen Report’s Social Impact “Killer Content” award. Jason founded the San Francisco Salesforce.com User Group and was one of the first 500 people in the world certified as a Salesforce.com administrator. Jason graduated with a degree in English from Rutgers University.

 

Comments

  1. says

    Good summary, if I had $1 every time I heard/read/saw an article proclaiming the death of email… I’d be typing this from Tahiti.

    The company is called Salesforce, not Marketingforce, so they are doing everything possible to remain relevant in that stream. As the B2B world slides into consumerism all the lifestyle tracking depth from retail will be gold.

    The challenge, can they continue to innovate working within the CRM beast? The companies you mentioned as pickups earlier seem stalled and stagnant.

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