United Kingdom–based marketing automation company Alterian has acquired United States–based social media monitoring company Techrigy in exchange for Alterian shares valued at $4.1 million and $900,000 worth of shareholder loans. The acquisition brings to Alterian's software-as-a-solution (SaaS) marketing product a buzz-generating social component. The U.K. vendor's search for a social monitoring solution took longer than a year, according to executives, and Techrigy only came out the winner after Alterian had examined approximately 50 social monitoring solutions. [Click here for Alterian's description of the deal, and here for the company's press release.]
"Social media monitoring has become part of mainstream marketing platforms as opposed to just an experimentation area or some kind of adjunct or standalone offering," says David Eldridge, chief executive officer of Alterian. "We really felt that, with the volume and relevance of the information that's out there, people need to take account of it across their marketing activity."
Though Aaron Newman, Techrigy's chief executive officer and cofounder, tells CRM that he's "very, very happy" about the acquisition, he notes that he's suddenly unsure how to introduce himself. "I'm going to have to ask Bob Hale [Alterian's senior vice president of corporate development], ‘Should i start saying I'm from Techrigy or Alterian?'," he says.
The two companies are of radically different scale: Having recently hired its 13th staffer, Techrigy executives tell CRM that the full baker's dozen will be subsumed into Alterian's team of more than 300. As recently as 10 months ago, Techrigy had just four employees — and that's when Connie Bensen joined the company as its chief community officer. Bensen says that after spending the last 10 months developing Techrigy's brand message, she now finds herself wondering how she'll integrate those efforts within Alterian's overall marketing strategy.
In Gartner's April 2009 Magic Quadrant for CRM Multichannel Campaign Management Alterian was noted for its "campaign management execution built on top of a high-performing analytics engine." Adam Sarner, Gartner research director and author of the report, says he considers social monitoring an appropriate fit for CRM and marketing automation. "[They're] all thinking about social connections," he says, "[and] whether to engage people in the community within a buying process, or just getting a sense of where the conversation's going -- where it is, what's being said -- [and] put some connections around how to deal with multiple anonymous personas." The acquisition, he says, is a "step in the right direction" for Alterian -- and a similar move, he says, would suit any campaign management or CRM player trying to engage in the online conversation.
Jonathan Block, vice president and service director at benchmark and advisory firm SiriusDecisions, agrees. At the end of the day, he says, this acquisition points to "a natural evolution on both the marketing automation side as well as the social monitoring side."
Social is an area vendors and their clients are very keenly looking to invest in, Block says, especially as it becomes a critical element within the marketing mix as opposed to a standalone collection of data. "We've been predicting this [trend] for a while," he says. From the perspective of a marketing platform provider, he says, the real value proposition "is the ability to have visibility into the full set of interactions one has with prospects or customers."
Alterian's Eldridge cites five key criteria that solidified his company's decision to approach and finally select Techrigy:
- Like Alterian, Techrigy is also a SaaS company; and rather than providing services, Techrigy provides a solution that customers can use without customization.
- Techrigy has a historical database comprising two years' worth of social data, allowing users to look at historical trends to understand current behavior and tactics.
- Both companies cater to marketing agencies as a core part of their go-to-market strategies.
- The two companies have similar technology that leverages Microsoft's infrastructural stack, easing integration concerns.
- Techrigy displays a culture of innovation simlar to the one Alterian has strived to maintain.
For Techrigy, Newman says, the benefits were obvious. "It's a great way to take our company to the next level," he says. "We'll be able to leverage the infrastructure of Alterian both tactically and strategically." The acquisition, he adds, will enable Techrigy to provide a better product, platform, customer service, and support. "It's a win-win."
Newman authored a book last year — Enterprise 2.0 Implementation — and he recalls speaking, in the course of his research, with various industry professionals applying social technology to the enterprise. When he began, he says, "everyone was talking about their cats on blogs. No one cared — but it was quickly becoming a way consumers were connecting. If marketers didn't understand that, they [were going to be] be in trouble."
A handful of companies may have been able to manually capture a random smattering of conversations before, but SiriusDecisions' Block suggests the extent of interactions between and among customers and companies has reached a level that is "way too complex and too many" for manual capture and integration to remain practical. Therefore, he says, we should expect to see similar social monitoring capabilities taken up by other marketing automation and CRM vendors — whether they choose to build their own or follow Alterian's lead by acquiring a smaller specialist. Block says that one of the key motivations for the acquisition of Techrigy is that it will enable Alterian users to gauge the extent of the information they may be inadvertently missing out on. "Who knows how much of that activity we're not capturing?" he asks.
Techrigy's current social solution, known as SM2, will be integrated into Alterian's marketing platform, according to the two companies. An "SM2 Freemium" version of the software — free but with limited functionality — is already available on the Alterian Web site. Freemium users, the company says, can later upgrade to the full subscription-based SM2 product. Eldridge promises that, as with like the rest of Alterian's on-demand offerings, consumers can buy what they need at the moment, knowing that the roadmap is pre-integrated should they choose to attach the next component to fit their need.
Although Alterian is primarily a SaaS provider, the company announced last February that it would offer an on-premises solutions as well. As Michael Fisher, Alterian's senior vice president of commercial operations, explained at the time, the move was an effort to reach the more than 50 percent of the market that currently stands by the on-premises model. Eldridge says that many customers now like to mix-and-match on-premises and on-demand for varying solutions. "It's really horses for courses," he says, using an expression common in his native U.K. for choosing the right tool for a given task. "You never have to have one or the other. It's just what suits you."
The Techrigy technology, however, will remain a SaaS offering, Eldridge says, "because of the scale of data that's held there." (According to an acquisition FAQ prepared by the two companies -- available as a PDF document here -- Techrigy’s Social Media Warehouse, created in October 2007, now contains over 1.5 billion social media mentions, blogs, tweets, posts, images and conversations.) Moreover, Eldridge says, a SaaS model will reduce the complexity of updating and referencing the social media database without having to worry about the data being duplicated or stored in different places.
According to Block, marketing automation platforms are becoming increasingly commoditized, with perhaps 80 percent of functionality uniform among all vendors. (Eldridge, for his part, credits a series of acquisitions for extending Alterian's marketing-product portfolio: Direct Marketing, an email marketing company, in May 2006; Nvigorate, a marketing resource management firm in September 2006; and the intellectual property of Campaign Calculus, a contact optimization tool, in April 2007.)
Coupled with Alterian's July 2008 deal for Mediasurface, a provider of content management software (CMS), the acquisition of Techrigy may give the company a leg up yet again, Block says — but maybe not for long: Social media technologies are on the radar of every major vendor in the marketing automation space. "Alterian is a little more ahead now from the CMS side and social media monitoring side, but other vendors will quickly get up there," he says. "Any market advantage they have now is really relying on their ability to capitalize on that."
While Eldridge declined to rule out the potential for future acquisitions, he noted that Alterian's annual revenue increased by 73 percent in 2008, thanks in part to organic growth of between 15 percent and 20 percent.
Editors' Note: The following supplemental information was provided by the companies and not generated by CRM:
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