IBM announced that it has acquired Silverpop, an Atlanta-based cloud marketing automation player with a customer base across the B2B and B2C markets. "Across the board, we're seeing technology play more of a role in how the discipline of marketing is working. It used to be more creative; we're seeing the need to blend the art of marketing with the science of marketing," says IBM Smarter Commerce Strategy Director Jay Henderson.
Henderson said IBM hopes Silverpop will accelerate business in three areas: email execution, B2B marketing, and the tools that go with B2B marketing, such as lead scoring and lead nurturing. "We think the considered B2B purchase, with its long sales cycle, has strong implications for B2C marketing, as B2C marketing goes away from 'batch and blast' and more towards customer engagement and dialogues," Henderson says.
"The benefit of Silverpop is that it's not limited to just B2B or B2C. It's been effective for customers across all types of companies," explains Ray Wang, principal analyst and founder of Constellation Research. "This helps IBM compete with Marketo and [Oracle's] Eloqua." He puts Silverpop's capabilities "on the lines of [Salesforce.com's] ExactTarget and Hubspot."
Silverpop has 8,000 customers in 50 countries, and according to Henderson, there is "minimal" overlap between their customer bases, representing opportunities for growth. One reason is that IBM and Silverpop have gone after different levels of marketers.
"[IBM's] Unica solution is very rich and heavy but not easy to use," Wang says. Silverpop has an easier-to-use interface, with capabilities that are appealing for companies experimenting with marketing automation.
Henderson agrees on this point. "A lot of the interfaces we have today [at IBM] are really designed for expert marketers, people who are very steeped in one-to-one, relationship, database marketing.They're powerful interfaces that can do sophisticated and complex things, and for them it's a market leading tool. We're seeing another wave of adoption...among the aspirational marketer, and they need a different type of interface. It's less power and more about intuitiveness and ease of use."
Another one of Silverpop's capabilities that appealed to IBM is its ability to create customer profiles based on behavioral attributes, allowing for enhanced personalization. If a financial services company sees a customer look at a college savings plan calculator, for example, it can trigger an email about a 529 savings plan. A B2B company can gauge the quality of a lead and send out appropriate email offers based on behavior such as a download of a whitepaper or if a customer viewed a Webinar.
"While IBM has an army of assets in play for marketing, the reality is that you need mass personalization at scale to deliver on relevancy and context. Silverpop brings this and its ability to effectively keep identities in context, regardless of how that individual is engaging inside a brand and potentially with other brands," Wang says.
The acquisition is the latest in a series of consolidations in the marketing automation space over the past few years. ExactTarget acquired Pardot in 2012, and a year later was swallowed by an even bigger fish, Salesforce.com. Oracle acquired marketing automation provider Eloqua in December 2012. Microsoft acquired MarketingPilot in later 2012. Adobe acquired Neolane in June of last year. In January of this year, Atlanta-based marketing automation company Salesfusion acquired Loopfuse.
Meanwhile, Marketo filed an IPO in April of 2013, and many other players in the marketing automation space remain targets for acquisition. "In the next eighteen to thirty-six months, we will see a massive wave of consolidation. The marketing landscape is evolving," says Wang.
"It's very clear that there is a fair amount of consolidation happening today in marketing technology," Henderson agrees. "It's a sign the market is starting to mature, and it's an exciting time to see this inflection point in the marketplace."
"We will continue to see acquisitions in this space, though attention will turn to other marketing tech categories as the marketing automation vendors get snapped up," notes Cory Munchbach, a Forrester analyst.
But challenges are still ahead as these large vendors bring their acquisitions into the fold. "What everyone wants now is integration and scale—that is where the vendors must dedicate resources to justify all these moves," Munchbach underscores.