Adobe has confirmed its acquisition of Marketo, the California-based software marketing specialist, for $4.75 billion. The deal brings Adobe’s competition in line with Salesforce Marketing Cloud and widens Adobe’s lead in the customer experience across B2C and B2B. Marketo’s software-as-a-service platform, delivered through Google Cloud, allows teams to manage digital marketing campaigns and track their performance. The likes of SAP, Oracle and HubSpot also offer products and services in this area.
The purchase is the biggest in Adobe’s history and comes just months after its purchase of e-commerce specialist Magento in May 2018. Both additions will soon be integrated into the Adobe Experience Cloud, putting it at the heart of marketing. It’s a big deal and the company believes that the combination of Adobe Experience Cloud’s analytics, personalisation and content solutions with Marketo’s lead management, account-based marketing and attribution technology will make it a leading platform for marketers.
"This acquisition demonstrates Adobe is firmly on the march. Adobe has picked up Marketo's B2B marketing automation skills but the “experience gap” will exist as long as it treats personalisation as a feature, rather than a full-scale cloud category that is strategic to the martech stack,” commented Mike Ni, CMO, marketing and ecosystem at RichRelevance.
“Overall, this move shows that enterprises are demanding for the increased leverage of data across the digital, advertising, and owned channels is spanning both B2B and B2C use cases.Other large competitors like SAP are closely watching. While it’s unclear if they will respond with a similar acquisition in the fairly mature space of marketing automation, it is clear that they will look to neutralise the threat from a commerce perspective,” he continued.
Adobe reported earnings of $2.29 billion for the third quarter of 2018, which represented a 24% year-over-year increase and set a new record for the company. A big chunk of this continues to come from Creative Cloud, which includes InDesign, Illustrator and Photoshop, to name a few, although now it wants to build its enterprise marketing software.
The buyout is expected to close in Adobe’s fourth quarter, with Marketo CEO Steve Lucas reporting to executive vice president and general manager Brad Rencher. Marketo’s 1,300 employees will become part of Adobe’s Digital Experience business, the companies said.
Notably, the announcement came just days before Salesforce's big tech conference Dreamforce in San Francisco, and Microsoft’s Ignite conference in Orlando.