By acquiring ExactTarget, Salesforce just entered an escalating battle for control of the marketing-services field. Data fragmentation poses a great problem for marketers as new technologies and data sources arise.
Over the next five years, dozens of tech titans, startups, and traditional data managers will seek to become the dominant platform to integrate data across all marketing channels. From this battle, marketers will emerge with a unified view of their customers and strategy from a social, mobile, email, display, search and direct-mail standpoint.
While data-driven marketers will benefit massively from the competition, the spoils will go most heavily to the company that wins control of the cross-channel stack -- gaining a near-monopoly on marketing budgets.
The Prize
Three trends have been redefining the marketing landscape, creating an opportunity for major disruption in the industry and a lucrative prize for the winner.
First, there is a shift of budget from offline channels to digital. This trend is not new, nor is it surprising -- but it is accelerating and it means a significant amount of money is in play.
The second trend is the growing significance of data in marketing. Smart targeting, measurement and modeling techniques are redefining the capability of marketers to reach the optimal audience and invest in the highest-ROI campaigns.
The final trend is fragmentation. New marketing channels are emerging much more quickly than the industry is catching up, spawning companies focused on success within a particular channel. Within the last five years alone, mobile and Facebook have grown from negligible channels to key parts of a marketer's strategy. This means the typical CMO is now inundated with dozens of different tools to manage their different channels.
Herein lies the opportunity: The industry's fragmentation is keeping data siloed and preventing companies from using their data intelligently across channels. If a company can successfully reverse this trend by creating a single unified platform for all marketing, it can take advantage of huge amounts of this untapped data that was previously siloed.
The Players
This is where Salesforce's acquisition of ExactTarget fits. Salesforce is already managing CRM data for many companies. Between the Buddy Media and ExactTarget acquisitions, it is now entering the marketing execution space -- rather than just hosting data. The integration of CRM data and email marketing can be much tighter than the integration of CRM and social marketing, allowing Salesforce to more strategically integrate data across channels.
In moving into cross-channel marketing execution, Salesforce's vision now directly competes with dozens of other companies. Let's look at the other major players:
Traditional data managers: Companies like Acxiom, Epsilon, Experian and Merkle have traditionally managed CRM data for the largest marketers and also made much of their money executing their campaigns in various offline channels. Most of these companies have in-house email service providers, direct-mail services and are increasingly moving into display and digital channels with innovative cross-channel products. Salesforce is now squarely competing with these companies for the future of data management.
Online data management platforms: Online "DMPs" like BlueKai, Turn and Adobe have the same vision as the traditional data managers, but start by aggregating online data (such as display-ad performance, online behavioral data, etc.) and executing in online channels. Over the next few years, they will be moving across the stack to aggregate data from offline channels, too.
Single-channel marketing solutions: As marketing changes, the companies that dominate a particular channel are moving to integrate into others. The most dramatic change will be among email service providers. Even before the ExactTarget acquisition, leading ESPs like Responsys and SilverPop have tried to pivot into cross-channel solutions.
Giant tech companies: Like Salesforce, other tech titans such as IBM, Adobe, Google and Oracle are eager to take advantage of their relationships with marketers, their possession of customer data, and their big data expertise to enter the battle.
The Battle
While these four categories compete very little today, their five-year visions converge almost identically: Each company wants to own the cross-channel marketing stack.
While the battle has been brewing for years, Salesforce's acquisition of ExactTarget has accelerated it significantly. Marketers will now be torn between several platforms, each one competing to create an exceptional cross-channel experience and to build the dominant platform. Expect this acquisition to be the first of many as the battle unfolds.
