Dive Brief:
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Adobe on Thursday afternoon announced it is acquiring Marketo, the cloud-based marketing platform focused on business-to-business (B2B) services, for $4.75 billion. News of the negotiations were first reported by Reuters last week.
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Marketo works with more than 500 partners, 5,000 customers and has a community totaling more than 65,000 members, according to a press release around the news. The San Mateo, California-based software firm will be integrated into the Adobe Experience Cloud, which focuses on marketing analytics, content personalization, advertising and commerce.
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Upon the deal's completion, Marketo CEO Steve Lucas will shift to Adobe's senior leadership team, where he will continue to spearhead Marketo's strategy and report to Brad Rencher, EVP and general manager of digital experience at Adobe. Marketo last year saw revenue of roughly $321 million, according to Moody's Investors Service data cited by Reuters.
Dive Insight:
In purchasing Marketo, Adobe is aiming to translate the personalization and focus on cross-channel experiences that are highly desired in consumer-facing marketing into a B2B specialty. Marketo comes with a built-in, engaged marketing community and customer base that could further support Adobe's digital marketing and cloud-based services, which have proven a boon for the company that owns platforms like Photoshop and the Creative Cloud.
"The imperative for marketers across all industries is a laser focus on providing relevant, personalized and engaging experiences," Adobe's Rencher said in a statement. "The acquisition of Marketo widens Adobe's lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing."
Adobe has surpassed analysts' performance expectations for the past eight quarters, according to Reuters, thanks in large part to its digital media business. The company reported record revenue in Q3 results released last week, generating $2.29 billion for the fiscal quarter, up 24% year-over-year.
The Marketo deal also arrives on the tails of Adobe's $1.68 billion purchase of the e-commerce platform Magento Commerce in May. Overall, the ad tech and marketing technology sectors continue to see their lines blur, with categories like cloud services and AI solutions being ripe targets for acquisitions as brands and businesses put a higher premium on data.
"There continues to be consolidation of martech and related tech firms these last few years — in particular, by strategic vendors such as Adobe, Salesforce, IBM and Oracle," Sean Brady, president of the artificial intelligence-driven marketing platform Emarsys Americas, told Marketing Dive in emailed comments "The value that these 'acquired clouds' promote is to achieve greater functionality."
The issue, as is the case with much of M&A, is ensuring the Marketo transition is seamless and not implemented haphazardly. Brady cautioned in his comments that "acquired clouds" can lead to conflict when it comes to who "owns" the responsibility in solving issues, and can result in a user experience that feels "cobbled together."
