This week Adobe announced that they’re buying Marketo for a whopping $4.75 billion. For marketers, the purchase – along with the huge price tag – tells us a lot about the future of the consumer marketplace and the emerging field of martech.

What are the pros and cons of the purchase? Here are Octave Media’s 5 big takeaways.


1.) Martech is Big – Really Big

First, is “martech” part of your everyday lingo? If not, no worries – it’s not a household word (yet).


Martech is the blend of marketing and technology that puts companies closer to customers. It includes every bit of technology used to forge deep buying connections, from the email server you select to a social media management platform like HootSuite.


The concept of marketing technology is thousands of years old, but the concept of martech is still gaining traction. Think of a company like Dollar Shave Club, which popularized direct-delivered shaving supplies using customer preferences. When Unilever bought out Dollar Shave Club, it paid $1 billion primarily for the company’s robust user engagement platform – aka martech.


These billion-dollar deals indicate that martech is the undisputed future of marketing. A massive enterprise like Adobe or Unilever doesn’t invest at that level unless they’re sure it will pay off.


And in a way, it’s a self-fulfilling prophecy: When industry giants invest in something, you can bet they’re going to make sure it impacts millions of people.


2.) Consolidation, For Better or Worse

Marketo isn’t just any company. With 65,000 users, it’s one of the world’s biggest marketing software innovators, which handles an enormous amount of email, social media messages, mobile traffic, digital advertising, and analytics.


In addition, just months ago Marketo announced a major deal with Google whereby Google tools would be built right into the Marketo platform. The two companies said they’d work together on developing new AI solutions.


Now Marketo has been purchased by Adobe, forging an unholy alliance among some of the world’s biggest tech companies. This means there’s been a major consolidation in the martech world.


Three giants just became one superpower. Yikes.


Some watchdog groups are concerned about these kinds of consolidations because of their impact on personal data vulnerability. Consumers already have ambivalence about how their data is gathered and stored. Buy-outs just make it worse.


What does it mean if you gave your personal info to Marketo? The answer is: Adobe owns it now, like it or not.


Of course, a short-term consolidation in power can also mean a longer-term expansion in product lines and features. That can be a good thing for customers. Adobe says the deal won’t create any limits for current Marketo users and will only expand their options.


Adobe’s VP of digital marketing, Brad Rencher, said on his blog that the buyout will give current Marketo users the following additional benefits:

  • Acquire more customers through targeted, account-based advertising
  • Improve campaign creation and execution velocity with access to an intelligent repository of content assets
  • Use a data-driven approach to focus sales and marketing activities on the most valuable prospects and customers
  • Deliver cross-channel experiences including web, mobile, email, in-store and in-person that are personalized and consistent

Can we trust Adobe to deliver on all that? Time will tell.


3.) A Reputation for Innovation?

Adobe has a so-so reputation with marketers, designers, and the general public. (Have you ever tried to open a PDF, only to be told you have to update to the latest version of Adobe Acrobat? Did it inspire rage in your soul? Yeah, millions of people feel that way.)


Nevertheless, the last few years have been good for Adobe. FastCompany named them one of the most innovative companies of both 2017 and 2018, largely based on their ability to partner with tech innovators to improve consumer products.


For example, Adobe worked with machine learning experts to develop Adobe Sensei, then used that technology to develop a Photoshop tool called “select subject” that automatically separates a figure from its background. It’s a handy feature.


According to FastCompany, Adobe is also mulling over the purchase of artificial intelligence and virtual reality companies that could further strengthen its “tech” side of martech. Again, that would mean more consolidation, but hopefully more innovation too.


4.) Selling Out and Shutting Down

Here’s something else to think about. When martech companies consolidate, it makes other martech company owners start thinking about the big picture. Is it time to sell out? Is it time to shut down?


Billion-dollar sales and mergers leave the remaining, usually smaller competitors with a sense of marketplace ennui: Do I really want to be in this business anymore? Martech entrepreneurs might feel ready to move on to the next big thing – maybe something in martech, maybe something in a new field altogether.


This could either provide a fresh burst of innovation or have a dampening effect on the field of martech. Hopefully not the latter. We need energetic entrepreneurs to keep the blood flowing in this thriving industry.


5.) The Customer is Still #1

Aside from all the marketing hubbub, Marketo joining forces with Adobe is an indication that the customer journey remains at the core of marketing. In fact, the joint press release from Marketo and Adobe says the point of the partnership is placing “customer experience and engagement at the heart of digital transformation.”


Steve Lucas, CEO of Marketo before and after the transition, says it remains his personal mission to deliver “a seamless and unforgettable end-to-end customer experience.” The world’s Marketo and Adobe users sure hope that’s the case.


It’s nice to think that customers are still the driving force behind the digital transformation in marketing. Martech might have a robot body, but it still has a human heart.


For more thoughts on the past, present, and future of marketing, stop by the Octave Media blog. Octave Media specializes in music marketing and offers a free 5-Point Website Marketing Inspection that could transform your business. Need help? Let’s chat.


(Photo by Matan Segev from Pexels)