Adobe’s purchase of Marketo’s B2B martech ‘resets the playing field’

Adobe has confirmed that it will be acquiring the privately-held cloud marketing software group Marketo from Vista Equity Partners for $4.75bn (£3.6bn). The sale price is a near $3bn (£2.3bn) mark-up on Vista’s 2016 purchase price of $1.8bn (£1.4bn).

The announcement yesterday followed rumours of an impending deal last week as reported by Marketing Tech, and speculation around the impact the purchase would have on the fiercely-competitive marketing software market.

One of the key attributes that Adobe will inherit from Marketo is its capability in B2B marketing where Adobe has had only a peripheral presence. Global B2B marketers spend 22% of their budgets on technology, according to Forrester, and 66% are planning to up that spend in the year to come.

According to the research group’s principal analyst, Rusty Warner, the acquisition “fundamentally resets the competitive playing field” for B2B marketing technology buyers and vendors. While Adobe had been a leader in the marketing cloud landscape from a consumer perspective, said Warner, investments “not made” over the last few years had rendered it unviable for most B2B use cases.

“Now, it is able to compete in the B2B marketing cloud business against Salesforce, Oracle, and SAP,” added Warner. “[Marketo] is on the short list in just about every B2B marketing automation platform selection.”

But while B2B martech was certainly a key driver of the decision, the acquisition also strengthens its B2C offering, providing access to two markets the company hasn’t managed to tap into all that well. Those are considered purchases, where a consumer buying an expensive product will take a long and complex buying journey, and consumer sales, where there is a human seller, such as agent or advisor.

On Marketo’s own reasoning behind the sale, Warner points to the wider consolidation of the martech industry, particularly among Adobe’s closest “fullsome” marketing cloud competitors, Adobe, IBM, Oracle, Salesforce, and SAP, as a probable motivator.

“There is not much room for an independent platform to compete as a best-of-breed point solution - no matter how important the breed or how best the solution,” said Warner.

“Frankly, Marketo was running out of potential landing spots when it came time for it to exit Vista, as the major marketing cloud vendors filled their portfolio gaps in other ways. This acquisition ensures that Marketo (the product, the people, the vision, the passion) has a secure future.”

Adobe’s own CEO Shantanu Narayen added following the announcement that, with both companies having many customers in common, there was a “clear” demand for the integration into its Digital Experience arm, where Marketo CEO, Steve Lucas, will continue to lead.

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