Thoughts on Adobe’s Acquisition of Marketo

Ever since Vista Equity Partners acquired Marketo in May 2016, the countdown was on to see what the future would be for the industry’s gold standard marketing automation platform. Much like the Amazon HQ2 frenzy, theories ran rampant as to who the eventual acquirer would be, and everyone from Google to Salesforce made the list. After Marketo’s purchase of Bizible, it seemed like Vista was following the standard private equity formula of bundling a bunch of related technologies together for a profit. And wow did they do it perfectly! When the news broke regarding Adobe’s acquisition of Marketo, my first thought was, “The team at Vista really knows what they are doing.” Everything seemed to go according to plan.

The Details of the Deal: That’s Billion, Not Million

By now we all know that Adobe purchased Marketo for $4.75 Billion. Yes, billion. In fact, it is Adobe’s largest acquisition ever. The Wall Street Journal highlights that Adobe is looking become a one-stop-shop for marketers and states, “This deal is expected to add scale to Adobe’s existing marketing-technology capabilities. It will also bolster the company’s clout with business-to-business brands, which make up the bulk of Marketo’s customer base.”

According to Marketo CEO Steve Lucas, “Adobe and Marketo both share an unwavering belief in the power of content and data to drive business results. Together we will deliver an unrivaled solution that will place customer experience and engagement at the heart of digital transformation.”

Why We’re Excited About Adobe’s Acquisition of Marketo

For Adobe, acquiring Marketo’s customer base brings them firmly into B2B territory. For Marketo, being in the Adobe portfolio brings some very exciting possibilities for a more designer-oriented UX and product integrations, including:

  • Enhancing the overall Marketo UI (which has remained largely the same since Marketo’s inception) to be more in-line with the Adobe brand
  • Making the campaign building process more visual, like Eloqua’s Campaign Canvas, Pardot’s Engagement Studio, or Autopilot’s Journeys
  • Seamless integrations with Adobe tools such as Dreamweaver, Photoshop, or Illustrator

Autopilot, a relatively new entrant to the marketing automation space, uses a visual campaign workflow called Journeys

Why We’re Leery of Marketo Being Acquired by Adobe

As with any big acquisition, there’s the possibility of stagnant development, lackluster support, and a loss of the community that made Marketo so attractive in the first place. I was an Eloqua customer when they got bought by Oracle, and support seemed to die overnight. The already complicated and admin-heavy platform became even more so, and with Oracle’s commitment to the high end of the enterprise market, it very clearly didn’t feel like a product for the mid-market anymore.

Marketo has built its success firmly on B2B mid-market tech companies, to the point that it has a cult-like following among marketing ops professionals in the industry. I personally hope it stays that way. Of course there’s great opportunity for Marketo to evolve into an even better platform under Adobe’s stewardship, but there’s always the worry that a company you’ve been rooting for since the beginning — a product you’ve built your career on — ceases to be the thing that makes it special. And so, we’ll be watching closely to confirm that the Marketo community remains as vibrant as ever and that product development marches forward.

A Big Question Mark for Marketo’s Analytics Capabilities

When Marketo acquired Bizible earlier this year, it was a signal that they took the marketing data problem seriously. Even with RCE and tons of reporting options in Marketo and Salesforce, most marketers still struggle to run meaningful reporting in an automated way. We work with marketing teams every week who spend a ton of time manually cobbling data together to create relatively simple reports on campaign performance and to prove marketing’s impact on revenue. While most of this reporting typically ends up in Salesforce, the vast majority of the data is populated via the marketing automation system.

Adobe doesn’t have the backbone of a company overly concerned with analytics and reporting, so it will be interesting to see if or how they tackle this. The reason Marketo is so popular among MOPs folks is because it’s flexible enough to get things legitimately correct. It takes a lot of work and data infrastructure, but if you have an idea of what you’re looking for the reporting output to be, you can construct a system in Marketo to accomplish it. If Adobe could find a way to make this infrastructure/attribution/reporting process much easier for the standard marketer to figure out, however, it would be a huge differentiator.

What It Means for the Rest of the MarTech Industry

“Adobe clearly stated their intention to expand their Marketing Cloud to compete more effectively with the leading players in marketing automation and customer relationship management space, and this is a first major step down that path,” says Ryan Duguid, chief evangelist at Nintex, a workflow automation platform.

It has also been mentioned that the Marketo deal will help Adobe “compete in marketing services against Microsoft, Oracle, SAP and even the great powers of digital advertising, Google and Facebook.” However, I foresee Salesforce feeling the largest impact of Adobe’s Marketo acquisition. Salesforce acquired marketing automation platform Pardot in 2013, and they do a phenomenal job selling the integration when in reality Pardot’s integration with Salesforce is nowhere near as robust as Marketo’s. On the business development side of the house, bundling Pardot in with Salesforce renewals and upgrades has been an effective way for Salesforce to win deals and gain market share.

But, Salesforce should be careful continuing this strategy. In many organizations, it’s typically the VP of Sales that executes the agreement with Salesforce. While the bundled deal is attractive, I’ve seen it more than once that the sales leader rushes forward to save money without consulting the marketing team on whether Pardot will meet their needs. This inevitably leads to resentment towards Pardot once marketing gets their hands on the product because 1) they weren’t a part of the evaluation process and were forced into it, and 2) Pardot is a subpar platform. This could come back to haunt Salesforce unless they can radically improve the UI and catch up on functionality.

Charting the Future of Marketing Automation

Yes, I’m a Marketo groupie, but I firmly believe that Marketo is in a position to chart the future of marketing automation. It already boasts the most robust and flexible platform compared to its mid-market competitors like Pardot and Hubspot, and its integration with Salesforce is best in class. However, leveling up the visual components of Marketo would be a welcome change, provided updates and functionality to data and analytics don’t fall by the wayside.

Driving Sales and Marketing Alignment During Planning

Don’t you love when meetings collapse into finger pointing and frustration?

Me neither.

One of the common mistakes you can make during the planning process is to assume sales leadership is on board with your plan.

And if that alignment never happened, looking back at the end of the quarter can be painful.

Sales & Marketing alignment is essential—and it can pay dividends:

Companies with aligned sales and marketing generated 208% more revenue from marketing.” – HubSpot

With Q4 planning in full swing, let’s dig into some tips on how to align and work toward a common goal.

Be Efficient Yet Effective

Sure, we all know that end of quarter is tricky for Sales: they’re busy closing business and don’t have time for marathon planning sessions.

While it’s important to communicate the marketing plan, don’t forget the pressure they’re under.

As things settle down, Sales will appreciate that sensitivity and (should) return the favor by engaging in a plan review.

During the review session, cover the following:

  • Revenue Targets
    If you’re not in alignment on revenue goals for new business and/or expansion business, stop what you’re doing and see to that.
  • Personas
    Brush up on your target personas and key accounts. Make sure your plan aligns to targeting and converting the right people.
  • Themes
    Don’t go over your plan in painful detail, and avoid jargon and acronyms. We’ve mastered MQLs, TQLs, SQLs, and AQLs, but no one else has. Instead, focus on the larger campaigns and themes you’re focusing on, any events you’re participating in, and expected outcomes at a high level.
  • In-Quarter Check-Ins
    Establish a bi-monthly or monthly check-in to discuss progress, lead quality, and where any adjustments are needed. Better to avoid surprises at the end of the quarter when it’s too late to turn it around. Use Sponge to measure progress against your plan and share relevant reports with Sales.

And this: be vocal and confident. You’ve been respectful of time constraints, but that doesn’t mean to give up communicating.

Communicate the plan with confidence, iterate when it makes sense, and don’t rest until you get sign off.

Do those things and you’ll avoid fraught meetings at the end of the quarter.

Set (and Reset) Expectations (Early & Often)

There’s nothing worse than having to make constant changes to your plan because you aren’t meeting Sales’ expectations.

And you’ll definitely hear about it if they think they’re light on leads. So set expectations up front about marketing’s contribution to revenue, lead and opp targets, account engagement, and other key metrics—and continue to reset those expectations throughout the year.

Zach Benard has outlined a few key questions:

  • Does each department have the same definitions for the terms you’re using? For example, when you say “leads,” what do you mean?
  • Do your marketing team’s goals line up with your sales team’s goals? Do they also mesh with your company’s goals?
  • Does anyone have questions about SLAs? Clarity is a must-have, and any gray areas should be addressed before moving forward.

And here’s something else that tends to get overlooked: outline what you’re going to need from Sales throughout the quarter (or year, for annual planning).

For example, lay out a time frame during each quarter that looks like this:

  • Assumptions we made
  • Where we hit targets
  • Where we fell short
  • How we’ll adjust

When changes need to be made, be forthcoming about how these changes will affect the plan.

If leadership requires a shift of focus, strategy, or marketing budget, be very clear about how any changes will impact lead flow, opportunity targets, or planned campaigns.

No one else in the organization understands this better than marketing. Outline exactly where and how any changes will be experienced in “real life” and how they’ll impact the marketing plan.

Sign Off & Own It

As mentioned, it’s critical to ensure Sales & Marketing are on the same page—and have taken ownership of SLAs and responsibilities.

And you can’t do that until you’re sure both teams are working from the same sets of numbers.

Sales has a spreadsheet to come up with their quotas, and you probably have a spreadsheet to come up with lead goals. Compare those numbers!

In the name of all that is righteous—make sure everyone is working off the same set of numbers. Otherwise your Sales & Marketing check-ins will devolve into spirited debate over who has the right data.

Here at Sponge we work with clients of all shapes & sizes, and the question of “the right data” is one of the most common problems we see.

Organizations typically have disparate data from their marketing automation platform, CRM, and a slew of other data-generating systems (including SQL or some other database, where that one super nerd presents numbers that no one else in the company has ever seen).

Take the time to straighten this out (or drop us a line and we’ll do it for you), so that Sales Ops and Marketing Ops are working from a common set of numbers and tracking the right KPIs.

Frankie Say, Relax

One last note: be honest with yourself and never sign up for an unrealistic plan. There’s just no way that can end well.

Once you’ve achieved true alignment—and you’ve crafted a plan your team is comfortable with—you’ll breathe much easier during the quarter.

According to HubSpot, “When Sales & Marketing are in sync, companies increase their closing rate by 67%.”

We’ve all seen how tumultuous the relationship between Sales & Marketing can be, but we’ve also seen what happens when both teams work together productively.

Focusing on alignment and building a strong relationship will always result in greater success for everyone.

 

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