Adobe to buy Marketo for $4.75bn

Adobe VP and GM, Digital Experience, Brad Rencher

Adobe is buying cloud platform Marketo for $4.75bn. (£3.62bn). Marketo’s ecosystem includes over 500 partners and an engaged marketing community of over over 65,000 members.

The company’s B2B marketing platform integrates planning, engagement and measurement capabilities. Adobe said that adding Marketo’s engagement platform to Adobe Experience Cloud will enable Adobe to offer “an unrivalled set of solutions for delivering transformative customer experiences across industries and companies of all sizes”.

With the addition of the Marketo platfotm, Adobe intends to mirror it’s B2C offering for B2B customers, using a combination of Adobe Experience Cloud and Marketo to harness massive volumes of customer data and content in order to deliver real-time, cross-channel experiences that are personalized and consistent.

“The imperative for marketers across all industries is a laser focus on providing relevant, personalized and engaging experiences,” said Brad Rencher, executive vice president and general manager, Digital Experience, at Adobe. “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.”

The transaction, which is expected to close during the fourth quarter of Adobe’s 2018 fiscal year, is subject to regulatory approval and customary closing conditions. Until the transaction closes, each company will continue to operate independently.

When the deal goes through, Marketo CEO Steve Lucas will join Adobes senior leadership team and continue to lead the Marketo team as part of Adobe’s Digital Experience business, reporting to Rencher.

Rusty Warner, principal analyst at Forrester, said the deal is good news for Adobe. First, the company now gets to participate in the B2B marketing automation market,” said warner. “Global B2B marketers spend 22 per cent of their marketing budget on technology – nearly as much as they spend on marketing programs and media. And 66 per cent are planning to increase their technology spend in the upcoming year, which is more than that for any other budget category. Forrester is forecasting the global market for B2B marketing automation to grow at a 19.4 per cent CAGR over the 2017-to-2023 period from a base of 1.3bn in 2017.

“Although Adobe does have B2B customers, it was definitely a company at the periphery of B2B marketing automation. In order to participate in the B2B marketing automation market, Adobe needed the functionality that Marketo brings. And Marketo was a very good choice. The company is on the shortlist in just about every B2B marketing automation platform selection.”

And while Adobe focused the acquisition announcement messaging on the B2B market, Warner believes the acquisition also strengthens the firm’s offering in the B2C marketing space. “Historically, Adobe has been strong at direct-to-consumer B2C direct marketing and digital marketing,” he said. “Buying Marketo gives them an entrée to two B2C markets they haven’t previously addressed that well: considered purchase (i.e. expensive consumer purchases with a long-complicated buying process) and consumer sales where there is a human seller (e.g., sales reps, agents, advisors, distributed marketing situations, etc.). The acquisition also helps accelerate Adobe’s ‘Marketing Cloud’ street cred because Marketo is a true SaaS offering.”