Could the big surge in MarTech deals last year signal the end of one wave of consolidation and the beginning of the next? Either way, it’s clear brands are more focused on harnessing data to connect with customers than ever.
In a synopsis of 465 mergers and acquisitions that took place in the advertising and marketing world last year, the consulting and publishing firm R3 Worldwide concluded that the consolidation that swept through the agency world in recent years finally spilled over, into and around the MarTech stack.
R3 estimated global M&A spending in the industry rose 144 percent to $33 billion in 2018 but noted that only 20 percent of transactions completed involved a global holding company. The overwhelming majority of growth came not from a global holding company acquiring an agency but from what R3 dubbed “unconventional buyers” targeting MarTech companies.
“M&A activity in 2018 signaled that the grand view of MarTech is becoming actualized and 2019 will be about how companies move beyond facilitating the intersection of marketing technology and management to real integration into the enterprise,” Greg Paull, principal and co-founder of R3, wrote in the report.
The activity is being driven in part by global CMOs, who after years of experience with digital marketing are opting to bring more expertise and technology in-house in a bid to extract more value from their own data and streamline sprawling – and often less-than-transparent – marketing supply chains.
Consolidation hits the MarTech Stack
In terms of targets, personalization remains front and center, as evidenced by Walter J. Thompsons merger with Wunderman. The two companies said they combined to create a one-stop, data-driven creative shop capable of meeting the needs of global brands.
“We already share many core clients, who will now have simpler access to our combined expertise,” the companies said in a joint statement announcing the merger. “And, as technology reshapes marketing, we have existing partnerships with Adobe, Amazon, Google, IBM, Microsoft, Salesforce, and SAP.”
Adobe spent $4.5 billion to acquire Marketo, while Salesforce.com acquired Cloudcraze in deals each company said was aimed at bringing MarTech to the lagging B2B sphere. Forrester predicts that U.S. B2B commerce will grow from $889 billion today to $1.2 trillion by 2021.
“The imperative for marketers across all industries is a laser focus on providing relevant, personalized and engaging experiences,” Adobe’s Executive Vice President and General Manager Brad Renche said of the $4.5 billion deal to acquire Marketo. “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.”
Salesforce also gobbled up Mulesoft to help companies unlock data across legacy systems, cloud apps and devices; as well as Rebel, which allows brands to “turn emails into an extension of their website or app – collecting data, removing friction from the conversion process, and enhancing the customer experience.”
Smaller, but potential seminal deals included Singapore-based InMobi’s decision to acquire Reserve for $90 million and as part of its plan to launch the world’s first, largest and most transparent in-app and video programmatic exchange.
What do these M&As signify for the industry?
The deals signaled an acceleration of consolidation in the MarTech space being driven in large part by global CMOs eager to rationalize their marketing supply chains. Clearly, investors have heard their plaints and are rushing to stitch together companies that can provide integrated solutions spanning the entire length of the customer journey from content marketing to programmatic advertising, check out and customer loyalty programs.
The quest for ever deeper levels of personalization was apparent in both the Adobe and the Wunderman Thompsons deals, which hinge in part on the bet that data can be used in new ways to not just automate marketing but inspire creativity.
The BDX data difference
The one thing all these deals have in common, of course, is that they will either add to the volume of third-party data or rely on it to succeed.
As one of the world’s first data exchange platforms, BDEX stands ready to help marketers access the best of that data as inexpensively, quickly and easily as possible. Our 100 percent deterministic cross-device matching and a uniform taxonomy spanning more than 5,000 industry categories enable us to verify and aggregate more than 900 billion data signals generated by tens of millions of U.S. consumers in real time.
We do this so marketers can focus more on marketing and less on scrubbing data – or who owns which layers of their marketing stack.
Why not call 917-410-6616 or contact us today to see how BDEX is building the infrastructure for human connectivity that can help take your personalization, real-time targeting and other marketing initiatives to the next level.