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Summary:

The marketing automation arms race continued as IBM snaps up Silverpop to contend with Oracle, Salesforce.com, Adobe — you name it.

IBM is buying Silverpop, an Atlanta-based marketing automation software provider, in the latest example of maneuvering by major IT vendors to capture more marketing IT spend.

The idea behind this deal — and several others in this arena — is that marketers have money to spend on IT and they want to move from what IBM’s VP of enterprise marketing Kevin Bishop calls the “spray and pray model” to more directed, personalized product pitches. Silverpop takes data from multiple sources and puts it into a “universal customer profile” that it then uses to build a campaign that could be delivered via SMS, email or other method, said Bishop.

There is some overlap between Silverpop and Unica, a previous IBM acquisition, but Silverpop is much more user friendly, sources said.

Silverpop competes with Eloqua, which Oracle bought two years ago, and Responsys, which Oracle bought last year. But this isn’t a two-horse race. Salesforce.com, which bought ExactTarget for $2.5 billion last year, is all about the “marketing cloud” now. And last month SAP, rumored to be in the market for more marketing automation savvy, inked a deal with Adobe Systems to resell that company’s marketing cloud.

forrester survey

Other IBM buys in the broad area of marketing automation include Unica, Core Metrics and DemandTech. And then there are the remaining independents — Marketo, which went public last year, and Hubspot, which hopes to go public soonish. Silverpop is privately held and IBM did not disclose terms of the deal.

Bishop said IBM’s goal is to integrate a bunch of these marketing automation offerings into a SaaS suite, something the company will have more to say about in May.

R. “Ray” Wang, analyst with Constellation Research, does not expect the marketing automation buying binge to end any time soon. “As much as we’ve seen, we’ll see more deals in the next 18 months,” he said. The reason? While IT budgets in general have been sliced, line-of-business managers — the people in charge of human resources or accounting and especially marketing departments — still have money to spend.  Most of them are spending it on easy-to-consume-and-maintain SaaS offerings. No wonder IBM keeps touting its 100+ SaaS products.

Fodder for those who say the days of big marketing campaigns are numbered:  A recent Forrester Research survey found that fewer than a quarter of 61,000 consumers surveyed (22 percent) trust email coming from companies, and even fewer (13 percent) believe anything advertised on websites. Perhaps more personalized interaction could help but I’m not sold on the notion that people will believe targeted marketing much more than they do the “spray and pray” type — although at least if they opt in, marketers will know they’re interested in the category.  There’s some value in that, I guess.

This story was updated at 8:04 a.m. PST with more analyst comment and detail around the Forrester report.

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  1. Good overview here. I don’t know that there’s a lot of overlap between users of IBM (fka Unica) Campaign and Silverpop, though. Silverpop’s automation and targeting platform (Engage) is much better suited for digital campaigns, enhanced by the sort of behavioral analytics that we’ve offered for a long time. IMO, that’s a challenge that the other big marketing suites will have a hard time answering.

    Here’s my take on what we can do together: http://www.bullishdata.com/2014/04/10/ibm-buying-silverpop-heres/

  2. Barb – I wanted to add a few data points from “the crowd” – end user reviews, and buyer behavior on http://www.trustradius.com.

    1. “There is some overlap between Silverpop and Unica, a previous IBM acquisition, but Silverpop is much more user friendly, sources said.”

    UNICA is very much a large enterprise oriented solution. Silverpop Engage has a more diverse client base. Based upon reviews on TrustRadius, we estimate 57% of Silverpop’s clients to be enterprises with more than 500 employees, contrasted to 100% for IBM Unica. However, Silverpop has some work to do with respect to usability. Silverpop scores 6.3/10 on usability relative to the marketing automation benchmark of 8.4/10 on TrustRadius.

    2. “Silverpop competes with Eloqua, which Oracle bought two years ago, and Responsys, which Oracle bought last year. But this isn’t a two-horse race. Salesforce.com, which bought ExactTarget for $2.5 billion last year, is all about the “marketing cloud” now. And last month SAP, rumored to be in the market for more marketing automation savvy, inked a deal with Adobe Systems to resell that company’s marketing cloud.”

    Based upon 13,812 comparisons run by Marketing Automation software buyers on TrustRadius in Q4 2013, Silverpop was most often compared to Marketo (29% of the time), followed by ExactTarget (11%) followed by Pardot from Salesforce (9%), then Hubspot (8%). Eloqua surprisingly was not frequently compared to Silverpop. You can access the data here:
    http://www.trustradius.com/products/silverpop/competitors

    I hope this adds some additional “crowd” perspective to your readers.

    Vinay Bhagat
    CEO, TrustRadius
    @vinaybhagat
    #forusersbyusers

    1. thanks @vinay and @blair appreciate your insights…. this is not my primary focus so i’m learning by doing.

  3. Yaron Fraiman Friday, April 11, 2014

    You left out Microsoft, one of the leading CRM vendors who acquired Marketing Pilot and is now in the process of integrating this offering (in additional to their social listening acquisition) into Dynamics CRM.

  4. The IBM acquisition of Silverpop is one that they ‘”had to make,” but you forgot to mention Teradata which acquired Aprimo 3 years ago. IBM has been late and slow, and the momentum now lies with vendors that are further along the curve in integrating their purchases. Beyond the IT integration piece — which IBM and others might beed too focused on — being data-driven is about helping businesses know more, they can do more to increase the value of their data and customer relationships. Lisa Arthur, CMO, Marketing Applications, Teradata

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