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.
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.