Social Marketing Platforms and Acquisition Frenzy:
Why the Big Guys Are Acquiring Social Media Marketing Platforms
By
Seth Lieberman
In recent months, acquisitions in the social media marketing/marketing platform space have accelerated and the deal size has grown exponentially. Why all of the M&A activity? It’s simple: social media as a key piece of the marketing mix is here to stay and many of the largest CRM companies are woefully behind. To catch up, keep up, and win, they need to add social media capabilities right now.
Here is just a sampling of recent acquisition activity:
- Oracle / Vitrue, Involver
- Marketo / Crowd Factory
- Salesforce / Buddy Media
- Microsoft / Yammer
- And most recently: Google / Wildfire
What exactly are these companies buying? There is a range of social media software companies, but, for the most part, they fall into three buckets:
- Software to create content. Platforms that allow marketers to easily create content that plays well on social media sites are receiving lots of prime-time attention. Most often, interactive content often takes the form of contests, sweepstakes, surveys, personality tests, quizzes, and simple games that encourage visitors to react, respond and share. Creating original, compelling content can be hard work, so tools to simplify this are highly valued by marketers.
- Software to easily reach multiple sites. Think of this as a dashboard from which it is possible to interact across channels without having to visit each channel. Pretty straightforward stuff. It evolves constantly as various channels come and go. Long term, however, it really doesn’t make sense as a standalone business and is more often incorporated into 1 above or 3 below.
- Software to measure/analyze social media impact. This is another evolving industry segment: measuring and monitoring social media activity is a full-time gig—or in the case of many organizations, a full department gig. Given the monies companies are investing in social media, they want to make sure they have the analytics in place to justify the investment. In short, is the marketing converting to dollars—how often, when, in what situations?
The best of breed software platforms in the social media marketing space include all three of these: the ability to create interactive content like quizzes and sweepstakes, distribute it across the web and the ability to measure results. That is because, while the world’s largest brands are able to employ legions of marketers and a cadre of agencies to create content, publish it, and evaluate its impact; medium sized businesses, without the big marketing budgets and armies of social media marketers, are desperate for solutions to simplify their lives. In many ways, social media has made their jobs harder—so many channels, so much one-to-one interaction required, and the never-ending demand for something new.
Why buy instead of build? Because the Marketos, Oracles, and Salesforces realize that they don’t have the time to build it and get it right, companies are looking for solutions today and don’t want to bet their marketing dollars on version 1.0. In addition, if one platform doesn’t offer a suitable solution, they quickly look to another. By acquiring these social marketing platforms, the big sales/marketing/CRM players can get into the game quickly with solid offerings and apply their huge sales and marketing infrastructure to growing the business—starting with the selling to and retention of their existing customer set. A few common themes in these acquisitions:
- Buying functionality that spans from top of the funnel on down.
- Buying market-readiness/proven businesses—of course we hear most about the big acquisitions, but it makes sense. The acquirers want to go to market now, so they want to know that what they are buying is salable. The best way to guarantee this is to buy those players that have impressive customer lists.
- Paying big dollars. Time is money. The acquirers have money, not time. They know they can’t risk losing the next round of software marketing.
Despite the recent activity, there are still a number of companies that have not yet made that strategic acquisition—and some players that are, presumably available. Who will be caught without a seat in this round of musical chairs? Time will tell.
Seth Lieberman is the CEO of SnapApp/Pangea Media and has more than 15 years of online marketing experience. With the SnapApp marketing platform, companies can easily create powerful promotions such as sweepstakes, quizzes and surveys and publish them across the web. SnapApp customers include Comcast, Martha Stewart and Harper Collins.
