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Adobe forks out $4.75bn for Marketo in massive marketing mashup move

Deal puts pressure on competitors

Adobe has forked out $4.75bn for cloudy software-as-a-service biz Marketo, in one of the largest marketing tech buys to date.

The transaction, which was first mooted last week, was confirmed today and puts Adobe in a position to compete for enterprise customers in the marketing automation playing field.

The near-$5bn price tag is much higher than the $1.8bn transaction paid when Vista Equity Partners Management LLC took Marketo private two years ago. The Californian-based Marketo, founded in 2006, went public in 2013.

The SaaS business, which has some 5,000 customers, will be sucked up into Adobe Experience Cloud in the Digital Experience section of the firm, which turned over $614m in Adobe's recent Q3.

Marketo’s tech centres on automating lead management and account-based marketing and is squarely aimed at line of business users.

In a blogpost, Marketo CEO Steve Lucas – who will continue to lead the firm inside Adobe – put on the rose tinted specs.

“Marketo’s exceptional lead management, account-level data, and multi-channel marketing capabilities will combine with Adobe’s rich behavioural dataset to create the most advanced, unified view of the customer at both an individual and account level.

“The result will be an unprecedented level of marketing engagement, automation, and attribution power, all with a goal of delivering end-to-end, exceptional experiences for our customers, where and when they want them.”

The buy comes months after Adobe bought open commerce platform company Magento, and will put pressure on competing marketing cloud tech firms like Salesforce or Oracle, as customers consider buying marketing software from a single vendor, and the space consolidates around specific partnerships.

"This marketing automation acquisition will put it into a better position to complete with SAP and Oracle on the customer experience front," said TechMarketView research director Angela Eager.

"More significantly, it reinforces the growing axes around Adobe-plus-Microsoft which supports integration between Adobe Experience Management and Microsoft Dynamics 365, and Salesforce-plus-Google which rests on integration between Salesforce and Google G Suite and Google Analytics."

Marc Benioff’s firm was once a close partner of Marketo, with Salesforce customers opting to use the other firm’s marketing automation platform – but this relationship was effectively scuppered when the CRM giant bought automation competitor ExactTarget in 2013.

According to Business Insider, Salesforce had been sniffing around Marketo but decided against it – while SAP was reported to have put in too low an offer.

The acquisition is expected to close in Q4 of 2018. ®

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