Buying Buddy Media will help bring Salesforce.com's marketing cloud capabilities into focus and give it an opportunity to introduce clients to further social CRM capabilities through Facebook marketing.
On 4 June 2012, Salesforce.com announced that it has entered into an agreement to acquire the social media marketing platform Buddy Media for approximately $689 million in cash and salesforce.com equity. The transaction is expected to be completed during salesforce.com’s fiscal third quarter ending 31 October 2012.
This deal offers another example of a major vendor picking off one of the hottest properties in the social CRM market to bolster, improve or help launch its own social CRM offering. Buddy Media is usually at the top of Gartner client shortlists for Facebook marketing, and marketing remains the hottest area in social CRM. Companies like L'Oreal, Carnival and Mattel use Buddy Media to manage consistency of coupons and vouchers, competitions, content, and advertising management (through Buddy Media's February 2012 acquisition of Brighter Option) across multiple franchisee Facebook pages.
Facebook marketing, like social monitoring, is only one of the area in social marketing. But Facebook marketing is often the venue through which companies enter into a larger integrated social CRM strategy spanning sales, marketing and customer service. Gartner has predicted that by year-end 2012, more than 60% of Fortune 500 companies will actively engage customers with Facebook marketing, up from 20% in 4Q11 (see " Predicts 2012: Marketers Must Adapt, Differentiate and Innovate in Social CRM, SaaS and IMM") . Gartner also has predicted that by 2017, the chief marketing officer will spend more on IT than the CIO.
Buddy Media will help Salesforce.com extend its marketing cloud set of solutions, which until now has been mostly piecemeal and focused on business-to-business (B2B) capabilities. Salesforce.com is trying to break out of its sales-focused market with many acquisitions addressing the business-to-consumer (B2C) market, including:
Radian6, which has largely sold to marketing organizations, not sales.
Database.com/Heroku, which has customer-facing application development use cases.
Combining these and the Buddy Media capabilities with Salesforce.com's Chatter offering for marketing collaboration and workflow will enable Salesforce.com to further rationalize these investments and produce a more comprehensive B2B and B2C social marketing solution.
Other large enterprise application vendors like SAP, Microsoft and IBM that are looking to extend their digital marketing offerings with social capabilities are likely to feel pressure to respond to the Salesforce.com/BuddyMedia deal. This will likely result in further acquisitions in the multichannel campaign management space as well as in the still-growing and fragmented social CRM application space. Acquisitions in the latter market have centered around social monitoring/analytic tools and more recently, stand-alone marketing applications for Facebook. The still-growing roster of recent deals includes Salesforce.com/Radian6, Lithium/Scout Labs, Alterian/Intrepid and Techrigy, Attensity/Biz369, Kana/Overtone, Visible/Cymphony and, at this writing, Oracle’s planned acquisition of Virtue and Collective Intellect.
Salesforce.com customers, particularly those who use Radian6 for social monitoring and response: Expect to benefit from this extension for social marketing execution activities such as campaigns and advertising, largely in Facebook.
Current and prospective Buddy Media customers: Though you are not likely to be negatively affected by the deal, you should understand salesforce.com's future focus and the likelihood of its leveraging its social acquisitions beyond marketing into customer service and sales.
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"Predicts 2012: Marketers Must Adapt, Differentiate and Innovate in Social CRM, SaaS and IMM" — Our marketing predictions for 2012 include social CRM's further acceleration of software as a service and larger rationalization of integrated marketing management. By Adam Sarner
"Magic Quadrant for CRM Multichannel Campaign Management" — Innovation by traditional campaign management vendors will be needed in areas such as social and mobile marketing. There continues to be a growing demand from clients. By Adam Sarner