In The New Wave Of Social Marketing M&A, Facebook PMDs Call The Shots

SecondSocialThe participants in a new race to snap up social marketing technology companies aren’t the usual enterprise software suspects. In the latest wave of consolidation, Facebook Strategic Preferred Marketing Developers (PMD) are buying each other.

Search and social software company Kenshoo this week moved in on Adquant, a social ads platform specializing in mobile apps and games.

Similarly, video ad server Mixpo purchased rich media platform and Facebook PMD ShopIgniter to pave its way into paid social. Social media management platform Sprinklr snapped up Dachis Group and TBG Digital and HootSuite grabbed BrightKit to do the same.

“If you look at the simple fact that more media buying is getting disintermediated and going in house, more social planning and execution is going in house, too,” commented Julie Hopkins, research director at Gartner. “What’s driving it is the increased movement by social providers into the paid media space. You require the paid amplification to get the reach you used to get organically.”

To the casual observer, it may seem like some of the smaller PMDs are waving the white flag and understandably so – social is but one rung on a ladder in a wider portfolio of data management and analytics considering enterprise competitors like Adobe Marketing Cloud.

Kenshoo, which routinely earned accolades on Forrester’s social ads platform Wave, seemed a logical landing point for Adquant because it augmented social campaigns with other channels like search.

According to Joe McCormack, Adquant’s CEO, the company decided two years ago to break from the agency model and put a pure SaaS product into market. Matomy Media Group one year ago absorbed Adquant’s social media agency business.

“Turning into a technology company was obviously a completely a different mindset,” he said. “It’s not just a single channel play. It’s not just about social. It’s about the wider concept of SaaS, display, mobile all coming together. We understood … it was time to scale up on the sales and marketing portion, and access more channels.”

In many ways, Salesforce.com’s $689 million Buddy Media purchase started the first domino effect of social marketing acquisitions. But Buddy had notably been hemorrhaging money, which resulted in a number of layoffs at sister social listening company Radian6. Salesforce.com has, since, rolled Buddy's previous social ad management buy Brighter Option into a suite it dubs "Social.com," and more recently rolled out a Social Studio for content marketing.

There are a couple of differences between the early stage of enterprise social acquisitions and the new deal drive by Facebook PMDs.

“Social developer skills are in demand,” said Leslie Ament, SVP of research and principal analyst at Hypatia Research Group. “These acquisitions are as much about gaining talent as increasing customer reach. Companies…(are) seeking to simplify social business processes as well as resources dedicated to social by relying on one solution or module for greater visibility, vis–à–vis their marketing platform.”

So is the era of the standalone social point solution over? Sivan Metzger, SVP of business development for Kenshoo, said the notion of “paid, earned and owned coming together” was table stakes – in 2012.

Social marketing platforms are in a race to incorporate display, search, etc., and the flurry of deals of late point to that. To help brace for that change, Kenshoo’s also courting agencies, recently unveiling a strategic deal with iCrossing to tap one another’s audience-targeting tools.

“We’re really trying to provide value around our core assets, which are search and social and the triangulation between the two [and these days] we’re partnering with mobile and attribution companies [to address consolidation] and [challenges] facing the CMO,” Metzger said.

Ray Wang, principal analyst and chairman of Constellation Research, said the three key motivators for social deals moving forward are: feature sets and IP, where it simply makes more sense to buy a patent or fill a hole in a feature set ; talent, for an automatic injection in sales and marketing; and new customer acquisition.

 

 

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