Salesforce’s marketing connection

Contact: Scott Denne

Salesforce moved into marketing with its boldest acquisitions, but they’ve generated only modest returns. Despite above-average market success, its Marketing Cloud is the smallest cloud within the company and the second-slowest in growth. As it kicks off its annual marketing conference, the environment is ripe for Salesforce to build on its existing capabilities, as digital marketers are ready to spend.

Salesforce’s Marketing Cloud posted $654m in revenue last year, up 29%. That kind of growth in marketing software would be the envy of several other enterprise software vendors – particularly HP Inc and Teradata, both of which recently fobbed off their low-growth marketing assets. Yet marketing feels malnourished at Salesforce. The CRM giant paid $2.5bn, $689m and $326m to pick up marketing automation provider ExactTarget and social marketing specialists Buddy Media and Radian6, respectively. Today, those businesses are the core of Salesforce’s Marketing Cloud – which accounts for just 10% of total revenue and is the second-slowest cloud in growth behind the legacy, and much larger, Sales Cloud. Compare that with its customer-service software business, which jumped 38% to $1.8bn and has its origins in the $32m acquisition of InStranet in 2008.

As Salesforce kicks off its annual Marketing Cloud conference, Connections, there’s much it could do to bolster this unit. For one, there’s still work to be done in integrating Marketing Cloud into a shared UI across other Salesforce offerings. The company has long pitched the vision of a single view of the customer, although today less than one-third of its clients purchase Salesforce products across multiple categories.

Starting with email marketing, Salesforce has added multiple marketing applications, unified around its Journey Builder offering for designing rules-based campaigns. And although Salesforce’s marketing team hasn’t gone shopping in three years, its Marketing Cloud could benefit greatly from the inclusion of additional identity data to better track online and offline customer interactions. Reaching for LiveIntent would bring these capabilities to Salesforce, as well as enhance its email service with some additional personalization capabilities. Alternatively, it could look to buy an audience management platform vendor such as Lotame or Krux. Both have developed cross-device matching as part of their products. In fact, Salesforce recently expanded its partnership with the latter vendor to enable Marketing Cloud customers to match their data with that from third-party providers.

The environment is ripe for Salesforce to build on its existing capabilities. Although much of the basic functionality of digital marketing – website analytics and email marketing – is maturing, the overall space has plenty of momentum for Salesforce to capitalize on. According to a recent survey by ChangeWave Research, a service of 451 Research, 17% of marketers plan to increase spending on digital marketing in the coming quarter. That’s higher than at any point in the previous two years and a larger anticipated increase in spending than any other category in the January survey.

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