Wednesday, March 19, 2014

IgnitionOne Buys Knotice, Prompting Many Deep Thoughts

Digital marketing technology vendor IgnitionOne today announced its acquisition of email and audience management vendor Knotice. Both vendors are listed in Raab Associates’ Guide to Customer Data Platforms in the “audience management” category. But the extract below from the CDP Guide also shows how they complement each other: Knotice does “fuzzy” matching of names and addresses and sends email, while IgnitionOne buys online media and selects best customer treatments. In other words, Knotice gives IgnitionOne a much stronger ability to incorporate non-Web channels and known individuals in its marketing and databases.

The only gaps shared by both systems are B2B clients and Web scanning for customer data, which is also mostly a B2B application. This further highlights the shift in industry acquisitions to B2C marketing technologies in general (ExactTarget/Salesforce, Responsys/Oracle, Neoalane/Adobe) and in audience data management platforms (BlueKai/Oracle, Aggregate Knowledge/Neustar) in particular.

These deals also reflect some other trends beyond acquisitions. One is the expansion of email vendors into broader multi-channel marketing. ExactTarget, Responsys, and Neolane all did this before they were acquired. StrongView (formerly StrongMail) and SmartFocus (formerly eMailVision) are making similar moves. SiteCore and SDL are moving in similar directions from a base in Web content management.

The second trend is a move by data-owning companies towards execution systems. Neustar, whose core business is linking people to phone numbers, is one example: it recently introduced “PlatformOne”, which it describes as a “centralized marketing solution” that gives marketers “a complete, real-time portrait of their customers and prospects based on accurate data, enabling a personalized dialogue across all marketing channels.”

V12 Group, another major data compiler, offers “Launchpad”, which “allows organizations of all sizes to build new audiences and manage existing customers using multiple channels and tools on a single platform.” Infogroup (which for some reason refuses to speak with me directly) in January announced “Yes Lifecycle Marketing” combining “email and digital marketing services, data, database technology, and agency services”. Venerable Acxiom has repositioned itself around the “Audience Operating System”, an “open platform” where “marketers, agencies and publishers can plan, buy and optimize audiences across channels, devices and applications, with precision and scale.”

Of the two trends, I think the second is more important. It’s not because execution systems are hard to find. Quite the opposite: they are essentially commodities, which is what makes it possible for so many data vendors to offer them. The significance is that consolidated customer databases are still very difficult to build, which is why there’s a Guide to Customer Data Platforms in the first place. A consolidated customer database is inherently part of the data vendors’ offering of execution systems, since the execution systems need to access a company’s own data to be useful.  This means that data vendors entering the execution market will compete to offer consolidated customer databases to marketers, hopefully at a much lower cost than the custom-built databases those vendors have traditionally provided. That these databases will combine digital advertising audiences with personally-identifiable names and addresses is pretty much a given, subject of course to privacy constraints. Many marketers will find hiring one of these vendors is an appealing alternative to building their consolidated customer database in-house.

Of course, today's real giants in compiling customer data are the companies like Google, Facebook, and Amazon.  They already sell advertising and do some customer data ingestion, and their resources dwarf the data vendors listed above. Don’t be surprised if any of them start building customer databases and offering execution systems. The only barrier is they may not think it’s a big enough business to be worth the trouble.

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