Understanding Adobe Real Time CDP

Adobe fully released its Real Time Customer Data Platform last November. Although they had briefed me on it before then, it was only this week that I finally caught up with them to discuss the final product. Since this is a topic of great interest – and confusion – it’s worth sharing what I learned.

Part of the confusion has to do with Adobe’s habit of reusing product names. It’s easy to confuse the Adobe Experience Platform, the core system for collecting customer data, assembling profiles, applying machine learning, and sharing the results with services and applications, with Adobe Experience Manager, the Web content management system that is one of those applications. Similarly, Experience Platform contains a Real Time Customer Profile, which is different from the Real Time CDP, one of the services that consumes data from Experience Platform. Got that?

It also doesn’t help that Adobe describes Experience Platform and Real-Time CDP as managing unknown and known profiles for activation across all channels, without clarifying that it’s only referring to first-party data. It turns out that Audience Manager, their Data Management Platform (an “application” in their terminology), holds third party profiles that aren’t shared with Experience Platform.   Adobe nevertheless uses the term “audience activation” to describe movement of first party profiles from Experience Platform into other applications, including into Audience Manager itself.

Somebody get these people a thesaurus.

But that’s just words. What really takes explaining is that Adobe has split what it considers the functions of a CDP between the Experience Platform and the Real Time CDP itself. Specifically, they describe a CDP as doing three things:

• ingesting customer data from all enterprise sources
• creating persistent customer profiles used for modeling and segmentation
• “activating” the profiles by moving them into applications

The first two functions, ingestion and profile management, are provided by Experience Platform. The third is provided by Real Time CDP.  

In other words, although Adobe’s combined stack does everything you expect from a CDP, its Real Time CDP only provides one of the three core functions. I’ll pause for a moment while you wrap your head around that.

Ready to continue? Great.  There’s nothing inherently wrong with Adobe’s approach, which is ultimately another matter of labels. In fact, I’ve recently seen several situations where the CDP is primarily an access tool that connects a master data store to marketing systems. As with Real Time CDP, the role is simply to take already-assembled data and put it in a format that’s suitable for marketers (or potentially other business users). So Adobe may be on to something.

Of course, any system that just provided data access would not be a CDP. Adobe’s combined solution does meet the CDP Institute definition of a CDP: packaged software that builds a unified, persistent customer database accessible to other systems. They might be a bit weak at the edges – I haven’t explored whether they can truly include all sources and all details within the Experience Platform database.  News that that Experience Platform excludes the third party profiles in Audience Manager does raise some questions about that. But, truth be told, quite a few CDPs have some practical limits in those areas.

You’re likely aware that some analysts and CDP vendors disagree with the CDP Institute definition, arguing a CDP should include analytics and experience orchestration. The general logic is that data is worthless unless it’s exploited, so the CDP should include features to use it. This is usually described as “activation”, a word I’m avoiding since Adobe is using it one way (to describe moving data from the CDP into application systems, with some segmentation capability but no message selection), while others often use it to include message selection, personalization, and orchestration. I personally don’t much care how anyone defines “activation” so long as they’re clear about what they mean when they use it. I happen to agree with Adobe that message selection, personalization, and orchestration aren’t essential CDP functions.  But that’s a debate for another day.

That said, it’s important to know that Real Time CDP isn’t the only Adobe service that can access the customer profiles in Experience Platform. Services including analysis, journey orchestration, and offer management provide alternative connections between Experience Platform and the applications. This is wrinkle that wouldn’t be present in a CDP that provided ingestion, profile creation, and access as part of one system. It adds complexity if one application might connect with several services. You might even worry that it recreates the crazy wall of point-to-point connections that causes people to want CDPs in the first place.  But that’s an overstatement if only four services are involved.

A more pressing concern would be how much data is actually loaded into Experience Platform. Some operational data will stay within the individual Adobe applications because no other system can use it.  Beyond that, my understanding is that Experience Platform has an extensible data model which would theoretically handle any information that users wanted it to ingest. But that could be wrong. Anyone thinking about buying the system should check that it can load the sources that matter in their situation. Remember that Experience Platform grew out of Adobe’s previous approach, which largely relied on storing identifiers within the central data store and looking up everything else in its source systems as needed. Adobe has clearly moved beyond that but some traces may linger.

Adobe's Magento Deal Makes Great Sense

Adobe yesterday announced its purchase of the Magento Commerce platform, a widely used ecommerce system, for a cool $1.68 billion.

That Adobe would purchase an ecommerce system was the least surprising thing about the deal: it fills an obvious gap in the Adobe product line compared with Oracle, Salesforce, IBM, and SAP, which all have their own ecommerce systems. Owler estimates that Magento had $125 million revenue, which would mean that Adobe paid 13x revenue. That seems crazy but Salesforce paid $2.8 billion for Demandware in 2016 on $240 million revenue, giving a similar ratio of I2x. It’s just what these things cost these days.

More surprising was the mismatch between the two business’s client bases. Magento sells primarily to small and mid-size firms, while Adobe’s Experience Cloud products are sold mostly to enterprises. The obvious question is whether Adobe will try to use Magento as an entry point to sell Experience Cloud products to smaller firms, or use Experience Cloud as an entry point for selling Magento to big enterprises. The easy answer is “both”, and that’s more or less what the company said when asked that question on an analyst conference call about the deal. But my impression was they were more focused on adding Experience Cloud capabilities like Sensei AI to Magento. References during the call to cloud-based micro-services also suggested they saw the main opportunity as enhancing the product Magento offers in the mid-market, not selling Magento to big enterprises.

This could be very clever. Selling enterprise software packages to mid-market firms doesn’t work very well, but embedding enterprise-class micro-services would let Adobe add advanced features without asking mid-market IT managers or business users to do more than they can handle. It would also nicely skirt the pricing problems that come from trying to make enterprise software affordable to smaller firms without cutting prices to large enterprises.

The approach is also consistent with the Adobe Experience Cloud Profile announced last month, which uses an open source customer data model co-developed with Microsoft and is hosted on Microsoft Azure. This is also at least potentially suitable for mid-size firms, a market where Microsoft’s CRM products are already very strong. So we now see two recent moves by Adobe that could be interpreted as aimed at penetrating the mid-market with its Experience Cloud systems. Given the crowded, competitive, and ultimately limited nature of the enterprise market, moving downstream makes a lot of sense. Historically, it’s been very hard to do that with enterprise software but it looks like Adobe has found a viable path.

(As an aside: it would make total sense for Microsoft to buy Adobe, a possibility that has been mentioned for years. There’s no reason to think Adobe wants to be bought and the stock already sells at over 16x revenue compared with 8x revenue for Microsoft. So it would be hard to make the numbers work. But still.)

Perhaps the most intriguing aspect of the deal is that Magento is based on open source.. This isn’t something that most enterprise software vendors like to buy, since an open source option keeps prices down. Like other open-source-based commercial products, Magento includes proprietary enhancements to justify paying for something that would otherwise be free. Apparently Adobe feels these offer enough protection, especially among mid-size and larger clients, for Magento to be a viable business. And, Adobe’s comments show it’s very impressed at the size of the open source community supporting Magento, which it pegs at more than 300,000 developers. That does seem like a large work force to get for more-or-less free. Again, there’s a parallel with the open source data model underlying Experience Cloud Profile. So Adobe seems to have embraced open source much more than its main competitors.

Finally, I was struck by Adobe’s comments in a couple of places that it sees Magento as the key to making “every experience shoppable”, an extension of its promise to make every experience personal. The notion is that commerce will be embedded everywhere, not just isolated in retail stores or Web sites. I’m not sure I really want to live in a world where everything I see is for sale, but that does seem to be where we’re headed. So, at least from a business viewpoint, let’s give Adobe credit for leading the way.

Adobe Marketing Cloud Marches Towards Martech and Adtech Integration

At pretty much the same moment I was publishing my post on the merger of martech and adtech into madtech, Adobe was announcing its latest marketing products, including a press release on uniting “Data-driven Marketing and Ad Tech” . Naturally, this caught my attention.

As you might expect, Adobe’s reality is considerably more complicated than the simplicity of the “madtech” vision. Like the other enterprise software vendors who offer broad martech and adtech solutions, Adobe has built its marketing cloud by buying specialist systems. And, again like its competitors, it has only integrated them to a limited degree.

In Adobe’s case, the various products remain as distinct “solutions” served by a common set of “core services”. The current set of eight solutions includes Analytics (Web, video and mobile analytics, née Omniture Site Catalyst), Social (social publishing, based on Context Optional), Target (Web optimization and personalization, derived from Omniture Test & Target/Offermatica), Experience Manager (Web content management , originally Day Software), Media Optimizer (based on Efficient Frontier and Demdex), Campaign (formerly Neolane); Primetime (addressable TV) and Audience Manager (data management platform, formerly Demdex). Of course, the products have all been modified to some degree since their acquisitions.  But each still has its own data store, business logic and execution components.

Rather than replacing these components with common systems, Adobe has enabled a certain amount of sharing through its core services. In the case of customer data, the “profiles and audiences” core service maintains a common ID that is mapped to identities in the different solutions. This means that even though most customer data stays in the solutions’ own databases, the core service can use that data to build audience segments. There's also an option to load some attributes into the core services profiles themselves.   Audiences, which are lists of IDs, can either be defined in solutions and sent to the core service or built within the core service itself.  Either way, they can then be shared with other solutions. Data from external systems can also be imported to the core service in batch processes and used in segmentation.

Adobe says that data stored in the solutions can be accessed in real time.  I'm skeptical about performance of such queries, but the ability to store key attributes within the core service profiles should give marketers direct access when necessary.  There’s certainly a case to be made that digital volumes are so huge and change so quickly that it would be impractical to copy data from the solutions to a central database. Where external data is concerned, marketers will increasingly have no choice but to rely on distributed data access.

But here’s the catch: Adobe's approach only works if all your systems are actually tied into the central system. Adobe recognizes this and is working on it, but so far has only integrated five of its solutions with the profiles and audiences core service. These are Analytics, Target, Campaign, Audience Manager, and Media Optimizer. The rest will be added over time.

The second big limit to Adobe’s current approach is sharing with external systems. Only Adobe solutions can access other solutions’ data through core services. This makes it difficult to substitute an external product if you already have one in place for a particular function or don’t like Adobe’s solution.

Adobe does connect with non-Adobe systems through Audience Manager, its data management platform, which can exchange data with a company’s own CRM or operational databases, business partners, and external data pools and ad networks. Audience Manager can hold vast amounts of detailed data, but does not store personally identifiable information such as names or email addresses. Audience Manager can also copy Web behavior information directly from Analytics, the one instance (so far as I know) where detailed data is shared between Adobe solutions.


So far, I’ve only been discussing data integration. The various Adobe components also have their own tools for segmentation, decision logic, content creation, and other functions. These are also slowly converging across products: for example, there is an “assets” core service that provides a central asset library whose components can be uploaded to at least some of the individual solutions. The segmentation interface is also being standardized product-by-product. There’s no point in trying to list exactly what is and isn't standard today, since this will only change over time.

The lesson here is that suites are not simple. Marketers considering Adobe or any other Marketing Cloud need to examine the details of the architectures, integration, and consistency among the components they plan on using. The differences can be subtle and the vendors often don’t explain them very clearly. But it pays to dig in: the answers have a big impact on whether the system you choose will deliver the results you expect.

Adobe Buys B2C Marketing Automation Leader Neolane: One Gap Filled, But Where's CRM?

Adobe today announced plans to acquire Neolane, the largest remaining independent B2C marketing automation vendor (excluding email-focused providers like Responsys and Silverpop). Price was $600 million, which is roughly in line with the 8x revenue paid for ExactTarget and Eloqua recently.  (Neolane announced $58 million revenue in 2012 and has been growing around 40% per year, which would yield about $80 million 2013 revenue.)

The deal is not particularly surprising. Adobe was on everyone’s list of potential buyers, and Neolane was ripe for acquisition or an initial public offering. It reinforces suspicions that Adobe was the mystery bidder for ExactTarget mentioned last month by Salesforce.com.  Indeed, my take on the ExactTarget deal explicitly mentioned an Adobe/Neolane possibility. That frankly didn’t take much insight, but I’ll brag a bit more about having pegged Adobe as needing to add marketing automation as far back as this post in 2009 and again in 2010.

Neolane is more of a mid-tier solution than an enterprise product, which may be a slight mismatch with Adobe.  I’d say that reflects a lack of enterprise systems available for Adobe to purchase, more than any particular desire to target the mid-market.

Predictable or not, this deal does fill a gaping hole in Adobe’s marketing cloud. It still doesn’t put Adobe on equal footing with Oracle, Salesforce, SAP or Microsoft, since they all have major CRM platforms which Adobe does not. Adobe obviously has a leadership position in content creation, although I’ve never felt that does much good in selling customer management systems. (To be more precise, content creation COULD give Adobe an advantage if it very tightly coupled auto-personalized marketing treatments with content creation, but that doesn't seem to be happening.)

More important, Adobe also has an unmatched position in Web analytics, Web advertising, and Web content management. In fact, adding Neolane gives it a profile very similar to IBM, which also has strong Web and marketing automation products but not CRM (and which also shares Adobe’s digital-is-everything mono-vision).

Come to think of it, the contrast still comes down to the dueling strategies I described in 2011: Web-plus-marketing automation (Adobe and IBM) vs. CRM-plus-marketing automation (Oracle, Salesforce, SAP, Microsoft). Everything will eventually converge Web-plus-CRM, with marketing automation baked in so deep you can't see it.  But that’s still some way off, except arguably for Oracle, which has all the pieces but hasn’t fully integrated them. In the meantime, we’ll see which approach is more popular – and what becomes of the stand-alone marketing automation vendors who are caught in between.

Dueling Strategies: Adobe and Oracle Take Opposite Paths to Customer Experience Management

Adobe on Monday announced a new “Digital Enterprise Platform for Customer Experience Management”. The platform fills the center of Adobe’s three-part corporate mission to “make, manage, and measure” digital content and experiences. The other two pieces were already in place: “make” is Adobe’s original content creation business, while “measure” is Omniture Web analytics.

The strategic significance of the announcement seems more important than the actual product enhancements. These include improved integration of the company’s Web content management system (formerly Day C5) with Scene 7 dynamic content and Omniture Survey and Test & Target; features for salespeople and customer service agents to customize standard documents in a controlled fashion; integrated content reviews and workflows; and a platform to build and share content in multiple formats. The announcement also included beta versions of tools for social engagement, online enrollment, and agent workspaces. Good stuff but nothing earth-shaking.

Adobe's strategy itself is a curious mixture of broad ambition and narrow execution. Adobe describes its scope as nothing less than optimizing customer experience and marketing spend across the entire customer journey, from first learning about a company through validation, purchase decision, product use, and commitment. But Adobe also explicitly limits its scope to digital channels, and implicitly limits its concern to content creation, delivery, and evaluation. In fact, the only customer-facing technology Adobe offers is Web site management. Otherwise, Adobe expects even digital content such as emails to be delivered by third party products. Offline interactions, such as telephone and retail, are definitely out of the picture. Nor does Adobe manage the underlying customer database, marketing campaigns, or deep analytics. The only exceptions are customer profiles, segmentation, and content to support Web personalization.

The company argues the tools it does provide, combined with the cross-channel content sharing, are enough to build a unified digital customer experience. I’m not so sure that’s correct, and even if it is, I question whether customers will be happy to have only their digital experiences be unified. Either way, marketers will certainly need other vendors' products to manage their full customer relationships.

On the other hand, I do agree with Adobe’s argument that its approach lets clients create a unified digital experience without replacing their entire enterprise infrastructure. This is certainly an advantage.

Adobe’s announcement was released on Monday, but I didn’t get around to writing about it until today. The delay is unfortunate, since the attention of the enterprise marketing automation world has already shifted to yesterday’s announcement that Oracle is acquiring Web “experience” management vendor FatWire Software. I’m not sure I accept “Web experience management” as a legitimate software category, but FatWire does combine conventional Web content management with unusually strong targeting, personalization, content analytics, digital asset management, mobile, and social features. Perhaps that justifies calling it more than plain old Web content management.

The strategic purpose of the FatWire acquisition is self-evident: to fill a gap in Oracle’s customer-facing technologies, which already had ATG ecommerce and general Enterprise Content Management for Web sites, as well as Oracle CRM and Oracle Loyalty. (Oracle isn’t very creative with product names.) FatWire will allow much richer, more personalized and targeted Web site interactions. It also provides some Web analytics, although I still think Oracle has a gap to fill there.

The Oracle and Adobe announcements do highlight a clear strategic contrast. Adobe has largely limited itself to digital interactions, and has largely avoided customer-facing systems except for Web sites. Oracle has embraced the full range of online and offline interactions, including customer-facing systems in every channel. Oracle has also hedged its bets a bit with Real Time Decisions, which can coordinate customer treatments delivered by non-Oracle systems and powered by non-Oracle data sources. Of the other enterprise-level marketing automation vendors, IBM, SAS and Teradata share Adobe's focus on digital channels and its avoidance of customer-facing systems, although they resemble Oracle in offering deep analytics and customer database management.

Based on my fundamental rule that “suites win”, I think Oracle’s strategy is more likely to succeed. But only time will tell.

Day Software Acquisition Adds Some Marketing Features to Adobe, But Gaps Remain

Summary: Adobe added Web content management, digital asset management and social media features to its arsenal when it purchased Day Software last month. But it still lacks key pieces of a complete marketing solution.

Last month, Adobe announced their $240 million acquisition of Web content management vendor Day Software. Adobe was already a major force in Web development through its Dreamweaver, Flash and ColdFusion products, not to mention Omniture for Web analytics. But Day fills out its line by adding enterprise-class content management, digital asset management and social (blog, Wiki, etc.) publishing. In fact, the fit is so obvious that it doesn’t seem to have generated much comment, at least among the marketing gurus I read.

But the significance to marketers may be greater than they think. Back in February, Day released its 5.3 version, which specifically aimed at letting marketers manage their Web promotions without help from technical specialists. Of course, this is a goal shared by so many vendors that it verges on cliché. In particular, it’s also one of the main benefits offered by the landing page, Web form and microsite features of marketing automation systems.

Still, as I’ve argued many times, it ultimately makes more sense for marketers to build their pages in the company’s core content management system than in separate marketing automation tools. This can only happen if the content management system provides the features that marketers need to do their jobs.

Day’s 5.3 release attempted to do this by adding targeting capabilities, including segmentation and segment-driven personalization. Segments can be based on anonymous visitor characteristics such as referring site, search keywords and geolocation; on history captured in a registered visitor’s profile; and on attributes of the pages viewed. Profiles can also be enhanced with non-Web data, such as purchase history.

As you might expect, Day does a particularly good job of tracking visitor activities within the Web site. The system uses Javascript on each page to track cursor movements and capture the details of what each visitors has looked at within the page. It can also read the visitor’s browser cache to check for visits to specified external sites, a technique that’s legal although many privacy advocates think it shouldn’t be. The system also supports multi-variate content testing, which can be related to customer segments or operate independently. Tests are judged on click-throughs, which are captured within the system.

Are these features really enough to replace a dedicated marketing automation system? Surely not: marketers still need to maintain a marketing database, send emails, respond to trigger events, score leads, and integrate with CRM. In fact, Day itself expects clients to integrate with marketing automation products for campaign execution. The system does have connectors that let marketers create their emails and Web pages within Day and use an external system to deliver them.

Day’s Chief Marketing Officer Kevin Cochrane told me yesterday that he sees marketing automation as separate from Day’s business of building “customer facing solutions”. But companies that want to integrate all their online (and ultimately offine) marketing will want to combine both sets of features. Although Adobe already owns many tools used in marketing departments, it lacks the campaign management features at the heart of marketing automation. I expect that Adobe and other major Web content management leaders will eventually acquire email and/or marketing automation vendors to fill the remaining gaps.

Adobe Buys Omniture: Good for Marketers, Bad for Marketing Automation Vendors

Summary: Adobe's agreement to purchase Omniture illustrates the on-going convergence of Web content management and Web analytics systems. This puts pressure on marketing automation vendors, who also want to provide Web analytics and content management, and who are already being pressed by customer relationship management (CRM) vendors. That's a pretty unpleasant position.

Adobe's announcement that it will purchase Omniture for $1.8 billion makes perfect sense. As I discussed in July, marketers have a lot to gain from tight integration between a Web content management system (CMS) like Adobe's Dreamweaver and Web analytics and optimization like Omniture.

Let's take it as a given, then, that major Web content management systems will soon include integrated analytics. This sets up a new clash between marketing automation vendors and Web CMS vendors. One of Omniture's major selling points before the merger was its ability to combine information across all online marketing channels, and I think they were working towards adding offline channels as well. Although short-term priorities will probably shift now towards Adobe integration, I doubt their long-term ambitions in that direction will evaporate.

And even if the CMS vendors do restrict their focus to online, they will still be competing with Web CMS and analytics solutions from marketing automation vendors who realize that online is too big a sector for them to ignore. Even though both sets of vendors will need to provide some degree of openness so their clients can move data from one platform to another, both will really want to sell their clients the entire execution and analysis stack, and will tightly integrate them to encourage this.

I think I've made this point before, but I'll repeat it again: the marketing automation vendors are really being squeezed between the Web vendors on one side, and the CRM vendors on the other. This is a very unpleasant position, since both CMS and CRM vendors are much larger than the marketing automation specialists. It's hard to see how they can survive as anything but niche products in the not-too-distance future.

This position probably puts me at odds with industry analysts who see great opportunities for growth in the marketing automation space. (I'd point to specific examples but can't find any just this minute.) The general argument seems to be that low adoption rates mean there's plenty of unmet need that will eventually lead to sales. I agree that adoption is low -- but there's no guarantee that the marketing automation specialists will be the ones who fill the gap. Improved CRM or CMS offerings might actually meet marketers needs. And if since nearly everyone has or needs a CRM and CMS system, it will actually be easier for companies to use the expanded features in their existing systems than to buy a separate marketing automation product.

If anybody has a good counter argument, I'd be happy to hear it.

Two further thoughts:

- When I asked one of the marketing automation vendors recently whether he considered CMS vendors as competitors, he said he didn't because CMS vendors still sell primarily to IT, while marketing automation is purchased by marketing. Assuming this is true, then Omniture also helps Adobe by giving access to marketing departments.

- The acquisition may make marketing automation vendors more attractive acquisition candidates for CMS vendors wishing to beef up their marketing capabilities. Autonomy (Interwoven), Open Text, and EMC (Documentum) could all swallow a Unica, Aprimo or Alterian without stopping to chew.