- Forrester Councils
- Councils Overview
- log in
Posted by Melissa Parrish on June 4, 2012
As an analyst, I make a lot of predictions about various technology offerings. Over the last year those predictions have increasingly focused on the Social Media Management Platform (SMMP) space, specifically about how I expected consolidation as demand increased from marketers, and big tech players realized the necessity and potential of these platforms. It seemed pretty obvious to me that this space would continue to heat up, especially as I fielded more and more phone calls every week from marketers vetting the players in this space. So in answer to the most common question I’ve been getting since last week: no, I’m not at all surprised that a company like Salesforce would buy Buddy Media.
First of all, brands are maturing in social media and they’re realizing they need something like a true social software stack to manage it all, especially as social media spreads across the enterprise and grows beyond the boundaries of just the marketing department. To truly manage their growing social presences, they need ways to get more employees involved while still enforcing their social media policies -- and that means a software stack that offers all of the benefits of an SMMP (robust editorial workflow management, moderation tools, easy page and application creation, influencer identification, content archiving, and analytics) as well as deep social intelligence and CRM capabilities. No single SMMP offers deep listening and non-social CRM today, and no listening platform or non-social CRM offering currently delivers what an SMMP can. Acquisitions were inevitable.
Second, when I talk to marketers about their requirements for these platforms, one of the things that comes up high on everybody’s list is integration with other enterprise systems. The two systems that get mentioned the most? Non-social analytics (usually Adobe/Omniture and Google Analytics) and non-social CRM (usually Salesforce, sometimes Oracle and SAP.) Well, Adobe already jumped into the game when they bought Efficient Frontier who had previously acquired Context Optional. And of course Oracle made their play just a couple of weeks ago with their acquisition of Vitrue. Many of the SMMPs already integrated with Salesforce anyway thanks to client demand, so they were the logical choice for making a high-profile acquisition.
That leaves a couple of big players who are obvious choices to make a move in this space. Google could use an SMMP to monetize social in a way that has nothing immediately to do with search. SAP could jump in for a lot of reasons, perhaps the most important of which is simply to not be the last one to do it.
And how about Facebook? News about advertisers feeling like their Facebook spend wasn’t getting them much was met with cries of, “You’re not doing it right!” Should marketers focus more on engagement rather than traditional display ad metrics on Facebook? Maybe, but that’s a problem for Facebook because they’re not monetizing those engagement presences — the Facebook page. Adding or acquiring SMMP capabilities would give them a way to monetize those presences without going back to charging for them directly.
Of course there are other companies who we could see make acquisitions here too. Maybe tech behemoths like IBM and Microsoft will add SMMPs to their comprehensive enterprise software offerings. Maybe MSPs like Acxiom, and messaging vendors like Responsys will follow Exact Target’s early lead and add these tools their arsenals. But for whoever makes the next acquisition, a bit of advice:
Though there are hundreds of millions of dollars being exchanged in these acquisitions, the actual revenue being earned by SMMP vendors is a drop in the bucket compared to overall revenue in the enterprise technology sector. These acquisitions are not about adding immediate significant revenue. They’re about adding technology offerings.
So far, the two highest-profile acquisitions have focused on the two highest-profile SMMPs: Vitrue and Buddy Media. And while there are just a few independent SMMPs left with decent name recognition (Wildfire, Hearsay Social, HootSuite), there are probably 2 dozen companies out there with growing platforms and revenues. Companies who are looking to acquire these capabilities must be evaluating the robustness and quality of the SMMP vendor’s technology and services rather than the relative size of the company. There may be a smaller vendor among these dozens whose technology is just as solid and whose vision and culture is better aligned with the acquiring company.
So just to be clear: I don’t expect acquisitions to slow down just because Buddy Media has been bought. In fact, I expect the entire space to accelerate — both acquisitions and the adoption of these platforms by companies looking to grow their social presences.Look for more partnerships that bring together enterprise listening platforms with SMMPs. Look for SMMPs to support more and more social networks beyond just Facebook, Twitter and LinkedIn. And most importantly, look for both tech companies and brands to continue to take social more and more seriously as it proliferates across the enterprise.