Adobe Buys Marketo to Boost B2B Solutions

With the acquisition, "Adobe is sending out a $5 billion signal that it is not just an also-ran" in the marketing technology space.
Matthew HellerSeptember 21, 2018

In its largest acquisition ever, Adobe has agreed to acquire software company Marketo for $4.75 billion, boosting its ability to compete for enterprise customers with marketing automation rivals such as Salesforce.

Marketo, which is currently owned by Vista Equity Partners, specializes in providing management solutions for B2B marketers. Adobe’s marketing platform already includes such products as Photoshop, Illustrator, Lightroom, and Dreamweaver.

The acquisition of Marketo comes just months after Adobe’s $1.7 billion purchase of e-commerce specialist Magento. Both additions will soon be integrated to the Adobe Experience Cloud.

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“Adding Marketo’s engagement platform to Adobe Experience Cloud will enable Adobe to offer an unrivaled set of solutions for delivering transformative customer experiences across industries and companies of all sizes,” the company said in a news release.

Vista took Marketo private two years ago in a $1.8 billion deal. Other companies in the marketing automation sector include Oracle and SAP but analysts believe Adobe’s move is aimed in particular at competing with Salesforce, widely considered the market leader in business-to-business and sales marketing services.

“Adobe is sending out a $5 billion signal that it is not just an also-ran,” John Koetsier, a vice president at marketing intelligence platform Singular, told Ad Age. “Adobe is here to compete for leadership in the marketing technology space.”

According to Ad Age, Adobe and Salesforce have been competing “to offer marketers one-stop, cloud-based services that make sense of voluminous data and automatically take action whenever consumers or clients engage though channels such as search, social media, email and video.”

Adobe reported revenues of $2.3 billion for the third quarter of 2018, with its Experience Cloud business contributing $614 million. Jason Holmes, chief operating officer at Showpad and the former COO at Marketo, noted that Adobe had been primarily focused on business-to-customer solutions.

The Marketo deal “entrenches Adobe as a B2B and B2C marketing platform, and squarely pits them against Salesforce and Oracle and well ahead of SAP,” he told Ad Age.

Adobe executive Brad Rencher said the deal “puts Adobe Experience Cloud at the heart of all marketing.”