Salesforce.com and Oracle Buy Social Marketing Systems: Not the End of Marketing As We Know It

Salesforce.com yesterday announced agreement to buy social media publishing vendor Buddy Media for $689 million, thereby adding another big fluffy piece to its “marketing cloud”. Oracle followed suit this morning  with an acquisition of social media monitoring and semantic analysis vendor Collective Intellect. This followed Oracle’s $300 million acquisition last month  of social publishing system Vitrue. Just for symmetry, it’s worth pointing out that Salesforce.com acquired its own social monitoring system, Radian6, in March 2011.

What are marketers to make of all this activity, not to mention Marketo’s acquisition in April  of social marketing vendor Cloud Factory? Is this the death of marketing as we know it?

In a word, no. Social media are certainly a new way to hear what buyers are saying and send them marketing messages. But only the most besotted booster would argue that it will replace, rather than supplement, traditional methods. Every serious marketer already recognizes this, so I’m not even being boldly contrarian by saying it out loud.

The more interesting question is whether social media can be the foundation of a company’s marketing infrastructure. Both Marketo and Oracle already offer robust marketing platforms, so they presumably see social media as a supplement rather than a replacement. (It’s possible that Marketo hopes to reinvent itself as a social media specialist, which is surely more attractive to investors than marketing automation. The key positions taken by Cloud Factory executives might even support the theory.  But Marketo hasn’t hinted at this approach.)

Salesforce.com is another story.  They’ve always avoided traditional marketing automation, so perhaps they feel a complete “marketing cloud” can be built without it.

The gaps in this approach are obvious to anyone familiar with standard marketing automation systems: no Web behavior tracking, no multi-step nurture campaigns, no marketing resource management. But Salesforce.com could close those gaps by gradually extending its existing products. This might actually be easier than acquiring a separate marketing automation system and shoe horning it into other Salesforce.com components.

One thing I don’t see is social media systems themselves expanding to be marketing automation platforms. So far as I know, the data structures within the social media systems are simple contact profiles – little more than flat files – which can’t easily be extended to store and analyze detailed activity histories across multiple channels. Nor does a standard social media publishing or monitoring platform have the multi-step, branching campaign flows that are the heart of marketing automation. It’s probably easier to add social marketing functions to a marketing automation platform than the other way around. Indeed, many marketing automation vendors have already started.

So, back to the original question: what do these acquisitions mean? I’d say they’re good news for marketers, who will increasingly find social marketing functions available within core marketing platforms, ending the need to integrate separate products. The acquisitions are more problematic for marketing automation vendors, who now need to build, buy, or connect with social marketing systems to remain competitive. This will make it still harder for smaller vendors to compete, hastening the industry consolidation we all know is coming anyway. Nothing boldly contrarian about that prediction either, but it’s still worth bearing in mind.