Larry Ellison’s recent interview on AdAge, Hey CMO: Larry Ellison and Oracle Want Your Business, was the single largest article of its kind, in which Ellison stated that the software business needs the marketing tech revenue stream. Ellison already has an impressive business, garnering $38.3 billion a year from IT departments. However, the current growth rate of that business is 3% year-over-year. Comparatively, the growth rate of marketing tech is far more aggressive.
Outsell reports a 25% year-over-year growth on all digital marketing in the US, estimated to be a $181 billion industry in 2014. As a second source, IDC Research forecasts a 23% growth rate for digital marketing. With those growth rates it’s no wonder that Ellison is spending a few billion on his marketing tech acquisitions. As a subset, digital advertising makes up $50 billion of that $181 billion and is growing at similar rates, which makes the $375 million BlueKai acquisition seem like a great deal (based on market opportunity, not existing revenue).
Rightly so, Oracle understands how important the convergence of advertising and marketing tech will be, and the upcoming integration between Eloqua and BlueKai represents the strongest convergence between ad tech and marketing tech to date. According to Ellison, it’s valuable because, “We have all the service data, we have all the accounting data, we know what they bought, we know what they use. We have all the third-party data we collect from BlueKai.” While this is true, it glosses over BlueKai’s true unique asset: Its ability to transfer clients’ 1st party data from Service to Accounting to CRM to ad tech etc.
The potential in that integration is huge. Imagine allowing a high value customer segment to be actionable across the full Oracle stack. That’s not just a Marketing Cloud offering. Having all that raw data to correlate is Cloud Nirvana.
That said, the marketing tech landscape is vast and diverse. Oracle has a monumental opportunity and offering, but they certainly aren’t the only ones in the game. There’s a lot of debate about which marketing cloud is “better” or “going to win,” but the reality is far more nuanced thanks to all the moving pieces and marketing technology.
What it comes down to is that if you ask the end customer if they would standardize all their primary technology to one large vendor, they would likely say no. There are three reasons why:
The mostly likely outcome is that this arms race will not result in one winner. It will result in what I call the Agnostic Cloud, which not only allows buyers to choose best of breed technology in each silo but also provides a connective tissue between the silos regardless of which software titan is involved. For example, this would allow SFDC CRM to speak to Adobe Target and Oracle BlueKai.
Ultimately, the pie is big enough for all the companies mentioned above to thrive in their area of expertise. So when the software titans pitch their cloud, we should really be asking how many integration points they have. The cloud is not the endgame. It’s where everything should be connected.