Salesforce’s ad acquisitions could spell bad news for agencies

Salesforce CEO Marc
Benioff
Salesforce

• Salesforce’s recent acquisition of Datorama signals
  that the marketing cloud firm wants to take on agencies and
  consultancies, according to Bill Wise, CEO of Mediaocean,
  a software marketing platform.
•  The deal gives Salesforce direct insight into
  paid advertising, an area where it has historically lacked
  expertise.
• Agencies, consultancies and marketing clouds are all
  vying for more analytical and strategy work.

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Massive consultancies like Accenture Interactive and Deloitte
Digital have been aggressively moving into ad agencies’ turf.

But agencies should also watch out for the likes of Salesforce,
Oracle and Adobe.

That’s one school of thought when it comes to why Salesforce
acquired data aggregation tool Datorama last week
for a reported $800 million, according to Bill Wise, CEO of
Mediaocean, a software marketing platform.

Advertising agencies are under increasing pressure to keep up
with clients’ growing digital needs. Holding companies like

Interpublic Group and
Omnicom are rapidly building out data expertise to keep up
with
consultancies that promise to tie technology, data,
creativity and strategy together for giant marketers.

According to Wise, Salesforce’s acquisition of Datorama opens up
a new revenue stream that pits the company against those agency
and consultancy giants.

Salesforce is eyeing a bigger push into paid advertising

Datorama is aggregation tool that helps brands like Unilever
and PepsiCo. piece together and make sense of data from social
media, search and display advertising campaigns.

“When you look at ad-tech and all the data, there are hundreds of
companies in the space that provide unique value,” Wise said. “If
there’s a company that can suck all the data into a cohesive
business, that’s a kick ass business—if they can execute on it,
it’s a billion dollar business.”

According to Datorama,
the acquisition “will enhance enhance Salesforce’s
Marketing Cloud with expanded data integration, intelligence and
analytics, enabling marketers to unlock insights across
Salesforce data and the myriad of technologies used in today’s
marketing and consumer engagement ecosystem.”

Salesforce pointed Business Insider to Datorama’s blog post
for more information about its acquisition.

If that sounds a lot like what Salesforce already does, you’re
right. Both companies crunch reams of data and sell software
organizing the data into dashboards. Salesforce is plugged into
all sorts of marketers’ ‘customer retention management’ (CRM)
data sets like email lists, phone numbers and social platforms —
but has traditionally lacked roots into paid media. It’s not been
a tool for buying and selling ads.

That could change, says Wise.

“Datorama becomes the thread to pull it all together,” he said.
“That would put [Salesforce] up against companies like Oracle and
IBM.”

Giving ad agencies a run for their money

The ad agency business continues to grapple with a mounting list
of threats and challenges. Brands are increasingly asking for
their agencies to offer more services for less money and are
increasingly taking more of their marketing work in-house.

Meanwhile agencies are scrambling to assemble data-driven
practices and
offer streamlined services for clients.

So why would a marketing cloud company like Salesforce, Oracle or
Adobe want to get into the day-to-day business of managing ad
budgets?

“They’re already dealing with the largest Fortune 500 companies
and they’re adding more and more capabilities,” Wise said.

“People have talked a lot about the consultancies going after the
ad agencies — what people aren’t talking about is the marketing
clouds are building things that can go directly to brands and
compete.”

But don’t expect for Salesforce or IBM to start making or selling
TV commercials.

“They don’t want to compete in creative and all the labor
associated with media buying,” he said. “They want to build
automated systems.”

Plus, the duopoly of Facebook and Google
continue to suck up digital ad budgets, meaning that
marketing clouds are looking for new sources of revenue,
according to Wise.

“The traditional software companies have always stayed away from
it and now because of Google and Facebook, people are looking at
advertising as a meaningful form of revenue,” he said.