Salesforce.com's acquisition of Buddy Media highlights how social networking is becoming critical to marketing, but also indicates that the technology buying power is shifting away from the chief information officer to the chief marketing officer.
JMP Securities analyst Patrick Walravens said that social marketing is a "must have" for enterprise software players. More deals are likely as Involver, Hearsay Social and Wildfire are probable takeovers. The goal will be to take social, corporate data, marketing and measurement and create one platform. For Salesforce, the combination is Radian6, Buddy Media and Chatter plugged into CRM.
In a nutshell, CRM is increasingly social and corporate software players have to play the social enterprise game. Why? That's where the IT spending is going.
On a conference call with analysts, Salesforce CEO Marc Benioff outlined the money trail.
Buddy Media has nearly 1,000 customers including major global l brands like Ford. With the social revolution, the marketing industry is undergoing the biggest transformation it's seen in 60 years. Facebook has become the new corporate home page and according to Gartner, CMOs will surpass CIOs in spending on technology within the next five years. We're doubling down on the Salesforce marketing cloud. We absolutely believe Buddy Media will help us capture more of this fast growing market and accelerate our growth. We've traveled around the world on our tours. We've seen tremendous response to our social enterprise messages. They want integrated sales, service and marketing. Gartner says that CRM is 15% of the purchase intention of global CIOs this year. That's the number one global purchasing intention.
Salesforce's plan is to take Buddy Media, Radian6 and other social assets and target "the entire social media marketing lifestyle platform." And guess what? Other vendors will try to stitch together social enterprise combinations. Benioff said that it will be difficult for SAP and Oracle to cobble together social players without integrating them to core systems. "We're acquiring at the edge and then we're able to take the edge and integrate it to our core," said Benioff. "If we were going to acquire we were going to have to acquire these companies like Radian6 and Buddy Media and others and then stitch them into this solid core."
According to Benioff, social marketing is a "multi-billion dollar opportunity." Indeed, Benioff said that CMO technology spending has moved from $4.3 billion in 2011 to $6.5 billion in 2015. Salesforce plans to bring distribution to Buddy Media and grow the market.
What is happening is that these CMOs are tightly partnering with the CIOs and in some cases the CMOs even have their own CIO but the CMO is the buyer, pure and simple. And in this case, the line of business is the dominant buyer.
Other vendors---notably IBM---are already planning to target the CMO. Rest assured, the CMO will be among the in-crowd with vendors---especially as she controls more of the IT budget.