Salesforce doubles down on social with Buddy Media, following CMO spending

Salesforce doubles down on social with Buddy Media, following CMO spending

Summary: The technology buying power is shifting to chief marketing officers and Salesforce is poised to take advantage with its social enterprise mix of Chatter, Radian6 and now Buddy Media.

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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.

Salesforce paid $689 million for Buddy Media in a cash and stock transaction. Buddy Media, a social listening and marketing outfit, competes with Vitrue, which happened to be acquired by Oracle.

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.

Benioff added:

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.

Topic: Social Enterprise

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3 comments
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  • The CIO and CMO as best friends

    I was a little puzzled why Gartner said that CMOs will surpass CIOs in spending on technology in the next 5 years. That makes no sense given the broad mandate of most good CIOs. However, it is not very important to argue that point in reality. Benioff makes that statement that CMOs and CIOs must partner to be effective. That is the key as the marketing function has become more complex given the variety of tools that are available to the CMO (including the new social media and marketing automation tools) and the need for CMOs to be both data driven and profit oriented.

    It's an interesting observation, yet the second reality is that the good CMOs have known this for a long time. And the good CIOs have recognized that good CMOs can help them get the best benefit of technology. I am just glad to see the heightened awareness of this trend of "bonding." Maybe this is somewhat irreverent but it might be akin to the new way of looking for the business counterpart of "friends with benefits."

    David Friedman
    CMO/Business Advisor/TechCoastAngels
    dfriedman1
  • The CMO and CIO Partnership

    I think that the Gartner assertion on CMO "versus" CIO spend misses the point and actually serves as poor guidance for both of these executives. In a way, it sets up the issue as a battle ground. Marketing automation deployment is super-challenging and it needs to be a CMO+CIO collusion, not a collision. CMO's are going to need a lot of advice and parterning with their CIO peers. And the bottom line is that it is company money that is being expended; not departmental monies.

    The better dialog (versus "whose money") is: What are the activities related to marketing automation and which department: marketing or IT or other, is in the best position to perform those activities that are related to marketing automation? And then sort out the money issues.

    Rich Vancil , IDC
    Rich Vancil
  • Not until Corporate Mobile is liberated from the IT Gestapo

    This will be a waste of money, until corporate mobile is liberated from the Gestapo in the IT department.

    My corporate Blackberry is so locked down, I can barely do any social anything on it. Facebook, Chatter, Twitter, Blackberry Marketplace all removed, by the IT/BES security policy.

    For corporate laptops, outside technical support do-ers, it's pretty much the same with standard locked down 'webtop' builds.

    ... and commonly, Facebook, eBay, Twitter, LinkedIn are corporate firewall blocked too.

    LOL.

    --
    Still not convinced 'social' in the enterprise is anything other than a tech-replacement for banal/desperate corporate schmoozing, and junk mail. And also a back-stop, for when you get Fired/Made redundant/laid off and need to spin up your Linked In Afterburners.

    Willy Loman, 60 years on, would still be a crap salesman with Buddy Media, Radian6, Salesforce on his iPad. Corporate/Product/Personal reputation are the ways to win business, not social targeting sales leads you don't know from Adam.

    Reading the products/who are we/what we do on Radian6 and Buddy Media, you can just smell the corporate marketing bullshit, pushing this as pseudo-science as the new corporate 'must have'.
    neil.postlethwaite