I just witnessed the beginning of Adobe's transformation to a possible marketing technology power. There is a lot to do for them to get there, but they truly have a shot. Read why and what they need to do.
I have to start this with an apology to both Microsoft and Parature (which, effectively, is one apology). I have been entirely remiss about coverage of Parafest 2014 and Convergence 2014 because I’m so caught up in the Watchlist reviews that I’ve had no time for anything else so far. And, because, I’m about to make an exception to the “no time so far” thing, and present some of my thinking on the Adobe Marketing Cloud.
I’ve just spent three days in Salt Lake City and two days at the Adobe Digital Marketing Summit. There were all kinds of peripheral benefits; I got to finally meet in person, the rock star Peter Kim (now working with Ray at Constellation Research Group—a stellar move on both their parts), hang out with Brent Leary, Ray Wang, and Robin Fray Carey (Social Media Today) and see a long-time friend and CRM thought leader, Scott Rogers, who is the VP of Customer Experience at the American Credit Union, in Salt Lake City.
But this became an exceedingly valuable trip for me because I saw a company who, I have to admit, I was very skeptical about crush my skepticism and at the same time establish themselves in my eyes, with caveats here, as seriously credible players in the Marketing space. The opportunity for Adobe Marketing Cloud is huge, but the caveats, at least as of now, are potentially stifling. To put it in a sentence: Adobe is at an inflection point in their history and they have the chance to become a breakout player, but to do that, they have to get over their legacy baggage.
So, Greenberg, what in hell does that mean?
As we all know, Adobe is one of the most important tech companies in the world. They have a history of accomplishing what they set out to do. They wanted to be a standard for printing language and they established postscript. They wanted to be a standard for documents and, voila, the .PDF file was born. They were and are the standard for creative graphics work, with a range of products, from consumer friendly to professionally challenging and powerful, that have been the tools for the creation of countless pieces of business and entertainment art. They haven’t fallen into this. They set out to be a standard in these things and, to their credit, did what it took to succeed.
But in 2011, right after Rob Tarkoff left the company to go head up Lithium (who announced their acquisition of Klout last week for a purported $200 million). I received a request to talk about Adobe’s strategy for the enterprise. I found it both a little strange since I had virtually no relationship to the company other than having Acrobat Reader on my system at the time, but I admired what they had done and figured this could be interesting.
Well, sadly, it was not only uninteresting, it was a complete waste of my time. They, as far as I was concerned, had no understanding of the enterprise at all, especially since the one guy who did, Rob, gone to Lithium. Throughout the conversation, they were insistent that customer experience was going to be a HUGE market, which, of course, it not only isn’t, but isn’t any market for technology at all (customer engagement, on the other hand, is). They were just looking for validation, not discourse, for their perspective from third parties and I didn’t give it to them—I opposed it vehemently, in fact.
I came away with a distinct feeling that they were going to mess up if they kept down this path. I don’t have a problem with people or companies who disagree with me—what kind of egotistical jerk would I be if I did? After all, all I’m doing is giving someone my opinion, which, because it’s an opinion, has no guarantees about being right. However, I do have a problem with people who argue with me because I’m not agreeing with them—and have no defensible response to what I said. Which was how this went throughout what was a somewhat contentious call.
So, I wrote them off, to be entirely honest, but retained my historic admiration for them, nonetheless. I was a strong skeptic about their chances in the enterprise.
I began to hear about the Adobe Marketing Cloud about a year later, but it seemed to be just a rebranding of a couple of their customer experience apps at the time. That, honestly, was a bit of progress, because they were no longer focusing on a customer experience market. I noted it, and moved on.
Then, last June Adobe announced their intent to acquire Neolane, a CRM Watchlist winner and one of my favorite marketing technology companies, for $600 million. They moved incredibly fast and a month later the acquisition was complete. Now, Adobe had my attention again, eyebrows raised attention in fact. With the combination of their existing offering and Neolane, they became a serious contender in the marketing technology world. They made a great move and placed themselves in contention, which I wrote about after they announced their intent.
I still hadn’t heard anything from Adobe—no further outreach since that ill-fated call in 2011—but they were back on my radar big time. I wasn’t sure that Adobe would do the right things with Neolane but there were some definite possibilities here.
So when Brent Leary, uber influencer and thought leader in CRM and a BFAM, asked me earlier this year if I would be interested in going to the Adobe Digital Marketing Summit, I said sure.
I'm not 100% certain how to begin this discussion of what I see and what I think about the Adobe Marketing Cloud—and the direction of Adobe itself. I see a potentially bright future, but there's still a lot of work to do; though, interestingly, the assets they bring to the customer-facing table are truly vast.
I’m going to break this into three parts, I think: the concept, the products, the messaging. There is one big caveat. I’m operating off of what I know and what I saw at the conference. A lot of what I know is based on what I know about Neolane and my generic tracking of Adobe for the last several years.
Adobe made a decision a couple of years ago to enter the marketing space. They became aware—I presume in part because of their work with agencies that were using the Creative Suite—that this was an area of huge opportunity that required creativity, productivity, public exposure via campaigns, and knowledge of the consumer. They had the creative tools with the Creative Suite. They had the analytics tools led by Omniture and Adobe Target to get them the knowledge and identify the information they needed to provide customer insights.
They also understood, and had understood for a long time, the value of an effective web presence. And, as the web became increasingly social, they understood what kind of data a highly targeted digital message could provide and what kind of effect it could have. They had the tools for that as well, with Dreamweaver and other web tools they offer.
They owned tools that were appropriate for visualization—Photoshop, Lightroom, etc. In other words, they had a strong toolbox for creation and consumption, but they lacked the tools for delivery. Those would be the marketing automation technologies that were being scarfed up by acquisition, one after another.
While they understood all this, several market factors and industry trends began to assert themselves in ways that were far more powerful drivers than they had anticipated. The broadest was the emergence of both engagement and personalization as key drivers of business success. Due to the communications revolution of the early part of this millennium, customers were demanding more personalized interactions with companies and yet, also more control over those interactions. Not only did the company have to know more about customers so they'd feel more valued by the company, they still had to provide the customer with the tools, products and services they needed. That meant the company needed to offer the customer what they needed to control the kind of engagement the customer wanted.
But there was much more going on. The digital transformation of business was also driving a significant uptick in the number of messages that a customer consumed in a given day. As far back as 2005, it was shown that every individual in the U.S. is exposed to 3,000 messages a day, which translates to a million a year. Even more frightening, that translates to marketers exposing Americans to some 12 billion display ads, 3 million radio ads, and more than 300,000 television commercials each and every day!
With that kind of assault, the 4Ps of marketing—price, product, placement and promotion—was not a valid way to see marketing anymore. That's because the premise upon which the 4Ps rested was competitive in the old-school sense: One company's products competing with like products of other companies.
Marketing is now much more that you have to do what it is you must to get the attention of the prospective customers. If you are competing with 2999 other messages every day, you aren’t competing initially for product supremacy, you are competing initially for a customer’s initial interest in you.
Marketing went from pushing messages at customers who, at best, represented a segment of the population to be targeted, to becoming the first line of engagement, the effort that went into getting the individual customer to talk to you for the first time.
To do that took creativity of course, but it was much more complex. The customers wanted to see something that they wanted to see, not what someone who had a similar demographic profile wanted to see. Also, it became important to manage assets, execute campaigns, capture richer and higher volumes of data and then assess all that in as close to real time as possible. It had to be real time because customers were considerably more impatient when it came to getting a result that they were looking for than they had been.
Why do you think so much attention is given to humor now when you see a commercial? Because it makes you laugh, not because it makes anyone laugh. You remember the best ones, and they tend to either be funny or sentimental. For example, one of the best commercials on TV was one that Adobe does. Check this out:
It makes the point via visual humor and you get people's attention. Watch this commercial for San Sabadell Bank in Spain. As of this writing, it has been watched by nearly 36 million people on YouTube. These are both dependent on a complex network of like-minded people telling each other to go take a look at this.
Marketing is not easy but success can be defined reasonably easily. Personalized messages get to a body of prospective customers. You get their attention, they continue to engage, and eventually buy your stuff. The bonus is that they stay engaged and engage others.
Are all these factors what lay behind Adobe’s decision to get into this space? I don’t know. I’m speculating. What I do know is that they already had a great deal of the assets that they needed to get there and with the acquisition of Neolane and its integration, they completed the product portfolio to a large extent (though the ecosystem isn’t complete necessarily).
So what does the Adobe Marketing Cloud look like?
The products themselves
Firs thing to know about Adobe is that they are a tools company—and this is both good and bad. For the most part and for the purposes of this discusion, the products are a good thing.
The second thing to know about Adobe (and the Marketing Cloud) is that if you buy into what I’m saying above, what they are currently offering is a significant piece of a digital engagement platform—and that’s how I’ll be looking at it. Keep in mind that we are talking of the marketing side—the first line of engagement—the first place that the customer comes into contact with the brand and either starts interacting or doesn’t.
The core around which the Marketing Cloud is built is the Master Marketing Record which goes to the heart of two Adobe themes, one of which is as old as modern man—the single view of the customer—and the other is the Real Time Enterprise, which is a broader concept that I’ll discuss later.
The Adobe Marketing Cloud essentially consists of a basket of applications and services. At the highest level it is:
Adobe Analytics—A strong package focused around digital analytics, mobile and web in particular. They also, wisely, have predictive analytics as part of the core offering.
Adobe Campaign—For now, this is where the core Neolane integration has occurred. They have done a remarkable job of taking that piece of Neolane’s capabilities and making it seamless in a short period of time. There are still parts of Neolane to be integrated into other areas and here too.
Adobe Target—This allows you to test scenarios and options for the web and develop personalized responses for individuals. It's one of the most popular and powerful of Adobes tools. It's as close as Adobe gets to what Epiphany and Exact Target does.
Adobe Experience Manager—This is the Adobe’s digital experience management; its purpose is to manage the assets and create and manage the communities needed to optimize the customer journey across digital channels and media.
Adobe Social—This is a combination of social listening, analytics, content publication and distribution, tracking (which they oddly call “campaign”) as well as a strong workflow and rules engine geared around governance and protocols.
Adobe Media Optimizer—The idea is simple: Who’s your audience, what ads will appeal to them the most and what media mix should we use to maximize that appeal? To do that is complex and difficult, but the tools in Media Optimizer are designed to make it as accurate as possible, while not necessarily as easy as possible.
All of these applications are built to ultimately feed what Adobe calls the Master Marketing Profile—a centralized customer record that pulls in all data based on digital activity that can be identified by a single customer ID. That means that John Smith's record will have his social profile data, his transactional data, his response to campaigns, his click-throughs, his web browsing, etc. This goes to the heart of their effort—the personalization of the response to individual customers. The Master Marketing Profile is where you find all that data.
To be fair, I’m not doing their toolbox justice. To its credit, Adobe has done some solid integration of the entire portfolio (much more to come in the July time frame, I’ve been told). The total package, if viewed as an advanced digital marketing cloud, could very well be the best of its kind on the market. I haven’t gone deep enough to make that an unequivocal statement, but as a digital toolset with some early integration, I’m genuinely impressed so far. Just see what I said earlier about the Neolane integration. You’ll understand.
But thing is, they are competing with other Marketing Clouds—notably, if the name Marketing cloud is meaningful, salesforce.com and Oracle. If the name Marketing Cloud isn’t—add Marketo, Microsoft, Teradata Applications, SAS, IBM Unica, and Infor to the mix. If niche players count, there are dozens and dozens out there chomping off pieces of the potential revenue stream. This is a hot competition.
So the question becomes what do they have to do with the product in its next iterations to make it even more competitive and what do they have to show to the rest of the world to gain an big share of mind and market?
The missing product pieces
I’m not going to dwell on this much because I have no idea of the Adobe Digital Marketing Cloud roadmaps. But there are a couple of things they could be thinking about that might be a priority for their roadmaps. There are some things around content that I have to presume they are taking care of through what seems to be the convergence between the Creative Cloud and the Marketing Cloud.
Marketing Resource Management—If Adobe is going to address the enterprise market and compete with those who do, they are going to have to take the operational capabilities they offer a bit more deep than they are now. They have digital asset management, but MRM is much more than that. (Example: Microsoft Marketing Pilot, Teradata Applications).
Traditional Channel Marketing Applications—Make no mistake about it. Adobe’s Digital Marketing Cloud is just that—digital. But there's no lack of traditional channels that are being accessed and used every day. A solid email marketing product would not be out of line here. (Example: Exact Target, Silverpop)
Loyalty/Advocacy Marketing—The value of creating advocates and loyal customers is, without too much debate, immeasurable. That means that the ability to create, distribute, measure, analyze, and personalize the offers and programs for existing customers is of vital importance when churn is such a big issue. (Example: Oracle)
These are product gaps at the moment that tend to be somewhat important missing pieces; but again, they may have something in their road maps to address this, I don’t know. Also, there are many other areas that they could address.
The Adobe SAP partnership has greater implications than the apparent, though. To be blunt, as good as SAP’s CRM suite is in some areas, marketing has never been one of their strong suits, though their loyalty marketing applications are competitive. So if SAP is, in effect, using Adobe’s Marketing Cloud as part of their overall offering, then all of a sudden their suite becomes much more interesting and powerful. Additionally, Adobe, despite its outsized reputation, doesn’t have nearly the reach of SAP, nor the market that SAP has when it comes to customer-facing or enterprise capabilities.
Working with SAP expands Adobe’s footprint in a market where they could use the support. But this would require the partnership to go to the next level, which is Adobe’s Marketing Cloud resold by SAP CRM, not just hybris and HANA. That becomes particularly attractive if Adobe adds the more standard marketing capabilities that SAP customers would be interested in.
That said, this is a win-win alliance and one that I think, if politics and cross-cultural dissonance don’t get in the way, could be hugely valuable to both parties.
As I said before, Adobe is a tools company. Even if the tools were for productivity and creativity, their appeal is to the IT world and those who get the deeper side of analytics and technical side of creation. My meetings with customers were clear reflections of that. The customers were genuinely brilliant, and loved the tools.
As good as the product portfolio is and as much as this contributes to the ecosystem Adobe is offering, the messaging is conversely…uncomfortable. It’s not entirely bad. That would be an overstatement, but there are a significant number of elements that aren’t there, some that lag, some that are just outright terrible—and some that make complete sense. But that also says that at a higher level the message they're presenting is not entirely familiar or even well rehearsed. They can’t even fake it; it seems painful and difficult.
What this led to is that you saw a legacy tools company moving rapidly into the contemporary world with a truly excellent effort at doing what they do best—to make tools—while their messaging was still trying to break free from its legacy.
If there's one thing you would think that Adobe is adept at, given their history, it would be storytelling, the hallmark of what contemporary marketing looks likes. To their huge credit, at the Summit, there were brilliant bits of storytelling done with videos and with customer interviews. For example they not only showed the now-familiar commercial above, but also showed a genuinely hilarious video done with Eric Strongstreet of Modern Family fame and Richard Sherman of Seattle Seahawks fame and infamy. Here is that video:
There were customer stories from companies like REI Sports, Sephora and Audi. MGM Resorts John Bollen, showed us evidence of a huge guest experience program that is powered by multiple Adobe applications and provides personalized insights into customers who are staying at the hotel or have stayed and specific treatment based on the results of the analytics. Real stories, great outcomes along with creative smart memorable productions.
This they did well, very well.
But that was coupled with messages out of CRM 1999 like “it’s all about people.” Worst of all, was their focus on day 2 on the 3Ps.
The 3Ps of Adobe are people, process, and product. While taken individually, you could justify each one as a legitimate function that marketers should be concerned with, when you think about the context for it. But let us just say that the alliteration makes the whole thing suspect.
The competition for the marketing clouds out there—Oracle, Salesforce, etc., is fierce. All are based on a single premise—the world of marketing has changed dramatically and we have to meet the needs of the new marketer who is, it seems, the first line of engagement with the customer. That whole new world of marketing also means that the old world of marketing is no longer applicable since we're dealing with capturing attention. Old World Marketing 101 was called the 4Ps, product, price, placement and promotion. It was the kind of thing that drove the Don Drapers of the ad world of 1965 or so. As far back as 2006, I was calling the 4Ps dead, not because there was something inherently wrong with them, but because what marketing had to do was different than in the past.
Adobe’s advocacy of the 3Ps, so called, while severely limited in general and not the message that you want to present when one of your competitors is going with “the Internet of Customers," is also useless in the headwinds of marketing transformation going on now. By calling it the 3Ps to begin with ties them to that kind of dead school thinking and an era that’s over, even if they don’t mean it that way.
But there's another problem that marketers have when they get cutesy at the expense of a meaningful message—that alliteration has to rule the concepts.
If you're thinking about marketing in the way that makes the most sense, you're going to determine what you need to get across to those you're marketing to. You are going to develop the stories, similes, metaphors, and even the literary pieces that have the most significant impact on the groups in the population you are trying to get the attention of.
But I get the distinct feeling that the alliteration came first here—and then the justification to support the alliteration after the fact. It seems like a coincidence beyond belief that the three things that Adobe felt they must get across happen to all start with a P.
"Adobe continues to build their marketing platform on a foundation of content creation, interaction design, and analytics. And now with the common customer profile layer, it will be easier for users of the individual pieces of the platform to share information to create even more personalized experiences. While they are still in the early stages of this development, it's come a long way since last year's Summit. Which makes you curious to see where things will be a year from now".
In other words,
Not a P in the lot of them as far as I can tell, but far more accurate as a positioning for Adobe’s Marketing Cloud as it currently stands—when tied to engagement.
There is one really big irony, I guess. It’s that if they persist with this silly 3Ps thing, which I strongly recommend they don’t, there is another P that is a much better representation of what they are trying to do than the three that they are using: personalization.
The missing pieces
Okay, if we are to sum up where Adobe is right now, here’s where we are at.
Their product portfolio is a high-caliber—very high-caliber—digital engagement platform focused on marketing.
For what it is, it may be the best one out there, but with caveats.
Their alliance with SAP has seriously good possibilities that could benefit both companies' bottom line and market visibility (and viability)
They need a serious change in their messaging. Time to rid themselves of legacy thinking in that.
But there are two pieces that they are missing that are critical to their forward progress that have nothing to do with product.
When Adobe acquired Neolane, they acquired not only an excellent product, but a great team besides—and, unlike many of their competitors post-acquisition, the culture at Adobe is strong enough and was compatible with Neolane’s so the losses were minimal, at least by comparison. Luckily for Adobe, they kept the key player at Neolane: Suresh Vittal, former Forrester analyst, VP of Neolane and now on top of all product strategy for the Adobe Marketing Cloud. Suresh is both respected by the community at large, i.e., the analysts, the other vendors, the buyers, and knows what they are going to have to do. Great move.
But what they lack is a public face, one who is not just a BD guy but who is in fact the name that people think of when they think of as a go-to guy in the practice. Someone who is akin to what Anthony Lye was at Oracle during his stint there as the head of the CRM practice.
In order to compete in the 21st century as a vendor in an increasingly crowded, busy, and lucrative space, you have to stand out. One way is through the person who is running business development. He or she should have the ability to understand customers, meet with them, think about the sales opportunity and the service; work with the analysts and be their go-to for the group you represent at the company; know the market inside and out so that you can represent your company’s commitment to the latest of requirements and to the best of products; be able to build the partnerships and alliances that lead to the kind of deals and recognition that is needed to close the deals; and finally provide some level of thought leadership in public forums.
Adobe has no one remotely like that. Suresh, who would fall the closest is tied up in the product strategy. They need someone even more than their competitors do because they're coming from a different place and further back to start and that means someone needs to be there to assure the buyers and analysts and market place that they are “on it.”
That also brings up the other facet that Adobe lacks. They lack the thought leadership, the body of content, the intellectual framework that's needed to make the case that, a.} there's new marketing that has to be addressed (and implicitly, of course, they are the ones to address the technological needs of that new marketing) and b) there is a framework for action that operates like a blueprint for success if effectively implemented.
At the moment Adobe has neither the public face nor the intellectual framework. That said, they are eminently capable of finding the right person and building and distributing the right content. They just have to plan it and do it efficaciously, given that their competition isn’t waiting.
I’m no longer skeptical about Adobe. They are a definite force to be reckoned within the marketing technology world and at the enterprise level. They still have to overcome their legacy, their history as a tools company, and focus, as they are able to, on the outcomes that they can support for their customers—and by implication future customers. They still have to add products to their portfolio to compete with all the other vendors in the space. They still need a public face and an intellectual framework. But there is no doubt to me that the company that brought us postscript, PDF, Pagemaker, Photoshop (The 4Ps. LOL!) and that acquired Neolane, will do the smart things they have to and make themselves one of the biggest winners in the market. But they have to do what they have to do. Their talent is prodigious, their starting point is great, but the job ahead is immense. Good luck, Adobe.