Strategy

ANALYSIS

Marketers, Let’s Get Personal

On Aug. 13, IBM and Unica Corporation announced they had entered into a definitive agreement for IBM to acquire Unica, a leading provider of marketing software solutions that focuses on streamlining marketing program development, execution and management to achieve improved marketing effectiveness.

The acquisition is valued at approximately US$480 million, or $21 per share, and is subject to approval by Unica shareholders. According to Aberdeen’s research, this acquisition comes at a time when organizations of all sizes and across all vertical segments are looking to automate some/all of their marketing process and campaigns. Those that do are achieving superior performance gains in key marketing effectiveness measures.

Business Context

In June, Aberdeen surveyed 273 executives for The 2011 Marketing Executive’s Agenda regarding their marketing objectives through calendar year 2011. The research revealed that while marketers are bombarded with pressures that range from the economy to competition to limited resources (both budgetary and headcount), they are also under increasing pressure to deliver a clear ROI from their investments.

To demonstrate strong program results, marketers across all industries are focusing on automating some or all of their marketing process and campaigns. Indeed, research shows that failing to automate marketing initiatives or utilize the technology that enables automation directly impacts marketing performance.

Acquisition Should Extend Strategic Reach

In light of significant pressures, marketers are being driven to improve their ability to launch targeted multichannel and/or cross-channel marketing campaigns. IBM’s acquisition of Unica provides the foundation to achieve greater marketing program results by enabling organizations to streamline processes and launch more targeted marketing campaigns based on customer preferences.

In fact, Aberdeen’s October 2009 research report, u201cOffer Optimization: Using Customer Analytics to Improve Marketing Performance,u201d affirms that creating personalized marketing campaigns and adjusting existing processes and campaigns based on changing customer preferences indeed delivers greater results. Solutions that support an organization’s ability to analyze customer actions and behavior to deliver focused cross-channel and/or multi-channel campaigns have strong growth potential.

In its joint press release with Unica, IBM specifically highlights that this acquisition “will expand IBM’s ability to help organizations analyze and predict customer preferences and develop more targeted marketing campaigns.” Unica’s solutions enable companies to incorporate customer and Web analytics data with centralized decision making and integrated marketing operations to execute cross-channel campaigns throughout multiple mediums such as email or social media. By applying these types of software tools to program management and execution, companies can achieve a greater return on investment from their marketing dollars by delivering campaigns that use insight into customer behavior.

In Conclusion

The addition of Unica’s marketing automation solutions to the IBM product set for automating and managing core business processes within various functional areas (i.e. marketing, sales or procurement) has the potential to provide companies with greater ability to launch targeted cross-channel campaigns by using customer data. By analyzing customer information to predict behavior and utilizing this knowledge to launch targeted marketing campaigns, companies can both personalize interactions with their customers and increase the relevancy and timing of their offerings.

Of course, the true value of this acquisition is dependent on the ability of IBM to integrate Unica’s marketing automation solutions into its business analytics and process management solutions. The results of this successful acquisition should enable IBM to expand its product portfolio by allowing customers to achieve increased marketing effectiveness by delivering highly focused marketing campaigns that impact overall business results.


Chris Houpis is a senior research analyst in Aberdeen Group’s Marketing Strategy and Effectiveness Practice. Omer Minkara is a research associate for customer management technology at Aberdeen.

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