On Monday, Salesforce.com announced the acquisition of social marketing software company Buddy Media for $689 million. Read more.
Marcel LeBrun, CEO of Salesforce Radian6, and Michael Lazerow, CEO of Buddy Media discussed the transaction with AdExchanger.
AdExchanger: Marcel – can you talk a little bit about why Salesforce’s Radian6 is part of the discussion when it comes to [Monday]’s acquisition of Buddy Media and what it means?
MARCEL LEBRUN: Here’s what it means. Salesforce is focused on the social enterprise, which is how social is transforming everything in the front office – and the biggest area that we feel is being transformed because of social is marketing. We believe it’s a billion‑dollar business [for us]. Salesforce’s first acquisition in that space was Radian6. I lead the Radian6 team, but, also, I’m working with [CEO Marc Benioff] and team on how we are going to build a billion‑dollar sales and a billion‑dollar marketing business.
As we’ve been looking around and figuring out what that strategy is, we’re very focused on where marketing dollars are going next, not where they come from. We believe that’s social marketing. As we looked in the space, we identified our next priority, which was to build on top of what we’ve already invested by acquiring and integrating Radian6 to become the number one social marketing vendor.
As we looked around, that’s how we got to Buddy Media. Salesforce’s strategy has been buy the number one player, market leader, because Salesforce is the market leader. It worked pretty well with Radian6, and then that’s how we got to Buddy Media, the marketing leader in this space. That’s really the seed of the thinking behind how we got here.
Mike, does Buddy Media bring a social media marketing stack to Salesforce, or is it, in some ways, adding to an existing part of the social media marketing stack that Salesforce already has?
MICHAEL LAZEROW: I think it’s a little of both. This was a deal, at least in my mind, in which both companies are significantly stronger afterwards. If you look at how this acquisition benefits Salesforce.com customers, I’m always thinking from a customer perspective, not necessarily from a company organization structure, because Radian6 is a great business and growing – and so is Buddy Media. Shame on us if we get in the way, and probably the easiest way to get in the way is to shove us together and force integration. What we’re looking for is from a customer perspective – how do we make this work?
You basically combine data-sourcing with Buddy Media and get comprehensive — what we’re calling the marketing cloud, but in essence it’s one login. One place for your data, like the cookie, and so on, and you can listen, engage, publish, advertise and track everything in one place.
When we started talking with Salesforce, the idea that our customers would be able to leverage this trusted, social mobile open technology stack, this Cloud computing stack [was compelling]. In addition, they have an ecosystem of partners.
We were distribution constrained. There was only so many clients we could talk to given the size of our sales team. We were a young company. Salesforce will help us scale our sales and team as well as develop and support all the marketing that we do – not necessarily because of product integration, but because of the lead sources available.
In regards to the product offering, is there a use case you can provide that you see coming in a year or two from the combination of the companies?
MARCEL LEBRUN: Obviously there’s a lot of work we have to do between now and when the transaction closes in order to figure out what we’re going to do together. But what the customers are saying is, “I want to put more dollars into social.” I want to do fewer things that simply get me brand impressions, and fewer things that are one way interruption-based communication. I want to do more things that result in engagement – customer connections, advocacy, and relationships.
And so, how do I do that? Well, I know my brand is now the sum of conversations about it. So I know I need to listen, engage and publish on these various social channels. I need to engage on those channels. And now, with the way these platforms are going, I need to amplify my message, which is the great content that I’m putting out there with social advertising.
But the key is, I need the technology to show me the ROI so I can dial up my dollars in this space and have the confidence that it’s getting me a better return from what I was spending.
So I need to measure that. I want to tie this all together. I need a common view of the customer. When you look at Salesforce’s social enterprise strategy, it’s the core of this thing called a “social customer profile.” It’s a common view of your customer, and all of your interactions, and your relationships. Not just your customers, but your community.
For example, those that are fans and advocates of your brand who may not have bought yet. Yet, they like where you’re going, and how you’re thinking. So that’s how we see the opportunity – bringing all of that together. Customers are telling us this is where they want to spend their money. They just need some help in terms of pulling it all together.
Is it too early to talk about what happens with the team and integration given this transaction closes in the third quarter?
MARCEL LEBRUN: It’s too early to talk about details. But what we can say is that the team is going to grow. We are in this to be the partner of the CMO in terms of where they’re taking their business. That’s very clear.
This question is in regards to paid media and Buddy Media’s acquisition of Brighter Option in February. Mike, do you believe that paid media is an important part of the offering in spite of the important listening features that are involved and all of that social stuff that you guys are bringing together.
MICHAEL LAZEROW: The answer is yes. I think paid media was so important that we couldn’t wait to build it. Frankly, partnering in that space is a non‑starter. I look at other companies in the space…I don’t want to use crude terms but they are futile exercises in marketing announcements around partnering.
Read Shiv Singh’s blog post, out of Pepsi Digital. His vision is the customer journey that Marcel talked about earlier. It starts as a real‑time insight based on what are people saying right now, and that you’re actually doing something. You’re engaging, you’re buying that engagement, and it’s all through this one powerful dashboard.
The scale comes from the paid side. Paid advertising, I don’t think that should be a dirty word or phrase. Brands are in the business of distributing content. Some is content distributed for free, and some will be paid in order to distribute. That’s the way the world works.
MARCEL LEBRUN: When Procter and Gamble announced last year that they were stopping the funding of soap operas and were going to do more things like the Old Spice guy campaign, well, Old Spice guy had a TV element, too, so TV advertising’s not a bad thing. It’s just not sufficient, and the focus of campaigns needs to be on engagement. What you may or may not know is that the Old Spice campaign produced about 180 YouTube videos within three days following that launch of that campaign. They were all customer response videos with the character responding in‑character to what customers were saying. That’s the idea. There’s a paid component, but it goes beyond just an ad impression. It goes to, how do you amplify what you’re doing and create engagement? That’s really the difference here, but paid is still a key part of it.
This last question has to deal with success metrics for this acquisition. Of course accelerating revenue will be a success metric. Are there some other things?
MICHAEL LAZEROW: For me, it’s two things. How do we make the customer more efficient, so there’s a whole internal organizational component and we measure that in a different ways. Then how do we make them more effective. By tying the data together and by offering our vision ‑ obviously we’re at day one. Our vision is a unified system to let you listen, engage, publish and advertise.
You asked earlier, is Buddy Media bringing unified solutions to Salesforce? Is it Salesforce that has to be plugged in? I think we’re both implementing the same business plan, it’s just we believe in this comprehensive solution. Now it becomes a reality.
Marcel, anything to add there in terms of success metrics?
MARCEL LEBRUN: I’d add that we want to be the trusted cloud provider of the CMO, to power their social marketing investments. We’re new at that. Salesforce, as you know, is number one in sales and service, but we’re still new. We’re assembling amazing technology, and so we’re buying market leaders. The success metrics is, are we going to be that number one player that CMOs look to to manage their social marketing investments?
By John Ebbert
