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SMToolbox: Understanding the Changing Landscape of Social Media Marketing Tools
Posted on January 27th 2014
Introducing the Social Media Toolbox
Almost every week we see the launch of a new social media tool or the acquisition of a marketing software company. The market is crowded, complex and changing. It ranges from large digital marketing suites to point tools for specific social media networks.
To help guide you through this changing landscape I will be writing a weekly column, the SMToolbox, where I will provide regular updates and commentary on the social media tools market. I will also undertake independent reviews of social media tools each week. Watch out for the first review next week, where I will be looking at the popular Google+ tool CircleCount.
A Changing Market
What do Radian6, Followerwonk, UberVu, Eloqua, Loopfuse, Pardot, Responsys, Chime, ExactTarget, Seesmic, Optify, Alterian, Syncapse, Aprimo and Crowd Factory have in common? The answer is that they have all been acquired or gone out of business in recent years. The market is not what it was.
A Fragmented Market
There are a vast number of marketing and social media software tools. These have grown in a fragmented manner with some focusing on publishing, some on monitoring, some on analytics, some on influencer engagement and so on.
As a consequence, companies are frequently using multiple tools to meet their marketing needs. Altimeter recently gave an example of one of their clients using Radian6 for monitoring, Vitrue for social content publishing, Cotweet for customer care and Adobe Analytics (formerly Omniture) for web analytics. In reality many companies are using a much wider range of point tools to manage their marketing including a number of social media tools.
Ovum analyst Gerry Brown argues that many businesses having built up a fragmented collection of digital marketing tools over the years are now looking for unified systems to tie data and processes together. This has had significant implications for the market has a whole as it is leading to the emergence of digital marketing suites.
Digital Marketing Suites
Over the last few years we have seen the emergence of such Digital Marketing Software Suites. These typically include marketing automation software, customer relationship management, content management, data management, analytics and increasingly they also include social media software.
Ovum has identified 6 large vendors making strategic investments in digital marketing suites namely IBM, Adobe, Oracle, Salesforce, SAS and Teradata.
Suite Development Through Acquisitions
When we look at how these companies are creating their digital marketing suites we can see that a key part of their strategy is the acquisition of emerging best of breed solutions. Let’s briefly review a few examples.
Salesforce are putting together a digital marketing suite they call the Salesforce Marketing Cloud. In 2010 they acquired social monitoring company Radian6 for $326m. In 2012 they acquired Buddy Media for $689m. In 2013 they acquired ExactTarget for $2.5bn. ExactTarget had themselves previously acquired Pardot, a well respected marketing automation suite for $95m.
Oracle acquired Eloqua and is building out what it calls a social relationship management suite. Oracle acquired social media marketing company Vitrue in 2012 for $300m and folllowing Salesforce’s acquisition of ExactTarget, Oracle bought Responsys in December 2013 for $1.5bn. Responsys is a key competitor of ExactTarget.
IBM's enterprise marketing suite includes a range of social tools following their acquisitions such as Unica, Cognos, and Coremetrics. Teradata’s suite has been enhanced by the acquisitions of eCircle and also of Aprimo for $525m.
Below these six hundred pound gorillas the larger marketing automation players are also looking to grow through acquisition. For example:
- Marketo acquired Crowd Factory in 2012 and Insightera in December 2013
- SDL acquired Alterian in 2012
- Vocus bought iContact in 2012 for $169m
- Nearstream acquired Loopfuse in January 2013
- Hubspot acquired Chime and PrepWork in 2013 (their third and fourth acquisitions)
The Hubspot CEO has stated they are just getting started when it comes to acquisitions.
There have been many other smaller acquisitions such as Moz acquiring Followerwonk.
Acquisitions can be for different reasons for example Hootsuite acquired Seesmic which was primarily about transitioning Seesmic customers to Hootsuite, whereas their latest acquisition of UberVu is clearly about adding complementary product functionality as well as enterprise customers.
Altimeter are of the view that most medium sized companies either have to build integrated suites of software or become irrelevant
For companies looking to grow it is arguable that a necessary core competency is the ability to execute strategic mergers and acquisitions, as this is a potential source of competitive advantage.
Not everyone can win
The nature of the changes taking place mean there will be casualties. Best of breed winners will emerge and others, especially leveraged companies, will fail. In 2103 Syncapse filed for Chapter 15 bankruptcy protection in the U.S. federal court, despite having big name clients. Optify also closed in 2013.
What is the current social media marketing tools landscape?
Currently there is an incredibly fragmented landscape with many point tools that focus on a single function or social network. We can group the social media marketing software tools broadly by the tasks they help you perform such as:
scheduling and management (examples - Hootsuite, SproutSocial, Buffer, Oktopost, Socialoomph)
influencer outreach (examples - 33Across, Followerwonk, Engagor, Appinions, InkyBee, Twtrworld, Tribrr, Commun it, Sverve, BuzzStream, Twellow, Tapinfluence, Littlebird)
social content search (examples - BuzzSumo, Topsy, Bottlenose, Socialcrawlytics, TwazzUp)
brand watch and listening (examples - Mention, Radian6, SocialMention, Sysomos, Hearsay social, UberVu, Attensity, Simply measured, Socialmotus, Trackur, Twitonomy)
competitor tracking (examples - many of the above plus Rival IQ, Zuum, SocialBakers)
social analytics (examples - Moz, SimplyMeasured, Topsy, Gnip, Datasift, Sum All, Quintly)
content curation (examples - Scoop.it, Curatar, BuzzSumo)
network growth (examples - many of the above such as Triberr plus Crowdbooster and Socialbro)
Many of these companies and tools increasingly perform a range of tasks, so can't easily be poisitioned in any single category.
Some point tools are also network specific such as:
- Twitter (examples Followerwonk, Twtrland, Twellow, Tweriod, Topsy)
- Facebook (examples Likealyzer, Agorapulse, EdgeRankChecker)
- Google+ (examples Circlescope, Circlecount, Allmyplus)
The positive side of this fragmentation is focus. Often these social media tools are the best in class tools at what they do. They also often work alongside or increasingly integrate with other digital marketing tools.
What is the future for social media software and tools?
The future for most social media software companies and their tools is likely to follow one of the following trajectories:
- Some companies will invest and grow to become a suite of social media software or an established best of breed point solution. This is likely to include mergers and acquisitions.
- Many emerging leaders will be acquired and incorporated into one of the larger digital marketing suites or marketing automation companies.
- Some companies will simply fail commercially and close, as the market is too crowded or they have unsustainable business models.
- Some tools will continue as niche point tools supported by hobbyists or communities.
I believe over the next few years we will see rapid change in the digital marketing software industry and in social media tools in particular.
I look forward to sharing my views and discussing these developments with you. If there are specific tools you would like to see reviewed in SMToolbox, please let me know.
Disclaimer: Whilst I don't own shares in any of the above companies at the moment, I am considering investing in Twitter, BuzzSumo and LinkedIn shortly.
Column logo by Marie Otsuka