IBM Acquires Silverpop — Just How Big a Market is Online Product Promotion?

On April 10, 2014, IBM® published a press release about its intention to acquire Silverpop. Perhaps it will be useful for readers to consider the importance of this acquisition from a couple of different angles:

  1. How, if it all, could Silverpop leverage other components of IBM to deliver substantial return on this investment?
  2. How big a market are we talking about when we consider Silverpop’s niche?

1) Does Silverpop’s stated business model promise to leverage other IBM components? and does this synergy look like a promising, substantial, net positive contributor to IBM’s bottom line?

The answer to the first question is “yes”:

  • Silverpop presents what I would read as the core of its market message in a short video available for viewing on its web site. This video (which speaks to the efforts of marketing communications teams within a larger business) contrasts the telltale emblems of a mediocre marketing campaign (without Silverpop), to a personalized campaign, targeted to prospects (presumably with Silverpop’s software). IBM’s Watson could be the perfect complement for Silverpop, promising to provide a much higher level of personalization than could be achieved via other methods.
  • Cognos, and other pieces of IBM’s data analytics offer can add more value to Silverpop as clients look for metrics on campaign performance, and more
  • finally, a quick glance at Silverpop’s client list reveals a number of firms where IBM’s consulting teams are likely to be already established, and trusted providers.

Should IBM provide Watson and its data analytics tools as a backend to Silverpop, then corporate marketing communications should be able to produce, over time, a number of useful case studies, success stories, etc. illustrating how this backend played an essential role in the effort.

How big is Silverpop’s market?

The answer to this question is, in my opinion, “not big enough”. I point to an article written by Jack Hough, and published on the Barrons web site late last month: Google, Facebook, Twitter: Not Enough Dollars to Go Around. Keep in mind: Silverpop’s niche is a subset of the online advertising market, and, necessarily, of a much smaller size. Further, Silverpop has a couple of competitors in its market, Marketo and Oracle’s Eloqua. So, even if one assumes Silverpop emerges as the market leader, the actual contribution to IBM’s broad revenue performance may not be substantial.

Bottom Line

Nevertheless, IBM needs methods of demonstrating the power of Watson and its data analytics tools to the much larger enterprise business market for business intelligence solutions. The Silverpop acquisition promises to give them another show piece for this effort.

Disclaimer: I have neither a position in IBM, nor any verified statistics to substantiate claims I make in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

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