Big Data Reshaping Digital Marketing Landscape

Analytics data solutions provider Teradata announced an agreement to acquire eCircle, a cloud-based digital marketing firm, to enhance and expand Teradata’s overall Big Data market prowess. We believe this deal also highlights a major driver in the Big Data market – growth of vertical Big Data solutions – and in this case – analytics solutions for the marketing organization. Forrester reported that digital marketing represents one of the largest and most strategic areas of investment for most companies and big data is a critical focus for CMOs with a market that is expected to grow to $16 billion by 2016. When you transform big data into customer intelligence, and then leverage it across multi-channel marketing, the opportunities to drive revenue throughout the customer lifecycle become enormous. It also helps to identify and define what markets and customers represent the highest revenue and profitability potential, how to build more brand loyalty and tie that to profitability potential, and ultimately, how to find, win and keep more valuable customers.

As the race to dominate Big Data Marketing space continues, we expect to see a lively M&A market. Both IBM and Teradata have been on a tear buying up big data and marketing companies. IBM paid $480M for Unica in 2010 (4.4x revenue)and following up quickly with a whopping price of $1.7B for Netezza (7.6x revenue). Teradata reached for Aprimo paying $550M (6.3x revenue) and later scooped up Aster Data in 2011 for $236M (12.1x revenue). Most recently, IBM picked up Vivisimo that is expected to further IBM’s efforts to automate the flow of data into business analytics applications, helping clients better understand consumer behavior, manage customer churn and network performance, detect fraud in real-time, and perform data-intensive marketing campaigns. While IBM and Teradata duke it out, there are many other early stage businesses that will change the digital marketing landscape as they gain traction. Members of the Clearsight team were involved with the growth equity capital raise of Sitecore, a customer experience management software company, by Technology Crossover Ventures, which closed in December 2011. Expect to see private equity firms start to jump at more of these kinds of opportunities and at strategic valuations. We also expect to see privacy concerns start to dominate the conversation as all the pieces of our lives become a social experiment to shape how, when and what we buy. We expect the privacy discussions, whether on Capitol Hill or in your kitchen at home, to shape the Big Data Marketing sector and companies will think more broadly about adding compliance solutions to their marketing application stack.