The Rise of Mobile Marketing Platforms
By Marty Johnson | August 20, 2018
Consumers are making retail decisions and purchases on their mobile devices at an increasing rate. Recently published research from eMarketer.com noted that retail e-commerce sales worldwide reached $2.3 trillion in 2017, marking a 24.8% increase year over year (YoY) with mobile commerce (m-commerce) accounting for approximately 58.9% of total sales.(1) Organizations and marketing leaders are utilizing mobile marketing techniques to gain a competitive edge on their competitors. Gartner notes that mature multichannel marketers apply 22% of their channel marketing budget toward mobile marketing, while less mature marketers apply just 12%.(2)
Most recently, Gartner released its inaugural “Magic Quadrant for Mobile Marketing Platforms” report outlining which mobile marketing platforms offered competitive advantages and measurable business value, while maintaining a vision to drive their business. Gartner labels six organizations as leaders, four as challengers, four as niche players, and one as a visionary. The report is based on past execution in 2017 and future development plans.
Gartner describes leaders as organizations that possess resources and acumen to deliver extensive marketing capabilities guided by a clear, comprehensive view of mobile marketing’s crucial role as the dominant engagement point for customers and prospects. These leaders have also executed a substantial number of implementations across a variety of industries, pushing their customers toward more advanced states of mobile marketing capabilities. They are also equally successful in B2B and B2C marketing scenarios. Urban Airship, Braze (formerly Appboy), Swrve, Localytics, IBM (NYSE: IBM), and Leanplum were awarded the leader title from Gartner.
Urban Airship prides itself in delivering billions of personalized, interactive notifications that inspire interest and drive action across all digital channels. Urban Airship is categorized as a leader due to its Connect platform that offers automated cross-channel engagement capabilities in addition to strong push notifications and in-app messaging features. Most recently, in 2018, the organization introduced a cloud-based AI marketing capability, which will help continue its growth.
Braze, formerly Appboy, offers a purpose-built mobile marketing platform capable of providing personalized experiences across mobile channels including email. Gartner awarded Braze the leader title due to its ability to balance a vision to manage the complete customer life cycle with real-time personalization capabilities. In 2017, it added the ability to exchange data with a wide range of partner solutions including Amazon S3 and Microsoft Azure for data warehousing, Amplitude for analytics and Foursquare for location. In addition, Braze has committed to upgrades in 2018 to its cross-campaign reporting capabilities, and ease integration with business and marketing systems.
IBM, also labeled as a leader, offers native mobile capabilities via the Watson Marketing mobile component of its MMH. IBM aims to leverage the Watson AI engine to extend its mobile marketing capabilities. Its strengths are in extending mobile marketing functionality for existing IBM customers, adding support, in 2017, for rich push notifications and added cross-channel notifications, and in 2018 IBM expects it will enable marketers to deliver personalized push or SMS messages based on user behavior and where the user is in a purchase journey.
Salesforce (NYSE: CRM), which offers a broad range of mobile marketing functionality exclusively as a component of its cloud-based MMH solution, was labeled as a niche player. While Salesforce has a suite of strengths, including the expanded reach of its AI solution (Einstein) and intentions to expand these AI capabilities further as well as its Mobile Studio, Gartner did not include the tech giant in its list of leaders. The reasons for this exclusion were due to the facts that Salesforce’s mobile marketing capabilities are features of its Marketing, Service, and Commerce Cloud products and not available as a stand-alone marketing solution, as well as below average satisfaction with the company’s service and support, compared to its peers.
Oracle (NYSE: ORCL), which provides its Oracle Marketing Cloud solution, offers a range of mobile marketing capabilities suitable for global enterprise brands. It joins Salesforce as a tech behemoth that is left off of the list of leaders and is listed as the lone visionary. Oracle also provides many strengths, such as a central canvas to create, test, launch, and manage mobile components as part of a multichannel campaign and also intends to add numerous mobile marketing capabilities to its platform in 2018, including predictive segmentation, RCS support, web push support, multivariate testing for rich push and in-app messages, mobile wallet cards and integration with Oracle’s Intelligent Bots platform. Due to two main cautions that Gartner notes: integration/UI complexity and overlapped mobile capabilities between Oracle solutions, Gartner did not include Oracle as a leader.
Current Mobile Marketing Platform Market
Mobile marketing platform organizations have seen an influx of venture capital money and M&A activity. Companies on the Gartner report received over $500 million of investments into them over the past five years, with ~60% occurring since 2016.(4) Currently, the public companies mentioned in the Gartner report are trading at 3.4x revenue and 14.5x EBITDA.
Notable M&A deals completed by companies that Gartner notes include:
· Localytics’ acquisition of Tapglue in 2017
· IBM’s acquisition of Resource Ventures in 2016
· Oracle’s acquisition of Crosswise in 2016
· Vibes’ acquisitions of Redfish Media in 2016, Moat in 2017, and Grapeshot in 2018
· Salesforce’s acquisitions of Demandware and Krux Digital in 2016, Sequence in 2017, and CloudCraze in 2018
· Sailthru’s acquisition of Carnival Labs Limited in 2016
· ImImobile’s acquisitions of Infracast and Sumotext in 2017
Companies of Interest
Mobile marketing platform companies we are keeping an eye on include Verve, Prolific Interactive, Mapp Digital, YouAppi, Outsell, Catalyst, Regalix, RhythmOne, The Media Kitchen, and Yeahmobi.
Author: Marty Johnson, Associate at 7 Mile Advisors
About 7 Mile Advisors
7 Mile Advisors provides Investment Banking & Advisory Services to the Business Services & Technology Industries globally. 7 Mile Advisors advises on M&A and private capital transactions, and provides market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, 7 Mile Advisors helps its clients sell companies, raise capital, grow through acquisitions, and evaluate new markets. For more information, including research on the M&A markets, visit www.7mileadvisors.com.
2) Gartner: “Survey Analysis: Mature Multichannel Marketers Prioritize Mobile Investment, Activation and Data” https://www.gartner.com/doc/3837369/survey-analysis-mature-multichannel-marketers
4) Capital IQ