On December 22, 2014, while many marketers were either on holiday or, in the case of retail marketers, sprinting to the final hours of holiday shopping season…a major acquisition announcement hit the wires: Oracle acquires Datalogix.
This is important on a few levels:
- Oracle already owned BlueKai: In February 2014, Oracle acquired BlueKai, one of the most well-known DMP’s and data providers in the digital space, for an assumed $400M. BlueKai and Datalogix are in many ways similar and most importantly, competitors. Essentially, Oracle has just inserted themselves into a sizeable chunk of the data market. As audience data is becoming a more prevalent ingredient in digital and omni-channel marketing strategies and tactics, this is impactful on marketers’ strategies as they have to determine if they desire to deal with Oracle for fluid marketing data decisioning.
- Oracle becomes a marketing cloud player: Adobe was pioneer in the marketing cloud arena and in audience management when they bought Demdex (now Adobe Audience Manager). However, Adobe’s value proposition centralizes Lararound advertiser 1st party data (e.g. audience data from the advertiser website). Oracle took on a seasoned 1st and 3rd party solution in BlueKai. In acquiring Datalogix, they brought on a market leader in omni-channel audience data. Just by signing the acquisition agreement, they are now in the game with an interesting chip to play.
But this leads to a few questions:
- Is Oracle buying these companies a good thing?: Oracle has yet to prove that it completely grasps the needs of marketers as opposed to their legacy CIO/CTO customers. It’s possible that their strategy of gobbling up data providers and then utilizing that data to attribute sales to marketing investments might be a quick way to win the hearts and minds of marketers. There is a lot of promise in their strategy, but they still have a lot to prove.
- By losing independence, will Datalogix and BlueKai lose their collective value?: Ultimately, if enough large advertisers utilize the Oracle Data Cloud, then it is likely the data doors will stay open to Facebook, Twitter, the coveted loyalty card data that Datalogix uses as one of their mechanisms for omni-channel attribution. However, there is a risk that once a thriving technology solution gets rolled into a larger enterprise entity like Oracle…they may run into larger competitive issues (e.g. Facebook not wanting to help create a new powerful data broker and thereby limiting access to coveted social data) or contractual issues (e.g. a company maintaining an enterprise agreement with Adobe, Microsoft, or others and being prohibited either contractually or organizationally from partnering with Oracle). These risks can be mitigated if the Oracle sales force can sell these products crisply and at high volume, although that could be a tall order. BlueKai and Oracle are quite different from legacy enterprise Oracle products, so there could be a steep learning curve.
While there are plenty of unknowns in terms of the long-term Oracle strategy and their success in executing, there are a few other answers the industry should be seeking as it relates to this news:
- What else can Oracle gobble up?: Interestingly, in this year’s consolidation of the attribution platform industry, the major acquisitions of the solutions designed to tell you where to spend your media dollars…WERE BY MEDIA COMPANIES. There is an interesting opportunity for Oracle to go looking for one of the attribution holdouts and preach the “no conflict of interest here”. The additional benefit is that audience data integrated directly with attribution data is high value and typically something that has required a lot of work by the attribution platforms on a one-off basis.
- Will Oracle nurture these companies?: Oracle has the money to support these companies with funds. However, these companies are very fluid (they are so tightly wrapped to the “life of an ad” in what are still immature markets). There will be need for adaptation, a need for R&D investment, and a need to be nimble and pliable in client agreements. It’s no secret that Oracle has a reputation for being “lawyer-led” which has served them well in the enterprise world. However, lawyers don’t typically do “pliable”. So this could be a challenge when competing with independent providers on a deal by deal basis.
- Can Oracle create something unique?: While neither BlueKai nor Datalogix are exclusive to retail, Oracle seems to have their eyes on that sector Why wouldn’t they? Retail is being disrupted. Digital disruption from Amazon. Consumer behavior disruption that is becoming more fragmented and more mobile. Technology disruption such as Indoor Positioning Systems like iBeacons. Disruption via increased urgency and real-time, instant gratification. If Oracle can help retailers solve “opportunistic profit challenges” in the omni-channel retail model such as order return risk management, merchandising and inventory refresh rate management, universal customer id management, or other hidden gems in the “ghost economy” as it is now being called…they stand to win big.
- What is the market reaction to Oracle’s acquisition appetite?: Does Adobe look to do any deals to beef up their Audience Manager product? Do any of the agreements between the data supply (e.g. Facebook) and Oracle’s Data Cloud solutions change? Does an independent data provider holdout use the opportunity to proclaim themselves as the unbiased and objective provider?
There is still a great deal to understand about how this acquisition will play into Oracle’s long term plans. While many have missed this acquisition announcement, it will be up to Oracle to capitalize on these recent acquisitions so they can’t possibley be missed in the year ahead.