Just a few years ago, I was at an email conference in Las Vegas, talking about the age of email and how the then recent space of acquisitions and mergers changed the trajectory of e-mail innovation.
Do you remember going to conferences? Share your knowledge, see your friends, go out after sessions and build a community? Can you say I can’t wait to go back to a show?
But now we’re starting to see some movement, with a new wave of courier company mergers and acquisitions.
The next era of acquisition
In my opening speech at this conference, I explained how one of the major eras in the email industry was marked by the acquisition of big players in the space and consolidations at the supplier level. These movements had ramifications that we still feel today. Essentially, they stifled the innovation that helped the email industry grow exponentially in its first decade.
Fast forward a few years and consider the growth of data privacy regulations such as CASL, GDPR, and state regulations in California, Virginia, and other states. It made me think this next era would be all about privacy, but we’re talking acquisitions again.
We are now in another âwowâ moment, where almost every day brings a new adventure. In just a few weeks:
- Intuit buys Mailchimp for $ 10 billion;
- FreshAddress and TowerData merge;
- The CM Group (Campaign Monitor, Liveclicker, Sailthru, etc.) merges with Cheetah Digital;
- Pathwire Acquires Email on Acid;
- Sinch acquires Pathwire;
- MessageBird acquires US company SparkPost for $ 600 million.
Is it 2013 again?
2013 was the year Oracle bought Responsys and ExactTarget was sold to Salesforce. Both ESPs have been at the forefront of email innovation for a decade or more, but have retreated to become tools in the larger toolbox of the âmarketing suiteâ format.
It was then. What I know now, after speaking with contacts in the companies that were involved in these most recent acquisitions or mergers, is that it is less about creating giant leaders in the messaging space and more about building giant leaders in the messaging space. large companies coming together with the desire to make the two partners better.
Most of the transactions on my bulleted list above are of mutual benefit to acquirers and acquires, or to each partner in the merger. When talking to company representatives, what I heard the most often is, âWe’ve got some great stuff. They have great stuff. We put our cool stuff together to make it better.
Unlike in the previous era of mergers and acquisitions, most of these seem to be good things for the email industry, aiming to develop it and keep it on track for growth.
3 implications for email marketers
As good as it may sound so far, we need to dive in and consider how these moves benefit marketers and if they are changing the approach to dealing with vendors. I see three sons:
1. History has not been favorable to acquisitions in the e-mail space
If you look at previous acquisitions over the past 20 years, very few companies have maintained their lead in leadership and innovation. This is because the agreements were not of mutual benefit. Usually, the acquiring company took the acquisition for a few plots, and the rest of the company died on the vine.
One of the few successful acquisitions at the time was Experian’s acquisition of CheetahMail. It was an add-on to get sales to companies to get their data.
2. The growth of the CM Group is an example of successful acquisitions through a methodical accumulation of semi-complementary companies.
Companies like Emma, ââLiveclicker, Sailthru and Selligent flourished after the acquisition because the acquiring company did not stifle innovation, cut marketing budgets, or prevent individual brands from continuing their thought leadership. . The companies were allowed to continue on the trajectories they had before the acquisition.
Did everything go as planned? No, but CM Group has proven that it has a better recipe for combining individual businesses into a complete ecosystem of mutual support and growth and helping them optimize their success.
Considering the acquisition of Cheetah Digital by CM Group, I see the same approach. Cheetah Digital brings expansion through CDPs, new technologies and building a platform from scratch.
Recently, I was in contact with a client during a call for tenders when we heard the news of the acquisition of Cheetah Digital. Our client was considering a CM Group company, but I assured him that this event should not be a cause for concern as the group has shown that it can make acquisitions better than the historic record.
However, there are concerns about the future if the CM Group is sold. It might introduce some instability, but we’ll have to wait and see.
Having said that, I have no vested interest in any of the companies I have mentioned here. Instead, I look at CM Group with optimism for its future.
3. The theme of all of these recent acquisitions is âbuilding a better approachâ.
TowerData and FreshAddress are reputable companies that have great people at the helm and run great companies.
This merger makes sense, with two large companies that complement each other. The unified enterprise will be a powerhouse. There are many strong companies in the data and list quality business, and the new company will take both TowerData and FreshAddress to the next level.
Read more: Learn more about email marketing from Ryan Phelan
Tips for Email Marketers
My general advice is to stay away from newly acquired businesses. You cannot accurately assess any instability resulting from consolidation, which could put you at a disadvantage for your business.
With this latest round of mergers and acquisitions, I don’t see the potential for instability in most of these deals. There is not this instant sense of unease that the combined companies will not meet their commitments.
Yes, some of them might. Those who don’t are those who realize the value of thought leadership, building strong teams, innovating and retaining customers by taking good care of them.
This is what separates this era of mergers and acquisitions from the previous one. For email marketers, that means email can continue to thrive. We’ve seen the importance of emails in COVID-19 and as a way to get into customer inboxes and express a business’s unfiltered perspective.
This holiday season, I expect marketers to still rely on email as much as they once did. What these mergers mean is that bringing good companies together benefits our clients, who can get things done quickly without worrying about the madness that can arise after an acquisition.
My real-time experience during an acquisition
Here’s what I experienced a few weeks ago: I launched a small newsletter list through the free FreshAddress list validation tool. This doesn’t replace a full validation, but it does give you an idea of ââhow many problem addresses your list might have.
I didn’t expect to find a lot of issues as the list is relatively small and is 100% opt-in, with a clear authorization path. I’m generally not a fan of list validation where you have permission and no apparent issues sending emails. But my free check came back with a list of challenges. After running the list through FreshAddress’s paid service, we ended up removing 2% of the addresses.
It was right after the announcement of the TowerData / FreshAddress merger. But I didn’t let him cloud my decision where it might have been in the past. I trusted the technology. I was able to clean up my client list. I did not ignore the company just because of the merger. Instead, I looked at the rationale for the event.
Smart marketers will examine the company’s offerings, synergies, and their relevance to business.
At this point, most of us still have a long way to go before the vacation rush. I mean, we have a few days before things get crazy, don’t we? So use them wisely. Consider your options and which companies can help you.
If we’ve learned anything over the past year, it’s that third-party services and agencies are here to accelerate your innovation. With these latest developments in the industry, I see great companies helping marketers market better.
This time around, I look forward to the next wave of acquisitions to see if they continue to move forward in bringing great companies together to build each other for the benefit of all.