Social at Scale
In the past month alone, some of the world’s largest enterprise technology companies have acquired social media marketing start-ups accumulating a total spending of close to $2.2 billion dollars. In the age where digital startups can open with little-to-no cash, and balloon from nothing more than an idea to millions of users overnight, the question becomes whether acquisition as a strategy helps or hurts a product.
As a senior executive at a boutique digital agency that focuses heavily on social, and in the spirit of full disclosure, has recently launched a competitive social media management system called HYFN8, I spend considerable time looking at the market in an effort to determine our forward-moving strategy. In doing so, I often question whether we focus on a rapid-growth acquisition strategy or slow-growth (long-term) strategy.
In the wake of Buddy Media’s acquisition by Salesforce for close to $700 million, my feelings are confirmed in witnessing how socially serious large enterprise companies are becoming and, in the same thought bubble, warned by prognosticators that this “will be very bad for Buddy’s competitors.” Countless articles are citing the belief that this acquisition positions the two companies as unstoppable with an already powerful sales platform now married to robust social tools. I’m thrilled to see more and more companies embed social within their organization and Buddy Media certainly worked hard to get to this exit point. I don’t think it’s time for the independents to throw in the towel though. No. Just as the underlying reasons for an acquisition may not always be clear, so is the future of what that means for the rest of the market. I actually believe the time is ripe to rally on and retain our independent, entrepreneurial spirit.
Having spent many years working at large corporations, I watched as we acquired a variety of companies. Without exception, as they were “integrated,” we at the business level, (though not mandated), were coerced into using their services. As was the case, “integrated” often meant a few things:
1. The acquired was no longer hungry. That focus on being an innovative leader in order to win customers was lost.
2. The sheer operational complexity of working within the walls of a large corporate parent vs. a startup would shape the pace at which they were able to iterate on ideas.
3. Often the acquisition was with the intent of integrating an audience or technology into some other internal platform.
This is where the divide in acquisition strategy lies for me, and further my disagreement with those that have stated how market dominance will be the result. Assuming you have a great core product it seems it’s my belief that acquisitions such as Buddy’s actually help other platforms. To clarify, Buddy Media has spent years evangelizing the need for a platform to manage your social presence. They largely built the market, but that’s not to say they “own” the market. Those that are first often benefit from that, however, that’s also balanced with the challenge of defining a market often through trial and error. Also, as they are integrated into a suite of products, they are forced to focus on (even if only a few) things that fall outside core product development. This means, their focus has to shift and the result is an opportunity for new products to iterate within this newly created market. In fact, the ideation and development of HYFN8, the platform I mentioned earlier took place long after there were others in the market. In fact, much of what’s driven our product roadmap is anecdotal feedback from clients who haven’t found what they are looking for in other platforms. Our strategy doesn’t place a target on the backs of our competitors, rather focuses on delivering what we believe is a longer term and more sustainable growth strategy, which allows for product development and an emphasis on our clients.
We believe there are three tenants to long-term success: 1 –Listen to your customer. 2 –Easy to use technology. 3 –Stay nimble.
The pace at which the digital landscape is shifting becomes the only constant that business marketers should be aware of.
In five years, CMOs will spend more on IT than their counterpart CIOs.
In the last month, three of the largest social media marketing companies were sold for a total of over $2 billion dollars.
Today, more enterprise companies and multinational brands are employing social messaging models to their global marketing mix.
Tomorrow, we continue to build social at scale.
Matt Fitz-Henry is SVP and General Manager of HYFN, a preferred LA-based digital agency specializing in mobile and social app development. Previously, he was a digital media executive working at The Walt Disney Company.