customer experience management
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Adobe reported its Q2 FY’18 earnings yesterday and the news was quite good. The company announced $2.2 billion in revenue for the quarter up 24 percent year over year. That puts them on an impressive $8.8 billion run rate, within reach of becoming the next $10 billion software company (or at least on a run rate).
Revenue was up across all major business lines, but as has been the norm, the vast majority comes from the company’s bread and butter, Creative Cloud, which houses the likes of Photoshop, InDesign and Dreamweaver, among others. In fact digital media, which includes Creative Cloud and Document Cloud accounted for $1.55 billion of the $2.2 billion in total revenue. The vast majority of that, $1.30 billion was from the creative side of the house with Document Cloud pulling in $243 million.
Adobe has been mostly known as a creative tools company until recent years when it also moved into marketing, analytics and advertising. Recently it purchased Magento for $1.6 billion, giving it a commerce component to go with those other pieces. Clearly Adobe has set its sights on Salesforce, which also has a strong marketing component and is not coincidentally perhaps, the most recently crowned $10 billion software company.
Adobe CEO Shantanu Narayen speaking to analysts on the post-reporting earnings call sees Magento as filling in a key piece across understanding the customer from shopping to purchase. “The acquisition of Magento will make Adobe the only company with leadership in content creation, marketing, advertising, analytics and now commerce, enabling real-time personalized experiences across the entire customer journey, whether on the web, mobile, social, in-product or in-store. We believe the addition of Magento expands our available market opportunity, builds out our product portfolio, and addresses a key underserved customer need,” Narayen told analysts.
If Adobe could find a way to expand that marketing and commerce revenue, it could easily surpass that $10 billion revenue run rate threshold, but so far while it has been growing, it remains less than half of the Creative revenue at $586 million. Yes, it grew at an 18 percent year over year clip, but it seems as though there is potential for so much more there and clearly Narayen hopes that the money spent on Magento will help drive that growth.
Even while it was announcing its revenue, rival Salesforce was meeting with Marketing Cloud customers in Chicago at the Salesforce Connections conference, a move that presented an interesting juxtaposition between the two competitors. Both have a similar approach to the marketing side, while Salesforce concentrates on the customer including CRM and service components. Adobe differentiates itself with content, which shows up on the balance sheet as the majority of its revenue .
Both companies have growth in common too. Salesforce has been on quite a run over the last five years reaching $3 billion in revenue for the first time last quarter. Adobe hit $2 billion for the first time in November. Consider that prior to moving to a subscription model in 2013, Adobe had revenue of $995 billion. Since it moved to that subscription model, it has reaped the benefits of recurring revenue and grown steadily ever since.
Each has used strategic acquisitions to help fuel that growth with Salesforce acquiring 27 companies since 2013 and Adobe 13, according to Crunchbase data. Each has bought a commerce company with Adobe buying Magento this year and Salesforce grabbing Demandware two years ago.
Adobe has the toolset to keep the marketing side of its business growing. It might never reach the revenue of the creative side, but it could help push the company further than it’s ever been. Ten billion dollars seems well within reach if things continue along the current trajectory.
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At the Adobe Summit in Las Vegas this week, privacy was on the minds of many people. It was no wonder with social media data abuse dominating the headlines, GDPR just around the corner, and Adobe announcing the concept of a centralized customer experience record.
With so many high profile breaches in recent years, putting your customer data in a central record-keeping system would seem to be a dangerous proposition, yet Adobe sees so many positives for marketers, it likely believes this to be a worthy trade-off.
Which is not to say that the company doesn’t see the risks. Executives speaking at the conference continually insisted that privacy is always part of the conversation at Adobe as they build tools — and they have built in security and privacy safeguards into the customer experience record.
Ben Kepes, an independent analyst says this kind of data collection does raise ethical questions about how to use it. “This new central repository of data about individuals is going to be incredibly attractive to Adobe’s customers. The company is doing what big brands and corporations ask for. But in these post-Cambridge Analytica days, I wonder how much of a moral obligation Adobe and the other vendors have to ensure their tools are used for good purposes,” Kepes asked.
It’s worth pointing out that the goal of this exercise isn’t simply to collect data for data’s sake. It’s to offer consumers a more customized and streamlined experience. How does that work? There was a demo in the keynote illustrating a woman’s experience with a hotel brand.
Brad Rencher, EVP and GM at Adobe Experience Cloud explains Adobe’s Cloud offerings. Photo: Jeff Bottari/Invision for Adobe/AP Images
The mythical woman started a reservation for a trip to New York City, got distracted in the middle and was later “reminded” to return to it via Facebook ad. She completed the reservation and was later issued a digital key to her room, allowing her to bypass the front desk check-in process. Further, there was a personal greeting on the television in her room with a custom message and suggestions for entertainment based on her known preferences.
As one journalist pointed out in the press event, this level of detail from the hotel is not something that would thrill him (beyond the electronic check-in). Yet there doesn’t seem to be a way to opt out of that data (unless you live in the EU and will be subject to GDPR rules).
As it turns out, that reporter wasn’t alone. According to a survey conducted last year by The Economist Intelligence Unit in conjunction with ForgeRock, an identity management company, consumers are not just willing sheep that tech companies may think we are.
The survey was conducted last October with 1,629 consumers participating from eight countries including Australia, China, France, Germany, Japan, South Korea, the UK and the US. It’s worth noting that survey questions were asked in the context of Internet of Things data, but it seems that the results could be more broadly applied to any types of data collection activities by brands.
There are a couple of interesting data points that perhaps brands should heed as they collect customer data in the fashion outlined by Adobe. In particular as it relates to what Adobe and other marketing software companies are trying to do to build a central customer profile, when asked to rate the statement, “I am uncomfortable with companies building a “profile” of me to predict my consumer behaviour,” 39 percent strongly agreed with that statement. Another 35 percent somewhat agreed. That would suggest that consumers aren’t necessarily thrilled with this idea.
When presented with the statement, Providing my personal information may have more drawbacks than benefits, 32 percent strongly agreed and 41 percent somewhat agreed.

That would suggest that it is on the brand to make it clearer to consumers that they are collecting that data to provide a better overall experience, because it appears that consumers who answered this survey are not necessarily making that connection.

Perhaps it wasn’t a coincidence that at a press conference after the Day One keynote announcing the unified customer experience record, many questions from analysts and journalists focused on notions of privacy. If Adobe is helping companies gather and organize customer data, what role do they have in how their customers’ use that data, what role does the brand have and how much control should consumers have over their own data?
These are questions we seem to be answering on the fly. The technology is here now or very soon will be, and wherever the data comes from, whether the web, mobile devices or the Internet of Things, we need to get a grip on the privacy implications — and we need to do it quickly. If consumers want more control as this survey suggests, maybe it’s time for companies to give it to them.
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Oracle announced a slew of AI-driven capabilities across its Customer Experience Cloud Suite today that are designed to help users to deliver better, faster and more personal experiences. If you think you’ve heard this before, it’s because Oracle joins its customer experience competitors in offering a similar set of capabilities complete with underlying artificial… Read More
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For years we’ve been hearing about the promise of customer experience management, the notion that you can understand your customer at a highly detailed level and serve them the content, products, services and even ads that matter (or at least make sense) to them.
Today’s marketing software is bringing that idea closer to reality.
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While it’s not exactly sentient, Sentione sure sounds like it should be. This Polish company watches social media for brands allowing you to create an instant monitor for any topic. Founded by Bartek Baziński, Michael Brzezicki, and Kamil Bargiel, the company raised $3.5 million from Venture TFI and Trigon TFI Group to build out their platform internationally. The company has been… Read More
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We’ve all had crappy customer service calls. Primed by staticky elevator music and the ever-mysterious agitating echo, most of us come into calls with strained patience. On the line, customer service and sales agents are paid to build relationships, but after a long day of working with callers (who typically only call if they’re having a problem), even the bubbliest of people can… Read More
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EMC and Hippo announced a partnership today in which Hippo, an open source web content management platform, will integrate with EMC Documentum, EMC’s enterprise content management software.
As with all good deals, each partner gains something. EMC fills in a missing piece in its content management arsenal without having to spend a lot of money. Hippo gains access to a much broader… Read More
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Business today has entered a twilight zone of sorts where what you used to know doesn’t really apply any more. From the firewall mentality in IT to traditional marketing and advertising approaches in marketing to the way you run your customer service desk — it’s all changing because of the digital transformation happening all around us. And you have to change too by… Read More
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