December 22, 2016 by China Martens
SAP’s latest tuck-in acquisition is the pending purchase of Abakus, a cloud cross-channel marketing measurement and optimization startup. Announced in mid-December, the acquisition is set to close in the first quarter of 2017 and will help SAP address an increasingly important area of marketing automation—the accurate measurement of marketing endeavors and their individual contributions to a customer purchase.
“Attribution has become absolutely key,” Jamie Anderson, SVP and CMO at SAP Hybris, says in a phone interview with ASUGNews. “If you’re running a live business, you need to be able to adapt in real time and make smart interventions.”
Having visibility into which types of marketing are actively contributing to increases in customer sales versus those which are demonstrating little to no benefits means companies can confidently make shifts in marketing investments in real time, he adds.
Founded in 2013, Abakus has its headquarters in Emeryville, Calif. The Abakus marketing attribution software includes patented technology which makes use of economic collaborative game theory--so the science of strategic decision making.
In explaining its use of game theory, Abakus gives the example of card players and how they might split the winnings from a game. If two players, when joined by a third player, start amassing winnings, what’s then the fairest allocation of those winnings? Applying this construct to the world of marketing, 'winning the game' is a customer buying your product, while the ‘players’ can be a variety of marketing campaigns or channels or placements or partners.
“Abakus has really smartly applied that theory,” Anderson says. “You can measure the efficiency of marketing and nurturing, and map the customer journey. If you’re sitting with the marketing budget, you can see what’s driving the most [customer] conversions.”
Anderson positions Abakus as a “perfect complement” to what SAP already offers with Hybris Marketing Cloud. “Attribution is definitely an area we recognized as a gap,” he says. “We had no formal partnership with an attribution player and we’re seeing it come up more and more with customers.”
What’s particularly attractive about Abakus for SAP compared with other attribution providers is the software’s collection of data from a variety of sources, so all marketing interactions with potential and existing buyers. “If you look across the market at attribution measurement systems, many are not that accurate,” Anderson says. “They only focus on the last touchpoint [prior to purchase] rather than analyzing all touchpoints across the customer journey.”
As we’ve seen with other data-based technologies, for instance, SAP Digital Boardroom, change management can be an overlooked issue when organizations adopt the software. The arrival of accurate data may upset previously established (and unchallenged) assumptions.
Anderson agrees, noting that Abakus may reveal some “inconvenient truths” for organizations about their marketing investments. “It may force people to rethink how they market products to customers,” he says. “This [Abakus] will uncover the efficacy of display and banner ads, of advertising via Twitter, of paid media, and paid search, and more. We will discover where you get the biggest bang for your buck.”
Once the acquisition closes in the first quarter of 2017, Abakus will become part of SAP Hybris. SAP will continue to provide Abakus software as a stand-alone offering as well as working to integrate the acquired technology with Hybris Marketing Cloud. “You will hear a lot about Hybris Marketing Cloud in 2017,” Anderson says. “Abakus was the right acquisition at the right time.”
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