Tech giants are investing in social media again. Here’s how they can get it right this time

Photo credit: Jason Howie.

Earlier this spring, Oracle spent almost a billion dollars on a marketing tool that few people had ever heard of. Moat is used to audit social media ads and ensure that they’re showing up on Facebook and Google, as promised. But the exact function is largely beside the point.

What’s important is this: Once again, big-time software players like Oracle, Adobe, and Salesforce are turning their attention to buying up social media and related tools for their marketing clouds. And this time around, they’re confident that things will turn out better than the last buying spree.

More than 5 years ago

Let’s rewind five years or so. Back in the early 2010s, the concept of the unified marketing cloud—a single collection of integrated tools for marketing teams, embracing everything from email to analytics, campaigns, ads, and more —was still fresh. Adobe had been among the firsts to the scene, but other industry heavyweights were racing in with their own alternatives.

At the same time, social media as a business tool remained a novel concept. Facebook had been around for years, but companies were only just beginning to explore how social networks could be used as a part of a serious marketing strategy.

It was in that uncertain climate that some of the biggest names in software began literally dropping billions of dollars on emerging social tools. In fast succession, Salesforce acquired social listening tool Radian6 in 2011 for US$326 million and social publishing tool Buddy Media in 2012 for US$745 million. Adobe scooped up Context Optional and ad tool Efficient Frontier for a rumored US$400 million in 2011. In 2012, Oracle acquired social marketing startup Vitrue for US$300 million. All of these technologies promised to add a robust new social media component to existing marketing clouds. Press releases touted the coming social business revolution.

Then, crickets. After news of the high-priced acquisitions died down, eager CMOs waited and waited for these new social tools to roll out. Some were mothballed almost as soon as they were bought. In other cases, integrations took years, with results that were patently underwhelming.

What went wrong the first time

The post-mortem on the first wave of social cloud applications reveals a host of fatal errors. For starters, social media itself was misunderstood. At the time, it was still thought of as a siloed function within a business, the domain of a lone social media manager and small team of social-savvy millennials. There wasn’t an appreciation yet for how social pervades the entire buyer’s journey—from product discovery to consideration, purchase, and advocacy.

Precisely because social media was thought of as an “add-on,” it was relegated to a peripheral role in early marketing clouds. Rather than being part of the central “brain” of these platforms, it was treated as simply another system of engagement —no different than an email application or a messaging service. Customer data from other parts of the cloud didn’t flow freely into social tools nor were these tools engineered to gather and organize insights from customers.

On top of this, the initial crop of social media marketing tools were largely untested. It’s important to remember that the early 2010s were still the nascent days of marketing technology. The promise of automating and refining mundane marketing tasks —and finding ways to track revenue from campaigns —had whipped marketing teams in big and small companies into a buying frenzy. (Gartner had famously predicted that CMOs’ tech budgets would soon outpace CIOs’.) Big software companies were eager to get in on the action. So, Salesforce, Oracle, and their peers ended up doubling down on tools that may not have been quite ready for prime time.

The combined result was disappointment. These new social media additions were hard to use, non-intuitive, and not well-integrated— afterthoughts, rather than central pieces, of the marketing cloud. As a result, marketers who wanted serious social media tools were forced to look outside the big clouds and instead rely on more targeted point solutions, which defeated the purpose of buying a comprehensive marketing cloud in the first place.

Social cloud redux

Just five years later, however, the situation has changed markedly. Social media has proved to be less like a technological fad than a cultural sea change. Thanks to mobile technology, the average user now spends two hours on social media every day. Teens (i.e. tomorrow’s consumers) spend up to nine hours a day. Companies have come to recognize social media as possibly the central tool for gathering insights about and reaching customers —both B2B and B2C —and guiding them from discovery to purchase.

Likewise, social media management platforms available today have matured substantially from the earlier wave of acquisitions. AI-powered analytics tools enable separating “signal from noise” in a way inconceivable just a few years ago — sorting through millions of data points to identify trends and consumer sentiment at a glance. Meanwhile, with social ad spend now surpassing TV spend, new ad buying tools have emerged to launch, automate, and maximize ad campaigns across social networks. Social platforms have likewise evolved to serve not just the narrow needs of marketers but also sales and customer service teams.