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Digital marketing partnerships key to vendors' channel strategies

Rackspace, Salesforce and Progress Software explain how digital marketing agencies factor into their overall channel partner ecosystems and strategies.

For some vendors, a thriving channel ecosystem means engaging a variety of partner types, including digital marketing...

partnerships.

Digital marketing organizations were among the earliest firms to recognize the IT budgets for marketing shifting from the purview of customers' IT departments to marketing executives. Vendors took note of the agencies' influence and unique reach within customer organizations. While on the surface, digital marketing agencies didn't appear to be direct competition for traditional channel partners, some industry watchers asserted the agencies did in fact pose a potential threat. For example, agencies working on digital initiatives with a client's marketing department could hypothetically usurp the client's infrastructure decisions, cutting channel partners out from those deals.

Vendors, however, view their digital marketing partnerships as an important subgroup of their overall partner ecosystems that, if anything, is complementary to a traditional channel base.

Progress cites potential partner synergies

Progress Software, an application development and deployment software vendor, said it sees an opportunity for digital marketing agencies to partner up with traditional channel firms.

Progress began to pursue digital marketing partnerships following its acquisition of app development vendor Telerik in 2014, said Matthew Gharegozlou, vice president of sales at Progress. The Telerik buyout brought with it Sitefinity, a content management system, as well as digital marketing agencies that had been working with the product.

Matthew Gharegozlou, vice president of sales, Progress SoftwareMatthew Gharegozlou

"The acquisition of Telerik and Sitefinity gave us the ability to go after these relationships," Gharegozlou said.

He noted that about 65% of Progress' content management business is now derived from channel partners. About 80% of those partners are digital marketing agencies.

Progress' traditional partners typically share a few traits: They work in the app development space, deal with customers' IT departments and lack skill sets related to digital experience and digital marketing. "So far, we haven't had any conflict" between traditional and agency partners, he said, because "the bulk of the experience needed on the digital side, our traditional partners don't have it."

Traditional Progress partners also usually have expertise in vertical industries, he said, adding that most are based in markets such as financial services, government, healthcare and education. "Our traditional partners are extremely knowledgeable" and have strong relationships in their vertical spaces, he said.

Because of traditional partners' strengths, Gharegozlou said Progress looks to pair them up with digital marketing agencies for certain leads. Combining the expertise in back-end work and vertical markets with agencies' expertise in web development and related technologies can produce compelling offerings. 

But while optimistic about these synergies, he recognized that a "full-service" digital marketing agency, which can do both the front-end and back-end work for a customer, diminishes the value that traditional partners may offer. In this sense, full-service agencies may be preferable to customers "because they can do the entire project," he said.

Salesforce supports acquisition trend

For Salesforce, digital marketing partnerships play a critical role in advancing its marketing platform.

Stephane Viallet, vice president of global alliances, agencies, at SalesforceStephane Viallet

Salesforce has signed numerous digital marketing agencies over the last six years, spurred by several acquisitions to build out its business-to-commercial and marketing portfolio, said Stephane Viallet, vice president of global alliances, agencies, at Salesforce. Salesforce's acquisitions have included digital marketing software company ExactTarget in 2013, as well as e-commerce provider Demandware and data management platform Krux in 2016. Viallet also cited Salesforce's alliance with Google as a driver behind the company's growing digital marketing agency partnerships.

"Partners, including digital marketing agencies, are the lifeblood of Salesforce, extending our platform in new and exciting ways and fueling our growth," Viallet said in an email. He said Salesforce and its partners are pursuing opportunities created by "our ability to merge media, adtech and martech to execute on a whole new way for brands to connect with customers."

Digital marketing organizations use Salesforce's products such as Salesforce Commerce Cloud, Marketing Cloud and Service Cloud to offer "transformative digital experience that enable clients to meet consumer expectations," he noted.

I think often agencies can help us get into areas of the business or with clients that we may not thoroughly be in today.
Adrianna Bustamantedirector of digital sales and alliances, Rackspace

In addition to having digital marketing and advertising skills, Viallet said Salesforce seeks partners that understand "the importance of merging data, technology and creativity" to deliver customer experience strategies.

Viallet also pointed to a trend among digital marketing organizations acquiring Salesforce practices, such as Publicis.Sapient's 2016 buyout of Vertiba, a Gold-level Salesforce Consulting partner.

Other notable acquisitions have included the following:

  • Wunderman bought a majority stake in Salesforce consultancy Pierry Inc. in September 2017.
  • Dentsu Aegis purchased Swiss digital marketing company Blue-Infinity in January 2017.
  • MRM//McCann acquired e-commerce service provider Optaros in December 2014.

"Digital marketing agencies haven't just built Salesforce practices around the globe organically -- they've been acquiring them as well," he said. "Salesforce supports these collaborations as we work to provide our partners with an edge that enables them to exceed customers' expectations."

Rackspace: Little overlap between the channels

Managed cloud provider Rackspace, meanwhile, looks at digital marketing partnerships differently: Traditional channel firms and digital marketing agencies can do business with the same customers without necessarily encroaching on each other's turf.

Rackspace's alliances with digital marketing agencies stem from its digital services practice. Launched in 2014, Rackspace Digital provides application and infrastructure hosting for web content management systems, e-commerce products, and mobile and critical application services. Adrianna Bustamante, Rackspace's director of digital sales and alliances, noted that the company has formally developed strategic digital marketing partnerships since about 2010.

Adrianna Bustamante, director of digital sales and alliances, RackspaceAdrianna Bustamante

"I think often agencies can help us get into areas of the business or with clients that we may not thoroughly be in today," Bustamante said.That's partly because digital marketing organizations tend to target a customer's marketing department -- versus the IT department.

"Nowadays ... your traditional agencies have to be more digitally focused. ... But still their main focus is very much around the consulting, the service and the creative -- potentially integration and development," Bustamante said.

She noted that the line between digital marketing organizations and systems integrators are blurring. Digital marketing organizations now look a lot more like systems integrators, while systems integrators "look a lot more like agencies," she said.

Rackspace works with its agency partners in reseller and referral models. The company offers enablement resources for creating "sticky engagements for their customers and successful projects," she said, while Rackspace focuses on the back end to ensure their projects meet scale, security and compliance requirements.

"We are heavily focused on trying to ... accelerate now in certain verticals and certain segments, now in midmarket and enterprise. We can form a strong partnership when the agency realizes and understands that we are that trusted partner for them," she said.

Rackspace generally doesn't see any tension between its traditional and digital marketing partnerships, according to Bustamante.

"There might be several partners that we might have within ... a certain customer that we are working with, but they might be working on five different projects, 20 different workloads, across three different business units," she said.

This was last published in August 2018

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