When companies undergo mergers and acquisitions (M&A), the immediate focus typically lands on financial consolidation, operational efficiency, and integrating enterprise systems like ERP and supply chain software. However, one key area often underappreciated during these transitions is marketing technology including, marketing automation platforms (MAPs), customer relationship management (CRM) systems, and customer data platforms (CDPs). Overlooking these systems can lead to significant missed opportunities and challenges, ranging from lost revenue to integration bottlenecks, ultimately impacting the deal’s success.
Marketing technology is essential for maintaining business continuity, especially in preserving customer relationships and ensuring streamlined marketing and sales operations. A successful M&A should prioritize integrating or transitioning these systems early in the process. Whether you’re aligning platforms between merging entities or migrating to a new one, the role of marketing technology in managing customer data, driving revenue, and supporting business growth is crucial.
“Incorporating marketing technology early in the M&A process ensures these systems are ready to support seamless operations, even amid organizational shifts.”
Strategic Importance of Marketing Technology
While enterprise systems like ERP typically take center stage during M&A discussions, marketing technology plays a critical role in a successful integration. Beyond its technical functions, martech enables companies to unify and leverage customer data, a valuable asset in mergers. When properly aligned, these tools streamline processes, support customer retention, and align sales and marketing functions across the newly merged entity. They also help the business deliver consistent messaging to its entire customer base, building brand loyalty and maximizing revenue.
Incorporating marketing technology early in the M&A process ensures these systems are ready to support seamless operations, even amid organizational shifts. Failing to prioritize them can lead to fragmented customer experiences and disengaged audiences, issues that can weaken the combined brand and ultimately reduce revenue. In fact, as we’ll cover in more detail below, the financial costs of MAP integration alone can reach millions, underscoring the need for careful planning.
A well-planned integration of marketing technology offers several strategic advantages:
- Customer Retention: Aligning marketing systems during a merger is key to maintaining loyalty and minimizing churn.
- Data Utilization: Integrated platforms allow for enhanced data utilization, which supports cross-selling, up-selling, and customer insights.
- Faster Market Entry: A unified marketing technology environment allows companies to execute campaigns more efficiently and establish a strong brand presence post-merger.
Preparing for Martech Integration
Successfully integrating marketing technology requires careful planning, collaboration, and adaptation to the nuances of each system. Before integration begins, the new entity should establish a clear understanding of its combined marketing goals and the role technology will play in achieving them.
Preparation includes identifying key data touchpoints, assessing any redundancies, and deciding how to handle customer data privacy. Cross-departmental alignment is crucial and therefore, so is planning ahead. By ensuring everyone is on the same page, businesses can reduce the risk of costly missteps or downtime during the transition.
In addition, considering any future scalability needs is essential. Marketing technology should not only meet current demands but also allow for the growth that the new entity is expecting while also being able to adapt to shifts in customer needs or emerging technologies. Proper preparation for martech integration positions the new organization to hit the ground running, minimizing disruptions and maximizing the synergies that were the foundation of the deal.
Expanding the Role of Marketing Technology in M&As
Marketing technology’s role in M&As is about creating new competitive advantages that help the merged companies thrive in their evolving market. In post-merger scenarios, martech can facilitate rapid entry into untapped markets by enabling precise targeting and personalized engagement on a larger scale. Unified systems also allow for a seamless brand experience, building trust with a broadened customer base and establishing the newly combined brand as a cohesive entity.
With access to integrated customer insights, companies can proactively identify and respond to emerging trends and customer needs, turning data into a strategic asset that drives revenue growth. For companies involved in high-stakes M&As, marketing technology becomes an engine for sustainable growth and differentiation in an increasingly competitive landscape.
“In this scenario, if the MAP migration costs are not accounted for, a buyer might miss the opportunity to negotiate a $22.5 million reduction in purchase price.”
Financial Impact Breakdown
To illustrate the potential costs associated with marketing automation during a merger or acquisition, consider this scenario involving a larger enterprise.
Company Profile:
- Annual Revenue: $1 billion
- Employee Count: 5,000
- Existing MAP: An enterprise-level MAP (e.g., Salesforce Marketing Cloud, Adobe Marketo, Oracle Eloqua)
- Migration Context: The company A is being acquired by a Company B and each use a different MAP.
Estimated Costs of MAP Migration
Licensing and Subscriptions:
- The cost of maintaining the current MAP licenses during the migration period: $250,000 per year.
- New MAP license costs (including potential overlaps during the transition): $350,000 per year.
- Additional licenses for testing environments, expanded user access, and integration phases: $100,000.
Total Licensing Costs: $700,000
Data Migration and Integration
- Data extraction, transformation, and loading (ETL) from the old MAP to the new platform, including data cleansing and validation: $500,000.
- Integration with existing enterprise systems (CRM, ERP, data warehouses): $400,000.
- Development and deployment of custom APIs, connectors, and middleware: $200,000.
Total Data Migration and Integration Costs: $1,100,000
Asset Migration
- Migrating and testing a large volume of email templates, landing pages, forms, and automation workflows: $250,000.
- Redesigning and optimizing assets to leverage the new MAP’s features: $150,000.
Total Asset Migration Costs: $400,000
Training and Change Management
- Comprehensive training programs for marketing, sales, IT, and leadership teams: $200,000.
- Development of tailored training materials, ongoing support documentation, and knowledge transfer: $100,000.
- Change management initiatives to ensure smooth adoption and minimize resistance: $100,000.
Total Training and Change Management Costs: $400,000
Post-Migration Support and Optimization
- Hypercare support during the first three to six months post-migration: $150,000.
- Continuous system optimization, performance monitoring, and troubleshooting: $100,000.
- Managed services for ongoing support, including campaign management and advanced analytics: $150,000.
Total Post-Migration Support and Optimization Costs: $400,000
Total Estimated Cost of MAP Migration: $3,000,000
The Cost of Overlooking Martech
Now, consider an acquisition priced at $1.5 billion, with an EBITDA of $200 million and a multiple of 7.5. In this scenario, if the MAP migration costs are not accounted for, a buyer might miss the opportunity to negotiate a $22.5 million reduction in purchase price. The math shows that a revised EBITDA of $197 million (after considering MAP migration costs) could have resulted in a purchase price of $1.4775 billion, effectively saving the buyer $22.5 million. The scenario highlights the critical financial implications of properly addressing MAP migration.
On the sell side, ignoring these factors could lead to litigation or unhappy shareholders. In today’s era of automation, it’s more crucial than ever to ensure marketing technology is given the attention it deserves during M&A transactions. Engaging experienced consultants early in the process ensures that all aspects of the merger, including marketing systems, are handled strategically, paving the way for smoother transitions and better financial outcomes.
By carefully considering marketing technology in M&As, companies can avoid costly mistakes, achieve operational synergies, and realize the full potential of their merger or acquisition
