Former IBM Marketing division steps up local and regional investment to bolster its growth as a pure-play marketing technology vendor
Building brand credibility as a pure-play marketing vendor and demonstrating local customer commitment through tech and employee investment is how Acoustic is hoping to secure growth in Australia and across Asia-Pacific.
Acoustic was officially divested from IBM in April 2020 and has been operating for just over a year as a standalone brand providing marketing and analytics solutions. The company has just had its first financial year, which coincides with the Australian financial year, under ownership of private equity firm, Centerbridge Partners.
Last week, the business announced expansion of offices in Sydney and Melbourne as well as the launch of an Australian, cloud-based data centre. It’s part of a commitment that see Acoustic prioritising tens of millions of dollars over the next two years to accelerate growth and expand local headcount. The local data centre is also a reflection of Acoustic’s customer base across industries requiring high levels of data privacy and governance and localisation of data sets.
“Young, hungry and scrappy” is how Acoustic VP sales APJ, Jeremy Smart, described the vendor’s approach in Australia and regionally as it works to build a distinct brand and culture. All things considered internally and externally, Smart said business prospects looked good from an APJ perspective, with the business growing at the same industry rate over the past fiscal year.
“We’re not Adobe, Salesforce or Oracle, we’re no longer IBM, we are young, scrappy and hungry. That’s how we’re operating today and I think that’s why we have seen those successes so far,” Smart said.
“Initially, there were challenges around retention as there were lots of questions from customers in those first couple of quarters. It’s difficult when you are carved out from one of the biggest and oldest technology companies on the planet, and we saw some fluctuations as we worked to stabilise the business.”
Smart noted APJ had the highest levels of retention rates and ability to retain customers globally, with net new business performance also superior to many regions worldwide.
“We also had a great second half, which is what has framed the investment we’re seeing into key markets and geographies such as Australia,” he said.
Smart noted the addressable market in Australia for Acoustic is worth $200 million, while in Japan, the opportunity exceeds $300 million. A third of the vendor’s top five growth markets in India.
As a result, Acoustic is planning to have up to 50 employees in region by the end of the calendar year in APJ, a doubling of headcount.
“It’s a huge market opportunity for us to tap into and to do that, we need people,” Smart said. “And it’s people to help in all areas, from pre-sales to sales, product development, support services, customer success and management.”
Growing the partner network is another priority, with Acoustic looking to recruit key strategic partners from specialist digital agencies, systems integrators and consultancies providing a raft of managed services in the martech space.
Related: Acoustic CEO: What we’re doing to be the best-of-breed marketing cloud alternative
Acoustic arguably faces a big task. In recent years, there has been rapid consolidation of marketing technologies into enterprise stacks, as well as growing emphasis by leaders in the vendor pack, such as Adobe, Salesforce and Oracle, to acquire wider enterprise applications to connect marketing to the wider business technology ecosystem.
Despite this trend, Smart said Acoustic remains committed to its best-of-breed approach and a laser focus on the marketing department.
“Our strategy is not necessarily to try and build out this holistic, all-encompassing marketing tech offering. While there is a lot of consolidation going on in those larger vendor organisations, the market doesn’t necessarily want a complete, all-encompassing solution,” he argued.
“At Acoustic, we are focused on the upper mid-market, and we have some great case studies there. Yes, we are going to come up against an Adobe or Salesforce there. But at the lower end, we’re also going to come up against Hubspot.
“What we are now seeing, in the last 5-10-year journey of large enterprise transformation, is customers are still running on average 80 different applications in the business. And they’re not all Adobe, Oracle or Salesforce. So what they are looking for are applications that have synergy and are complementary to some of the other apps running lines of business, be it, human resources management or whatever it is.
“That’s the fertile ground we’re playing in and it’s very much reflected in our go-to-market message. Sure, if a customer wants to talk more than just Acoustic Campaign or Tealeaf, that’s great, but we’re not walking in saying here are four solutions you get for the price of one, so to speak.”
Smart also played down the possibility of Acoustic looking to acquire or bolt-on broader solutions to its product portfolio.
“We’re laser focused on marketing and it’s about building solutions that help them do their jobs,” he said.
To do this, Acoustic needs to prove its worth as a valued partner, Smart continued. He cited the biggest trend in Australia and ASEAN right now is a “demand for value”.
“Customers want a lot more skin in the game from the vendors they work with. They have learnt there’s no buying one silver bullet that takes away the pain – they know they need to instrument the application and operationalise the solution. It’s not like someone installs the tech and all your problems disappear,” Smart said.
“There is a strong push on vendors to step up and help marketing teams articulate the value from the solutions. That’s great for us and we can do that. We can demonstrate and craft business cases and ROI models around using our solutions. We are trying to use that as a point of difference in the market. That’s opposed to having a large logo.”
Smart admitted one big challenge Acoustic faces to growth is brand awareness and building. The emphasis therefore has to be on helping marketers do what they do, he said.
“We do that by demonstrating we are listening, being more supportive and engaging customers after the transaction – by staying on point month to month, providing a voice, working with partners if there is a partner involved,” he said. “It’s about addressing those concerns and providing ongoing support.
“We need to continue to support existing customers and give those customers a voice – to amplify us in the market.”
Existing Acoustic customers locally include the Service Australia, which has ramped up invested in Acoustic’s Tealeaf analytics solution as a direct response to the Covid environment and changing citizen needs. Also on the list are Reece, GWM Haval, Baby Love, Borough Markets and HelpPay.
Continual investment in the technology is also critical given how quickly businesses are changing, Smart said. One such transformative trend he noted was the push towards direct-to-consumer models, new tech solutions appearing in this space with ever-easier UI and cut through.
“That means Acoustic needs to keep investing in this side to ensure appeal with marketers,” Smart said.
Continuing to invest in and talk about Acoustic’s own culture is another must for customers wanting to build relationships with vendors with aligned values and commitment.
“We have an opportunity in APJ to create our own identity and proposition as Acoustic. It’s all going to come down to actions ultimately, however, and what we do in the market,” Smart said.
Acoustic’s flagship offering is the Acoustic Marketing Cloud, which incorporates Acoustic Campaign (formerly Campaign Automation, which in turn has its foundations in Silverpop and IBM Watson Marketing); Experience Analytics (formerly Tealeaf and Coremetrics); Content (formerly Content Hub); Personalisation (formerly Real-Time Personalisation); Journey Analytics; Digital Analytics; and Exchange (formerly Universal Behaviour Exchange / UBX). The company also offers Lifecycle Pricing and Lifecycle Promotion tools, formerly DemandTec, as well as Acoustic payments (formerly Payments Gateway).
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