After a weekend of speculation, today Lithium announced its acquisition of the social media monitoring tool, Scout Labs. Lithium is known for its community platform software, powering popular user communities like Best Buy's support forum and Barnes & Noble's Book Club and by integrating Scout Labs into its offerings, plans to track customers and brands on site through communities, and off site through social media. This deal strengthens Lithium's commitment to its message of "Social CRM", giving it a broader set of customer data to integrate.
This acquisition comes just weeks after Attensity announced its purchase of Biz360 and a few months after Jive bought Filtrbox. The growing number of acquisitions in the social media technology space is common for a young industry, but also indicates two distinct trends:
- The importance of social media data. As more and more companies begin to embrace social media as a series of channels for rich qualitative customer data, they'll need technology to enable their collection and analysis of the data. This is why there are more and more social media monitoring startups cropping up every month. But as I've said before, the real power in social media data comes from combining it with other customer data channels. In this case, the other data channels exist within the communities themselves.
- The value community platforms see in social media analytics. The community platform players like Lithium and Jive know well that much of the value they provide clients comes from the insights created within their communities. These vendors are now tasked with delivering better insights around their existing data, because while many have analytics infrastructures in place, their customers continue to evolve and expect more out of the communities – including better and richer insights. By adding broader listening platform capabilities to their product offerings, they can create better reports around community actions as well as complete the picture of social media data – onsite with a client's existing customers and off site with their potential customers.
As more and more Customer Intelligence professionals focus on the importance of data-driven marketing, vendors focusing on analytics will continue to heat up. In this case, both social media technology and analytics merge for a powerful combination. With these growing trends, it's safe to say that the social media technology space is prime for more M&A and we're likely to see even more in the near future. Congratulations to both Scout Labs and Lithium on the deal.