ExactTarget today announced plans to acquire two companies: Pardot and iGoDigital. The acquisitions signal that ExactTarget, only recently public, intends to use its cash reserves to grow aggressively against the competition in revenue, market segments, and features. So what does it mean?

Are the two acquisitions related?

No, the dual acquisitions are a quirk of timing, allowing ExactTarget to drive the marketing technology conversation in advance of Connections, its user conference in Indianapolis next week. I’ll separate my comments to better address each.

Still, I’ll risk a theme for these two acquisitions: Marketing automation without predictive analytics is blind, but analytics without automation is empty.

Why did ExactTarget make the acquisitions now?

iGoDigital Pardot
The acquisition is unlikely to make a big impact in the short term. Recommendations are a small part of the marketing software mix for retailers.  ExactTarget can cross-sell online recommendations into its significant B2C base, but in the end, ExactTarget is acquiring the firm for a longer-term move. Pardot will have a bigger short-term impact. Acquiring Pardot also reduces competition in B2B automation deals, giving the firm breathing room and a bigger arsenal of automation experience, engineering muscle, and IP against larger players like Marketo and Eloqua.

Is there a long-term play for ExactTarget?

iGoDigital Pardot
The bigger impact lies down the road in the expertise and experience that iGoDigital brings. Cross-channel campaign management and marketing automation is increasingly a game of customer intimacy, optimizing experience and relevance from the explicit customer data and implicit contextual signals sent by customers. ExactTarget should move iGoDigital from recommendations to offer optimization and real-time, inbound interaction management. That legwork will also improve the perceived value of its segmentation and automation tools. ExactTarget will need to invest heavily, but analytical expertise and behavioral data are key starting points. For ExactTarget, Pardot means the company remains relevant in the fast-growing B2B marketing automation space, particularly as the buyers gravitate towards sophisticated lead scoring, lead nurturing, and revenue-based reporting. Look for ExactTarget to retain a focus on the SMB focus in the near term and to grow Pardot into a competitive with larger players — like Marketo, Eloqua — in the long term. The move also signals that ExactTarget is unafraid to experiment with revenue models other than purely volume-based messaging.

What does it mean for customers?

iGoDigital Pardot
For existing iGoDigital customers, the immediate effect is a new orange-tinted logo. ExactTarget’s retail customers get simplified integration with a recommendation engine in the short term, and hopefully, in the long run, all customers get cross-channel offer management and guided dialogue-based campaigns. For existing Pardot customers, the immediate effect is a new orange-tinted logo, and some interesting conversation at the Pardot user conference in two weeks. ExactTarget’s customers gain a better business account-focused data model, lead scoring, and new nurturing focused capabilities.

What’s the effect on the competitive space?

iGoDigital Pardot
The iGoDigital acquisition won‘t have much of an immediate effect on the competitive landscape. If ExactTarget can successfully transition to real-time offer management, it will become a much more significant competitor in the cross-channel campaign management space. Pardot will have more of a short-term effect, effectively ending last year’s Hub partnership with Marketo, and moving ExactTarget directly into the B2B marketing automation field. Expect to see more intense competition from both small and large vendors in the space.

Are these acquisitions a good move by ExactTarget?

Yes. Our research shows that behavioral personalization is the biggest concern in customer relationship marketing, and we see that concern expressed across industry verticals, company sizes, and maturity levels. Technology providers (and their clients) that only focus on traditional targeting methods will not be successful in the marketplace. ExactTarget needs analytics to add intelligence to its maturing automation platform, both to be more competitive and to establish a pricing beachhead beyond commoditizing email CPMs.

Perhaps as, if not more, importantly, the company needs to make advances in helping its clients resolve customers' identities – recognizing customers across channels – and in making customer knowledge meaningful – enacting the right customer action, not just offer. ExactTarget’s open architecture will help it attract new partners, but it needs to own the ability to help companies identify and guide their customer’s journeys if it wants to remain relevant in the age of the customer.