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Why Adobe entered into a partnership with Publicis Groupe

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Adobe partners with Publicis Groupe

On September 10, 2014, Adobe (ADBE) and Publicis Groupe, an advertising and communications company, announced a strategic partnership. The partnership involves delivery of the Publicis Groupe “Always-On” Platform. Publicis claims Always-On is the first end-to-end marketing management platform that automates and connects all the components of a client’s marketing efforts.

If Adobe’s strategic partnerships turn out fruitful, they would benefit ETFs like the SPDR Morgan Stanley Technology ETF (MTK), the Guggenheim S&P 500 Equal Weight Technology ETF (RYT), and the Technology Select Sector SPDR Fund (XLK). These funds have high exposure to Adobe.

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The above chart shows the areas that receive CRM Software spending. Customer service tops the list. Marketing, which includes marketing automations, also forms a sizeable part, at 20%.

A lot of acquisitions are happening in the marketing automation space. Adobe acquired Neolane in 2013 and Salesforce.com (CRM) acquired ExactTarget in 2014.

Strategic partnership aims to deliver Always-On, a global marketing platform

The Always-On platform is a marketing management platform that automates and connects all components of its client efforts. Always-On will be standardized on Adobe Marketing Cloud.

Through a unified technology and data structure, marketing performance will be tracked and measured. All the agencies across Publicis Groupe will have the freedom to create engaging content, access marketing intelligence, and identify and build audience segments.

What this partnership yields for Adobe

Adobe is a leading player in digital marketing. Publicis Groupe is the third-largest global communications group. Considering their leadership positions in the digital space, a partnership between the companies appears symbiotic. Through this partnership, Publicis aims to generate 75% of total revenues from digital and emerging markets by 2018.

According to Adobe president and CEO Shantanu Narayen, “The massive scale of agency services across the Publicis networks, coupled with Adobe’s unique leadership in digital marketing solutions, will enable Publicis clients to develop best-in-class digital marketing capabilities that drive growth.”

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