What concerns surround Adobe stock?



Adobe’s Marketing Cloud lacks link to CRM

As we have seen in previous parts of this series, Adobe’s (ADBE) efforts in strengthening its place in the digital marketing sector have paid off with being crowned as the leader in this space. However, unlike Salesforce.com (CRM) and Oracle (ORCL), Adobe’s offerings are mainly focused on marketers, and don’t target the sales side of the businesses. Thus, Adobe provides plenty of content creation and analytics with less focus on customer relationship management (or CRM).

Adobe’s growth not only benefits Adobe investors, but also ETFs like the Powershares QQQ Trust ETF (QQQ), and the Technology Select Sector SPDR Fund (XLK), which have high exposure to Adobe.

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As the above chart shows, industry peer Salesforce.com dominates the CRM area. SAP, Oracle, Microsoft (MSFT), and IBM (IBM) are other leading players in this space. According to Rebecca Wetteman, analyst at Nucleus Research, “Adobe lacks a link to CRM, which brings all the marketing efforts back to measurable results. Having that CRM piece is becoming more and more critical in closing that loop to find out what type of campaigns are working.”

As of now, Adobe allows the integration of its digital marketing solutions to a company’s existing CRM platform. To ward off the competition posed by its peers, there is a strong possibility that Adobe might build out existing CRM capabilities in both Campaign and Analytics in the future.


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