Adobe continues to eye digital marketing growth in its Experience Cloud business segment, according to Adobe CFO John Murphy.
Adobe sees a total addressable market (TAM) from that market segment of about $84 billion in 2022 and that business will account for about $4 billion for the company, he said Feb. 12 at the Goldman Sachs 2020 Technology and Internet Conference in San Francisco.
That means it represents “a lot of great growth opportunity for us,” he told attendees, while discussing Adobe’s positioning in the digital marketing sector.
About 10 years ago, Adobe bought the online marketing and web analytics company Omniture, he recalled. A few years later, Adobe stopped using that company’s name and shifted to the Adobe Marketing Cloud brand, before putting Marketing Cloud under its Adobe Experience Cloud umbrella.
The company looked at the digital marketing business as an adjacent one to “our digital media space because of content creation and data analytics and how we would look at engaging with people – how enterprises need to engage with their consumers,” he explained.
“So, it was really a good natural fit for us to extend the franchise of digital media over to digital marketing and with enterprise,” he said.
And Adobe believes that it offers the “most comprehensive set of digital marketing solutions,” he said, adding those solutions can be used to “drive engagement for our enterprise” and other customers to “engage with their consumers to drive their business and drive revenue and drive loyalty.”
Looking back, he said: “It’s definitely played out as expected. When you think about the content creation explosion that’s occurred and it’s continuing to occur because of the devices that are available to engage with consumers and customers across different enterprises and different verticals – whether it be on mobile devices, on tablets, on desktops, on screens in your car…. There’s all these touch points that are available for enterprises to engage with customers, [but] they have to have rich content to engage with customers. So, that was the perfect marriage really of our businesses.”
Adobe was essentially able to take a $2 billion business and “basically triple it in size in the last 7-8 years through the use of our own tools,” Mike Saviage, VP of investor relations, told the conference. Now there’s a long line of customers who want Adobe to help them do the same sort of thing with their businesses, he said, noting Adobe’s use of artificial intelligence and machine learning only strengthens what it’s offering customers.
Although Digital Media, including Creative Cloud, still accounts for the largest percentage of Adobe’s revenue, its Digital Experience business is catching up. In the fourth quarter (ended Nov. 29), Digital Experience revenue grew 24% from a year earlier to $859 million, trailing the $2.08 billion it saw in Digital Media (22% growth).
Adobe also continues to make major investments in the Digital Experience business. That was reflected in its purchases of Magento Commerce and Marketo.
Creative Cloud, meanwhile, has been a dominant product for a long time and Adobe intends to sustain its competitive advantage in that business also. “It’s a market that is growing,” with TAM of about $31 billion, he said. What has helped grow that business significantly is the fact that there are so many people creating content now and posting it on social media, he noted, adding that the mobile devices they’re using are also making it possible to create content in real-time.