Editor’s note: SAP’s acquisition of Gigya integrates omnichannel marketing and commerce experience, says Technology Business Research Analyst Seth Ulinski.

HAMPTON, N.H. – Omnichannel orchestration and data deluge challenge marketing and commerce; Gigya assets will position SAP Hybris to address market needs

In a digital world where brands must balance personalized messaging while combating not only dwindling consumer trust but also login fatigue and increased government intervention, both consumers and chief marketing officers should applaud the SAP-Gigya deal.

The addition of Gigya’s consumer-centric, data privacy-compliant platform to SAP Hybris’ existing enterprise marketing and commerce capabilities will enhance the new entity’s value proposition on multiple fronts. Leveraging existing integration with SAP Hybris, the customer identity and access management (CIAM) vendor’s opt-in Identity Exchange Marketplace, whereby 1.3 billion consumers control how and when login credentials are shared with 700 brands, provides deterministic data that will ultimately help address a significant piece of the omnichannel challenge, enabling the orchestration of more timely and more relevant brand messaging.

  • VIDEO: Watch an omnichannel overview from SAP  at https://www.youtube.com/watch?v=KUvdqMB-C1c

As the consumer increasingly dictates when and where brand engagement occurs, the stakes are high in the deployment of data-driven omnichannel marketing and commerce platforms. Given that nearly 50% of enterprises in TBR’s 1H17 Digital Marketing Technology Customer Research are in the “test and learn” or “transitioning” stages with regard to marketing and commerce platform maturity, it is early days for such platforms and SAP Hybris is well-positioned to capitalize on investments.

Further, one-quarter of respondents to TBR’s 1H17 Digital Marketing Technology Customer Research indicated they plan to increase budgets for programmatic marketing and customer data management tools by 10% or more in 2018 — two key areas that SAP Hybris addresses, bolstered by the acquisition of Gigya.

Marketers tasked with understanding cross-device behavior as consumers move through the consideration and buying process have historically turned to cookies and device IDs for audience segmentation and campaign measurement. They increasingly embrace people-based approaches, which typically leverage an email address as the identifier. In this vein, walled gardens of Facebook, YouTube (Owned by Google), and Amazon are maximizing respective revenue opportunities; however, their platforms create blind spots for marketers by limiting “data exhaust” or insights from ad campaigns.

Meanwhile, data privacy regulations add layers of risk and complexity in optimizing customer experience (CX), such as in the European Union, where the upcoming General Data Protection Regulation represents a potential speed bump for vendors and marketers. Gigya complements the omnichannel marketing and commerce capabilities within the SAP Hybris suite. Particularly, SAP Hybris Profile, a tool for audience data management.

As the data economy heats up, marketers will need to be mindful of maintaining trust with consumers as they deliver omnichannel campaigns and look to drive commerce. Through omnichannel platforms, key vendors such as SAP Hybris are blurring the lines of advertising, marketing and commerce — en route to optimization of CX.

About the acquisition

On Sept. 24 SAP announced plans to acquire Gigya, a CIAM vendor. The enterprise software vendor will integrate Gigya with its SAP Hybris Marketing and Commerce portfolio, with plans to expand integration across the entire SAP Hybris portfolio, including Sales, Service and Revenue.

While the terms of the deal were not made public, TBR estimates an acquisition price of $350 million and forecasts Gigya will generate $35 million in revenue for 2017. The 10 times multiple signals the value of CIAM solutions as enterprises ramp CX and larger digital technology transformation efforts. The deal is expected to close in 4Q17 and follows the smaller tuck-in 4Q16 acquisition of Abakus, a marketing attribution specialist.