Dynamic Marketing Communiqué

Save as a PDF (*.pdf): How did this computer software company maximize the use of digital marketing? [Monday Marketing Marvels]

August 17, 2020

Photoshop, Lightroom, Illustrator, and InDesign.

These are some of the famous applications that most people use to create digitized and easy-to-share content.

What do they have in common?

These applications were all produced by one company.

ADOBE INC.

Adobe Inc. is an American multinational computer software company that produces printing, publishing, and graphics software.

It is well known for products and services that help people manage their digital content and improve their digital experience. As the digital landscape changed, so did the company’s focus.

Instead of just creating multimedia and software products such as those mentioned above, Adobe started developing better digital marketing software.

The Adobe Marketing Cloud.

Businesses need to adapt to the changes in consumer behavior, especially as the marketplace has moved digital thanks to the e-commerce boom. However, not all businesses or owners know what platform to use or how to market their brand effectively.

Here enters Adobe with a software that addresses the problem.

Reaching and determining your target market can be a hassle when you don’t have the right tools for it.

Most people refer to sites that often don’t give them the full package.

As a solution to this, the company created and introduced the Adobe Marketing Cloud in 2012.

Adobe provides individuals and companies with the necessary tools to promote their brand and produce more marketing features that aid in producing better content through Adobe Marketing Cloud.

This software offers real-time data analytics, segmentation, and visualization tools to give marketers immediate insight into campaign success.

It provides marketers with a clear view of customer activity across channels, essentially giving them a quick tool to measure customer engagement and determine the content they’re looking for.

The Adobe Marketing Cloud offers solutions for every industry, from travel and hospitality to retail, media, or telecommunications.

Today, this platform is used by thousands of brands worldwide, including two thirds of Fortune 50 companies, together with attaining over 30.4 trillion transactions a year.

Everything you need to improve your brand’s customer experience is there.

No wonder most companies rely on it.

Adobe Marketing Cloud in the works.

By focusing on the development of the Adobe Marketing Cloud, the company was able to improve its profitability and grow its business.

As reported by Adobe in 2014, these are the results:

  1. The company’s search revenue increased by 120%, with an average revenue of up to 45% per view.
  2. In terms of costs, Adobe Inc. got to reduce its Facebook cost by 28% during the first 2 weeks of the platform’s campaign. It also increased the content publishing from weeks to hours.
  3. Improved engagement and total conversion by 40%, with specific lifts up to 2,500%; pushed Marketing Cloud conversion from 2.5% to 12%
  4. Enhanced targeting raises click-through rates by 70% for personalized offers; achieved 10% boost on pages by delivering more tailored content

In 2016, the company generated revenue of over USD 1.6 billion from the Digital Experience segment, of which Adobe Marketing Cloud is a major component.

The growth didn’t stop there!

For the past five years, Adobe inc. has reported revenues of:

  • USD 4.8 billion in 2015
  • USD 5.9 billion in 2016
  • USD 7.3 billion in 2017
  • USD 9.0 billion in 2018
  • USD 11.2 billion in 2019

Each year, the segment accounts for about 27% of Adobe’s total revenues.

The Adobe Marketing Cloud, now known as the Adobe Experience Cloud, truly worked wonders for the company as it helped in generating sustained revenue growth over time.

Adobe Inc.’s Earning Power: Valens Research vs. As-reported numbers

Adobe Inc. makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a better earning power generator on average than investors might think.

So, how well has Adobe Inc. been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.

The blue bars in the chart above represent Adobe Inc.’s earning power (Uniform Return On Assets). With the company’s continued expansion into marketing and cloud service, and end markets that are experiencing substantial tailwinds, its Uniform ROA continued to strongly outperform its historical profitability. The firm generated a 52% Uniform ROA in 2019, slightly below 2018 peak of 60%, but still strong profitability.

The global ROA average is just 6%.

The orange bars are the company’s as-reported financial information. If you relied on these numbers, ADBE’s profitability is massively understated, recording only 10% as reported ROA for 2019, which should be 5x more at 52% Uniform ROA (return on assets, a measure of earning power) for 2019.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.

The numbers show that it has been doing well and making a profit.

Adobe Inc. continues to improve their software to keep up with the development of technology, making the digital experience, especially for people from the business field, better than ever before.

Moreover, the company equips these people with the right tools they can use to better navigate their digital marketing.

Quite the response to the needs of their market!

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com