How Intuit’s $12B Acquisition of Mailchimp Will Impact Marketers

Building in Mountain View, Calif. that houses the offices of Intuit Incorporated.

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Intuit’s $12 billion acquisition of email marketing provider Mailchimp last month represents the largest of any single standalone marketing software startup of its kind.

For acquired software providers that focus purely on marketing outcomes, the closest that comes to mind would be Adobe’s $4.75 billion grab of Marketo in 2018. But $12 billion? That’s hallowed ground for private software companies and certainly one of the top for Software-as-a-Service (SaaS)-based providers.

Why Mailchimp and Why Now?

Email marketing providers haven’t come out of nowhere, of course. It’s the tried and true practice that still remains the central component of many digital marketing engines. After all, with 4 billion daily email users and another 0.6 billion expected by 2025, it’s a decent little tool in the marketing arsenal to get brands in front of prospects and customers. In 2020, the global email marketing market was valued at $7.5 billion and is expected to increase to $17.9 billion by 2027.

But this? $12 billion for Mailchimp from the technology company that produces consumer brands like TurboTax, QuickBooks, Mint and Credit Karma? How did this come to blow the doors off prior acquisitions in the email marketing space? And why would a major consumer brand acquire a marketing software company? Adobe-Marketo was a same-space acquisition, as were other marketing automation acquisitions like Salesforce-Pardot and Oracle-Eloqua. 

There is a predecessor in some sense — McDonald’s acquisition of personalization software provider Dynamic Yield in 2019.

“Intuit is really trying to get back into all aspects of the small business market,” said R “Ray” Wang, founder, chairman and principal analyst of Constellation Research. “They have been focused on the back office, and Mailchimp takes them a bit into the front office. It doesn’t address commerce, it doesn’t address CRM, but it gets them started on the journey to marketing automation.”

What Mailchimp brings is a high-volume email platform that is hard to beat, according to Wang. In the long run, he predicts it will be competing more with Zoho which already has these capabilities and does it at a much lower cost.

“However,” Wang added, “if they were serious about CRM they should have bought something like Keap which is much more than email and would have cost much less.”

Related Article: Adobe Acquires Marketo: Good Things Are Seldom Cheap

Email Validation, Once Again

Not all acquisitions are perfect; some Mailchimp employees reportedly aren’t fans of this one. And many have long rallied the email’s dead rallying cry.

However, this acquisition is proof of the importance of email marketing to the greater digital transformation story, according to April Mullen, director of brand and content marketing at SparkPost and co-founder at Women of Email. Email has been affected by privacy changes, including the recent deprecation of email open tracking by Apple and regulations like GDPR, she added.

However, touting capabilities her own company produces as an email sending provider, Mullen said email is a greater marketing opportunity in comparison to advertising where Apple’s IDFA and third-party cookie tracking present challenges.

“Email is worth the investment of time and money, because it’s such a trusted channel for customers, and one with great flexibility and opportunity for brands,” Mullen said. “The deal proves there’s incredible value and power in email.”

Related Article: Apple’s App Tracking Transparency: A New Direction for Consumer Privacy

Message to Mailchimp Users

What’s the message specifically to Mailchimp users? It’s clear that Intuit wants to connect with SMBs that often work within the Mailchimp product, according to Mullen. It’s a brilliant move, she said, to help products like Quickbooks scale into SMB and to integrate customer communications and transactions into a single platform. “It’ll be interesting to see what they do from an innovation standpoint,” Mullen said.

Joel Presman, general manager and co-founder of ecommerce marketing automation solution Remarkety, calls the acquisition beneficial for Intuit because they serve millions of small businesses.

He added, however, it doesn’t necessarily benefit the traditional, marketing automation-minded Mailchimp user who isn’t necessarily focused on optimizing the financial aspects of the business.

“That said, this acquisition opens up more opportunities across the industry and will ultimately move automated marketing industries forward into their next phase of growth,” Presman said. “With omnichannel and multichannel trends at the forefront of the marketing industry, this acquisition showcases how important it will be for email marketers to consider thinking beyond email, and more so their wider digital marketing programs as whole. While Mailchimp is known for email marketing, their services extend beyond email marketing into SMS, etc. The name of the game for marketers will be to assess their omnichannel and automation strategies if they want to win the customer.”

‘Big Moves’ Coming for Intuit

Intuit’s move to acquire Mailchimp’s massive small business database is a smart one, according to Presman. The strategic acquisition is less about direct synergies between the two companies and more about new customer acquisition and helping to bolster Intuit’s automated marketing functions, he added.

“The fact that Intuit is buying a massive company shows power in their share price and for their investors,” Pressman said. “Beyond financial implications, Intuit’s move to make QuickBooks more automated and CX friendly will drive more meaningful engagement with their customers and improve satisfaction, ultimately helping them to become a holistic customer-relationship management platform.”

The acquisition shows that even though email’s been around since the beginning of digital, there’s still a lot of maturation happening in the space, according to Mullen. “Intuit’s reach is extensive,” she said, “but its content is usually specific to financial literacy. But with this acquisition, we can expect more to come from the company. As the company leans into content and email, I think we’re at the beginning of witnessing some big moves from Intuit.”

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