Insights Into the Acquisitions of Leading A/B Testing and Personalization Companies [Optimizely, Dynamic Yield, Monetate, and More]
Did you know that about 60% of companies believe A/B testing is highly valuable for conversion rate optimization?
Today, most serious eCommerce businesses have figured out how to drive traffic to their sites using marketing and advertising. On the other hand, online stores increasingly struggle with high cart abandonment rates. Oftentimes, this leads them to try A/B testing to improve customer experience and gain more website conversions.
A/B testing can help brands get more visitor engagement, higher conversion rates, and reduced bounce rate. Because this is actually seen as strategic, many of these testing firms have become targets of acquisition by other businesses. Either to add capabilities to an existing platform or to provide dedicated optimization and personalization services for their own portfolio of brands.
(Note: “A/B testing” is often used as a catch-all term. People might also associate A/B testing with the broader practice of web analytics, optimization, experimentation, and even personalization).
Why are A/B testing companies so valuable in eCommerce?
eCommerce and A/B testing have a long history. You could say they were made for each other. With eCommerce’s business model predicated on digital transactions, it becomes a competitive necessity to improve the buying experience as more and more visitors engage with online stores. Therefore, A/B testing has become a popular methodology for eCommerce teams to explore; this in turn created greater demand for systematized A/B testing, and eventually more and more software companies formed to fill that demand.
Today, there are dozens and dozens of A/B testing software companies to choose from; all promising their own unique take on what has become a well known practice amongst marketers and growth hackers. My advice is – if you are looking to buy A/B testing software – take the time to truly research the various claims out there and scrutinize your own traffic/order volume. If you have online sales below $5M a year, it is unlikely you will see either quick or lasting gains from a program of A/B testing.
List of A/B testing & personalization companies that got acquired
Leading digital retailers don’t just analyze their data, they focus on actively generating actionable insights by running frequent experiments. Many of these companies aim to deliver the best possible experience while collecting minimal user data, but obviously that doesn’t always happen.
Most top brands will perform frequent UX research on their websites to improve the user’s experience. However, some companies go further and perform A/B testing. The result: more knowledge of how to keep visitors longer on-site in addition to improving other metrics, like cart abandonment rate. It is rare for teams to build their own A/B testing solutions from scratch, so they turn to specialized software companies to further enhance their customer experience.
Here are the companies that got acquired for their exceptional A/B testing services:
Optimizely, the ‘world’s leading experience optimization platform’, acquired by content management company Episerver
Privately held Episerver Inc., acquired Optimizely, a 10-year old tech company backed by Goldman Sachs Group. The company paid less than $600 million for Optimizely in its funding round in June, according to PitchBook.
It’s official! We’ve closed the acquisition of @Optimizely creating the ultimate system of differentiation for companies to compete and win in the #digitaleconomy. Read our announcement for more info. https://t.co/FUZfgnr3N1 #digitalexperience #experimentation pic.twitter.com/AQGHqE3HfU
— episerver (@episerver) October 21, 2020
Optimizely was founded in 2009 and became synonymous with A/B testing, later specializing in a broader suite of optimization tools for marketers. The company has raised $200 million in funding from Index Ventures, Goldman Sachs, Andreessen Horowitz, and others.
Episerver CEO, Alex Atzberger said in an interview: “This is the most significant transformation in our company’s history – one that will set a new industry standard for digital experience platforms”.
Expanding the DXP theory behind the acquisition
San Francisco-based Optimizely offers digital experience optimization tools such as AI-powered personalization and experimentation, A/B testing, multivariate testing, and server-side testing. Episerver offers a digital experience platform (DXP) including content management and commerce software. The acquisition of Optimizely allows Episerver to make its DXP story more compelling.
“It’s also opening up further opportunities for both Episerver and Optimizely Customers”, said Irina Guseva (Senior Director and Analyst for WCM and DXP for Gartner).
Optimizely could a big win for Episerver because its advanced engine will allow experimentation at multiple touch-points, facilitating a more personalized user experience. Given their pedigree, I am sure few of us could have predicted this outcome for Optimizely.
Commerce platform Kibo acquired optimization leader Monetate to become next big eCommerce cloud provider
(I am sure you are already seeing the theme to these acquisitions!)
Kibo’s clients include more than 600 B2B, consumer retailers, and brands that use cloud commerce platforms. Monetate offers AI-powered personalization tools and engines to help brands connect with multiple data sources, improving decision-making and interactions with every customer.
“With Monetate, we recognized the opportunity to acquire a market leader in the discovery, segmentation, testing, measurement, and optimization”, said David Post (CEO of Kibo).
How will AI, personalization, and an agile cloud influence retail tech?
Kibo, by leveraging Monetate, will expand its personalization capabilities. This complements their best-in-class Certona solution and provides a chance to extend their reach of end-to-end cloud commerce by using AI specialization.
We’re honored to help Taco Bell deliver an innovative omnichannel customer experience, showing guests the most relevant menu items, promotions, and content based on a particular individual and visit. Read all about it in QSR Magazine: https://t.co/9uwnnjQYKt pic.twitter.com/pbXJvr9eZO
— Kibo (@KiboCommerce) January 16, 2020
The combined solution of Kibo and Monetate will deliver a cloud commerce platform to provide customers with a robust, personalized omnichannel experience.
“Monetate continues to be committed to providing our clients with capabilities to deliver the best experiences for their customers in every interaction over time. Our clients have leveraged our solution to deploy successful personalization strategies to drive growth and conversion”, said Stephen Collins (CEO of Monetate).
Moreover, the addition of Monetate will enable Kibo to offer content personalization, A/B testing, multivariate testing, and building and targeting of audiences with an intuitive self-serve user interface.
CRM company Salesforce acquired leading personalization and customer data platform provider Evergage
Salesforce acquired the leading software platform for real-time 1:1 personalization, Evergage, to accelerate its efforts of enhancing personalization solutions as part of its Commerce Cloud offering.
Evergage, a Somerville-based provider of personalization software was founded about 10 years ago. The company raised $26 million prior to the acquisition by Salesforce.
“The acquisition by Salesforce highlights Evergage’s industry-leading product and its ability to service clients”, said Matthew Safaii (Founder and Managing Partner at Arrowroot Capital – who have partnered with Evergage’s founders).
Evergage is known for its excellence across personalization and customer data platform (CDP) that enables eCommerce teams to interact on a one-to-one basis across multiple channels. This new partnership should benefit significantly more users.
“As more organizations focus on improving customer experiences, A/B testing and personalization tools have become increasingly sophisticated at leveraging data for segmentation, personalization, and targeting at the individual level, unified views of each customer and predictive capabilities”, said Megan Headley (Research Director at TrustRadius).
There’s more to Evergage’s acquisition than just CDP
Salesforce entered the CDP space with the launch of its own 360 audiences, before even acquiring Evergage. The move to bring Evergage into the Salesforce fold has more to do with delivering a personalized experience to a large number of users.
The CRM company has its own CDP but lacks a personalization engine that its marketing cloud competitors (Adobe, Episerver, and Oracle) have.
With Evergage, Salesforce [Commerce Cloud] turns into an instant leader where personalization is the first concern.
“Evergage puts in play personalization capabilities and features that Salesforce does not have. CDP plus machine learning plus their platform will make it easier to provide the context needed for mass personalization at scale”, said Ray Wang (Founder and CEO of Constellation Research).
The right personalization will enhance customer’s shopping experiences and also increase engagement and loyalty by anticipating what they really want.
Fast-food giant McDonald’s acquired AI-powered personalization platform Dynamic Yield
Dynamic Yield works with several brands across e-commerce, finance, travel, and media to create a personalized online experience. With the acquisition of Dynamic Yield, McDonald’s has built on its technology platforms to accelerate its digital transformation.
Dynamic Yield’s ability to meet customer needs, coupled with their commitment to growing capabilities with evolving marketing technologies, has a lot of benefits in store for McDonald’s. The combination has allowed the continued advancement and elevation of the customer’s experience with the technology.
“With this acquisition, we’re expanding both our ability to increase the role that technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers”, said Steve Easterbrook (former President and Chief Executive Officer of McDonald’s Corp.).
The purpose behind acquisition of machine learning engine Dynamic Yield
Spending around $300 million to acquire Dynamic Yield, McDonald’s said that they will use this technology to create a digital drive-through menu. This menu would be able to tailor things like weather, trending menu items, and current restaurant traffic. Also, once you start ordering, the display may recommend additional products based on what you have already chosen.
The acquisition of Dynamic Yield plays a critical role in McDonald’s digital transformation. This also gives McDonald’s an opportunity to become more focused on customers by deploying the best digital experience.
“Ultimately, Dynamic Yield will facilitate a range of personalization benefits, where we can leverage the knowledge of the customer, and order patterns to provide a tailored experience in restaurants, at the drive-through, and on our app”, said Steve Easterbrook.
Dynamic Yield claims a machine learning engine; enabling marketers to increase their business revenue through personalization, recommendations, and automatic optimization. Its platform delivers solutions in the areas of segmentation, omnichannel personalization, optimization, and dynamic advertising. Dynamic Yield is all about benefiting the customers for both businesses by adding a personalization layer to the McDonald’s tech stack.
Mobile marketing company Airship acquired user experience (UX) testing company Apptimize
The leading digital customer statement leader, Airship acquired Apptimize, the industry’s most popular solution for testing and optimizing, to provide marketers and developers with a single solution. The combination of the two offers the solution for optimizing the entire user experience across the channels.
“By combining Apptimize mobile app and web testing with Airship’s deep insight into customer engagement across the channels, marketers, and developers can focus innovation on the most critical areas while creating the seamless end-to-end experiences customers really want”, said Brett Caine (CEO and President of Airship).
San Francisco based, Apptimize conducts A/B testing across various channels including web, mobile web, native mobile, over-the-top (OTT). The company has served many customers like Glassdoor, The Wall Street Journal, Rakuten, and Hotels.com as per the company’s website.
By acquiring Apptimize, Airship offers clients with a single platform to manage digital ad campaigns.
Insight into the acquisition of Apptimize
The acquisition of Apptimize by Airship is a smart move for the company as well as its clients. The acquisition combines the messaging orchestration of Airship with personalization through an A/B testing company. Also, around 20 people from Apptimize joined Airship, thus bringing the company’s overall headcount to 330 employees.
Apptimize focuses on automatically integrating with most analytics platforms. And also its visual editors allow the marketers and product owners to make changes to the IOS and Android apps with ease without the requirement of any coding or updates.
Through the acquisition, Airship (formerly known as Urban Airship) adds the testing technology of Apptimize to its platform. This will benefit all its clients including- Adidas, Asos, Sky, and Vodafone to send notifications on mobiles across various channels.
Together Airship and Apptimize will offer- expanded ability to optimize CX, code-free options for deploying experiments, consistent experiences, and more.
Role of A/B testing in future eCommerce experiences
Whenever a company is looking to aggressively expand, the most common method is the acquisition of smaller companies. The companies listed in this article recognized that by acquiring A/B testing tech, they got a quick way of personalizing their platforms for every user. This way, they get a higher conversion rate on their websites as well.
Moreover, it illustrates eCommerce platforms are serious about transforming digital experiences, allowing their own customers to replace guesswork with evidence-based outcomes.
Overall, testing and personalization is most effective when executed continuously and as part of a wider data-driven strategy. Together, the firms listed here enable eCommerce brands to experiment with layouts and back-end logic, get real-time insights for more responsive customer experiences, and measure the outcomes of the options which can drive transformation, customer engagement, personalization, and brand engagement.
Ultimately this is a win for everyone involved.