For Whom the Bell Tolls: What the D&B/Lattice Acquisition Means for B2B Marketers

June 14, 2019

Well, the data-driven company acquisition race continues at full throttle.

As we mentioned in our post discussing what recent moves by Google could signal for the future of PPC and SEO, quality data is king.  And just as I hit publish on that post came the news that Google has entered into an agreement to acquire Looker, the data analytics company. This news, on the heels of an announcement that Google had also entered into a first-of-its-kind, multi-year revenue-sharing agreement with ad management platform Marin Software.

Head spinning yet? Then get a good grip on your hat.

On June 13th, Dun & Bradstreet (D&B) announced their own B2B data play – the intended acquisition of customer data platform Lattice Engines. In a post on the D&B website sharing this news, Lattice is positioned as a ‘leading AI-powered customer data platform, enabling B2B organizations to scale their account-based marketing and sales programs across every channel.’

Credit where due, the PR team has done a masterful job of getting all those high-value B2B marketing buzz words in. AI? Check. Data? Check. Account-based marketing? Oh, hells yes.

But what does this mean, really? For the industry and for existing Lattice customers?

That’s where things start to get a little less buzzy.

Full disclosure: I previously worked at a start-up that was acquired by one of those Big Global Brands Everyone Knows. So, from personal experience, I’ve got a good inkling of what happens next. This isn’t to say that all acquisitions are the same – they’re decidedly not, but there are some commonalities that are worth digging into. Particularly in this case.

First, let’s look more closely at the Big Player.

 

Dun & Bradstreet: They’ve DUNS Something Right

Clearly, any company still in business after 178 years is doing something right. That kind of longevity doesn’t just happen by chance. Initially founded as a company that would provide “objective credit information to subscribers,” they’ve always understood the market value of good data. They’re best known for the D&B DUNS Number, or Data Universal Numbering System, that has since become a worldwide standard.

Invented in 1963, the DUNS is a system that assigns a unique, nine-digit number to each business entity. Today, the DUNS database includes over 300 million entries for businesses around the world, and is in active use by governments and global organizations. All to say, they’ve got some experience with managing an incredibly large set of basic business data.

In the realm of acquisitions though, they haven’t made a strong showing. But not for lack of trying. Although there are some notable exceptions, such as credit reporting agency Moody’s, they’ve more recently acquired a host of data-centric companies that haven’t delivered on their early promise. Rather than acquire innovators and build upon their strengths, D&B has instead gathered companies into the fold and, more often then not, let them flounder.

Companies like Hoovers, Avention and NetProspex, on track to make a significant dent in the data industry, got swallowed into a slow-turning machine. And in the meantime, huge market opportunities similar to what LinkedIn and Angie’s List developed could have been highly profitable powerhouses – but they failed to look into building those types of data-driven platforms, despite having the immense trove of data to do so.

To illustrate, in 1998, long before companies like Google, LinkedIn, or Salesforce.com were dominating B2B sales and marketing, revenues at Dun & Bradstreet (D&B) were a modest $1.4B. Even though D&B had benefited from the rise of the Information Age, it was still just a steady, conservative business. Of course, 1998 is about the time the Internet was exploding, as you may recall. Since then, big data and the cloud have emerged.

Fast forward to now, 19 action-packed years later, and the last year D&B that published revenue figures, before being bought by private equity and starting over, their revenues were just $1.7B. That’s right, just $300M in growth in 19 years. Google had better growth in many of its quarters.

So, why would a company, with what had been unique B2B data, fail to grow? Companies like Google and Facebook have experienced hyper growth because of their access to, and savvy use of, data.  The fact is, D&B has not innovated in how to capture new sources of data. The company uses the same tired NAICS industry codes as everyone else, and has never found a way to accurately clean that data of duplicates and out of date information. No new data, no innovations, little growth.

Given this history, the future isn’t looking quite so hot for Lattice Engines.

 

What Really Happens, Post-Acquisition

And, let’s be honest, it’s a rare acquisition where the company acquired does reach it’s promised glory under the umbrella of a mega-corp. Here’s why that happens:

  • Big companies can’t move fast. A lot of acquired companies build up an initial head of steam by innovating. And that’s incredibly hard to do in an oft-bloated corporate structure. It’s a lot harder to try a lot of things and fail fast in the search for the next greatest invention when you’ve got stockholders to answer to. They want reliable return on their investment, they don’t care how you get there. But don’t waste their money on R&D. Stick with what works.

 

  • Too many cooks in the kitchen. A multinational corporation has a lot of moving parts – and a lot of people in charge of those moving parts. And everyone has an opinion. Suddenly, a go-ahead product decision that previously took one meeting with a couple of team leads, pre-acquisition, now requires sign off from 7 different C-Suite executives and weeks or months of meetings before buy-in. This is not anyone’s fault, this is just how it works when there are a lot of people in the game. And it kills innovation quickly because you don’t have the agility to put out less-than-perfect versions to see how the market reacts. You’ve got to get it right the first time – and if you don’t, that new product idea is dead in the water.

 

  • Change is a given. And not in a good way. I’m talking nuts and bolts changes. Changes to the legal framework of your service provider-client agreements. Changes to pricing structures. Changes to expectation in terms of how much a company will deliver to their customer base, and in what time frame. And typically the biggest change is in the level of customer service. With start-ups, a high level of quality service is crucial – customers aren’t a number, they’re a valued relationship. With corporations, clients are revenue-generating numbers. You just have to keep enough of them on board. On this front, D&B already doesn’t enjoy a good reputation, so existing Lattice customers might find this to be the most visible change – they’ll get less service, and they’ll likely pay more for it.

 

So, Is There an Upside?

To be clear, for data-driven companies powered by truly incredible AI, this acquisition is really good news. The world’s biggest players are taking notice of some remarkable improvements in how B2B marketers can access, and ultimately gain deep insights from, valuable data. That data isn’t going to get less valuable. As more marketers start adding AI to their campaigns, the amount of data increases, the models get smarter, and the results get better.

For us, it’s the use of proprietary vectors – unique company-level data that’s built to be processed in a meaningful way with artificial intelligence. This is how we generate client results like adding $500K in pipeline value for Oracle’s initial pilot campaign, and why Google, Uber and AdRoll trust us to deliver high quality sales leads.

We’re agile, we know what data is genuinely valuable – and we’ve got a talented, Red Bull-fueled team of data scientists that live for discovering the correlations that actually make a difference for B2B companies today.

For a lot of startups, getting acquired is the golden ring – but if you’re not careful about who you choose to partner with, that golden ring can turn into golden handcuffs pretty fast.

Further Reading

September 12, 2019
Olin Hyde
December 1, 2016