Walldorf, Germany-based SAP just announced its intention to acquire Emeryville, Calif.-based Abakus, a provider of cloud-based solutions for cross-channel marketing measurement and optimization. The terms of the deal were not disclosed.

Abakus helps brands evaluate, plan and optimize their marketing activity so that they get better return on the dollars they spend.

Game Theory + Attribution = SAP Acquisition

What sets Abakus apart is its patented game theory-based attribution technology built for media placement, including what-if scenarios for budget planning and optimization.

SAP said it plans to integrate Abakus into its SAP Hybris Marketing solution to help marketers better understand customer interactions across channels, with the aim of increasing overall efficiency and return on investment.

In other words, when C-level managers gather in the boardroom, a Chief Marketing Officer whose company uses SAP Hybris should be able to tell the Chief Financial Officer what the company is getting for its spend. 

Neither SAP nor Abakus has commented on whether this was a pure sale of technology or an acqui-hire as well. (Update: SAP confirmed that Abakus employees would stay on following the acquisition.)

Abakus's Hands-On Leader

Alex Saldanha, Graham Ratcliffe, and Tim Brown founded Abakus in 2013. The three met while working at Exponential Interactive. Abakus has received one round of funding of $825,000 in 2013 according to an SEC document.

Abakus CEO Saldanha was unwilling to comment on how many employees the company has, or anything else for that matter, until the transaction is complete. The company's LinkedIn profile claims 11 to 50 employees.

He is not yet in Disney World celebrating, CMSWire can assure you — he was manning Abakus' phones when we called.

SAP Adds 'More Chops' with Abakus Buy

SAP Hybris was already on the leading edge of solutions in its class, according to Constellation Research analyst Holger Mueller. Once the acquisition and integration is complete, Mueller expects that SAP Hybris will leverage Abakus’s algorithms to re-optimize ad campaigns. 

In simpler terms, "SAP will be getting more chops,” as Mueller put it.

SAP customers should, in turn, be able to base their marketing strategy on actual data from all touchpoints across the entire customer journey as opposed to models. This could be a game-changer, especially for brands whose profit margins are shrinking because of the high costs of customer acquisition.

Constellation Research analyst R "Ray" Wang told CMSWire that Abakus fills a big hole in SAP's portfolio: "Cross channel attribution is key for marketing automation," he said. "Abakus is the tip of the spear. Game theory for sales is good."

SAP Hybris is already a visionary based on Gartner’s assessment in its latest Sales Force Automation Magic Quadrant. It will likely score higher and bring its customers more if SAP delivers on its goals for the acquisition:

  • Reduce complexity by integrating data from multiple sources into a single unified view of the customer across disparate systems
  • Simplify marketing through automation of planning, personalization and optimization
  • Provide trusted measurement by using advanced analytics attribution to show what is driving sales

SAP expects the acquisition to close in Q1 2017.