What Adobe's Weird Omniture Acquisition Means for Advertising

NEW YORK (AdAge.com) — It’s sexy these days for creatives to talk about data. And Tuesday’s marriage of a major content-development platform with a major web-measurement company means analytics could soon be conceived right along with art and copy.

Adobe Systems announced last night that it will acquire web-analytics firm Omniture for $1.8 billion in equity by fourth-quarter fiscal 2009. The deal finds Abobe picking up all outstanding Omniture stock at a 45% premium.

The union foretells a digital-content platform that sees ads through creation to delivery — and now to optimization. Adobe hopes marrying its creative production tools with Omniture analytics will create what Adobe President-CEO Shantanu Narayen calls an “end-to-end platform.” For creatives, that means metrics can’t be an afterthought; they’ll need to be part of the content-creation process from the beginning. For data analysts and media companies, it means potentially more clarity into what creative formats and media placements are working — and how.

“Chief digital officers want to understand which video content is performing the best,” said Mr. Narayen during the third-quarter earnings call. “They want to produce rich ads, but also understand the click-through rates in real time.”

 Ad Age Digital  DigitalNext  MediaWorks Omniture CEO Josh James said the deal will allow creatives to integrate measurement into the front end of the ad-creation process and that marrying the two companies would improve content engagement, ad effectiveness and the overall user experience that’s driving the shift of ad dollars from offline to online.

Covario CEO Russ Mann said in a company point-of-view issued to clients that “in the new Adobe media world, video developers and agencies will build Adobe Flash creative with Omniture tracking codes implanted from the beginning. This will enable them to track the views and virality of that creative across the web, and perhaps begin to micro-charge for every view, partial view or forward of their content.”

Wall Street, however, was less enthusiastic about the deal; analysts point out that integrating two giant companies is never easy and some lamented the lack of cost-savings synergy in the deal.

Sales upside
Still, the companies share some of the same types of clients and there is sales upside, especially for Omniture. Mr. James noted that Omniture’s client base, traditionally made up of marketers and clients, has expanded to include agencies. Mr. James noted 20% to 30% of new Omniture business bookings were coming from agency partners. In January, WPP invested $25 million in the analytics firm.

“As we’ve emerged as a leader in the space, folks like WPP have invested time and resources in educating their people about our products and platforms,” he said. “We’re not changing our strategy [with the Adobe acquisition], we’re accelerating our strategy. … We need to sit down and talk to [our partners] but by all accounts it seems they’ll be very excited. I haven’t had an opportunity to speak to WPP about the specific transaction but I can say they have 500 people in their organisation trained on our products and services.”

In most cases, he noted, [agencies] have more meaningful relationship with Adobe. So by being part of that larger company, “it strengthens our ability to partner with these agencies.”

Forrester principal analyst Suresh Vittal said this could be the industry’s chance to establish standards around web viewership. Omniture tracks consumers through the online-purchase path, right through to conversion. Once integrated into Adobe’s creative tools, it could make it easier to see how creative executions and media placements translate into sales.

“You get a chance to value traffic beyond just numbers, beyond just volume, but on quality of traffic,” he said. “In the long term, audience-measurement tools could potentially change the way advertising gets prized and measured. The opportunity for this joint company is to really solve the audience measurement problem. They’re both dominant tools in their spaces, so they can establish standards to measure digital content.”

~ ~ ~
Abbey Klaassen contributed to this report.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.