Earlier today, I received a few press breifings regarding Adobes acquistsion of Ominuture. For today’s podcast, I’d like to share with you one of them.
According to a press report provided by Covario.com, Ann Lewnes, the Chief Marketing Officer of Adobe, has said that “Marketing is the new Finance” – meaning that the digital age is driving the corporate marketing function to become accountable for spending in a far more rigorous way than the old “reach and frequency” metric days. Adobe officially put its money where its marketing is by purchasing Omniture for $1.8 billion. According to Adobe CEO Shantanu Narayen, the goal of the merger is to create a holistic way in which to develop creative content and measure the value of that content – be it video, web pages, mobile content, or social media content, and to “close the loop” in the content creation and content measurement worlds.
The report also reflects the following:
We believe this is a brilliant strategic move for Adobe, one that could change the rules of the game for digital
media -from creation to measurement to monetization.
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. This creation
and tagging could even provide the onset of a new type of digital watermarking and intellectual property
management.
• Web design firms and companies with large or commerce-focused websites will create dynamic
landing page and rich internet ads and apps leveraging Adobe technologies that will have tracking and
multivariate testing code from Omniture Test & Target (formerly Offermatica) implanted from the beginning,
to create not just pages, but entirely new forms of creative and engagement that shape-shift to the user’s
interests, demographic and conversion patterns, yielding action maximization for the website publisher
• As PDFs are built, the components of the PDF can be tracked, providing valuable “additional use” metrics
for the creators of such content, again creating entirely new forms of measurement of written content
• Exciting new application types will be built in Adobe AIR, with new forms of engagement for consumers.
These will all have measurement and metrics pre-considered and incorporated.
• The need for expensive and difficult maintenance of tracking codes after the fact would be eliminated, providing a more accurate read on the value of creative.
We also believe this combination will have the most potential traction in the mobile arena where the tagging infrastructure is often far less mature than what’s available for web pages. Being able to eliminate the retagging of existing mobile pages by having creative rendered with embedded tracking is of potentially huge value – particularly in APAC and EMEA where mobile is dominant.
Beyond the potential long-term product synergies, this deal has great short-term business value for both Adobe and Omniture:
• An Adobe-Omniture combination “closes the loop” between CIOs and CMOs, and their agencies and staff. Adobe has historically sold directly to marketers and agencies, while Omniture traditionally sold to CIOs (and recently, has been more aggressive in selling to CMOs). This combo helps bridge the divide with an end-to-end solution.
• Adobe has seen growth in its direct B2B business over the past few years, and Omniture’s focus on B2B
CIO level sales will augment this process. Adobe also has much larger scale and scope by geography and
vertical, and this will help drive Omniture sales and adoption more quickly.
• Adobe gets financial benefit. On top of Adobe’s $3.6 Billion in annual revenue, Omniture’s additional $330 Million will add 10% -with almost all of it recurring revenue. As this transaction heightens the co-opetition in the interactive marketing world, here are some interesting points to consider for everyone in the digital marketing industry:
• What does this mean to the WPP/Omniture Deal? In Q2 Omniture and WPP announced a $25M deal whereby Omniture became the preferred web analytics system for the WPP agency family. From a purely financial perspective, WPP just doubled its money. At the client level, the WPP/Omniture deal was just starting to get traction, and that relationship seems to be independent of the combination with Adobe –
however, we would expect to see Abode try to build some level or preferred arrangement with WPP and other agencies around the integrated offering in the future.
• What does Microsoft think of all this? Microsoft, which offers competing products to Adobe, and has its
own web analytics (DeepMetrix) and media management system (Atlas), will likely evaluate what moves it needs to make as a result of this merger. Do they acquire a web analytics system and multivariate system themselves (Webtrends/Widemile)? Or do they look to expand the integration of the Atlas tagging processes into their creative products? Their natural counter will be that “this is not a creative development problem, but rather a content management problem.” Tagging should be done during the content development process, of which the creative pieces are a small part. The content deployment process, managed through content management systems (for which Microsoft is one of the leaders), is a key component that Microsoft controls with various technologies – and Adobe does not.
• What does Google think of all this? This relationship poses a very interesting quandary for Google on four fronts: Analytics, Landing Page Optimization, Bid Management and Mobile OS. Google has been aggressively going after all three of Omniture’s core businesses – Google Analytics offered for free against
Omniture SiteCatalyst, Google website optimizer offered for free against Omniture Test and Target, Google AdWords (and also DART) offered for free against Omniture SearchCenter. Free has always been compelling, but sophisticated enterprise clients like Covario’s have been concerned about Google having too much information, and have also wanted compelling, end-to-end, best-of-breed solutions, even if they come at a premium price. The Adobe-Omniture combination will create an even more compelling alternative.
Add in that Android, Google’s new mobile operating system, does not offer Adobe Flash support, creates an interesting dynamic between Adobe/Omniture and Google. The emerging relationship between these technology powerhouses will be one of the most interesting to watch.
• What will Agencies think about this? Most large companies, and Covario clients are no exception, outsource much of their creative development to agencies. Traditionally, there has been a sharp division between the creative and analytic aspects of agency work. SEO professionals are all very familiar with the “Flash’ed out” page with no tagging built by the creative agency. It may be that this problem is eliminated if/when agencies embrace the creative products with embedded Omniture tagging. This is not enough, in and of itself, to address completely the problem of making marketing accountable – but it is foundational and a basic requirement. If agencies become part of this process, it will work to their advantage and hasten the integration between the creative and analytic parts of these firms.
• Any other interesting angles to watch for? Most interesting to see will be whether Adobe/Omniture will invest in or buy a display, rich media or video advertising network, ad exchange or ad serving solution to parallel SearchCenter, such that the creative content for advertising media created in the Adobe suite could be immediately activated in various advertising channels. Such a play would be even more of a direct challenge to Google’s buy of DoubleClick/Dart and Microsoft’s buy of aQuantive/Atlas- and would be a bold move by Adobe, but not at all unthinkable.
3 ACTIONABLE INSIGHTS FOR COVARIO CLIENTS
Actionable Insight #1 for Covario clients who use Omniture: This combination will be a great opportunity with little to worry about. This deal gives Omniture the opportunity to worry less about new customer acquisition and to focus more on maximization of satisfaction and retention in the short term. So current Covario clients leveraging Omniture can feel comfortable in their long-term investment, but should use the opportunity to get more out of Omniture in the short term. Look for great deals and innovative new products in the mid- to long-term (6 months to one year after the transaction is approved and completed).
Actionable Insight #2 for Covario clients who use WebTrends and Coremetrics: The Adobe acquisition of Omniture may cause another large player to buy one of the two remaining independent web analytics players. Depending on how this plays out, clients may want to consider a “Plan B” with either Adobe/Omniture or Google Analytics –both of which will have more stability and long-term innovation plans.
Actionable Insight #3 for Covario clients who use Google Analytics: You will probably remain happy with “free” for the short term. The Adobe/Omniture relationship likely will cause Google to invest even more in innovation around the three products mentioned, so that will be a benefit. Google will probably also make a big push to gain share while Omniture clients and prospects digest the transaction information. In the mid-longer term, however, it will be very interesting to see what innovative new products Adobe and Omniture can create together, what new pricing models they come up with, and whether they will be able to create such compelling solutions that clients will switch from a free product set to a paid services end-to-end solution.
Actionable Insight #4 for all Covario clients: Covario already has strong relationships with most of the companies named in this note. Covario’s Marketing Action Platform (MAP) and products Paid Search Insight (PSI) and Organic Search Insight (OSI) are complementary, not competitive, with the products mentioned here and are already integrated with most the products described in this note. Covario SEM and SEO staff have certifications and operating familiarity with all products mentioned as well.
Thus, as a provider of one of the leading business intelligence platforms for online marketing that provides seamless ETL (data integration), visualization and advanced analytics, Covario will continue to develop and support for all the productsmentioned, as appropriate for and requested by our clients.
Thank you Covario.com for this in depth report and insight.