VML Marketing Intelligence Report

Adobe + Omniture
Implications for Ad Agencies and Brand Managers

Frank Jurden & Eric B...
Adobe + Omniture


Adobe’s acquisition of web-metrics firm
Omniture may sound incongruous to some.
But below the surface, ...
The play for Adobe, then, is simply the marriage of                            of integration. Witness the recent issues i...
Adobe clearly feels the pressure, and is moving to                             In its fullest implementation, this “Flash ...
Two Words: Predictive Design. Paul Hauser,
Managing Director of Planning at digital agency
VML speculates about the advent...
VML’s Market Intelligence Reports
     provide insights into today’s
       digital marketing trends.


  For more informa...
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Adobe And Omniture: Implications for Brand Managers

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Adobe And Omniture: Implications for Brand Managers

  1. 1. VML Marketing Intelligence Report Adobe + Omniture Implications for Ad Agencies and Brand Managers Frank Jurden & Eric Beane September 2009
  2. 2. Adobe + Omniture Adobe’s acquisition of web-metrics firm Omniture may sound incongruous to some. But below the surface, the marriage reveals a two-fold strategy: to vertically integrate the rich-media workflow from creative inception through optimization, and to defend against ad giants Google/DoubleClick and Microsoft/ Atlas. Agencies and brands that quickly adapt to data-driven workflow stand to benefit the most, but the promise remains years away. First, the good news. Adobe is synonymous with ask Microsoft: their Silverlight rich-media spec enabling designers to deliver the most engaging remains a modest blip on the rich-media radar after experiences online. Brands love rich-media – those years of trying to break through. Even Microsoft’s highly engaging formats that allow users to explore, own online advertiser portal provides submission discover, interact with media, especially online guidelines for Flash, not Silverlight.1 video. Adobe has benefited from the explosion of these experiences and extended them from the The Attractiveness of Omniture desktop, to the web and soon to mobile platforms. Omniture, for its part, has built an impressive Adobe has also benefited because rich-media business as well: two in three of the top 50 online advertising is a vertically integrated industry built retailers and almost half of the top 500 retailers almost exclusively around their Flash standard. Ad all rely Omniture’s tools. 2 Brands benefit from a agencies, ad serving providers, and publishers all suite of tools that help marketers maximize on-site have built interlocking systems for creating, traf- acquisition and conversion. ficking, and serving Flash-based ad units. Just 1 http://advertising.microsoft.com 2 Omniture Trumpets Market Share. http://www.techrockies.com Adobe + Omniture 2
  3. 3. The play for Adobe, then, is simply the marriage of of integration. Witness the recent issues in moving these two powerful forces, creating a single entity HitBox customers over to SiteCatalyst among other that combines the immersive qualities of rich media examples: Customers without large implementation with the insights and addressability of precision contracts have yet to move and take advantage of analytics. Agencies could presumably extract a the new tools. premium for campaigns that deliver this one-two punch of immersion and precision.3 If design- Omniture’s struggles to integrate technologies ers “fell in love” with Omniture as they have with are typical: In businesses around the globe, true Adobe, it would make it easier to integrate analytics integration between disparate tech platforms is the into campaigns from their inception, reducing the exception rather than the rule. The overwhelming barriers to getting insightful data on campaign majority of tech integration efforts fail, are aban- performance. doned, or end up only partially implemented despite massive overruns in time and money. 4 This fact Now the Bad News does not bode well for Adobe-Omniture. The marriage makes sense, but it is far from a slam dunk for the companies and their customers. Alienated Customers. Current customers might see some of this writing on the wall and take their Clash of Cultures. Omniture is a product for business elsewhere. Omniture has less-than-stellar marketers, web analysts, and businesses whereas customer support after the sale; the likelihood that Adobe is all about designers. Designers do not that this would improve post merger is low. (always) love metrics because it brings a new accountability to their work, one that is tied to actual What About Microsoft & Google? user behavior. Microsoft: The Advertising Company. Microsoft’s 2007 acquisition of Atlas, the ad serving platform, Clash of Workflow. Most agree that Omniture is is among the most visible of the company’s recent an extremely robust toolset. But with robustness efforts to enter the advertising market. The comes complexity: it is very difficult to fully use to Redmond Software Giant is beginning to look its capability without massive investments in both increasingly like the Redmond Advertising Giant: time and labor. So too with Flash. Asking design- From their 2006 purchase of Massive (the online ers to retool their creative process to become more gaming platform), to their $6B purchase of Atlas data aware, while simultaneously asking analysts to parent aQauntive, to the once-failed-now-recast infiltrate the creative process presents challenges to partnership with Yahoo!, Microsoft is building out agency traditions and workflows. its place at the advertising table. Clash of Technology Platforms. Omniture has Like Adobe’s strategy, the Microsoft strategy is one acquired and developed numerous products in of vertical integration: desktop development tools, recent years. They continue to struggle to integrate ad serving, ad networks, and their newly revitalized them into one concise package, essentially adding search engine all tied together under the Microsoft new cogs to the machine without the true benefits moniker. It’s an attractive package to media compa- nies and advertisers alike. 3 Explaining Adobe’s Weird Acquisition of Omniture. http://www.businessinsider.com 4 Does IT Matter? Nicholas Carr (2004). Boston: Harvard University Press. Adobe + Omniture 3
  4. 4. Adobe clearly feels the pressure, and is moving to In its fullest implementation, this “Flash killer” would defend its franchise from downstream encroach- be the ad-industry equivalent of the Unified Field ment by Microsoft and others in the channel. Micro- Theory in physics: Google/DoubleClick would own soft may not own the rich-media development tools the first integrated platform for creating, targeting, the way Adobe does, but Microsoft’s presence in ad tracking and optimizing both search and display serving and ad tracking could conceivably threaten units. All of it running in the cloud, with none of the Adobe’s position in the long term. headaches (or the margin-depleting cost-structures) of supporting boxed software or integrating dispa- Google: The Software Company. Google, for its rate technology platforms. This is a threat to both part, is also encroaching on Adobe’s business, albeit Microsoft and Adobe. in distinct ways. Google AdWords brought market forces to search advertising, a web app whereby Implications for Agencies advertisers compete with one another to set ad & Brand Managers prices. Google’s acquisition of DoubleClick and the Brand Managers Expect More. The movements by recent re-launch 5 of the DoubleClick Ad Exchange Adobe and others are in response to the evolving brings similar market efficiencies to the display needs of brand managers. The market forces driving advertising space. these acquisitions are the expectations on the part of advertisers for higher levels of addressability and Combining market efficiencies in ad pricing, and accountability in their campaign investments. data-driven precision with keyword placement, all integrated into Google’s near-real-time analytics, Agencies Must Evolve (Again). Just as the dotcom Google owns the later stages of the search and boom and the decline of traditional media have display advertising workflow. upended the ad agency business, the current shift toward integrated, data-driven marketing brings new We can speculate in broad strokes about Google’s pressures for agency transformation. Those without a strategy and its implications for Adobe. Google data-driven ethos will lose out as more of their clients AdWords and AdSense are essentially web apps move ad budgets online, seeking agencies with the customized for advertisers, just as Google Docs is skills to provide end-to-end campaign optimization. a collection of web apps for information workers. Google Chrome now provides an operating system Begin Sourcing Next-Generation Talent. Agencies of sorts, allowing engineers to create the most are merely collections of people, and the transforma- advanced web apps yet, independent of the desktop tions suggested here involve changing traditional (read: independent of Microsoft’s OS). roles, creating what might uncharitably be described as the “old-dog-new-trick” problem. However neces- What’s to stop Google from launching web-based sary retooling existing staff is, it is only one source tools for creating rich-media ad units, a full-on of filling the talent gap: agencies should consider “Flash in the browser” implementation? In fact, exhorting universities to integrate data-driven they’ve already implemented a preliminary version optimization into the traditional marcom curriculum. of this idea with the release AdWords Display Ad Retooling brings top-down change while academia Builder, 6 a tool that enables users to create simple provides bottom-up change. animated ad units. 5 Google Aims to Wrest Display Ads From Yahoo. Wall Street Journal (September 18, 2009). 6 http://www.google.com/adwords/displayadbuilder Adobe + Omniture 4
  5. 5. Two Words: Predictive Design. Paul Hauser, Managing Director of Planning at digital agency VML speculates about the advent of predictive design: “With sufficient descriptive data linking past user behavior with design variations, we could use that knowledge to model future behavior … maybe even eliminating the need for the traditional trial-and-error approach to optimization.” What About Social Media? In terms of agency zeitgeist, social media eclipses analytics in terms of overall buzz. The Adobe acquisition leaves unanswered the issue of how measurement aligns of these emerging forms of engagement. The debate on social media ROI won’t be answered soon, but it likely will be the next phase in the evolution of data-aware marketing. About the Authors Frank Jurden is Director of Strategic Planning for VML, an interactive firm that is part of the WPP network of agencies. He also serves as a Lecturer in Marketing at the University of Kansas Graduate School of Business. When not running the numbers and building line graphs, he spends his time with his wife and 3.0 children. Eric Beane is Director of Analytics & Optimization with VML. Eric specializes in A/B Multivariate testing, analytics, online marketing and ecommerce. When not making sure the numbers Frank is show- casing are accurate, he spends his free time with his wife and watching way too much soccer. Adobe + Omniture 5
  6. 6. VML’s Market Intelligence Reports provide insights into today’s digital marketing trends. For more information, please contact: Rusty Neff, Market Intelligence Editor rneff@vml.com About VML VML is a global interactive agency that helps companies thrive in the digital age. Founded in 1992, VML has grown by providing clients creative solutions at the intersection of marketing and technology. To learn more, please visit vml.com

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