Adobiture - Brave and measured or foolish?


The day Kwantic had it’s official launch at the record breaking Helsinki Web Analytics Conference in front of 300 people, Omniture were acquired by Adobe.

Slightly bigger news from the other side of the world then! :)

There were 3 Omniture guys at the event and like me, none of them saw it coming or at first understood why it had happened. After reading reactions, particularly a good one here from Russ Mann and a very good one here from Eric Peterson as well as talking to Omniture I have reached my own conclusions.

  1. This is a great deal for Omniture. Probably Josh just did the best deal of his career and you’ve got to applaud that. The Omniture management team basically managed to sell a company that is struggling under fierce competition from Google and Yahoo! free solutions as well as a number of lower priced good systems for a price that is 25% higher than its market value. $1.8BN is a superb price for a company yet to make a profit. This was my first reaction to hearing the news and that opinion hasn’t changed since.
  2. Like Eric Peterson I don’t buy the synergy. Russ Mann makes some great points about how the technology “can be integrated” with Omniture. But what he fails to address is that while it might make it easier to code flash or flex it isn’t going to solve the fundamental cultural problems that exist in companies. Just because the designs have tags in them doesn’t mean that people will suddenly start using analytics. I have written 280 pages on this subject and could’ve written another 500! It’s a bigger problem than the technology.
  3. Adobe have certainly taken a bold step and drawn a clear line in the sand to Microsoft and other competitors. It takes balls (the kind made of granite). I was surprised when Omniture bought Visual Sciences. That though was a completely understandable deal for Omniture and VS with easy to see wins on both sides. Adobe however are entering a market they really have very little idea about and the business models are totally different right now. The move by Adobe is certainly brave in my opinion. It remains to be seen whether it will be a foolish move.

The jury for me is out on this one.

I have my doubts that the market is ready for Adobiture.

No-one I know in the Analytics field uses Adobe products to any great extent. Adobe creative products are for the designers and coders and education in this sphere about Analytics is one of the big jobs facing the industry. If Adobe expect that to change then they will run into trouble in my opinion. Of course if this is a step in the direction of educating the creatives then that’s great!

I hope for Adobe’s sake they have done their due diligence on how they will work with analytics beyond their own product suites, actually in the enterprises using analytics. I can see Adobe products integrating with Omniture as both companies have the technical abilities to do that. However I think the bigger problem is educating the people using their products as well as those that don’t inside the enterprises that will be their customers.

If Adobe feel they need to revolutionize their products to include measurement, they have my support but I feel they could’ve done it a lot cheaper than acquiring the biggest vendor on the planet.

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September 16th, 2009
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Comment Number:
1
Written by:
Jukka
Posted on:
September 17, 2009 at 8:02 am

Nice analysis but is it fair to say that it is looked more from the web analytics point of view ? Is there possibly synergies how the two companies tell about themselves (their abstract strategy) ? Adobe software and services revolutionize how the world engages with ideas and information — anytime, anywhere, and through any medium. + Web Analytics and Online Business Optimization Platform by Omniture. I can see some synergies and vision in the press release http://www.adobe.com/aboutadobe/invrelations/adobeandomniture.html Integrating content creation process with measuments sounds very nice but how will it affect web analytics consulting ?

Comment Number:
2
Written by:
Alex
Posted on:
September 17, 2009 at 10:31 pm

I would personally love to see some analytics and optimization capability within Adobe tools. No more arguing about subjective elements or wasted time vetting & approving UI/design. For example, say a designer needs to create a landing page for a DVD player campaign. From within the Adobe tools the best layout, headlines, product images, and all the other elements are suggested based on past performance of similar campaigns. Once that page is launched, it will be self-optimizing based on real-time analytics and adjust design, layout, messaging, etc accordingly. The designer does not have to create iterative variations of these b/c the Adobe tools have done this for them as part of the publishing process. Think of it as modular web design with the ability to make informed choices via real customer data on what IA patterns and design elements should be used. I would see this getting into some predictive analysis including ROI when you use all the Omniture tools together. You could essentially model out ROI before development is done by factoring in PPC keyword bids, email marketing, expected web conversion, etc.

Comment Number:
3
Written by:
Sampsa Suoninen
Posted on:
September 19, 2009 at 5:31 pm

This was a big piece of news, but then again both companies have a history of buying their competitors or pieces to complete their offering. This however, in my opinion, is neither.

The way I see it Omniture products are ment to monitor and collect information about the interactions of people on the online, while Adobe products are usually something used offline, so analyzing them is not what this is about. Using tools designed to work with WWW and browsers will need extensive redesign to work measuring offline tools and I think its not even sensible.

Don’t get me wrong, I very much like the fact that this happened and I’m anxious to see what this merger will bring and how they will co-operate. Also, I might be wrong (which I’m not).

Comment Number:
4
Written by:
Captain Blackbeak
Posted on:
September 20, 2009 at 10:34 am

@Jukka/Alex;

One great thing to come of the acquisition is that designers and usability experts like yourselves are excited about this. It’s woken the design industry up to the potential this acquisition offers to them.

@Jukka;

It remains to be seen how this will affect Web Analytics consulting. I am optimistic personally because we do user experience analysis and usability studies as part of our current offering and I see this as potentially something that can help us bring together the in house design teams with the marketers. In order to improve conversion for instance I use competitive analysis (based on personas), clickstream analysis and user experience analysis combined. Therefore I see this additional design angle helping us.

@Alex;

I agree, it sounds great on paper. However while I don’t doubt that they will integrate their tools in the manner you describe the fundamental problem Analytics has is integration within the enterprise. It’s a cultural thing. I don’t see how this acquisition will help this as most big companies outsource design. Also it’s a big change in the way designers work and will take a long time to be widely adopted unless it’s very easy, which I don’t think it will be (based on experience with Omniture).

WPP were my bet to acquire Omniture and that would have made a lot of sense because they could then use the tools to measure all of their clients campaigns taking the issue away from the enterprise and making it a necessary part of the marketing/advertising process.

@Sampsa;

I’m inclined to agree. It’s going to be a long time before Adobe/Omniture works for designers in the way for instance Alex described. Most designers work offline on their design projects, so they’re going to have to see the benefit very quickly to start using this new extra functionality, a lot of which they won’t be used too.

Comment Number:
5
Written by:
Thomas Molitor
Posted on:
October 9, 2009 at 7:18 pm

The sellers of competing vendors of Omniture have told me for years “Omniture” buys business. Now, I believe them. Omniture lost $47 million on $295 million sales last report. You can’t be profitable on $295 million of sales I ask? Adobe paid $1.8 billion for Omniture, a 6 x price on unprofitable sales? Justified on the vision that content developers can now embed tagging from the start? You bet it’s a good deal for Josh and Omniture. Financially. But I don’t see the integration - either in product or sales orgs - to justify this price tag.