Adobe Systems has announced that it has entered into a definitive agreement with Omniture for the former to acquire the latter in a transaction valued at approximately $1.8 billion on a fully diluted equity-value basis. Under the terms of the agreement, Adobe will commence a tender offer to acquire all of the outstanding common stock of Omniture for $21.50 per share in cash. The proposed offer represents a premium of 45% over Omniture’s average closing price for the last 30 trading days through yesterday’s close.
The completion of the transaction, pending regulatory approval, is expected to close in Q4 of Adobe’s fiscal year. The company believes the acquisition will be accretive to its non-GAAP earnings in fiscal year 2010. Omniture will become a new business unit within Adobe. Omniture’s CEO, Josh James, will be joining Adobe Systems as the unit’s Senior VP, reporting directly to Adobe CEO Shantanu Narayen.
The online advertising business is in for a rough patch, especially for display advertising. The signs are everywhere. Yahoo, the biggest publisher of display ads on the Web, reported a 2 percent decline in display ad revenues in the fourth quarter, and the New York Times is seeing even steeper declines.
There is just way too much advertising inventory out there, and Websites are actually trying to show less ads per page to reduce ad clutter and keep advertising rates from cratering. The chart above from comScore’s 2008 Digital Year in Review shows that the number of display ads served in the U.S. is actually slightly down from a year ago. Even so, comScore estimates that 4.5 trillion ads were served to U.S. consumers last year. That comes to 2,000 ads per month per person.
As a consequence of the declining display ad revenues and the over-saturation of ads, there is simply no need for the 300-plus ad networks out there. And what we are seeing now is the stronger ad networks are picking up funding to shore up their positions and the weaker ones are getting bought.
Omniture is extending its SiteCatalyst measurement tool to native iPhone applications, enabling developers and marketers to gain insight on how users are interacting with their iPhone apps, based on real-time information. This should allow them not only to improve the user experience based on analytics, but also make adjustement necessary to generate more revenue by enhancing ad clicks, purchasing and increasing page views.
The new offer, which is basically an extension of its existing SiteCatalyst solution, is called App Measurement for iPhone and will be generally available as from January 2009. To our knowledge this is the first analytics program specifically designed for native iPhone applications, but it’s safe to say other providers will soon follow suit with similar offerings.
Omniture, which provides tools for marketers to track their online campaigns, is announcing a set of product upgrades today. New versions of its flagship product SiteCatalyst and its search advertising product SearchCenter will be released.
In addition to improved user interfaces (apparently five years of usability testing went into the products’ redesigns), the products in Omniture’s suite of SaaS applications are now connected tightly by a unified wrapper. Basically this means that marketers can move more easily between the products to manage various aspects of their campaigns. The unification is not only on the front end; all the programs now run off the same database as well.
As far as functionality is concerned, the most important addition to SiteCatalyst is support for the tracking of video usage across the web. If you are a marketer who uses videos to spread your message, you can now use Omniture to track metrics like how long people are watching your videos, whether they tend to skip forward in them, the rate at which they drop off, and which particular features in the video players they use.
The same technology that can be used to track video usage can also be applied to Flash and Flex-based applications. Omniture representatives say that only a 2 byte SWF file added to a Flash application is needed to prepare that app for tracking. As with video, marketers can see which application features are being used most.
Omniture released an integration analytics tool called Genesis at a two-hour event today at the San Francisco Museum of Modern Art. Genesis was created with over 30 marquee online advertising partners such as Ask.com, Google, Yahoo Search Marketing, and Salesforce.
Omniture is an online marketing analytics company. Genesis is a measurement, performance, and integration tool. Integration being the key buzzword of the event. In this case, integration refers to the ability to understand how various online campaigns perform both together and separate, and making marketing purchases accordingly.
Are marketers not doing that? Forrester analyst Char VanBoskirk presented data showing that they don’t. Instead, she said that most marketers subscribe to the more-is-more theory.
“Users know how to filter out messages with spam filters and pop-up blockers. So how are most marketers responding to this challenge? They just send more messages,” VanBoskirk said. “Advertising on network TV has increased. Radio stations are airing more commercials per hour of programming than ever before. So in case you’re wondering, this is bad!”
VanBoskirk said that the smarter marketer will develop a data store, subscribe to a reporting and analysis tool, and then find a dashboard to manage activities. That’s what Genesis is.
Genesis allows users to develop about a billion “what if” scenarios based on various marketing campaigns. They can choose a campaign, and then drag and drop distribution tools such as DoubleClick for banner ads, or CheetahMail for email campaigns. All 30 Genesis partners have their product there for marketers to choose as a possibility. Once all distribution scenarios have been chosen, marketers can order up a channel summary that shows revenue by channel, top performing campaigns, etc. It’s a ton of information.
Omniture calls this a Plug and Play approach, which they say is the next generation in marketing. They call it the perfect example of Marketing 2.0.
