Adobe is beefing up its Marketing Cloud product family with the $540 million acquisition of TubeMogul, maker of a video advertising platform. Here are the key details from Adobe's announcement:
TubeMogul is a leader in video advertising, with a single platform that enables brands and agencies to plan and buy video advertising across desktops, mobile, streaming devices and TVs. Adobe’s acquisition of TubeMogul will create the first end-to-end independent advertising and data management solution that spans TV and digital formats, simplifying what has been a complex and fragmented process for the world’s biggest brands.
Adobe sees an opportunity to pair up TubeMogul's platform with its Marketing Cloud, which includes the video content creation tools, Premiere Pro and Primetime; Media Optimizer, for online campaign management; Adobe Audience Manager for audience creation and segmentation; and Adobe Analytics.
While today, total digital video advertising spending is about one-fourth that of television ads, digital video ad spend is growing much more quickly, at double-digit rates. Still, TubeMogul holds up its platform's ability to purchase television advertisements in a programmatic manner as a key differentiator, per its website:
You can gain access to inventory and audiences unavailable through traditional TV ad buying.
Scatter-buying becomes vastly more efficient, flexible and scalable; inventory from local affiliates, cable and satellite companies can all be tapped through a centralized dashboard; and audiences can be pinpointed with unprecedented accuracy by using targeting criteria that goes far beyond basic demographics and ratings.
Adobe and TubeMogul have many joint customers, including Allstate, Johnson & Johnson, Kraft, Liberty Mutual, Nickelodeon and Southwest Airlines, according to a statement.
The TubeMogul deal is just the latest instance of consolidation in the so-called demand-side platform market, with previous acquisitions seeing Facebook scoop up LiveRail and BrightRoll bought by Yahoo. Other prominent TubeMogul competitors include AppNexus and MediaMath.
TubeMogul has butted heads with the 800-pound gorilla of online advertising, Google, arguing the company engages in unfair practices that make it difficult to use third-party tools to buy ads through Google's properties, as the Wall Street Journal reported. It's unclear whether Adobe will pick up that battle flag once the deal goes through, but overall, independent DSP players do face competitive risks in an online advertising world where the likes of Google, Facebook and Twitter have first-line control over the most massive audiences.
Overall, buying TubeMogul "makes all the sense in the world" for Adobe, says Constellation Research VP and principal analyst Cindy Zhou. Video is the key way forward for content and marketing, and Adobe is in a unique position, having its Creative Cloud suite of tools. "If you're a graphic designer, there's no one on this earth who doesn't use an Adobe product," Zhou says.
TubeMogul's advanced audience segmentation capabilities go beyond the traditional demographics such as age and gender, becoming more granular based on the type of content audiences are interested in, for example, she adds. "I think it's very powerful what they're trying to do here."
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