Adobe has made a bold foray deep into the heart of adtech, buying TubeMogul the programmatic video DSP for $540 million.

The move enhances the video capabilities of its marketing cloud, and more importantly positions it to provide the core management for two of the most valuable advertising categories in the world;  television and digital advertising.

As Which-50 has been suggesting for two years now, the marketing technology and advertising technology worlds are colliding after decades of parallel development.

And Gartner recently issued similar advice, when it combined its marketing technology and advertising technology hype cycle.

“As marketers embrace data-driven marketing strategies to improve customer experience through coherent content and messaging, and advertising adopts programmatic practices and real-time bidding markets, customers will increasingly expect consistency and coordination from all branded communications,” said Mike McGuire, research vice president at Gartner.

Adobe, Oracle and Salesforce have all invested heavily in data management platforms (Adobe quite some years ago, Oracle last year and Salesforce most recently with Krux). And in the other direction AdRoll which started in retargeting has applied its smarts to email marketing.

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Under the terms of the agreement, Adobe will commence a cash tender offer to acquire all of the outstanding common stock of TubeMogul for US$14 per share.

Adobe said the 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 brands.

TubeMogul’s video advertising platform, combined with Adobe Marketing Cloud, will give customers access to first-party data and measurement capabilities from Adobe Audience Manager (Adobe’s data management platform) and Adobe Analytics respectively.

TubeMogul CEO Brett Wilson will continue to lead the TubeMogul team as part of Adobe’s Digital Marketing business.

“Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs,” said Brad Rencher, executive vice president and general manager, digital marketing, Adobe. “With the acquisition of TubeMogul, Adobe will give customers a ‘one-stop shop’ for video advertising, providing even more strategic value for our Adobe Marketing Cloud customers.”

Adobe and TubeMogul share a long list of joint customers including Allstate, Johnson & Johnson, Kraft, Liberty Mutual, L’Oréal, Nickelodeon and Southwest Airlines.

In a letter to shareholders and clients Wilson explained the rationale, “Adobe and TubeMogul will provide a unified advertising and data management solution that enables brands to precisely identify the right segments and plan, execute and measure paid media across any device.”

He described the conflated offering as the industry’s first independent end-to-end video advertising platform. “Current TubeMogul clients can envision a future where first-party data and measurement from Audience Manager and Adobe Analytics is available directly in TubeMogul’s platform — a combined data and buying dynamo that spans TV and digital formats.”

According to Wilson, “Of course, TubeMogul has long been known for independence and many of you partnered with us due to our buy-side, media-agnostic approach. What’s especially exciting about this acquisition is that it actually deepens that commitment.”

The parties argue that once integrated brands and agencies will be able to plan, buy, measure and optimize their global video advertising with a neutral, independent partner that doesn’t have direct ownership of media or content.

“Our combined incentive is to arm marketers with insights on what’s working — and act on it.”

The transaction, which is expected to close during the first quarter of Adobe’s 2017 fiscal year, is subject to customary closing conditions.

TubeMobul’s Australian connection

Unusually for an American technology provider, TubeMogul’s Australian operation is a more significant contributor to the business than might normally be expected.

It was an early growth driver for the company which is now reflected by the size of its local operation (a spokesperson declined to provide headcount numbers).

More interestingly Australian partners have played a significant part in product development. For instance, the early development of BrandPoint (TubeMogul’s solution for buying video using TV metrics) was greatly influenced by Phil Cowlishaw, the company’s current VP of Strategy, from his days at Ikon.

And TubeMogul first launched its automated, data-driven buying of digital out of home advertising in Australia, and its earliest programmatic direct buys also came from this market as well.

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