Late Tuesday afternoon Adobe announced it had reached a deal to acquire Omniture (OMTR) for $1.8 billion, with Adobe (NASDAQ:ADBE) expecting the deal to close in the fourth quarter. While on the surface it may seem odd that Adobe would buy a company and get into the Web analytics space, if integrated correctly, Adobe has the potential to provide a crucial missing piece to content creators.
Right now, everyone in the industry is saying that delivering higher quality video allows for better monetization since the average viewing time with higher quality video is so much longer. The idea is that content owners can provide a more engaging branding experience for advertisers and as a result, charge more for that campaign and deliver more of them. While no one has yet to prove this theory in the market, the biggest hurdle to doing so has been in the analytics. Most of the solutions on the market provide details on reporting, not analytics, and trying to pull together the data from the website, the video and the ad campaign has not been easy.
While I haven't spoken to anyone at Adobe about the acquisition and the company's strategy, it starts to get interesting when one thinks of how Flash fits into the picture. If Adobe can start taking all of the data from the Flash player and offering that on top of Omniture's SiteCatalyst product, all of a sudden content owners might truly be able to see what's taking place with their content from more than just a how many people watched, how long did they watch scenario. And with the vast majority of web ads being delivered in Flash, the potential tie with Omniture might allow advertisers to finally know what's being seen, by whom, with targeting and based on that data, decide how they want to buy ads across a network. Ad sales are driven by data, now they have the potential to be driven by the ad data from Flash.
The major problem today is the workflow between the content publisher, advertiser and delivery network is not tightly integrated. In order to truly monetize content, you need the data from all three to line up so you have a total picture of the user experience and the branding. One also has to wonder if Adobe will take Omniture and bundle it into its family of Flash Media Server's which would give content owners a lot more incentive to buy the server, knowing it has built into reporting AND analytics, something no video server has today.
The combination of these two companies is going to be an interesting one to watch come next year.