The Year in Ad Ops 2011 – Adobe Emerged as a Major Force in Ad Tech

I can’t think of another powerhouse corporation that has moved so quickly into the ad tech business as Adobe did this year. Before 2011, Adobe had only happenstance exposure to the market, playing a key role in things like site analytics (via Omniture), and rich media development (via Macromedia’s Flash), but didn’t have much involvement in the delivery of ads themselves. In the course of a year however, Adobe bought its way to a leadership position in data management, cross platform video ad serving, and social marketing. Thanks to three major ad tech acquisitions book-ending the year as well as the launch of an ambitious product to streamline ad trafficking, Adobe’s moves should make any Ops department sit up and take notice as one of the most viable competitors to the Google stack to come along yet.

Demdex

The first, and perhaps most significant move this year happened in January, however when Adobe bought one of the leading Data Management Platforms (DMP) in the marketplace, Demdex. In a year where ‘data’ was certainly one of the most powerful macro themes, Adobe’s purchase is a big deal. Demdex is a cloud based, cookie management and segmentation platform that allows media organizations to target people based on observed and inferred behaviors, and one of a handful of companies leading the charge toward audience targeting, site personalization, and richer, data driven experiences online. Big data solutions for digital media companies have existed for a long time online, but Demdex and other DMPs make that data actionable in other systems.

Adobe’s acquisition of Demdex adds momentum to the adoption of data management platforms among big companies, and is likely to drive adoption of the technology with major marketers and publishers, who may have been hesitant until now to share their data with a startup ecosystem. Certainly seeing the resources of a public company behind the big ideas of a startup will be interesting to watch over the coming year. I’m particular interested to see how Adobe integrates Demdex into the Omniture suite of products.

Auditude

After Demdex, Adobe’s acquisition of the video monetization and ad serving platform, Auditude was their next most important move of the year in my opinion. Auditude has done a lot of work in the video space to make cross platform video ad serving easy, whether the creative is destined for a smartphone, tablet, or desktop device. They’ve done a ton of integrations work as well to make sure the product plays nice with traditional ad servers and measurement companies as well, which is what big brands want to hear.

While it represents a small piece of the pie now, make no mistake, advertising on digital video, especially on mobile devices is going to a major growth story in the coming years. Video supply is far more constricted in the market, and the user experience and engagement results are much richer for advertisers, so video is one of the few places where publishers have real pricing power. There’s going to be tremendous investment on the publisher side because of the available budget, so Auditude makes a lot of sense for Adobe.

Efficient Frontier

Then, red hot after the Auditude acquisition, Adobe announced their purchase of Efficient Frontier, a search and social advertising company that is best known for its technology to execute and optimize ad buys on Facebook. Despite billions in ad revenue and thousands of advertisers ranging from local mom and pop stores to Fortune 500 brands, Facebook still feels like an untapped market and most industry sources agree that the social network should effective double revenues year over year for the next few years.

Adthenticate

Finally, outside of acquisitions, Adobe launched an under-reported project around ad tag validation in October, perhaps their most relevant project to Ad Ops professionals. I’ve written about Adthenticate in detail in a prior post on this site, but the big idea is to streamline the ad trafficking process through ad tag certification against a publisher’s ad spec, and potentially integrate that functionality into Macromedia Flash, also an Adobe product, so creative is built to spec from the get go. This is yet another case of exciting potential versus having a product live in production, so time will tell how successful the effort will be, but I’m optimistic at Adobe’s ability to execute.

What’s Next for Adobe?

With so many acquisitions, it leaves one to wonder what’s next for Adobe in 2012? In my mind the answer is clear – buy an ad server. If Adobe acquired or developed a mobile ready, RTB enabled ad server, they’d have one of the most impressive offerings in ad tech out there, well positioned for the next arc in digital marketing. Adobe, are you listening?

Read about the other most significant developments in Ad Ops in 2011:

MediaBank & Donovan Data Systems Merger
MRAID Specs Released