Sep

21

Adobe buys Omniture – what to make of it?

Filed Under Web Analytics News 

Last Wednesday, we found out how to make an onion and chocolate sandwich and were left to wonder how it could possibly taste good.  With Adobe’s acquisition of Omniture, you can tell that nobody quite gets this one: ADBE stock dipped just slightly, and OMTR hopped up to just under $22 a share, up from around $17 (quite a bump, but still adding up to less market cap than the purchase price, and neither of these responses is anything exciting).  So why did Adobe buy Omniture? Let’s take a look at the case.

Financial Reasons

One answer is obvious: now’s as good a time as any to buy Omniture.  They’ve scooped up tons of great companies and technology over the past few years (through acquisitions), have a tremendous client roster, and somehow have managed to be squarely in the red almost every year since going public. Adobe must feel like they can manage the business better than the mormons, and they’re buying at a good price.

If you’ve ever been to Omniture Summit or Omniture HQ in Orem, UT, you’ve no doubt realized that Omniture likes things that look cool.  They spend a lot on creative work (or have a lot of internal people to do it) because every piece of collateral you touch or presentation you see is filled to the gills with 3D images and fly-throughs that explain their products in more dimensions than you use them.  Omniture’s offices are pretty cool, too, but nothing crazy.  They’re just pretty cool. You’ll also notice that their employees are paid very, very, VERY well compared to standard Orem, Utah salaries, and that would be okay if their customer service wasn’t such an issue.  There are a lot of places for Adobe to step in and manage budgets, without a doubt.

Clients

Adobe has tons of clients.  Omniture has tons of clients.  They’re probably just about all the same clients…

Business Model

Adobe writes software.  Omniture writes software.  They both have talented programmers. Check.

Adobe distributes software in boxes and via downloads as client-side design tools, and bills by the product version.  Omniture delivers software as a service and lacks the server infrastructure to make the tool as responsive as it should be – and they bill by the byte. This expansion of infrastructure will equal major dollars out of Adobe’s pocket if they want the tool to feel as snappy as Google Analytics any time soon. Ding.

Adobe provides service over the phone or Internet if you have trouble with their software (which is usually your fault). It’s pretty simple.  Omniture provides service as a major component of their offering: the tool is incredibly complex, prone to installation error (not their fault), prone to misinterpretation (again, not their fault), and needs a lot of hand-holding. This service model has tiers: account managers for most accounts and engagement managers for big names and big-bucks (or big complainer) customers.  Ask any client of Omniture’s what their biggest complaint is. Definitely customer service: the tool is great, but support response time is just awful. Since Adobe has a completely different customer service model, bring out the wallet again! Ding!

The future of computing is definitely software as a service.  We have Google Docs, online email, calendars and task management, online photo editors, online design and layout software, and we’re expecting online versions of MS Office in the very near future.  So of course, Adobe will want to leverage Omniture’s experience developing online applications, and will definitely want to leverage analytics to improve the user experience over time.  No question, although it could be a while. Check.

The Internet, Analytics, etc.

Online marketing is a pie everyone wants a piece of, and integrating SearchCenter into SiteCatalyst was a big step in the right direction for Omniture.  While tools like SearchIgnite and Marin still probably capture more interest because of their power in an agency environment, SearchCenter does pretty well and represents a huge investment by Omniture.  An investment that has zero benefit to Adobe. Ding.

From a web analytics perspective, it’s a little perplexing until you consider Flash. Yeah, you have Dreamweaver, but that’s so obvious and such an easy cut & paste job that it’s not even worth mentioning (so forget that I did).  Getting Flash tracking to be built in without the designer having to do anything is a very big deal, but it won’t be easy to create those hooks.  Same thing with Flex/Air, etc. The internet is definitely going the way of the RIA, so an analytics tool that builds itself in is a huge boon.

The trick will be in how to do this.  With so much manual naming of page names, site sections, eVars, props, and on and on, these tools definitely aren’t going to do the work for you.  There will still have to be a significant amount of strategy developed around analytics, but perhaps with the bonus of not having to worry about tagging. From a time savings and data accuracy perspective, this could be a huge plus.

And comscore?

Now this is definitely worth getting excited about TODAY.  Want to know how your page views for yesterday stack up against the industry leaders? Want to know how your conversions stack up? What your traffic source breakdown is vs others? Want to be alerted when your competitor ups their paid search budget? Done. And right next to your data.  Very cool.

Hopefully we’ll hear something from these guys on their plans.  I’m definitely eager to understand the deal beyond fishing around in the bargain bin.

I’m still confused about…

I still just don’t get it.  There are too many places where there is no perceived benefit at all.  While there are definitely opportunities to stitch the online components together (creation software like Dreamweaver, Flash, etc.), there are too many places where each company will be speaking a different language.  SearchCenter, as I mentioned, will benefit Adobe zero.  Photoshop, InDesign, Lightroom, and the majority of Premiere and After Effects will have nothing to do with Omniture.  The customer service and sales models are completely different.  And Adobe doesn’t stand to benefit from investment in server farms and increased bandwidth for years – until they develop their products as a service.

In other words, the venn diagram that describes synthesis here is just a thin sliver of overlap as far as I can tell, unless the benefits are much farther out than I’m seeing.




Comments

2 Responses to “Adobe buys Omniture – what to make of it?”

  1. Mike on September 21st, 2009 7:39 pm

    Good article. My first reaction was the potential to truly integrate tracking with Flash – but that seems like swatting a fly with a steamshovel. You shouldn’t really have to acquire the whole company to do that. I’m with you on the ‘they got a deal’ piece, but there’s gotta to be more to Adobe’s angle than that…

  2. EG Online Marketing on October 8th, 2009 8:16 am

    I believe knowledge is key. Google learns more about people than anyone else. Trends, tendencies, etc….

    We know Adobe wants google to rank flash and articles have been released saying that they are working together on it. I think this is an important factor for Adobe. Maybe they want to build in their own analytics like you said.

    Either way knowledge is power and where you have power you have the opportunity to make money.

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