Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Adobe’s $1.8 billion acquisition of Omniture, the largest provider of analytics to Top 500 retailers, could raise the ability of online retailers to quickly judge the effect on consumers of online content in merchandising displays and web ads.
Adobe Systems Inc.’s acquisition of Omniture Inc., the largest provider of analytics to Top 500 retailers, could raise the ability of e-retailers to quickly judge the effect on consumers of online content in retail merchandising displays and online ads, experts say.
Adobe, whose digital content development and design tools are widely used among retailers, said when announcing the approximately $1.8 billion acquisition yesterday that it would integrate its technology with Omniture’s to help clients produce more effective and revenue-producing content in online merchandising and marketing campaigns. “This optimization will enable advertisers, advertising agencies, publishers and e-tailers to achieve greater return on investment from their digital media investments and improve their end users’ experiences,” the companies said in a joint statement.
Analysts agree that combining Adobe’s content tools with Omniture’s analytics technology could provide online content managers with a significant edge in producing effective merchandising and marketing efforts-if the two vendors and their users can meet the challenges of integrating technology and changing traditional content development and management practices.
If those challenges aren’t met, “this could turn out to be nothing more than an add-to-revenue deal for Adobe and a way for Adobe to get into Omniture’s software-as-a-service technology market,” says Suresh Vittal, a marketing technology analyst at research and advisory firm Forrester Research Inc.
But if Adobe and Omniture can work out an effective system of applying the latter’s analytics tags to content developed by Adobe’s tools, and if merchandisers, marketers and information technology specialists cooperate on how to use the integrated systems, Vittal says, the two companies could greatly improve how content managers can measure the impact of their merchandising and marketing campaigns. By having Omniture’s analytics tags embedded from the start of content development, instead of after content has been developed and placed on web pages, managers will be able to immediately gather extensive information regarding consumer response, Vittal says.
“They will be able to go further in-depth to see not just how many eyeballs are viewing content, but the quality of those eyeballs, such as the kind of traffic in terms of demographics and past shopping behavior,” he says. In online advertising campaigns, for example, a marketer could use this information to compare the quality of consumer response to ads placed across several web sites. Likewise, in online merchandising displays on a retailer’s own site, merchandisers could compare how different content displays immediately attract different types of shoppers-and quickly make any necessary adjustments to the displays.
Although it’s possible for web site operators to build their own integration between content tools and web analytics applications, this typically takes too long because of issues related to technology system compatibility and the availability and cooperation of personnel, Vittal adds. “One retailer told me it can take 15 months to get new analytics targeting tags onto web sites,” he says.
Brian Kilcourse, managing partner of research and advisory firm Retail Systems Research LLC, says the Adobe-Omniture deal presents the potential for retailers to have a single source for content tools and measurement applications. “It’s interesting news from the point that Adobe, whose content tools like Flash and Flex are fairly ubiquitous in web environments, now seems intent on getting into the solutions business,” he says. “Omniture seems to have a pretty broad set of capabilities that e-marketers need to personalize the customer experience, and to measure the effectiveness of campaigns. So with the acquisition, Adobe combines their tools with Omniture’s capabilities to provide a rich solution set-a one-stop-shop for e-marketers.”
“It seems like a pretty good fit,” says Jim Okamura, senior partner of retail consultancy J.C. Williams Group. “The increasing need for analytics has to be tied into content management systems, both of which are critical competencies for retailers going forward.”
Steven Broussard, director of marketing and e-commerce for Golfballs.com, says the Adobe-Omniture tie could have an important effect on the ability to measure the effect of running rich media content on web sites. “It’s been historically diffcult to get good analytics from Flash content, so the more analytics that can be embedded inside Flash animations will be good,” he says. “Embedding Flash with analytics will probably get e-commerce sites to use Flash more.”
The acquisition is Adobe’s second major online retailing technology deal in recent years. In May 2007 Adobe acquired Scene7 Inc., a provider of rich media for web sites, much of it built on Adobe platforms. Terms of the deal were not disclosed.