ADOTAS – Adobe

For Auditude, this acquisition is a great outcome. The deal occurred at a very healthy multiple of revenue and sends a clear signal to the market about the significance and value of online video advertising technology.

The rationale behind the deal seems clear. Adobe wants to move upstream and provide more sophisticated value-added services on top of their core infrastructure technology. Just like the telecommunications companies, Adobe doesn’t want to be merely the “dumb pipes” responsible for cheaply providing the infrastructure on top of which other companies make their fortunes. As internet-delivered video continues to explode and slowly work its way toward replacing traditional broadcast TV, Adobe clearly sees an opportunity to put their technology at the heart of TV 2.0.

For proof of the march toward connected TV, look no further than the recently announced partnership between LG and YuMe, where the latter company is helping Toyota serve ads to consumers who use a connected TV app store or search screen. By purchasing Auditude, Adobe is getting a roster of premium customers that translate very well to connected TV, including Comcast and Major League Baseball.

Adobe is already dabbling in connected TV with its Adobe Pass software, which is widely used by content owners to authenticate their video streams across connected platforms. As more networks look to monetize their content on internet-connected TVs, Adobe can now offer them ad serving and access authentication in one shop.

Then there’s Adobe’s already massive role in the online video space. Flash powers the vast majority of online video, yet Adobe has received relatively little financial benefit from the ubiquity of its format. Adding advertising capabilities not only provides potential opportunity to monetize Flash’s enormous footprint, but potentially defends the platform long-term against commoditization and eventual replacement by HTML5.

Although this all makes sense in principle, Adobe may initially face some challenges attempting to get publishers and advertisers to adopt its new integrated solution. The addition of Auditude to its Adobe Marketing suite would give premium publishers a stack that contains video ad serving, analytics and data management, but this is unlikely going to generate the “1 +1 = 3″ math that Adobe is going for. Most publishers already have analytics tools and DMPs, and for those looking to expand into video, it’s far simpler and more cost-effective to find a stand-alone video solution, rather than tear everything down and overhaul the entire system with an integrated suite.

While they may be newcomers to this space, Adobe’s reputable brand and integrated tools, combined with Auditude’s technology, is sure to push the boundaries of what online video can be. While they will have an uphill battle at the start, it’s very likely that the trusted Adobe name will encourage more premium publishers and advertisers to explore the segment. If anything, this will lead to increased competition, which will surely drive increased innovation in the space.

Efficient Frontier will evidently continue on as an independent entity under the umbrella of Adobe’s Digital Marketing Suite. There’s been no announcement yet of how much Adobe paid, but it’s worth noting Ad Age cited Efficient Frontier‘s 2010 revenue as $37.5 million.

ADOTAS

• According to a joint survey by Sybase 365 and the Mobile Marketing Association, 62% of the 1,000 consumers polled would be willing to make purchases with their mobile devices during the holiday season if motivated through coupons, discounts, text alerts, gift cards or even loyalty points. That’s double the number who said the same the year before. More interesting, a quarter claimed they would be more likely to make mobile payments if the solution was offered by their financial institution — 18% would be enticed if their credit card company offered that ability, while 22% would appreciate it coming from PayPal. But what about Google?

• Facebook has acquired Strobe, a business that helps developers distribute apps to multiple platforms at the same time. Strobe’s development platform (which is in beta and will remain available for a while) uses HTML5, which is of interest to Facebook as it works toward creating a common app platform — as is Strobe’s founder, Charles Jolley, evidently. Business Insider is calling the acquisition a talent hire.

• ChoiceStream has added Audience Intelligence Reports to its CRUNCH Audience Targeting Platform, which uses the company’s proprietary intent data to predict audience reaction to brand messages. In addition to detailed audience demographic and engagement reports, the feature offers visual representation of how segments react to display campaigns.

• Rocket Fuel has introduced Social Booster for Facebook, a data-driven tool for automating the creation, monitoring and management of display campaigns on the social network.

• Adobe has opened its Project Adthenticate — with the goal of streamlining ad validation and trafficking process for advertisers and publishers – to the wider online advertising community through a public beta.

The SEO monitoring and keyword analysis from the Searchmetrics suite will allow SearchCenter+ users to compare SEO and SEM performance side by side, improve bids by using organic rank scenarios and receive keyword recommendations. Searchmetrics’ software tracks keywords in 28 countries through 90 various search engines.

“Adobe Genesis continues to add valuable integrations with best-in-class technologies like Searchmetrics,” said John Mellor, vice president of strategy and business development for Adobe’s Omniture unit. “Our joint customers will benefit from a clearer picture of their search initiatives and where to take action to best boost traffic volume and revenue from search.”

In March, SearchCenter integrated Conductor’s SEO Cloud, which allows third-party marketing platforms to interact and exchange data with SEO platform Searchlight.

Last August, six web users filed suit against Specific Media in the U.S. District Court in the Central District of California for using Flash Cookies for tracking purposes and thereby violating federal and state wiretap laws.

The suit came in the wake of an academic study that found 50% of sites researched were using Flash Cookies — originally developed to retain user data for Flash-based applications — to collect user information. Lawsuits were filed en masse against ad tech companies like Quantcast and Clearspring as well as major media companies like Disney, Fox Entertainment Group and NBC Universal. Quantcast and Clearspring admitted to using Flash Cookies to collect user data, but internal analytic purposes, not tracking or ad targeting.

The most damning accusation in the report, however, was that some publishers and advertising companies used Flash Cookies — which are stored in a different browser location than HTML cookies, and therefore are not deleted when a user (can’t resist this) tosses his/her cookies — to resurrect deleted HTML cookies, which certainly are used for targeting ads.

The suit against Specific Media claimed the company was up to such notorious behavior to “obtain personal identifying information, monitor users, and to sell users’ data.” Specific filed a suit to dismiss in March, and a month later the cookie case has been (wait for it) tossed.

Flash Cookies, which Adobe refers to as “local shared objects” (LSOs), have long been a source of controversy in terms of online tracking. Consumer Protection Chief David Vladeck commented last year that his agency was “currently examining practices that undermine the tools that consumers can use to opt out of behavioral advertising,” a not-so-veiled reference to Flash Cookies.

Responding to online privacy advocate calls for more user control over Flash Cookies, Adobe developed an API for clearing LSOs from a browser as well as all plugins that install the API. In addition, the company updated its Flash Player Settings Manager to allow users to decide which sites (if any at all) they want to employ LSOs.

Adobe’s SEM solution SearchCenter+ is the first service to integrate Conductor’s SEO Cloud, which allows third-party marketing platforms to interact and exchange data with Searchlight, Conductor’s SEO platform launched last year. SearchCenter+ users will be able to use organic search data — including customer and competitor visibility metrics, search volumes and proprietary SEO health scores from Searchlight — to inform efficient and automated bidding rules.

Searchlight users will be able to import data such as traffic, conversions and revenue, and the SEO platform will connect the information with metrics like search rankings and keyword volume.

“Search marketers can make the best decisions when they’re able to look at paid and natural search together,” said John Mellor, vice president of strategy and business development for Adobe’s Omniture unit. “From increased relevance affecting bid pricing to bidding based on natural search position, paid and organic need to work together.”

In addition, Searchlight is in beta integration with Adobe Genesis, which automates partner integrations with the Adobe Online Marketing Suite, to receive certification as an Adobe Accredited Application Partner.

While we’re fantasizing, you can also leave work early and fly home on your winged pony (that talks!).

However, easy-to-insert codes for rich media capabilities didn’t sound too good to be true to Adobe and MediaMind. The two have teamed up to release MediaMind Blocks, Flash-based prepackaged codes for incorporating cutting-edge functionalities — from augmented reality, geolocation, Facebook and Twitter to Papervision3D and physics simulation — into rich media ads.

Each code can be edited within the Flash authoring tool to comport to a specific ad on MediaMind’s platform. The constantly updated code library also features demos of the tools, including consumer feedback modules.

“With MediaMind Blocks, marketers now have a myriad of options to develop and execute sophisticated and highly creative rich media experiences,” said Gal Trifon, MediaMind president and CEO. “The pre-packaged offering makes it incredibly convenient and easy for marketers to expedite the creative process with instant production and delivery.”

Flash Cookies, which Adobe prefers to call local shared objects (LSOs), are used to support web technologies such as Flash Player and browsers employing HTML5. They were designed to save small pieces of information (LSOs are three hundred times smaller than an MP3) such as logins or preferences locally on a computer rather than on a site’s server.

However, some unsavory types were taking advantage of their hard-to-kill nature to restore tracking information to deleted HTML cookies or track browsers without their knowledge… Quantcast and Clearspring argued they used Flash Cookies for analytics purposes only.

Adobe has heard the cries of online privacy advocates and worked with companies such as Mozilla and Google to build a new API for clearing LSOs from a browser as well as all plugins that install the API. It was approved for implementation on Jan. 5 and should appear any day now on the Google Chrome developer channel.

In addition, Adobe is enhancing the Flash Player Settings Manager to allow users to decide which sites (if any at all) they want to employ LSOs. Currently by visiting the Global Storage Settings page you can opt out of collecting LSOs.

Investors liked the idea, so Adobe shares skyrocketing 12% yesterday, but my immediate impulse was to gag. Of course, I love Adobe Creative Suite and loathe Microsoft Windows (though Office is OK in my book). Can you guys imagine what terrible things Microsoft would do to my beloved Photoshop? For heaven’s sake, leave InDesign alone!

However, sources from the two companies were quick to downplay the get-together: Settle down, settle down, Internet! It was just a routine meeting. The big dogs on Wall Street also expressed their doubts on a merger as Adobe shares dipped more than 5% on Friday.

Really it seems Microsoft and Adobe are scheming to battle the beast known as Apple on the mobile front. Apple has banned Adobe Flash from its mobile platforms, though the company recently eased its developer licensing agreement to allow the use of third-party development tools that translate code from programs such as Adobe Flash. According to IDC, Microsoft’s share of the mobile ad market will wither this year from 10% to 7%, as Apple enters with a 21% slice of the pie.

The enemy of my enemy is my friend, they say. What kind of weapons could a Microsoft-Adobe partnership unleash on the mobile ad front? Would they stand a chance against Apple’s mobile juggernaut?

Apple announced that it is relaxing drastic changes to sections 3.3.1, 3.3.2 and 3.3.9 of its developer licensing agreement for the iPhone OS, allowing the use of third-party development tools that translate code from programs such as Adobe Flash. It’s all good, as long as the finished apps do not download any code, Apple said in a release.

The update of the licensing agreement back in April caused all kinds of developer fury
– the revisions of 3.3.1 seemed particularly aimed at Adobe’s just-released Flash CS5, which introduced a method to port Flash apps to the iPhone.

Also for the first time Apple is publishing the guidelines for programs sold in the app store to promote transparency (yes, you read that right — Apple wants to promote transparency) and better app-making.

Apple’s relationship with mobile app developers has been akin to a bouncer at the door of a ritzy club — except instead of arbitrarily denying entry to dweebs and letting the hot chicks roll by, Apple arbitrarily denies apps that are “racy” or “Flashy” maybe a bit too satiric or they’re just not that active. In particular there was the great app store purge of February, which counted among its victims “iWobble,” an app that could make areas of certain photographs jiggly. Sigh, we miss you so, iWobble.