Adobe Pays $400 Million for Efficient Frontier
Last month Adobe said it was buying search marketing firm Efficient Frontier, but didn't disclose a purchase price. Yesterday it came clean: The deal will end up costing around $400 million. — That brings the price tag for Adobe's …
Context & Ripple Effects
The price tag closes the loop on a deal Adobe announced in November without terms: the search-marketing firm Efficient Frontier joins Adobe for roughly $400 million. It slots into the digital-marketing stack Adobe has been assembling since its acquisition of Omniture in 2009, which turned the company from a pure creative-tools vendor into one selling measurement and campaign management to marketers.
The timing matters because Adobe spent November 2011 dismantling its other big franchise story — confirming it would stop developing Flash for mobile browsers after Android 4.0 and pivoting to HTML5, alongside layoffs and restructuring. With Flash receding on mobile, the marketing-software business built on Omniture becomes the growth narrative Adobe is buying its way deeper into.
First-order effects
- Efficient Frontier's search bid-management technology is folded into Adobe's Omniture-based marketing suite, giving Adobe customers paid-search optimization alongside existing web analytics.
- Adobe's investors and rivals now have a benchmark price — about $400 million — for a search-marketing asset, after the November announcement left the deal size undisclosed.
Second-order effects
- Web-analytics and ad-management vendors competing against Omniture now face an Adobe bundle that pairs measurement with automated search-media buying, pressuring them to add bid management or partner for it.
- Search-marketing agencies and independent bid-management tools lose differentiation on technology alone as platform vendors absorb the capability, pushing competition toward service and integration.
Third-order effects
- If the Omniture-to-Efficient-Frontier sequence holds, Adobe's center of gravity keeps shifting from selling creative software licenses to acquiring recurring-revenue marketing platforms — a consolidation path that makes standalone marketing-tech firms acquisition targets rather than long-term independents.
The trend: Adobe is rebuilding itself around acquired marketing-analytics and media-buying assets even as its legacy Flash franchise winds down on mobile, making enterprise marketing software its primary growth engine.