Adobe Continues Its Move into Online Advertising

Adobe announced this past week the acquisition of Auditide Inc., a provider of video advertising technology, in its third advertising industry purchase in the last couple years.

The purchase reflects both Adobe’s interest in branching into the industry and the increasing sophistication of online advertising in the first place. During the early years of widespread Internet use, online advertisements were generally basic and unrefined compared to advertisements found in print and television media. Internet ads, often displayed in the form of blinking banners, unrelated gimmicks, and direct textual appeals, represented a crude and fast-growing business – one that grew rapidly alongside the web but displayed little tendency for innovation. As hosting companies evolved to offer services like Microsoft Exchange and Sharepoint Hosting, many marketers used these platforms as the basis of more advanced and holistic adverising. 

These ads still proliferate online these days, but site managers and developers more and more often look to create ads that are more professional, unobtrusive, and better targeted towards an intended audience. Businesses can create these targeted ads by tracking information about a person’s browsing habits, and the ads can then be easily disseminated through services such as Google’s AdSense. If an Internet user spends a lot of time searching Google for old high school friends, for example, they may soon thereafter see an ad for classmates.com or Anywho.com. These ads now more likely mirror advertisements made through other media channels in both content and construction.

More recently, online advertisers have turned their focus to newer frontiers. Prime among them are advertisements inserted into internet video. With people increasingly watching not just short clips but also full-length movies and television shows online, internet video advertising is an increasingly specialized and lucrative business.

Which brings us to Adobe’s recent purchase of Auditude. Auditude, which has raised funding from a variety of venture capitalist firms, provides a service for putting ads into online videos and works with publishers to create a standardized advertising approach across various video types. The company will be bringing its clients, software, and expertise into Adobe’s fold, which promises to quickly spur Adobe’s quest to enter and excel in the online advertising industry.

Adobe’s intentions to branch into advertising are nothing new. Over the past couple years the company has acquired several businesses to help achieve this goal, most notably Omniture in 2009 and Demdex, a business that manages audience data, earlier this year. The purchase of Auditude was only the most recent development in this quest.

In a statement released by Adobe, the company said that its technology fits well with Auditude’s advertising platform, which it will integrate with the Adobe Digital Marketing Suite. While the terms of the sale were not disclosed, the deal has an estimated value of about $120 million.

In conjunction with the Auditude acquisition, Adobe also announced the launch of a service it calls Project Adthenticate, which will use IAB’s Rich Media Creative Guidelines to test and optimize online advertisements. The service, the company hopes, will draw clients to its burgeoning ad business and make it a leader in more sophisticated marketing technologies, such as those behind the growing use of interactive ads.

It is yet to be determined whether Abode will become one of the leaders in the booming online advertising market, especially in the realm of video ads. But with its recent moves and acquisitions, there is little doubt that it is moving in the right direction.