Industry Reaction: Adobe Acquires Efficient Frontier

Adobe-Efficient Frontier Industry ReactionOn Wednesday, Adobe Systems announced the acquisition of media buying platform and services company Efficient Frontier. In an interview with, Adobe’s John Mellor said in regards to the acquisition, “We are answering the call of customers to give them more capability in how they spend those dollars, how they understand performance, and how that understanding loops back into how they can spend more.” Read more.

We asked a selection of executives across the digital ad ecosystem, their “take” on the deal.

Click below or scroll down to read their responses:

Chris Copeland, CEO, GroupM Search (WPP Group)

“Adobe’s purchase of Efficient Frontier strikes me as a decision made by a company (Adobe) dead set on spending money on something, regardless of what it is. For the past decade, Efficient Frontier has been positioned as a search bid technology, focused on its portfolio management approach. Now, it seems Adobe is buying Efficient Frontier for the value they perceive their social toolset brings to the Omniture suite. Any other reasoning for this move would have to be questioned, owing to the fact that Adobe spent so much on Omniture which already has Search Center as a core component. The acquisition will certainly make Adobe stronger, but I question why Efficient Frontier as opposed to a smaller, cheaper entity with a social-only component to avoid redundancy. Also in question is the likelihood that the team at Efficient Frontier will stick with Adobe/Omniture long-term, which makes the potential for successful integration and true impact a debatable point.”

Daina Middleton, CEO, Performics (Publicis)

“Efficient Frontier has been a respected technology leader in our industry for many years, and we feel this announcement reaffirms the value of search in today’s evolving digital marketing toolkit. We have long believed that the DNA of search marketing can and should influence the integrated digital media landscape. There are many complimentary and previously competitive aspects of Omniture and EF’s offering that, if integrated successfully, will help marketers leverage the ever-expanding data trail to make better decisions.”

Jeff Green, CEO, The Trade Desk

“On one hand, I’m glad to see companies making bets. Adobe has always been a player to watch in this space, and I’m glad to see them taking the end-to-end challenge to Google. I also think the multi-channel approach that Adobe is building is the right one – tying together search, display, social and more.

However, I’m not sure that the E-Frontier acquisition gets Adobe what they’re looking for. It’s difficult for one company to build a world-class product in every channel, and also provide managed service. E-Frontier has tried to do both, and it’s arguable how successful they have been to date.

Ultimately, E-Frontier has evolved into an agency for all media channels. Does Adobe – who is still new to the online marketing space – really want to be an agency?”

David Kidder, CEO and Co-Founder, Clickable

“Digital advertising continues to grow rapidly, though multichannel complexity is growing much faster. In fact, it’s overwhelming. As a result, advertisers and agencies — under great pressure to grow revenue — are longing for solutions to make sense of the chaos, streamline work flow, and achieve success in less time. That’s resulted in our industry’s vision of the online marketing suite, and that is the path Adobe is pursuing with the acquisition of Efficient Frontier.

With Efficient Frontier, Adobe gains a competitive search product, with new social capabilities that will broaden its leadership position in marketing analytics. To be sure, Adobe will face a new class of competitors in large incumbents like IBM as well as new, nimble platforms

As with any acquisition, you can never underestimate the task of integration, and you have to fight to keep vision, positioning and product focus that resonates with customers. Technology is not complex, people and customers are.”

Andrew Leinecke, Media Director, RBM

“My colleagues and I were enthusiastic to learn about the acquisition of Efficient Frontier. This move will give EF access to all those enterprise clients who use Omniture. Moreover, it gives the engineers at EF access to those clients’ post click data. It will be fascinating to see who can build next generation marketing platforms that draw from analytics, search, and ad serving. I think we can expect to see similar partnerships in the future.”

By John Ebbert

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  1. I find it comical that Jeff Green referred to EF as a company that evolved into an agency. It really shows he has no idea what he is talking about, as EF started as an agency, and then evolved more into a platform company. Anyone in the industry should have an understanding of that. Sounds like sour grapes to me, perhaps his company was in consideration and got passed over.

    Nevertheless, it is a very interesting move by Adobe and EF seems like to right fit for their vision of a Digital Marketing suite to complement Omniture. Everyone knows Search Center is a joke of a tool so I also don’t know why Chris Copeland is making such a big deal about overlap. Omniture certainly didnt build their massive business on SC, it was built on site catalyst. SC the product will most likely be replaced with EF’s search tool, which is clearly more advanced and superior, and Adobe also gets a DSP, Social marketing and a community development and engagement platform in Context Optional. The more I think about it, the more brilliant of a move this is by Adobe if they are serious about owning this space, which clearly they are.

  2. I don’t agree with the previous comment. At least in my experience, EF often uses the managed service team. To me, an agency provides service and that’s what EF does. How else would you define an agency? Their tech certainly isn’t very cutting edge, so I wouldn’t really consider them a pure platform. Their service is still a big factor. Anyhow, interesting move by Adobe, I bet we see a bunch more acquisitions from them.

  3. [Disclosure: I built & ran Sales at Efficient Frontier from 2003-2007, and ran SEM sales at Omniture 2008-09]

    @Jeff Green – on the question of whether EF is an agency or a SaaS solution, I think that Adobe’s acquisition of EF (including the price they paid, once that’s revealed) is the answer. If it turns out Adobe paid an agency multiple (1-2X revs), then EF’s an agency; if Adobe paid SaaS multiples (5-10X revs), then EF’s SaaS (or an agency with SaaS margins, in which case why does it matter *what* they are).

    @Chris Copeland – From Adobe’s most recent quarterly earnings release, it’s clear Q4 ’11 will be the first quarter SiteCat is <50% of Omniture's $400M+ revenues. That's a big [green] milestone, and proves that Omniture's acquisition strategy has been a good one. To my point above, the deal makes perfect sense, and means that the line between SaaS & agency services is blurring. WPP already knows this, though, as its own acquisition strategy (24/7 Media, JumpTap, etc) attest.

    • Jeff and Chris, do you really think a 5-10X. its my understanding that a 3-4 is highly valued in most software companies. it is not an agency but I think Adobe wont pay more than 4 times. What makes you think 5-10 times, it seems unrealistic.

  4. Michael Donovan

    $400million publically reported in the earnings call.

    said it would cost around $400 mill. what does that mean. anyone?. what is the net value for the shares after all fees, employee rention costs and lawyers and how many shares were borght ? price per share ?

    looks like for 60-80mill the multiple was 5-6. not saas but i guess ok. looks like they couldnt ipo for some reasons ?