cookie, biscuit, round

TBT – OMNITURE AND ADOBE – A COOKIE CUTTER DEAL (2009)

Update 10/8/2010 – Imagine what this will mean if the Microsoft acquisition is real.

There’s been no shortage of speculation about the true motive behind Adobe’s acquisition of Omniture. There has been a great deal of confusion, wondering how this partnership makes sense.  If you dig a little into history and look a little into the future, I think the picture becomes more clear.

History – Take a look at Adobe’s two major acquisitions1:
ïMacromedia $3.4 billion 2005 
ïOmniture $1.8 billion 2009

The 2005 acquisition of Macromedia makes sense in that it brought to the table robust content creation tools like Photoshop, Dreamweaver,Freehand and Flash, just to name a few. What it also brought to the table was Flash’s Persistent Identification Element,2 better known as the Flash Cookie3.

Cookies have been around for many, many years4.  Cookies are text files that Web sites drop onto visitors’ computers to capture information.  Depending on how the cookie has been created,the type of information they can capture can be as simple and anonymous as a unique ID to recognize repeat visitors to a site.  More insidious, complex cookies can search your computer and find, capture and store very personal information.  

Cookies are valuable to marketers because they provide the ability to serve up relevant ads based on the information captured in the cookie.  But many people don’t like the idea of anyone, much less any company, having access to this personal information.  So people periodically make sure to delete their cookies (or at least try to).  Since cookie deletion was brought to light several years ago, there have been many products created to help users delete their cookies.

But Flash cookies aren’t like regular (HTTP) cookies.  They are not deleted by these programs and oftenpeople aren’t even aware that they exist on their computers.

Many articles have been written about the controversy surrounding the Flash Cookie, since its launch5 to  more recently6.  But the great privacy concerns caused by the Flash Cookie’s ability to not only capture personal data but to stick around, to avoid being deleted like other cookies, creates great opportunities for marketers, especially in the area of behavioral targeting.  

The Web sites that use Flash Cookies have lots of useful information about their visitors, information that they can provide to advertisers.  Based on the information in the cookie, they can make sure that only people who have certain preferences or meet certain criteria are served the ads. Advertisers are willing to pay more, much more, to ensure that their ads are relevant.

Now, imagine that a company that owns a content creation tool that creates every Flash movie or Web site to set this Flash Cookie.  But now the Flash Cookie that is created leverages the data capturing ability of the largest, most powerful web analytics, Omniture (who also has a history of controversial data capturing practices7 ).  Pretty scary stuff.

With this partnership, Web sites and Flash movies automatically have a robust data collecting cookie built right in.  Adobe has the ability to retain and report on all of this information because of Omniture’s data warehousing and reporting capabilities.  Not to mention that Omniture’s reporting capabilities have moved far beyond Web sites. Omniture now has reporting for social media (Facebook) and iPhone applications.

And it gets even better (well, for Adobe, but maybe worse for you and me).   Shortly after the acquisition by Adobe, Omniture release a partnership with comScore8.  This will give comScore the ability to report on visitor information gathered by Omniture. And it will give Omniture customers the ability to see demographic and psychographic information from comScore.

The Future – Where is this going?
Right now users have to pay for access to Omniture reports.  But one day in the future, Adobe may change this model and, like Google, offer the analytics for free in exchange for ownership of the data.  

In owning this data, Adobe would have access to the most valuable information, information on how to monetize not just Web sites and Ad Networks, but ALL content.  

And so maybe it is a stretch, but maybe not.  From a recent job posting, “Adobe delivers a complete and integrated solution to create, distribute, and monetize video content for output anywhere: on-screen, on-air, on-disc, on-line and on-device. Only Adobe provides a complete and integrated end-to-end solution–from content creation to playback–while offering new ways to distribute, track and build businesses around video assets. With Adobe Flash Player on 99.7% of desktops worldwide, Adobe offers rich, interactive online experiences ubiquitously, regardless of platformt9”.

As additional proof, we see not only is Adobe making it easier to create Flash based media on social networks and mobile phones10.  These media will contain the Flash Cookie and gather data that Omniture can already robustly report on.  But also Adobe is making inroads in creating content that can be delivered on next generation television sets11.  

A Big Win for Marketers 
Web site owners and Ad Networks would have access to robust behavioral,demographic and psychographic data.  The guesswork is virtually removed from media buying across sites, networks, social media, video and more.

But What Does it Mean for You and Me?
No more annoying irrelevant ads.  Visitors will only relevant and useful ads.   A win,win situation.  
Or is it?

References:

http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Adobe_Systemshttp://en.wikipedia.org/wiki/Adobe_Flash_Player#Internet_Privacy.2FPersistent_Identification_Elementshttp://en.wikipedia.org/wiki/Flash_cookiehttp://en.wikipedia.org/wiki/HTTP_cookiehttp://www.informationweek.com/news/showArticle.jhtml?articleID=160400749http://www.wired.com/epicenter/2009/08/you-deleted-your-cookies-think-again/http://en.wikipedia.org/wiki/Omniturehttp://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113823http://www.webguild.org/jobs/sr-product-manager-media-measurement-adobe-contractorhttp://www.theregister.co.uk/2009/09/21/adobe_flash_service/http://online.wsj.com/article/SB125366988207032789.html?mod=dist_smartbrief

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