Adobe will acquire the video demand-side platform TubeMogul for $540 million in debt and cash, the companies said Thursday. [Here’s the deal release.]
The deal gives Adobe a sophisticated DSP capability for the first time. Though Adobe had display and search-buying capabilities via the Efficient Frontier acquisition (now Media Optimizer), Adobe has never been lauded for its display media execution.
Publicly traded TubeMogul originated in pre-roll desktop video, but had since expanded into programmatic TV.
Its value proposition is similar to Adobe’s own converging marketing cloud and video/TV business, Primetime. The two have integrated more closely in the last year.
Many of TubeMogul’s competitors had already flown off the market for prices in line with what TubeMogul has commanded: Adap.tv went to AOL for $405 million, BrightRoll went to Yahoo for $640 million and LiveRail went to Facebook for between $400 million and $500 million.
The transaction values TubeMogul at nearly double where it was at close of market Tuesday.
The deal is designed to maximize Adobe’s customers’ video ad investments across desktop, mobile, streaming devices and TV, according to the company.
“TubeMogul’s video advertising platform, combined with Adobe Marketing Cloud, will give customers access to first-party data and measurement capabilities from Adobe Audience Manager,” according to a statement from the company announcing the deal.
“Adobe doesn’t have a major DSP and this positions them for the next generation of programmatic, which will be video and brand-driven, as opposed to display and performance-driven,” commented Martin Kihn, research VP at Gartner. “In other words, I think they’re positioning themselves to capture TV dollars as they move into programmatic channels.”
TubeMogul closed a strong third quarter on Wednesday, with total revenue up 21% year over year to $56.1 million.
More to come.
