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Is Adobe's acquisition of TubeMogul a sign of maturing video advertising space?

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Is Adobe's acquisition of TubeMogul a sign of maturing video advertising space?

Adobe, last week, announced that it has entered into an agreement to acquire TubeMogul for approximately $540 million net of debt and cash. TubeMogul is a leader in video advertising, with a single platform that enables brands and agencies to plan and buy video advertising across desktops, mobile, streaming devices and TVs. The company said that TubeMogul’s acquisition and subsequent integration to the Adobe Marketing Cloud would create the first end-to-end independent advertising and data management solution across TV and digital formats.

 “Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs,” said Brad Rencher, executive vice President and GM, (Digital Marketing) of Adobe. “With the acquisition of TubeMogul, Adobe will give customers a ‘one-stop shop’ for video advertising, providing even more strategic value for our Adobe Marketing Cloud customers.”

 “Adobe and TubeMogul share a similar culture and vision for the future of advertising,” said Brett Wilson, CEO and Co-founder of TubeMogul. Wilson will continue to lead the TubeMogul team as part of Adobe’s Digital Marketing business.

So what does this mean for the video advertising business in general?

“It is audience data being wed to a demand side platform so it is good for both of them. It will help marketers buy more audience through video and more intelligently,” said Piyush Chhaperwal, Director of Sales at Vdopia.

Video advertising has been the fastest growing segment within the digital marketing. According to eMarketer, digital video advertising is expected to grow at annual double digit rates in the US with ad spending continuing to grow at a pace that exceeds TV advertising growth through 2020. The IAB  says US ad spending on original digital video programming increased 114 per cent since 2014 with marketers and advertisers are spending on average more than $10 million annually on digital video.

“2016 has been a year of consolidation in the ad tech and marketing tech ecosystem. We've already seen over 300 mergers and acquisitions this year. This is actually great news for brand advertisers and marketers. The increased consolidation means that they don't have to look for multiple technology providers to solve their needs. With this move, Adobe enters the programmatic ad buying space with a bang and its customers can increase their investments in video ads. The other big acquisitions in the space ( by AOL, LiveRail by Facebook and BrighRoll by Yahoo) put a lot of pressure on the other marketing tech vendors like IBM, Oracle, SAP etc. It'll be really interesting to see how this consolidation continues,” said Subrat Kar, Co-founder of Vidooly.

A number of ad tech companies are now trying to bridge the gap between digital and TV advertising. For example, Xaxis has been developing a product called Sync that allows the company to match a mobile ad to what is happening on TV. On similar lines Zapr, a Bengaluru-based start-up, had developed a platform that allows advertisers to profile offline consumption behaviour that can be then used to deliver targeted ads on mobile platforms. 

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