Adobe Omniture Acquistion: Innovation is Key

So I have had some time to think about the Adobe acquisition of Omniture and wanted to relay some of my thoughts on the merger. I, like most, was extremely surprised at the move. This definitely feels like a good partnership, but an acquisition? It was a little hard for me to swallow. When I left Omniture almost one year ago I was asked to drop everything and work on integrating metrics tracking into flash communication server. I had scoped the work, but at the last moment decided I was ready to move on. Halloween was my last day and I got to see the execs rent “little people” as Munchkins for their Wizard of Oz theme. Every year the execs rented midgets and it made me snicker (4 years total).

Like I said in previous posts, I was sad to leave, but Omniture wasn’t feeling as innovative as they had been (at least the department I was in). Omniture does have a strong culture, but that was morphing into more organized and clanish. For most at Omniture it didn’t matter because at some point we were “destined to make it big”.

So, let’s speculate on what happened at Omniture. The one thing that gave me comfort at Omniture was that Josh James was shooting for the moon. He was looking to do 1 Billion in Revenue. I still remember at an Omniture Summit when he announced his vision and Eric Petersen, while explaining the importance of a vision, said soon afterward “I don’t think that will happen, but at least Josh has a vision”. I don’t think Eric was invited again then after. Well, looks like Eric is right, at least in part. The Omniture business unit may still achieve the billion mark, just not on its own now. Josh’s high expectations were comforting because it meant the company was going all the way. We were looking to be the next IBM or Oracle and it was part of our vision. I was on board 100 percent.

If they were shooting for the moon like this why did they sell? Someone was feeling the pressure and I don’t think it was the executive team. Those guys were hyper focused on building the company to be the next Salesforce. I think the execs had confidence that the stock would rebound. Or, I have to question, did they? With Google and others putting extreme pressure on clients to switch and creeping costs they may have been feeling the pressure.

My guess is that the executive team still had the same vision. But with clients leaving for Google and Unica (maybe even Tealeaf) and with the difficulty in keeping costs low, the Omniture board voted to take a bird in the hand. My guess is there was an offer to enhance Adobe’s own position and the Omniture board took the bait. At this point the executive team is just making the best of the decision. That’s what I think happened, but I’ve been wrong before, sometimes very wrong.

I tend to agree with Omni_man Adam Greco about Omniture’s ability to integrate products. They did have a hard time focusing, but I think that comes from the change in their culture. Innovators became gun shy because failure was getting high visibility from an organized-clanish culture. The old innovative culture just plowed through the failures to create some great products. Now there is a lot of finger pointing and power plays. I was very sad to see the change, but I do feel it was the fault of execs who hired management from large companies who were very good at being “organized”. The product and the digital marketing industry are not ready for that type of management. Innovation should have been the focus; it still should be the focus. Rather than hiring externally, Omniture could have hired internal innovators and paid for them to get their MBA. Innovators like Richard Zinn, Josh Ezro, Chris Error and Catherine Wong should have been given that opportunity. Catherine is now a VP over integrations which is good, but who let Richard Zinn walk away? Richard’s combination of innovative spirit and ambition would have spelled super innovative leader with an MBA. If there was someone that fought for him to stay, that’s the person who knows the importance of these types of people. Chris Error would have been an innovative rock star with a few organizational behavior and project management classes.

I recently finished my MBA and after taking a class on mergers and acquisitions I was surprised at some of the mistakes that Omniture made, specifically with Touch Clarity. It was a technology acquisition and all the metrics that would indicate a successful technology acquisition were not ideal. Take a look at linkedin and the talent exodus is definitely not a good sign. a Technology acquisition is all about the people. Keeping the people and allowing them to innovate is the big key. Omniture learned from this acquisition that due diligence could have been better and pre-acquisition integration work would have helped or at least given some warning signs. After the Touch Clarity and Instadia acquisitions, Omniture created task forces to work on the organization and cultural integration of acquisitions (i.e. websidestory). But when it comes to even more horizontal acquisitions like Offermatica, product integrations are a little more difficult. It would have been a breeze 3-5 years ago, but the culture change from innovative to organized-clanish made the innovators gun shy and the bureaucracy was tiring. This is only the fault of management and not the fault of the innovators themselves. Offermatica is a technology acquisition where hopefully the technical innovators stay. As for Adobe, Omniture is also a technology acquisition, don’t forget the innovators.

As far as the product synergies, I think most everyone in other blogs have touched on them. One of the value propositions I was working on when I left was automatic tracking of videos served by flash communication server. Obviously with the convergence of traditional media and the web, this is a great move. They could easily unseat Nielsen for media tracking and push flash as a standard for media delivery. The other tracking pieces are important, but the shot at standardized media delivery and tracking for top media companies is huge.

Overall, I wasn’t surprised to see this move by Adobe, but I was surprised by Omniture’s acceptance. The exec team was focused on making the company into the next Oracle. But with pressures from competitors, the economy, and cost structures my guess is the board voted to sell. I have heard that Adobe is even more business focused (organized) than Omniture. My only suggestion to Adobe is to find those innovators at Omniture and treat them VERY VERY well. Empower them and let them try things that may fail, because when there are failures, that is when they are at their best! (See my article on innovation and failures).

6 Months Since I Left Omniture

I started at Omniture in 2000 when it was named myComputer.com. Josh and John were younger, I remember seeing them enjoy a ride in John’s first Porsche. They built an engineering friendly culture and for the most part everyone enjoyed working there. Then came the bubble burst and I luckily found a more steady job in Utah Valley. MyComputer.com went down from 130+ employees to 30+ employees in less than a year. In 2003 the company, now rebranded Omniture, won a dark-horse race for the HP contract and I was hired on (kind of funny, now I work for HP). I was employee number 40 of the regrowth. I loved the Omniture Culture, I had come from a family-run business and was a bit tired of the nepotism and family politics. Omniture was highly innovative and innovation was explicitly expected from everyone that worked there.

Rather than working as an engineer, I came back to work as an implementation consultant. That is when I discovered my love for digital marketing and web-site optimization. And the next few years were a whirlwind of growth, new employees, and demanding clients. When the whirlwind started to settle I found myself working on the first Genesis integrations and passing those integrations on to engineering and consulting.

Over the years it soon became apparent the the engineering-driven culture was beginning to cease. The highly innovative culture became more organized and clanish. Organized because Omniture brought in more ”seasoned” management and more clanish because the “good-ol-boys” mentality seemed to increase as everyones’ pockets grew bigger and bigger. Not to mention that the CEOs balance from John Pestana was gone once Pestana left (think Jobs and Wozniak).

So, I was sad to see the culture change from highly innovative to organized-clanish. But a big thing that affected my decision to leave was the unsure future of web analytics. I hope Omniture wins the analytics game as I still have many friends that work there and it would be an overall benefit for Utah Valley if they are successful. As we start to see industry conversion in analytics I’m very interested to see who will come out on top.  If anything Omniture will definitely end up a successful consulting/agency group because of the knowledge they have gleaned over the years. And of all the vendors out there they have the best shot.

6 months later I must say that I do miss innovating at Omniture. There is still a lot of hope that Omniture will emerge victorious in this Petabyte Age, but only time will tell. If anything, they definitely have a shot. I feel they should probably fine tune their innovation rather than focusing on organization to increase their chances. All the best to my friends at Omniture.

-Ryan Ekins

Omniture Summit 2009

There is a saying amongst the entrepreneurial community here in Utah Valley “Going big creates trust” and this year the Omniture Summit was the biggest yet in many ways. The event was at the Salt Palace Convention Center a much larger venue than the Grand American Hotel or the Ski Resorts of the past. In past years you would find it hard to move in the partner showcase and other locations. This year there was plenty of room to stroll without feeling claustrophobic at every turn of the corner.

Omniture’s theme for the Summit was “lead the change”. The point of the theme; during these hard economic times we can let change happen to us or we can lead the change. Omniture made it clear that they are here to lead the change to the online marketing suite. They announced a few more products that will be added to their growing list of tool sets. The Online Marketing Suite, brings together all of Omniture’s applications for partners and agencies. Developer Connection, a spider that searches for pages without code and indexes keywords on pages for further understanding of SEO efforts. Omniture Recommendations, a product recommendation engine which was in beta with ExactTarget for targeted emails with product recommendations and supposedly had a 200% lift in conversion from emails.

A lot was said about the present economic environment, but Omniture perceives this environment as an opportunity because all online web sites have a reason to believe and a need to believe for optimizing their online marketing spend and widening their conversion funnel.

I had the opportunity to be a part of Mindmeld, which brings together the analytics and optimization experts of the industry and discuss new channels of marketing like mobile, kiosks, etc. We discussed bringing web analytics to the executive level, particularly the CMO level.

My main focuses for the breakout sessions were social media and SEO. A big takeaway that I had from the social media side is “fish where the fish are”. Building your own social media tools may be helpful, but if you are looking to help people convert or support users, you may want to build out tools or departments that work directly with existing social media tools. A guest speaker from Comcast described how using Twitter he was able to gain real time insight into customers that had service issues. Because he was able to interact with them directly he gleaned valuable information for their service department to fix issues. In fact, Omniture has just released a solution that takes Twitter data and pushes the number of times your brand is mentioned into a report in SiteCatalyst. This is helpful in showing how your brand is being mentioned, but a real solution would be a brand monitor that can detect negative and positive comments across the entire web, including all social media tools. There are many brand monitors out there and it is probably a better solution to import data from the brand monitors rather than from just one source, like Twitter.

The other side that I concentrated on was SEO. It was a lot of the same that I had already known. SiteCatalyst doesn’t do a good job of tracking natural search keywords and if you want better tracking either add in a HUGE piece of JavaScript that detects search engines or add a VISTA rule on the backend that takes the keyword and places it into a custom variable. It is a popular VISTA rule known as unified sources (besides better search engine traffic tracking it takes all marketing channels and places in a single variable). Then you can look at how landing pages from natural ultimately causes conversion on the site. This is done by segmenting out traffic that had a landing page with natural search. This works, but doesn’t take into account any mid visit searches. So as part of the unified sources it is best to add in the landing page into its own variable. Categorization of keywords was also another topic, but for those with hundreds of thousands, if not millions of natural search phrases coming through, categorization can be a daunting proposition. The only advice the speaker could give for that was to “hire an intern”. Coming from Omniture I know some of the tricks of the trade and created a solution to automatically classify keywords through a database driven VISTA rule. If anyone else is interested in automatic natural keyword categorizations, let me know.

As a side note, I had many people come up to me and thank me for having brought Maroon 5 to the Summit. I wasn’t able to attend the Maroon 5 concert (daughter’s birthday), but I guess HP had sponsored their appearance. Good move PR/Marketing/whoever from HP who set that up. J

At the end of the Summit we gathered in a large room and marketers are given the chance to stand and request feature additions to the product. I was able to make a feature request on behalf of HP. A tracking pixel that can be used for external impressions on banner ads, emails, and other external media that does not affect visitor, visit and page view counts. That way we can look at impressions to conversion for external media. About half of the audience agreed with the request.

Overall, it was another successful Summit for Omniture and I learned a few things here and there in the process.

-Ryan Ekins