Adobe Buys Ad Tech Firm TubeMogul for $540M

The deal will add TubeMogul's automated platform for buying and measuring video ads to Adobe's digital marketing services.
Matthew HellerNovember 10, 2016
Adobe Buys Ad Tech Firm TubeMogul for $540M

Photoshop software maker Adobe Systems said Thursday it will acquire TubeMogul for about $540 million in a move to offer “one-stop shop” video advertising services to digital marketing customers.

As part of the deal, TubeMogul’s automated platform for buying and measuring video ads will become part of the Adobe Marketing Cloud, which offers tools for businesses to analyze customer interactions, manage social media content, and create online video.

Adobe said the acquisition will enable customers to capitalize on the “meteoric shift to online video” and maximize their video ad investments across devices. It will pay $14 a share for all of TubeMogul’s common stock, an 82.5% premium to the closing price on Wednesday.

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“Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs,” Brad Rencher, Adobe’s executive vice president and general manager for digital marketing, said in a news release. “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 already offers the Premiere Pro CC and Primetime products for video creation and delivery.

“The combination of Adobe Marketing Cloud with TubeMogul’s software creates a uniquely comprehensive platform that will help marketers always know what’s working — and act on it,” TubeMogul CEO Brett Wilson said.

TubeMogul went public in 2014, but the stock has plummeted from its $22 peak in December 2014 to less than $8 this week, roughly the same as the IPO price. For its most recent quarter, it lost $12.4 million on GAAP revenue of $56.1 million.

According to Reuters, advertising technology firms such as TubeMogul, Rocket Fuel, and Tremor Video are facing fierce competition from online ad giants Facebook and Google.

“Facebook, Google and Twitter have all been betting big on video over the past year, a format where advertisers are willing to pay a premium for a few seconds of users’ undivided attention,” Reuters added.

TubeMogul was represented by the Silicon Valley office of global law firm DLA Piper; partners Peter Astiz and Brandee Fernandez led the transaction.