Adobe Buys Efficient Frontier In Deeper Foray Into Advertising

Another Independent Digital Agency Gets Snapped up as Consolidation Continues

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Efficient Frontier, one of the largest independent digital advertising agencies, found an unlikely buyer: software giant Adobe Systems.

Adobe announced Wednesday it reached a deal to acquire Efficient Frontier for an undisclosed sum and will integrate the agency into Adobe's Digital Marketing Suite, which includes measurement firm Omniture, bought by the company in 2009, and the recently acquired Auditude, a video ad-management company.

Efficient Frontier will be run as an independent unit at Adobe by current CEO David Karnstedt, though his new title has not yet been finalized.

Like a lot of digital agencies founded over the past decade, Efficient Frontier started out as a search-advertising firm, but then moved into all manner of online marketing that can be optimized through data. Efficient Frontier added social media to its capabilities when it bought Context Optional for $50 million in May. The company had an estimated $37.5 million in revenue in 2010, according to Ad Age DataCenter.

David Karnstedt
David Karnstedt

The deal gives Adobe another piece in building an online marketing infrastructure to compete with Google, which has built a market-leading system on the back of DoubleClick, acquired by Google in 2008. The play here is to be the operating system for digital advertising that buys and optimizes marketing spending in real time.

The deal also takes one of the last big independent digital agencies off the market. Hearst bought the search firm iCrossing earlier this year, and Dentsu bought digital agency 360i along with its search unit Search Ignite in 2010.

"With the explosion in global internet advertising, our customers need to know where, when and how to spend their digital marketing dollars to get the greatest return," said Brad Rencher, general manager of Adobe's Digital Marketing Business, in a statement. "The addition of Efficient Frontier will give our Digital Marketing Suite customers a leading platform for turning ad spend into business impact."

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