Blog Archives

Digital marketing is going to be the next big thing: Shantanu Narayen, CEO, Adobe Systems

Shantanu Narayen

Image via Wikipedia

Adobe Systems, the world’s largest maker of graphic design software, has been adding capabilities for online marketing even as its core market undergoes a social media centric, web shift. In January Adobe acquired Efficient Frontier, a California-based company that lets advertisers place ads on Facebook, buy keywords on Google and purchase display ads on the web.

This ties up with its previous purchases of Omniture, which helps analyse web traffic; Demdex that provides data on online users and Auditude, a video advertising company. Not surprisingly, Shantanu Narayen , the 48-year-old, CEO & president of Adobe likes to talk about a laser-like focus on digital marketing, which along with digital media will be the growth engines for the $4.2 billion company. In an interaction with Shelley Singh , on his recent visit to India, Narayen shares his views on how digital marketing is impacting companies, customization of advertising and more. Edited excerpts:

Adobe has identified digital marketing and digital media as twin growth engines for the company. What are your strategies to grow the two? 

Digital marketing and digital media is what we will focus on. The creative process is going through a transformation – from print work-flow to web work flow. And now, how do companies get their content out on app stores?

When you think about digital media, Adobe is already the largest provider of tools and services for the creative community. Everybody is re-tooling for the future of web – devising strategies for new and multiple screens (television, mobile, tablet/PC)and app stores. With devices like Photoshop touch and cloud-based services, we are aggressively moving towards that shift. Everyone including Reliance, Fox, Turner wants to stream out content on different platforms with customised ads. We help them achieve that goal.

The other one, digital marketing, is a massive opportunity and relatively new from Adobe’s viewpoint. We have put together some of the core pieces for digital advertising with our acquisition of Efficient Frontier, Omnitureand Day Software — a Switzerland-based company which makes web content management software.

We have supplemented the acquisitions with organic innovation that we have built around social analytics. We believe that enterprises have dealt with enterprise resource planning, finance and sales and now digital marketing is the next big thing for them. Customers want to measure what’s happening on the web and we help them do that. This is the space we will continue to target and grow.

How big will digital marketing be for Adobe? 

We see digital marketing as our largest software-as a-service (SaaS) business and it will be $1 billion in three years. There’s an evolution which will happen towards that model. First step is that companies will really be able to understand they can measure impact of their marketing effort. Once you have that in place companies will seek actionable ways to do intelligent things (like target-specific buyers by age or gender).

We believe we are on a multi-phase journey and to begin with, we are doing the plumbing that will help companies measure all information. Omniture helps analyse one trillion transactions every quarter. We will help create new business models for companies in financial services, publishing, retail, travel and other industries which are gearing up for an era of online marketing. It is going to be an ongoing campaign and that’s what digital advertising agencies are also thinking of – it’s a new opportunity for them as well.

What does this customisation mean for jobs. Will there be new kinds of employee skills that companies like Adobe seek? 

There are multiple areas of innovation. First, is the creation part, creating new tools. How do you take advantage of these new formats (digital marketing), new screens (mobiles and tablets) and new media types. That’s one area of innovation.

From Adobe’s point of view lot of this is mathematics – how do you deal with all of this large data and make sense of it? We process one trillion transactions per quarter. Looking at all of that data in an easy to use way is a new job skill companies are seeking. Big data is one of the new things that everybody is talking about. We have hired a number of doctorates who are experts in analysing data as well as in predictive modelling.

Do you think companies in India need to do a lot more in understanding the consumer in context of our growing economy? 

As India moves on, it is not going to be any different from the models in advanced countries. Companies like makemytrip.com and flipkart.com are seeing explosive growth online. Telecom usage is exploding in India. On new Android-based tablet devices, it is going to be really cheap to get online. When I was growing up, companies like Hindustan Unilever were state-of-the-art in understanding customer behaviour and tailoring distribution. And now it’s all going online. I have no doubt that savvy Indian companies will now look at new ways of improving that.

Is your strategy going to be tablet/smartphone centric rather than creating solutions and products for desktops? 

Last year, 400 million desktops were sold and that market is seeing a 14% growth. That’s big and I don’t see the death of the desktop. There’s new growth in smartphones for consumption and tablets for creation of software and we are making sure our solutions support both of them. But for at least another decade we see desktop will be the core platform.



There are three distinct trends – move towards mobile and multiple screens. People don’t talk much about the first screen television, but that will transform a lot. The second trend is more social – what does it mean for me not just from the point of people interacting with me directly but people out there in the social network.

How products are designed and what happens – the immediacy of this, the scale of it is unlike anything that we have seen. Everybody has to deal with social media today.

And the third trend is cloud. Everybody expects access to data anytime, anywhere and this will be enabled via the cloud. These are the three big technology shifts and they are all happening together. That’s also unparalleled.

Earlier, there was just one shift at a time – like shift to client server computing. Now you have all of these happening together and its exploding – it’s exciting time for technology companies.

Adobe aims to help companies earn from digital marketing spends

With an increasing number of enterprises taking their marketing campaigns online to tap social media, software major Adobe today said it is focussing on delivering solutions that help companies create, measure and monetise such digital marketing initiatives.

The company had recently announced restructuring efforts to focus on businesses like digital media and marketing.

“We have a digital publishing suite…to add to that now the focus is on marketing solutions with products like social analytics tool (used to measure social media) and other media tools,” Adobe Systems President and Chief Executive Officer Shantanu Narayen told reporters here.

This will help companies make, manage, measure and monetise their digital marketing campaigns, he added.

Adobe Systems acquired Omniture in 2009 for about USD 1.8 billion for its web analytics, measurement and optimisation technologies.

“The transformation of Adobe from a company focussed on desktop and electronic publishing, we are transforming that to move into all of this content lifecycle management — make, manage, measure, monetise and mobilise content,” Narayen said.

For the end-consumer it means that they get more personalised service as companies, using these analytics tools, figure out what the consumer is looking for, he said.

Adobe’s revenue in FY’11 stood at USD 4.2 billion, growing 11 per cent year-on-year. Digital Media solutions contributed 15 per cent, while Omniture constituted 11 per cent.

The digital marketing is also of strategic value for its software as a service (SaaS) business.

“With increasing demand from marketers, we expect this business to drive a billion dollars of SaaS-based revenue in the next three years,” he said.