Shares of advertising technology stocks are in focus after Adobe (ADBE) announced it has agreed to acquire TubeMogul (TUBE), which offers a cloud-based platform for buying and optimizing video advertising spend.

ADOBE DEAL: Earlier Thursday, Adobe, which describes itself as "the leader" in video content creation and delivery, announced it was acquiring TubeMogul for approximately $540M, or $14 per share. According to Adobe, "Video consumption is exploding across all devices and video advertising is the fastest growing advertising category. Adobe is the leader in video content creation and delivery with its Premiere Pro CC and Primetime solutions. Adobe's acquisition of TubeMogul will enable brands to capitalize on the meteoric shift to online video."

MISUNDERSTOOD SECTOR: Advertising technology stocks took a beating in 2015 after a burst of IPO activity in 2013 and 2014. According to a Wall Street Journal article from October of 2015, industry experts connected the decline in those stocks since IPO to confusion and worries about "the dominance of the online ad market by major firms such as Google (GOOG) and Facebook (FB)." The vulnerability of the smaller ad tech companies was made obvious this past May when the WSJ reported that Facebook was planning on shuttering its ad exchange, known as FBX, which allows third party ad technology companies to purchase ads on the social network. Companies like Criteo (CRTO), DataXu, MediaMath and AppNexus had been buying ads on behalf of marketers through the ad exchange over the past few years. Shares of Criteo fell hard on that news.

CROWDED MARKET: A recent WSJ article citing Terence Kawaja, Chief Executive of digital media advisory firm Luma Partners, echoed the fear of dominance from giants Google and Facebook. According to Kawaja, despite the continued and rapid growth of the U.S. online advertising market, smaller ad tech companies are not seeing as much benefit as tech giants Google and Facebook.

PRICE ACTION: Shares of TubeMogul are up 81.62% to $13.93 per share in midday trading.

AD TECH PEERS: Shares of other ad tech companies are active, with the Rubicon Project (RUBI) and Tremor Video (TRMR) up around 8%. Criteo (CRTO) is lower by over 3% after announcing earlier that it completed its acquisition of HookLogic. Shares of YuMe (YUME) , another ad tech company, are up fractionally despite a downgrade to Underperform this morning from Boenning & Scattergood. Rocket Fuel (FUEL) is down 2.7% in midday trading.