- Various high-profile promoting and marketing-tech offers occurred this yr, together with AT&T’s $1.6 billion acquisition of AppNexus and Adobe’s $four.75 billion acquisition of Marketo.
- Sources say whereas there’s nonetheless alternative for consolidation, 2019 might be quieter than 2018.
- One motive is that tons of of ad-tech firms have the identical pitch for entrepreneurs.
- In the meantime, impartial firms like The Commerce Desk and MediaMath are well-positioned as a result of they create customized tech stacks for companies and types.
From AT&T’s blockbuster deal to amass Time Warner and AppNexus to Adobe’s $four.75 billion wager on Marketo, 2018 was a giant yr for promoting and marketing-tech offers.
For years, enterprise capital companies and acquirers have chased “mad-tech” firms with the aim of loosening Fb and Google’s chokehold on digital promoting. In the meantime, Amazon has emerged as a brand new menace to each the duopoly and smaller ad-tech firms.
This yr produced some large offers. For instance:
- AT&T bought AppNexus for a reported $1.6 billion
- Non-public-equity agency Vista Fairness Companions acquired a majority stake in Integral Advert Science, rumored to be price $850 million
- Adobe shelled out $four.75 billion for Marketo, which automates and runs digital campaigns with information.
Fb, Google and Amazon loomed over such offers. Based on eMarketer, Fb and Google managed 56.eight% of US digital advert this yr whereas Amazon will take 2.7%. Google has its tentacles deep into advert tech, powering and managing the information from advertisements served on thousands and thousands of internet sites.
Learn extra: ‘The business is searching for options to the duopoly’: Listed here are the winners and losers of AT&T’s acquisition of AppNexus
Advert-tech companies must show that they will earn money
Rising stress from the tech giants implies that there may very well be much less M&A exercise in 2019, Jay MacDonald, CEO of the funding financial institution Digital Capital Advisors, informed Enterprise Insider.
In the meantime, buyers are involved with ad-tech firms’ profitability.
“Firms out of necessity and survival are going to wish to get worthwhile. They’ve identified that, however now they’re actually beginning to work on it,” he stated. “The advert markets are usually fickle — they just like the shiny, new object. For those who’re not worthwhile, you are now not the brand new, shiny object.”
There is a glut of firms who do the identical factor
MacDonald stated a rising variety of ad-tech and mar-tech companies are vying to unravel the identical downside, making it exhausting for ad-tech companies to construct greater companies. Take cellular advertising. A gaggle of location-based firms like Verve, GroundTruth and PlaceIQ have lengthy pitched their information to entrepreneurs as a approach to higher goal advertisements, however these firms battle to construct big-enough audiences to draw advertisers.
Competitors is stiff in programmatic promoting, too, the place a rising variety of distributors are vying for a similar commoditized show advert impression. Firms like MediaMath and The Commerce Desk have began to pitch expertise like synthetic intelligence and roots in related TV promoting to set themselves aside.
Each OpenX and MediaMath went by management restructuring and layoffs this yr.
“There’s too many lookalike firms that aren’t the dominant participant of their vertical,” MacDonald stated.
The expansion in lookalike firms has led ad-tech companies to be extra clear in how they package deal advert offers, stated Nate Woodman, U.S. chief information officer at Havas Media. As extra entrepreneurs scrutinize so-called ad-tech taxes, firms like MediaMath are beginning to break down the prices concerned in media for consumers, then bundle the advert offers with information prices.
“The final couple of years have shed a number of mild on the ad-tech tax, and I am placing out subsequent yr as one thing dramatically being performed about it,” he stated. “The conversations with the information and media homeowners are turning extra into bundling throughout expertise, , information and media and discovering a mixed value for all of that.”
Entrepreneurs are searching for much less “off the shelf” tech
One benefit that impartial ad-tech and mar-tech companies have over giants like Google and Adobe is the flexibility to customise tech stacks for manufacturers.
As a substitute of pitching entrepreneurs on the identical generic set of instruments, ad-tech firms can construct tech pipes which might be particular to them, which generally is a large promoting level with manufacturers.
That is why Mac Delaney, SVP of media funding and innovation at Merkle, believes that entrepreneurs will lean more durable on smaller ad-tech companies in 2019.
“Entrepreneurs will centralize on one platform for a for much longer time frame, perhaps endlessly, and that might not be [Google’s] DoubleClick Bid Supervisor on a regular basis,” he stated.
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