Quick overview of a hot space: The ad tech sector
The ad technology space is hot because a) brand owners are keen to realize the promise of the internet that it can put messages in front of those people who will care about their product or service b) online media platform owners are keen to monetize their audiences. Just think Facebook, Google, Twitter, YouTube, etc
As a result a great many ad technology ventures have sprung up to help these two sides realize their goals. In fact this space is now so crowded and ever-changing (as new ad tech ventures get started or go bust) that one of the US VC firms now attempts to create a map of the space to help us all keep track of who is who in the ad tech zoo. I have included a picture of it here, but I suggest you go to http://www.improvedigital.com/en/wp-content/uploads/2012/02/IMPROVE-DIGITAL_Display-Advertising-EcoSystem-Map-2012.pdf to download it properly as it also comes with a handy explanation of the different types of ad tech companies. (Or if you prefer video than take at look at the video “from Ad men to math men” next to this post. It does a good job at trying to clarify the whole space…though it may at times feel a little bit like watching a kiddies video…..
Why do you need to know about this space even if you are not a marketer? Because this is the space in which some of the big M&A deals of 2012 are expected to happen. Consolidation in this space has already started and is expected to increase:
· Adobe bought Efficient Frontier, a platform for managing ads on facebook last fall. It also bought Auditude, which has technology for placing ads in video. Why did Adobe buy these two companies? The purchase of Efficient frontier makes total sense when you remember that Adobe also owns Omniture, which collects data about web usage. So combined they are now able to help advertisers place online ads more effectively.
· Google bought Admeld for $400million, a supply side platform that enables publishers to optimize the sales of their online advertising space. Why? Most say it was purely about taking out their nearest competitor…..with some good ad yield optimization technology and important publisher relationships as a bonus
· Microsoft bought AppNexus, a demand side platform where advertisers can bid real-time through an online exchange for online advertising space from different inventory sources such as ad networks, sell side platforms, or other sources they are connected to. They offer benefits such as algorithmic buying optimisationWhy? Microsoft, is the fourth-biggest seller of display ads in the U.S. and through Microsoft Advertising Exchange
