Vertically Challenged – Consolidation in Adtech

Adam Wright in Advertising

in Advertising

Salesforce recently announced its purchase of Datorama, an Isreali global marketing intelligence platform, for an estimated $800 million.

Datorama works for over 3,000 top brands including the likes of PepsiCo, Ticketmaster and Foursquare. Enabling customers to extract data from various platforms and have them collated onto a single dashboard, with Salesforce, Datorama have “expanded upon [their] core mission- to help marketers integrate and gain insight from one single source of data truth” .

However, looking broader than just this single deal, this news comes after a summer stream of ad tech acquisitions, from agency group IPG acquiring the biggest division of Acxiom for $2.3 billion, to Vista Equity taking a majority stake in a digital ad measurement firm, Integral Ad Science for $850 million.

Forecasted as a top trend for Adtech in 2018 by ADTEKR, this consolidation seems likely to continue throughout the second half of 2018, in particular as those holding data look to vertically integrate with those monetising it.

This can be particularly seen in the continuing trend of telecom providers purchasing adtech providers in order to acquire larger stacks of data and generate revenue from the data already held by the telcos.

This could be seen as win-win for those involved – good news for the ad tech industry, which has experienced a few rough years of lower investment interest and difficult exit strategies; good news for telcos, with their core business being increasingly squeezed, digital advertising has offered them a lucrative growth strategy and their ever-sought ability to monetise the data that flows through their pipes.

The summer of acquisitions offers an interesting injection of competition into the market, as new, less-traditional tie-ups threaten to disrupt the digital duopoly of Facebook and Google. Facing their fair share of respective scandals this last year, from the placement of ads on their platforms to huge anti-trust fines, the data strong duo should keep an eye on the healthy growth of competition in the market.

Of course, consolidation and acquisitions are not the only sources of challenge for the big two. With one eye on the telcos, Facebook and Google should keep the other fixed firmly on Amazon. With its vast riches of extremely valuable shopping data, many of its customers effectively using it as a search engine, and an ever improving technical platform, Amazon looks to be quietly building a significant threat in the market.

Whilst there are so many new players growing in the adtech arena this year, one thing is for certain: the continued digital ad domination of Facebook and Google shouldn’t be taken for granted.

Vertically Challenged – Consolidation in Adtech was last modified: July 23rd, 2018 by Adam Wright