The internet majors are no longer the most important buyers of adtech companies. In many cases, the platforms have all the tech and capability that they need in adtech. We have seen new categories of buyers emerge for adtech companies. These new buyers include telecom companies such as Verizon and SingTel, consumer facing businesses such as Walmart and Priceline and enterprise software companies such as Oracle, IBM and Salesforce.
The drivers for these groups of buyers are very different to the internet majors. This has profound implications for how adtech companies need to position themselves. We expect this trend to accelerate.
Research shows that the flurry of M&A in the advertising industry is nowhere near slowing. In Q1 2016 alone there were 72 merger and acquisition events among advertising technology, marketing technology and digital media firms. It’s clear much of this deal activity is about industry consolidation, with giants like Google and Facebook (and before their own buyouts — AOL and Yahoo) buying up small or medium-sized firms to bolster or establish their own audience, round out their tech stack or neutralize potential threats. But what other trends are driving M&A activity in the adtech sphere? What happens if you look beyond internet or advertising companies that are already operating in the space, and look at the large-scale acquirers from outside the space?