The advertising technology industry can be described as fragmented at best, and at worst, a chaotic mess. With the acronym soup of DSPs, RTBs, SSPs, and ever newer technologies being introduced at the speed of light, that’s not going to change anytime soon. What may happen instead is consolidation.
In a panel at the Interactive Ad Bureau’s Innovation Days conference, executives from WPP Group, Criteo, MediaMind, and Collective shared predictions for ways the industry of ad sellers, buyers, and networks could streamline a complex system that, according to one panelist, is barely understood by those working in it.
“We think we know how this industry works, and that that’s made its way to CMOs, but I don’t think it has,” said Joe Apprendi, CEO of Collective. “Their heads are spinning.” Add to that a universe of large players looking to buy their way into technology they don’t understand, paired with hundreds of small, over-funded startups, and the industry is ripe for consolidation.
“The notion of consolidation is a wet dream for people in the industry,” said Andrew Bloom, SVP for Business Development at MediaMind. Because of the volume of small players, it’s very difficult to grow to a significant size of, say, $100 million. Bloom said he’d personally love to see consolidation because “I’d only have to worry about 20 companies nibbling at my heels,” instead of the hundreds of competitors he currently keeps an eye on. Besides, consolidation of an overly complex system can only help with scaling.
The problem is that large buyers hardly benefit from buying technology they don’t understand. “The amount of roadkill I’ve seen, of people that bought these companies that didn’t integrate well or didn’t take advantage of the company’s technology… is just gigantic,” said Greg Coleman, Global President of Criteo and former President of Huffington Post. The solution, he said, is for larger players to create partnerships with the adtech companies first to learn about their offerings, before deciding if they want to acquire them.
WPP, an active acquirer in technology, takes a modular tactic, which involves building core technologies in-house while partnering with and acquiring new technology “in variations where it makes sense,” said Sheila Spence, SVP of Corporate Development for the holding company.