Why there is a sudden upsurge in Adtech M&A in 2019?

Recent flurry of Adtech M&A

When we look at this month of October, there has been a recent flurry of Adtech M&A.This has left many observers and analysts wondering the reason behind this.
When we dissect the Adtech M&A activity in 2019, the first half of 2019 was slower due to regulatory uncertainty and fears of a potential economic recession.In the last month, there has been a rise in the deal making.This could be because many companies are looking to exit their stake before or soon after the arrival of 2020 as media advertisers are looking to build out their data driven advertising products and services.
A few notable acquisitions that were carried out recently includes Mastercard acquisition of SessionM to improve customer engagement and loyalty. The biggest acquisition was when Roku bought DataXu for $150 million to improve its self service model for buying automated ads within streaming media.Other acquisition includes AT&T buying programmatic ad platform Clypid to develop its programmatic stack within Xandr.

Streaming media companies are fueling Adtech M&A

  • In this year, media companies has been an active part of the data rush.They are building adtech stacks to bring digital advertising to the TV market.People are also willing to share data if it meant getting more relevant TV ads.
  • As Digital advertising grew exponentially this year, video advertising was a major contributor to its overall growth.This has prompted NBC Universal, Foxcorp and Viacom to create a new digital market place for video advertising inventory that will compete with likes of Facebook and Google for programmatic video dollars.Content recommendation, multitouch attribution and DMPs have also seen a huge upsurge in M&A.
  • With more exits happening this year, companies with coherent revenue and expense models were more successful in exiting.In US, companies are looking to do deals before the 2020 presidential elections as they don’t want to put their companies for sale too late as they fear the elections outcome can affect the valuations.
  • Due to the increasing regulatory control on how the data is collected, many investors have slowed down their acquisitions till there is more certainty about how the new privacy act will affect the adtech’s revenue models.
  • The diversity of adtech buyers is also increasing as major brands like McDonalds and Walmart are looking increasingly to bring adtech inhouse.
  • Consultancies have also become a new pillar of the advertising strategic landscape.This is evident as companies like Accenture, Deloitte and Capgemini are making investments in adtech space.

Next steps in Adtech M&A

The recent upsurge in adtech M&A clearly indicates one thing – Dont follow the money, follow the data.