Despite “programmatic” being voted 2014’s word of the year, at least one analyst thinks “2015 is shaping up to the most significant year for ad tech yet.”
That’s what Brian Wieser, senior analyst at Pivotal Research, wrote in a note on Friday. And if the rest of 2015 goes the way these first 12 days have, there’s no doubt that prediction will come true. The new year is not even two weeks old yet, and we’ve already seen Yahoo (twice), AOL (twice), Verizon and Twitter tied to speculative mergers and acquisitions.
In the ad tech space, 2014 was packed with M&A activity, with several digital giants making significant acquisitions. There was also considerable consolidation among the ad tech players themselves, such as Rubicon’s move to acquire two programmatic direct ad platforms. If 2013 was the year of ad tech IPOs, then 2014 was the year of M&As.
So what does that make 2015? The dust, in some regards, is settling. With the biggest names in digital entering the fray in a bid to establish themselves as king of ad tech, the “landscape” is more formed now than a year or two ago. But that’s not to say things won’t shuffle again in 2015 -- or that new surprises will not arise. For example, per Wieser, “ADS was not a name that many would have thought of as a potential buyer of ad tech properties when Conversant was sold to them.”
I’m already on record predicting more M&A in 2015, and according to Wieser, I’m not alone. “Much more of this activity is likely to occur in 2015 as some of the larger companies attempt to play buyers -- especially those not named Facebook or Google -- against each other given the hegemony that the two largest companies in digital advertising are establishing.”
However, despite the anticipated excitement for the biggest players, we will likely see some companies “fade away,” Wieser projects. “[O]thers dependent upon traditional venture investors may be running out of time to prove themselves as stand-alone businesses,” Wieser writes.
He adds: “[T]o simply call 2015 great is missing an important nuance: it will be spectacular for some, mediocre for others and downright painful for others among the sector’s participants."
Some of that “pain” has already been experienced by companies that are public and well-established in the space. For one, AdExchanger has reported that Yahoo is shutting down Right Media Exchange, and collectively, the public ad tech companies didn’t fare well in 2014.
Wieser’s projection of 2015 being spectacular, mediocre, and downright painful all at once is indicative of a maturing market. The same thing could be said about one's high school years.
"Happy and sad" image via Shutterstock.