But this story isn’t complete. What’s missing? The customer.
Advertisers, thanks to mergers and acquisitions, have never been in a better position. They’re looking for the best possible solution, and don’t really care if it emerges as a result of an acquisition or an independent player executing on their own unique value proposition. Either outcome furthers the advertiser’s goal of (say it with me) reaching the right consumer, in the right place, at the right time.
The problem with the “walled garden” theory is that it’s extremely short-sighted. Sure, a lot of acquisitions in a short amount of time will result in a market with fewer players, but we’ve barely scratched the surface when it comes to potential innovation. Just as some players exit, others will enter to take their place.
Take a look at the anticipated growth of mobile, for example. As the money advertisers spend on mobile increases, so too will the number of players entering the market. Additionally, the prospect of an exit via an acquisition is a great motivator for startups looking to provide a real return on their investors’ money.
There’s also a tremendous amount of existing demand for solutions that we have not yet mastered as an industry. True cross-device measurement, more efficient data analysis and beacons are just a few examples, and they’re all sparking investment in new companies. There are still so many new ideas to be explored that will benefit advertisers, and ultimately solution providers.
Finally, it’s important to highlight that Google, Facebook and Twitter are not a single entity or even an organized group. They are three distinct businesses that are looking to satisfy advertiser and consumer demand in unique ways. Lumping them together only serves to identify them as something separate from the ad tech ecosystem (“walled gardens”), when in reality they’re an integral part of it.
We should recognize that, ultimately, what’s good for the customer is good for the industry. Advertisers right now have a wide range of wants and needs, not all of which will be met by the integrated solutions of the biggest players. The M&A trend, while it might seem frightening in the short term, is really only negatively impacting companies without the sustainable tech that would allow them to remain independent.
There will always be funding available for great ideas in ad tech, and we probably haven’t even reached the peak as we continue to reach new audiences digitally around the world. Right now, we’re seeing companies without enough differentiation consolidating, but that only leaves more space for truly unique ideas. If our focus is really on satisfying our customers, then this should be nothing but exciting and inspiring.