Jul 25, 2017

The ad tech cookie that’s about to crumble

A wave of consolidation in the advertising technology industry will soon eliminate the majority of players in the space. Some of the biggest ad tech companies that went public during the ad tech boom around 2013 now trade in the single digits.

Why this is happening: Ad tech was created to help advertisers save money and create a better user experience, but the market grew too fast for publishers to manage. That led to regulatory fallout (like the General Data Protection Regulation (GDPR) in Europe), the rise of ad blockers, and publisher/advertiser backlash. Also, once media shifted to the smartphone, many ad tech companies that were cookies and targeting-based (works well on desktop, not on mobile) were left in the dust.

Data: Money.Net; Chart: Chris Canipe / Axios

Last week, Sizmek announced plans to acquire Rocket Fuel, for $125.5 million and there are reports that a merger between Taboola and Outbrain is in advanced stages. Earlier this year, Terry Kawaja, founder and CEO of media and technology firm LUMA Partners, said consolidation in the ad tech space will cause 90% of the companies disappear.

Go deeper: Most of this consolidation is occurring in the ad targeting and distribution space. We're now seeing a whole new wave of ad tech companies popping up that specialize in new digital formats, like augmented reality, artificial intelligence and measurement. These companies will inevitably go through the same rise and fall driven by consumption habits. There's always the next best thing!

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The 2010s: When all companies became tech companies

Tech companies dominated the 2010s, with the FANG stocks (Facebook, Amazon, Netflix, Google) helping the S&P 500 return more than 350% over the course of the decade. The index would have done even better had it included Domino's Pizza, which is also a tech company.

Why it matters: These companies don't look like the tech firms of earlier decades. They don't manufacture computer hardware; neither do they sell software. They don't even make high-tech planes, like Boeing, or high-tech cars, like Tesla.

Go deeperArrowJan 2, 2020

2020 rules of the road for the Age of Misinformation

Illustration: Sarah Grillo/Axios

With just weeks to the Iowa caucuses, social media platforms have finalized their rules governing political speech — and fired a starting pistol for political strategists to find ways to exploit them from now till Election Day.

Why it matters: "One opportunity that has arisen from all these changes is how people are trying to get around them," says Keegan Goudiss, director of digital advertising for Bernie Sanders' 2016 campaign and now a partner at the progressive digital firm Revolution Messaging.

Bloomberg, Trump each secure $10 million Super Bowl ad slots

Left photo: Melissa Sue Gerrits/Getty Images. Right photo: JEFF KOWALSKY/AFP via Getty Images.

Michael Bloomberg and President Trump's 2020 campaigns have both secured 60-second advertising spots during the Super Bowl on Feb. 2 at a likely cost of at least $10 million each, Politico reports.

Why it matters: The buy highlights Bloomberg's massive spending power, as the billionaire continues to pump millions of his own money into his campaign. And it's just the start of what's likely to be a huge spending year for Trump.

Go deeperArrowUpdated Jan 7, 2020