Inc. Revenue Survey Illustrates Marked Slowdown For Ad Tech

Looking for proof that the ad tech sector is still growing? Well, you won’t find much on Inc. Magazine’s most recent revenue survey, released on Wednesday.

The list, which keeps tabs on the three-year revenue growth of independent companies, was nearly devoid of ad tech startups – although there are a handful of notable exceptions.

Freestar, a company that helps solve header bidding complexity, for example, came out of nowhere to snag the coveted No. 1 spot, with $36.9 million in revenue last year and a 36,680% three-year growth rate.

Beeswax, which provides software to help companies bid programmatically, clocked in at No. 46 with $16.9 million in revenue, while video ad tech startup VideoAmp came in at No. 387 and generated $19.5 million in revenue.

Why these technologies? Although they do different things, all three are trying to solve real problems, rather than throwing yet more shiny objects out there, said Lindsey Harju, co-founder of ad tech consultancy Blinc Digital Group.

“The market might be embracing more pragmatic solutions based on making current solutions more efficient vs. new next-gen mind-blowing solutions,” she said.

Seeing fewer familiar names overall from the ad tech/mar tech community on the list, however, shouldn’t surprise anyone. The market is maturing, certain startup categories are saturated and there are a lot of large, scaled providers sucking all the air out of the room, Harju said.

Companies that made the list last year and not this year include Samba TV, NinthDecimal, Ahalogy, GumGum, Teads, Kargo and MightyHive (which, to be fair, can no longer be included, since it’s now owned by Martin Sorrell’s S4).

But there’s more to this story than the inevitable leveling out of a maturing market, said Andrew Frank, a research VP at Gartner. Macro issues, such as the uncertainties surrounding impending privacy legislation and the future of browser cookies are “taking a toll on growth in the ad tech sector,” he said.

Just because there are clouds on the horizon, though, doesn’t mean the weather won’t eventually clear.

“It will take a couple of years for the situation to stabilize, at which point there will be plenty of opportunities for innovation and application of new technologies to improve what is still a very opaque and inefficient advertising ecosystem,” Frank said. “In the meantime, we can expect continued consolidation as retail and media conglomerates focus on competition with walled gardens.”

Less appetite for ad tech in the venture capital community could also be contributing to the general slowdown. Startups fund their growth with venture capital, and there just isn’t as much of it flying around these days.

“In order to grow, most businesses require investments,” said Harju, who noted that analysts are predicting that investment in the industry will shrink by 75% this year.

Beeswax and VideoAmp, both still small in the grand scheme of things, are in that halcyon VC-funded stage of life. Beeswax has raised $28.3 million since 2016, and VideoAmp has raised just over $100 million since 2014.

Below are highlights from the survey, including reported and unaudited revenue, ranked in descending order according to three-year growth rate. (Click here to check out last year’s list.)

Of note, ad tech players with more than $100 million in revenue were few and far between beyond TripleLift ($138.5 million), Index Exchange ($127.4 million) and AdTheorent ($106.9 million), although one has to wonder if Index’s revenue would have clocked in a bit higher if not for last year’s bid caching scandal.

No. 1 – Freestar, 36,680%, $36.9 million
No. 15 – MuteSix, 10,176%, $17.3 million
No. 46 – Beeswax, 5,768%, $16.9 million
No. 309 – Wrapify, 1,468%, $2.9 million
No. 387 – VideoAmp, 1,191%, $19.5 Million
No. 440 – ClickFunnels, 1,035%, $94.6 million
No. 562 – TripleLift, 790%, $138.5 million
No. 730 – AppsFlyer, 599%, $92.7 million
No. 869 – Gimbal, 489%, $32.6 million
No. 985 – Choozle, 428%, $17.4 million
No. 997 – Bombora, 425%, $ 26.4 Million
No. 1,081 – Channel Factory, 387%, $63.6 million
No. 1,324 – Mobile Posse, 311%, $58.3 million
No. 1,384 – Index Exchange, 299%, $127.4 million
No. 1404 – Pixability, 293%, $38.4 million
No. 2373 – Consumer Acquisition, 169%, $6.2 million
No. 2426 – Rockerbox, 164%, $5.6 million
No. 2548 – AdTheorent, 154%, $106.9 million
No. 2595 – iQuanti, 151%, $14.6 million
No. 2611 – MomentFeed, 149%, $17.7 million
No. 2661 – Adwerx, 146%, $25.8 million
No. 2680 – Semcasting, 145%, $23.3 million
No. 2842 – Mobilewalla, 132%, $8.8 million

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