Last month, Paul Pellman took over as CEO of Kazoo, the HR software company. He’d previously spent four years at Google, after the industry giant bought the ad attribution startup Adometry, where he’d served as CEO.
“I enjoyed my time in the media industry, but I’m excited to learn a different industry,” Pellman said. With Kazoo, he said he could take his understanding of software as a service business and data analytics in a new direction.
Marketing tech is a less compelling draw for entrepreneurs, because ad budgets have consolidated to large media and tech companies that own apps, browsers, content and hardware, said Jonathan Opdyke, founder and former CEO of HookLogic, the ecommerce ad tech startup he sold to Criteo in 2016. He left Criteo last December, after working his way up to chief strategy officer.
“There are certainly still opportunities in the space, but from what I’ve seen they tend to be less transformational, more niche software solutions,” Opdyke said. “Most venture capital has observed this trend and is quite wary of investments in the space, fearing that companies may be quickly disintermediated by the platforms or that there won’t be a path to exit.”
O’Kelley was an angel investor in many second-generation ad tech startups, including Tapad, Moat and Invite Media, to take a few that have had successful exits. But he said an informal policy he’s followed since last year is no more ad tech investments.
And even for some ad tech pioneers who still work for ad industry leaders, there’s a strong draw away from ads.
In 2017, Andrew Bosworth, Facebook’s former VP of ads, took over the company’s hardware and VR technology, which have no paid media (not yet, at least).
And Jonathan Bellack led Google’s publisher-side ad platform products for more than a decade, since joining Google via its acquisition of DoubleClick. But in January he transitioned internally to Jigsaw, which incubates non-advertising publisher services, like secure journalist communication systems and tech that scans for toxic comments.
“I came into this industry because I was a content guy – I was a content guy trapped in an ads word,” Bellack told AdExchanger when he took on the new role. “A lot of people who were partners in the Google Ad Manager world, I’ll still be working with, just in a new way.”
But there’s more to the OG exodus than investment or media trends. One common refrain among founders who have left the industry is the public perception of ad tech businesses.
Brett Wilson, founder and former CEO of TubeMogul, departed Adobe last month, two years after the marketing cloud acquired the video DSP. He told AdNews that one of the main reasons he left is that he “finally got tired of hearing the same jokes for 12 years.”
Wilson isn’t ruling out another ad tech or mar tech startup. And many other industry leaders are open to taking another run with a startup, if the right opportunity presents itself.
“Ad tech is a much different space than it was 10 years ago,” Opdyke said. “That said, sometimes the best opportunities are where others have stopped looking.”