The Shrinking, Audience Buying Ecosystem

The Shrinking EcosystemHave you noticed? The ad tech, audience buying ecosystem is shrinking. For all the talk about how complicated the ecosystem is and how many companies there still there are, it’s smaller than it was a year or two ago if you look at the number of VC-backed startups in the ad tech space.

I did a quick count of companies that have been bought between 2008 and today and came up with 57 mergers and acquisitions relevant to digital audience buying. And, I’m sure I missed a few.

If you consider the audience buying space as typified by LUMA Partners’ display chart, it’s not just about PC browser-based display – it’s about mobile, video and social channels – even the search channel as search retargeting has emerged as yet another tactic for the digital media, audience buying specialist. I won’t throw addressable TV in their quite yet, but it’s coming (shameless plug!). And hey, you could add radio and digital-out-of-home for that matter to audience buying. But it’s still early with those two, too.

In The Beginning…

I’d suggest the audience buying “Garden of Eden” was in 2007 when Google bought DoubleClick, Yahoo! bought Right Media and Microsoft bought Avenue A/Aquantive and AdECN. Those are the acquisitions that lit the audience buying fires to varying degrees (yes I know retargeting goes back much further.) and aggregated inventory pools for targeting in an exchange-like system.

Here’s my rough list of the ad tech “shrinkage” since late 2008 – around the same time began:


UPDATED 12/7/11

Using’s admittedly loose, counting methods, that’s 20 acquisitions in 2010 and 33 acquisitions and mergers already in 2011. More evidence of “shrinkage” momentum, potentially. We’ll see what the fall brings.

Some logos are bigger than other logos

When looking at Terence Kawaja’s LUMA Partners’ chart, I’d make a couple of adjustments when thinking about complexity. (By the way, I’m really glad I don’t have to manage that chart. Terence Kawaja, enjoy!)

First, you can you remove quite a few logos with recent consolidation and as LUMA’s dotted red line shows.

Next, some logos represent marketing stacks – or growing ecosystems unto themselves, if you will. Actually, the ad network/DSP world has many of these types of companies with varying degrees of revenue and capabilities. Consequently, some logos are much bigger than other logos.

Also, some point solutions remain extremely valuable. And some, not so much, as they edge toward oblivion. Again, some logos are bigger than others.

I’ve never bought off on the idea that there are too many companies taking too many pieces of the audience buying pie, etc. This is about re-thinking media. And a lot of people have a lot of good ideas.

But, if it makes you feel better, the ecosystem is shrinking while the number of users (advertisers, agencies, publishers – and still more trading desks/ad networks/DSPs) of the ecosystem continues to increase.

By John Ebbert

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  1. There are still quite a few great companies out there doing real audience technology and delivering real audience buying value for marketers – ROI out of the gate. Those include Media6Degrees, Legolas Media, BrightTag, 33across & Meteor Solutions. I am clearly biased for these companies but they are delivering real value for lots of big brand name clients.

    The deal volume for the middle tier firms leaves room for big acquisitions for the companies leading their categories.

    Audience buying is still in its infancy. Getting robust technology in the hands of marketers to do better media buying against their audience or validation of their audience is just starting to happen at scale. Especially with brand clients. Social is helping this transition to becoming a mainstream media buy. There is more money coming from big budgets. The shrinking group of companies will benefit from the growing pie!

  2. Pictela to AOL 12/10. For some reason Terry never put us on his chart, perhaps because we went from founding to exit in just 26 months. Pictela now powers all of AOL’s Devil ads.

  3. Why don’t Agencies cut out Trading Desks, DSP’s Exchanges and just go direct to the Ad Networks (or just go to the publisher I.E. Facebook) ?

    Speaking of Facebook, there’s now firms that are the middle-men between Agencies and Facebook for advertising on Facebook (i.e. Facebook Ad Management Firms) – like GraphEffect.

    Is advertising on Facebook literally so hard that there’s not one person internally working in an agency that can figure it out? Or do Agencies just prefer a hands off approach to online advertising?

    • Emily Steel of the Wall Street Journal recently wrote a good article about why marketers are opting for tools to manage their Facebook ads. I couldn’t find it but I know it was published in the last few months.

  4. Good list. I know it’s just display, but if you look at the wider adtech landscape, there have been exits in mobile, social, video, etc. also. Just this year:

    PostRank to Google (6/11)
    Context Optional to Efficient Frontier (5/11)
    Condaptive to Millenial Media (5/11)
    Spinback to Buddy Media (5/11)
    Greystripe to ValueClick (4/11)
    Radian6 to Salesforce (3/11)
    Rel8tion to Facebook (1/11)

    You’re also missing some, like Adroit to MediaMath (4/10), Mindset Media to Meebo (2/11), etc. (I have an incomplete list of interactive ad exits at

    As Terry says “great exits happen when companies are bought, not sold.” It’s been a pretty active market, but it’s moving quickly from companies being sold to companies being bought.