Private equity-backed tech stacks don’t have a bulletproof record – Sizmek is one notable failure. But some of the leading PE firms showed this year that they still have the desire to build digital marketing businesses.
Blackstone caught the mobile ad industry by surprise with its $750 million purchase of Vungle. A mobile ad network may seem an odd choice for the staid investment firm, but it’s one of the only ways to bet on growth in mobile gaming without going through huge tech platforms (Tencent, Microsoft, Apple and Amazon) or placing riskier bets on game developer studios.
Private equity also provided the dry powder for ad tech M&A, even when PE firms don’t show up in the news.
For example, Providence Partners took a majority stake in DoubleVerify two years ago, spurring three acquisitions this year. In 2018, Integral Ad Science sold a majority stake to Vista Equity Partners, and IAS showed up as an acquirer this year.
Customer data platforms have been at the center of venture capital funding and a fierce hype cycle in the past few years. So, unsurprisingly, many companies that jumped into the CDP category have jumped out via M&A.
There’s a heavy overlap with private equity, too, which are taking the baton from VC investors. Dun & Bradstreet was taken off the stock exchange earlier this year by a group of private investors, and then turned around and bought the CDP Lattice Engines.
And Acquia, which is backed by Vista Equity, acquired the CDP AgilOne. Acquia is trying to build what it calls a “digital experience platform,” tracking the CDP focus on customer data but not paid media.
CDPs can be acquirers too. Especially since they’re flush with investments. Amperity, a CDP founded three years ago, has raised almost $90 million, and some of that went to the customer analytics startup Custora in a deal this year.
Here come the brands
New kinds of strategic exits have materialized; with many mar tech and digital advertising companies looking for an off-ramp. Data-rich brands like McDonald’s, Nike and MasterCard chose to acquire instead of renewing deals with their respective analytics vendors.
Walmart was expected to continue acquiring retail sites and product manufacturers, which directly boosts its share of ecommerce. But, instead, this year Walmart has considered divesting ecommerce subsidiaries like Bonobos and Modcloth, but acquired an SSP and ad server with Polymorph Labs. Sam’s Club, which is owned by Walmart, also bought out some account execs and proprietary ad tech from Triad, its retail marketing agency.
Broadcast and digital media companies are merging or acquiring out of necessity, as they try to reach meaningful scale.
Vice and Refinery29 both missed ad revenue targets in recent years, and have struggled to break out of niche advertising despite being among the best-known digital media companies. So Vice bought Refinery29, and they hope their combined audience elevates the whole (Vice, with mostly young men, while Refinery29 covers young women).
Vox acquired New York Magazine. And Ben Lerer’s Group Nine Media absorbed PopSugar.
The world of television isn’t immune from those affects.
Viacom started the year with a $340 million deal for the OTT app Pluto TV. It ends the year named “ViacomCBS”.
Broadcast ad tech
“The major driving forces in M&A this year, though, were private equity and television,” said Paul Georges-Picot, a director and mar tech advisor at the investment firm Results International. “But television most of all.”
It isn’t just the entertainment mega-deals, like Disney taking over Hulu or closing its $71 billion deal for 21st Century Fox, which might outweigh every mar tech and ad tech deal this year combined.
Roku acquiring dataxu; AT&T’s Xandr scooping Clypd; LiveRamp’s splashy $150 million deal for the TV attribution startup Data Plus Math: Ad tech’s bread and butter used to be marketing clouds, but is now broadcasters and companies pursuing broadcast ad budgets.
And TV isn’t slowing down, even if cable subscribers are.
Ad tech startups like Triplelift, Samba TV, Innovid, and iSpot TV are among the companies that could be potentially coveted for deals in 2020, largely because of their appeal in video and OTT, said Elgin Thompson, managing director of JMP Securities’ technology investment banking group.
“Frankly, because Nielsen and Comscore haven’t gotten it right, there’s opened up room for innovators,” he said.
Here’s a list of the key marketing and advertising technology deals from 2019 (so far, at least, considering last week alone saw multiple M&A announcements).
The location data platform Gimbal snaps up UberMedia’s managed service media business.
European media giant RTL Group acquires Yospace ad stitching company for $33 million.
Integrate enhances its programmatic capabilities in B2B advertising with deal ListenLoop
Claritas acquires the CRM and identity startup as it revamps its legacy audience segmentation for real-time ad sales.
One of the major deals in the OTT and CTV categories, Viacom snaps up the AVOD streaming player Pluto TV for $340 million.
Taptica continues its acquisition spree with $176 million deal for RhythmOne.
Spotify buys Anchor and Gimlet Media as it expands its position in podcasting.
After a long, bumpy ride, Ooyala sold its online video platform to Brightcove for $15 million.
Apple quietly acquires the customer journey marketing and analytics company DataTiger to improve its own brand marketing, and potentially for its mobile advertising and attribution partner programs.
With an $11.3 million deal for the bankrupt Sorenson Media, Nielsen starts up its Advanced Video Advertising Group.
The DoubleVerify pickups continue with acquisition of Zentrick, which measures, tags and can block video ads.
Disney closes its $71 billion acquisition of 21st Century Fox, heralding a new era of streaming media giants.
McDonald’s drops $300 million on Dynamic Yield, an Israeli audience personalization startup, as retailers and brands start to look like mar tech strategic exits.
Accenture Interactive makes its biggest push into agency territory with the acquisition of independent creative shop Droga5.
IBM bows out of the marketing cloud business by offloading its marketing platform and commerce software to Centerbridge Partners.
The Walmart Media Group sharpened its ad tech chops with the acquisition of Polymorph Labs, which has an ad server, server-side header bidding and a self-serve buying interface.
Agency holding companies aren’t done dealing for data, as Publicis shows with its $4.4 billion acquisition of Epsilon.
Zeta Global enters the media-buying fray with bankruptcy auction deal for the Sizmek DSP and Rocket Fuel DMP, worth about $15 million plus incentives.
The digital media and streaming startup Cheddar ups its ad game and distribution after it’s acquired by Altice USA for $200 million.
Disney strikes a deal with Comcast to take full ownership of Hulu, valuing the streaming subscription service at $27.5 billion.
The old-school credit bureau and consumer data company TransUnion accelerates its audience targeting and matching business with acquisition of TruSignal.
Foursquare buys the location data and attribution company Placed from Snap. Placed CEO David Shim took over the top job at Foursquare earlier this month.
The Sizmek saga comes to a close as Amazon buys the ad server business and dynamic content optimization solution.
B2B leader Dun & Bradstreet buys Lattice Engines, a lead gen and email marketing platform that repositioned itself as a CDP.
LiveRamp isn’t done shopping, as it announces a splashy $150 million deal for TV analytics startup Data Plus Math.
PE backers and Sizmek vets spin out Peer39 into a standalone contextual ad tech company.
Zeta Global takes an opportunistic approach to DSP deals, taking over PlaceIQ’s advertising business with a strategic location data partnership.
Private equity giant Blackstone drops a reported $750 million on Vungle, the video-focused mobile ad network. A deal that has everyone saying, “Wait, what?!”
Vobile Group, a video measurement and monetization service, acquires Zefr’s rights and IP management assets RightsID and ChannelID for about $90 million.
Microsoft raises ad tech eyebrows again with deal for PromoteIQ, a software company that connects in-store and ecommerce for retail trade marketers.
Nike continues to buy its way into digital media and analytics with acquisition of analytics and inventory optimization startup Celect.
Samba TV adds to its OTT data pool with the acquisition of Axwave, an ACR startup that uses audio fingerprinting to track what plays on smart TVs.
The mobile messaging platform Airship snaps up Apptimize and A/B testing tech.
With MuteSix acquisition, the Dentsu agency iProspect beefs up tis DTC customer roster.
Zeta Global ain’t done yet. The marketing cloud contender takes over the IgnitionOne DSP business, but leaves behind its enterprise data service.
The TV and video ad server startup Innovid brings on display advertising and full-channel capabilities with $30 million deal for Buenos Aires-based Herolens.
Vice Media acquires Refinery29, as early digital media leaders consolidate in search of scale.
Outbrain and Taboola merge (at last) as they try to get through a challenging period for third-party content recommendation platforms.
Ben Lerer’s Group Nine Media merges with PopSugar, another new media consolidation play.
The ecommerce tech company Kibo buys Monetate in its Vista private equity-backed bid to be the next ecom marketing cloud.
Xandr ends a long quiet period with its second acquisition, a deal for Clypd to bring more data-driven advertising to national cable programmers.
Enterprise tech services company Inmar enters programmatic with acquisition of OwnerIQ second-party data and ad exchange.
Mastercard buys the customer data and loyalty marketing company Session M.
Rubicon Project nabs the header bidding startup RTK.io for $11 million.
Roku makes a splash in the programmatic ecosystem with $150 million takeover of dataxu, one of the few remaining large-ish independent DSPs.
Google to acquire Fitbit for $2.1 billion, but pledges not to use the data for advertising.
Viant co-founders Tim and Chris Vanderhook buy the DSP back from the publisher Meredith Corporation.
The CDP Amperity makes a deal for the predictive analytics company Custora.
DoubleVerify makes a sell-side push with the acquisition of Ad-juster, its third deal of the year.
Integral Ad Science is buying new features as well, with the European brand safety and ad tech company ADmantX SpA.
PayPal drops $4 billion on Honey, the ecommerce data company that sits in a browser extension.
As it prepares for a potential IPO, Sprinklr makes its 12th acquisition with purchase of Nanigans’ performance advertising business.
Acquia is buying and building a digital experience platform, rounded out this year with a deal for the CDP AgilOne.
Sam’s Club takes over some proprietary tech and account executives from the WPP retail marketing group Triad.
The supply-side ad tech company Smart acquires a DSP, Liquid M, as it becomes the latest player to operate on both sides of the online ad exchange.
Rubicon and Telaria, two leading and publicly traded independent SSPs, announce a groundbreaking merger to complete next year.