Home The Sell Sider In Gaming And Ad Tech, Not All Consolidation Is Created Equal

In Gaming And Ad Tech, Not All Consolidation Is Created Equal

SHARE:

The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Itai Cohen, who leads marketing and corporate strategy at Digital Turbine

Consolidation is a sign of health – a necessary part of a maturing industry’s life cycle. 

The mobile gaming and ad tech ecosystems, for example, have been going through accelerated consolidation over the past two years, as they both evolve individually and together. But not all consolidation yields the same outcomes. For mobile gaming companies in particular, joining forces with an ad tech provider unlocks a wealth of opportunity and first-party data, not to mention the tools they need to grow their business.  

By looking at the differences between the types of mergers or acquisitions that take place, we can understand how the shifts in the competitive dynamic impact mobile gaming, one of the largest and fastest-growing media channels today.

Within industries, consolidation expands capabilities

Over the past few years, we’ve witnessed a flurry of M&A activity within ad tech, specifically in mobile and programmatic. And the activity is projected to continue this year.

This type of consolidation is typically about expanding a company’s core competencies to increase the breadth and quality of services.   

Consolidation within gaming has recently reached new heights as well. The need to diversify strengths, de-risk operations and scale up typically drive gaming consolidations. Reaching across genres makes mobile game publishers less dependent on maintaining a single hit game in a certain genre, adding games with varying shelf lives and monetization strategies.

In addition, recent data privacy changes have led large players to think even bigger when it comes to first-party data, acquiring their way to a massive user base.  

Across industries, consolidation amplifies data

When a mobile ad tech company buys a gaming studio or a gaming company buys an ad tech platform, consolidation becomes an entirely different ball game.

Why? Because the core customer of one company is the direct competitor of the other. And that can create potential conflict.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

The basic premise of mobile ad tech companies is to serve the mobile ecosystem and enable growth. To do that, they have to be committed to their clients and provide a basic level of opportunity, ensuring it is unconflicted and agnostic. However, when ad tech companies own or publish mobile games, it’s in their best business interest to prioritize those properties over those of their external clients.

Mobile ad tech companies have a privileged vantage point thanks to the first-party data that stems from the work they do for their gaming publisher clients. Mobile app gaming publishers, in turn, have their own highly valuable first-party data, which includes not only ad engagement metrics but also game engagement metrics, in-app purchases and user retention data.

Historically, game companies have been very cautious and selective about sharing such data with their ad tech partners. The fact that some ad tech partners own a mobile gaming business themselves only serves to emphasize the data-sharing dilemma facing mobile gaming companies. 

Although the data pool created by this type of consolidation can be the foundation for a strong strategy, if the ad tech is still used to serve the broader ecosystem, it creates an inherent conflict for any game developers that don’t reside under the combined umbrella. In other words, it’s a potential conflict for the vast majority of the mobile gaming ecosystem.

Making tough choices

Today, independent game companies are now forced to choose ad tech partners not only based on the quality of their product and service, but also on the level of competitive implications they might face. Do all gaming clients get equal access to product features, ad inventory and data? The answers to these questions have become more complicated.

Consolidation in the mobile app space is inevitable. At the end of the day, the real choice is at the hand of independent game companies who need to set themselves up for long-term, sustainable success in a fiercely competitive and incredibly dynamic industry. Making an informed choice about your partners can make a world of difference.

Follow Fyber, a Digital Turbine company (@Fyber and @Digital Turbine) and AdExchanger (@adexchanger) on Twitter.

Must Read

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.

Albertsons Takes Its First Steps Into Non-Endemic Advertising, Retail Media’s Next Frontier

Albertsons is taking that first step into non-endemic advertising next week via a partnership with Rokt to serve ads to people who have already purchased groceries.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Marketecture Buys AdTechGod (No, Really)

Marketecture has acquired AdTechGod – an anonymous ad tech Twitter poster turned one-man content studio – and the AdTech Forum, an information resource hosted by AdTechGod and Jeremy Bloom.

Why The False Advertising Lawsuit Against Poppi Is Bad News For RMNs

This week’s dispatch explores the new trend of false advertising class-action suits in the food and CPG industry and how the evolution of online, data-driven retail media could exacerbate the problem.

Seedtag Acquires Beachfront For Deeper Roots In TV And Streaming

Contextual ad platform Seedtag acquires Beachfront, a supply-side platform that specializes in TV and video.