M&A This Year, Especially Q3 And Q4 Says DeSilva+Phillips’ MacDonald

DeSilva + PhillipsThe research arm of DeSilva & Phillips recently published a paper called “Ad Exchanges, RTB and the Future of Online Advertising” about the fast-moving, digital advertising ecoystem. You can download it here.

Jay C. MacDonald, Partner, DeSilva + Phillips, discussed the research paper and today’s M&A environment.

AdExchanger.com: For DeSilva & Phillips, what were the tipping point(s) for deciding to create “Ad Exchanges, RTB and the Future of Online Advertising”?

JM: I/we have done a lot of deals in the ad network, online marketing services arena (IE-ad based models) and are very familiar with the trends and challenges facing the online advertisers and advertising. We have witnessed the impact that technology has played in the revolution impacting all facets of the buying process: targeting, roi measurement, ad units/placement, etc. and knew that the continued development and deployment of exchanges with RTB was going to again disrupt the entire buying process. So we wanted to see if our premise was right.

Can you discuss the available window for exits to ad tech companies?

It’s always tough to predict the timing of exits but clearly there will be one within the next 6 months given the nature of the industry which is always looking for a technology based advantage to gain share over their competitors. And the 800lb gorilla in the space (Google) means that the field needs to make bets that will either take them into direct competition with Google or head in another profitable way.

What are the variables to this “window?” If one DSP sells, for example, do the other still have opportunities?

There are a lot of variables: timing, funding levels, market conditions and more. But, we don’t see mass consolidation happening until the first few bets are made and the industry absorbs the impact of those and then decides if they are right or wrong.

Do you anticipate significant M&A this year? What type of companies may go first, if so? And what may the range in exit prices look like?

I do see quite a bit of M&A this year, especially Q 3 & Q4. And M&A includes additional funding for some players who want to hold out for scale and for an IPO or a super large exit. There will be a lot of obvious categories like the Ad Network space where the activity will be brisk but what’s most interesting will be to see who the buyers are because I submit that the definition of “what is a media company” has is changing quickly (note: Adobe buying Omniture, Limelight buying EyeWonder).

By John Ebbert

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