2019 was the year the adtech industry was forced to adapt to sweeping new privacy laws and a rapidly changing media business.
Growing concerns about privacy and the death of cookies that fuel digital advertising; the advent of the California Consumer Privacy Act (CCPA) and Europe’s General Data Protection Regulation (GDPR); and tech giants Apple and Google clamping down on how marketers use third-party cookies required many adtech companies to change their pitches to marketers.
Amazon’s nascent advertising business gained steam with a new cottage industry of e-commerce-minded firms helping marketers use the platform. Adtech firms also had to join the chase for the $70 billion TV-advertising market.
At the same time, it has gotten harder for adtech companies to raise funding as investors look for sustainable business models with recurring and diversified revenue. And Facebook, Google, and Amazon control about 70% of digital-advertising budgets, leaving adtech companies to fight for the scraps.
As a result, 2019 was a year of consolidation. The holding-company giant Publicis bought Epsilon for $4.4 billion. Firms like Dataxu and Placed got scooped up, while other companies like Sizmek, Nanigans, and IgnitionOne sold off for pieces.
As more big companies acquire adtech firms, it’s getting harder for independent adtech companies to compete, Karsten Weide, the program vice president of media and entertainment at IDC, said.
“The whole independent advertising ecosystem is really in trouble — they need to diversify,” Weide said.
We identified a handful of companies that were best positioned to survive these challenges and thrive in the year ahead.
Index Exchange: Wants to help publishers tackle privacy regulations
Star to know: Mike O’Sullivan, the vice president of product
2019 revenue: between $125 million and $200 million
Comment: With Apple and Google clamping down on how marketers use third-party cookies for targeting, Index Exchange is helping publishers prepare by leaning more on first-party data. One way is through a product called Blackbird, which lets consumers opt out of receiving ads and control their privacy settings on publishers’ platforms. Index Exchange is also working with LiveRamp to match publishers’ data with first-party data. Initial results of a test showed LiveRamp was able to match 100 million daily users that generated 8 billion bid requests used to fill ads when a web page is loaded.