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So Many Acquisitions. What Will Become of the Smaller Players in Ad Tech

March 16, 2016

  

On the heels of the Inneractive acquiring (congrats to our partners!), I thought it important to talk about where this industry is headed. I wonder if larger companies will continue to buy up the smaller ones, or if even more little ones will crop up? The online advertising ecosystem that exists today is full of players interconnected in this web of demand and sell. Is this sustainable?  Will the industry consolidate, or is there still room for the small fries in the niche to thrive?

 

 

Consolidation is a natural process that most industries go through, a kind of natural selection that a market does to weed out the weaker brands and allow the survival of the fittest champions rise to the top. But according to a few experts in the industry, consolidation is just a ghost that the larger corporations promote to scare off the competition. There are close to 2,000 individual brands, and new ones cropping up all the time. The market is in constant flux; with so much change in vendors, trends, and platforms, there seems to be too much movement to keep all the smaller businesses down.

 

On the other hand, anyone watching the news is aware of how much buying up the big companies have been doing. It’s been one acquisition after another – there were 120+ mergers or acquisitions in 2015 alone. Among those who weren’t bought out, there are many are dying a slow death with stocks plummeting by as much as 90%. This has to make you wonder who will be left standing when the dust settles. In such a crowded market, smaller businesses often don’t have the stamina or budget to beat out the major companies.

 

There is much to be contended on either side. The terrible hydra that is the online advertising ecosystem today could definitely stand to lose a few heads. Yet, the important question isn’t whether or not consolidation will happen, but whether or not it is a good thing for the industry. My thoughts about it? The less players, the fewer options for publishers, etc. to choose from, and services would come at a higher cost due to a lack of competitive pricing. But on the flip side, there is then a high chance for standardization and cleaner ads. An ad security and verification company like GeoEdge, would work with market players across the board so that they all would provide clean, safe, and engaging ads to users. So if the industry does go through a Darwinian war, then I look forward to the positive impact it could bring to the world at large.

  

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