The year in ad tech can be characterised by two trends: the growing rivalry to Google’s dominance of the online advertising business; plus the ongoing consolidation in the sector, which gave rise to mobile operators re-emerging as serious contenders for ad budgets. Oh yes, and ad blocking…
Before addressing the above, it’s worth noting that UK programmatic ad spend is set to surpass £2bn in the UK in 2016, according to eMarketer numbers, with 60 per cent of all display ads being bought using such technology in 2015, which is one of the reasons why all sides of the industry should be concerned at the lack of adequately skilled staff in the sector.
This was an issue that was spelt out in IAB research conducted earlier this year, which further demonstrated that data-literate media professionals are currently in high demand, with the role of ‘data scientists’ officially being crowned as ‘the sexiest job of the 21st Century’, a trend explored at length by The Drum earlier this year.
To address the growing amount of rivalry for Google’s dominance of the ad tech space 2015 was remarkable for the rise of Facebook’s Atlas, which saw it pull off a dual coup with the hire of Damian Burns as Atlas’ global sales chief, plus Andy Mihalop as his chief lieutenant – both of whom defected directly from Google.
Official numbers are not publicly available to directly analyse the impact Facebook’s Atlas is having on drawing ad budgets away from Google’s DoubleClick, but needless to say Google is not taking this lying down.
Elsewhere in the ad tech space, 2015 was also notable for the ongoing rise of AppNexus, a ‘full stack’ ad tech offering which it maintains is a more transparent alternative to both Google and Facebook. The key issue of concern here is the ‘open ecosystem versus walled gardens’ debate – an industry dynamic AppNexus president Michael Rubenstein dubs the “ad tech power game”.
Of course, this ‘power game’ has been characterised by year after year of consolidation as more players are eager to capitalise on advertisers’ growing desire to improve their online targeting. As mentioned this trend has been in place for a number of years, but 2015 was a particularly notable year, with US telecoms operator entering the fray with the $4.4bn purchase of AOL, plus the latter’s subsequent purchase of Millennial Media a little over a month after that.
Mobile operators were some of the first to voice an interest in the online advertising sector (mobile in particular) dating back to the early 21st century, but operational priorities – plus lack of consumer demand prior to 2010 saw this interest fade. However, as we enter the big data era operators are wading back into the fold, with mobile operators widely reckoned to be in the market for another of the internet’s iconic brands in Yahoo.
Doubtless 2016 will see leaders in the ad tech space face further disruption.