Paul Gubbins: reasons not to fear the adtech reaper this Halloween

M&A is back and the sector is performing well - both privately and publicly

M&A activity is heating up in the adtech sector. In the last few weeks alone, we’ve seen Roku pick up DSP DataXu to help bring advertising budgets and addressability to its growing OTT ecosystem. We’ve also seen The Rubicon Project pick up RTK.io to bolster its header bidding footprint and Xandr continue in its efforts to build a CTV powerhouse in its acquisition of Clypd.

There’s still smart money being spent in the adtech sector and companies that can provide a strategic point of difference remain attractive propositions.

Adtech companies are also performing really well on Wall Street, and that’s good news for everybody.

The better these public barometers of programmatic advertising perform, the more investment and opportunities there are across the whole sector. The likes of $TTD, $RUBI & $TLRA are all building great companies, and over the last 12 months these efforts are reflected in their growing stock prices.

Digital budgets continue to grow

More budget than ever before is entering the digital advertising ecosystem.

The latest IAB report showed that US digital ad spend for the first half of 2019 totalled $57.9bn, an all-time high for the first six months of the year. The record total marks a 17% uptick from the previous half-year mark, with video advertising seeing the fastest level of year-on-year growth at 36%, totalling $9.5bn.

Despite concerns over Brexit, UK digital ad spend also grew 13% to £7.3bn in the first six months of the year (source: IAB UK).

More and more ad dollars are flowing into digital - and it’s all to play for.

The supply chain is a lot more transparent, while zombie adtech companies that add no value are finding it hard to hide

Not only has Ads.txt now been adopted by the majority of the world's leading digital publishers, but app-ads.txt -- the in-App version -- is now starting to get just as much traction.

This is great news as the app space remains one of the few environments that support a persistent identifier that can power RTB and is not yet under threat from browser updates.

We’ve also seen the deployment of both sellers.json and OpenRTB SupplyChain object initiatives. Both were released as a collective from the IAB Tech Lab and are designed to give ad buyers more information about the origins of an ad impression as it flows between direct and indirect SSPs. For the first time, buyers can now get into the weeds and arm themselves with the right information to make real-time decisions about their supply partners.

Blockchains pivot from phantom vapourware to reality

Xi Jinping, the president of China, this week said the country needs to “seize the opportunity” afforded by blockchain technology. The same week the price of Bitcoin increased by over 20%.

Now, neither have anything to do with RTB, but it does illustrate that interest in blockchain and its associated outputs, such as crypto-currencies, are continuing to build. And when it comes to the application of blockchain technologies for digital advertising, interest is just as strong.

Only 12 months ago, many in adtech circles dismissed blockchain vendors as unnecessary middlemen. Twelve months on and brands and agencies are asking adtech companies to comply with the demands of these new blockchain vendors or risk being excluded from their plans. How the tables have turned.

Yes, adtech is facing headwinds that appear to be stronger than ever before, but it’s important to remember this Halloween that despite all the gloom, the sector is alive and kicking. Roll on 2020, it’s going to be a great year!

Paul Gubbins is global programmatic strategy lead at Unruly.