There is simply not enough room for the flurry of ad tech companies emerging today. Consolidation is inevitable, and these mergers and acquisitions will represent both a challenge and an opportunity for CIOs.
In just a few short years, advertising technology has become one of the fastest growing areas in the tech world. There are now hundreds, maybe even thousands, of ad tech companies vying for a piece of the digital marketing pie, but few are self-sustaining businesses.
The crowded space of startups building tools and solutions for ad management, analytics, targeting and optimization is ripe for consolidation. As companies run out of capital or drag on without appropriately evolving in this opportunistic but complex field, acquisitions are likely.
“There are a lot more ad tech [mergers and acquisitions] coming,” says David Berkowitz, CMO at creative and technology agency MRY. “There are so many companies out there trying to solve marketers’ challenges, and challenges keep getting more complex with more money going into digital.”
An Opportunity for CIOs — and a Challenge
Complexity and uncertainty about ad tech are leading companies to make decisions — sometimes based on nothing more than gut instinct — that directly impact the CIO. Framing this challenge as an opportunity for the CIO is critical.
“The CIO will have no shortage of technologies to vet in the years ahead,” Berkowitz says. “Marketers may keep commanding larger tech budgets, but that doesn’t mean marketers understand the ins and outs of tech.”