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AD TECH INSIGHTS
The views expressed herein are those of the authors and not necessarily the views of FTI Consulting, Inc., its management, subsidiaries, affiliates, or other professionals. FTI Consulting, Inc., including its subsidiaries and affiliates, is a consulting firm and is not a certified public accounting firm or a law firm.
About FTI Consulting FTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn | fticonsulting.com/mai.
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As advertisers and publishers decry the “ad tech tax” they put pressure on ad tech providers to further reduce profit margins
Market is consolidating with Google and FB gaining market share. However, the ‘other’ Ad Tech market remains fragmented.
Big Strategic “Exit Options” May Still Exist for ‘others’
Key: AOR: Agency of Record ATD: Agency Trading Desk DSP: Demand-Side Platform DMP: Data Management Platform
Acquirers May be Eyeing the “Next
Big Thing”
Source: Market survey by Publicitas July 12, 2016; as republished by eMarketer
The Global Ad Tech Industry is Maturing
“Those fractional margins at no growth are not going to be our play, purging cost will not create value from these sorts of assets, which is why we stay away from AdTech.” – West Coast based PE investing in assets with operational improvement opportunities
Investment dollars down by 33% from
$3.3 B (2015) $2.2B
(2016) to
Deal volume reduced by 17% from
414 (2015) deals
343 (2016) deals
to
“AdTech is not consolidating, there is not much to consolidate – it is more like cleansing of poorly run companies, products and business models. Once this space is cleansed, all else will consolidate but we will let strategic buyers deal with those.” - $30Bn European Fund
“Thanks, but no thanks. AdTech does not lend itself to the PE model of investing. Advertising is better off outside programmatic [industry] quite honestly.” – Large Global PE
Nitin Kumar Senior Managing Director +1 408 915 8627 [email protected]
Phil Schuman Senior Managing Director +1 310 569 8765 [email protected]
Dan Punt Managing Director +1 310 699 4060 [email protected]
Ad Market Segment Ad Tech Firms
Digital Display
Digital Video
Television
“Publishers see only $0.20 of a
dollar of ad spend”
Source: World Federation of Advertisers 2016, AdNews 2017. ExchangeWire 2016
Source: FTI Consulting, Pivotal, Magna Global
Source: Market survey by Publicitas July 12, 2016; as republished by eMarketer
