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Writer's pictureFahad H

Evolution of ad tech in 2019: Streaming services and content ownership

Heading into 2019, I predict this will be another year of consolidation across the media landscape. From IPG buying Acxiom Marketing Solutions to WPP’s move to merge J. Walter Thompson with Wunderman, to AT&T acquiring Time Warner Inc., there have been a multitude of mega-deals in the media business, this past year, which had a lot do with years of growth hitting the walls of reality. The breadth and depth of this industry-wide consolidation will turn into more streamlined business opportunities to come. The larger Internet companies are filling out their tech stacks and shifting their focus to big companies issues, like regulation, you’re left with less of your typical strategic buyers within ad tech.

In 2018, we saw numerous companies such as Videology and Visto being sold at deep discounts and that trend is likely to continue. I would expect that the first half of 2019 will see the dust to settle a bit, making way for new business models built on blending people-based and technology-based capabilities and setting the stage for the next bull marketing in advertising technology. An example of this can be seen with what Sir Martin Sorrell is doing with S4 Capital and their acquisition of ad firm MightyHive. Businesses like his have agility baked into their core, allowing them to better align with clients’ needs in comparison with larger agencies who struggle to evolve and provide the transparency that marketers demand. They still lack scale so it will be interesting to see how the big players reply to these nimble new businesses.

Here are my specific predictions for the year ahead.

Streaming service competition heats up and puts a light on content ownership

On Nov. 8, Disney CEO Bob Iger announced that Disney+ would launch in late 2019. Apple and Warner Media are also planning to join the subscription streaming market. In order to be a player in the consumer driven area, you must have the content. It also remains to be seen how many subscription services are too many, but my guess is this will have a sizeable impact to programming on the current market leaders Netflix and Hulu.

Could Snapchat be snapped up?

I predict that 2019 should be the year that Snap will be acquired. Most TV and cable networks would love to have 180 million active daily users of which 71 percent are under 34 years old. The platform has the attention of the coveted millennial audience (even though some Snap users are getting older), however the stock market seems to push them to the side. Mainly because Snap has struggled with issues around their Android rollout which means their growth has stalled. What if Google did buy them? It could be a good time from a valuation standpoint, and once the Android rollout happens, (because of course it will) Google could quickly scale it. This would be an interesting combination and create competition against Facebook – if they can come to terms on a deal.

Rubicon Project will be bought

The Rubicon Project is on track to be cash flow-positive in 2019, a rarity in ad tech land and now AppNexus is off the market. Rubicon still has many large publishers in its mix, so it represents value to the right buyer looking for a line extension into the publisher market and connection to all the large buyers and third-party exchanges.

The fight for ad tech talent in NYC is on the rise

Amazon is coming to Long Island City, but why? Maybe because New York has many skilled players in the areas of Internet advertising, and Amazon has plans to scale their advertising business. In addition to taking a bite out of Google’s advertising business, they’ll also be competing for talent in an area rich with industry-specific talent.

Amazon plans to create 25,000 jobs over the next decade with an average salary of $150,000.00. With plans to build one of two HQ2s in Long Island City, the income opportunities for savvy professionals living in the greater New York City area are looking bright. Pros who understand digital media and programmatic advertising are already sought after, and the opportunities that will be created by Amazon’s HQ2 will only turn up the heat in the fight for talent.

This year will be one of the most interesting years on record, from a rocky start to a strong finish. I look forward to keeping score on my predictions and seeing how the year turns out. Happy Holidays everyone and best for a happy, healthy and successful year!

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