Digital Ad Opportunities and Capital Spur Investor Interest in Ad Tech
The industry, once shunned by investors, has regained its mojo, fueled in part by a rise in digital ad spending
by Alexandra Bruell (Wall Street Journal) – July 2, 2021 6:00 am ET
Deal activity and public offerings in the advertising and marketing technology industry are rising as the sector gets a boost from a flush of available capital and companies looking for a share of a growing digital ad business.
In the span of roughly 48 hours starting Wednesday, there was a rash of activity in a category that was once largely written off. Content recommendation company Outbrain Inc. announced its IPO, ad verification company Integral Ad Science Inc. made its debut on the stock market and Magnite, a business focused on helping media companies sell ads, closed an acquisition of connected TV ad server SpringServe.
Ad tech facilitates automated digital ad buying and targeting, while marketing tech generally supports longer-term efforts such as customer relationship management.
Investors in the past decade or so shunned ad tech as the sector’s companies struggled to compete with ad giants like Alphabet Inc.’s Google and Facebook Inc. and to evolve their businesses to rely less on manual labor and more on self-service models. The industry was marred with bankruptcies, with chapter 11 filings from companies such as Videology in 2018 and Sizmek Inc. in 2019, and confronted by challenges related to changing privacy expectations and rules.