Ad Ops Strategy

A History of Ad Tech Acquisitions

Updated: Nov 8, 2016

Today I’m publishing a list of over eight hundred ad technology acquisitions as a resource going forward. You can read more about the methodology on how I decide what to include and what not to include on that page, but I will be keeping it up to date moving forward, adding companies each week as transactions happen.

Pulling this list together was a ton of work, but now that I have it, we can do all kinds of interesting analysis on the trends we’ve seen over the past 15+ years.

Overall Trends

No surprises here, there’s been an explosion of acquisitions as the market has grown and capital has been cheap.  Entirely new sectors were created during this timeframe; remember – there was no such thing as mobile ad tech in 2000, no such thing as video ad tech in 2002, no such thing as social ad tech in 2004.

ad tech acquisitions graph

The First Ad Tech Acquisition – LinkExchange

So far as I can tell from my research, Microsoft’s $265 million dollar purchase of LinkExchange was the very first ad tech acquisition – nearly 17 years ago! LinkExchange was the very first ad network model and figured out how to monetize the then-popular concept of a web-ring. For all you whipper-snappers out there, a web-ring is a cooperative effort by many publishers to link to each others’ sites in hopes of driving traffic. Usually, they popped up in common niches, so people who had a site about robotics, or space travel, or nature photography, or the New York Yankees would all put links to other related sites. LinkExchange figured out how to build a business off that concept by allowing publishers to promote their own site across a huge web-ring in exchange for serving paid, promotional links from LinkExchange every so often.  This was good for publishers because it gave them greater exposure, and was good for LinkExchange because it enabled them to create a platform that could reach a very large percent of the internet for advertisers.

LinkExchange is also notable because it was founded by Tony Hsieh, who went on to future greatness as a thought-leader in office culture, and the founder of Zappos which he sold to Amazon ten years after LinkExchange.

Early Years (1998 – 2007)

The early years of ad tech acquisitions are not well documented, so frankly I feel less good about my data, but the dot-com bubble that collapsed in March of 2000 likely put a damper on any significant transactions.  One that just squeaked by though was the NetGravity purchase by DoubleClick for a massive $530 million in 1999.   (more…)

Lookalike Modeling Your Ad Ops Team Can Build With a DMP

Digital Publishers and Advertisers that have access to a Data Management Platform (DMP) can bootstrap their own data modeling, or lookalike model capabilities with some simple index-based approaches.  That is to say, if you can understand both the total population of users for every segment and for any specific segment, how many users of every other segment overlap in that target segment, you can build a fast and easily understood audience model with a little legwork. It’s not the rocket science approach of a regression model or black box algorithm, but it works, and it’s pretty easy for people without a degree in data science to execute once you figure out how to get the right data out of your system.

How to Do Lookalike Modeling Yourself

The first step to building a lookalike segment is to first define what you are trying to model, that is, what audience you want want more of.  This will be your ‘target’ – for our example here, let’s consider the following audiences:

SegmentQualified Users% of Total
Women 20,000 20%
Pet Owners 5,000 5%
Coffee Drinkers 8,000 8%
Outdoor Enthusiasts 9,000 9%
Total Users 100,000 100%

Let’s say we’re trying to reach females.  Unfortunately, we only have 20,000 we can identify, out of a total population of 100,000.  Now let’s assume that our content isn’t skewed to one gender or another, and therefore there’s clearly some users in the 80,000 other users that we can expect would be female.  But we need to find a signal within that group that directs us to which other audiences are likely to be female. (more…)

What is Holistic Ad Serving?

Certainly one of the biggest opportunities in ad tech today is integrating real time bidding (RTB) systems to core ad serving platforms such that ad serving decisions are made from a single system. This vision of a fully integrated monetization stack is known as holistic ad serving, and it’s going to be big.

Holistic ad serving consolidates what is today a fragmented marketplace, modernizes the publisher ad serving stack, and lays the groundwork for advertisers and publishes to transact guaranteed campaigns over RTB infrastructure.  In other words, it provides a way for publishers to transition from a world of manual campaign implementations to accepting and trafficking campaigns programmatically without having to manage the balance between two systems.

Tactically, holistic ad serving is a seems like a basic change – instead of filling direct campaigns first and then letting the exchange try to fill whatever is left, the idea is for publishers to call to the exchange marketplace and get a bid for every single impression, thereby allowing RTB demand to compete directly with the traditionally sold campaigns with guaranteed goals.  By at least getting a bid for every impression, the publisher’s ad server can understand the benefit or cost of filling an impression with a direct campaign – it has all the information.  Holistic ad serving also opens the possibility, on an impression by impression basis, for an RTB campaign to trump a direct campaign. (more…)

The Year in Ad Ops 2011 – MRAID Specs Released

Even though it’s been the ‘year of mobile’ for the last decade, mobile advertising really did seem to reach a critical mass this year, as many publishers sold some of their first campaigns, and marketers moved more share of budgets to the mobile medium.  From an Ops point of view, this was also the first year for a lot of organizations to come to terms with needing a real process around mobile campaign implementation on both the mobile web as well as in application environments. As it turns out, getting ads, particular rich media ads to work in an app is fairly complex, requiring a higher level of technical expertise than desktop advertising.

Thank goodness then for the IAB’s release of the first set of development specs for mobile rich media APIs, known as MRAID and written in partnership with ORMMA to unify the industry’s approach to in-application advertising and simplify the implementation of mobile rich media.

Why is MRAID Necessary?

Thanks to some of the security features built it to smartphones, a layer of software called a software development kit, or SDK is typically required in the app to allow ads to expand over content, play sound and video, and do other things that are fairly standard in a desktop environment.  An SDK is nothing more than a block of code that a vendor like a rich media company might write to get their products to work in other applications, so the application developers don’t have to write the code themselves.  The problem is that every ad server and network has their own proprietary SDK for publishers to implement in order to get their ads to work, which usually requires an update to get released through the app store, which typically takes a few weeks.

Publishers not only have to do some development work to make this happen, but they then have to ensure that it doesn’t break the app itself before releasing it and then have to support updates to the SDK, basically forever, since not all users will update their apps, so legacy SDKs will stay in place long after a publisher might remove a vendor’s code from the most current version of the app.

So, with all that headache, the IAB took up the challenge to set some standards for SDK development, creating an open standard for rich media APIs to communicate with a mobile device, which is what an SDK does. By standardizing the API code, publishers can hopefully move to an SDK agnostic place, where they can use one centralized SDK that works with all rich media, and not need to support multiple piece of vendor code to enable ads. This is a big deal for the Ad Ops community and the Ad Tech community, who have struggled under the weight of technical problems to get campaigns live and facilitate mobile ad budgets. Hopefully MRAID makes a huge dent in those operational problems, and makes it faster and easier to get campaigns up and running, which should encourage advertisers to put more money to work in mobile.

I would encourage all Ops professionals to demand MRAID compliant apps and ads in your mobile ad spec and with vendor negotiations. The good news is that MRAID has enjoyed wide adoption and compliance from the major players in the mobile marketplace from the beginning, so there is already considerable momentum here.

Read about the other most significant developments in Ad Ops in 2011:

MediaBank & Donovan Data Systems Merger
Adobe Emerged as a Major Force in Ad Tech

The Year in Ad Ops 2011 – Adobe Emerged as a Major Force in Ad Tech

I can’t think of another powerhouse corporation that has moved so quickly into the ad tech business as Adobe did this year. Before 2011, Adobe had only happenstance exposure to the market, playing a key role in things like site analytics (via Omniture), and rich media development (via Macromedia’s Flash), but didn’t have much involvement in the delivery of ads themselves. In the course of a year however, Adobe bought its way to a leadership position in data management, cross platform video ad serving, and social marketing. Thanks to three major ad tech acquisitions book-ending the year as well as the launch of an ambitious product to streamline ad trafficking, Adobe’s moves should make any Ops department sit up and take notice as one of the most viable competitors to the Google stack to come along yet. (more…)