The importance of mobile has been underscored again, with news that ad network App Lovin is being targeted by a Chinese investor, to the tune of $1.5bn.
AppLovin has had particular success with mobile ads, doubling its revenue from 2014-2015 and hitting over $200 million, with some projections suggesting that revenues could hit half a billion this year.
2016 has been an acquisition-heavy year in ad tech, with Chinese companies and conglomerates in particular making big advances on markets through acquisitions.
It looks like the Chinese are taking the sector very seriously. Chinese companies have already invested more money overseas this year than they did in all of 2015. And ad-tech seems to be of major interest. Mobile ad tech firm Smaato was acquired by a China-based group for $148 million earlier this year, while mobile led AdTech platform Opera was bought by Chinese investors for $1.2 billion.
This simply emphasises the disruption that the advertising and marketing technology sector is undergoing. Agencies, IT services companies, enterprise software vendors, telcos and media groups, as well as traditional data companies are all now competing for ownership of sector. And countries without a home grown option are expanding where they can. Current changes are affecting everyone and anyone not fighting for space and position may not be around much longer.
According to Acuity, “Companies are recognising the importance of the sector and more non-ad players are viewing M&A as a way of getting ahead of competitors. Demand for ad start-ups is rising in M&A hubs such as Silicon Valley, London corporate finance and in China.”
Major player WPP, which has been fairly quiet on the adtech front recently, rejoined the headlines with its purchase of iStrategyLabs, making the new agency responsible for real-time content marketing and online-plus-offline campaign work. The company said,”The acquisition continues WPP’s strategy of investing in key sectors, such as digital, and important markets such as the US.”
It’s not just the US market that it’s focusing on however. WPP also made a recent commitment to the Turkish market, despite the recent coup. Early August saw news that J. Walther Thompson has bought WANDA Digital, a local agency.
The point is that there is growing recognition within digital that ecommerce, ad and martech continue to go from strength to strength and if you don’t have the skills or market knowledge, you buy them. Ad and martech companies, if they can demonstrate an innovative, differentiated offering, and one that they are managing to scale, may well find themselves a target of investor appetite.
Of course, don’t forget that AI and VR are going from strength to strength. The UK’s Loop Me mobile video platform uses an optimisation and reporting technology. It uses AI to continuously optimise mobile video campaigns towards brand metrics such as purchase intent, brand affinity or product recall, helping deliver ads to the users most likely to change opinion and move along the path to purchase, enabling brands to increase revenues and loyalty.
So it looks as if while one part of the market is up for grabs, another part is developing entirely new approaches.
