Following a year of consolidation in the advertising technology sector – boasting high profile deals such as Facebook’s $400m acquisition of video ad firm LiveRail and Yahoo’s $640m purchase of video ad network Brightroll, 2015 has begun with a number of stories about the imminent fall of ad tech M&A. However, certain sizeable deals continue to spite the ‘nay-sayers’.
Last week saw Nielsen acquire data exchange Exelate for a reputed $200m. Nielsen, best known for tracking the viewership of television shows, said the acquisition would help it move into the fast-growing world of online “programmatic” advertising where ads are bought automatically on digital exchanges – often using big data sets to determine consumers’ buying intent.
Was the acquisition really worth $200m? It appears that Nielsen took the plunge into ad tech to protect its position in TV and assist its expansion into the $70bn US TV advertising market. With “programmatic” advertising encroaching on the outdated reach and frequency metrics of TV advertising, maybe Nielsen would not have been able to compete without the acquisition should TV fully embrace the new technology. Only time will tell! However, yet again, ad tech is proving to be an important piece of the monetisation puzzle for both data- and media-driven businesses. There will undoubtedly be more deals as outlier buyers realise they need this tech to remain competitive in an ever-changing digital media landscape.