We all would love to see some shake up of the display landscape, more so in a favorable direction with some mergers or acquisitions rather than have a few companies drop off the map. But the reality is that consolidation isn’t going to happen this way.
What is changing right now in the industry is that everyone is just able to integrate with each other more easily. So the days of a late night drink between C-levels discussing major juggernaut mergers that send ripples through the industry are becoming few and far between, at least in technology. Now it’s more like “Hey, what if we just integrated our inventory together and split revenue by x?” “Wow, yea we can just use your API!” So, instead of marrying companies together in some grand royal wedding, now you can just “date” as many as you want and not have to make a major financial commitment to just one.
What happens when everyone just starts integrating with each other? The quality of the major merger or buyout is not as impactful as it once was. It doesn’t send a wave through the industry because it’s not that hard for anyone to pull of. For example, Advertising.com / AOL took their cash reserves and went on a buying spree in the later half of the last decade, picking up a video network, a text ad network, a behavioral network, a social media company and an ad server to link them altogether. Today, this would never happen because if AOL needed, it would just call up a smaller video company and ask them for access their API to plug their inventory into the AOL network. The video company would just flip the switch in a second for a simple rev share and wait for the huge influx of revenue.
Does that mean acquisitions and big mergers are done? No, there is still inherent value to these major commitments sometimes. For example, Mediabank's purchase of AdBuyer.com. Owning the company you are integrating locks others from integrating with them and it may allow you to do more with the company than an integration allows. But if you don't need to make a huge commitment, and it's easy to just “plug in” to each other then why go through the hassle?
In my example above, if it was easier for AOL to just buy or merge the video company outright, they would. But today, integration avoids having to deal with all of the things that go along with an acquisition or merger. Things like equity distribution, job restructuring, process hiccups, outstanding deals between the companies and much more.
So now what? If I’m an advertiser or publisher on either end of the landscape spectrum and I need technology, I’m going to want a solution that meets ALL of my needs. Whoever meets all of my needs will get my business. But what if I could just tap the best technologies from the best companies in the landscape with one click, sort of like adding software to my PC? As an advertiser I’d have all the technology I need to run my business.
In this scenario, who gets the grand spot of being the operating system? History tells us it’s whoever has the most compatible software. So the race is on for integrations. Place your bets.
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If you are looking for a good contextual advertising network, I suggest that you have a look at ExoClick.
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