There were a number of announcements confirming mergers and acquisitions in the ad tech space during New York Advertising Week, and there is growing enthusiasm among dealmakers to see a flurry of such activity in the second half of 2024.
Separately, the announcement of $25 million in funding for Brian O’Kelly’s Scope 3, one of the most prominent companies in the ad tech industry, has led experienced observers to believe that the sector is one of the most prominent in the digital space. You might have thought the clock had turned back to the dizzying days of 2014, when things were developing rapidly. media. Still, amidst such a whirlwind of announcements, it pays to maintain civility.
Last week, Zeta Global announced it had acquired LiveIntent for approximately $250 million, funded by a combination of $77.5 million in cash and $172.5 million in Zeta common stock. The agreement also includes potential benefits related to performance targets, with the potential to add up to an additional $25 million annually over the next three years if certain EBITDA growth milestones are achieved. .
The strategic rationale for the acquisition focuses on Zeta’s need for identity targeting (especially given the long-delayed but inevitable decline of third-party cookies) and LiveIntent’s email-based ID solutions scratch that itch.
Meanwhile, after Digiday first reported news of such negotiations in July, JW Player and Connatix have announced that they will be working on a new project called JWP, which aims to provide end-to-end capabilities to broadcasters, publishers and advertisers. Confirmed plans to merge to create a comprehensive video technology and monetization platform called Connatix. , especially in the rapidly evolving CTV environment.
Meanwhile, in the same week, Scope 3, a startup focused on capturing trends towards sustainable marketing and led by ad tech godfather Brian O’Kelly, announced a $25 million Series B funding round. (particularly led by Google Ventures).
The latest round is the latest for Scope3 to raise a total of $45 million from investors including Venrock, Room40 Ventures, Craft Ventures, Aperiam Ventures, and Virgo Strategic Investments since 2021, with O’Kelly saying, “It’s becoming more commonplace,” he said. Like the search giant before us, through advertising,” the Oct. 9 announcement said.
Meanwhile, fellow ad tech veteran Fabian Magalong also announced an $8 million funding round for his attention measurement company XPLN.AI, led by Ventech and Spring Invest.
Furthermore, a recent market report from LUMA Partners states that the second half of 2024 will be a “soft landing” for M&A, with deal numbers in the ad tech sector reaching “the highest level since the first half of 2022” and a high number of deals. Third-quarter sales volume increased 13% sequentially.
One such notable deal is Outbrain’s acquisition of Tees, the sector’s first unicorn deal in years, but sources told Digiday that it was announced in August. Several other companies had previously kicked the tires on the sell-side sector, but were balked by the price, he said.
But even with the recent rate cuts, expected funding rounds and M&A deals in the coming months are likely to be more modest, sources said.
Advertising Week New York officials interviewed by Digiday said they expected consolidation in the public markets. Zeta’s acquisition of Live Intent is an example at hand, followed by Verve Group’s acquisition of Jun Group and LiveRamp’s acquisition of Hub in early 2024.
While most sources seem to believe that recent acquisition talks between Criteo and Skai have stalled, one M&A executive, who requested anonymity to preserve commercial relationships, said the French company’s board previously He said he was not convinced that the company known as Kenshoo was worth more than $500 million. -Plus asking price.
Similarly, some expect many ad tech companies that went public in 2020-2021 to go private, largely due to the hype surrounding digital valuations in a post-COVID-19 world. This is because the company was unable to respond to the cycle.
Many point to Cadent’s acquisition of AdTheorent as a prime example of such companies screaming their way out rather than making a big splash, with private equity players in particular We expect more companies to follow, as companies like these try to squeeze value out of the technology they actually have. .
