After several days of media investment banking conferences (Gridley and JEGI), I can reliably report that 2014 will be "the year" of many uber-trends, some of which will enrich the M&A bankers who have a focus on the increasingly frothy ad technology and marketing space. Here are five memes to consider:
1. "Mobile First"
If you were to believe every ad tech panelist, you might be inclined to throw your laptop in the East River. Apparently—despite desktop only slightly starting to lose overall time-spent share to mobile on a year-over-year basis—nobody is developing ad tech solutions for the desktop anymore. Everyone is "mobile first," meaning that they are writing code for tablet and mobile phone browsers and apps before developing solutions for the poor laptop or desktop computer.
Also, in case you missed this, it is now passé to call "mobile" "mobile." Companies are so hip to the growth in portable digital devices that they just talk about "reach" rather than distinguishing between "tablets" and "smartphones." You know it's really the "year of mobile" when it's too lame to talk about.
2. "No Cookie, No Problem"
Guess what? Nobody is worried that cookies are going away. Again, if you spend all of your time in conference ballrooms listening to panelists, you naturally understand that cookies are a thing of the ancient past, rather than the data currency without which 80% of Lumascape companies could not credibly operate.
I am really glad that no one is particularly worried but—hearing this meme several times over the past week—I would be interested in how many platforms and ad networks have developed and deployed data technologies that enable them to do audience targeting at scale without cookies.
3. "Stack"
The idea of the "technology stack" is not new for 2014, but what has changed is that tons of point solutions that were funded in 2008 are still unprofitable, their VCs are at the end of their fund lifespans, and it's time to find an exit. That means unprofitable point solutions can either become a part of another's "stack" or everyone can take their toys and go home.
The biggest players in the marketing space (IBM, Adobe, Salesforce, etc.) represent the vast majority of M&A dollar volume, all of which has gone towards augmenting "stacks"—and it doesn't look like they are going to be done anytime soon.
4. The Funnel is Dead… It's Now the "Customer Journey"
Everyone now has to have an "omnichannel-capable programmatic offering." That's the one parked right next to my Unicorn. Not that the instinct is incorrect—the proliferation of screens means that marketers have to reach people along their "consumer journey."
It's no longer a trip down the sales funnel, but a twisting landscape where the consumer pushes you information through various social interactions. Sounds like marketers may actually start to miss the old "AIDA" funnel!
5. "Sutton Pivot"
One of 2013's memes was the notion of the "Sutton Pivot," or running where the display money is—namely, the 70% of digital dollars that get transacted through the RFP channel. That's where we get to complain endlessly about funding the "23 year old media planner" with "sneaker parties."
David Moore remarked at the recent JEGI conference that "50% of the cost of a campaign" went into the complexity of planning and delivering it. Everyone wants everything more programmatically, but the problem is that publishers haven't quite given up yet. They are still keeping the premium inventory to themselves and out of the exchanges.
Happy New Year!
Every one of these memes will produce a ton of innovation, lots of M&A, a good deal of mid- to senior-level hiring, and plenty of bankers fees, so don't worry! 2014 looks like a great year for ad technology!