Month: January 2021

The pressure is now on the sector’s main stakeholders to prove to both the industry and investors alike that it’s uplift is more sustainable and conscientious than it ever has been in the past. 

On the surface, there are multiple reasons for ad tech to be optimistic about its chances. 

In short, more ads are being bought online and subsequently via ad tech as evidenced by The Trade Desk’s market capitalization, which doubled in value last year to $28.6 billion — making it bigger than Omnicom and WPP, the world’s largest advertising holding groups — combined. The coronavirus intensified existing bright spots like connected TV, commerce and audio for ad tech and even banks seem impressed and some like Southern California-based East West Bank went so far as to extend lines of credit to programmatic — part of the market that has had its fair share of cash flow worries. 

“It’s a testament to the strength of the industry that you have a bank that’s prepared to invest in what is usually seen as the riskiest part of the market,” said Hanna Kassis, CEO of Oarex, a invoice factoring company that was able to renew its existing $50 million deal with hedge fund Arena and secure another $50 million in credit from East West Bank.

Now, many ad tech companies, even those whose businesses took a direct hit from the outbreak, are finding they have to adapt to a time when cash is suddenly much harder to raise for the uncertainty that lies ahead. Pubmatic raised $118 from its IPO at the end of 2020, while both Israel-based IronSource and small-scale ad tech vendor AcuityAds plan similar moves sometime later this year. 

“More successful IPOs could beget more successful IPOs given that we’ve seen a lot of this activity recently,” said Eric Franchi, operating partner at venture capital fund Math Capital. “That could have an interesting effect on M&A as public companies have a strong currency to do those sorts of deals given they tend to have a lot of liquid stock.”

IPOs. M&A. Explosive growth. Ad tech’s purple patch harks back to the advent of the industry back in 2013.  The market had a ‘Wild West’ vibe back then. People were building businesses as fast as they could with very few rules or constraints except for what was ‘possible’ or cost-efficient. Along the way, those practices were found to be unhealthy, and, in effect, checks and balances were created to address these harmful shortcuts.

“When the first set of ad tech IPOs came there was nothing to compare them too so investors had a hard time wrapping their head around it,” said Daniel Knapp, chief economist at IAB Europe. “The businesses were also smaller back then because programmatic was still a young part of the industry. Today, there are better and more appealing revenue models from an investor perspective.”

These are undoubtedly heady times for ad tech vendors. But it’s important to be realistic.

Yes, ad tech fared well in 2020 but it benefited from the stay-at-home economy. For example, it took ad tech vendor TripleLift nine years to get $1 billion in ad spend on its marketplace, with half of that coming in 2020 alone. So, as people travel more, attend live events, socialize outside, and do everything they haven’t been able to do in 2020, many ad tech companies will benefit, but the overall sector might not. 

In fact, now might be as good as it gets for some ad tech companies.

“Between a hot stock market that continues to defy expectations and the arrival of more economic stimulus in the U.S, there’s a working assumption across the industry that we may be set for another six to 12 months of strong performance,” said Bob Regular, CEO of ad tech firm Infolinks. “If ad tech CEOs are ever going to find a liquidity event in the market then probably now is the last chance to do so for a while.”

The reality is ad tech’s robuts health owes a great deal to macroeconomic factors beyond its control. At some point, however, intrinsic value will have to matter, and when it does those in the sector will be forced to show they have credible plans in place for existential dangers on the horizon. 

After all, ad tech remains volatile, and the market capitalization of some of the biggest players has arguably been driven up by speculation spurred by cheap money as opposed to surefire plans for some of the industry’s existential threats. When third-party cookies crumble sometime next year, so too will the primary source of targeting data for many ad tech companies, for example. 

No wonder many observers regard talk of an ad tech bubble as premature — even if the sector is moving in the right direction. 

“There are positive signs for companies on the stock market, but the consolidation is still there,” said Abeed Janmohamed, director of M&A consulting joint venture Waypoint Partners and VOGL. 

While extroverts gain energy from social interactions online or face to face, more introverted people can miss out on selection for a project team or being shortlisted for promotion because their efforts go unnoticed.

Occupational psychologist Kirsten Godfrey, author of the blog ‘A work of thought,’ believes the online environment has made it harder for introverts to fight their corner. In a physical office it can be straightforward to grab a quick word with a manager to discuss an issue. Finding the right moment to share an important thought during a conference call on Teams or Zoom is not so easy.

“Introverts are more likely in a group setting to sit and soak up what is being said and process their thoughts before taking an appropriate moment to say something,” said Godfrey. “This is often perceived as being shy or not interested, but they are just more reserved.” 

Godfrey said anyone who fears they are not being noticed should offer to chair online meetings or agree with a manager that at the end of each get-together there is time for everyone to have a final input. “Ask for an agenda in advance so you can prepare,” she added.  “This isn’t about being less of an introvert, it’s about adapting slightly to make the situation work for you.”

Rhonda George-Denniston, global director of talent development at ad agency TBWAWorldwide based in New York, agrees. She said everyone needs to play to the extroverted strengths they do possess, however hard that might be. “This means doing what introverts do best: Make deep and meaningful connections one workmate at a time,” she said.  

George-Denniston added that while some people may lose ground at work because they are not having casual interactions with their colleagues and boss, being at home does provide different opportunities. Individuals can demonstrate how they are delivering quality work at a faster pace because they are not jostling co-workers for a meeting room or quiet space in the office. 

Nikki Hawke, CMO at Montreal-based global digital out-of-home ad tech firm Hivestack, has managed staff remotely for years and said ensuring no-one is unwittingly ignored can be a challenge.

“When I began at Hivestack in August there was one employee who reported to me who I noticed immediately. She was well-presented online, demonstrated she was a team player and had her camera on during virtual meetings,” said Hawke. “I have had to coach other people to understand the importance of these things because managers need to know someone is engaged. They need to see who the problem solvers are and who can communicate effectively.”

Using collaborative tools such as Slack has helped the quieter members of Hawke’s team. The company also organizes social events on Zoom so people from across the company can interact.

“When we go back to the office we need to make sure that those who still prefer to work at home are not left out. There will be a return to drinks after work and face-to-face networking events, and conversations that started during online meetings will continue afterwards.”

Ultimately it comes down to the management style and culture of each organization whether people are unintentionally overlooked. Managers must be aware of each individual’s personality type and not only acknowledge their output but also appreciate what someone working at home could offer. They might be ideal for a project or vacant role, even if they haven’t openly expressed an interest.

Cindy Machles, CEO at Glue Advertising and Public Relations, agrees it is the responsibility of senior leaders to ensure everyone remains visible.

“This requires diligence from the top,” she said. “I speak to senior leaders by phone and in one-on-ones at least weekly, and my direct reports are in contact with their team members throughout the day. It is their recommendations that guide promotions, raises and bonuses.”

Glue holds online status meetings on a Monday where every team member is asked to discuss projects and mention where they would like support.

“These sessions are critical for camaraderie and recognition,” said Machles. “Everybody speaks, so everybody gets noticed regardless of personality type. We also have brainstorming sessions where we proactively look at client businesses as a broader group. These help feed the creative process.”