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A recently released report from independent consulting firm Technology Business Research projects that ad tech revenue will increase from $30B in 2015 to $100B in 2020 — a 300%+ increase over a 5-year span. According to MediaPost, this rapid boost in revenue is a clear reflection of “advertisers’ continued shift toward digital formats and the rise of self-serve platform offerings.”
To formulate the $100B figure, the consulting firm evaluated vendors from four different segments — data management platforms, demand-side platforms, ad exchanges and hybrid platforms — taking into account their company size, global presence and profits as well as their business models (self-serve vs. managed services). As you can see from the crowded chart below, the advertising ecosystem holds many possible partnerships and integrations for digital decision makers with 2015 budgets to spend; the key question is where to invest money and personnel in order to maximize resources and gain a 360 degree view of the customer funnel. Seth Ulinksi, Senior Analyst at Technology Business Research says it is possible: “The concept of a fully integrated digital marketing stack is becoming a reality for chief marketing officers (CMOs) and chief digital officers (CDOs).”
In a press release for its Ad Tech Vendor Benchmark, TBR posits that “End users are ramping up ad tech investments to maximize media performance, improve operational efficiencies and leverage big data.” But the advantages of leveraging Software as a Service go beyond keeping first-party data close; direct-to-publisher media buying also has substantial long-term cost benefits. An in-house advertising investment means no more media markups from agencies or middlemen, and black box operations are frequently cited by CMOs as a reason to leave the traditional agency model of media buying behind. In “Ad Tech” Companies Are Selling More Ad Tech by The Wall Street Journal, reporter Jack Marshall muses, “So why are marketers opting to buy their own ads instead of buying media packages? Transparency, mostly. Buying their own ad space gives marketers greater visibility into exactly where their money is going.”
As we’ve learned from partnering with 200+ direct response-focused ecommerce and gaming customers over the past five years, digital advertisers yearn for simplicity. In a sprawling ad tech ecosystem, the vendors who offer direct access to customer data and a window into automated bidding logic will have a clear advantage. As we continue to add social media and mobile channels to our ad automation platform, we will also continue to deliver best in class business intelligence tools to in-house advertisers who understand the value of owning their marketing messages.