Execs from Roku, Amobee, Factual, and Xandr are shaking up digital advertising and marketing.
Samantha Lee/Business Insider
After a few quiet years, 2018 was a big one for advertising and marketing tech. Before May, investors and observers worried whether the increasing regulatory scrutiny from Europe’s General Data Protection Regulation would shut down companies or dry up venture-capital funding even more than it has in recent years. And while there were a few initial casualties of GDPR, VC money continued to flow to a variety of companies, from established programmatic players to data-minded startups trying to shake up TV and digital measurement. Seemingly everyone from private-equity firms, agency holding companies, telecoms, and marketing clouds went on acquisition tears, snatching up “mad-tech,” a blend of advertising- and marketing-tech companies. A handful of ad-tech companies either quietly faded or went up for sale. “You could certainly say that 2018 was a year of consolidation,” Mark Wagman, managing director of MediaLink, told Business Insider. “In the view of the marketers and brands we work with, it’s still not yet enough consolidation. They hope that more will happen that will simplify their media-value chain.” In the past our list has often highlighted the hottest pre-IPO companies, but given all the activity this year — and a dwindling number of private companies — we’ve now opened it to public and private firms. So on this list, major companies that generate billions of dollars in revenue join startups expecting to make a few million dollars this year. “Both advertising and marketing professionals should be following a wider swatch of companies who are innovating and executing in this space,” said Ana Milicevic, principal and cofounder of Sparrow Advisers, a boutique consultancy that advises advertising and media companies. Since we’re focusing on upstarts and companies born out of media companies, Facebook, Google and Amazon are intentionally not on the list. That said, the big three are circling practically every one of these companies in some way, whether it’s with its data, power, or potential to disrupt an industry. Methodology There was no one criterion used to decide which companies made our list. The lines between ad-tech companies and mar-tech companies continue to blur. So, similar to last year, this list reflects the growing number of mar-tech players we’re watching, including some that don’t touch paid media at all but instead specialize in data or analytics. We looked at a number of factors in evaluating companies, such as headcount, revenue, and recent funding. We also considered what issues the companies are trying to solve, whether it’s powering millions of programmatic spend or experimenting with blockchain technology. We talked to a lot of execs, analysts, and investors to figure out which companies should, and shouldn’t, be included, based on their reputation and with whom they work. We tried our best to follow where money and marketers’ interest are going. That means a handful of firms valued at billions and have raised millions aren’t included. Most notably, you’ll notice two categories that are less represented this year than in previous years: social-media management and native advertising. Here are the 19 most intriguing ad-tech and mar-tech firms of 2018, listed alphabetically.
Amobee: Buying up independent ad-tech firms to form a giant tech stack
Amobee CEO Kim Perell.
CEO: Kim Perell Employees: More than 850 2017 revenue: $800 million Comment: The growing competition and squeezed margins make it difficult for independent ad-tech companies to operate. Amobee is betting that building a digital-ad business within the Singapore telecommunications company Singtel can save some of those firms and keep money flowing through the industry. Amobee’s bread and butter is software that helps marketers manage data across channels and plan media. It owns data-management platform and demand-side platform Turn, and this year it acquired Videology for $100 million and has hinted that more acquisitions could be coming.
Beeswax: Ad tech in a box for marketers
Beeswax CEO Ari Paparo.
CEO: Ari Paparo Employees: 60 2018 revenue: $25 million Total funding to date: $13.3 million Comment: Most ad-tech companies work by charging advertisers a fee based on the amount of ad spend. Beeswax’s model is different and promises to save customers like Foursquare money by charging them a flat fee based on how much tech and software they need (starting at $10,000 a month), then stores their tech stack in the cloud. The startup says that business has increased 150% year-over-year, primarily from marketers taking programmatic buying in-house.
Braze: Crunching data to make smarter email and push notifications
Braze CEO Bill Magnuson.
CEO: Bill Magnuson Employees: 270 2018 revenue: $53 million Total funding to date: $175 million Comment: Brands are increasingly pumping money into technology that crunches reams of web, email, and mobile data and can fire off millions of personalized push notifications and emails. Braze (formerly Appboy) is somewhat of an alternative to marketing clouds like Salesforce and Adobe but without the high costs and cookie-cutter deals that marketing clouds are known for. And as more marketers focus on collecting first-party data in light of regulation like Europe’s GDPR, the hype is at least winning over investors: Braze raised $80 million in Series E funding in October. The company is now valued at $850 million.
Datorama: Figuring out which digital ads actually work
Datorama CEO Ran Sarig.
CEO: Ran Sarig Employees: 400 2018 revenue: Salesforce Marketing Cloud will make $13.24 billion, according to guidance from its third-quarter earnings Comment: With advertisers desperate to know if their ads are working, Datorama corrals all of a brand’s data into a dashboard and uses artificial intelligence to evaluate media spending effectiveness so that advertisers can shift their investments accordingly. The firm’s inroads with big brands like Ticketmaster and Pepsi grabbed Salesforce’s attention; it acquired Datorama for a reported $800 million.
Factual: Plugging location stats into marketing
Factual CEO Gil Elbaz.
CEO: Gil Elbaz Employees: 200 2018 revenue: Between $40 million and $50 million, according to people familiar with the matter Total funding to date: $104 million Comment: Location-based advertising firms have taken a hit under GDPR because of privacy and legal concerns as well as challenges in targeting ads to smartphones, which is why Factual steers clear of paid media. Instead, the firm helps marketers analyze and measure location stats and powers the mapping technology within apps including Uber, Snapchat, and Apple Maps. In September, Factual clinched $42 million in funding with plans to grow a team in the Asia-Pacific region.
Innovid: Spearheading OTT advertising
Innovid CEO Zvika Netter.
CEO: Zvika Netter Employees: More than 220 Revenue: $60 million in 2017 Total funding to date: $65 million Comment: Innovid is one of a handful of ad-tech companies that got their start in delivering digital video ads and transitioned to dropping ads into connected TVs. The company wouldn’t share 2018 revenue but said that its connected-TV business has doubled this year and now makes up 30% of its total revenue. “They’ve established their presence with digital, but they’ll add scale by adding TV,” Brian Wieser, a senior analyst at Pivotal Research Group, said.
Integral Ad Science: Verifying that digital ads are seen
Integral Ad Science CEO Scott Knoll.
Integral Ad Science
CEO: Scott Knoll Employees: More than 600 2018 revenue: $180 million (trailing 12 months as of June 2017) Comment: Marketers are hungry for third parties to make sure their ads are running next to brand-safe content, and IAS remains one of a few established companies at the forefront of this space. Its edge led private-equity firm Vista Equity to purchase a majority stake in the company in June, rumored to be valued at $850 million. Next up: tackling OTT and TV measurement.
iSpot TV: Measuring action driven by TV ads
iSpot TV CEO Sean Muller.
CEO: Sean Muller Employees: 165 2018 revenue: $40 million, according to people familiar with the matter Total funding to date: $57.8 million Comment: TV ad measurement is a messy problem that a handful of startups are vying to solve. iSpot TV arms marketers with granular viewing data from TV ads by pulling stats straight from smart TV devices. The company has a long-term deal with TV manufacturer Vizio to license data and works with network clients including NBCUniversal to track whether TV ads drive action for brands. In September, iSpot TV secured $30 million in Series C funding.
LiveRamp: Meshing real-world data with digital ads
LiveRamp CEO Scott Howe.
CEO: Scott Howe Employees: 750 2018 revenue: Between $275 million and $285 million Comment: After spinning off Acxiom to Interpublic Group for $2.3 billion in July, LiveRamp became a stand-alone public company solely focused on helping advertisers use offline data like loyalty cards and CRM data to inform digital ads — data that Forrester Research’s Joe Stanhope called “arguably one of the most comprehensive identity offerings on the planet. That’s compelling — there’s a lot of companies that might be interested in that.”
Lucidity: Using blockchain to find ad fraud
Lucidity CEO Sam Kim.
CEO: Sam Kim Employees: 27 2018 revenue: $1 million to $2 million Total funding to date: $5 million Comment: Some think blockchain is more hype than substance, but its potential to shake up how advertising is bought and tracked is still a burgeoning area for advertisers and publishers. After securing an initial $5 million in funding in August, Lucidity is working with brands like Toyota to sniff out fraud and “ad-tech taxes” that layer hidden fees into buying digital ads. The company is also helping the Interactive Advertising Bureau’s Tech Lab’s pilot program to create best practices for the industry.
Marketo: Using data to pinpoint marketing messages to people
Marketo CEO Steve Lucas.
CEO: Steve Lucas Employees: 1,300 2018 revenue: At least $38.4 million, according to Marketo’s credit-rating process Comment: The race to own marketing software that can crunch huge reams of data and target consumers with specific messaging continues to grow, especially for marketing cloud companies. Adobe snapped up Marketo for an eye-popping $4.75 billion in September in its largest acquisition to date, which will help it compete with Salesforce and Oracle with “as comprehensive suite of offerings as possible,” Pivotal’s Wieser said. This year’s expected $38.4 million in revenue represents a 20% year-over-year increase.
mParticle: The anti marketing cloud for managing data
mParticle cofounder and CEO Michael Katz.
CEO: Michael Katz Employees: 110 Revenue: $20 million Total funding to date: $76 million Comment: Think of mParticle as an alternative to the marketing clouds like Adobe and Salesforce — at least when it comes to storing and moving around reams of data for clients such as Airbnb and Spotify. The firm pulls data from websites and apps and then sends it to other tech companies that handle push notifications, email, and advertising.
Roku: Leading the charge into connected-TV advertising
Roku CEO Anthony Wood.
CEO: Anthony Wood Employees: 1,000 2018 revenue: $727 million Comment: Roku is switching from being a hardware company to an advertising juggernaut and wants to power the pipes of publishers’ OTT apps as well as its own app. The company’s growing user base of connected TV owners could help fend off Amazon’s ambitions in tracking OTT ads. During its recent third-quarter earnings, Roku reported that it has 23.8 million active customer accounts, a 43% year-over-year spike.
Shopify: Helping direct-to-consumer brands with e-commerce
Shopify CEO Tobi Lütke.
CEO: Tobi Lütke Employees: More than 3,000 Revenue: $1.1 billion Comment: With 600,000 merchants using its e-commerce platform and marketing tools, Shopify hardly counts as an upstart, which makes its rapid growth remarkable. As more marketers — including a slew of direct-to-consumer customers like Outdoor Voices and Allbirds — handle ecommerce in-house, Shopify is quietly becoming their one-stop shop for everything from fulfillment to analytics and advertising. Earlier this year, the company revamped to let merchants run digital-ad campaigns across Facebook and Google.
SourcePoint: Helping publishers survive GDPR
Sourcepoint cofounder and CEO Ben Barokas.
CEO: Ben Barokas Employees: 25 Revenue: Less than $30 million Total funding to date: $26 million Comment: Sourcepoint started out fighting the rise in ad blockers with technology for publishers that offered people other ways to pay for content, like subscriptions or micro-payments. When the digital-ad industry buzz turned to GDPR, Sourcepoint pivoted, rolling out a consent-management platform that helps publishers tackle how they collect explicit permission from web customers to serve ads while avoiding fees from regulation.
The Trade Desk: Soaring in programmatic advertising
Trade Desk founder and CEO Jeff Green.
The Trade Desk
CEO: Jeff Green Employees: 1,000 2018 revenue: At least $464 million, according to its third-quarter guidance Comment: The Trade Desk is a standout in the notoriously shaky market for public ad-tech companies. Since going public two years ago, the company has continuously performed well, growing revenue 50% year-over-year in the third quarter and impressed media buyers with its account help, self-service platform, and transparency into digital advertising’s often murky inventory and pricing. “They’ve cornered the market on a global basis in a way that just makes them more desirable to use than other DSPs for a number of situations,” Jay Friedman, the president of Goodway Group, said.
Thunder: Giving Google a run for its money
Thunder CEO Victor Wong.
CEO: Victor Wong Employees: 60 2018 revenue: $15 million Total funding to date: $18 million Comment: As marketers pump more money into programmatic advertising, a crop of startups are pitching software that can test and optimize creative on the fly. Thunder has a platform that brands use to track and manage creative and also runs an ad server that competes with Google Marketing Platform, offering brands a solid ad-tech alternative to Google.
Xandr: AT&T’s big bet on advertising
Xandr CEO Brian Lesser.
CEO: Brian Lesser Employees: 1,500 Revenue: $7 billion (including Xandr, WarnerMedia AdWorks and other revenue) in the third quarter Comment: AT&T has big ambitions to be an advertising juggernaut and acquired one of the largest ad-tech firms this year to prove so. AT&T acquired AppNexus for a reported $1.6 billion in June, fueling rumors over which high-flying ad-tech firm could be snatched up next. AppNexus is now folded into AT&T’s recently created Xandr unit, which, under former WPP executive Brian Lesser, aims to shake up TV and digital advertising using data and premium content from sibling company WarnerMedia. “They’re making a big, bold bet,” said Eric Franchi, the founder of Undertone who now invests in digital media and marketing companies at MathCapital.
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