While the years 2014 and 2015 were each once heralded as “the year of ad tech consolidation,” 2016 may easily blow away anything previously witnessed in this sector. Those years, it appears, were just the warm-up.
Merger and acquisition (M&A) moves in the marketing technology, advertising technology, and digital content sectors have mushroomed in 2016 as visionary firms seek to offer a panoply of complimentary services.
In the first quarter of this year, there were 72 M&A events — reportedly the second-highest quarter for such activity since early 2015. Digital content sector transactions alone spawned 34 of them, with seven pegged at valuations of more than $100 million.
What’s the incentive for all of these consolidations? Basically, it streamlines things for marketers when they can get most of or all of the services they need from one provider. In tandem, companies that offer everything from a platform to ad serving technology, targeting technology, data analysis, and/or other services are better positioned to grow and prosper.
Mobile, of course, is the driving force. In fact, researchers forecast that by 2019, mobile ad spending will rise to $65.87 billion and will constitute 72.2 percent of total digital ad spend. It will result in substantial demand for digital marketing and advertising services. That’s a huge incentive to companies that want to serve digital marketers.
While decreased competition can be a common drawback of consolidations (more than a few watch acquisition moves by giants like Facebook and Google with some trepidation), there are also benefits: increased standardization, better ad quality, clarity and consistency for marketers, and more a more efficient menu of tools for digital advertisers.
What company is among the best of the digital firms pursuing an M&A strategy? One notable contender is Mobvista. Earlier this year, this shrewd and forward-thinking Asian mobile ad platform — a leader in its market space — purchased Denmark-based GameAnalytics, a behavioral analytics platform for game developers.
“The acquisition will help China’s Mobvista extend its international reach and help game developers simplify their businesses by providing an ad-tech platform that helps drive revenue and lifetime value,” noted a report from Venture Beat that heralded the acquisition. “Mobvista said it chose GameAnalytics for its rich player insights, which complement Mobvista’s proprietary ad tech and unique native ad mediation service.”
Today, Mobvista is well positioned because of its resources and talent to capitalize on rich market opportunities made possible by the company’s far-sighted steps in recent years. The Chinese ad platform is now in rapid expansion mode after its success in user acquisition and app monetization.
It has been a short but very busy journey for Mobvista. When the firm first started in 2013, it specialized in helping app companies achieve user acquisition in key regional markets such as Southeast Asia, the United States, and India.
According to Mobvista’s VP for business development Yuan Xi, the company was “privileged” to benefit from the growing mobile market and globalization trend in China.
“Advertising beyond the China market was a major trend within the Internet industry in China during that time,” explained Xi. “Some big names in the industry, like Baidu, Alibaba, and Tencent were our initial clients. Through the campaign solutions (we) provided, these clients saw our capabilities in app marketing.”
In recent months, the company has diversified its clientele (it now serves a global roster of companies) and now offers them more comprehensive and innovative marketing solutions. Currently, Mobvista has established 11 offices globally (FYI:Hong Kong / Guangzhou / Beijing / San Francisco / New Delhi / Singapore / Minneapolis / SartellJarkata / London / Copenhagen), with local teams based in every major market. Some of its clients include Uber, Paytm, VNG, Lazada, etc.
We’re told that overseas business accounts for 40% of total revenue.
“We’ve evolved from a business-driven company to a technology-driven company, offering our clients top-notch advertising solutions in the industry, through ensuring higher efficiency and precision, and introducing automated solutions in our marketing process,” Xi said.
One move Mobvista made right away was to purchase NativeX, a U.S.-based mobile advertising platform that offers native ad technology for mobile apps and games.
“End-consumers prefer native advertising to banner popups within the app, as the experience is less intrusive and follows the form of the app or even the news feeds,” Xi explained. “We’ve received feedback from our clients that the consumer experience has been positive with native advertising, and we believe that native advertising will reign in Asia for some time.”
In a mobile marketing universe dominated by internet giants, Mobvista has gained a firm foothold in industry rankings. One reason is that Mobvista’s traffic currently takes in more than 240 countries and regions. Its robust development —backed by its business model and strategy — is rarely seen in the competitive mobile marketing industry. In fact, in the AppsFlyer Performance Index released in February, 2016, Mobvista ranked Number 3 in the Android Ranking (non-gaming) following Facebook and Google AdWords and Number 1 in Asia. As for its iOS strength, Mobvista was the only Chinese advertising network included in this ranking for two consecutive quarters.
Now finalizing a funding round of U.S. $100 million in order to pursue further digital tech prowess, Mobvista already offers a variety of performance-based SSP ad formats, including Native Feed Ads, App Wall, Rewarded Video, and Interstitial. Working with 10,000 publishers, the company handles 15,000 apps and boasts a 97 to 99 percent fill rate. Ads requested top 5 billion.
In addition, Mobvista’s precise targeting pipeline is powered by three terabytes of data. Its user-based targeting is ideal for marketing campaigns based on location. Workflow is automated and optimized via an advanced algorithm.
Mobvista’s technologically advanced mobile ad platform — which benefits from user targeting based on customer objectives — helps a variety of clients.
“As a critical component of our full stack product strategy, our self-developed native ad mediation platform enables advertisers to target users more precisely and thus lower the cost of user acquisition. For publishers, this product substantially increases their yielding. What we are offering is a one-stop solution for app developers: from user acquisition, data analysis to app monetization, uderpinning this whole process is a SaaS model,” said Xi.
Mobvista is one of a roster of firms focused on smart acquisitions designed to create value for clients, as Snapchat did when it acquired Bitstrips (for an estimated $100 million) and Microsoft as it scooped up mobile keyboard firm Swiftkey (for an estimated $250 million).
And the beat will go on. Analysts tracking merger and acquisition activity suggest that marketing technology firms associated with activity like data analytics are likely targets for future deals we may see in 2016.
There’s no way to perfectly foretell the future, but two things are certain: there will be amazing new digital technologies and consolidations will bring them together for marketers. And one more thing: Mobvista will remain at the center of this whirlwind.
