Dive Brief:
- At the IAB leadership meeting Sunday, Terry Kawaja founder and CEO of Luma Partners—an influential investment firm—predicted that "Winter is coming" for ad tech.
- He explained that a bubble may be about to burst as there are approximately 2,000 venture backed ad tech firms—with only 150 poised for a liquidity event.
- Eventually, Kawaja predicts that all the ad tech firms will end up being picked up by 10 to 15 conglomerates like Yahoo, Facebook, and Google.
Dive Insight:
The digital world is no stranger to bursting bubbles, and all trends point to ad tech being the next one to pop. The Game of Thrones reference certainly helps put a visual on where the market is heading, which alludes to struggling firms pledging allegiance to several power players.
The picture Kawaja already makes sense: AOL has acquired five ad tech companies, Facebook and Yahoo are known to invest in ad tech, with acquisitions being a part of the plan, and Google almost has a monopoly on the programmatic ad buying process. So those already invested in the game should be looking for a real exit strategy, and make themselves attractive to potential acquirers.