Advertising technology trends: Adtech in a post-pandemic world June 2022

We are pleased to present our views on the Advertising Technology landscape to help increase transparency and communication between adtech companies as well as financial and strategic investors.

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We are excited in the unfolding of the new adtech landscape given aggressive industry consolidation, shift in regulations and changes in advertising behaviour as we continue into the post-pandemic world.

We expect to see a divergence in financial performance between those making aggressive investments now and those who hesitate. We also anticipate an increase in investment and consolidation as financial investors and strategics look for new technologies to cope with the “new normal”.

Adtech Notable Key Themes for 2022:

  • Global Digital Ad spending grew from $236bn in 2017 to $491bn as of 2021 and is projected to further grow to $809bn by 2026 at a CAGR of 11%. The major drivers behind the growth of the adtech market include surges in programmatic advertising spending and mobile advertising spending due to pandemic-induced increases in online traffic.
  • A post-cookie world: As major browsers phase out third-party cookies, digital advertising is shifting towards the use of first-party data, browser-based tracking data, and identity-based tracking data, which are expected to grow the cookie-less advertising segment by $12bn+ in TAM over the next 2 years.
  • Digital advertisements are getting more expensive. In the wake of the post-pandemic rebound, increases in demand without subsequent increases in the supply of ad space have prompted an industry-wide increase in ad price. CPCs for search ads, for example, are up 12% YoY for Q1’22.
  • An increasing number of US retailers are investing in Retail Media Networks either by forging partnerships with DSPs or by developing their own platforms. Walmart partnered with Trade Desk to launch its own DSP and Albertsons launched its own RMN, “Albertsons Media Collective,” in 2021. By 2026, the RMN market is projected to grow to $100bn.
  • M&A and private placement activity have increased significantly: 2022 deal volume is off to a strong start, with the number of M&A transactions up by over 100% and private placements up by over 25% YoY in Q1’22.