Comic: Apple Who?

2021 was delivered to you by the letters M&A.

After a pandemic-induced lull in deal activity in 2020, final yr was wall-to-wall consolidation throughout the media and advertising and marketing know-how sectors.

Complete deal-making exercise in 2021 was up greater than 82% yr over yr, based on LUMA’s 2021 market report launched final week.

And you’ll expect more to come in 2022, mentioned Conor McKenna, a director at LUMA.

“Based mostly on the conversations we’re having and the bulletins you’re already seeing out there, it doesn’t really feel like we’re slowing down anytime quickly,” McKenna mentioned.

The brand new yr is lower than two weeks outdated, and we’ve already seen acquisitions by Integral Ad Science (of French contextual promoting startup Context), (of London-based Google promoting specialist and Magnite (of cryptographic viewers information startup Nth Get together).

On Monday, T-Cellular acquired rideshare advert community Octopus Interactive.

The 2 foremost classes fueling deal exercise

The vast majority of M&A taking place throughout media, advertising and marketing and advert tech falls into six foremost buckets: cellular apps, information and id, commerce media, audio, the continued maturation of the programmatic ecosystem and, after all, related (or, as LUMA likes to consult with it, “convergent”) TV.

Nevertheless it was cellular apps and CTV that spurred among the greatest offers in 2021.

App assault

On the app entrance, “individuals lastly got here to appreciate that gaming is a large area with large progress that generates a ton of client consideration,” McKenna mentioned. “And plenty of that engagement is pushed by ad-supported fashions.”

AppLovin is essentially the most salient instance of cellular advert tech making good. The corporate has been on a content-buying spree – (see its 2020 acquisition of Machine Zone) – and an advert tech shopping for spree.

AppLovin spent roughly $1 billion apiece in 2021 to amass mobile measurement platform Adjust in February and cellular advert trade MoPub from Twitter in October.

Within the midst of all that deal exercise, AppLovin went public in mid-April.

“We’re seeing cellular advert tech corporations constructing themselves into large entities and actually beginning to bulk up,” McKenna mentioned.

Along with AppLovin, ironSource went public in June, and Digital Turbine, already a public firm, made three advert tech acquisitions in fast succession final yr: AdColony in February adopted by cellular DSP Respect and app monetization platform Fyber in March.

“Just like CTV, the expansion we’re seeing within the cellular app ecosystem is constructed on client traits that aren’t going away, which is creating an enormous alternative when it comes to promoting and monetization,” McKenna mentioned. “The panorama additionally continues to shift, as we’ve seen with the IDFA, and when corporations want to maneuver shortly, they’ll typically flip to M&A.”

CTV eats the world

The necessity to transfer shortly can also be one of many foremost elements driving the breakneck tempo of deal exercise within the CTV ecosystem.

“SVOD, AVOD, FAST – nevertheless you need to reduce it, CTV is rising quickly, and plenty of that progress is accruing to the promoting aspect of issues,” McKenna mentioned.

Subscription video on demand (SVOD) generated plenty of the preliminary progress in streaming. However as CTV matures, subscription fatigue is resulting in an embrace of ad-supported streaming content material – and buyers and analysts are taking discover, he mentioned.

As advert tech corporations hit the general public market over the previous yr, “CTV turned a part of the required narrative,” McKenna mentioned.

Which begs the query of whether or not among the pleasure round CTV is basically simply hype in disguise.

Originally of 2021, tech shares had been extraordinarily frothy, and it was sufficient to easily point out “CTV” on an earnings name to bask within the channel’s mirrored glow.

However that’s now not the case, McKenna mentioned. The market has began to develop up.

“A few of that shine and sheen you’d get simply from saying ‘CTV’ with out with the ability to again it up with outcomes is over,” he mentioned. “Corporations have had three or 4 quarters to mature, buyers have gotten smarter and analysts are asking the appropriate questions – and so corporations are being judged on their capabilities and their outcomes slightly than simply speaking to speak.”

And as a way to get these capabilities shortly, public corporations particularly are utilizing their multiples to develop inorganically. Simply take a look at Magnite, with its acquisitions of SpotX and SpringServe; Blackstone’s majority stake in; and Integral Advert Science’s buy of Publica.

“There’s nonetheless a lot change on the horizon that we’re not even near the tip on the subject of CTV – and it’s nonetheless only a fraction of linear advert spend as we speak,” McKenna mentioned.