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The Winning Curve

Powered by SourceKnowledge

Category
Programmatic
Author
Laura Canter

Why Wall Street Loves Ad Tech

The advertising industry is constantly evolving, becoming more sophisticated and nuanced at a rapid pace. This is critical for success, as today’s customers are not impressed with the impersonal, flashy banners ads of the past and demand a more creative approach to advertising that speaks to their interests and needs. To accomplish this, the technology that supports modern advertising has become more powerful than ever, allowing publishers and advertisers to keep up with the expectations of savvier audiences.

As a result, spend on advertising and advertising technology continues to rise - programmatic ad spend alone is expected to reach $20 billion this year, and experts don’t anticipate it to peak anytime soon. But marketers and publishers aren’t the only ones taking note of the powerful advantages that ad tech provides. The breadth of the industry, uncapped growth of advertising spend and exciting developments announced on a regular basis make advertising technology an attractive target for Wall Street as well.

Unstoppable Growth

The momentum of the ad tech industry makes it one that investors cannot afford to ignore. Overall, digital ad spend is predicted to grow by nearly 16 percent, or $83 billion, showing that while Google and Facebook may be the major players, there is definitely an opportunity for both advertisers and ad technology to make its mark in the industry. From the search giant’s more traditional search and display ads to Facebook and mobile advertising, publishers and advertisers alike are all looking to expand their advertising programs and use of advertising technology.

Size of Digital Advertising

While digital advertising grows, other more traditional advertising channels are already on a declining path. Television, once the reigning champion of ad spend, in 2017 will comprises less than 36 percent of all media advertising. This change results from millennials watching less television than previous generations, combined with the fact that 60 percent of people prefer watching video online to on their television. By contrast, the audience on digital channels continues to grow, as do the number of unique channels for displaying ads - and at nearly 39 percent of media ad spend, it has already overtaken television.

Ad Tech’s Inflection Point

Another factor that makes advertising technology an attractive investment for Wall Street is the fact that the entire industry is at a transitional stage, an inflection point. Digital advertising, in particular, is in the process of defining both what it is now, and what it will be for the future. This makes it a critical time period for investing in the companies that will determine ad tech’s focus over the next few years and even decades. The rapid changes and value of ad tech is evident in the amount of ad tech and marketing tech deals, which numbered more than 400 in 2016.

Looking to Future Success

From search king Google to social empire Facebook, there are definitely some major players in the advertising industry - but there are still plenty of opportunities for others to use ad tech to their advantage. Without the technology, the opportunity provided by the growing field of digital advertising will be lost. The organizations that will continue to thrive in this complex, rapidly changing environment will be those, like SourceKnowledge, who have the right technology and the knowledge to optimize it.

Why Wall Street Loves Ad Tech

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