And the ad tech companies that go public, might acquire more ad tech companies, McKenna said.
“The market is rewarding action,” McKenna said. When Magnite bought SpotX and when Digital Turbine spent $1 billion acquiring Fyber, AdColony and Appreciate, their respective stocks jumped by more than the value of the actual deal, he said.
Right now, with markets so focused on growth, it’s better “to make errors of commission rather than omission,” he said.
The rush to CTV
“CTV has become a crucial narrative for any company that’s touching media, marketing or technology,” McKenna said.’
The TV space is hot: Vizio went public, Magnite bought SpotX, LG acquired Alphonso for $125 million, Comcast’s Freewheel closed its purchase of Beeswax and Roku acquired Nielsen’s video ad tech assets.
The Nielsen-Roku deal held particular interest to McKenna, because it indicates how an OTT player could expand into data-driven linear ads.
“In the traditional TV ecosystem, the supply side is the scarce side of the market,” he said. “Roku, one of the largest AVOD CTV players, is looking for more supply beyond what they’re touching, and moving into data-driven TV advertising.” This migration will be slow – over the next decade – but the trend toward convergent TV is in motion.
Identity crisis? Not in ad tech
When Google Chrome said it would remove third-party cookies last year, it injected plenty of uncertainty into the market. The ensuing pandemic didn’t help matters, halting deal-making for more than 90 days, McKenna said.
But while few know exactly what marketing will look like come 2022, that uncertainty isn’t having a huge effect.
Though Q1 2021 may go unmatched in terms of deal-making, there are still plenty of conversations happening at LUMA that indicate more companies will pair up or go public in 2021.
The new, billion-dollar big fish can snap up smaller ad tech companies. For instance, Magnite was able to purchase SpotX after its stock hit record highs. “There are now very large, viable buyers that are deep in the ecosystem,” he said, along with an influx of consumers consuming media and shopping online – a perfect storm that’s continuing unabated.