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Marketing Technology Barometer – Q3 2017 Market Review

By Rosemary Fallowfield 12 Oct 2017

Welcome to the Q3 2017 edition of the Marketing Technology Barometer – Results International’s quarterly review of the global advertising and marketing technology sectors.

Following on from a strong first half of the year, the public markets have continued to perform well. In particular, our Results MarTech index rose ~26% in Q3, with an overall gain of ~75% over the last 12 months. All constitutes of the index recorded an increase over the last quarter, with Shopify continuing to lead the way: almost tripling in value over the last 12 months. Recently IPO’d HubSpot and The Trade Desk have also soared with share prices increasing over 200%, the latter helping to drive the Results AdTech index up ~22% over the same period. Taptica and Telaria (the rebranded Tremor Video) also had notably strong quarters suggesting that investors approved of Taptica’s acquisition of Tremor’s DSP division. For the first time since our quarterly reports began 13 quarters ago, AdTech was no longer the laggard of the Results indices, leaving the Results Data index trailing behind with ~2% growth over the same period.

Q3 saw a quiet quarter in terms of initial public offerings, with no reported IPOs in the AdTech/MarTech space. In July 2017, Cision listed on the NYSE through a merger with Capitol Acquisition Corp. III (a public investment vehicle and part of GTCR), enabling the media communication technology and analytics company access to new sources of capital and focus on pursuing its platform growth strategy. In contrast, Q3 saw three of the Results AdTech index constituents – YuMe, MaxPoint and Rocketfuel – taken private by larger AdTech acquirers; two of which are backed by private equity, evidencing the continued consolidation among AdTech players as companies look to build scalable end-to-end platforms and become the one-stop shop for marketers. Private equity houses themselves also continued to be active in the market; Providence Equity’s acquisition of DoubleVerify, plays into the same acquisition trend as Oracle’s acquisition of Moat last quarter – investing in leading tech platforms that verify ads and media, giving the industry confidence in whether, and where, ads are being viewed.

After last quarter’s management buyout of UK-based customer engagement and analytics ‘unicorn’ Ve Interactive, this quarter saw its rebrand to Ve Global followed by a $15m cash injection from existing investors. With three $100m+ raises in Q2, Q3 delivered a wealth of relatively smaller rounds, including notable European activity: UK-based kids ad content platform, SuperAwesome, received $21m from Mayfair Equity Partners and Finland-based Facebook and Instagram ad automation and optimisation platform, Smartly.io, raised $20m from Highland Europe.

While deals appear to be declining quarterly throughout 2017, the AdTech/MarTech M&A market is coming off its most active period in its relatively short history and we are likely seeing a normalisation in activity. Market trends are continually positive for the wider tech community and consolidation continues to be rife within both MarTech and AdTech; 2017 and beyond remains exciting for both. As such, now would be a good time to be contemplating fundraising, exit or growth through acquisitions in the AdTech and MarTech space – if you are, please do get in touch.

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Marketing Technology Barometer - Web

We hope that you enjoy the document and look forward to discussing the data and underlying themes with you. We have also produced our view on the previous quarter’s proceedings in a series of other market reviews on:

Digital Services

Enterprise Software

HealthTech

Cybersecurity

The Tech Report (all 5 sectors)

Rosemary Fallowfield

Analyst

Contact Rosemary

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