Welcome to the 2018 full year edition of the MarTech Barometer – Results International’s annual review of the global marketing technology sector.
Review of 2018:
- We saw continued strong M&A activity with a number of large transformational acquisitions (9 deals over $1bn) with double-digit revenue multiples. Disclosed deal value and volume in Q4 were the highest on our record since we began tracking in 2014.
- The large software players continue to build out their stacks to be a single purchase solution for customer experience: Adobe acquired Marketo ($4.8bn) and Magento ($1.7bn) adding B2B and eCommerce; SAP acquired Qualtrics ($8.0bn) and CallidusCloud ($2.3bn) for greater customer experience feedback & sales intelligence, and Oracle and Salesforce addressed the impact of brand safety and AI-driven data analytics acquiring Grapeshot ($454m) and Datorama ($726m) respectively.
- New buyers in the space included Ipsos who acquired Synthesio, adding real-time first-party social data to their proposition, and Deloitte and Accenture who acquired directly into media execution.
- Our Martech and Adtech share price indices demonstrated positive performance over the last 12 months although there was limited IPO activity. Potential IPO candidates attracted PE interest (Episerver acquired by Insight Venture Partners) or were strategically acquired (Appnexus acquired by AT&T) with strategic M&A paying premiums to the public markets.
- Large funding rounds and minority investments demonstrate the continued confidence in the growth prospects for martech from private equity, including ByteDance ($3bn), AppLovin ($400m) and MediaMath ($225m). Results International advised Baird Capital on its $25m investment in Crisp Thinking (AI-driven brand safety).
Review of predictions made for 2018:
- As predicted, Amazon has gone from strength to strength and is now the world’s most valuable public company. It strengthened its position as a serious contender to Google/Facebook; its ad revenue is estimated to be up 145% on the previous year. Amazon is now looking to build video ad serving technology to rival the Google/Comcast duopoly.
- The introduction of GDPR in May drove focus towards proprietary first-party data; brands now face greater consequences for data privacy breaches and inappropriate ad placement. Oracle combined its acquisitions of Grapeshot and Moat to provide pre-bid filtering. Others with third-party data reliance have found the market dynamics in Europe more difficult.
- As expected, AI and machine learning continued to gain traction in the industry with companies using the technology to drive insight-based marketing, execution and optimisation of real-time media buying.
Predictions for 2019:
- Activity in the private markets will continue with M&A and fundraises attractive alternatives to the public markets as companies continue to delay or cancel IPOs.
- The rising use of AI and machine learning will continue as sophisticated data analytics will be required to power intelligent multi-channel execution and management. Companies in the CDP space and AI-native tools will be highly attractive acquisition targets.
The martech and adtech sectors remain active and the outlook is exciting. As such, now is a good time to be contemplating fundraising, exit or growth through acquisition in the martech or adtech space – if you are, please do get in touch.Read Less