Anecdotally, I have recently been cleaning out promo materials and lead lists from digital media conferences several years past. What I noticed was that none of the sponsors have gone out of business. With all of these players fighting for dollars and the natural lifecycle of new technology companies where some make it and some don't, shouldn't some of these guys be dead by now? I expect that is what is about to unfold.
Going forward I think that this signals an unhealthy ad tech market and a coming crash in the speed of innovation. Looks like the big buyers of ad tech may be satisfied with how much they have innovated over the past several years and are ready to pause and digest all of their new capabilities. This gives time for more traditional advertisers to catch up to what they can now do and use it more, making the technology in place much more valuable.
What I see over the next 2 - 3 years is that companies are either going to be:
- A major player within their niche - very few of these.
- Acquired by a larger enterprise - Check out Seth Ulinski's (@digital212) article on ERP companies coming to play ball soon (http://www.adotas.com/2013/09/opinion-when-will-global-erps-acquire-dsps/)
- Profitable, mid market player
- Out of business
With the lack of investment funding, the startup/innovation is going to stall. Acquisitions and consolidation will put talent into the market thereby leading to lower operational costs for new companies.
I predict a new growth cycle to begin starting in 2016 due to a shift toward business friendly and pro growth policies from our government & a change in demographics where millennials are earning more and spending more as they enter the family formation point of their consumption lifecycle. Demographics and their effect on our economy is best saved for another blog post but let me just share that I believe that Harry Dent knows what he is talking about.
