Network advertising industry is in the shuffle stage, the dialogue around mergers and acquisitions is fast warming up

Network advertising industry is in the shuffle stage. At present, the industry has dozens of start-ups, but the lack of diversity, and limited size, now they have to face the increasingly narrow living space to achieve.

The number of mergers and acquisitions related to "advertising technology and services" reached 100 in 2014, up 32% per cent year-on-year, according to Coady Diemar of investment banking services. The total amount of these deals amounted to $7.5 billion trillion, more than three times times the total amount of the industry's acquisitions (2.3 billion US dollars) in 2013.

Established technology companies and media companies are aggressively acquiring small start-ups to boost their competitiveness in the online advertising arena.

Last year, social networking giant Facebook funded about 400 million dollars to buy LiveRail, a video advertising company. Yahoo agreed to buy a video ad network BrightRoll at a price of 640 million dollars. Oracle also datalogix the advertising data company, which is an important partner for Google and Facebook. This kind of purchase details can also be long.

At the same time, a large network of advertising companies are still chasing limited business opportunities. Look at the number of companies that provide the advertising demand side platform, and they rely mainly on software tools that can automatically buy online ads. There are currently dozens of such companies, including Media-math, Turn, Dataxu, the mini-advertisements Desk, Audiencescience and Merchenta.

In addition, in the field of network advertising, as well as Google and AOL and other established strong enterprises.

"There are several companies that can become top companies in the industry, gain opportunities and others may lose their capacity to scale," says Sanjay Chadda, general manager of investment banking Petsky Prunier. ”

The investment bank said its tracking showed that 2014 's digital advertising-related mergers and acquisitions activity grew by 28%, with a total of three times times the size of 2013 years, and is expected to grow further.

Trens Kavaga Terence Kawaja, a luma of investment banking focused on digital media, says there is no room for 20 major online advertising companies in the long run. "I don't know what the exact number is, but it could be less than 10," Kavaga, blaming the growing market share of Google and Facebook for the narrow living space. ”

For advertisers, the patchwork technology offered by dozens of of companies is neither attractive nor efficient. With that in mind, several companies, including Google, Facebook and AOL, are building claims of large, simple, efficient end-to-end systems to meet the needs of all advertisers for digital advertising,

Colin R. Knudsen, general manager of the investment banking services company Coady Diemar, said: "Advertisers and advertising agencies are demanding more effective advertising campaigns, and they are growing in size." "Nuderson also said that only one or two specific services for small companies will be more expensive, only the best enterprises can become a standing entity, to achieve sustainable development."

Online advertising companies often claim to have super-class products, technologies, and algorithms that are superior to competitors, but it is difficult to form a clear core competency, as this requires one by one of advertisers to know. In addition, small companies often boast that they can innovate faster and run more efficiently than large, unwieldy businesses.

As investors seek to leave the market, the network advertising industry reshuffle trend in 2015 will be further deepened. In recent years, online advertising companies have received tepid attention in the open market, and many private companies may see the search for scale as a better choice than an IPO.

Advertising-buying software company Rocket Fuel, video advertising company tremor videos and mobile ad network company Millennial Media are now significantly below the IPO offering price.

"The dialogue around mergers and acquisitions is rapidly heating up," Kavaga, CEO of Luma, said.