How Consolidation can Help Safeguard the Future of the Open Web

By Peter Wallace, General Manager, EMEA at GumGum

The long-awaiting thaw in adtech M&A activity has finally arrived if Cannes Lions last month was anything to go by. The annual festival coincided with a string of M&A deals between independent ad players. Equativ and Sharethrough, for example, announced a merger and pledged to become “one of the largest global independent ad platforms”.

Meanwhile, Madhive acquired Frequence, to combine CTV adtech with the latter’s omnichannel reach. Other mergers announced at Cannes include a $185 million agreement between mobile ad businesses Verve and Jun Group.

Some may view this activity as a welcome return of investment after a tough economic cycle. But I’d argue there’s something more profound at play. Cannes Lions was also a reminder of the immense influence of the tech giants in our industry. In the face of this competition, consolidation has become essential for safeguarding the future of independent adtech and for protecting the Open Web.

Challenging the monopoly

The likes of Google, Meta, Amazon and TikTok are dominating vast swathes of US ad spend and despite various legal woes (e.g. over antitrust and data security issues), their power is only becoming stronger.

But the domination of the walled gardens is far from inevitable if independent players in our ecosystem can learn to work together to pool their strengths. This idea is what’s behind a growing influx of consolidation in our sector – writ large at Cannes via blockbuster M&As and strategic partnerships.

Vendors are increasingly drawn by the opportunity to work with complimentary solutions that can provide access to tactical technologies, particularly in the cookieless arena. AI-led contextual targeting is a prime example, a technology which is considered by many to be the natural successor to behavioural advertising, and which has been largely pioneered by independent players in the industry.

But while innovation has never been a problem for independent vendors, scale has, and that’s arguably the most important benefit that consolidation could unlock. By working together rather than against one another, adtechs can achieve a scale that they never could alone, allowing the very best technologies to rise up and take on the tech platforms at an equal level.

A return to consumer centricity

The other great strength that I believe will be bolstered by consolidation is independent adtech’s stronger inclination towards user-centric thinking. I believe the walled gardens are primarily driven towards beating each other and much less concerned with the consumer experience. The attempts of the tech giants to develop post-cookie targeting solutions that lock advertisers and consumers into their own ecosystems has exposed this ulterior motive.

Digital advertising is also just one cog within a much bigger machine for the walled gardens. Because of that, the need to create solutions that both respect consumers and benefit advertisers is far less of a priority than it is for independent vendors, for whom it is mission critical.

That’s why the best privacy-first solutions and technologies will continue to emerge outside of the walled gardens, driven by the most innovative independent companies. Greater consolidation will mean these players can combine their strengths to ensure consumer-centricity is baked into digital advertising at every level.

An equitable future

The battle for an open, fair internet – one that’s led by privacy-first technology, editorial excellence and world-class standards of transparency – can only be won with a thriving independent adtech sector.

Rather than fighting each other while the walled gardens continue to gobble up our industry, we must look for every opportunity to collaborate and drive privacy-first approaches that fuel the open web and maintain power with the consumer. It’s clear that consolidation will be a powerful catalyst for making this happen.

With Cannes Lions setting the tone, expect to see plenty more M&A movement over the next 12 months, as we push to level the playing field and challenge those that threaten an equitable future.