 Check out the latest Next in Media Podcast with Mike Shields, featuring U of Digital's Shiv Gupta. They talk about the Trade Desk's marketing prowess, Disney's embrace of ad tech, why the cookie delay has everyone in limbo, and more!
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Why Oracle is shutting down its advertising business, which once brought in billions in revenue🔒
Source: Business Insider
Summary: As recently as 2022, Oracle's ad division was generating $2B a year. Revenue fell to $300M during their most recent fiscal year, and now Oracle is shutting down the business unit completely. It's quite a turnaround considering that Oracle spent $4B buying ad companies over the years. It spent $400M on data management platform BlueKai, $1.2B on data broker Datalogix, $850M on measurement company Moat, and $200M on social data company AddThis in 2016. The data privacy movement hit Oracle hard in recent years, including when the Cambridge-Analytica scandal caused Meta to stop allowing Oracle and other third-party data providers from offering targeting on its platform. The EU's General Data Protection Regulation also ended Oracle's AddThis business in Europe, where unconsented third-party data was no longer welcomed. According to former employees, Oracle never properly invested in their Marketing Cloud and Oracle Advertising, dooming the business.
Opinion: Pour one out for some OG ad tech brands like BlueKai, MOAT, DataLogix, and Grapeshot. It’s possible that some of these brands get salvaged in firesale deals, but who knows. Oracle is getting out of advertising because it’s a rounding error on their balance sheet and not worth the headache, especially as cookies go away and there’s no guarantee they’ll be able to transform their business for a cookieless future. So what’s the impact of this deal on the broader landscape?
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Competitors like Adobe and Salesforce might see the writing on the wall for their own advertising products and sunset them. After all, it’s a copycat industry.
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Smaller, more niche competitors like Lotame, Peer39, and DoubleVerify will use this as an opportunity to grab Oracle’s customers.
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Marketers, agencies, DSPs, and SSPs will need to find ways to fill the data targeting and measurement void left by the death of BlueKai and DataLogix.
It’s easy to sh*t on Oracle and say they screwed up (they did), but the counterpoint is that they are being realistic now and know their business won’t be able to withstand signal loss. There’s too much risk associated with uncertainty of it all, so it’s time to cut their losses. Other companies will wait till the last minute and it’ll be ... uglier.
Privacy takes another victim (probably for the best in this case) and industry consolidation continues.
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Equativ Is Acquiring Sharethrough to Compete Among Undifferentiated SSPs🔒
Source: Adweek
Summary: Speaking of consolidation, supply-side platform (SSP) and ad server Equativ hopes that consolidating with Sharethrough will help it become a top three SSP and compete with Magnite and PubMatic, the two largest, independent, publicly traded SSPs. Joining forces would give Equativ (formerly known as Smart AdServer) better geographic coverage. It's based in Paris and New York, with 40% of its business coming from the U.S., 40% from the EU, and the rest from Latin America, Middle East, North Africa, and Asian Pacific. Most of its customers are independent agencies and direct advertisers. Most of Sharethrough's business comes from tier-one agencies, holding companies, and Fortune 1000 brands in North America. The combined company would have $200M in net recurring revenue and 720 employees. The deal makes sense at a time when marketers want to work with fewer partners, but how much will the combined company be able to differentiate? Terms of the deal were not disclosed.
Deal Grades:
Equativ: C
ShareThrough: B-
Opinion: It seems like M&A is really, actually heating up! Ad server + SSP is a classic ad tech playbook. It’s the playbook that got Google to where it is today. Unfortunately, many companies have tried to copy this playbook and haven’t succeeded. There is some value in the aggregating scale as an SSP, because scale is the name of the game in this space. But we’re concerned about the ‘falling tides’ (commoditized SSP tech, display and native formats, ad serving) and the lack of ‘rising tides’ (CTV, proprietary data / inventory, differentiated tech) in this mashup.
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Roku Will Pass More Data In The Bidstream
Source: AdExchanger
Summary: The Roku Exchange will enable programmatic buyers to access almost all the same data as direct, IO based Roku buys and Roku OneView buys, including bidstream information about the content surrounding ads, the length of ad breaks, and metadata about networks, channels, and genres. Buyers will be able to utilize their programmatic tech of choice. The only data that will be held back is show-level data (because of privacy reasons). Roku Exchange integrates with both DSPs and SSPs like Magnite. The exchange will kick off with inventory curation for pre-roll and mid-roll ads within Roku-distributed content such as The Roku Channel. Buyers will eventually be able to use the exchange to access inventory packages with home screen ad units, including those on the Roku City screensaver.
Opinion: Not every company can be a walled garden. You need a ton of unique inventory and data, great buying tools, and patience. While Roku had a lot of the necessary ingredients for a successful walled garden, the patience part got too hard. Roku is opening up their data and inventory to the programmatic space because they are under a tremendous amount of financial pressure and they can’t afford to play the long game; they need to maximize short-term revenue. This marks the end of Roku’s ambition of being a publisher + DSP walled garden business. It’ll be interesting to see if Roku eventually pivots towards becoming more of an SSP and bypasses traditional SSPs by integrating directly with the DSPs. That would make sense. For now, walls are coming down, Roku makes more money, the still-standing SSPs and DSPs benefit, marketers get to consolidate their buys further, and the industry matures...
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That's it for this week's newsletter. Drop us a line with any questions / feedback.
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