Seth Ulinski

Editor’s note: Adobe and Microsoft partner up in a series of moves that are strategic on multiple levels, as each company looks to simplify complexities of front- to back-office systems while fending off competitors such as Salesforce, Oracle and SAP.   HAMPTON, N.H. – Adobe and Microsoft announced last week an update to their strategic partnership, specific to CRM and customer engagement. Adobe Experience Manager, a leading content management solution and Adobe Marketing Cloud component, is now integrated with Microsoft Dynamics 365, a CRM system tailored for supporting sales and lead management needs of the largest enterprises. While details are...

Editor’s note: In lessons learned from attending the MarTech conference for marketing executives, Technology Business Research Analysts shares lessons learned, including insight from best-selling author Seth Godin. HAMPTON, N.H. – As team and technology integrations become integral to marketing success, distributed leadership and new personas emerge For brands to compete for consumer attention in the real and digital worlds, historically siloed processes across marketing, IT and management must become integrated, from both a technology and cross-team communication standpoint. During the recent MarTech Conference 2017 opening day keynote, Program Chairman Scott Brinker summarized this need, “An enlightened model has to...

Editor’s note: In the second part of an in-depth report about trends in the ad tech industry, Technology Business Research picks the top players among public and private companies in each of seven different categories. HAMPTON, N.H. – Maximizing ownership of the media technology value chain will provide the  greatest business opportunities for most vendors  Companies that combine original content with the ability to monetize via advertising and/or  subscriptions will be best‐positioned in the future.  AD TECH REPORT PART ONE: The future of ad tech Those that own the infrastructure to deliver content and advertising will maximize revenues and profits. Vendors that deliver original content, targeted ads and reduced ad load will be positioned for an equitable value exchange with consumers. This will offset  trends in ad blocking, while investments and alliances with ad fraud specialists will help mitigate  potential revenue losses due to weaknesses in the digital ad value chain. As traditional TV and digital channels converge and the vendor ecosystem consolidates, omnichannel will become a reality for  marketers.   Top 3 public companies by segment  Based on TBR’s Ad Tech Vendor Benchmark, Ad Tech Customer Research and Ad Tech MarketView Report, these vendors maintain strengths that position them to dominate revenue and profits:   Digital natives: Facebook, Google and Amazon    Telecom operators: Verizon, AT&T and Comcast   CX clouds: Adobe (Nasdaq: ADBE), Salesforce (NYSE: CRM) and Oracle (NYSE: ORCL)  Pure plays (public companies): The Trade Desk, Criteo, Telaria ([NYSE: TRMR] formerly Tremor  Video)  As the market evolves, not all vendors, particularly pure plays, will have the resources to maintain the  pace of innovation required to compete with enterprise companies. For example, Amazon (Nasdaq: AMZN) maintains leadership positions in e‐commerce and cloud infrastructure services, allowing it to  invest in its ad tech unit, Amazon Advertising Platform (AAP).  Walled gardens such as Facebook and Amazon limit effectiveness and value add of independent ad tech  vendors. It will be imperative for privately held vendors to forge strategic alliances with global brands,  agencies and holding companies that control ad spend and set the stage for integration opportunities.  Top 3 private companies by segment  We’ve...

Editor’s note: New business models create a mixed bag for vendors in ad tech. Here’s a look at the future from Technology Business Research Analyst Seth Ulinski. This is the first of a two-part report. HAMPTON, N.H. – The $32 billion advertising technology (ad tech) market is a faster‐growing subsegment of the $200  billion digital ad industry. With an 11.8% CAGR projected through 2021, ad tech is fast becoming the  lynchpin for planning, executing and optimizing omnichannel campaigns for digital channels, including  advanced TV.  However, there are many other opportunities arising in the ad industry for ad tech  vendors such as Google, Criteo (Nasdaq: CRTO) and The Trade Desk (Nasdaq: TTD) as well as multi‐line  technology vendors that directly or indirectly operate in this market, including AT&T (NYSE: T), Verizon  (NYSE: VZ) and Comcast (Nasdaq: CMCSA). As a result, TBR believes ad tech is reaching an inflection  point whereby three varying futures are possible, namely that ad tech will continue to add value  through the monetization of content, require innovation to add value, or hold little to no value.  Future No. 1: Ad‐supported content — a business model under pressure as  consumer viewing shifts to digital channels and subscriptions   The current ad‐supported model that is the lifeblood of many content owners will remain intact despite  pain points such as ad fraud and ad blockers, two plagues in the digital realm, as well as cord‐cutting,  which impacts multichannel video programming distributors (MVPDs). With the legacy ad model facing  headwinds, media technology vendors able to leverage infrastructure, subscribers, content and ad tech  will be insulated, and in some instances able to increase revenue and profits. AT&T aims to do this with  the pending acquisition of Time Warner (NYSE: TWX), as AT&T CEO Randall Stephenson implied that  advanced TV ad targeting will command a premium, allowing the company to decrease ad load. The fact  that a major telecom vendor is considering fewer ads highlights the value proposition of data‐driven ads,  both for marketers that seek higher ROI and for consumers who have become overloaded with brand  messaging. Future No. 2: No advertising — not feasible for most media owners  Consumers have limited disposable income for subscriptions, making it highly unlikely that media will  shift exclusively to subscription‐only formats made popular by Netflix and Amazon. Meanwhile, media  heavyweights such as NBCUniversal (owned by Comcast) and Time Warner (soon to be acquired by  AT&T, pending government approval) are generating billions in advertising revenue and profits. A seismic shift to subscription‐only businesses would be a massive and risky undertaking for these key  players.   Future No. 3: Ad‐infused — augmented reality and virtual reality technologies  support variations of the legacy ad model  Pressure on the incumbent ad model will create more opportunities for ad‐infused models, including  product placement, fueled by augmented reality (AR) and virtual reality (VR). While AR and VR are in  their infancies, this niche market will become a legitimate channel that captures billions in ad dollars as  marketing and technology blur the lines between brands and content owners, creating a new customer  experience (CX). This is where pure plays, CX clouds and media technology vendors will capture growth  in the next five to 10 years.  While three potential futures are most likely for those companies already immersed in ad tech,  enterprise software vendors and device manufacturers are in the early stages of rolling out ad tech‐ enabled platforms that will flourish in the consumer‐centric data economy. For example, Verizon is  offering discounted mobile plans to consumers in exchange for monitoring device behavior. This “give to  get” approach will pave the way for Data as a Service (DaaS) revenue opportunities via Verizon’s ...

Editor’s note: Salesforce captures opportunities across advertising, marketing and commerce, and a crash course with WPP may be imminent, says Technology Business Research Analyst Seth Ulinski. HAMPTON, N.H. – WPP is taking a hit as brands transform business models to compete in a digital world and as platforms become the new agency retainer The digital era is forcing enterprises to adjust the ways in which they engage with consumers, impacting advertising, marketing and commerce. WPP, the largest agency holding company in the world, with $70 billion in revenue and over 200,000 employees, is experiencing a trifecta of headwinds as...

Editor’s note: Facebook and Google face increasing competition from two emerging rivals – Verizon combining with Under Oath and Amazon – says Technology Business Research Analyst Seth Ulinski. HAMPTON, N.H. – TBR estimates Facebook and Google will capture approximately 55% of the $200 billion in digital ad spend in 2017. By leveraging a combination of global subscribers, engagement data and advertising technology (ad tech) to support ad buying and selling, both companies will command significant market share. At a high level, Facebook capitalizes on ad opportunities via communication gateways and Google via queries (i.e., search), its DoubleClick suite and...

Editor’s note: Seth Ulinski is a senior analyst in TBR’s Digital Practice, covering digital advertising, advertising technology (ad tech), marketing technology and agency landscapes. Seth provides analysis of vendors including public companies such as Facebook, Google, Amazon, Oracle, Salesforce and SAP. In addition to business performance of public vendors, Seth analyzes private firms and industry trends through syndicated reports and custom engagements. A Q&A with Ulinski about the latest trends in omnicnalle developments: What are the top omnichannel trends? Today’s digital consumers increasingly dictate how, where and when they engage with content. Omnichannel is the new complexity, and it...

Editor’s note: After billions of dollars in venture capital investment and initial public offerings, a fragmented  advertising technology (ad tech) sector is maturing and consolidating with new challengers rising to face Google, says Technology Business Research analyst Seth Ulinski. HAMPTON, N.H. – As ad tech consolidation continues, new challengers are lining up against Google. After billions of dollars in venture capital investment and initial public offerings (IPOs), a fragmented  advertising technology (ad tech) sector is maturing and consolidating. On July 18 ad serving vendor  Sizmek announced it would acquire programmatic ad‐buying specialist Rocket Fuel (Nasdaq: FUEL) for  $145 million, including debt. In 3Q16 Sizmek was acquired by private equity firm Vector Capital for $122  million. By integrating Sizmek and Rocket Fuel assets, Vector Capital looks to assemble a formidable  contender against Google, which has largely cornered the ad serving market via DoubleClick. Rocket Fuel’s journey  In 2013 Rocket Fuel’s IPO raised $116 million, with a market cap that approached $2 billion during the  first day of trading. Since then, the company has struggled to sustain a combination of revenue growth  and profitability. Rocket Fuel achieved growth early on (e.g., 73.9% in 2014 and 18.0% in 2015);  however, the company has been challenged to demonstrate a sustainable, profitable business long  term, particularly as programmatic advertising has shifted from insertion orders and a managed service  delivery model to a SaaS model based on volume. As a result, the company’s trailing 12‐month metrics  for operating margin and net revenue were ‐14.2% and ‐23.8%, respectively.   Client demand for self‐service platforms resulted in increased transparency and control, as well as  improved intelligence and operational efficiency. This put Rocket Fuel at a disadvantage since its user  interface was built for internal staff rather than for agencies, trading desks and in‐house marketing  teams. Another factor the demand‐side platform vendor contended with in the fast‐moving ad tech  market was lack of an integrated data management platform (DMP). Rocket Fuel addressed SaaS and  DMP shortcomings through R&D and the acquisition of peer X+1 for $230 million in 3Q14; however, this  only solved for the technology side of the equation.  To build a profitable SaaS‐led enterprise, the  company needed a road map for scaling the business, including go‐to‐market strategies for agencies,desks and inhouse marketing teams. The company identified trading desks of agency holding  companies as a pillar to its corporate turnaround strategy, but cracking the agency code was a challenge  until 3Q16, when Rocket Fuel signed an agreement with one of the top six holding companies.    Scaling a profitable SaaS business through agency holding companies and  usurping incumbents has been a tall order for Rocket Fuel  In recent quarters Rocket Fuel CEO Randy Wootton stated that the company had signed agreements  with agency holding companies, but that activation of campaigns was slow. This could be attributed to  the strength of incumbents, such Google and The Trade Desk (Nasdaq: TTD), as well as Rocket Fuel’s  previous efforts to work with brands directly, potentially disintermediating agency partners. Higher  margin SaaS revenue streams required significant volume to offset the loss of lower‐margin managed ...