2019 was the year the adtech industry was forced to adapt to sweeping new privacy laws and a rapidly changing media business.
Growing concerns about privacy and the death of cookies that fuel digital advertising; the advent of the California Consumer Privacy Act (CCPA) and Europe's General Data Protection Regulation (GDPR); and tech giants Apple and Google clamping down on how marketers use third-party cookies required many adtech companies to change their pitches to marketers.
Amazon's nascent advertising business gained steam with a new cottage industry of e-commerce-minded firms helping marketers use the platform. Adtech firms also had to join the chase for the $70 billion TV-advertising market.
At the same time, it has gotten harder for adtech companies to raise funding as investors look for sustainable business models with recurring and diversified revenue. And Facebook, Google, and Amazon control about 70% of digital-advertising budgets, leaving adtech companies to fight for the scraps.
As a result, 2019 was a year of consolidation. The holding-company giant Publicis bought Epsilon for $4.4 billion. Firms like Dataxu and Placed got scooped up, while other companies like Sizmek, Nanigans, and IgnitionOne sold off for pieces.
As more big companies acquire adtech firms, it's getting harder for independent adtech companies to compete, Karsten Weide, the program vice president of media and entertainment at IDC, said.
"The whole independent advertising ecosystem is really in trouble — they need to diversify," Weide said.
We identified a handful of companies that were best positioned to survive these challenges and thrive in the year ahead.
To compile the list, we drew on nominations and talked to analysts, consultants, and investors.
We looked at a number of factors in evaluating companies, such as their revenue, funding raised, and reputation in the industry. We considered the issues the companies were trying to solve, from building technology to modernizing the decades-old TV industry and preparing marketers for privacy legislation and regulation.
We also highlighted one "star to know" from each company. This list includes a mix of roles.
Here are the 18 hottest adtech firms of 2019, listed alphabetically:
Amobee: Wants to bring digital-ad targeting and planning tools to TV
Star to know: Ryanne Laredo, the senior vice president of client services
2019 revenue: $850 million
Comment: Amobee has spent the past few years acquiring firms like Videology and Turn to build a marketing-tech stack that rivals walled gardens like Google and Facebook. One of advertisers' biggest gripes with TV is that ads aren't as targeted as digital ones. In 2019, Amobee directed its pitch at shaking up the TV industry, launching a marketplace that pulls in data from Lotame, Oracle Data Cloud, and Inscape to create 6,000 audiences that advertisers can pick from to target ads. Amobee, which is owned by the Singapore telecommunications company Singtel, also signed a deal with the ad-verification company DoubleVerify, which says it can stamp out ad fraud in over-the-top media services (OTT).
Beachfront Media: Wants to make TV more digital
Star to know: Laura Wu, the head of strategy and operations
2019 revenue: $35 million to $45 million, according to sources familiar with the company
Comment: Beachfront Media wants to make it possible to buy more video advertising programmatically. Over the past couple of years, the firm has switched to OTT and on-demand advertising from digital video. In April, Beachfront Media rolled out a platform that allows pay-TV services like Comcast, Altice, and Frontier to sell on-demand ad inventory though set-top boxes programmatically. The firm also sells ads that run on OTT apps programmatically.
Beeswax: Wants brands to move adtech in-house
Star to know: CEO Ari Paparo
2019 revenue: $28 million
Total funding to date: $28 million
Comment: Beeswax helps marketers take their adtech in-house and charges a flat monthly fee that starts at $10,000. Marketers use Beeswax's "bidder-as-a-service" tech to bid on digital ads and customize their tech stacks based on their needs. In 2019, Beeswax raised $15 million and rolled out new tools for marketers to build their own bidding algorithms, which are used in optimizing ad buys to improve performance and cut down on prices. Next up is helping marketers buy connected-TV inventory.
Downstream: Wants to help advertisers navigate Amazon
Star to know: CEO Connor Folley
2019 revenue: less than $20 million, according to people familiar with the company
Total funding to date: $4 million
Comment: Amazon's growing ad business has spawned a cottage industry of e-commerce-minded adtech firms that includes Downstream. Folley, a former Amazon exec, started Downstream two years ago to help brands sell and advertise goods on the e-commerce platform. The firm sells subscription-based software that helps sellers and advertisers track performance and recommend ad buys through automation.
FreeWheel: Wants to change how TV ads are bought and served
Star to know: General manager Dave Clark
2019 revenue: $1.76 billion for the first nine months of the year (according to Comcast Advertising)
Comment: FreeWheel is tackling large issues, such as a lack of standards and audience fragmentation, that are threatening the traditional TV business of its parent company, Comcast. This past year, FreeWheel launched a blockchain-based platform called Blockgraph that allows distributors, networks, and marketers to run addressable TV ads using customer and Comcast data. The firm also hooked onto the Comcast sibling NBCUniversal's trafficking systems to improve the scheduling of linear and digital ads to help NBCUniversal sell both types of ads together for advertisers. FreeWheel is also part of several TV-industry groups, like OpenAP, that are trying to solve issues such as the ability to buy specific audiences across national TV and digital ads. This year, FreeWheel's technology started powering OpenAP's ad server.
Index Exchange: Wants to help publishers tackle privacy regulations
Star to know: Mike O'Sullivan, the vice president of product
2019 revenue: between $125 million and $200 million
Comment: With Apple and Google clamping down on how marketers use third-party cookies for targeting, Index Exchange is helping publishers prepare by leaning more on first-party data. One way is through a product called Blackbird, which lets consumers opt out of receiving ads and control their privacy settings on publishers' platforms. Index Exchange is also working with LiveRamp to match publishers' data with first-party data. Initial results of a test showed LiveRamp was able to match 100 million daily users that generated 8 billion bid requests used to fill ads when a web page is loaded.
Innovid: Wants to fix OTT's measurement problems
Integral Ad Science: Wants to verify that all types of ads are viewed
LiveIntent: Wants to use email to tackle big privacy issues
Star to know: Kerel Cooper, the senior vice president of global marketing
2019 revenue: $110 million
Total funding to date: $65 million
Comment: LiveIntent is best known for serving ads in emails for publishers like The Washington Post and The New York Times, but in 2019, it made a bigger move into identity to compete with LiveRamp and DigiTrust. As Apple and Google clamped down on publishers' ability to target people, LiveIntent's ID allows publishers and advertisers to do cookieless targeting by matching their customer data with LiveIntent's identity graph. Advertisers can then use that data to target ads precisely through demand-side platforms. LiveIntent said the process boosted advertisers' performance, enabling publishers to increase ad rates, though it wouldn't say by how much.
LiveRamp: Wants to help marketers prepare for privacy laws
Star to know: Anneka Gupta, the president and head of products and platforms
2019 revenue: $286 million
Comment: LiveRamp is one of a few bigger firms helping marketers navigate privacy laws like CCPA by helping marketers use first-party data to target ads. LiveRamp is also among a handful of firms like DigiTrust and LiveIntent that are pitching marketers identity-graph technology that helps ad targeting for audiences. In April, LiveRamp acquired the Dutch company Faktor and then rolled out its own consent-management platform, which publishers use to collect consumer data from websites and apps. And in June, LiveRamp acquired the TV-tech firm Data Plus Math to bolster its TV measurement arm.
Mediaocean: Wants to make TV buying and billing programmatic
Star to know: Drew Kane, the head of client services
2019 revenue: $250 million
Comment: Mediaocean has long sold software that helps advertisers with their ad buying and billing and is now trying to shake up the hidebound process of TV-advertising buying. This past year, Mediaocean piloted a way for agencies to buy linear and digital TV programmatically through a marketplace instead of buying it directly from broadcasters. With IBM, it's experimenting with blockchain technology that gives more transparency into the fees that adtech companies take from advertisers.
Roku: Wants to chip into big TV-ad budgets
Star to know: Jared Lefkowitz, the director of ad strategy
2019 revenue: $1.1 billion, according to third-quarter guidance (advertising and hardware)
Comment: Roku wants to own the advertising industry's shift from TV to OTT. The streaming TV company acquired the adtech firm Dataxu for $150 million this past year to build that business and work with performance-based marketers who are moving into TV advertising. In March, Roku signed a deal with Adobe to improve ad targeting with marketers' first-party data. The company also rolled out a tool that analyzes waste in marketers' TV spend. About two-thirds of Roku's revenue comes from its platform business comprising advertising and licensing fees, meaning that Roku is forecast to make about $726 million from advertising alone this year.
Telaria: Wants to handle publishers' OTT ad sales
Star to know: Chief Product Officer Paige Bilins
2019 revenue: between $69 million and $71 million, according to third-quarter guidance
Comment: Telaria helps publishers like Tastemade, Cheddar, and Hulu make money from their OTT services, mobile apps, and websites. It's moved full steam ahead into TV and grown its OTT business 115% year over year, with OTT representing 44% of the company's revenue, up from 6% in 2017. Telaria's big bet on OTT led to a yearlong uptick in its shares, making it a rare successful public adtech firm this year. In December, Telaria announced it planned to merge with Rubicon Project in a stock-for-stock deal that is expected to close in the first half of 2020.
The Trade Desk: Wants to be the biggest independent adtech company
Star to know: Tim Sims, the senior vice president of inventory partnerships
2019 revenue: $658 million, according to third-quarter guidance
Comment: The Trade Desk's clout continues to grow both as a public adtech company and through its increasing share of programmatic advertising dollars, making it one of the few adtech companies that is a viable competitor to Google. As advertising spend moves from TV to OTT, The Trade Desk is plugged into connected-TV devices. This past year, The Trade Desk signed deals with Amazon Publisher Services and Disney to sell OTT ads programmatically. The Trade Desk is also one of a few companies pitching technology that it says helps marketers cut the huge costs of running cookie-based ads.
TripleLift: Wants to put product placements in OTT apps
Star to know: Chief Revenue Officer Jacqueline Quantrell
2019 revenue: $300 million
Total funding to date: $16.6 million
Comment: A few years ago, it seemed like the native advertising boom was waning as a glut of publishers and adtech firms competed to sell the ads that mimic editorial content. This year, TripleLift pivoted hard into OTT advertising, building native ad products like product placements and brand integrations for streaming services. The New York-based company also went on a hiring spree, adding 184 employees in 2019 to bring its total head count to 300.
TVision: Wants to measure when people actually watch TV
Star to know: Tristan Webster, the vice president of data and analytics
2019 revenue: $9 million
Total funding to date: $24.7 million
Comment: TVision wants to compete with the old-school measurement firms Comscore and Nielsen by tracking how people watch TV. The TV-tech firm has a panel of 5,000 households that agree to share their viewing data and install a small device next to their TVs at home in exchange for a small payment. TVision tracks people's movement to detect if someone was in the room or looking at the TV when a program or commercial airs. TVision then sells the data about who's watching what and when to networks like Disney-ABC and The Weather Channel, and advertisers such as Pepsi that use it to inform their ad planning and buying.
Xandr: Wants to use data and content to change TV advertising
Star to know: Lauren Wetzel, the vice president of strategy and corporate development
2019 revenue: about $2 billion
Comment: AT&T made a number of moves this past year to change how TV advertising is planned, bought, and measured. The telecom's year-old Xandr unit launched a marketplace called Community that lets advertisers buy ads across publishers like Bloomberg, A&E Networks, and Vice Media, and it acquired Clypd, an adtech firm that helps advertisers target TV ads. Xandr also built out the demand-focused arm of its adtech technology, called Xandr Invest, with new features pitched to buyers as an alternative to Google's adtech. Expect more cozying up with its sibling company WarnerMedia next year: The two AT&T units will run a joint upfront next year, and Xandr is building out new ad formats for the ad-supported version of HBO Max that is expected to launch in 2021.
Zeta Global: Wants to build a programmatic-ad business through acquisitions
Star to know: Divisional President Mike Caprio
2019 revenue: more than $400 million
Total funding to date: $380 million
Comment: While a lot of adtech companies are trying to move into marketing tech to chase recurring revenue and big brand deals, Zeta Global is going the other direction. The firm is mostly known for selling big brands a marketing-technology stack that includes artificial intelligence, messaging, and data tools. But it acquired assets from a few distressed adtech companies this year to build out a programmatic-advertising arm. In May, Zeta Global acquired Sizmek's demand-side platform as the bankrupt Sizmek sold off its business in pieces. Zeta Global also acquired the location-based firm PlaceIQ's ad business and parts of IgnitionOne's business.