The advertising technology (AdTech) sector has experienced remarkable growth over the past two decades, becoming an integral part of the modern digital economy. Originating in the early 2000s, AdTech emerged as a means to connect advertisers with the rapidly expanding digital audience. It provided businesses with the necessary tools and platforms to effectively reach, engage, and convert online consumers.

As the digital landscape continued to evolve, so did the AdTech sector. It expanded alongside the proliferation of online platforms, mobile devices, and, more recently, the Internet of Things (IoT). This growth has solidified AdTech's position as a crucial component of the digital economy.

A few notable mentions throughout the decades:

• Early 2000s: The seedlings of AdTech are sown with the evolution of real-time bidding and programmatic advertising, setting the stage for a more automated, efficient digital advertising ecosystem.
• 2007: Google acquires DoubleClick for $3.1 billion.
• 2007-2009: The Trade Desk, AppNexus (rebranded as Xandr after acquired by AT&T and later sold to Microsoft), MediaMath steps into the arena, with a vision of enhancing the open internet through advertising.
• 2010: Criteo, with its retargeting technology, makes a splash in the market, going public and demonstrating the burgeoning potential of AdTech.
• 2012: The inception of Magnite, a confluence of Rubicon Project and Telaria, brings forth a robust sell-side platform.
• Mid-2010s: InMobi carves its niche, extending the global reach of AdTech from Asia, and reflecting the sector's growing global footprint.

The Corona Conundrum

The COVID-19 pandemic brought about a great deal of uncertainty, affecting various sectors, including the AdTech industry. Initially, there were significant budget cuts in advertising as businesses grappled with the economic fallout of the crisis. However, as companies adapted to the new digital landscape during lockdowns, a silver lining emerged for AdTech with an increased demand for digital advertising solutions.

Despite the resurgence during the pandemic, the AdTech sector is currently facing a narrative of slowdown due to lay-offs. This narrative is often attributed to various factors, such as the ongoing data privacy crackdowns, the persistent issue of ad fraud, and the rise of ad-blocking technologies. Additionally, the implementation of regulatory frameworks like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) has presented new challenges for the industry to navigate.

Dipping Below IPO Prices

There are numerous unicorns, privately held startups valued at over $1 billion, that have experienced significant valuations in the market. These unicorns have attracted attention and investor interest, with some even choosing to go public through an initial public offering (IPO). However, it is important to note that currently, many of these unicorns' prices have dipped below their IPO prices (as of October 2023). This decline in valuation has sparked different interpretations among market observers. Some see it as a necessary correction in the market, while others remain hopeful that it is simply a reflection of the past two years of reduced revenue.

Despite the current uncertainties surrounding the AdTech market, there are still forward-thinking companies pushing the boundaries and introducing innovative offerings that we recommend you keep an eye on.

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Cheq: Ensuring Safe and Efficient Digital Advertising

Cheq, an Israeli-based adtech unicorn, specialises in protecting brands from fraudulent internet activity such as bots and click farms. The company reached a $1 billion valuation in February 2022, following a successful $150 million Series C funding round led by Tiger Global Management.

Cheq's AI-Driven Solutions

Cheq's strength lies in its AI-driven cybersecurity capabilities that safeguard brands from serving ads on damaging content or being duped by fake bot traffic. The company's AI technology restores advertisers' faith in the digital advertising ecosystem, preventing revenue loss and damage to brand reputation.

CHEQ operates in two significant capacities, one as a cybersecurity company and the other as a social order-pay platform, as per the gathered information:

1. Cybersecurity Services:

• CHEQ is a global cybersecurity company that provides autonomous brand safety services.
• The company offers solutions that protect data, analytics, on-site conversion, and paid marketing from threats like bots, fake users, and other cyber threats.
• Its primary customers include organisations looking to secure their marketing, revenue, and data operations from such cyber threats​​.

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• CHEQ has developed a universal, frictionless, on-premise ordering and payment platform, which is the world's first social order-pay platform.
• This platform can be used by any restaurant operator without activation fees.
• It's designed to connect consumers and businesses, creating frictionless in-person experiences.
• The universal ordering and payment app provided by CHEQ can be used by restaurants, stadiums, and potentially other venues​​.

Cheq has recently launched, a self-serve protection tool that is designed to benefit both brands and agencies. This tool offers a range of services to enhance security and protection.

Cheq Essentials provides the following services:

1. Protecting PPC campaigns

• Block click fraud, ad fraud and fake impressions on ads.
• Divert all ad spend to real human traffic.
• Rely on pure clean data for decision making.

2. Purify website from IVT

• Detect invalid traffic coming from organic, direct and paid sources.
• Block malicious bots from visiting & engaging your website.
• Avoid fake form-filling, fake leads, and any bot attack.

3. ‍Privacy and Compliance detector

• Maintain marketing agility, and enable compliance with global privacy regulations like GDPR, CPRA, and LGPD with the consent management and preference enforcement platform.

Klaviyo: Specialising in Marketing Automation

Klaviyo is a global technology company that specialises in marketing automation, primarily through email and SMS marketing. The company provides a smart marketing automation platform with features like email template editing, data tracking, segmentation, social targeting, and push notifications.

Andrew Bialecki and Ed Hallen established the company in 2012. In August 2022, Shopify, an e-commerce company, announced a strategic investment of US$100 million into Klaviyo, making it the recommended email solution partner for Shopify Plus. In May 2023, Klaviyo filed for an IPO to be listed on the New York Stock Exchange. In September, the company went public, raising $576 million and achieving a valuation of $9.2 billion.

Klaviyo offers the following services:

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1. Marketing Automation:

• Klaviyo provides a powerful marketing automation platform that facilitates targeted email and SMS marketing campaigns. This includes a range of automation capabilities allowing businesses to send the right message to the right person at the right time.
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2. Email Marketing:

• Core to Klaviyo's offerings is its email marketing services, which include features like email template editing, segmentation, and social targeting, enabling businesses to craft personalised email campaigns to engage their audiences effectively.
  
  

3. SMS Marketing:

• Besides email, Klaviyo extends its marketing automation to SMS, allowing businesses to engage with their audience through text messages, fostering a more direct and personal connection.
  
  

4. Data Tracking & Analytics:

• Klaviyo emphasises data ownership and actionable insights, providing tools for data tracking and analytics to understand customer behavior better and optimize marketing strategies accordingly.
  
  

5. Integration with E-commerce Platforms:

• The platform integrates seamlessly with popular e-commerce platforms, making it a favoured choice for retail and e-commerce businesses looking to enhance their marketing efforts and drive sales.
  
  

6. Segmentation and Targeting:

• Klaviyo allows businesses to segment their audience based on various criteria, ensuring more targeted and relevant messaging which, in turn, improves engagement rates and ROI on marketing campaigns.
  
  

7. Push Notifications:

• Besides email and SMS, Klaviyo supports push notifications, further extending the channels through which businesses can interact with their customers and drive engagement.

Klaviyo's platform is designed with a focus on accessibility, ease of use, and data-driven decision-making, making it a robust solution for businesses across retail, e-commerce, and other sectors to elevate their marketing efforts and achieve better engagement with their audiences.

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MNTN: Transforming TV Advertising

MNTN, formerly known as SteelHouse, is an ad software company that helps brands and agencies create streaming TV ads. The company was founded by Hollywood star Ryan Reynolds and ad-industry veteran George Dewey. Reynolds serves as the chief creative officer of MNTN. With its headquarters in Austin, the company pivoted its focus from automated display ad buying to concentrate solely on streaming TV. In January MNTN raised $119 million funding.

MNTN's Advertising Revolution

MNTN's self-serve technology simplifies the process of running TV ads, making it as easy as managing search and social advertising campaigns. Their Performance TV platform, a Connected TV (CTV) advertising solution, optimises for direct-response marketing goals, pushing the boundaries of what television advertising can achieve.

1. Performance-Driven Advertising:

• MNTN's platform is designed for performance-driven advertising on Connected TV. It aims to drive measurable outcomes such as conversions, revenue, site visits, and more, enabling brands to evaluate the direct impact of their advertising campaigns on their business goals​​.

2. Automated Optimisation:

• The platform features automated optimisation to enhance campaign performance. This Auto-Optimised feature is crafted to drive stronger results, ensuring that advertising campaigns are always optimised for the best performance possibl.

3. Premium Inventory Access:

• MNTN provides access to premium inventory on the best streaming TV networks. This access ensures that advertisers can reach their target audiences on high-quality, reputable

Moloco: Harnessing the Power of Machine Learning

Moloco, a Silicon Valley-based adtech startup, utilises machine learning to optimise client acquisition and retention campaigns. The company, valued at over $2 billion, offers a cloud-based Demand-Side Platform (DSP), a Retail Media Platform (RMP), and Streaming Media Monetisation Solution  that enables performance marketers to scale user acquisition and improve their campaigns' lifetime value.

1. Moloco Cloud DSP: A Demand-Side Platform designed for performance advertising, supporting real-time bidding, cross-promotion, retargeting, and various ad formats while offering transparent reporting and analytics.
2. Moloco Retail Media Platform: Aimed at monetising commerce platforms, it provides a marketplace dashboard for spotting key trends and generating insights based on first-party data to create a new profit centre for online retail or marketplaces.
3. Moloco Monetisation for Streaming & OTT: Service for launching a full-funnel advertising business within streaming and Over-The-Top (OTT) platforms.
4. Tailored Solutions: Moloco offers specialised solutions for different sectors including gaming, fintech, commerce platforms, agencies, and streaming platforms, addressing their unique advertising and monetisation needs.

Their mission is to empower businesses to grow through operational machine learning, with a team founded by former Google machine learning engineers and a global presence in various regions.

Swiftly: Empowering Retailers to Compete in the Digital Age

Swiftly, a Seattle-based retail-tech company, gained the coveted unicorn status in September 2022, after securing $100 million in a Series C funding round led by BRV Capital Management. This marked the second $100 million funding round for Swiftly within six months.

Swiftly's Unique Offering

Swiftly's platform revolutionises brick-and-mortar retail by enhancing their digital capabilities. The company assists traditional retailers in upgrading their websites and mobile apps, further enabling them to run loyalty programs and delivery services. Swiftly also offers advertising services across the retailers' digital platforms.

The company's focus on helping brick-and-mortar stores compete with e-commerce giants like Amazon, Walmart, and Target sets it apart from its competitors.

1. Retail Tools
   
   Swiftly's retail tools are designed to create a seamless connection with retail customers across the shopping experience. These tools appear to be aimed at enhancing in-store interactions and engagements with customers, although the specifics of the tools are not detailed in the available information.
   
   
2. Mobile Platform
   
   The company has developed mobile solutions using a technology-first approach targeting both in-store and e-commerce purchases. These mobile solutions likely encompass apps or platforms that enhance the shopping experience, whether customers are shopping in-store or online.
3. Retail Media
   
   Utilising insights and first-party data, Swiftly aims to help retailers and brands tap into the margin-rich retail media revenue market, which is valued at $100 billion. The focus here seems to be on leveraging data to optimise advertising campaigns and improve the overall effectiveness of retail media initiatives.
4. Analytics & Insight
   
   Swiftly employs insights to deliver a deeper understanding of individual customer behaviour, spending habits, and lifetime value. This aspect of their service likely involves data analytics and insights generation to help retailers and brands better understand their customer base and tailor their marketing and engagement strategies accordingly.
5. Digital Transformation
   
   Swiftly is described as a tool to digitally transform the relationship with customers, grow sales, increase store visits, and win customer loyalty. It assists stores in distributing the most relevant deals to each individual shopper, aligning with the objective of enhancing customer engagement and loyalty.
6. AI-Powered Technology
   
   The technology deployed by Swiftly harnesses the power of Artificial Intelligence (AI) to aid retailers in building strong digital relationships with customers and achieving remarkable sales results. This likely involves leveraging AI algorithms to analyse customer data and enhance the personalisation and effectiveness of marketing campaigns.
7. Integration with Digital Coupon and Circular Vendors
   
   Swiftly integrates with every digital coupon and circular vendor to offer the best deals for customers both in-store and online. This integration feature facilitates the delivery of attractive deals to customers, thereby promoting a better shopping experience and potentially driving more sales.

Swiftly's approach combines digital transformation, mobile solutions, retail media, and data analytics to deliver an integrated and enhanced retail experience. The emphasis on utilising insights and AI technology underscores Swiftly's commitment to leveraging data-driven strategies to support retailers and brands in achieving their marketing and sales objectives.

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The Future of AdTech Unicorns

The future of AdTech unicorns is an interesting topic to explore. While it's difficult to predict with certainty, there are a few possibilities to consider.

Firstly, it's important to acknowledge that the AdTech industry has been evolving rapidly. With changing consumer behaviours, privacy concerns, and increasing regulations, there might be challenges ahead. However, AdTech still holds immense potential for growth.

In the next five years, we may see a mix of exits in the AdTech space. Some successful unicorns might choose to go public or be acquired by larger companies seeking to expand their advertising capabilities. This could lead to consolidation in the industry as smaller players merge to compete with larger entities.

The success of AdTech unicorns will largely depend on their ability to adapt and innovate. With the rise of artificial intelligence, machine learning, and data-driven advertising, companies that can effectively leverage these technologies might have a higher chance of success.

Furthermore, the industry's response to privacy concerns and regulations will be crucial. AdTech companies that prioritise user privacy, transparency, and ethical data practices are likely to gain a competitive advantage.

In Summary: Challenges and Growth in the AdTech Industry

In summary, the AdTech industry may face challenges in the next five years, but it is still expected to experience growth and innovation. However, it is anticipated that there will be more conservative valuations of companies, particularly after the fall of MediaMath.

What are your thoughts? Do you believe the companies mentioned above will see further growth? Do you think the valuation of AdTech companies has been corrected?

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