“The Sell Sider” is a column written by the sell side of the digital media community.
Todays column is composed by Mike Peralta, VP and GM of Marketing Solutions, a division of T-Mobile USA.
2021 brought unprecedented combination across advertisement tech. But theres one especially striking mini pattern thats emerging: Gaming studios are merging with ad tech platforms..
In the most recent example of this pattern, Microsoft announced two hit offers that pair advertisement tech with gaming content. In December, the company shared plans to acquire Xandr, AT&Ts information and analytics platform. And simply two week back, Microsoft announced its obtaining Activision Blizzard, the publisher behind Call of Duty and World of Warcraft, for a massive $68 billion.
Microsoft isnt the very first to take this approach. Its following in the footsteps of video gaming and software application giants, consisting of AppLovin, ironSource and Zynga. Whats the strategy behind the relocation? First-party data..
A popular playbook.
First-party data is the future of marketing, taking the place of out-of-date cookie-based tech. In previous years, advertisement platforms have actually stopped working to discover a way to totally take advantage of the power of this information.
In 2018, AppLovin raised $400 million from private equity firm KKR at an evaluation of $2 billion, using those funds to change itself from an advertising platform into a mobile video gaming powerhouse. Today, AppLovin has a market cap of almost $32 billion..
To get there, they made a variety of wise ad tech acquisitions: first, MAX, an in-app bidding option. SafeDK, an SDK management tool that assists mobile app publishers automate security and brand safety. Then Adjust, a mobile advertising measurement and attribution company. And, most just recently, MoPub, among the biggest in-app ad exchanges on the market.
Each of these acquisitions were tactical investments to grow AppLovins mobile advertisement organization. In 2020, in-house app traffic created more than 70% of AppLovins advertisement service. Following these acquisitions– particularly, MoPub– that number will shift drastically by monetizing app traffic throughout every vertical.
IronSource, which runs a gaming studio and advertisement network, took a similar method. In just 9 months, the company obtained an advertisement quality insights platform, an innovative platform and two major mobile in-app monetization platforms– Tapjoy and Bidalgo. Today, ironSource, much like AppLovin, continues to gain market share from the overall mobile gaming and mobile monetization market..
But wait, theres more. In 2021, Zynga, the leading global game developer, got Chartboost, an in-app money making platform with a commonly used SDK. And other up-and-coming gamers, like Media and Games Invest (MGI), continue to leverage M&A to turbocharge the content and platform development technique.
Sustaining first-party information.
Through these acquisitions, business like AppLovin, ironSource and Zynga can tap first-party data from their in-house mobile video games, add more first-party data via their monetization SDK integrations, then use those two sets of information to refine and scale both businesses: the gaming side and the media side..
For instance, through its MoPub acquisition, AppLovin can leverage information from other mobile video gaming publishers to obtain insights on KPIs like CPMs, CTRs, viewability rates, conclusion rates and more. Then, AppLovin can use these abundant insights to enhance and grow the video gaming assets they already own. Its a recipe for success– and clever companies with large budget plans are doubling down.
For Microsoft, the chance is similarly robust. It can now integrate the strengths of Xandr and Activision Blizzard to give both its gaming organization and its advertisement tech company a major increase. Moving forward, the tech giant can collect insights from Xandrs existing ad platform and use them to drive growth and enhance the monetization of Activisions portfolio of mobile gaming material..
Whichs really just the beginning. With the mobile video gaming material market in the United States expected to reach $25 billion in 2022, and United States mobile ad invest exceeding $160 billion this year, this particular M&A trend might effectively set the tone for mobile marketing in 2022..
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In the most current example of this pattern, Microsoft revealed two smash hit offers that pair advertisement tech with video gaming content. Each of these acquisitions were strategic investments to grow AppLovins mobile ad service. In just nine months, the company got an ad quality insights platform, a creative platform and two significant mobile in-app money making platforms– Tapjoy and Bidalgo. Through its MoPub acquisition, AppLovin can take advantage of data from other mobile video gaming publishers to obtain insights on KPIs like CPMs, CTRs, viewability rates, conclusion rates and more. It can now integrate the strengths of Xandr and Activision Blizzard to provide both its video gaming business and its ad tech service a major boost.