The Scatter Market Plateaus; Venture Capital Has Slowed For Ad Tech

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Back To Basics

After a scorching hot upfront period, Standard Media Index (SMI) notes the scatter market seems to have plateaued, writes Anthony Crupi at Ad Age. Case in point: The broadcast scatter market was down 10.5% YoY in June. Don’t read too much into it, though. It’s more likely a return to normal after scatter market growth went a little crazy beginning fall 2015, according to MoffettNathanson media analyst Michael Nathanson. [AdExchanger coverage.] Another return to normal: Digital growth rates slowed, said SMI CEO James Fennessy, as advertisers put their budgets back into TV. More.

The All-VCing Eye

The venture capital tap for ad tech companies has slowed to a relative trickle in recent years. Last year VCs invested $860 million in ad tech, the lowest sum since 2010 (down from a 2011 peak of $2.7 billion) – and this year venture dollars are on pace for the lowest total in more than a decade. But marketing tech, built on software subscription services, has projectable revenue and insulation from ad market trends that’s helped attracted many ad tech investors. “Software is just a better business,” says Jerry Neumann, an early investor in Percolate, The Trade Desk and Yieldbot, to Jack Marshall at The Wall Street Journal. “In ad tech you’re often an intermediary. Buyers use 20 different suppliers and test them all, which is why nobody could really get a foothold.” More.

Looking East

Add another to the list of ad tech companies getting huge offers from Chinese buyers, as mobile ad network AppLovin is reportedly in talks with a Chinese buyer for a $1.5 billion acquisition, writes Anthony Ha at TechCrunch. China is hungry for US investments these days, and a cluttered ad tech ecosystem with struggling private companies makes for an enticing shopping spree. These tend to be cash deals with opaque buyers and questionable price tags because of government manipulation of the yuan. [AdExchanger coverage] AppLovin is part of a string of ad tech companies unlikely to go public in the US market, and looking for a more stable position. More.

On Target

Snapchat plans to roll out behavioral targeting on its platform this year, per an eMarketer report by Snapchat revenue director Clement Xue. For now, Snapchat will only use data acquired via user activity or account information, such as age, gender, location, device, operating system, mobile carrier and content affinity. But that might change. The platform launched its first login integration with Bitmoji, which will allow it to glean insights on emoji usage from across a broader swath of the mobile ecosystem. Snapchat CEO Evan Spiegel has been outspoken about “creepy” targeted ads, but he’s also enthusiastically pro-revenue. More.

The Lion’s Share

A suggested reform from the European Commission (the regulatory arm of the EU, which has been dogging Silicon Valley tech titans for years) would give publishers new rights to demand revenue from the likes of Google and Facebook, reports Juliette Garside at the Guardian. It’s common for those digital platforms to highlight content from within a story for user search and discovery purposes. (People click more when there’s a sentence or two as a teaser.) The regulatory concept, known as “neighboring rights,” already exists for performing artists and record labels, and gives the content creators the right to allow their work to be distributed openly or exclusively (or, ideally, to negotiate a more pub-friendly rev-share deal with Google and Facebook). More.

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