AdExchanger.com: Some think that Fetchback sold before the market collapsed for their services due to factors such as Google opening up self-serve retargeting. How do you respond?
SC: Fetchback was approached by numerous parties late last year and early this year. The Company had no intention of selling but after turning down several offers and certain parties became more aggressive the board decided to hire us to run a limited process. Without going into specifics, the Company was exceeding its monthly budgets. Fetchback was very comfortable to stay a standalone entity but ultimately found a partner that could only accelerate its growth. This deal was not about the broader market or factors within it. This is a combination that ultimately was about winning and taking share.
Is the market for companies offering retargeting services drying up?
Given Fetchback's rapid growth as well as others we don't see the market drying up. Ultimately retargeting is a very effective way to enhance display advertising and its ROI and will help it gain share from other online channels. Display is a big opportunity and tools that enhance it will only gain further prominence in the market.
If not, who or what types of companies are potential bidders here?
There are several categories of potential bidders. Ecommerce service and tech providers, online analytics companies, seo / sem businesses, large ad networks, agencies and traditional marketing services companies that are building a suite of online tools.
In general, how do you think retargeters can differentiate?
Key differentiators amongst this group are reach, analytics and media buying / optimization capabilities.
On a related topic, do you have an opinion on demand-side platforms and ad networks? Do you expect M&A here?
There will be consolidation in both. DSPs will continue to be attractive to a number of different categories many of which I listed above. In general, ad networks will have fewer liquidity options. The ones that are differentiated by size or by the brand clients they serve will have more options and many appealing ones compared to the undifferentiated me-to players. Smaller networks will likely merge due to increased competition and the need to gain scale. In general there has to be a movement to higher end branded offers and a cleansing of low value negative continuity offers in the market.
Are there too many companies competing for the marketing dollar? What's your view on consolidation in the advertising technology sector?
In any fragmented market there will be too many players chasing not enough dollars. This is a big and growing market thus all of the investment in it. There are a number of segments that are ripe for consolidation. This is because there are either too many players or larger strategics have needs to fill. Further there are also companies that raised money years ago and their investors likely need liquidity. I would include online analytics, ad networks (traditional and video), seo / sem, optimization, attribution amongst others at the top of the list.
By John Ebbert