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5 Things Ad Tech Investors Need To Know This Week; Our DSP Sale Process Coming To A Completion; And Some Thoughts On Google Break-Up
FPC is having a jam packed June (deals, fundraising, events, etc). Because of this we had to skip last week’s edition. Apologies for that.
But before we get stuck into this week’s newsletter, we have a few announcements.
We are now co-hosting our Cannes drinks with ExchangeWire, and the networking event is being supported by Picnic, Adimo and Vane. Thanks to all supporting the event. Our wait list is now at 1000 so it will be tricky to add more people. But we are sure we will see you in Cannes.
If you do want to meet up, get in touch: contact@firstpartycapital. We are looking to meet potential investors, existing LPs, strategic buyers, generalist VCs, PE and anyone who can help our portfolio companies.
Now that we have done our ad tech housekeeping, onwards.
The 5 Things You Absolutely Need To Know This Week
This week FPC was at the longest running (and greatest) data-driven conference of them all, namely ATS London.
Over 600 of the finest industry minds gathered at ad tech’s big European gathering.
FPC was there in force, including a number of portfolio companies (Pixels.ai, LightboxTV and Watching That) exhibiting in the Innovation Alley area.
There was a lot of interesting chatter from the two day event. Here we have distilled the top 5 talking points for our ad tech investors:
Both CMOs and agency big wigs are getting bonuses on hitting sustainable targets: This will have implications on programmatic and media execution. There is a huge drive to cut carbon emissions by the ad tech space. Radical change is coming, including a rethink of the programmatic framework. One anecdote heard from ATS London conference would chill the blood of any RTB bull. An unnamed CPG brand in the Netherlands cut programmatic spend by 40% to hit sustainability targets. Execution was pushed via an ad server integrations using an IO. Performance was not affected. The CMO got his bonus. A big shift in how programmatic works is definitely coming. Sustainability bonuses are now accelerating this.
Attention is going to underpin a lot of what we do going forward: Attention took centre stage, as industry players look for solutions beyond the cookie. It is undoubtedly the evolution of verification as a key proxy for the efficacy of advertising spend. But some speakers were pushing attention as a possible measurement currency in a post-cookie world. That Lumen investment continues to look tasty.
Retail/commerce media is complicated: Retail media is a hot area, but are numbers getting jacked by outsized players like Amazon and Walmart? The consensus: big opportunity but fragmentation is a problem; standards don’t exist (yet) for measurement. FPC thinks the ad nets and sales houses will aggregate. Agencies are already pushing ahead by launching their own internal retail media ad nets (cc Unlimitail)
It’s addressable TV (including CTV): Did you know that, by the end of the year, FPC will have invested in 5 addressable TV startups? We will have to do an FPC TV ecosystem in the coming weeks to show you where they all sit. Big takeaway from ATS: CTV is important as part of a wider addressable TV market. That means we need great companies like LightBoxTV to help plan and execute across this disjointed market.
IDs will not save us: We do bang on about this very point (ad nauseam) in this newsletter - so it is reassuring to hear it vindicated by smart industry leaders. IDs will play a minor role in our measurement/targeting future when Google guts the 3PC next year. Context and SDA will be heavily adopted by the buy side in 2024 as the lights get turned off.
Very Close To Closing DSP Sale - One Last Shout Out
You are probably aware that FPC is currently selling a DSP for one of its portfolio companies.
We are agonisingly close to the finish line. But just to be sure there are no other buyers out there, we thought it would be prudent to do one last pitch to get anyone - with an interest in owning their own programmatic destiny - into the funnel.
Here are things you need to know about the DSP sale:
SPO capabilities core to the product
Strong client base
Honestly, this is the last chance to get into the process. If you want more details, email us on email@example.com. Cannes is the cut off for discussion.
The Google Ad Tech Dilemma
Oh dear, Google is in trouble again. This week the EU announced it was bringing charges against Google about its market dominance in ad tech - potentially resulting in the company spinning off its 3rd party ad tech business.
FPC thinks this action is a decade too late: the DoubleClick deal SHOULD have been blocked. Google got a free decade-long ticket to print money.
So now that the EU has got “ad tech” religion what next? Google is in a tight spot. There is no doubting that. But what is big G actually thinking?
Here’s a summary of Google internal debates that we think is dominating the fish Friday debate (not based on actual conversations; more probabilistic than deterministic):
Google has done its math on generative search. It will likely slash referral traffic. Google could easily make more money on its O&O properties by keeping users on page, serving paid ads. Not so much of a financial loss then by getting rid of the 3rd party ad stack, as there is no need to monetise downstream traffic.
Google opens up YouTube (in Europe only) to 3rd parties to placate angry regulators. And also agrees to shutter GAM. Might do the trick.
It spins out 3rd party ad tech, makes some money on sale, and walks away entirely from 3rd party ad tech.
Employ the tried and trusted Google routine: sit tight, do nothing, and drag it through the courts - appealing the ruling at every given opportunity. Just keep making money, people.
And on that stream of ad tech consciousness, we will leave it there. Hope to see you all in Cannes. Have a great weekend, readers.