Hello readers. Our MadTechMoney event is a week and a bit away, and we're hosting it alongside the mega ad tech conference, ATS London, on September 15 (get your ticket). It’s an action-packed MTM agenda - from fundraising to scaling to exiting.
One panel to watch out for is our M&A deep dive. We will no doubt be discussing the hottest areas of ad tech and how best to sell into this market momentum.
Ad tech M&A in Europe remains a very nuanced process. But ultimately you can never discount visceral animal spirits and the absolute FOMO that motivate buyers.
In this edition, we will discuss how to catch the ad tech M&A zeitgeist: specifically, how propaganda and clever positioning can play a pivotal role in the sales process.
Establishing The Important Categories
Without giving away the MTM panel discussion points, here are a few established and emerging categories that are capturing the buyers’ attention:
Performance CTV (very much a US-centric category): This particular zeitgeist has come and gone. But it is the most recent example of a category that generated huge hype and sizable transactions: TVScientific went for $400 million to Pinterest, and Vibe sold for over $1 billion to Walmart. More on how orchestrated collective action drove successful outcomes and what we can glean from it below.
Containerisation: This one is a nascent ad tech category. But we expect this to blow up over the next 12 months. What is containerisation? Put simply: it is the process of hosting ad tech - bidding logic, targeting, measurement, creative delivery - inside a platform’s own infrastructure, rather than as an external, stand-alone third-party solution. Index Exchange (an investor in FPC) has been pushing this aggressively over the past year. Our Bedrock Platform remains the world's first and only containerised DSP. Containerisation is a big deal for the following reasons: 1) it takes a chainsaw to out-of-control levels of ad tech taxation; 2) it enables the use of more proprietary data, as it keeps data in place instead of exporting to 3rd party platforms; and 3) it creates room for real-time innovation inside the bid window (no round-trip means more time to do things like data modelling and other mind-bending millisecond related tasks). Now every good ad tech category deserves a solid TLA. How about CAT: Containerised Ad Tech? Containerisation will gather momentum to become the breakout category in 2027.
Identity & Onboarding (post-LiveRamp): FPC got accosted on LI a few months back for suggesting that vendors, agencies and brands will be scrambling to get off LiveRamp now that it’s part of Publicis. Those naysayers are obviously wrong. Most LiveRamp customers that compete directly with Publicis are looking hard for replacements. Acquisitions will happen as vendors and agencies build new solutions in the post-LiveRamp era. FPC has multiple bets in this burgeoning category, and all will doubtless be targets for acquisitive agencies and ad tech. This is the M&A zeitgeist of the moment.
Proprietary Signal Vendors (PSV): The PSV will have its own panel at ATS London on September 15. Regular readers will know that FPC coined the term SSA (Super Signal Aggregator), the TLA that launched 1,000 startup decks and PE pitches. Keep an eye on the PSV as SSAs like Nielsen/DV and Experian add even more signal to power their data stack. Agencies, too, are looking for PSVs to help train custom algos. Expect to see more purchases around attention, quality, and sustainability. Sustainability is the signal that is returning with a vengeance, moving from vanity to performance.
We're incubating other new categories, but more on that later.
Why Well-Timed Propaganda Ferments Demand
The reason why both TVScientific & Vibe sold for so much was the heat generated by the founders and associated investors. Through various influencer vehicles and media outlets, both companies were hyped to the hilt. Performance CTV was talked about ad nauseam.
Both were effectively tidy UIs built on top of Beeswax (Vibe eventually built their own DSP). Both spent large amounts on customer acquisition. Both churned through many customers. But this mattered little as the narrative was so sharp and so clear - and was parroted by enough ad tech tastemakers to become a self-fulfilling prophecy.
This resulted in a minor bidding war for Vibe. FOMO was maximised throughout the process. Walmart ended up forking out a billion-plus for the company.
Propaganda matters. It stokes the emotions of buyers. And the yanks are world-class at it. When executed well, a strong category narrative can get you very far. It gives you the big mo, as they say.
A Structured Process
FPC is developing its own secret sauce of propaganda. We want to perfect a tried-and-trusted methodology, but in a subtler and region-specific way. The Americans have zero filter when pushing their own book - an admirable shamelessness that just won’t work in this part of the world.
European M&A requires a little more intellectual dexterity. First, when establishing the category, and then when putting the detailed case forward for the company itself. It takes a little more time and focus. Shouting about it on a weekly podcast only gets you so much mileage.
Putting together a sustained narrative around the company’s tech capabilities and category importance while running an M&A sales process is critical to success. Buyers need to understand the asset’s intrinsic value. A data room with financial details doesn’t sell a company on its own; it’s part of a bigger process.
You need to get into a buyer’s head. What is the potential of the company you are selling? How can you own the category? How could it change your own story overall? As FPC keeps saying, this is a 60/40 business: 60% bullshit, 40% tech. And your bullshit needs to be marketable and achievable.
We have the weaponry to do the full life cycle of an ad tech company - from incubation right through to a sale. It’s only taken 6 years to get the model up and running. The model is still evolving, but we’ve now got the necessary ad tech muscle memory to scale it and sell it.
MadTechMoney is going to be a lot of fun this year. We look forward to seeing you all there - and telling you how we are going to execute on our grand plans. See you at ATS London on September 15.
Come to Our Pre-Event ATS London Drinks (Monday, Sept 14)
We are hosting a drinks reception with our fund partner, Index Exchange, the evening before ATS London on Sept 14. Expect cutting-edge chat about CATs and other in-the-weeds ad tech topics. This will be a fun intellectual preamble to the epic ad tech bonanza the following day on Sept 15.
You can register here to attend the drinks event: https://events.indexexchange.com/happyhourwithfirstpartycapital.
And on that public service announcement, we will sign off for this edition.