Reasons To Be Strategic: Part 2, The Platform Strategic
In the second part of our three-parter on the types of corporations now investing in FPC, we focus on the platform strategic.
The platform strategic is a broad church as it covers everything from data vendors to publishers to agencies to OOH networks to TV companies - and much much more. It is the category most susceptible to changes in the ad tech ecosystem.
When Conflict Becomes A Big Problem
It’s difficult to “truly” trust big players like Google and Amazon when they are so conflicted.
Amazon, for instance, is having a moment. It is the darling of the ad tech community. It’s not Google. It’s not TTD (the independent everyone loves to kick). Amazon wants to be the ad tech layer for the open internet, hammering aggressively at TTD and Google market share.
Weirdly, ad tech seems to have forgotten that Amazon owns the biggest e-commerce site in the world, competing against most - if not all brands - in some fashion. Conflicted? Definitely.
It owns a chunk of CTV inventory, so you have to wonder whether or not it will favour its O&O supply via its DSP. And it also extracts a juicy chunk of “cloud tax” from everyone. Double-dipping on media and cloud? Obviously.
This is not a gripe against Amazon per se as the industry needs these big players; FPC is just pointing out the difficulty the platform strategic has in terms of navigating what strategy to employ. It’s a jungle out there.
Keeping The Moat Wide
Whether it is AI or direct integration, disintermediation is a genuine concern for many platform strategics. How do you preserve that moat when the industry moves at breakneck speed?
FirstPartyCapital is now serving as an outsourced R&D lab for strategics. It can be expensive and time-consuming trying to read the tea leaves and executing accordingly; that’s why we exist.
Our operator-led fund is at the bleeding edge of ad tech. And the reason we have such a large LP base of smart insiders is that we can lean into “the wisdom” of the ad tech crowd.
It is the secret weapon of our fund: having so many decision makers connected to FPC.
The fund and portcos work alongside strategics to build tech, product and commercial strategy to keep them ahead of the hungry pack.
Becoming a cog in a giant stack with no agency over your commercial future is not where anyone wants to be stuck.
We will gladly dig that moat.
We Chose The Independent Path
We are not a virtuous play. This is a calculated strategy on our part. We know there is huge upside in helping the platform strategics forge an independent path.
Let’s consider the 50 billion dollar OOH space. It seems a nice, idyllic, well-insulated channel, free of the encroaching ad tech behemoths. OOH platforms have control over supply and data. But for how long?
The reality is that the rise of POOH means that OOH networks can be bought around. Direct integrations eliminate the need for exchanges and SSPs. It’s happening in CTV and on the open web. How do you prepare for the eventuality? Because it is coming to OOH and other channels.
Nuanced strategies to counter this are thin on the ground. FPC applies our portfolio stack to address these big problems. And we have some interesting OOH investments already in the pipeline for Fund 2.
This is also applicable to the much derided agency model. The holdcos are either consolidating or aggressively pivoting. The indies are mopping up business, but are facing similar headwinds. How does an agency fit into this new ecosystem? AI is eating into the FTE margin. And clients are asking for more tech driven solutions.
We have partnered with agency investors to figure out these big existential business issues. Off the back of that we are launching a new solution in Q1 next year, making it easier to access the FPC tech stack at scale - without having multiple points of contact and head-spinning contractual issues. The idea is to provide an easy-to-use tech framework for agencies looking to stay competitive and relevant.
Making Sense Of it All
These are confusing times. You have trusted partners that are monopolists. You have new ad tech agentic protocols being pushed out every other week. You have ad tech influencers cheerleading questionable “AY EYE” innovation. You have bankers and ad tech companies releasing AI vendor scapes, which for the most part are a collection of thinly veiled ad nets with an LLM wrapper and attractive rebates. Trusting in anything at the minute is a problem.
What you need is people who live and breathe this space, understanding what is bullshit and what has value. That becomes almost impossible in a global context. Not for FPC.
We are offering the counter balance to unchecked hype. No doubt, AI is going to overhaul workflows and accelerate automation. If AI is embedded in your product, it’s likely to have significant upside for the business. If AI is the stand alone solution, you will have difficulty defending it in the age of Claude, Gemini and OpenAI.
It is important to note here that we are leaning heavily into AI. We have an AI consultancy - Carpio - within our portfolio building enterprise solutions for an array of customers (brands, agencies, tech and utility businesses). We are also using Carpio to road test new ideas. In some cases the differentiated ideas with real merit and utility are getting spun out and funded.
We see so so so many pitches in ad tech AI (the usual automated planning, ad ops and optimisation patter). 99% of them could be vibe-coded in a pair of hours by Carpio. It’s the ultimate filter that makes FPC essential in the industry.
Our goal is to work with great strategics to cut through the noise, building for longevity not for the latest ad tech hype cycle. That’s why we are top of the list for the smarter corporates. And we look forward to working with more of them as we roll out Fund 2.
Talk to you next week readers. Thanks for reading and do share with your peers. Have a great ad tech day.