I thought I’d write a post before the weekend set in. This weekend is going to be a special one as my brother, whom some of you might know, is getting married tomorrow night to an awesome bride. I could not be any more happier for him.
Back to the post…
Some interesting insights that I’ve been uncovering and/or thinking about over the past few months:
1. Large publishers are becoming increasingly wary of Google. I’ve spoken to two major publishers in the past 7 days as I’ve been doing some diligence for startups we’re looking at and they are increasingly becoming wary of Google’s power in the marketplace. “Monopolistic” is a term that I keep hearing about Google and it’s one that I think holds some ground. One of the main reasons why pubs are increasingly becoming worried about Google is the amount of both demand/supply side data that Google has… if they were playing cards in a casino, they would be the player and the dealer. It’s a ridiculously powerful position to be in.
2. Amazon. I’ve bought dozens of books from them over the years, but now, I’m starting to buy a lot of advertising from them. And quite a few other agencies and brands are as well. Amazon is becoming a quiet power in the advertising marketplace. Why? Intent. I wrote a whole post on this in March 2012. Amazon has a search engine which it acquired and has millions of people with real intent coming to their platform. Intent data married to advertising can yield very positive results. A big reason why we invested in Yieldbot (not currently in relationship with Amazon).
3. Social Media Monitoring. We see a new platform in the social media monitoring space every other week or so. We’ve not invested in this space because we feel that these platforms are becoming commoditized and are table stakes. Yes, there has been some value created (i.e. acquisition of Radian6) but that’s few and far between. In order for a platform to generate real value for shareholders, it needs significant market share at a fair price point. I’ve not seen any significant breakout companies yet.
4. Where are the $30-100MM ad tech and marketing technology companies? Many companies I’ve seen lately are all $1-10MM organizations. There is nothing wrong with that, but I’d like to see more ad tech companies maturing their business. Randall Rothenberg has a hyperbolic quote in a Forbes interview he did with John Battelle that offers one reason why, but as many people point out, VC’s don’t force exits generally.
Battelle: What are the biggest obstacles in our industry?
Rothenberg: Venture capitalists. They create new businesses, but they incentivize companies toward short-term cash-out potential, not long-term growth. So if I were a marketer, my worst problem is chaos–not knowing what will make a difference. Venture capital has supported and financed a bunch of chaos.
5. The next 12 months are going to drive returns to shareholders (including entrepreneurs) and continued investing will occur. I’ve had first hand conversations with many companies who are sniffing around the marketing & advertising technology industries who are looking to acquire. We recently saw this with Salesforce/Buddy Media ($800MM-$1bln +), SAS Institute/Ai Match, etc. I think there is going to be another 3-4 deals by the time 2012 is over.
Just some food for thought going into this weekend.