Verizon/AOL’s recent acquisition of mobile ad tech company, Millennial Media, raised a few eyebrows, but nothing should come as a surprise after AOL itself was acquired. It’s a brave new world out there. It makes sense that telco companies want to build technology with a mobile first view as this is a way to try to stay one step ahead of the giants of Facebook and Google.
Millennial Media was a smart move for AOL – it is a company with enormous scale and it was picked up at a good price. The deal gives AOL some important capabilities around advertising to mobile devices and will give AOL the ability to focus on targeted audiences (regardless of device) at scale. If they can integrate this effectively it can move the company into the major leagues.
But that is indeed the outstanding question: Can they integrate this effectively? Integrating is the hardest part of any deal. Not only will they need to get extremely complex back–ends integrated so the technology works, they will also need to get the companies’ cultures to align. With so many moving parts, players and geographies – it could be a multi-year integration. During this delay, will the entrepreneurial employees of Millennial stick around?
Be ready, this acquisition is only the beginning. There have been just a few major plays in the space but the writing is on wall. As other telcos realize the importance of having a strong advertising infrastructure as part of their offerings, they will need to make moves of their own to survive. I think we’ll see more of these big moves in the next year.
We have seen the growth of a handful of powerhouse closed systems/walled gardens, like Facebook, Google, and now Verizon/AOL. To join them you need scale and technology and resources. Will Yahoo succeed? Can we expect Comcast and other telcos to give it a shot? We can only expect to see more consolidation and those who can’t compete at scale will be forced to a niche.
I believe we will also see point solution based companies have shorter and shorter lifespans. Companies can no longer exist as a silo for very long. Integration and consolidation will happen and will improve the centralization of functionalities and customer data. We will see bigger marketing stacks and broader integration. Marketers know the importance of retiring channel or device silos in favor of focusing on the individual regardless device or channels.
Mobile advertising is just advertising in the end. These types of deals help highlight the importance of mobile, but are made because of the importance of connecting the dots between the marketing and advertising tactics and channels. By allowing marketers to get back to basics in terms of their advertising it makes it possible to treat a customer like a person and provide them a positive experience. You can’t do this when you rely on silos. You can’t do this when you use a dozen technologies.
The future will shake things up, but in the end it is good for marketers.
Jon Baron brings over 15 years of digital, managerial and SaaS experience to IgnitionOne. As CRO, Baron is responsible for expanding revenue opportunities to benefit both advertising agencies and brand marketers, and oversees global sales efforts. In addition, he is responsible for driving aggressive revenue targets for the company.