Worldwide Ad Tech Market Still Highly Fragmented Despite Intense M&A Activity, Continuing Strong Growth Spells Opportunity, According to IDC

FRAMINGHAM, Mass. — In spite of ongoing intense mergers and acquisitions activity, the advertising software market is still highly fragmented. According to a new market share report from International Data Corporation (IDC), the top 15 vendors represented less than 40% of the overall market in 2017 with a multitude of small, specialized vendors with limited revenue making up the rest.

The market for advertising software grew 38% year over year to $12.7 billion in 2017 with the top 15 vendors capturing less than 40% of the overall revenue, according to IDC.

Criteo was the top vendor in 2017 with a 7.4% share of revenues, followed by Google with 6.5% share. A little farther behind is MediaMath, with a 3.9% share, followed by Adobe (3.0%), AppNexus (2.9%), AdRoll (2.4%), and The Trade Desk (2.0%), after which begins the long tail.

Advertising technology is also a market that is still rapidly growing and will continue to do so for the foreseeable future. The overall market for advertising software grew at 38% year over year from $9.2 billion in 2016 to $12.7 billion in 2017. At these spending levels, advertising technology sales stood for 4.7% of total ad sales (2017), up from 4.0% (2016). We expect this share to grow to 7.8% by 2022 as the industry’s push for advertising automation continues and the overall volume of spending on advertising continues. The transition from traditional TV advertising to digital video advertising, specifically connected TV advertising, will be the one major driver of future growth.

“The ad tech segment is still very fragmented,” said Karsten Weide, program vice president, Media & Entertainment at IDC. “This means there is a lot of opportunity for acquisitions, but also for growth.”

These are the findings of IDC’s latest research on the advertising technology industry, as outlined in the reports Worldwide Advertising Software Forecast, 2018–2022 (IDC #US43940218) and Worldwide Digital Advertising Software Market Shares, 2017: Despite Intense M&A Activity, Still a Fragmented Market (IDC #US44240218). All vendor numbers are net revenue, excluding media sales and professional services. Estimated numbers are based on public filings, public company statements on revenue, acquisition valuations, and other considerations. The vendor market share document does not take into account data vendors as they are not technology vendors in the strict sense of the word, even if they were part of IDC’s underlying ad technology software forecast. It should be noted that a lot of advertising technology that comes to bear in transacting digital advertising is not paid for, but is priced into media sales, and is therefore not represented either in the advertising software forecast nor in this document.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit Follow IDC on Twitter at @IDC and LinkedIn.

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