2021 was a good year to be an adtech investor. Valuations are soaring, Wall Street is happy, and exits are frequent and satisfying. Now is the perfect time to step up and invest in an area that has been largely ignored but is poised to see major potential in the coming years: creative digital ad technology.
Think about it. When was the last time we saw a major adtech funding round that was directed at the ads themselves – the messages that people actually see every day? I would say now is the perfect time.
Adtech startups who can figure out how to tailor ads that can interact with the remote, a synced smartphone, or voice commands – maybe even make them purchasable – can theoretically be a game-changer.
Here are five reasons VCs should consider increasing their investment in adtech startups creating the next generation of creative tools:
Creative technology is far from saturated
Consider how much has been spent over the past 15 years on digital advertising mechanisms such as targeting, delivery, measurement, and verification. Not to mention the trillions that have helped brands track customer data and interactions – marketing clouds, DMPs, and CDPs.
Still, you can count the number of adtech companies focused on starting up on the one hand. This means that there is a lot of room for innovation and early leaders. VideoAmp, which helps brands advertise for various social platforms, raised $ 75 million earlier this year. Considering the speed of growth of platforms like TikTok and Snap, this won’t be the last.
Targeting of digital ads is reduced
Ads need to do more work today. Between regulation, the disappearance of cookies, and Apple’s blocking of data collection, we’ve seen a resurgence of interest in contextual advertising, including funding from GumGum, as well as identity resolution companies like InfoSum. .
But the digital advertising ecosystem cannot simply use broader data processing techniques to replace “retargeting”. The medium practically calls for a creative revival that can only be triggered by scalable technology. The recent funding from creative testing startup Marpipe is a start, but there needs to be more focus on actual tech-driven ideation and automation.