Ad Tech has become a bit of a dirty word in venture capital. Funding for adtech fell to a five year low recently, I’ve heard several VCs say that they wouldn’t touch adtech with a nine foot pole. If you ask yourself why, it’s enough to take a brief look at the marketing tech landscape and the answer will jump at you. There are so many companies in the field, barriers of entry are low, 99% of the growth in mobile advertising goes to the duopoly (Google & Facebook, but now also increasingly Amazon).
That said, for years Israel has been an advertising power-house. From app downloads, video monetisation to publisher tools, Israeli startups continue to grow in this space and work with Fortune 500 clients. According to Startup Nation Central, there are approximately 600 active startups operating in the marketing/advertising space in Israel.
What’s interesting in the future of Adtech and Martech?
The rise of ad-blockers means that you’re less likely to see a pop-up banner ad, but at the same time, improvements in technology (AI, machine learning, computer vision) enable a more data-driven approach, bringing together adtech and martech into one field that encompasses various disciplines from content marketing, mobile marketing, marketing analytics together with tools and platforms that were once only in one or the other.
What problems are left to be solved?
Brand Safety – showing your ads next to objectionable content or bad placements
Cheq – this Israeli startup understands the context of the page in real time and is able to stop an ad from showing next tonegative content. For example, Coca Cola wouldn’t like to see their ad in an article about the dangers of sugar, or obesity. Previously known as ComboTag recently announced its $5M series A led by Battery Ventures.
AR/ VR/ MR – 3D advertising
Anzu – founded in July 2016, Anzu is an early mover in the 3D advertising space. The company takes optimizes common creatives, such as images, banners, videos, and HTML5 ads, and blends them into 3D environments, allowing 3D ads to become part of the actual gameplay without harming user experience. These ads are used in VR content and games, localised to the market they are shown.
Video – nobody likes to wait 30 seconds for a pre-roll before watching their video
With 102 startups in video advertising alone, it’s not easy to cut the wheat from the chaff. A company that stood the test of time is Innovid. Started in 2007, Innovid offers a one-stop shop for video advertisers – from creation, to optimisation, distribution, measurement
Podcast monetisation
CastPlus – the rise of podcast consumption is undeniable, but monetisation of this medium remains unsophisticated and is still at its infancy. No one has figured it quite out yet, but CastPlus aims to a podcast marketplace. Connecting brands to podcasters and offering advertisers the ability to target podcast listeners in real time, keeping the ads relevant and supporting the creators of content. Seed stage, started in 2015.
Image recognition – shop the look
Syte.ai – (Disclaimer: I’m an investor via Remagine Ventures). Syte understands the content of images and offers retailers and publishers the ability to monetise images in various ways. From a camera button which enables users to upload a picture to find similar products, to Kim Kardashian’s ‘Screenshop’ app offering its users the ability to shop the look of screenshots they upload from fashion magazines. Syte was rated the #6 most innovative company in Israel by FastCompany, and awarded the ‘cool vendor’ award by Gartner in computer vision,
Hyper local targeting
Ubimo – imaging you could enable hyper local targeting, so everyone who is opening a certain app at the stadium during the world cup saw the same add for cold beer. Chances are, beer sales would go up. That’s what Ubimo’s location intelligence technology offers advertisers. In their network, they collect 400 GB of location data daily, from 12M active venues in the USA alone, reaching 80M monthly active users. Clients can import data, export to a DMP, connect to their DSP… very flexible way to leverage location data for advertising.
Content marketing – if it doesn’t look like an ad, it doesn’t mean it isn’t an ad
Eko – Started in 2009 under the name Interlude, the company used to offer viewers to decide how music videos would enfold. Now, Eko is an interactive storytelling platform working with brands together with Hollywood producers and studios, to create original interactive series entertainment to evoke certain emotions and deliver the brand messages subtly. Check out their ‘Sparks‘ to bring this into life. The company raised $102.5M from backers including Sequoia, Intel Capital, MGM and Sony. Clients include Coca Cola, Walmart, BMW…
***
The level of innovation in adtech and martech seems to be accelerating despite the challenges and limited funding available for the space, partly because they are less reliant on external funding for growth. Adtech businesses tend to generate revenue quickly, but their challenge lies in scaling and capturing any significant market share in a crowded space.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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