Adtech investors have had a nice year in 2021. The stock market is soaring, Wall Street is ecstatic, and exits are plentiful and pleasant. It is the ideal time to double down and invest in a sector that has mostly been overlooked but is primed for significant growth in the next years: Technology for digital creative advertising.
Consider that for a moment. When was the last time a significant adtech fundraising round was focused on the advertising themselves — the messaging that consumers view on a daily basis? I believe that now is the ideal time. Adtech businesses that can find out how to modify advertisements to interact with the remote control, a linked smartphone, or voice commands — and even make them shoppable — might potentially create a game-changer.
Here are five reasons why venture capitalists should consider increasing their investments in adtech businesses that are developing the next generation of creative tools: The market for creative technology is far from saturated.
Consider how much money has been spent on digital advertising techniques like targeting, serving, measurement, and verification during the last 15 years. Not to mention the billions spent on marketing clouds, DMPs, and CDPs to help firms maintain track of consumer data and interactions.
On the other hand, the number of creative-focused adtech businesses may count on one hand. This implies there is a lot of room for early adopters and innovators. Earlier this year, VideoAmp, which helps marketers create advertising for numerous social networks, raised $75 million. It will not be the last, given how quickly services like TikTok and Snap are developing.
The ability to target digital ads is being stifled. Today’s advertisements must be more effective. We have seen a revived interest in contextual advertising, including financing for companies like GumGum and identity resolution firms like InfoSum, because of legislation, cookie removal, and Apple’s data-collecting restrictions.
However, the digital ad industry cannot just replace “retargeting” with broader data-crunching approaches. The medium is in desperate need of a creative resurgence, which can only be generated by scalable technology. The recent financing for Marpipe, a creative testing business, is a start, but greater emphasis on tech-driven ideation and automation is required.