Unless you’ve been living under a rock, it’s hard to miss all the tech layoff news (Twitter, Meta, etc.). A common theme as to why they are occurring is declining profits due to decreased ad spending.

At the same time, there are numerous reports out there pointing to increased allocation of ad spending on digital advertising. If you don’t believe us, check out this article from Seeking AlphaAd-Tech Round-Up: Why We Think Google And Amazon Will Rise On Top

Key areas they highlighted as being winners include…

  • Search
  • Short-form video
  • Retail media
  • AVOD
  • Social Media

They also outline which tech giants are winning those ad spend dollars…

  • Positive: Google, Amazon
  • Neutral: Netflix, Warner Brothers Discovery, Disney
  • Negative: Meta

But if there is still a push to increase digital advertising spending, why are social media companies struggling? It ties back to shrinking programmatic advertising spending that can be easily stopped and re-started.

VideoWeek’s Tim Cross shared in While Tech Companies Report Slowing Ad Spend, Agencies are Increasing Revenue Forecasts

Social media companies and apps, which are frequently used for direct response campaigns, are similarly more liable to see slowing ad sales when the economy is struggling. Similarly revenues for any ad tech companies which focus mostly on performance formats like display will be more sensitive to a slowing economy.

And Snap’s CFO Derek Andersen says that programmatic sales are particularly vulnerable, because they’re so easy for buyers to turn off when they need to make quick cost savings.

“Advertising spending, in particular auction-driven direct response advertising, is among the very few line items in a company’s cost structure that they can reduce immediately in response to pressure on their top line or their input costs,” said Andersen. “As a result, as many industries and verticals have come under top line or input cost pressure, advertising spending has been amongst the first areas impacted.”

Add in pushes for cookie-less advertising and user privacy, and you have a ripe environment for innovation.

It’s not that programmatic advertising is going away; it’s morphing into being hyper-personalized and emphasizing ROI and the measurement of that ROI. Not to mention that there is a re-collaboration afoot. Programmatic advertising was an easy sell over traditional media, but CTV, OTT, influencers, etc., have opened the door for companies to pull dollars from programmatic advertising budgets.

That leads us to our feature in today’s Founder Friday, a list of startups leading the AdTech revolution…

  • ID5: A cookieless alternative ID solution
  • Tomi: Helps companies optimize their spend and analyze their acquisition costs
  • Semasio: Combines contextual and audience/semantic targeting
  • CreatorIQ: Influencer marketing analytics
  • VDO.AI: A CTV/OTT personalized video-driven experience platform
  • Adelaide: Predictive ad placement engagement measurement platform
  • Anzu: Places server ads programmatically in games (yes, we know what we said related to programmatic advertising)
  • Base: Helps identify which customers are the most likely to turn into brand ambassadors
  • Magellan AI: Podcast media campaign management and measurement tool
  • TvScientific: CTV performance advertising platform
  • VidMob: Converts TV and web ads into impactful short-video ads for various mediums, as well as predict ad effectiveness and performance measurement
  • Wearisma: Influencer marketing analytics
  • Kerv: Shoppable video platform
  • Amagi: Build ad-supported streaming channels for media companies
  • Picnic: Mobile ad platform
  • Seedtag: Contextual advertising AI placement platform

Big tech companies will undoubtedly figure it out, but it will probably come via acquisition from amazing startups like the ones listed here.


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