Adtech upheaval: why Digital Turbine bought Fyber, and what’s happening in the ecosystem

What is happening in the mobile adtech ecosystem?

Is it the rise of platforms? The need for size to fight the heavyweight contenders of mobile advertising? Consolidation to accumulate and stockpile more first-party data in an era of increasingly scarce second and third party information? Or just a need to acquire revenue on the path to going public?

Whatever it is, we are seeing a massive acceleration in mergers and acquisitions in the mobile marketing and adtech ecosystems. Applovin bought Adjust, Vungle bought GameRefinery, Verve bought Nexstar. District M and Sharethrough. Magnite (formerly Rubicon) bought SpotX just a few months ago … and, of course, the ink has barely dried on the $400 million Digital Turbine acquisition of AdColony.

Now Digital Turbine has bought Fyber

Both are super successful adtech companies that have featured well on Singular’s ROI Indexes over the years. Both are respected. And now, both are together.

But why?

Part of the success of adtech over the last decade has been the unbundling of all the pieces and components. (Which is also one reason why the industry is so crazily complex, of course.) Now we’re seeing consolidation.

To get the inside scoop, I spent some time with Offer Yehudai, president at Fyber, and Matt Tubergen, EVP corporate development and strategy at Digital Turbine.

Essentially, it’s about offering a full meal deal.

“We’re on about 600 million devices already today, and we enable about 60 million devices a quarter … that’s more than iPhones sold globally,” Tubergen says. “The acquisition of Fyber really represents us moving into the monetization space and having a fully verticalized and fully integrated advertising stack.”

There’s obviously a lot of change happening right now in the ecosystem. Privacy, IDFA, and iOS 14 is one part of that. Another part is the alphabet soup of components and partners and players that publishers have to navigate when monetizing, and marketers when acquiring. Another part is the unprecedented scale and power of industry behemoths who suck up a lot of the oxygen in the ecosystem.

So simplification and vertical integration makes some sense.

Aggregating players for first-party data consolidation makes some sense.

And building scale to compete globally also makes some kind of sense.

Two tracks of mergers and acquisitions in adtech

“I think we see pretty much two tracks of M&A and consolidation currently in the market, and they’re all trying to achieve scale and reach,” says Fyber President Offer Yehudai. “One track is around content … can publishers or content owners create their own platform and pretty much control their own destiny … the second track we see is about building some kind of an independent tech platform for all the others who don’t want to build their own platform.”

The first is the tried and true Disney model: create content and feed that content to an owned audience. The second is a full stack tech solution that provides what Yehudai calls “the unfair advantage,” the edge that makes an adtech conglomerate smarter than the competition.

“I think it’s safe to say … app developers, advertisers, everybody in the ad space is looking for supply chain optimization,” Tubergen says.

Digital Turbine, of course, is already a sort of platform in the sense we highlighted in the recent Singular ROI Index, having the ability like a big social or search giant to manage both the supply and demand on its own terms. For Digital Turbine, that’s 600 million Android devices that it ships with from the OEM, giving it “home screen advantage” in content and app suggestion capabilities natively from the device.

As we said back in January:

OEM or on-device platforms such as Digital Turbine, ironSource Aura, and AppNext are performing extremely well. They perform on-device app discovery via a persistent experience on new devices and a set-up wizard upon activation. They can tie into the home and/or lock screens, and offer live updates on new apps to try.

Digital Turbine and ironSource Aura together account for eight spots in the 2021 ROI top charts, and offer extremely impressive ROI.

(Fyber did well also, grabbing four slots in our top ad networks ranking by itself.)

The downside, obviously, is that on-device OEM models don’t work on iOS. Apple is not about to allow app recommendation engines or not-quite-but-sort-of-like app stores on an iPhone or iPad. The upside is that the Android universe is truly gigantic.

“It’s often overlooked that carriers and OEMs actually have a huge position and leverage in the whole mobile app space,” Tubergen says. “And we believe that marrying the application providers, brands, content with OEMs and carriers, and having the technology layer that can basically be the clearing house between those companies … we’ve got a pretty compelling position.”

Add AdColony and its access to brands and expertise in video, Fyber’s capabilities, and what Digital Turbine already owns, and it’s a significant force in mobile.

For advertisers and publishers

For mobile app businesses, there are a few takeaways here.

On the one hand, there’s a new means of both acquiring users and monetizing them all within the same stack.

Vertically-integrated mobile growth stacks like this will inevitably acquire more and more first-party data which should make them increasingly effective over time at identifying and delivering high-value users. That makes them competitors for the major platforms — the Facebooks and Googles of the world, plus others — which generally means good things. More competition for mobile growth marketers’ business should ensure that there’s some downward pressure on ad pricing.

In addition, it can simplify your tech stack over time: always a good thing when application size, number of SDKs with someone else’s code, and complexity of your backend systems all matter.

On the other hand, consolidation of independent players in the adtech space can reduce diversity and decrease competition at the not-Facebook-not-Google level. And a partner becoming mission critical at both the acquisition and monetization levels ties you in tighter and tighter to a specific conglomerate.

So there are a few risks here too.

More mobile adtech M&A to come

That said, there’s almost certain more M&A activity to come.

This deal is yet another signal to other players in the industry that with all the recent mergers, acquisitions, and consolidation in the space — and technological changes driven by iOS 14 — they might want to team up with complementary companies as well and ensure they’re not left behind.

Which probably means we haven’t seen the last of the purchasing activity in mobile marketing and adtech. Not by a long shot.

The goal?

Scale, as Yehudai says. And reach. Whether that’s in terms of content or technology.

So: independent measurement matters more than ever

All of that means that independent mobile marketing measurement is more important than ever. Just one reason: while there’s clearly consolidation in the advertising and monetization spaces in mobile adtech, there’s also consolidation across the ad network and measurement categories.

Mobile measurement partners like Singular are not immune to all these massive changes in the ecosystem.

Ultimately, however, Singular remains incredibly focused on independent marketing measurement.

There are new challenges to adapt Singular data integrations with rising consolidated platforms like Digital Turbine and ensure that they work seamlessly for advertisers and publishers. And there are also new challenges as consolidation impacts the measurement space as well. Singular is tackling these challenges to ensure that marketers will be able to use the best martech stack possible with world-class cost aggregation, mobile attribution, iOS 14 and SKAdNetwork measurement, and — of course — ad monetization.

No matter which players exist in the space and how they’re configured, advertisers and mobile user acquisition specialists still need to make investment decisions. They still need smart, predictive, accurate, and unbiased information to base those decisions on.