In games and ad tech, not all consolidations are created equal

Selleris a column written by the sell side of the digital media community.

Today’s column is written by Itai Cohen, who leads marketing and corporate strategy at Digital Turbine.

Consolidation is a sign of health – a necessary part of the life cycle of a maturing industry.

The mobile gaming and ad tech ecosystems, for example, have seen accelerated consolidation over the past two years as they both evolve individually and together. But not all consolidations produce the same results. For mobile gaming companies in particular, partnering with an ad tech provider opens up a wealth of opportunities and first-party data, not to mention the tools they need to grow their business.

By looking at the differences between the types of mergers or acquisitions that take place, we can understand how changes in competitive dynamics impact mobile gaming, one of largest and fastest growing media channels today.

Within industries, consolidation expands capabilities

Over the past few years, we have seen a flurry of M&A activity within advertising technology, specifically in mobile and programmatic. And the activity is planned to continue This year.

This type of consolidation generally involves expanding a company’s core competencies to increase the scope and quality of services.

Consolidation in the game has recently reach new heights as well. The need to diversify assets, reduce operational risk and grow generally drives game consolidations. The reach of all genres makes mobile game publishers less dependent on maintaining a single hit game in a certain genre, adding games with varying shelf lives and monetization strategies.

In addition, Recent data privacy changes have led big players to think even bigger when it comes to first-party data, earning their way to a massive user base.

Across all industries, consolidation amplifies data

When a mobile ad tech company buys a game studio or a game company buys an ad tech platform, consolidation becomes a whole different ball game.

Why? Because one company’s core customer base is the other’s direct competitor. And that can create potential conflicts.

JThe core principle of mobile advertising technology companies is to serve the mobile ecosystem and enable growth. To do this, they must commit to their customers and provide a baseline level of opportunity, ensuring that it is conflict-free and agnostic. However, when ad tech companies own or publish mobile games, it is in their business interest to prioritize those properties over those of their external customers.

Mobile ad technology companies get a insider’s view with first-party data that comes from the work they do for their game publisher clients. Mobile app game publishers, in turn, have their own very valuable first-party data, which not only includes ad engagement metrics, but also gaming engagement metrics, in-app purchases, and user retention data.

Historically, game companies have been very careful and selective about sharing this data with their ad technology partners. The fact that some ad technology partners own a mobile game company themselves only underscores the data sharing dilemma faced by mobile game companies.

Although the pool of data created by this type of consolidation can form the basis of a solid strategy, if ad technology is still used to serve the larger ecosystem, it creates an inherent conflict for all game developers who do not not reside under the combined umbrella. . In other words, it’s a potential conflict for the vast majority of the mobile gaming ecosystem.

Make tough choices

Today, independent game companies are now forced to choose ad technology partners based not only on the quality of their products and services, but also on the level of competitive implications they might face. Do all game customers have equal access to product features, ad inventory, and data? The answers to these questions have become more complicated.

Consolidation in the mobile app space is inevitable. Ultimately, the real choice is in the hands of independent game companies who must prepare for sustainable, long-term success in an extremely competitive and incredibly dynamic industry. Making an informed choice about your partners can make all the difference.

Follow Fyber, a Digital Turbine company (@Fyber and @Digital Turbine) and Ad Exchange (@adexchanger) on Twitter.

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