Progress Partners

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Progress Partners is a boutique investment firm based in Boston and New York City providing financial advisory services to companies in media, marketing, advertising, and software.

Progress Perspective: CES2019 Scouting Report

By Jeff Coon, Bret Brase & David Arslanian
Jeff , Bret, and David are a Managing Directors at Progress Partners who attended CES2019 in January, and have extensive experience in media, technology, marketing, entertainment, and more specifically in the intersection of tech ecosystem and advertising.

Progress Partners attended CES last month - the consumer technology trade show that hosts over 180,000 attendees in Las Vegas annually. This year’s event featured classic technologies in advertising & entertainment, automotive, home & family, and health & wellness; while also covering emerging technology in mobile, IoT, blockchain, and robotics. From the 11+ general topics (and 27 sub-topics), our team observed three general trends as they relate to the sectors we specialize in: data re-utilization, digital marketing in B2B, and the future of television and ads.

Data

While the market continues to see the proliferation of data’s presence in business practices, U.S. companies’ collection and exploitation of data is changing due to rising concerns from digerati and consumer protection organizations regarding data privacy. Recently, a few leading U.S. wireless telecommunication companies were found selling client’s location data to data brokers[1]. With the repeated occurrences of data leakage and the announcement from leading carriers, like AT&T and T-Miblie, the general consensus at CES2019 is that it will not take long for consumers to shift towards data-safe providers.

We are seeing underutilized assets and potential winners who may benefit from the shift following the change in companies’ practice regarding data. Commonly, marketers only consider information from their CRM systems as first-party data and overlook other ones such as real-time behavioral data. However, in the near term, there will be a move to capitalize on these sources by tying them to second party data and tailoring the correct offers over the corresponding channels. That’s why at CES 2019, we saw identity-graph-as-a-service companies such as Signal, Throtle, LiveRamp, Towerdata, Screen6, and Tapad growing significantly in the space by utilizing these data sets more efficiently. In essence, ID graph providers offer marketers unified customer views across multiple platforms with data set which include personal identifiers, cookies picked up in browsers and related behavioral data like browsing activity or purchasing history to power better people-based targeting and enhance customer engagement.

Additionally, while mobile providers are pulling their location data selling, attendees at CES2019 saw growth potentials for App Networks and brick-and-mortar data providers to further expand in the space. App networks would potentially benefit as the main “go-to” source for location data and brick-and-mortar data providers possess valuable data tied to retail transactions.

Digital Marketing and Influencer in B2B

Gamification of the industry hampers adaptation by a broader group of marketers beyond those seeking large impact in millennial behavior (interests in beauty and fashion). Although social discovery and marketing remains ambiguous, we think that there is an opportunity to develop exposure and attribution best practices for B2B as audience interests shift into thought leader segments.

The Digital Marketing industry continues to operate in silos to either the advantage or consternation of companies like Adobe, Oracle, Salesforce, and Microsoft. However, we might see a few changes and acquisitions in the space as larger companies might acquire similar service providers for consolidation purposes (i.e. Alphabet might purchase The Trade Desk, IBM might acquire MediaMath and MediaOcean, and finally, Singtel may use Amboee’s platform to buy up the other providers such as Sizmek, Acuity, and SpotX).

Meanwhile, consultancies remain acquisitive supporting and seek business from the holding companies. Deloitte Digital and Accenture are both great examples of the practice, but the main difference is Deloitte’s constrained conflict with their audit clients.

TV and Ads

Another general consensus at CES2019 is that Television is back (although many of us felt like it had never left). The consumers preference for device type is becoming less and less relevant but we are seeing location and time become more of a factor when it comes to video consumption. For marketers, the priority is to reach this audience wherever they are consuming the content. The challenge for marketers is that an increasingly substantial portion is happening behind the wall gardens (FANGA), other non-traditional distributors (Skinny Bundles/OTT) and Mobile devices where consumption may not be audited.

In order to handle the rapidly fragmenting usage consumption patterns, marketers need to reach their audience with more targeted and precise methods. That is where we see a few bright spots on the horizon that come out of Nielsen and ComScore, as well as promising future for newer players like Tru Optik (data management platform that enables brands and agencies to activate advertising campaigns through OTT, Connected TV, and streaming audio).

On the one hand, TV Ad Buying is quickly changing just within a short 20-year period. The high interest (as high as 24 bidders) to the proposed sale of MediaOcean, an advertising services and software company, reflects the high market attention to the space. On the other hand, TV Ad Selling may finally face some changes following the path of Radio. We’re expecting TV Ads sales to mirror the evolution that we have witnessed. With AdsWizz and Jelli blazing a path to programmatic audio, TV may offer automated TV sales.


For more information about our observations from CES2019 and market opinions, please contact marketing@progresspartners.com.

For more information about CES, visit their website.


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[1]https://bit.ly/2VMTIps

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