by AdExchanger Guest Columnist <span class="divider">//</span> <time class="updated" datetime="2022-02-02T00:35:15-05:00">Wednesday, February 2nd, 2022 – 12:35 am</time><br> <br><i><span style="font-weight: 400;">"</span></i><a href="https://ai.omeclk.com/portal/wts/ugmcmsbxAD%7Chfvwa0bkBaAEgz9bweR7La"><i><span style="font-weight: 400;">The Sell Sider</span></i></a><i><span style="font-weight: 400;">" is a column written by the sell side of the digital media community.</span></i><br><i><span style="font-weight: 400;">Today's column is written by Mike Peralta, VP and GM of </span></i><a href="https://www.t-mobile.com/marketing-solutions"><i><span style="font-weight: 400;">Marketing Solutions, a division of T-Mobile USA</span></i></a><i><span style="font-weight: 400;">.</span></i><br><span style="font-weight: 400;">2021 brought unprecedented consolidation across ad tech. But there’s one particularly striking mini trend that’s emerging: Gaming studios are merging with ad tech platforms. </span><br><span style="font-weight: 400;">In the latest example of this trend, Microsoft announced two blockbuster deals that pair ad tech with gaming content. In December, the company shared plans to </span><a href="https://www.adexchanger.com/online-advertising/xandr-formerly-appnexus-is-now-formerly-att-after-its-acquisition-by-microsoft/"><span style="font-weight: 400;">acquire Xandr</span></a><span style="font-weight: 400;">, AT&T’s data and analytics platform. And just two week ago, Microsoft announced it’s acquiring Activision Blizzard, the publisher behind </span><i><span style="font-weight: 400;">Call of Duty</span></i><span style="font-weight: 400;"> and </span><i><span style="font-weight: 400;">World of Warcraft,</span></i><span style="font-weight: 400;"> for a whopping $68 billion.</span><br><span style="font-weight: 400;">But Microsoft isn’t the first to take this approach. In fact, it’s following in the footsteps of gaming and software giants, including AppLovin, ironSource and Zynga. What’s the strategy behind the move? First-party data. </span><span id="more-185546"></span> <!-- /987/AdExchanger/AdExWeb600x300 --> <div class="adex-post-ad" style="display: initial !important;" id="div-gpt-ad-1610641992324-0"> <script>
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</script> <div style="clear:both;"></div> </div> <div style="clear:both;"></div> <div class="adex-ad-text"> <img alt="" class="alignnone" src="https://axxess.ar/wp-content/uploads/2022/02/advertisement2.png" /> </div> <br><b>A popular playbook</b><br><span style="font-weight: 400;">First-party data is the future of advertising, taking the place of outdated cookie-based tech. In previous years, ad platforms have failed to find a way to fully leverage the power of this data. But today, companies are putting it at the center of their strategies. And M&A is helping to fuel it.</span><br><span style="font-weight: 400;">In 2018, </span><a href="https://www.adexchanger.com/mobile/applovin-picks-up-400m-in-pe-investment-plans-acquisitions-and-potential-ipo/"><span style="font-weight: 400;">AppLovin raised $400 million from private equity firm KKR</span></a><span style="font-weight: 400;"> at a valuation of $2 billion, using those funds to transform itself from an advertising platform into a mobile gaming powerhouse. Today, AppLovin has a market cap of nearly $32 billion. </span><br><span style="font-weight: 400;">To get there, they made a slew of smart ad tech acquisitions: first, </span><a href="https://www.adexchanger.com/mobile/applovin-acquires-max-in-a-bid-to-spur-in-app-header-bidding-adoption/"><span style="font-weight: 400;">MAX</span></a><span style="font-weight: 400;">, an in-app bidding solution. Then SafeDK, an SDK management tool that helps mobile app publishers automate security and brand safety. Then </span><a href="https://www.adexchanger.com/mobile/applovin-to-buy-mobile-measurement-startup-adjust/"><span style="font-weight: 400;">Adjust</span></a><span style="font-weight: 400;">, a mobile advertising measurement and attribution company. And, most recently, </span><a href="https://www.adexchanger.com/mobile/applovin-acquires-mopub-from-twitter-for-just-over-1-billion-in-cash/"><span style="font-weight: 400;">MoPub</span></a><span style="font-weight: 400;">, one of the largest in-app ad exchanges on the market.</span><br><span style="font-weight: 400;">Each of these acquisitions were strategic investments to grow AppLovin’s mobile ad business. In 2020, in-house app traffic generated more than </span><a href="https://www.sec.gov/Archives/edgar/data/1751008/000119312521065782/d73804ds1.htm"><span style="font-weight: 400;">70%</span></a><span style="font-weight: 400;"> of AppLovin's ad business. Following these acquisitions – specifically, MoPub – that number will shift dramatically by monetizing app traffic across every vertical.</span><br><span style="font-weight: 400;">IronSource, which runs a gaming studio and ad network, took a similar approach. In just nine months, the company acquired an ad quality insights platform, a creative platform and two major mobile in-app monetization platforms – Tapjoy and Bidalgo. Today, ironSource, much like AppLovin, continues to gain market share from the overall mobile gaming and mobile monetization industry. </span><br><span style="font-weight: 400;">But wait, there’s more. In 2021, Zynga, the leading global game developer, acquired Chartboost, an in-app monetization platform with a widely used SDK. And other up-and-coming players, like Media and Games Invest (MGI), continue to leverage M&A to turbocharge the content and platform growth strategy.</span><br><b>Fueling first-party data</b><br><span style="font-weight: 400;">Through these acquisitions, companies like AppLovin, ironSource and Zynga can tap first-party data from their in-house mobile games, add more first-party data via their monetization SDK integrations, then use those two sets of data to refine and scale both businesses: the gaming side and the media side. </span><br><span style="font-weight: 400;">For example, through its MoPub acquisition, AppLovin can leverage data from other mobile gaming publishers to derive insights on KPIs like CPMs, CTRs, viewability rates, completion rates and more. Then, AppLovin can use these rich insights to improve and grow the gaming assets they already own. It’s a recipe for success – and smart companies with large budgets are doubling down.</span><br><span style="font-weight: 400;">For Microsoft, the opportunity is equally robust. It can now combine the strengths of Xandr and Activision Blizzard to give both its gaming business and its ad tech business a major boost. Moving forward, the tech giant can gather insights from Xandr’s existing ad platform and use them to drive growth and improve the monetization of Activision’s portfolio of mobile gaming content. </span><br><span style="font-weight: 400;">And that’s really just the beginning. With the mobile gaming content market in the US expected to reach </span><a href="https://www.statista.com/topics/1906/mobile-gaming/#dossierKeyfigures"><span style="font-weight: 400;">$25 billion in 2022</span></a><span style="font-weight: 400;">, and US mobile ad spend exceeding </span><a href="https://forecasts-na1.emarketer.com/584b26021403070290f93a57/5851918a0626310a2c186a4d"><span style="font-weight: 400;">$160 billion</span></a><span style="font-weight: 400;"> this year, this particular M&A trend may very well set the tone for mobile marketing in 2022. </span><br><i><span style="font-weight: 400;">Follow T-Mobile (</span></i><a href="https://twitter.com/TMobile"><i><span style="font-weight: 400;">@TMobile</span></i></a><i><span style="font-weight: 400;">)and AdExchanger (</span></i><a href="https://twitter.com/adexchanger"><i><span style="font-weight: 400;">@adexchanger</span></i></a><i><span style="font-weight: 400;">) on Twitter.</span></i><br>Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!<br><a class="btn" href="/newsletter/">Join Today!</a><br><a rel="nofollow" id="cancel-comment-reply-link" href="/the-sell-sider/the-real-reasons-gaming-companies-are-merging-with-ad-tech/#respond" style="display:none;">Click here to cancel reply.</a><br> <label for="author">Name (required)</label> <input type="text" class="five" name="author" id="author" value="" size="22" tabindex="1" aria-required='true'> <br> <label for="email">Email (will not be published) (required)</label> <input type="text" class="five" name="email" id="email" value="" size="22" tabindex="2" aria-required='true'> <br> <label for="url">Website</label> <input type="text" class="five" name="url" id="url" value="" size="22" tabindex="3"> <br> <label for="comment">Comment</label> <textarea name="comment" id="comment" tabindex="4"></textarea> <br><strong>XHTML:</strong> You can use these tags: <code><a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong> </code><br><input name="submit" class="button" type="submit" id="submit" tabindex="5" value="Submit Comment"><br><br><a href="https://www.adexchanger.com/the-sell-sider/the-real-reasons-gaming-companies-are-merging-with-ad-tech/">source</a>
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