Rise (and Fall) Of the Full Stack In Adtech

“Adtech Full Stack” or “Full Ad Stack” is a term used increasingly frequently in the ad tech space. During the past year, hardly a day went by without any announcement of a large advertising conglomerate acquiring a company to complete their “Full Ad Stack”. This sudden interest and trendiness for the term leads me to ask: What are these stacks and why is the market so hung up on the need to build or buy one?

Taking a look at the Mobile Advertising Lumascape, it is striking to see how many middlemen there are between advertisers and users, each taking a small (and sometimes not so small) share of the advertising dollars.

Advertising has already set its path to become a true commodity, furthered by trends such as the advent of programmatic trading, ad-option trading platforms and transparency becoming a standard, rather than a premium advertisers need to pay for. All of these milestones show that advertising, or at least adtech, is reproducing the pattern of the financial trading world from over 20 years ago. This pattern saw the incumbents’ margins shrink as competition increased. Consequently, with technological advances, financial trading became a commodity and the only way to capture some of the value was by offering new technological services to existing players.

Similarly, in adtech, increasing competition and technological platforms (DSPs, DMPs, SSPs), as well as new standards (such as OpenRTB) eventually minimize the technological barrier to media trading, thereby allowing anyone to enter and join the party.

This new paradigm, whereby advertisers can access consumers directly, will force middlemen to drop their margins and focus on value-added services to attract customers to their offering.

Here comes the Full Ad Stack. The ad stack is, as the name implies, a stack of tools and services allowing a company to provide all advertising-related services to enable advertisers to reach the users directly via one single platform.

Instead of using a myriad of mobile/video/social/display/rich media/native/incentivized networks, advertisers are then able to go through a one-stop shop and get all of the media deliveries bundled together.

Who is aiming at a full stack in mobile adtech?

The first ones trying to build such stacks are obviously the big players:

Google, Facebook, Yahoo, and Twitter have all made acquisition to support a cross-screen, cross-format advertising platform across display, mobile, video and native.

Ad agencies are not missing out on the party either there have been some interesting moves by agencies investing resources into cutting the middle men from the circuit (Publicis-Matomy investment, WPP/XAXIS-AppNexus strategic partnership).


However, in an industry as diverse as ours – does a Full Ad Stack strategy still make sense?

New areas are constantly being formed with the fast evolution of technology, and while it would be nice to think of a single mega-platform allowing access to display, mobile, wearable, virtual reality and digital outdoor advertising platforms, the world is too fragmented for this to happen and we are not heading towards a future where a single, closed platform will surround the users 24/7, allowing advertisers to access the latter.

The idea is great, but for the true Full Ad Stack to work, we would need to live in an Apple-like utopia of a world, where everyone resides in a technological closed-loop society. While I would be happy to live in such a world, akin to a sci-fi film from the 90’s, I am rather certain it’s not going to happen.

My opinion is that while the major media players & publishers (mentioned earlier as the big four) will continue to acquire companies to strive towards building an imaginary Full Stack, it is the rest of the industry that will keep on growing in the next years by innovating and providing new services that will add value to the chain. In this respect, it would be wise to look at what happened with retail: after a period of bundling products and services together within hypermarkets, the rise of technology (in this case Internet) allowed for smaller specialized, value-adding services to emerge.

Today we might be seeing, yet again, the dawn of the small & medium-sized businesses. Indeed, offering service and quality is sometimes even more important than saving a few bucks.