Adtech M&As Have Skyrocketed—What Else Is in Store for 2025?

The digital advertising industry had a lot to celebrate in 2024, as much of the uncertainty brought on by the pandemic was in the rearview mirror. Tech giants saw a spike in ad revenues: While Google’s ad revenue jumped more than 10% year over year, Meta saw a sales increase of 19% over the same period while its profits grew by 35%. Snap’s take from ads grew 15% year over year, primarily because of the company’s investments in augmented reality and AI. 

Unsurprisingly, an uptick in mergers and acquisitions has followed. Adtech, martech, and digital content companies have seen more dealmaking of this kind than they have since H1 2022, with a 118% year-over-year increase and a 26% quarter-over-quarter jump in Q3 2024.

The surge reflects the comeback of digital ad spending growth rates, which are now faster than before the pandemic. Adtech providers are looking for acquisition targets that can position them to capitalize on the growing demand for innovative technologies that address inefficiencies, enhance data transparency, and meet evolving privacy standards.

Many deals are strategic, with acquirers scouting specific deals rather than sellers running broad processes. Specifically, we’re seeing an increase in demand for acquisitions that bring unique first-party datasets, allowing adtech providers to give their users access to new channels and reach new audiences or enhance their capabilities with AI. Adtech firms also used M&A as a way to grow capabilities in growing channels like connected TV, retail media, and content syndication.

Several more trends will bring fundamental changes to the industry this year.

First-party data for navigating privacy regulations

Brands face inherent risks in maintaining engagement integrity without clear visibility into where content is promoted or who handles the data. Companies that fail to provide transparency and comply with privacy regulations will struggle to compete, while technologies and vendors prioritizing data integrity and privacy will continue leading the market and shaping the future of ethical and effective advertising practices. 

As third-party cookies continue to phase out and global privacy regulations like GDPR and CCPA evolve, organizations will depend more heavily on first-party data that they collect directly from customers. Businesses will prioritize investments in data collection systems like loyalty programs, mobile applications, and interactive experiences to create robust customer profiles. This change will also encourage partnerships between brands and publishers to share anonymized data within privacy-compliant frameworks.