Headline October 01, 2018/ '' ' GIGANTIC *$88 BILLION* GOBLETS ' ''


OVERALL SPENDING FOR ONLINE ADS continues to rise, to more than $88 billion last year according to the Interactive Advertising Bureau............

And in a bigger context : The old boundaries of the human self are being blurred by technology : Merging humans with robots, the world at large, generally says *is a good thing*.

The risks are very real, but the potential is astounding, too.

ALTHOUGH many consumers have never heard of ad tech firms, people's online activity is influenced every day by these companies as they battle for a share of ad impressions on phones, tablets and laptops.

The ''Mad Men'' style of advertising workers has been replaced by the ''math men'' of ad tech start ups, which specialize in gathering data on consumer preferences.

Advertising, the economic juice behind the Internet, has long been an attractive area for start ups.

During the last 10 years, the ease of forming companies and the availability of cheap venture capital led to a flood of ad tech startups, pushing boundaries on where and how ads were delivered.

They introduced technologies like the automation of  ad buying - called the programmatic advertising - and header bidding, in which many ad exchanges led to publishers space simultaneously.

Overall spending for online ads continue to rise, to more than $88 billion last year, according to the  Interactive Advertising Bureau, a trade group.

But more than 90 percent of the growth last year went to Google or Facebook.

Ari Paparo, chief executive of the ad  tech start-up Beeswax, said he had noticed distinct decline in venture capital funding for ad tech firms just in the last two years.

''The private market is influenced by the public market, and you saw so many fail as publicly traded entities,'' he said.

There were 260 deals between ad tech companies and venture capital firms in 2014 but only 122 in 2017, according to Pitchbook. In the first half of 2018, there have been 53 deals.

The fear is that when investment dries up, innovation will die.

Small start-ups are crucial to the industry because they often serve as catalysts for technological advances, said Doug Knopper, one of the founders of the ad tech platform FreeWheel, which was sold to Comcast in 2014.

''There's still more innovation to come, but if VC 's don't put money into it because they don't see a path to exit, does innovation stall?'' he said, referring to venture capitalists.

Some are hoping a third big competitor could help the industry. Eric Adelman, president and one of the founders of Three Pillars Recruiting, said that while AT&T  acquisition of AppNexus consolidates power in fewer places, the deal could help make AT&T a rival to Google and Facebook.

''Having three giants in the industry is much better than having two giants,'' he said.

Amazon is also making inroads into advertising, with a new advertising arm, raising the possibility that it will become a top competitor. Its trove of data on consumer spending habits could make it a formidable opponent.

The company recently reported that it generated $2.2 billion in revenue from its advertising business in the second quarter, more than twice as much as in the same period a year earlier.

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