With fears of an advertising duopoly, concerns about shady agency practices, a downturn in VC funding and mounting anger at programmatic opacity, there are plenty of reasons to be bearish about the digital advertising ecosystem right now.

But one of the leading thinkers and M&A advisers in the space doesn’t want you to forget the sector’s positive underlying outlook.

In this video interview, LUMA Partners founder and CEO Terence Kawaja spoke with Beet.TV at LUMA’s own Digital Media Summit, where he delivered a State Of Digital Media address he said puts “the case for optimism”. That case is a three-pronged reason to smile:

  1. Growth: Regardless of the challenges that do exist and have to be addressed, we’re seeing more and more dollars flood in to digital. When you think about super-charging that with artificial intelligence, we believe the organic growth of the sector is going to continue unabated for the next foreseeable future.”
  2. New entrants: We’re seeing large companies with massive capabilities and capitalisations coming in to the space, making investments, making acquisitions from a diverse group of buyers ranging from large CRM marketing clouds to big data companies, big media companies, telcos, even private equity. That ought to be a very strong ‘buy’ signal.”

  3. Deals: We are getting deals done at fantastic valuations, at great multiples that do not reflect the negativity associated with some of the publicly-traded companies.”

LUMA’s State Of Digital Media report shows a dip in venture funding to ad-tech companies. But, where VCs walk away, private equity is coming in – and Kawaja sees that as a sign of sector maturation.

What’s more – whilst many grumble about a duopoly of Facebook and Google in advertising, Kawaja tips Amazon to extend its cloud and voice-controlled device expertise in to digital ad services.

This segment is part of a series leading up to the 2017 TV Upfront. It is presented by FreeWheel. To find more videos from the series, please visit this page.

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