Last week, demand side platform (DSP) MediaMath filed for bankruptcy protection following a breakdown of talks with potential buyers and partners, including IBM and rival Viant.
The company was one of the first DSPs, formed over 15 years ago in 2007 to connect advertisers to media inventory via an automated buying exchange. The platform was used by more than 3,500 brand and agency customers with clients including PepsiCo, Adobe, and Sony.
More recently, MediaMath had been plagued by financial issues after the business appeared to miss its acquisition window and did not file for public listing. It was forced to recapitalise last year with Searchlight Capital, with the startup selling a controlling stake in the business to the private equity group in exchange for $150m in fresh capital and debt refinancing.
Staff were informed of the company's imminent closure last week.
“MediaMath had an outsized impact on the industry”
Speaking to PMW, Philip Acton, UK Country Manager at digital advertising solutions and services firm Adform comments: “It’s always sad to see independent adtechs go out of business. MediaMath had an outsized impact on the industry since its founding so to see it file for bankruptcy is certainly a shame. The news has and will continue to rock the adtech community as people find themselves facing uncertainty. I highly recommend JobsInAdtech.com for individuals who have been affected.
“The brands that were working with MediaMath will be facing disruption to their media buying campaigns. We are focused on minimising its impact for advertisers and agencies globally. As such, we have already migrated clients over to Adform and stand ready to assist many more in making a smooth transition,” Acton concluded.
A debt black hole in adland
The bankruptcy filing (registration required) reveals that the company owes money to between 200 and 999 creditors, including a number of major adtech businesses, and the firm’s rent for its World Trade Center offices.
The 30 companies owed the highest amounts are:
Microsoft’s Xandr: $4,014,169.96
Smart Adserver: $3,371,083.93
4 World Trade Center: $2,511,572.86
Index Exchange: $2,175,479.54
Gravy Analytics: $884,895.98
Google Affiperf: $883,308.25
Foursquare Labs: $862,389.71
The business is also paying back a $150m loan from Goldman Sachs, which it took out in 2017. As part of bankruptcy proceedings, Goldman Sachs will be paid back after paying out remaining wages and selling the company’s assets.
What next for MediaMath advertisers and the DSP sector?
The reasons for the company’s demise are still being debated, with cash flow issues, lack of diversification and the unorganised division of tech stacks incurring significant waste and costing the company millions, all cited as potential reasons.
The ad and martech landscape is becoming increasingly complex, and competition is heating up, with Google and The Trade Desk emerging as the major players in the DSP landscape, leaving brands and agencies scrambling to move their spend to other platforms.
The news echoes Sizmek’s bankruptcy in 2019, which went on to be bought by Amazon, becoming a major challenger in the DSP landscape in its own right. Amazon acquired Sizmek’s Ad Server and Sizmek Dynamic Creative Optimization in May 2019, at which time they were still the second largest ad server in the world, only outsized by Google.
The legacy of MediaMath remains to be seen.