While You Were on Vacation, AI Ate the Ad Stack

If you checked out on vacation this summer, you missed a lot more than a few earnings calls. Google, OpenAI, Amazon, Meta, Databricks and Uber all made moves pointing in the same direction: AI is no longer just helping people run advertising campaigns. It is starting to make the decisions.

Automation is becoming autonomy. The first generation of ad AI wrote copy, built audiences and summarized reports. Useful, but hardly revolutionary. The next generation is choosing inventory, allocating budgets and optimizing campaigns with less human involvement. Marketers set the destination; the machines increasingly choose the route.

Amazon's Brand+ and Performance+ products now automate deal selection for streaming-TV campaigns and adjust inventory based on results. Google is putting Gemini inside Ad Manager to diagnose delivery problems, generate reports and execute publisher workflows.

Google is shrinking the chain. Google's Buyer Direct also lets agencies reserve publisher inventory through Ad Manager without a conventional DSP. Add AI to that workflow, and Google could automate jobs currently handled by DSPs, SSPs, publisher sales teams and reporting tools - without letting the transaction leave its platform. Google's biggest advantage may simply be that everyone is already using its pipes.

That raises the stakes for independent adtech companies. Being another dashboard or workflow tool will not be enough. The valuable businesses will own something difficult to replicate: proprietary data, differentiated supply, independent measurement, cross-platform access or genuine transparency.

OpenAI wants the whole ecosystem. OpenAI appears to be building much more than a few sponsored boxes inside ChatGPT. Its moves since May point toward a full ecosystem spanning direct sales, resellers, agencies, outsourced services and self-serve buying.

Its superpower is conversational intent. People tell ChatGPT what they are researching, comparing, planning and considering buying - often in remarkably specific detail. Turning that intent into an advertising business will require attribution, product feeds, merchant onboarding, conversion APIs, brand safety and global distribution. Some of the most interesting acquisition targets may sit around the chatbot rather than inside it.

Customer data is becoming AI infrastructure. Databricks crashed the marketing party in June with CustomerLake, its new "agentic CDP." It combines identity resolution, customer profiles, audience creation, activation and personalization where enterprise data and AI models already live.

That leaves traditional CDPs with an uncomfortable question: why keep moving customer data into another marketing platform if agents can work directly where the data already sits? Basic audience building could become commoditized, while proprietary identity, enrichment, consent and transaction data become even more valuable to Databricks, Snowflake, Salesforce, Adobe, Oracle and Microsoft.

The black box needs a scorekeeper. Measurement used to explain what happened after a campaign ended. Now it is becoming a live signal telling machines where to spend the next dollar. That makes attribution, incrementality, creative analytics, attention measurement and cross-channel outcomes more important. The irony: the more mysterious the black box becomes, the more advertisers need an independent party to prove it works.

CTV is joining the loop. Amazon's automated streaming-TV buying connects inventory selection, commerce signals, creative optimization and measurement. Television buying is starting to look less like a string of media negotiations and more like one very large performance campaign.

Commerce data is the prize. Uber's proposed $14.8 billion acquisition of Delivery Hero in July contains another advertising clue. Beyond creating a global delivery giant, the deal would give Uber far more consumer, merchant, location and transaction data. Amazon, Walmart, DoorDash and Instacart are playing versions of the same game: their advertising advantage begins with knowing what people actually bought.

The takeaway: The ad stack may look simpler on the surface, but underneath it will depend on more data, infrastructure and measurement than ever. The best M&A thesis is no longer simply "buy an AI company." It is to acquire the scarce data, supply, measurement or execution capability that makes the AI smarter. That is the real signal this Summer - and probably a preview of the next consolidation wave.

Woodside Capital Partners is a leading corporate finance advisory firm for tech companies in M&A and financings in the $30M -$500M enterprise value segment. The firm has worked with extraordinary entrepreneurs and investors since 2001, providing ultra-personalized service to its clients. Our team has global vision and reach, and has completed hundreds of successful engagements. We have deep industry knowledge and extensive domain and transaction experience in these and other sectors: Artificial Intelligence, CyberSecurity, HR Tech, Digital Advertising and Marketing, Autonomous Vehicles, ADAS, Computer Vision, Aerospace and Defense, CloudTech, Enterprise Software, IT Services, Information Security, FinTech, Internet of Things, Networking / Infrastructure, Robotics, Semiconductors, Quantum, Energy Storage, Digital Health & Virtual Care, Diagnostic, Medical Devices & Precision Medicine, Healthcare IT & Data Analytics Platforms, AI & Automation in Clinical Decision Support, Revenue Cycle Management & Financial Ops, Behavioral & Mental Health Tech, Value-Based Care & Preventive/Wellness Platforms, Healthcare Infrastructure & Cybersecurity. Woodside Capital Partners is a specialist in cross-border transactions, and has extensive relationships among venture capitalists, private equity investors, and corporate executives from Global 1000 companies.

By Analyst Ted Celentino. Digital Advertising Managing Directors Ryan Klinefelter, Ron Heller, and Executive Director Russell Tillett contributed to this report