Lucid-Cint: Is there a Rollup in Survey Research Technology?
ResTech, or 'Research Technology,' is the next generation of customer research. And monopolization is coming along with automation.
The easiest time to structure a market is in its early stages, usually when there’s a technological inflection point. Standard Oil, for instance, didn’t try to monopolize the whale oil market, but took control of a key bottleneck of kerosene refining in the 1860s and 1870s. It lost its monopoly when the government broke it up in 1911, which was also right as the business shifted from kerosene to gasoline.
In online advertising, Google and Facebook began dominating from 2007-2014. They did this through mergers to ensure they controlled the shift to what was known as ‘programmatic’ advertising, or the ability to buy and sell online ads in automated marketplaces powered by software. (This is what the Texas AG suit against Google is about.)
With the massive merger boom engineered by the Fed, everyone is consolidating as quickly as they can. In one particular market, similar but much smaller than advertising, a reader alerted me to a fairly clear case of monopolization. This is the programmatic research technology space, where a European firm - Cint - is buying a New Orleans firm called Lucid for $1.1 billion. It’s not a big acquisition, but the industry is expanding at 25% a year and the margins for Lucid are at 79%.