LUMA Partners: AI Is Redrawing the Battle Lines Inside Ad Tech

Ad tech mergers and acquisitions have been rising steadily as 2026 draws to a close, and that deal flow framed this year's Digital Marketing Summit, hosted by investment bank LUMA Partners earlier this week.

The summit's opening session set the terms of the debate. LUMA Partners CEO Terry Kawaja and Conor McKenna, a partner at the boutique investment bank, told attendees that AI is reshaping ad tech along two distinct fronts: how marketing technology selects and delivers ads, and how consumers discover and buy products.

That distinction matters for anyone tracking where corporate development teams will spend next. Kawaja and McKenna's framing, delivered to an audience of dealmakers, effectively splits the industry's AI exposure into a supply-side story and a demand-side story — and the two may not reward the same acquirers.

Where does the competitive edge move?

The first shift sits inside ad tech itself. According to the LUMA Partners executives, AI-driven tools are making previously complex workflows easier to automate — work that once required specialist teams and bespoke integrations.

The consequence, as the bankers laid it out, is a migration of competitive advantage. Value moves away from managing the process of campaign delivery — the orchestration layer that has defined ad tech intermediaries for a decade — and toward making better real-time decisions.

In practice, that means firms able to establish which signals to use, what creative to show, where to place an ad, and how to improve results are positioned to thrive in what Kawaja and McKenna described as the AI-first era.

Each of those four capabilities deserves scrutiny. Signal selection is increasingly contested ground as identifiers deprecate; creative decisioning collides with the generative AI boom; placement optimization attacks the remit of demand-side platforms (software that automates ad buying). None of the summit's opening claims addressed how quickly buyers will pay for the shift — a gap worth watching.

The takeaway: automation commoditizes execution, and the premium moves to whoever decides, not whoever delivers.

What does this mean for the M&A market?

The backdrop is instructive. Rising M&A volumes into the close of 2026 suggest buyers are already repositioning, and the summit's explicit question — what spurs the interest of corporate development teams — signals that sellers are calibrating their pitches accordingly.

Kawaja and McKenna did not, at least in the session's opening, name specific targets or transaction values. What they offered was a thesis: companies whose value proposition rests on process management face margin pressure from automation, while those monetizing real-time decisioning — the "brain behind the buy" — hold the stronger hand in negotiations.

The caveat is timing. Thesis-driven dealmaking in ad tech has a mixed record, and AI valuations in particular carry wide error bars. The bankers' claim that decision-makers will "thrive" is a forecast, not a result.

The second front — AI changing how consumers discover and buy products — received the shorter treatment in the opening remarks, and it may prove the larger disruption; the full proceedings continued on the Digiday report carrying the summit coverage.

For now, the direction of travel is clear: as 2026 closes, ad tech's dealmakers are pricing a future where the scarce asset is judgment, not infrastructure.