JEGI: First Quarter M&A Activity Focuses On Linking Known With The Unknown

JEGIMarketing services and tech M&A activity in the first quarter of 2016 resulted in 187 transactions that generated $8.1 billion of deal value, according to JEGI’s Q1 2016 M&A overview report, released on Friday.

More than half of the deal value in marketing services and tech came from the data and analytics subsector ($4.3 billion across 30 deals), which is happening as marketers want to connect advertising and marketing data, most notably linking known CRM identities with anonymous, cookie-based sources.

“The technical capability to bring together marketing to known versus advertising to unknown is ahead of most organizations’ ability to actually do it,” said JEGI co-president Tolman Geffs.

Publishers are increasingly supplying the ability to help advertisers reach and prospect consumers. Consider Time Inc.’s acquisition of Viant.

Digital agencies accounted for a significant portion of deal volume, with 28 transactions at $950 million, as advertising shifts toward creating holistic brand experiences across multiple touch points – and as new competitors enter the space.

“It certainly hasn’t escaped [the agencies’] attention that IBM, PwC and McKinsey are moving into their business, and they need to keep pace,” Geffs said.

Despite all the excitement around the growth of mobile, however, M&A activity dropped in the mobile media and technology sector. There were 40 transactions at $1,095 million in Q1 2016, compared to 54 transactions at $2,011 million during the same period last year.

According to Geffs, “The rate of growth and transformation [in mobile] is still really strong,” and spending in the sector is settling to a more sustainable pace.

Finally, JEGI’s report indicates that marketing and technology M&A activity will focus on enabling automation.

“Marketing remains the last big frontier of the enterprise that has not been highly automated,” Geffs said. “The outsourced services shops are thinking hard about how to take more of this out of the enterprise to transform how marketing is done.”

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!