Shift to Technology Platforms and Social Commerce Transforms the Digital Commerce M&A Deal Mix, Reveals Hampleton Partners’ Research Reports

• Agency M&A is down, as media groups curb acquisition rate and face competition from professional services firms
• Digital software M&A is up, as a range of buyers hone in on digital solutions for higher returns

ID: 1551371
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Total Digital Marketing M&A Deals 2011-Present
Total Digital Marketing M&A Deals 2011-Present

(businesspress24) - London, UK – 13 August 2019. The growth of M&A activity in the ‘platform economy’ and in social commerce are two of the biggest trends identified in the latest E-Commerce and Digital Marketing M&A Market Reports from Hampleton Partners, the international technology mergers and acquisitions advisor.

Transaction volume for the digital marketing sector has remained stable since 2011, but in the first half of 2019, marketing application software received more M&A attention, with 95 deals inked and disclosed deal value of $2.06bn, versus 67 deals and deal value of $1.4bn for digital agencies & marketing services providers.

The top two acquirers so far this year are Dentsu Aegis and Accenture, with four agency acquisitions apiece. The ‘big four’ media agencies – WPP, Omnicom, IPG and Publicis – made no acquisitions in the first-half of 2019.

Instead, two of the most important digital marketing deals were in the software subsector, as risk advisory and brokerage firm Wills Towers Watson acquired TRANZACT for $1.2bn, and McDonald’s purchased personalisation platform, Dynamic Yield, for $325m.

Ralph Hübner, sector principal, Hampleton Partners, said: “2019 has begun with a total rebalance of the deal mix: agency M&A is down, while digital marketing software M&A is up. Where agencies are concerned, today’s acquirers are just as likely to be IT consultancies or corporates as they are media networks.

“Meanwhile, marketing software providers are caught up in a new hype cycle which includes buyers from a range of sectors.”

Rise of platform economy M&A
The first half of 2019 saw the IPOs of three later-stage e-commerce platforms – Pinterest, Revolve and Jumia – rank in the top 10 most successful VC exits so far this year.

Investors are keen to capitalise on the growth of the platform economy, particularly given the exceptional performance on stock markets of companies such as Alibaba or Etsy.


Stock market momentum and the potential for higher returns is translating into high levels of M&A activity, as illustrated by Etsy’s acquisition of vintage music gear marketplace Reverb for $275m in July.

Social commerce M&A
Ralph Hübner, sector principal, Hampleton Partners, said: “Given the number of users scrolling through Instagram during any given minute is expected to more than double to 372,000 during 2019, the proliferation and adoption of social media has hardly reached its peak.”

Legacy brands have paid hefty sums for microbrands which leverage social media and quickly penetrate niche market segments, as shown by Edgewell Personal Care’s acquisition of razor start-up Harry’s for $1.4 billion.

The future of e-commerce and digital marketing M&A
Ralph Hübner concluded: “The rise of platforms, marketplaces and social commerce will lead to more exits in the marketing application software segment, as all types of buyers attempt to navigate the marketing landscape of these new business models.

“As for agencies, they need their own tech or unique skillset in areas such as CRM, big data, social commerce or retail media, to avoid being sandwiched between nearshored competitors or the client’s in-housing of marketing and advertising.”



More information:
http://https://www.realwire.com/releases/Shift-to-Technology-Platforms-and-Social-Commerce-Transforms



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Date: 08/13/2019 - 05:47
Language: English
News-ID 1551371
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Freigabedatum: 13/08/2019

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