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.”