According to JEGI, deal valuation rose 75% across the board in the past year, driven in part by media and marketing-sector acquisitions such as Microsoft's $26 billion deal to buy LinkedIn and Dentsu Aegis's $1.5 billion purchase of Merkle. Marketing services and technology was the second most active sector, with 471 transactions valued at $32.7 billion.
“Mar tech gets a much better valuation,” Kawaja said. “If you think about a world where you’re marketing to known users in a completely lit environment, issues [like ad blocking, fraud and viewability] all kind of get solved.”
CRM companies and cloud providers like Oracle, Adobe, Salesforce and Merkle are liked by investors because of their first-party data connections.
But rebranding an ad tech company as mar tech can be like putting a lipstick on a pig.
“All I have to do is ask three questions and I can tell what your business model is,” Kawaja said.
Geffs agreed. “Last year was, ‘Hey we’re a SaaS company,’" he said. "Now it’s, ‘Hey, we have a customer success team.’ Really, you’re just services business in denial.”