Overview: This report provides an in-depth analysis of mergers and acquisitions (M&A) in the digital marketing and advertising industry over the last 36 months (roughly 2022 through mid-2025) in the United States. We examine recent deal volume trends, valuations, key drivers of M&A activity, notable transactions, and an outlook for potential sellers. The goal is to help owners of digital marketing, advertising, and related companies understand the current M&A landscape and prepare for a potential sale.

Industry Overview and Market Context

The digital marketing and advertising industry is a large and highly fragmented market. In the U.S. alone, advertising agencies (including digital-focused firms) generated about $70 billion in revenue in 2023. No single company dominates the industry – for instance, the two largest agency holding companies (Omnicom and WPP) together account for only ~11% of market share (Omnicom ~6.5%, WPP ~4.8%), with ~85% of revenues split among many smaller firms. This fragmentation has fueled significant M&A as larger players and investors acquire smaller agencies to expand capabilities and market reach.

Several macroeconomic and industry factors set the stage for recent M&A trends:

• Strong Digital Ad Spend Growth: Overall advertising expenditure has been rising. GroupM estimated U.S. ad spend grew ~5.9% in 2023 (to around $874.5 billion, excluding political ads) despite economic headwinds. This reflects continued shift of budgets into digital marketing channels. A surge in digital advertising post-pandemic (as businesses moved online) drove strong growth in 2021–2022, boosting demand for digital marketing services.
• Pandemic Effects: The COVID-19 pandemic initially caused a brief slowdown in early 2020, but it also accelerated digital transformation. Advertising agencies saw heightened demand following the outbreak of COVID-19 as companies rushed to improve online marketing. This contributed to a boom in 2021 when many businesses resumed marketing investments, benefiting digital-focused firms.
• Economic Cooling & Uncertainty: By late 2022 and 2023, high inflation, rising interest rates, and fears of recession made some advertisers cut or temper their marketing budgets. Certain clients paused big technology and ad spend projects, especially in more volatile sectors, leading to slower growth for marketing service providers. This moderation in client spending impacted both agency performance and M&A appetite in the short term.
• Capital Market Conditions: The cost of capital rose sharply in 2022–2023 (with interest rates climbing to multi-year highs), making deal financing more expensive. Many private equity buyers became more cautious with leverage, and strategic buyers took more time to evaluate deals. However, by late 2024 the interest rate environment began to normalize and even improve (the Federal Reserve signaled easing in late 2024), which has started to revive deal-making activity.

In summary, the industry’s long-term outlook remains positive – continued digital marketing growth (forecasted at ~1.3% annual growth in advertising revenues through 2028) – but the past three years saw cycles of boom, slowdown, and reacceleration. Next, we detail how these factors translated into M&A trends.

M&A Volume Trends (2021 Peak, 2022–2023 Slowdown)

According to Greenwichgp.com, M&A deal volume in digital marketing & ad tech peaked in 2021 and has declined over the last two years.

M&A activity in the digital marketing/advertising sector surged to record levels in 2021 before moderating significantly in 2022 and 2023. 2021 was a banner year for advertising & marketing M&A: deal volume spiked following the pandemic rebound. In the U.S., 2021 saw the highest number of advertising industry deals on record (835 deals). Globally, one report tracked 558 sector deals in 2021, up ~43% from 2020. Abundant cheap capital, high stock market valuations, and pent-up demand for digital capabilities all contributed to this M&A boom.

2022: Sharp Decline from Record Highs. The exuberance cooled in 2022. Sector M&A volume fell substantially as financial conditions tightened. Globally, the number of advertising and marketing deals dropped by ~22–25% in 2022 compared to 2021. For example, the combined AdTech and digital marketing services deals tracked went from 558 in 2021 down to 420 deals in 2022 (a 25% decline). In the U.S., deal activity also contracted – 2022 deal counts were roughly 15–20% lower than the 2021 peak. This pullback aligned with broader M&A trends across industries in 2022, as rising interest rates and economic uncertainty put a damper on deal-making. Many buyers hit pause or became more selective, and some would-be sellers delayed going to market amid valuation concerns.

2023: Continued Slump, Then Signs of Life. In the first half of 2023, M&A activity reached its low point. Industry analysts noted H1 2023 “deal volumes [fell] to the lowest levels seen since the COVID-induced slowdown of early 2020”. Global advertising M&A volume for full-year 2023 was reported at 1,147 deals, down 22.4% from 2022. The U.S. market similarly saw a decline – 2023 U.S. advertising deal volume was about 25% lower than 2022. In raw terms, if ~420 deals occurred in 2022 (global sector count), 2023 likely finished with only ~340–350 deals (an additional double-digit percentage drop). This two-year slowdown (2022–2023) was driven by the factors mentioned earlier: high financing costs, cautious corporate spending, and lower public market valuations (some ad tech stocks were down 50%+ from their highs, reducing acquisition currency).

However, by late 2023 there were early signs of recovery. Dealmakers reported an uptick in activity in Q4 2023, as some of the uncertainty cleared. “It feels like the tide has turned,” noted one M&A advisor in December 2024, observing that deal flow picked up in the second half of 2024 after a slow start. Indeed, by early 2024, market observers were predicting a rebound: Intrepid Investment Bankers forecasted in mid-2023 that M&A activity would rise in H2 2023 and further increase in 2024 as interest rates stabilized and a backlog of prepared sellers came to market. While official 2024 numbers are still coming in, anecdotal evidence suggests H2 2024 was significantly more active than H1. (For example, one report noted global M&A volume across industries was up 25% year-over-year in the first half of 2025, helped by a few mega-deals.)

Regional and Segment Variations: The pullback was not uniform across all segments of marketing:

• Digital Ad Tech vs Agencies: Ad tech (advertising technology) deal-making slowed as many publicly-traded ad tech companies saw valuation drops in 2022, making acquisitions (or being acquired) less attractive. Meanwhile, digital marketing services (agencies, marketing consultancies) also slowed, but those serving resilient sectors (e.g. healthcare marketing) still saw activity. Private equity-backed “roll-up” platforms continued to buy smaller agencies even during the 2022–2023 lull (more on this below).
• Strategic vs Financial Buyers: Strategics (industry players such as agency holding companies) have historically accounted for the majority of acquisitions in this space. In recent years roughly 85–90% of deals were by strategic buyers, with 10–15% by financial sponsors (PE firms). During the downturn, some strategics focused on internal integration, but well-capitalized buyers still pursued strategic acquisitions, especially to acquire data/tech capabilities. Financial buyers remained active through their portfolio platforms, albeit at a somewhat slower pace.

Looking ahead, the stage is set for a meaningful rebound. Through early 2024, U.S. advertising M&A activity was slightly below the prior year’s pace (deal count in Jan 2024 was ~10% lower than Jan 2023), but confidence is returning. Heading into 2025, expectations are high for a resurgence: industry insiders predict a “flurry of activity in the new year” (2025). The announcement of a potential mega-merger (Omnicom and IPG, discussed later) is seen as a catalyst that could spur further deals across the industry. In short, after two slower years, M&A activity is primed to accelerate as we move into 2024–2025.

Valuation Trends and Deal Multiples

Valuations in the digital marketing and advertising sector have fluctuated in tandem with deal activity. During the 2022–2023 slowdown, deal valuations compressed before rebounding more recently.

• 2022–2023 Valuation Dip: As buyer demand cooled and interest rates climbed, valuations saw an even greater decline than deal volume in early 2023. Intrepid Investment Bankers noted that in H1 2023, marketing services multiples fell significantly due to the rising cost of capital and slower growth among agencies. In practical terms, buyers became less willing to pay high earnings multiples, especially for companies with uncertain near-term growth. Many deals that did occur were at somewhat lower EBITDA multiples compared to the 2021 frothy market. This was the “valuation trough” for the cycle – one advisory firm estimates industry valuations bottomed out in 2022.
• 2023 Recovery in Multiples: By late 2023, valuations began to recover substantially. Davidson Capital Advisors reported that current valuations (as of early 2024) were up 25–30% compared to the lows of 2022. In other words, companies were fetching higher multiples in 2023 than they could have at the nadir of the market downturn. This rebound was due to improved market sentiment and competition for quality assets. Notably, even though fewer deals closed in 2023, the ones that did often maintained strong pricing. One analysis of 2024 deals found that “the deals that took place didn’t see lower valuations” – buyers paid robust prices for firms that showed resilience through COVID and the 2022 slowdown. Well-performing agencies continued to command healthy multiples, especially if they were in high-demand niches.
• Focus on Fundamentals: A key trend is that investors have shifted focus from pure multiple expansion to fundamental growth. In the 2021 boom, some buyers paid high prices expecting to “flip” acquisitions at even higher multiples (a bet on market momentum). Now, acquirers are more focused on revenue growth and margin expansion potential. They are scrutinizing targets’ quality of earnings, client retention, and scalability. As a result, the valuation gap between top-tier assets and average ones has widened. Premium businesses (high growth, low client concentration, IP or tech-enabled) are still achieving top-of-range multiples, whereas weaker firms might struggle to attract strong bids.
• EBITDA Multiple Ranges: The table below illustrates typical EBITDA multiples being paid for private marketing/advertising agencies as of 2025, segmented by size and type. Larger agencies (> $5M EBITDA) generally garner significantly higher multiples than smaller shops, and certain subsectors (e.g. data-driven “growth marketing” or martech services) trend higher than others:

Average EBITDA Multiples for Marketing/Advertising Agencies (Q1 2025)

Agency Type	Small ($1–3M EBITDA)	Mid-size ($3–5M)	Larger ($5–10M)
Digital Marketing	4.9×	6.1×	9.0×
Growth Marketing	5.2×	7.0×	10.2×
Performance Marketing	5.0×	6.5×	9.3×
Creative Agencies	4.6×	6.9×	8.1×
Social Media Marketing	5.3×	7.1×	9.2×
Advertising (Traditional)	5.5×	7.6×	9.5×
Account-Based Marketing	5.5×	7.6×	10.6×
Personal PR/Branding	4.5×	6.6×	8.2×
Branding Agencies	4.7×	6.5×	8.9×
“Traditional” Marketing Services	5.2×	8.2×	10.4×

(Source: First Page Sage, based on M&A deals and advisor input)

As shown, a typical mid-sized digital marketing agency might sell for around 6–7× EBITDA, while a larger firm in a hot sector could approach 9–10× EBITDA. These are averages; actual multiples vary by deal based on growth rate, client mix, IP, and other factors. In 2024–2025, best-in-class agencies have achieved double-digit EBITDA multiples (8–12×), especially if they boast three years of double-digit growth and low client concentration. By contrast, smaller agencies with flat growth or heavy client dependence often trade in the mid-single-digit range.

Deal Structures: It’s also worth noting that not all deals are valued purely on EBITDA. In smaller transactions, Seller’s Discretionary Earnings (SDE) multiples or revenue multiples might be used. Earn-outs and performance-based payments have become more common in 2022–2023 deals, bridging valuation gaps between buyers and sellers. But overall, as the market rebounds, sellers can expect improving valuations – especially if their business demonstrates resilience and fits key buyer criteria.

Key Drivers of M&A Activity

Several strategic drivers and market trends have fueled M&A in the digital marketing and advertising space over the past few years. Understanding these factors can help potential sellers see what acquirers are looking for:

• Private Equity “Roll-ups” and Platform Building: Private equity (PE) firms have been very active in this industry, typically via a buy-and-build strategy. PE firms often invest in a platform agency and then acquire smaller add-on agencies to gain scale, new clients, or capabilities. For example, in 2023 Amulet Capital (with Athyrium) formed Unlock Health by merging two healthcare-focused digital agencies (Eruptr and DECODE) into a larger platform. This new entity manages over $500M in annual healthcare marketing spend, illustrating how PE can quickly build size through M&A. Similarly, Power Digital, a PE-backed digital marketing company (backed by Court Square), has acquired five agencies since 2020 – including a boutique consultancy Sproutward in 2023 – to expand its analytics and technology offerings. These roll-ups are driven by the thesis that a larger, integrated firm can offer more services and command a higher overall valuation than fragmentary smaller firms. Implication for sellers: If you’re a smaller agency, PE-backed buyers may be interested in acquiring you as part of their growth strategy, especially if you have a niche they haven’t filled.
• Demand for Tech-Enabled Marketing Solutions: Traditional advertising is evolving, and technology and data are at the heart of many acquisitions. Buyers (both strategics and PE) are seeking to add analytics, martech, and AdTech capabilities to better serve clients. Intrepid IB notes strong demand for “tech-enabled solutions, including data analytics, attribution tools, and digital engineering capabilities” driving deals. For instance, the Sproutward acquisition by Power Digital was motivated by Sproutward’s proprietary data platform, which Power can integrate into its machine-learning marketing analytics suite. Large agency holding companies have also bought many data and digital firms to enhance their offerings. Private equity has shown interest in marketing tech firms as well, as evidenced by continued acquisitions in marketing software and AdTech (e.g., integration of ad platforms, e-commerce marketing tools, etc.). In summary, companies with strong technology, AI, or data-driven marketing solutions are particularly attractive M&A targets.
• Convergence of Consulting and Advertising: The boundaries between digital agencies, consulting firms, and IT services have blurred. Consulting and IT firms (Accenture, Deloitte, IBM, etc.) have been aggressively acquiring marketing agencies to build end-to-end customer experience capabilities. Accenture (via Accenture Song, formerly Accenture Interactive) is one prominent example – it has been a “consistently active acquirer” of advertising/marketing businesses in recent years. In 2023, Accenture continued with deals like acquiring The Unlimited Group (a UK customer engagement agency) and a Brazilian creative shop Soko. This trend is driven by clients’ needs for integrated marketing + technology solutions. Likewise, major ad agency groups have responded by acquiring more tech/data firms. The headline development is the planned merger of Omnicom and Interpublic Group (IPG) – a $13.25 billion deal announced in late 2024. If it proceeds, this merger would combine two of the “Big Four” ad holding companies, potentially creating a domino effect of further consolidation (as rivals respond). Implication: The landscape of buyers now includes not just traditional agency networks, but also consultancies, tech firms, and even telecom/media companies – all seeking marketing capabilities. This expands the pool of potential acquirers for marketing agencies and AdTech firms.
• Focus on High-Growth Segments: Acquirers are especially targeting high-growth or resilient verticals and channels. For example, retail media (advertising on retail platforms like Amazon, Walmart), connected TV/streaming advertising, and influencer/social marketing are seen as fast-growing areas ripe for investment. Companies operating in these niches have drawn interest. Adtech firm The Trade Desk and others have been speculated as buyers or partners in retail media tech. Another area is healthcare marketing – considered recession-resistant – which saw multiple deals (e.g., agency networks like WPP’s Wunderman Thompson acquiring healthcare marketing specialists, or PE forming Unlock Health as noted). E-commerce and direct-to-consumer marketing specialists are also in demand as online retail expands. Bottom line: If your company specializes in a high-growth marketing channel or a robust vertical (healthcare, fintech, etc.), it likely commands a premium in the M&A market.
• Buyer Competition and Dry Powder: Despite the recent dip in volume, there is still strong competition for quality assets. Private equity firms are sitting on record levels of dry powder (uninvested capital) and are under pressure to invest, which has kept valuations from collapsing. Strategic buyers with cash (or high stock valuations) also continue to look for bolt-on acquisitions. During 2022–23, many buyers took longer to diligence deals, but few outright abandoned deals – in fact, a report notes that buyers did not back out of signed deals at a higher rate than usual during the downturn. This underscores that serious acquirers remain committed, as backing out hurts their reputation in the market. Now, with the outlook improving, these buyers are reactivating. Private equity in particular is expected to remain very active (including new platform investments) going into 2025. For sellers, this means a well-run sale process can attract multiple bidders, and competitive tension can drive a strong outcome even in a cautious market.

In summary, M&A activity is driven by the need for scale, new capabilities (tech/data), and access to growth markets. Whether it’s an agency holding company filling a gap (e.g., data analytics or experiential marketing), a consulting firm expanding into creative services, or a PE firm rolling up niche agencies, the common theme is enhancing offerings and growth. Sellers that align with these drivers – e.g. having proprietary tech, serving a desirable niche, or adding strategic client relationships – are highly sought after.

Notable Transactions (2022–2025)

Several illustrative M&A transactions from the last few years highlight the trends discussed and the scale of deals happening in the digital marketing and advertising arena:

• Previsible’s Acquisition of Internet Marketing Ninjas (2025): In July 2025, Previsible, a fast-growing SEO and AI-focused search consultancy, acquired Internet Marketing Ninjas (IMN), one of the longest-standing SEO agencies in the U.S. Founded in 1999 by Jim Boykin, IMN was well-known for its legacy expertise in link building and digital PR. Previsible, launched in 2021 by former eBay SEO lead Jordan Koene, brings AI-native search strategy and enterprise SEO services to the table. The acquisition preserves both brands and retains IMN’s veteran team (average tenure: 14 years), while enhancing Previsible’s capabilities in authority-building and content marketing. This deal highlights how next-gen SEO platforms are combining traditional trust signals with AI-driven discovery—positioning themselves for the evolving landscape of search in an AI-first world. It also reflects the trend of founder-led, high-retention teams becoming valuable M&A targets for modern, tech-enabled buyers seeking credibility, continuity, and scale. DISCLOSURE: Legacy Advisors serves as the sell-side M&A advisor on this transaction.
• Omnicom’s Proposed Merger with IPG (2024): In late 2024, Omnicom Group announced a planned $13.25 billion acquisition of Interpublic Group (IPG). This blockbuster deal (combining two top global ad agencies) would reshape the industry if completed. It’s seen as a potential “lightning rod” for further M&A, as other firms may respond by merging or acquiring to stay competitive. The deal underscores that even the largest players see consolidation as a path to growth and efficiency.
• Formation of Unlock Health (2023): In February 2023, Amulet Capital and Athyrium Capital created a new healthcare marketing platform called Unlock Health by acquiring and merging Eruptr and DECODE, two specialist digital agencies. Eruptr was a leading healthcare-focused digital media and analytics company, and DECODE a full-service healthcare agency. The combined entity manages ~$500 million in healthcare marketing budgets and has 120+ staff. This deal exemplifies private equity’s “buy and merge” strategy to build a scaled company in a niche (here, healthcare marketing). It also reflects interest in healthcare as a high-value vertical.
• Power Digital’s Acquisition Spree (2020–2023): Power Digital, a fast-growing performance marketing agency backed by PE firm Court Square, has been an active acquirer. Notably, in 2023 Power Digital acquired Sproutward, a boutique marketing consultancy known for its proprietary analytics platform. This was Power’s 5th acquisition since 2020, bringing its headcount to ~600 and adding first-party data analytics capabilities to its toolkit. Earlier, Power Digital had also acquired agencies like Social Method (social media marketing) and FINN Partners’ digital unit. This string of deals shows how mid-sized agencies are using M&A to rapidly scale and enhance tech capabilities, often with PE support.
• Accenture Song’s Continued Acquisitions (2022–2024): Accenture Song (the digital marketing arm of Accenture) has been on a buying streak, exemplifying the convergence of consulting and marketing. In 2022–2023 it acquired companies such as The Unlimited Group (a UK-based customer engagement agency) and Soko (a creative agency in Brazil). These followed a series of prior acquisitions (Accenture has bought dozens of agencies over the last decade). The goal is to cement Accenture Song as a top global marketing services provider. As one analyst noted, by revenue Accenture Song became the world’s largest marketing services business – until the Omnicom/IPG merger potentially leapfrogs it. Accenture’s deal activity signals that non-traditional buyers will pay top dollar for agencies that bolster their digital experience offerings.
• Havas and Others (2024): European firms are also making moves. Havas (the French advertising group) was spun off by Vivendi and listed publicly in 2023, and signaled plans for more acquisitions in data analytics, digital transformation, and AI areas. In 2024, Havas acquired multiple firms including a data analytics company (DMPG), a B2B marketing agency (Ledger Bennett), and a social media agency (Wilderness). This demonstrates the continued appetite for deals in the international arena, focusing on digital capabilities. Similarly, Japanese holding company Dentsu has been investing in its Customer Transformation division, acquiring, for example, life-science focused digital agency Shift7 in 2023 to expand its Salesforce CRM marketing expertise.
• Ad Tech Moves: In the ad tech sub-sector, there’s been speculation around companies like Criteo (a prominent adtech firm in retargeting and retail media). In early 2023, Reuters reported Criteo was exploring strategic options (possibly a sale), drawing interest from firms like The Trade Desk, Walmart, or Publicis. Criteo also considered making acquisitions itself (e.g., it was in talks to buy Skai, a retail marketing platform). Additionally, mobile-focused adtech company AppLovin made waves – its stock soared in 2024, fueling rumors it might use its $100B market cap to acquire a major player (insiders even speculated targets like Snap Inc. or a CTV ad firm). While these potential deals are speculative, they highlight that adtech companies are both targets and acquirers, and large tech entrants could disrupt the space via M&A.

These examples collectively show an industry in motion: large-scale mergers at the top, private-equity roll-ups in the middle, and tech-driven plays throughout. For a potential seller, it’s useful to map where your firm fits – e.g., could you be an add-on to a PE platform like Power Digital, or a strategic bolt-on to an agency network looking to fill a gap? Tracking comparable deals (in size, segment, or geography) can provide valuation benchmarks and likely buyer candidates.

Outlook and Advice for Potential Sellers

If you are considering selling your digital marketing or advertising business, the good news is that the M&A environment in this sector is improving after a slow period. Here we summarize the outlook for 2024–2025 and offer tips for sellers:

• Market Outlook (2024–2025): Industry experts anticipate a rebound in M&A activity in 2024 and 2025. The second half of 2024 already saw deal flow accelerate, and advisors expect a “flurry” of deals in 2025 as confidence returns. Economic conditions – assuming no major downturn – are stabilizing. Interest rates have likely peaked and even ticked down in late 2024, easing financing pressures. Advertising spend continues to grow modestly, providing a supportive backdrop. In short, 2024–2025 could be an opportune window to go to market, catching the upswing in buyer interest.
• Valuations Rising: Valuations are recovering from their 2022 lows. With more buyers re-entering the fray, multiples are expected to expand again as competition for quality assets increases. Sellers who pulled back in 2022 due to low bids may find 2024 brings better pricing. That said, valuation expectations should be grounded in reality – the froth of 2021 isn’t fully back (nor likely to return immediately). Companies that demonstrate strong fundamentals (growth, profitability, retention) and fit key trends (digital, data, etc.) will command premium valuations, whereas those with challenges might see more conservative offers. Overall, the trajectory is positive: one industry review noted “an increase in multiple expansion is anticipated as economic conditions begin to improve”.
• What Buyers Want: Buyers in the current market are more selective, emphasizing business quality over sheer size. As noted, acquirers are focusing on revenue growth and margin improvement rather than betting on market multiples rising. Sellers should be prepared to showcase a compelling growth story: have you achieved double-digit growth? Do you have a diversified client base with long-term relationships? Do you possess a niche expertise or IP that a buyer cannot easily build? These factors can significantly boost your attractiveness. In recent deals, “agencies that sold at the top end of the multiple range (8–12×) had 3+ years of double-digit growth, low client concentration, and above-average client retention”. Conversely, if your firm has flat growth or heavy dependence on one or two big clients, expect buyers to weight that risk into the price or deal structure.
• Hot Segments & Timing: Consider where your company aligns with hot segments. Areas like AI-driven marketing, analytics and attribution tools, performance media (retail media, CTV), and influencer/social commerce are drawing extra interest. If your business has a strong foothold in one of these fast-growing niches, emphasize that in conversations – buyers are actively seeking it. Similarly, if you serve a particularly resilient or high-growth industry vertical (healthcare, fintech, e-commerce brands, etc.), highlight your specialization. It can sometimes make sense to time your sale to when your segment is “hot.” For instance, companies with an AI angle may see a surge in interest in 2024 given the massive focus on AI across marketing. Keep an eye on industry news to gauge demand in your sub-sector.
• Prepare Thoroughly (Documentation & Metrics): In a more meticulous M&A climate, being well-prepared is crucial. Ensure you have up-to-date financial statements, KPIs, and growth projections ready for buyer due diligence. Be ready to discuss metrics like client churn, lifetime value, ROI of your campaigns, etc., which savvy buyers will ask about. Demonstrating a handle on your numbers builds credibility. Also be prepared to explain any 2020–2021 anomalies (e.g., one-time COVID-related projects) or 2022–2023 dips in performance, with a clear story on how you’ve rebounded or adjusted.
• Use of Advisors and Process: Engaging an experienced M&A advisor can significantly improve your outcome. A professional advisor can help identify the right buyer universe (strategic vs PE), position your story, and create a competitive auction process. According to industry data, the best outcomes for agency owners were tied to a formal sale process with multiple bidders, whereas “deals on the lowest end of the valuation spectrum occurred when owners self-represented”. In short, going alone could leave money on the table. An advisor also helps navigate deal complexities (earn-outs, reps and warranties, etc.). Since you are reading a report by an M&A advisory firm (Legacy Advisors), we of course recommend considering professional guidance – but the statistics do back it up.
• Deal Structure and Flexibility: Be open to deal structures that can bridge valuation gaps. In recent deals, it’s common to see earn-out payments or performance-based incentives, especially if there’s uncertainty about future results. If a buyer is wary of paying for optimistic projections, an earn-out can align interests and ultimately pay you the full value if you hit targets. Understanding current market terms (e.g., typical earn-out length, size, and metrics) is something an advisor can help with. Also, consider whether you as the owner are willing to stay on for a transition period or in an ongoing role – many acquirers, particularly PE, value a team that wants to stick around and grow the combined business. This can sometimes be a factor in valuation (an owner looking for a quick exit might get a slightly lower price versus one open to a longer partnership).
• Know Your Buyer Landscape: Finally, identify the most likely and best-fit buyers for your firm. If you’re a pure digital agency, likely buyers could include the big agency holding companies (WPP, Publicis, Dentsu, etc.), mid-tier agency groups (MDC/Stagwell, S4 Capital, etc.), consulting firms (Accenture, Deloitte Digital), or a relevant PE-backed platform. If you have proprietary tech, don’t overlook tech companies or marketing software firms that might value your solution. Understanding who might want you and why will help tailor your pitch and negotiations. For example, if you know a particular holding company is weak in your niche, that could be your top target to approach (they may pay a strategic premium). The current trend indicates buyers are “looking for the glue that ties together components” in marketing tech and data – position your company as that missing piece.

In conclusion, the digital marketing and advertising M&A market is reawakening. While the last 36 months brought ups and downs, the coming period looks promising for sellers: there is ample buyer interest (from both strategics and PE), improving valuations, and clear areas of focus where demand outstrips supply. By understanding the market dynamics and preparing diligently, sellers can take advantage of this environment. Whether your goal is to join forces with a larger strategic partner or to secure an investment for growth, now is a good time to evaluate your options. If you do decide to explore a sale, approach the process well-informed and well-advised – it can make all the difference in achieving a successful legacy for your business.

Sources: This report is based on industry data and expert commentary from the past three years, including investment banking reports and news analysis. Key references include Davidson Capital Advisors’ Marketing & Advertising Industry Year Review 2023, Intrepid Investment Bankers’ 2023 Marketing Services M&A Recap, Business Insider interviews with ad industry M&A insiders, and other M&A market updates. These sources and additional citations throughout the report provide the factual basis for the analysis and recommendations given.