B2B Beat: A Look Back and a Look Ahead at Media, Marketing and Technology M&A
January 17, 2016
Mergers and acquisitions activity is a solid indicator of how strong an industry is – and how strong it can be in the future. M&A activity in 2015 showed that companies and private equity funds remained bullish about many sectors in the media, marketing, and technology arena.
The “JEGI 2015 M&A Overview,” released by investment bank Jordan, Edmiston Group earlier this month, showed that M&A activity increased last year in what the bank calls the “media, information, marketing, software, and tech-enabled services” sector. The total number of deals in the sector reached 2,342 in 2015, which was 8 percent higher than the previous year. In the same timeframe, the aggregate value of M&A deals grew 15 percent to $152.3 billion.
Overall, there were 29 deals in the media, marketing, and technology area that were in excess of $1 billion, according to Jordan, Edmiston. Five of these large deals were of particular interest to B2B marketers and showed that investors are still bullish on providing B2B marketers platforms to reach their audiences. The five $1 billion-plus deals that Jordan, Edmiston classified as either “B2B Media and Technology” or “Marketing Services and Technology” were:
- Cox Automotive’s acquisition of DealerTrack Technologies for $4.55 billion
- LinkedIn’s acquisition of video education platform Lynda.com, valued at a reported $1.5 billion
- Nikkei’s acquisition of the Financial Times from Pearson for $1.31 billion
- Exor’s acquisition of the Economist Group, also from Pearson, for $1.16 billion
- Endurance’s acquisition of Constant Contact for $1.11 billion
Another media- and advertising-oriented investment bank, AdMedia Partners, recently issued a report on the M&A outlook for 2016. The report, “22nd Annual Market Survey, 2016,” was based on a survey of executives in marketing services, media, and related industries. Almost two-thirds of respondents were prepared to seek acquisitions this year, and 81 percent said they expected M&A activity by corporations to increase in 2016, suggesting a bullishness in the media and marketing sector.
According to the survey, the top five areas of interest for buyers are:
- Analytics (51%)
- Digital agencies (51%)
- Social marketing (46%)
- Custom content/native advertising (46%)
- CRM/database marketing (38%)
The survey also appeared to confirm the continued growth of digital marketing. For instance, 46 percent of the surveyed executives estimated that 40 percent or more of their business was digital in 2015. In two years, 74 percent said that 40 percent of more of their business would be digital. The executives were also bullish on mobile, with 14 percent of executives saying 40 percent or more of their business is mobile currently, but 35 percent estimated that 40 percent or more of their business will be mobile in two years’ time.
The surveyed executives also identified areas where they anticipate growth in the coming two years. Sixty-three percent of the executives anticipate 2 percent to 6 percent overall advertising growth in 2016. Specific advertising segments will generate double-digit growth, a majority of the executives said. For example, 55 percent of the executives anticipate growth of more than 15 percent in social media advertising and custom content. And 65 percent expect 15 percent or more growth in mobile advertising.
The optimism in the two reports from AdMedia Partners and Jordan, Edmiston was palpable. But optimism doesn’t always stay on track, and the stock market’s current decline could quickly derail it. As with any prognostications, only time will tell.
The executives in the AdMedia Partners survey were especially bullish on social media and content marketing. For an organized approach to leveraging LinkedIn for content marketing, download our new guide, the "LinkedIn Content Marketing Tactical Plan."
Photo courtesy of: