M&A Activity Highlights the Rise of Marketing Technology [B2B Beat]

July 31, 2016

Earlier this month, The Jordan, Edmiston Group, a New York-based investment bank, released a report examining the state of mergers and acquisitions activity in the media, marketing, technology, and software sector.

In the not so distant past – let’s say a decade ago — this report from Jordan, Edmiston had a large focus on M&A activity in the trade publishing and trade show industries. That was back when companies such as Reed Business Information, Penton Media, and private equity firms rolled up smaller companies and created trade publishing giants. Now, deals in the traditional media sector are almost an afterthought.

This most recent Jordan, Edmiston report instead focuses on deals for technology and software companies that help marketers reach their audience more effectively and understand their customers more completely. This shift in focus reflects how the B2B marketing world has changed. No longer is the emphasis on sending static advertising messages to an audience in the pages of a print magazine. Instead, in our data-driven interactive world, marketers rely on software and other digital technologies to interact and engage with prospects and customers.

A 126% Surge in Deal Value

With this transformation to a technology-focused world, the Jordan, Edmiston report found that M&A activity is surging. In the first half of 2016, the media, marketing, technology and software saw 1,175 deals with a total value $121.2 billion. The deal flow was up 4 percent compared with the first half of last year, but the aggregate deal value increased 126 percent compared with the same period a year ago.

The Marketing Services & Technology category accounted for the second largest number of deals with 333 transactions. (Software & Tech-Enbabled Services was the leading category with 717 deals). The biggest transactions in the Marketing Services & Technology category included:

  • Salesforce’s acquisition of Demandware ($2.9 billion)
  • Vista Equity Partners’ acquisition of Marketo ($1.8 billion)
  • Axel Springer’s acquisition of analyst firm eMarketer ($242 million)
  • IBM’s acquisition of Bluewolf Group, a Salesforce consulting firm ($240 million)

More than half of the $13.3 billion deal value in the Marketing Services & Technology category was generated by deals for marketing technology companies, represented by Demandware and Marketo in the list above.

A Jump in Digital Agency M&A

Digital agencies were the second largest segment of the Marketing Services & Technology category with an aggregate deal value of $1.2 billion. Among the most prominent deals is this segment were digital agency acquisitions by Accenture, Deloitte, and IBM (which actually acquired three digital agencies on its own in the first half of the year).

At first glance, the third largest overall category in aggregate deal value was the B2B Media & Technology category with $30.2 billion in aggregate deal value (placing it only behind the Software & Tech-Enabled Services and Marketing Services & Technology categories). But about 97 percent of that value came from a single deal. As a LinkedIn employee, this topic is particularly salient, but I can’t comment on that particular deal (the Microsoft-LinkedIn transaction), as it has not yet closed.

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