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Digital Marketing And M&A Industry

The trillion dollars advertising inventory is a rapidly changing industry, and most of the focus is on digital marketing. As global digital advertising revenues increase, there is a worldwide demand for more online content. Search engine optimization, lead generation, advertising, and affiliate partnerships are the primary revenue drivers in the 21st-century marketing industry. This process increases the value of content related companies and digital marketing agencies at a time when everyone is eye stuck with their connected devices. All of this screen time has helped traditional advertisers (print, television, foreign, radio) to shift their enormous spending into digital marketing and mobile Internet advertising tactics, even surpassing television commercials.


Global expense on digital advertising is expected to reach $517 billion by the end of 2023.


Robust growth, large size, and strong fragmentation in the digital marketing industry have led to healthy mergers and acquisitions involving digital agencies. Everyone, from conventional advertising agencies to private equity investors, is looking for target companies that offer growth benefits.


Building digital skills and relationships has become a top priority for traditional advertising agencies and their large holding companies as they try to increase their digital revenues and expand their portfolios. As traditional media continues to be replaced by digital marketing, the percentage of spending on digital media on behalf of traditional advertising agencies will continue to increase.
Evolving Technologies


In the digital marketing industry, there is a growing popularity of technologies that offer personalized resources and more profound experiences. Brands are under pressure to invest and buy this type of technology, while after-sales marketing has become an essential feature of the customer journey.


-Using chatbots and personalized messages improve customer experience.
-Audio queries activated by smart devices and PDAs conduct a voice search.
-Online video advertising is a rapidly growing segment.


The analysis of artificial intelligence allows better targeting of marketing strategies based on real-time data. This data leads to valuable information used to improve interaction with customers and optimize budgets and media marketing strategies.

Social media research is changing e-commerce and vehicles for product reviews and recommendations.


This sector will undoubtedly see more and more future technologies that have not yet been developed, which continue to lead to rapid change and growth and to create opportunities for mergers and acquisitions.


Extraordinary Platforms For Users
Large platform companies like Google and Facebook offer free digital products and services, but they can still benefit from them because they reach such a broad audience.


The wider the platform, the more data consumers collect. The more a consumer operates the platform, the more information they get about it. And with increased data, the platform can better adapt the content that consumers see and can keep the platform longer. This translates into better customer experience and higher advertising capacity, which means a better understanding of consumers, more influence, and more revenue from targeted advertising.


Affiliated Partnerships
Affiliated partnerships use affiliate sites to promote products or services owned by another company. The evaluation of an affiliate site depends on the specific conditions of the affiliate program. These factors include product longevity, category and seasonality, commission levels, high-level content, and the portfolio of links. Websites that meet these attributes generally have better returns, margins, and life cycles that are attractive to investors. For evaluation purposes, advertising agencies are similar to affiliates in that they rely on the content and action of the end-user to generate revenue.


These types of content monetization partnerships also apply to offline businesses that need new and better ways to generate public access. Moreover, investors tend to be attracted to this segment because of the existing relationships which can be used to their advantage.


Exit Opportunities
Some digital marketing agencies have been created with the aim of selling in mind. There are shallow barriers to entry when it comes to starting a digital marketing business, but the benefits of growth are also limited. Some brands do not want to work with a large company. And low employee tenure means less business knowledge stored in an industry where retaining talent is already extremely difficult.

An agency with strong historical growth and expected growth of more than 20% can lead to large multiples. Buying from small agencies offers growth opportunities for large groups of advertisers and an easy way to bill small agencies.