Marketing and ad tech M&A activity hits near record heights for Q3

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The advertising and marketing tech sectors have continued to see buoyant merger and acquisition activity in the third quarter of this year with activity only just falling short of Q3 2014 figures which saw the strongest activity on record.

The data comes from a study released by specialist technology and marcoms corporate finance advisor Results International.

112 deals were announced in Q3 2015 compared with 113 for the same period last year. Compared to the previous quarter, total activity was up by 11% when 101 deals were announced.

Nearly a third of the deals were made in the marketing automation sector, a threefold increase on the second quarter. Deals in the marketing automation sector have more than doubled for the first three quarters of this year compared to the same period of 2014 with a rise from 8% to 21% of all global ad tech and marketing tech deals.

At the same time deals in the advertising platform space fell dramatically down from 35% in the second quarter to 7% in the third quarter. This is thought to reflect a growing emphasis on cross-channel marketing automation for customer engagement as well as ad platforms repositioning themselves as broader marketing automation businesses.

Mobile, e-commerce and video were three sectors that gained market share in the third quarter whilst deals involving social media technology nearly halved, dropping from 20% of the market in Q2 to 11% in Q3.

The study also showed a quadrupling of deals involving private equity buyers – either directly or via portfolio companies -- which hit 13% in the Q3 compared to 3% in the previous quarter. This comes as a result of a maturing of the sector which is now attracting later stage buyout capital as well as continued high levels of earlier stage and growth capital entering the market.

WPP remained the most acquisitive company with nine transactions in the first three quarters of 2015 compared to an average of one for three quarters of companies studied. Big deals in the third quarter included AOL’s acquisition of Millennial Media for $252 million and Oracle’s acquisition of Maxymiser.

Julie Langley, partner at Results International, said: “Notwithstanding the fact that the public markets have been very challenging for adtech companies this year, M&A activity has remained robust with high profile deals with new entrants such as News Corp and Verizon entering the fray. 

“Martech continues to be a very high growth sector, with a number of players vying to become the de facto marketing software platforms for the marketing function, and the typically SaaS-based revenue models attracting PE interest,” she added.

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