Ad industry mergers expected in 2016
In a recent industry survey by AdMedia Partners, 2016 is predicted to see an increase in mergers and acquisitions between advertising agencies (1). According to the study, more than 54 percent of companies surveyed expressed interest in combining with another agency between 2016 and 2017. This is an increase from 2014's results in which only 40 percent of companies surveyed considered such options. Moreover, 81 percent of respondents agreed that M&A by strategic buyers will increase in 2016 leading to new business opportunities and marketing services.
Advertising agencies and clients are no stranger to mergers. In just the past few years, PR giant Publicis Groupe bought Canadian digital agency Nurun, and Minneapolis-based agency Olson was sold to a consulting group for $295 million, according to Adweek. However, many smaller agencies acquired by larger firms are buying back their independence. According to Adweek, smaller agencies choose to reclaim their independence for greater creative freedom (2). This is because more often than not, the holding group has a different strategy than the agency. B2B marketers can expect these mergers and breakoffs to create less competition among boutique B2B marketing agencies going forward.