Senior marketing executives expect to see an increase in merger and acquisition (M&A) activity next year, especially in the social, mobile and analytics sectors, according to AdMedia Partners. The investment firm released its annual M&A survey December 15.
More than three-quarters (78%) of respondents who work in the marketing content sector, and 86% of those in the marketing services area, expect more M&A activity from strategic buyers next year. More than six in 10 respondents in each category – 63% and 68%, respectively – expect more activity from financial buyers.
These high expectations for deal-making are likely tied to the more stable financial position that many companies are in compared with last year.
“They’ve weathered the storm, the cash is flowing again, and now organizations can turn their attention to M&A in a way that they couldn’t before,” said Seth Alpert, partner and managing director of AdMedia Partners.
More than half (58%) of the 8,100 marketing executives who responded to the survey also said they expect the economy to be stronger next year.
Fifty-nine percent of respondents in the marketing services category said they would most like to acquire companies with analytics and optimization capabilities, followed by social marketing (44%) and mobile marketing (41%) competencies.
In addition, 73% of respondents from the marketing content sector put organizations with custom content capabilities at the top of their acquisition wishlist, while 64% in that space cited user-generated content and 55% chose mobile as most important.
“It’s hard for someone that doesn’t understand social media or mobile to learn it on their own, as opposed to finding an entity that has done it and has a proven record on it,” Alpert explained.
Alpert said convergence will be a major theme in M&A activity in the next year. More than two-thirds (68%) of service firms are seeing competition in new areas, while only 48% say they are seeing the same number of competitors.
“Pretty soon, it gets confusing about what’s a media company, what’s a marketing services company, what’s a technology company,” Alpert said.