M&A in Social and Ad Tech Shows Great Promise For 2015

By Alison Lukin

 

When people throw around the term “mergers and acquisitions” you tend to think of the multi-billion dollar deals that make the 11 o’clock news. Companies like Verizon, Pfizer, and AOL, these deals are so legendary they make corporate history.

In recent years, the tides have shifted bringing social media and ad tech companies to the forefront of acquisitions. More and more, industry giants are finding small brilliant companies to grow and expand their reach. To say that social media and advertising has changed the way companies market is an understatement. If you need more convincing, just take a look at the numbers.

The total value of mergers and acquisitions in the media, information, marketing and ad technology sectors in 2014 alone was $128.3 BILLION dollars. Yes, that’s billion, with a “B”!

One of the most notable was the growth of the world’s largest independent ad tech company, AppNexus. From June through December of this past year, they acquired the leading advertising viewability company Alenty, the premium ad-serving technology Open Adstream, and the leading cross-device technology business MediaGlu.

Perhaps the most significant contributor to that $128.3 billion dollar amount is Facebook’s acquisition in October of Whatsapp, which cost them a hefty $20 billion. And earlier in the year, they also acquired video ad firm LiveRail for around $400 million.

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If you’re in the game of mergers and acquisitions, one of the leading resources tracking trends is AdMedia Partners.

“AdMedia Partners is a leading M&A advisor that provides middle-market mergers and acquisition advisory services to marketing, media and related technology businesses. Founded in 1990 and located in New York City, the firm has completed over 220 transactions worth over $9 Billion” – www.AdMediaPartners.com

In late 2014, AdMedia Partners conducted its 21st annual survey of marketing, media, and tech companies to determine the industry mergers and acquisitions prospects in the coming year. Their findings showed a significant joining of forces when it comes to social marketing and mobile. Interest in acquiring social as a stand-alone has actually declined because it is so intertwined with mobile. Companies at the forefront need to be combining the two at inception.

However, the most sought after areas of interest for mergers and acquisitions do remain consistent with previous years: analytics (64%), digital (53%), mobile (50%), and social (47%).

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According to CMO Today, industry observers say it was “only a matter of time before a “shakeout” of this nature hit the ad tech industry.” With so many small companies vying for the attention of marketers, it is only natural that most of them get gobbled up by larger powerhouses.

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Coming tomorrow – we take a look at M&A activity in the world of digital advertising; particularly centered around Social Media and Ad Tech.

Today – we offer a few pieces of data relating to this activity.

h/t robaeprice for the graphics; check out his writing here: http://www.businessinsider.com.au/author/rob-price