A new global report by the marketing tech company R3 has found that agency mergers and acquisitions (M&A) fell a staggering 46 per cent in 2017. Conversely, M&A by the consultancy companies rose a massive 146 per cent from the previous year (albeit off a lower base).
You can check out some of the more interesting graphs from the report at the bottom of this article.
Based on the analysis, consulting firms such as Accenture, Deloitte, IBM, KPMG and McKinsey invested $US1.2 billion in agency acquisitions in 2017. By contrast, agency holding groups including WPP, Dentsu, Omnicom, Interpublic and Publicis declined by $US1.8billion in the same period.
R3 assessed 401 deals across the year in the marketing communications space, just a slight increase on 2016’s 398 deals. Overall, $US13.5 billion of M&A funds were invested in these deals, a three per cent decrease on the previous year.
By region, Europe saw the largest increase (34 per cent) with $US3.7 billion in deals despite the decrease in the overall number.
The US continued to lead the other regions, on both the volume ($US6.6 billion) and number of deals (202) through the year, including Williams Lea Tag, Turn and Rocketfuel.
Both Asia (down 34 per cent) and Latin America (down 45 per cent) declined in terms of deal size through 2017, led mostly by China (down 77 per cent) where there were just 16 deals completed.
It was another strong year for digital and digital service acquisitions, with these two categories representing $US6 billion combined in value over 2017. The creative number was bolstered by Bain Capital’s December acquisition of ADK Japan.
Spread throughout the year was an increasing number of unconventional buyers, outside the traditional acquirers. From Snap Inc. to the New York Times to boutique Private Equity groups, this was truly a year where investment ideas could come from anywhere. All regions were ultimately led by one of these firms.