Study: WPP And Dentsu Top List Of Agencies To Acquire New Businesses In 2016

Study: WPP And Dentsu Top List Of Agencies To Acquire New Businesses In 2016
SHARE
THIS



A study by global consulting firm R3 has revealed which media agencies have made the most acquisitions in the past 12 months with Dentsu leading the way with 39 and WPP second with 36.

R3 tracked 398 transactions around the world, covering $US14 billion in estimated deal value, a 150 per cent increase over 2015.

“This increase was driven by more buyers seeking out the best digital and analytic talent from around the world” said Greg Paull, principal and co-founder of R3. “The only thing that’s clear is that CMOs have never had a less clear choice in seeking out partners in this space.”

Holding groups represent only 22 per cent of acquisitions

The traditional buyers in this space, the six global holding groups, represented just 22 per cent of all transactions, with Japan’s Dentsu leading the way. Dentsu bought one of the largest independent agencies in the US (Merkle), bringing in significant data and analytics talent.

Dentsu also invested in gyro, a global B2B agency. WPP (36 transactions, down from 45 in 205) was also active this year, investing in Triad Retail Group in the US – with over 80 per cent of their investments in digital agencies and technology. The other four holding groups made just 19 deals between them and represented just 3 per cent of total merger and acquisitions for the year.Screen Shot 2017-01-19 at 9.41.08 am

The rise of the consultants

Last year was the year that the consulting firms got serious about expanding into marketing communications. IBM invested more than $US240 million into Resource Ammirati, Aperto and ecx.io. Accenture spent $US 175 million acquiring Karmarama in the UK and another agency. Deloitte invested into one of the US’s smartest boutique agencies, Heat.

Screen Shot 2017-01-19 at 9.42.51 am

Chinese and Indian buyers on the rise

This year also brought a number of new investors into the marketing services space – from P/E players, to Vice and Snapchat to new investors from India and China. Among the 10 largest deals of 2016 were investments from Salesforce, Telenor, Nielsen, India’s Miteno Group, and China’s Nantong Metals and Keda. “There’s a number of asynchronous buyers out there, many looking to make a major statement, to impact their business and share growth,” added Paull.

Screen Shot 2017-01-19 at 9.44.34 am

Private equity firms continue to invest

This year also saw a number of major deals by private equity firms in the sector, looking to build assets for future returns and sales. “With the growth of programmatic, analytics and mobile, the space has become a more dynamic sector for investors,” said Paull.

Screen Shot 2017-01-19 at 9.47.42 am

US leads the way from Asia

Despite extensive past activity in developing markets, 2016 saw the US market lead 50 per cent of value as well as 41 per cent of all deals. Asia Pacific ($US3.6 billion in deal value) was the second ranked region, ahead of Europe and Latin America. “More buyers are trying to build a strong foundation first in the world’s largest marketing base,” said Paull. “We expect more growth from Asia Pacific next year in terms of number of deals, but transaction size will be smaller than in the US.”

Trends for 2017

The coming year, with new governments in the US and other markets, promises to be a volatile one for investors. R3 is predicting a new group of players will emerge through this year. “We expect companies such as Facebook, Google, Amazon and Salesforce to be more active investors in the sector this year,” added Paull.  “They have the cash, and they are continuing to take leadership roles on content creation – so the need for talent will only increase,” he added.

Please login with linkedin to comment

Latest News

Zenith Sydney MD Karen Halligan To Depart
  • Media

Zenith Sydney MD Karen Halligan To Depart

Zenith Sydney's Karen Halligan has pulled-up stumps, although that's not to infer bad light had anything to do with it.

by B&T Magazine

B&T Magazine
PR Agency Hotwire Rebrands
  • Marketing
  • Media

PR Agency Hotwire Rebrands

PR agency Hotwire has rebranded, yet sadly not to "Hot Cocks Who Rock Your Socks Off". Which would've been far cooler.

Challenger Agency VCCP Wins Creative Account For Torrens University Australia
  • Advertising

Challenger Agency VCCP Wins Creative Account For Torrens University Australia

After a competitive pitching process involving five agencies, Torrens University Australia has appointed challenger agency VCCP as its new brand strategy partner and creative agency for 2018. Acclaimed for its work on dynamic brands including ING and Compare the Market in the financial services sector, Laureate Australia CMO Anne Da Cunha said VCCP’s reputation as […]

GumGum Appoints Ansible’s Sarah Baskerville As Victorian Sales Director
  • Advertising
  • Technology

GumGum Appoints Ansible’s Sarah Baskerville As Victorian Sales Director

AI advertising company GumGum has announced the appointment of Sarah Baskerville as its sales director for Victoria. Baskerville joins GumGum from Ansible, where she spent two years as its Melbourne mobile director. Prior to joining Ansible, she was head of specialist sales and partnerships at News Corp Australia, and also held a number of sales […]

The Diamond Concierge Gives Away $85K Ring In Campaign By McCann Queensland
  • Advertising
  • Campaigns

The Diamond Concierge Gives Away $85K Ring In Campaign By McCann Queensland

McCann Queensland’s second instalment of ‘The 5th C’ campaign launched over the weekend for online diamond retailer The Diamond Concierge, which received over 47million views around the world in the first 48 hours of it being released. In this second phase of the campaign, The Diamond Concierge gave away an $85,000 diamond ring, with Gold […]

Sparro Recruits Key Account Director Following Client Wins
  • Marketing

Sparro Recruits Key Account Director Following Client Wins

Digital marketing agency Sparro has announced the appointment of Hannah Jones (pictured above) as a key account director following a spate of client wins. Jones joins Sparro’s senior team alongside founders Cameron and Morris Bryant, overseeing a portfolio of accounts that includes Webjet, Domino’s Pizza, TAFE NSW, Temple & Webster, F45 Training and Bing Lee. […]

Women’s Health’s Jacqui Mooney On Driving A Women’s Brand In An Evolving Industry
  • Media

Women’s Health’s Jacqui Mooney On Driving A Women’s Brand In An Evolving Industry

In an industry facing change, Jacqui Mooney, editor of Women’s Health believes brands such as hers will continue to be a constant. Please note: this article was contributed by Magazine Networks. The magazine industry may be seeing substantial change but Jacqui Mooney has a goal that remains firm: to create happier, healthier lives for Australian women. […]

Why Consumer Brands Are Failing Aussie Mums
  • Marketing
  • Opinion

Why Consumer Brands Are Failing Aussie Mums

Is your game chainsaws or large marlin wall-hangings? Can't seem to attract the mums? This couldn't come soon enough.

Opinion

by B&T Magazine

B&T Magazine
Network Ten Creditors Approve CBS Deal
  • Media

Network Ten Creditors Approve CBS Deal

It seems the fight for Ten between CBS and media moguls Lachlan Murdoch and Bruce Gordon may finally be over.

by B&T Magazine

B&T Magazine
MKTG Signs Exclusive Commercial Partnership With PlayersVoice
  • Marketing
  • Media

MKTG Signs Exclusive Commercial Partnership With PlayersVoice

MKTG has announced it has signed an exclusive commercial partnership with newly-launched sports storytelling site PlayersVoice.com.au – an agreement that will see the agency move into a new territory of sports marketing. The partnership between MKTG and PlayersVoice will see the business managing brand partnership opportunities for the new platform; working with clients to deliver […]

Domo Introduces New Data Security Software Solution
  • Marketing
  • Technology

Domo Introduces New Data Security Software Solution

Domo has announced it has introduced new cloud security technology for its Bring Your Own Key (BYOK) software, which includes unique capabilities like rolling generation of data encryption keys and a built-in kill switch. Domo BYOK is the first BYOK enterprise software solution for cloud analytics and business intelligence, and builds on the company’s existing security, compliance and […]

Shopper Media Group Grows Sydney & Melbourne Sales Teams
  • Advertising
  • Marketing
  • Media

Shopper Media Group Grows Sydney & Melbourne Sales Teams

Shopper Media Group (SMG) has continued to grow its Sydney and Melbourne sales teams to keep up with the demand for Smartlite Panels for shopping centres. Ashley Munro joins SMG as group sales manager for Sydney, having previously worked in a similar role at NOVA Entertainment. Laura Mason has been appointed as SMG’s business manager […]

RIO DE JANEIRO, BRAZIL - AUGUST 14:  Usain Bolt of Jamaica competes in the Men's 100 meter semifinal on Day 9 of the Rio 2016 Olympic Games at the Olympic Stadium on August 14, 2016 in Rio de Janeiro, Brazil.  (Photo by Cameron Spencer/Getty Images)
  • Advertising
  • Media

Olympics, Census Prove Tough Hurdles For Media Agencies: SMI

Australia’s media agency market has experienced another tough month in August, according to the latest data by Standard Media Index (SMI). SMI noted the softer demand this time around was primarily due to the Rio Olympics and Census providing abnormal bookings last year, resulting in demand for August 2017 so far being back 12.1 per […]