News ID: 236879
Published: 0949 GMT January 05, 2019

Marketing services deals reached $33b in 2018, tech companies lead

Marketing services deals reached $33b in 2018, tech companies lead

Mergers and acquisitions (M&A) in the marketing world reached $33 billion in 2018, an increase of 144 percent on the previous year, according to consultancy R3.

Technology companies rather than agency holding groups were the biggest spenders last year, with Adobe's $4.75 billion acquisition of software firm Marketo being the largest in R3's December M&A league table, CNBC wrote.

Tech businesses including Salesforce and Alibaba spent a total of $7.8 billion in 2018, a huge increase on the $632 million spent in 2017. Alibaba acquired a 6.62-percent stake in digital screen company Focus Media for $1.43 billion last July, as part of its exploration of ‘new models of digital marketing.’

Agency holding companies including McCann owner IPG and Japanese group Dentsu spent $6.3 billion on deals in 2018, up from $2.7 billion the previous year. These groups also acquired tech companies, with IPG spending $2.3 billion on data mining firm Acxiom in July, in a move that IPG CEO Michael Roth said would help the business provide more personalized and targeted marketing.

Greg Paull, principal at R3, said that technology is becoming more important to marketing services companies. "The discipline of marketing has diverged. Martech (marketing technology) is making fringe digital tech more centralized in marketing operations, while agencies are focused on repositioning themselves as operating in both creative and data," he said in an emailed statement.

It was a tumultuous year for marketing services in 2018, with Martin Sorrell's sudden departure from his role as CEO of holding company WPP in April one of the biggest stories. Successor Mark Read moved quickly to merge agencies within the group, joining Young and Rubicam with digital agency VML in September and merging the longstanding JWT with Wunderman in November.

WPP also spent $464 million on acquisitions such as marketing technology company Emark and Indian digital agency Autumn Worldwide, according to R3's December league table, while Sorrell's newly-formed S4 Capital spent $475 million buying agencies MediaMonks and MightyHive.

Global trade concerns have had an impact on advertising budgets, with WPP's Group M media company lowering growth projections for 2019 to 3.6 percent from 3.9 percent.




Resource: CNBC
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