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How Social Commerce is Influencing M&A in Digital Marketing and E-Commerce

Digital Marketing, E-Commerce, Media, AI

Social commerce has gone mainstream with legacy brands in markets from groceries to travel keen to harness the power of microbrands and influencers to quickly connect with niche markets.

And as spending on online advertising overtakes that of traditional methods for the first time, it’s clear this trend is driven by technology’s ability to personalise the journey to purchase, and beyond.

To mark the launch of our 2H 2019 M&A Market Reports on E-commerce and Digital Marketing, we look at how the innovation behind the rise of social commerce is upsetting the marketing status quo.

To read our E-Commerce M&A market report 2H2019, click here
To read our Digital Marketing M&A market report 2H2019, click here


Social shoppers

It’s no secret that technology has changed the way we shop. The 1990s ideal of driving to an out-of-town supermarket to buy everything you could possibly need has faded into the background of the internet age.

Today, people want to connect to and have a relationship with the brands they buy from. In response, technology, which once moved us from the high street to online, is now taking us one step further: from online retail to social commerce.

Innovations like algorithms that serve targeted social media adverts based on the consumer’s own posts and follows, and AI-driven post-purchase in-app instant messaging are transforming the way we sell and are sold to.

In the clothing sector, social media is the new shop window and influencers the new mannequins. Brand partnerships mean shoppers simply click on an Instagram post to be directed to the store selling the influencer’s outfit. This process is turbocharged by social media discounts and promo code culture.

Facebook’s Marketplace offers everything eBay does, but in a virtual shopping centre with an existing footfall of millions. Pinterest, once an online scrapbook, has come of age and now acts as a platform for brands to showcase, and sell, products.

Nimble microbrands use social media to quickly connect with, and advertise to, their target market, in a way cumbersome legacy brands are unable to.

All this is driving a shift in the M&A market – and as big names secure market share by acquiring innovators, purveyors of traditional advertising and marketing are increasingly being left out in the cold.


Personalising the big brand

Our 2H 2019 M&A market reports on E-commerce and Digital Marketing are clear.

There’s been a sharp rise in marketplaces and platforms, particularly mobile-first and factory-to-consumer offerings, such as Letgo, Joom and Wish. At the same time, social commerce is skyrocketing, particularly on Instagram, Facebook, Pinterest and WeChat, but also on Snapchat and YouTube.

Legacy brands that have made their name on being all things to all people are now rushing to acquire the tech that will enable them to adapt to this new world.

Walmart, for example, has made 10 acquisitions in the last 30 months. The most recent of these were AI data analytics firm, Int Data Labs, Inc. global online poster, print and art retailer,, and BareWebInc, an online women's clothing store.

This combination of special interest microbrands and a data-driven understanding of customer needs, behaviours and habits look sure to be a winning combination in a social commerce world.

Even the ultimate global brand, McDonalds, is acquiring technology that will allow it to better connect with its client base.

The fast food giant paid over ten times revenue for Dynamic Yield in a $325million move into the machine learning customer personalisation adtech market. It will, it says, use the technology to tailor each customer’s Drive Thru experience.

It seems even the biggest multinationals are keen to throw off their faceless image and strike up a conversation.


“As microbrands leverage social media and influencers to quickly penetrate niche market segments, we expect that acquisitions will play an important role for legacy brands to integrate social commerce into their business models.

Ralph Hübner , Sector Principal & Partner

What about the traditional gatekeepers?

This year, global digital ad spending is expected to hit $333bn, or 50.1 per cent of the total advertising spend across all channels. According to eMarketer, it will account for more than 60 per cent of all world-wide ad spending by 2023.

But with legacy brands acquiring technical, rather than advertising, know how, the classic creators of marketing campaigns are in a precarious position.

They need pioneering social media, AI and other emerging technologies in their offerings to stay relevant. So it’s no surprise that they experienced a drop in exits during the first half of 2019.

In fact, digital agencies and marketing services providers have seen transaction volume fall from 91 in 2H 2018 to just 67 deals in the same period this year.

As our Digital Marketing report highlights: “2019 has begun with a total rebalance in the deal mix: agency M&A is down, while digital marketing software M&A is up.

“And, where agencies are concerned, today’s acquirers are just as likely to be IT consultancies or corporates as they are media networks.”


Transformative social commerce technology

There’s no denying that the worlds of e-commerce and digital marketing are growing, maturing and transforming.

The rise of social commerce, the dominance of platforms and the power of the microbrand mean understanding customer preferences and targeting them accordingly has never been more important.

While this is breeding technological innovation that’s changing legacy brand M&A strategies, it’s also having a knock-on effect on the buoyancy of traditional advertising and marketing agency sectors.

The real success drivers for agencies and marketing software companies in a social commerce-led world will be competence in social media, marketplace business and retail media.


About Hampleton Partners

At Hampleton, we are aligned with our clients and look forward to helping them achieve success through M&A and growth finance, long into the next decade and beyond. 

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt and San Francisco, Hampleton offers a global perspective with sector expertise in: Automotive Technology, IoT, AI, Fintech, Hi-Tech Industrials & Industry 4.0, Cybersecurity, VR/AR, Healthtech, Digital Marketing, Enterprise Software, SaaS & Cloud and eCommerce.

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To contact Hampleton about your M&A or growth financing queries or requirements, or simply to schedule a confidential conversation regarding technology M&A with Ralph Hübner or another director or sector principal, visit and submit your query using the contact form or email 

For the first time ever, digital ad spending worldwide is estimated to be higher than all other traditional channels. The normalisation of digital as a key marketing channel is exemplified by the acquirers who are currently active in the market.”

Ralph Hübner , Sector Principal & Partner

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