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13
AUG
Press Releases

Shift towards Platforms & Social Commerce Transforms Digital Commerce M&A

Digital Marketing, E-Commerce, News, Media, AI

• Agency M&A is down, as media groups curb acquisition rate and face competition from by professional services firm
• Digital software M&A is up, as a range of buyers hone in on digital solutions for higher returns
 

London, UK – 13 August 2019.  The growth of M&A activity in the ‘platform economy’ and in social commerce are two of the biggest trends identified in the latest E-Commerce and Digital Marketing M&A Market Reports from Hampleton Partners, the international technology mergers and acquisitions advisor.

Transaction volume for the digital marketing sector has remained remarkably stable since 2011. In the first half of 2019, marketing application software received more M&A attention, with 95 deals inked and disclosed deal value of $2.06bn, versus 67 deals and deal value of $1.4bn for digital agencies & marketing services providers.

The top two acquirers so far this year are Dentsu Aegis and Accenture, with four agency acquisitions apiece. Surprisingly, the ‘big four’ media agencies – WPP, Omnicom, IPG and Publicis – made no acquisitions in 1H 2019.

Instead, two of the most important digital marketing deals were in the software subsector, as risk advisory and brokerage firm Wills Towers Watson acquired TRANZACT for $1.2bn, and McDonald’s purchased Dynamic Yield for $325m.

Ralph Hübner, sector principal, Hampleton Partners, said: “2019 has begun with a total rebalance of the deal mix: agency M&A is down, while digital marketing software M&A is up. Where agencies are concerned, today’s acquirers are just as likely to be IT consultancies or corporates as they are media networks.

“Meanwhile, marketing software providers are caught up in a new hype cycle which includes buyers from a range of sectors.”

 

Rise of platform economy M&A

The first half of 2019 saw the IPOs of three later-stage e-commerce platforms – Pinterest, Revolve and Jumia – rank in the top 10 most successful VC exits so far this year.  

Investors are keen to capitalise on the growth of the platform economy, particularly given the exceptional performance on stock markets of companies such as Alibaba or Etsy.   

Stock market momentum and the potential for higher returns is translating into high M&A activity, as illustrated by Etsy’s acquisition of vintage music gear marketplace Reverb for $275m in July.

 

Social commerce M&A

Ralph Hübner, sector principal, Hampleton Partners, said: “Given the number of users scrolling through Instagram during any given minute is expected to more than double to 372,000 during 2019, the proliferation and adoption of social media has hardly reached its peak.

“Legacy brands have paid hefty sums for microbrands which leverage social media and quickly penetrate niche market segments, as shown by Edgewell Personal Care’s acquisition of razor start-up Harry’s for $1.4 billion.”  

 

The future of e-commerce and digital marketing M&A

Ralph Hübner concluded: “The rise of platforms, marketplaces and social commerce will lead to more exits in the marketing application software segment, as all types of buyers attempt to navigate the marketing landscape of these new business models.

“As for agencies, they need their own tech or unique skillset in areas such as CRM, big data, social commerce or retail media, to avoid being sandwiched between nearshored competitors or the client’s in-housing of marketing and advertising."

 

Latest Digital Commerce reports

Hampleton provides independent M&A and corporate finance advice to owners of Autotech, Internet, IT Services, Software and High-Tech Industrial companies. Our research reports aim to provide our clients with current analysis of the transactions, trends and valuations within our focus areas.

Download the full Hampleton Partners E-Commerce M&A Market Report: https://www.hampletonpartners.com/reports/e-commerce-report/.

Download the full Hampleton Partners Digital Marketing M&A Market Report: https://www.hampletonpartners.com/reports/digital-marketing-report/.

 

Join our free Digital Commerce webinar

If you are interested in hearing more about current trends in the Digital Marketing and E-Commerce sectors, join Hampleton for an exclusive webinar presented by Digital Commerce specialist Ralph Hübner and international M&A expert Jan Eiben.

5th September 2019, 1-1.30 BST:

"Why an Ever-Changing Market is Altering the Agency and Software Models“

Find out more at: https://www.eventbrite.co.uk/e/why-an-ever-changing-market-is-altering-the-agency-and-software-models-tickets-65512225831.

 

Media enquiries, photography or interview requests, please contact:

Jane Henry
Email: jane@marylebonemarketing.com
Mob: +44 789 666 8155
www.marylebonemarketing.com 

Note to editors
Hampleton Partners’ E-Commerce M&A Market Report 2H 2019 is compiled using data and information from the 451 Research database (www.451research.com) and from CapitalIQ, a product of S&P Global.

 

About Hampleton Partners

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.

Follow Hampleton on LinkedIn and Twitter.

For more information visit https://www.hampletonpartners.com.

 

This article was published by:

Ralph-Huebner

Sector Principal & Partner

Ralph Hübner

Ralph is Hampleton’s Sector Principal for the Digital Commerce sector and has extensive consulting and operational experience in digital marketing and e-commerce. Aside from being extremely well acquainted with agency, software and digital solutions, Ralph’s own expertise lies in optimising the customer journey, user experience, PIM, CRM, online shop solutions and platform business models.

Before joining Hampleton, Ralph worked as a digital strategy consultant for several leading names in the DACH region, Asia and the USA. He also has first-hand experience of managerial roles in larger corporations and leadership in start-up environments.

Ralph earned an MBA in Augsburg and Bologna, and recently undertook an ICF coaching qualification. While based in Munich, he is frequently invited to speak at and host digital commerce events all over the DACH region. He also publishes regular sector-specific articles and reports. In his spare time, Ralph also enjoys learning about psychology and history.