What Global Marketing M&A Activity Tells Us

Key Findings

• Data and Media Innovation is critical for harnessing developed streaming TV and retail media platforms
• Brands are now looking for ways to seize cultural moments and relevance, thereby leading to acquisitions of influencer agencies and social commerce platforms like Mavely for $250 million
• Private equity firms will power the next wave of independent agencies

The BB Buzz team explored the subject of mergers and acquisitions in the marketing communications industry, and we identified some patterns.

These patterns are highlighted below:

1. Brand advertising is now based on the mix of marketing and entertainment

This phenomenon is better explained by the partnerships between Universal Music Group and WPP, where entertainment production has now become integral to the marketing campaigns executed by WPP. Infact, industry players like James Kirkham have mentioned that “marketing campaigns” are dead as we know it. Marketing programs are now poised to find cultural moments where they can build greater share of mind and build brand equity. This is why creators, skit makers and influencers now occupy the centre of brand storytelling.

Hence,  Publicis Groupe has purchased Influential and Stagwell has acquired Leaders and Troublemakers

 2. The Rise of Social Commerce 

Later; an influence and social media management firm purchased Wavely for $250million. Wavely is  an influencer aggregator that rewards influencers based on the number of sales they can drive. Later itself boasts of amassing data from 350 million posts, based on 3 million influencer activations across its social platforms. The CEO of Later; Scott Sutton explained that they can see millions of transactions on Mavely, based on the work of its 120,000 creators and a billion dollars gross merchandising volume (GMV). This enables Later to be able to predict ROI on e-commerce. Later is looking toward more e-commerce acquisitions.

3. Data Analytics and Artificial Intelligence 

Omnicom’s acquisition of Interpublic it is predicted, will spur Accenture Song, the largest digital marketing services firm in the world to make purchases in data and media, considering that the merger of the former now poses a threat to its competitive advantage, after Publicis Groupe’s successful digital play.

Accenture song is also predicted to make a bid for an experiential business, considering that younger generations now want more physical experiences. hence, the incentive to create offerings that converge digital and physical platforms, in an omni-channel fashion.

In another vein, Criteo, an adtech and retail media firm looks like a prospective bride for acquisition. They have the best shopper dataset after Amazon. They are looking to acquire Skai; a retail search advertising platform. Criteo has since asked Evercore to help explore its strategic options.

Skai on the other hand has laid off 80 employees, signaling that it is preparing for a sale.

Havas is also bolstering its data and media play by acquiring data firm; DMPG, while Cadent has acquired performance marketing firm- AdTheorent

4. Internet of Things in Advertising 

Mobile technology and software publishing firm- AppLovin appears to be a favourite to acquire more Connected TV businesses, further bolstering its inventory business in streaming, after it acquired Wurl; in 2022.

Mediaocean acquired CTV advertising and analytics firm Innovid for $500 million

5. Growing Nexus of Marketing, Entertainment and Cultural Relevance 

WPP’s acquired of New Commercial Arts, while Disney paid $1.5 billion investment in Epic Games. LVMH has launched an entertainment division to complement its marketing activities.  All of these key into a brand storytelling and entertainment zeitgeist. Behind these acquisitions lie the intent to develop grow brand equity by exciting customers, while selling products.

However, an understated factor in the patterns so far reveals the influence of changing activity across marketing channels, which is now largely dominated by Gen-Z consumers. They may not have the deepest pockets, but their influence on culture appears disproportionate, even influencing other generational cohorts. They are digital natives, they consumer media in a different way, while also intent on pushing conventional barriers out of their way.

Gen-Z care more about how interesting culture behind the product, and not only the features.

6. Long Live Branding 

Brands like Nike have moved from focusing on performance marketing to brand building. Newly appointed CMO- Nicole Hubbard Graham may consider working with brand storytelling agencies as well as media independents that have capabilities in retail media to restore the branding legend of Nike. It may also opt to develop an entertainment division, just like LVMH.

Anthony Freedman, a former Havas regional chair has expressed the importance of branding in the age of the internet, where he underscored the role of brands in helping companies to weather storms of badly performing economies and reduction of the possibility of customer churn.

In conclusion, while the patterns identified above are not conclusive, or exhausted the conversations, deals and opinion on the state of mergers and acquisitions in the marketing communications industry, two element remains strong: 1.) Branding will always be king, and marketing teams that seize cultural moments better are poised to perform better 2.) Data and its manipulation for prediction and ROI optimization will play an increasing large role in marketing communications.

Finally, private equity firms will play an increasing role in developing stronger independent agencies, in the light of ultra mergers like Omnicom and Interpublic’s.