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As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in this rapidly evolving landscape.
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Introduction
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What’s hot in marcoms today?
Q3 2014
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What’s hot in marcoms?
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As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in
this rapidly evolving landscape. One of our key tools is our global deal tracker, which gathers the details of all completed deals in this sector, subcategorised and cross referenced by our team of analysts. This, along with the hundreds of conversations we have each month with both buyers and sellers, enables us to continuously identify emerging M&A trends. With the ever blurring boundaries between “marcoms” and “martech”, it is maybe unsurprising to see that the most talked about subsectors sit at their convergence points, namely : 1. Content marketing 2. Data & analytics,
3. eCommerce 4. Digital marketing; and 5. Mobile marketing This paper examines each subsector, the key trends and deal activity in 2014 YTD using both proprietary and third party data.
Introduction
Digital Marketing
Sector Overview
Market Overview
Digital Marketing Market Overview
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2012 2013 2014 2015 2016 2017 2018
North America 38.0% 38.5% 39.1% 39.9% 40.5% 40.9% 41.3%
Asia-Pacific 29.2% 29.1% 28.6% 28.2% 27.9% 27.8% 27.7%
Western Europe 25.1% 24.1% 23.2% 22.4% 21.6% 20.9% 20.2%
Central & Eastern Europe 3.5% 3.8% 4.0% 4.0% 4.0% 4.0% 4.0%
Latin America 3.2% 3.4% 3.8% 4.0% 4.2% 4.4% 4.6%
Middle East & Africa 0.9% 1.1% 1.4% 1.6% 1.8% 2.0% 2.3%
Total 100% 100% 100% 100% 100% 100% 100%
$104.58 $119.84
$137.53
$154.29
$171.08
$187.65
$204.10
20.4% 14.6% 14.8% 12.2% 10.9% 9.7% 8.8%
20.8% 23.2% 25.3% 27.0%
28.4% 29.8% 31.1%
2012 2013 2014 2015 2016 2017 2018
Digital ad spending % change % of total media ad spending
Digital ad spending share worldwide by region 2012-2018 (14)
Digital ad spending worldwide 2012-2018 (14)
• Digital ad spending will reach $137.5 billion in 2014, up 14.8%
over 2013 levels
• USA still biggest spender on digital ads, at 39% compared with
28.6% in Asia-Pacific – where share is dropping slightly
• Western Europe accounts for nearly one-quarter of all digital
spending around the world
• UK has highest share of total media spending on digital
channels, at 47.5% expected this year compared with 27.9% in
the USA
Summary
Digital ad spending share worldwide by region 2014 & 2018 (14)
% of total
Note: includes advertising on desktop and laptop computers as well as mobile phones
and tablets, and includes all various formats of advertising on those platforms; excludes
SMS, MMS and P2P messaging based advertising
39.1%
28.6%
23.2%
4.0%
3.8% 1.4%
41.3%
27.7%
20.2%
4.0% 4.6%
2.3%
2014
Total = $137.5 billion
2018
Total = $204.1 billion
North
America
North
America
Asia-Pacific Asia-Pacific
Western
Europe
Western
Europe
Digital advertising spending on track to hit $137.5 billion this year
Digital Marketing Market Overview
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6.6
4.6
2.8
1.4 1.2
0.8 0.9 0.6 0.6
7.4
4.7
3.5
1.7
1.3
0.9 0.9 0.7 0.6
0
1
2
3
4
5
6
7
82012 2013
Western Europe digital adspend by country, 2012 -2013 (€bn) (15)
• UK remains by far the largest market in Western Europe
• UK continues to grow faster than any other country in region at c.16% YoY despite being the largest market in Europe
UK remains the largest market in Western Europe
Digital Marketing Market Overview
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5,416
6,300
7,245
7,970
8,647
9,252
12.6%
16.3%
15.0%
10.0%
8.5%
7.0%
2012 2013 2014 2015 2016 2017
UK Digital Ad Spending (£m) YOY Growth
Search remains the leading category within digital ad spending (17) UK digital ad spending, 2012 - 2017 (16)
• In 2013, spending on digital ad formats in the UK rose 16.3% to
reach £6.3 billion
• This year, digital ad spending will slow to 15.0% but that’s still
much faster than total media ad spending at 6.6%
• Digital will account for half of all paid media ad spending in
the UK next year, according to eMarketer
• More than half of all digital ad spending will go toward search
formats, while spending on display formats will amount to one
third of the UK’s digital ad market
• This year mobile will account for nearly 30% of all UK digital ad
spending, with this figure rising to more than half by 2016
Total Digital
Adspend, 2013
£6.3bn
14%
30% 55% Paid for search
Classified
Display
1% Other
Category 2012 Share
Search 58%
Display 24%
Classified 16%
UK digital advertising market continues growth
Digital Marketing Market Overview
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345
590
£m
2012 2013
71%
• Mobile was up 95% in the UK in 2013, reaching £1bn for the first
time
• Adspend on social channels exhibited the next strongest
growth at 71% year on year to c.£600m
• Video adspend also showed strong growth at 63% reaching
£325m in 2013, as video continues to proliferate across different
devices
529
1,031
£m
2012 2013
95%
200
325
£m
2012 2013
63%
Mobile Social
Video Summary
Key growth drivers (18)
Digital Marketing Market Overview
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• Lack of digital skills, resource and funding
• Increasing complexity of digital landscape
• Managing big data
• Multichannel “integrated marketing”
Customers no longer use just one channel to complete a purchase. 2014 will see this trend accelerate, with retailers offering a multi-channel experience being the most successful
• Prime time for “real time” Real-time marketing ranges from mobile advertising that uses GPS and beacon technology to deliver location-based ads to customizing campaigns based on latest trends
• Micro-video
With the increasing popularity of photo and video sharing on social media sites, image and video based content such as infographics and micro-videos will play a key part in 2014
• Growth in paid media Facebook’s organic reach is gradually declining and Twitter also needs to grow revenues following their IPO last year. Expect both to be pushing forward with their own paid media strategies
• Content interactivity & storytelling
Consumers are increasingly looking for power, personalization and control over content. As such, brands and publishers are creating interactive content that puts the audience into the story
Key trends & challenges
Trends
Challenges
Digital Marketing
Sector Overview
M&A Market
Digital Marketing M&A Market
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Q1-Q3 2014 Digital Marketing deals (19)
Deal Volume Target Region
Major Buyers Deal Types
Quarterly Split
34
11
3
North America
UK
APAC
Western
Europe
29
3
Cross Border
PE Backed
15 Eastern
Europe 3
10 Africa
South America 2
Q3
Q2
Q1
18
29
31
6
6 3
2
2 2
WPP Publicis Omnicom IPG Havas Thoughtwire
78
Total Deals
Digital Marketing M&A Market
11
Date Buyer Target Target Location Target Description
Sep-14 France Provides digital marketing services
Aug-14 UK Full service digital marketing agency
Jul-14 UK Integrated marketing and advertising agency
May-14 UK Digital advertising agency
May-14 South Africa Provides digital marketing services
May-14 UK Digital advertising agency
Apr-14 Brazil Provides advertising services
Apr-14 Brazil Provides digital marketing services
Feb-14 South Africa Offers integrated digital marketing services
Jan-14 UK Provides digital marketing services
Q1-Q3 2014 selected transactions
Contents
01 Content Marketing 4
02 Data & Analytics 15
03 eCommerce 22
04 Digital Marketing 32
05 Mobile Marketing 42
06 References 54
07 About Results 56
13
Mobile Marketing M&A Market
References
1) Results Intelligence
2) Advantage Business Media’s digital road map, AdAge
3) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK
4) Nativeadvertising.com
5) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK
6) Content Marketing in the UK, Content Marketing in North America: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA
7) CapIQ, 451, OneSource, Results Intelligence
8) ExactTarget Marketing Cloud 2014 State of Marketing Survey, Deloitte Analytics Trends 2014, IBM, TechRepublic
9) CapIQ, 451, MergerMarket, Results Intelligence
10) eConsultancy (January 2014), eMarketer (January & April 2014), International Business Times (October 2013), eCommerce Week (January 2014),
bpost International (January 2014)
11) eConsultancy (January 2014), IMRG (January 2014), eCommerce Week (January 2014), bpost International (January 2014), Statista (2014)
12) The Drum (February 2014), Talk Business Magazine (December 2013)
13) CapIQ, 451, MergerMarket, Results Intelligence
14) eMarketer (March 2014)
15) IAB Digital Adspend 2013
16) eMarketer (June 2014)
17) IAB/PWC Adspend 2013
18) IAB Digital Adspend 2013
19) CapIQ, 451, MergerMarket, Results Intelligence
20) Cisco VNI Mobile (2014), NPD DisplaySearch (February 2014), IDC Worldwide Quarterly Tablet Tracker (2014)
21) IAB Native Advertising Playbook (2013), BIA/Kelsey
22) eMarketer (July 2014), Gartner (2013)
23) Google & Nielsen (March 2013), Cisco VNI Mobile (2014), relevant press, company websites
24) Gartner (September 2014), relevant press, company websites, Results Intelligence
25) eMarketer (August 2013), Kenshoo (December 2013)
26) CapIQ, Companies House documents, Press, company websites, Results intelligence
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About Results
Corporate Finance Advisors to the Marketing Services & Marketing Technology sectors
Selected clients and transaction counterparties
An established team of sector experts…
• Results International is a market-leading M&A advisory
firm founded in 1991
• Entrepreneurial and owner-managed
• 40 person global team with over 250 completed
transactions
• Senior level attention on all transactions
• Winner of Cross-Border Deal of the Year 2014 (sale of We
Are Social to Blue Focus)
Software
Marketing Services
Marketing Technology
Digital Media
Sector specialism
…with global reach
15
About Results
has been acquired
by has been acquired
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by has invested in
has been acquired
by
launched a new
global creative
network
has been acquired
by has been acquired
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Unrivalled expertise in the Marcoms sector
16
About Results
Mark Williams Director
• Joined Results in 2010, with over 15 years of M&A experience
• Prior to joining Results Jim led
European M&A activity for the
marketing services division of
Omnicom (DAS)
• Clients include We are Social,
Blue Rubicon, Virgo Health,
Crayon and Iris
• Joined Results in 2005 - Previously Head of M&A at Ernst & Young
• 20+ years experience in corporate
finance, including M&A,
fundraising, IPOs, JVs, MBOs and
MBIs
• Clients include The Group, Figtree,
Monitor Media, Spannerworks, Flip
Media, Transactis, Punktilio,
Flamingo, Brand X, and AIA
• Joined Results in 2012. He started
his career at KPMG working in
Financial Services M&A and
moved to Ingenious Corporate
Finance in 2010
• Clients include Staffcare, Moonpig, St Ives, and Inflexion
Julia Crawley-Boevey Director
• Joined Results in 2010 having spent
over four years at BDO where she
worked in both Audit and
Corporate Finance
• Clients include The Group, Blue
Rubicon, Virgo Health, Incite, and Crayon
• Joined Results in 2012 to lead the
tech and digital media practice
• 15 years M&A experience at
Broadview then Jefferies, advising
tech and digital media companies
on M&A and fundraising
• Advised on transactions with
Oracle, Microsoft, Experian,
Moody’s, IAC, Axel Springer, DMGT,
and BT
• Joined Results in 2014, with over
15 years M&A experience
• Prior to joining Results, Chris led
the Technology M&A practice at
KPMG. He previously spent 11
years advising tech companies
at Arma Partners and JPMorgan
• Recent clients include Zinc
Ahead, Pushbutton and Irdeto
James Kesner Manager
• Joined Results in 2013 from Kingston
Smith
• ACA qualified, previously worked
as a Finance Director for a London
based brand consultancy
• Clients include ID magazine, Not to
Scale, Writtle, Adam and Eve
Richard Latner Manager
• Joined Results in 2014 after having
spent 9 years at KPMG across
audit, TS & M&A functions
• Clients include: WRG, Irdeto and
neoworks
Selected Team Members
Jim Houghton Partner
Keith Hunt Managing Partner
Julie Langley Partner
Chris Lewis Managing Director
17
About Results
Selected Team Members – International
• Long career in marketing sector
(Ogilvy & Mather, The Ball
Partnership)
• Managed the acquisition of SMART
by McCann Worldgroup, CCG by Publicis Group to establish Digitas
China, CIC by Kantar Media and
The Upper Storey by Isobar
Andrew Kefford Managing Partner –
Asia Pacific & MENA
Chris Beaumont Managing Partner –
North Asia
• 16 years of experience
consulting in Asia
• For 10 years Chris was with
McCann-Erickson in Asia; he was
both Vice-Chairman of its operations in Tokyo and Chief
Strategy Officer for WorldGroup
across Asia
• Has closed over 35
transactions totaling $0.75
billion
• Experience includes advising
Hunt Mobile Advertising on its
transaction with Opera Mediaworks
• Maurice has previously
worked at the Zanett Group,
Morgan Stanley and IBM
Maurice Watkins Partner
• 27 years experience in the
advertising sector, including
as COO of JWT's Middle East
Network
• Joined Results International in
2008 and has since been
engaged in a number of buy
and sell mandates
Imad Kublawi Regional Partner –
MENA
• Spent 24 years at Hindustan Thompson (part of JWT), the
largest ad agency in India
• Other roles include COO at
RK Swamy/BBDO and as
advisor to companies in India,
Pakistan & Dubai
Sunil Gupta Area Liaison –
South Asia
USA
Asia
Pierre-Georges Roy Partner
• Closed $4.0 billion in cross-
border transactions
• Experience includes advising Hunt Mobile Advertising on its
transaction with Opera
Mediaworks and Telesystem
International Wireless (NASDAQ:
TIWI) on its sale to Vodafone
For more information contact:
Jim Houghton Partner
+44 (0) 20 7514 8234
Julia Crawley-Boevey Director
+44 (0) 20 7514 8239
Disclaimer:
This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
