A new report has been released by professional services firm, KPMG, which forecasts that 2014 will be filled with some significant mergers and acquisitions throughout the digital marketing industry. In 2013, there were a total of 854 completed mergers and acquisitions in this industry, which were worth a total of $28 Billion. While this may seem significant, it is important to compare it to 2012, where there were 933 deals worth an impressive $46 Billion. This is a huge drop in the total dollars spent in this area, and a significantly lower number of total deals.
These types of things typically go in trends where the market may over correct by taking part in too many or too few mergers or acquisitions, and that seems to be what has happened in 2013. In 2014, it is very likely that companies throughout the digital marketing industry will, at a minimum, return to the previous year’s buying rate. Some expect that the trend will swing in the other direction, bringing the total number of changes, and the amount spent, will swing significantly higher than the 2012 numbers.
David Elms, the head of media with KPMG, reported that they predict that there is pent up demand in the market at this time, and it will be released in 2014. Specifically, he stated, “The pace of change across the media sector is now so rapid that many businesses cannot adapt through a natural process of evolution – creating a market-leading proposition organically is becoming more difficult; companies need to make bold changes in strategy.”
He went on to comment, “Together these factors will mean that, in 2014, businesses that have been following a ‘wait and see’ position on M&A, are likely to have to act or get left behind.”
At this point it is difficult to predict which specific companies will be involved in any merger and acquisition deals that take place in 2014, but one thing is almost certain. There will be some major changes to this industry which will likely affect us all. Keeping a close eye on the industry is going to be critical for success over the next 12 months.
What do you think of this prediction from KPMG? Share your thoughts in the comments below.