13 February 2017
London and Amsterdam showcase the Ciesco 2016 Global M&A Review – with leading industry Speakers and networking events
M&A activity is driven by many circumstances. Not least of all confidence and opportunities in a specific market or category, often linked to that adage of right time – right place. Certainly, in the technology enabled media and marketing space 2016 was an extraordinary year right around the globe. The global economic instability aligning with some unprecedented political events and outcomes did not even make a dent in the increased activity both from a volume and value perspective worldwide. Ciesco’s 2016 Global M&A Review of activity in the technology enabled media and marketing space certainly reflected that, and so much more. The detailed review presents comprehensive findings and highlights ongoing and emerging trends, noteworthy deals and industry specialists’ sector outlook for 2017 and beyond.
The exciting, exclusive events to launch the Ciesco 2016 Global M&A Review took place end January and early February in both London and Amsterdam, gathering over 150 leading and influential figures from the wider industry. The key objective of the event was to tell the story about the year gone by and what to look out for in the future across the category and market sectors.
Ciesco’s analysis presented by their CEO Chris Sahota, Partner Colin Wheeler, and Director Adriana Roman-Holly – highlighted an increase of 6% year on year in global deal volume and 36% increase in value, to over $82bn – and that’s excluding the three mega deals recorded of over $10bn, positioning 2016 as yet another record year for M&A activity and demonstrating the robustness of the sector, the appetite of the acquirers and the ever-emerging opportunities across all sectors and geographies. 1,175 deals were announced, with buyers from 43 different countries acquiring companies across 50 different countries. The granular analysis shows that the first half of 2016 was stronger in terms of deal volume, with 635 completed in first half vs.540 in the second.
The Review highlights some of the largest and most interesting deals in more details. For instance, the three mega-deals, with a value reported of over $10bn – AT&T’s acquisition of TimeWarner ($85.4bn), Microsoft acquiring LinkedIn ($26.2bn) and 21st Century Fox’s acquisition of Sky ($14.57bn). Dentsu’s acquisition of Merkle – its largest acquisition to date since they acquired Aegis back in 2012 is also worth highlighting.
The traditional holding networks were still strong players featuring in the Review’s Top10 Active Buyers chart, with Dentsu for the first time overtaking WPP, who in the past has been our most prolific acquirer. Dentsu announced 36 deals compared to WPP’s 33. Only 4 of the 6 largest marketing holding networks feature in the Top10, with Omnicom and Havas dropping out of the list this year. Holding networks’ share of total M&A activity fell to 8% (vs. 9% in 2015 and 10% in 2014).
The emergence of Technology and Consultancy buyers, as well as was the activity of other Emerging buyers, were captured and analysed in the report. While tech acquirers were largely focused on developing their machine-learning and data analytics capabilities, the Consultancies put the emphasis on building strong strategy and creative capabilities that will enable them to provide a richer all round offering, primarily digitally led, to existing and potentially new clients.
The analysis also demonstrated that the majority of all transactions involved a strategic buyer, and Private Equities only accounted for 10% of global deals (slightly higher than 9% last year). The level of take private M&A activity has been high with several significant transactions of this standing, including Vista Equity/Marketo and HIG Capital acquiring Lionbridge Technologies.
The Geographical Overview section of the report identifies the USA dominating with a similar deal to 2015 – 514 deals. Whereas, Western Europe increased by 13% with a deal count of 178 and the APAC region was once again very strong, completing 197 deals in 2016, a 15% increase. Special attention was given to the activity of Chinese buyer which increased 23% to 84 deals in 2016.
The Chinese market, and with it – its Buyers, is maturing and opening more opportunity for tech-enabled and media & marketing companies.
When we look at the sectors, the Marketing Technology remains the busiest sector for mergers and acquisitions this year, as it was in 2015, with 102 deals representing $8bn in value. Mobile sector broke through in 2016, with $2.8bn recorded across 90 deals. In China app store sales have grown 90% since 2015. Data and Analytics was fourth most active sector with 16% growth from 2015.
After presenting the summary of the Global M&A Review, Chris Sahota introduced the speakers to the audience. The speakers come from a various backgrounds and experiences and provided a comprehensive understanding of the sectors and overall marketplace.
The London event, hosted by Ciesco Group in partnership with Taylor Wessing, featured presentations from Dominic Grainger, Lindsey Clay, Dele Atanda, Rupert Howell, Dave Reed, and Steph Fastre.
The focus of Dominic’s presentation was on the significant rise in the use of connected devices and consequent growing obligation on retailers to personalise the shopping experience. The increasing complexity of customer purchase journey has led to GroupM creating [m]platform, which enables them turn data into insights. The platform is built to improve advertisers’ ability to use audience-defining insights from hundreds of data sources to find and communicate with their consumers across all media, essentially moving from media planning to audience planning.
Lindsey’s presentation named “TV’s bright future” comprehensively painted the picture of the ever increasing and consistent power of TV advertising in the UK marketplace. She said that even though the number of devices that content can be viewed within is increasing, the effectiveness of traditional TV viewing and with it advertising has not been disrupted. Lindsey provided the audience with audited facts and figures on TV viewing and demonstrated the effectiveness across different demographics, based on various criteria – including emotion, trust, popularity and rememberability. Lindsey’s conclusion – “TV is by far the most effective form of advertising”!
Discussion on the consumer’s journey continued with Dele’s presentation, via his dynamic talk about IBM’s Cognitive Experience Design. Positioned and described as the smart solutions designed to accelerate the ability of technology to bring human value and meet human needs, where experience design brings the human and creative component, and cognitive brings the intelligence, responsiveness and insights. Dele shared numerous insights into how data, machine learning and cognitive services can be used to deliver messages unique to a brand and tailored to both the user’s personality, interests and context.
Ciesco identified IBM as the second highest Consultancy acquirer in technology enabled media and marketing sectors, with its seven acquisitions in 2016, three of which were announced in one week in the beginning of the year – Resource/Ammirati (US), Aperto and exc.io (Germany) – all strategic digital agencies.
The future of print media and marketing has become one of the most debated universal topics throughout 2016. Rupert’s presentation titled ‘Weathering the Perfect Storm’ took the audience through the challenges faced by publishers worldwide and specifically, by Trinity Mirror plc, the UK’s largest newspaper, magazine and digital publisher. He told the story of how, despite the rising paper and distribution costs, fall in print advertising expenditure and continuing shift of the audience towards digital media, Trinity Mirror plc could adjust their approach and take an even stronger position within the market. He believes that ‘Fake news’ and ‘post truth’ environment focus the readers/viewers’ attention on traditional media and called the publishing industry ‘the only disrupted industry where incumbents are still prospering’.
In 2016, Trinity Mirror Plc sold their digital marketing business Rippleffect to Idox Plc [link]
Next up was Dave and he approached the discussion around the consumer experience from the ‘Data’ point of view and perspective. As we have entered an ever-increasing era of data and social science coming together – there is an ever-growing strength and need to recognise and truly make sense of the numbers. MediaMath has been building programmatic advertising solutions for brands and trying to identify the challenges of them never fully knowing whether their ads are reaching the right target markets and never being sure of their return on ad-spend investment. Dave expects there to be a convergence of AdTech and MarTech and continued growth of programmatic. With an increasing importance and focus on consumer experience – Dave made the case for programmatic being employed by brands as a top solution to boost their business outcomes.
Each of our Speakers had unsurprisingly referenced the Google brand name in their presentations. Therefore, it made perfect sense to finish the line-up of speakers at Ciesco’s London Event with Steph Fastre, who has been a key part of the Google leadership team for almost a decade.
Google is one of the world’s most innovative companies and it was exciting to learn what drives that innovation and power. Steph’s answer was simple and unexpected – People. She passionately talked about the importance placed on people and culture at Google and about three pillars supporting it – Mission Transparency and Voice. The founders of Google realised that innovation ‘‘has always been about small people having a new idea, typically not understood by people around them and their executives’ so they created an environment where people are constantly encouraged to think of new ways to organise the world’s information, make it universally accessible and useful and improve user experience’’. All thought provoking and inspiring.
After the presentations, insightful conversations continued over drinks and canapes. During the course of that part of the evening the many more topics were discussed, old associates re acquainted and new relationship formed.
The successful launch of Ciesco’s 2016 Global M&A Review in London was quickly followed by a similar event in Amsterdam, this time at Van Doorne offices. The Dutch market is often regarded as a barometer in the global media and marketing space – what is happening and what is coming, so Amsterdam felt like a the right and appropriate place to bring together the leaders from media, marketing, related the technology and financial sectors.
Findings of the report were again presented in the Dutch capital and were followed by a different line up of guest Speakers from the leading companies in the sector.
Diederik kicked off the guest Speakers’ presentations with his presentation, titled ‘The Beauty of Urgency”, in which he talked about the strategy behind IPG Mediabrands’ M&A activity. The company’s recent acquisitions in the Benelux region included Traffic4U, a performance agency, in 2014 and of a content marketing agency Yune in January 2017.
He talked about their reasons for building capabilities by way of acquisitions rather developing them from scratch in-house and about their focus areas, when making acquisitions – Data, Tech, Digital and Missing Links. He emphasised that solid financials and strong capabilities are not enough to make a great target – finding the right people and the right culture – and as he put it “good mates to have a beer with” – is as important as their performance.
During the London event, Dele passionately talked about the value and importance of Cognitive Experience Design. So, we were delighted that Lot, also from IBM iX, shared interesting insights with our Dutch audience. Lot talked about how IBM embedded design thinking into companies’ client interactions, enabling both parties to better build out solutions to business problems. She talked about the components that go into Cognitive Experience Design: Intelligence, Empathy and Code, and how they all underpin IBM’s Digital Reinvention.
One of the most powerful presentations of the event was given by Willlem, CEO of Havas Lemz. Lemz, one of the most awarded agencies in Europe, was acquired by Havas Group in November 2016 [link]. Willem talked about the values driving Lemz while it was an independent agency and how these values had become even stronger since the acquisition. The focus of the agency is on creating meaningful and impactful work. One of their most significant and highly recognised and awarded works, the “Sweetie” campaign, built to eliminate web child sex abuse, is aimed not only at raising awareness but at catching and identifying predators and pressuring governments to take action. They choose ‘meaning over money’ and are using ‘creativity to build a better world’ – unsurprisingly they are now aiming at creating work which will potentially receive a Nobel Prize.
We Are Free Agents, a media development company, was co-founded by Patrick Alders. Patrick’s presentation busted some of the myths surrounding TV. Similarly, to Lindsey Clay, who presented at the London event, Patrick does not agree that TV is dead, he does not believe that creativity is scalable – “Did an earn-out EVER result in more or even continued creativity?” – was his question, and he certainly disagrees that TV advertising is ‘so last century’. Far from it. By effectively outlining the role of TV in people’s lives, the volume and effect of the information transmitted via TV and by backing it up with relevant studies he easily smashed the not-so-true but frequently repeated ideas.
The final presentation was given by Robert, who talked about the ever-increasing demands and expectancy from today’s shoppers and with it, Hatch’s mission to make the world a dynamic shoppable place. He talked about the challenges faced by their customers and ways in which Hatch helps them. They are a ‘disruptive marketing technology platform, and Robert shared some key insights into the data provided by that platform.
The presentations were followed by some lively networking over drinks and canapes.
The amount of knowledge, insights and experiences – presented, shared and discussed – at the Ciesco Global M&A Review Launch Events in both London and Amsterdam is invaluable and inspiring, and we thank everyone who joined us – and also for the fantastic feedback that we have since received.
For a copy of the report please contact email@example.com