M&A opportunities among marketing firms in '09, executives say

NEW YORK: About 60% of senior executives at marketing and ad firms, as well as private equity investment groups, expect to take steps toward M&A deals this year, only a slight decline from last year's 67% finding, according to a recent survey from AdMedia Partners.

NEW YORK: About 60% of senior executives at marketing and ad firms, as well as private equity investment groups, expect to take steps toward M&A deals this year, only a slight decline from last year's 67% finding, according to a recent survey from AdMedia Partners.

The 15th annual “Merger and Acquisition Prospects for Marketing Services and Internet Marketing Firms” report surveyed more than 3,700 professionals from marketing and advertising firms, holding companies, as well as a smaller portion of private investors, via a Web-based survey in December.

Although more than three-quarters said they expect the 2009 economy to be weaker than 2008, more than half (56%) also expect to be approached by a prospective buyer or to approach a prospective acquisition (52%). In fact, most respondents believed that buyers should act now, while only about a quarter said sellers should act now.

“I find that to be a striking contradiction of the general malaise,” said Seth Alpert, MD of AdMedia Partners. “It modulates the doom and gloom in a meaningful way. For sellers who have a great company - where great is defined both financially, by capability, and clients - there's a great opportunity because there's less competition… there's just less for sale.”

The study also found that while respondents were “pessimistic” about display advertising, they overwhelmingly expected an increase in word-of-mouth/social media marketing as the hottest investment in online marketing, followed closely by search and mobile marketing. Following the trend, 57% were considering an entrance or expansion of their mobile marketing business, 42% of their search marketing business, and 38% of their word-of-mouth /social marketing business.

“What you see is a majority of respondents think there's going to be growth in [these areas],” Alpert said.

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