Luma Partners breaks down M&A activity in the digital media sector

Luma Partners claims that M&A rates in the ad tech and martech sectors continues to perform such activity in other industry verticals, the reason for this is that outfits with software capabilities – and data-literate staff – that can help large companies react to behavioural trend in real-time are likely to prove attractive to deep-pocketed outfits across a number of verticals.

During the first quarter of 2016 media and commerce proved the most attractive when it comes to ad tech companies, with such companies carrying out 35 per cent and 17 per cent of all deals (respectively) in the digital media sector (see chart), with Time Inc.’s purchase of Viant, and Telenor Group’s investment in Tapad noteworthy strategic buyers during the period.

Other notable buyers of ad tech during the period included RTL Group, which bought Smartclip to accrue its digital video and connected TV tools, as well as a consortium of Chinese investors which bought Opera to capitalise on its capabilities in the mobile advertising space.

Luma Partners further goes on to break down M&A in the sector adding that the total number of ad tech-specific deals during Q1 2016 was flat compared to 12 months earlier (19 during both periods), although it did note that native advertising companies are likely to be of particular interest with those eager to buy their way into the sector.

However, M&A in the martech sector was marginally up between Q1 2016 and 12 months earlier (18 compared to 17) with those in marketing in the small-to-medium business sector, as well as content marketers, among the key target areas, with Luma Partners stating: “we believe strongly that account based marketing will take off this year, as more B2B marketers recognise the value of delivering the right message, at the right time to the right account.”

Notable strategic buyers in this space include: IBM, which made a plethora of investments in the space, as well as Oracle, with the former furthering its marketing cloud capabilities, and the latter’s purchase of AddThis enhancing its ID Graph capabilities.

The financial services specialist also went on to state that M&A in the digital content sector soared compared to 12 months earlier, with the number of investments in the sector soaring to 34, compared to 22 a year earlier.

The outfit later went on to identify that messaging platforms would be of key area of interest to investors, as these are key areas of distribution for businesses wishing to offer content, as well as service providers.

See here for further insights from the Luma Partners Q1 Market Report