Active M&A Market Continues for Media, Information Sectors
(Press Release) New York, NY June 30, 2011 - Mergers and acquisitions in the media, information, marketing services and technology sectors continued to be active in the first half of 2011, rising modestly from brisk 2010 levels. The value of announced transactions reached $23 billion in 1H 2011, a 15% increase over 1H 2010, on a similar volume of M&A deals. The first half of 2010 had seen a 61% surge in deal volume and a nearly four times increase in transaction value over depressed 1H 2009 crisis levels. Continued growth in 2011 on top of the large rebound last year reflects a healthy continuing M&A environment, according to The Jordan, Edmiston Group, Inc. (JEGI), the leading independent investment banking firm specializing in M&A advisory services across these core markets.
Interactive, marketing services and technology markets continue to account for the majority of deal activity and value, with the B2B and B2C Online Media & Technology, Marketing & Interactive Services, and Mobile Media & Technology sectors accounting for 71% of total deals and 63% of deal value in the first half of 2011. Interactive companies are maturing, while still growing rapidly, leading to rising deal sizes in these markets.
Marketing & Interactive Services
There is a secular evolution at hand, and marketing dollars continue to rapidly follow consumers online. Media consumption continues to shift to the Internet and away from traditional media, such as magazines and newspapers. On average, consumers are spending 36% of their media time online, compared to 19% just five years ago, according to Forrester Research. Digital advertising dollars have considerable runway left for growth, as just 15% of US advertising spend is currently online. By comparison, consumers spend 35% of their media time with television, and television accounts for 33% of advertising revenue. The gap between time spent online and advertising dollars spent online equates to a $35 billion annual advertising opportunity and points to continuing movement of ad dollars to the Internet in the coming years.
As a result major media companies, such as Hearst, Meredith and Gannett, have been investing in marketing services to better assist their customers and capture more revenue. Advertising agencies and marketing services companies are retooling their business models via investment in integrated and interactive marketing solutions. Large technology companies, such as IBM, Cisco, Akamai and Adobe, are aggressively entering the marketing services market and investing in analytics, optimization and digital advertising solutions for the enterprise. These trends have made Marketing & Interactive Services among the most active sectors for M&A, accounting for 27% of all transactions in 1H 2011.