The next convergence?

AdMedia Partners this week published the results of its annual survey of senior executives within “leading media”, which it defines as traditional and digital media, and “marketing services”, a compilation of the advertising, marketing services and digital marketing sectors. AdMedia provides both groups with investment banking services.

The full report, “Merger and Acquisition Prospects for Media, Marketing Services and Digital Marketing Firms”, describes the market for mergers and acquisitions (M&A) activity in the year ahead. Available as a PDF download at the firm’s website, the report indicates that M&A activity is expected to rebound as buyers are “faced with a wide array of acquisition opportunities and look to use excess cash”.

Prospects for M&A activity appear greater in marketing services than media, something that AdMedia characterizes as “perhaps a reflection of digital media’s continuing disruption of the industry.” Still, the firms feels that “evolving mobile and social media/marketing offerings are considered to be important growth opportunities in 2010″, although you probably didn’t need a survey to figure that out.

Because the capital gains tax may increase in 2011, the report notes that some business owners may be more motivated to sell in 2010. If a significant share of those firms are privately held, greater consolidation in some sectors (associations, take note) may be the result.

This is the first time in the 16-year history of the report that AdMedia combined what had previously been separate marketing services and media surveys into one report. They described the move as one that reflected convergence of the various industries. Although not something AdMedia surveyed, the consolidation may be the most telling development of all.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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