You want to sell your marketing agency? Then it's good to know what the acquisition market in the field of marketing agencies looks like. The number of mergers and acquisitions in the marketing world is still growing. Boundaries are blurring, as more and more international parties are buying up marketing agencies.
The number of mergers and acquisitions in the marketing world is still hot and happening. Boundaries are blurring, as more and more international parties are buying up agencies across borders. In the process, for many businesses, the corona crisis has been the straw and the willingness to sell has increased. Although the number of acquisitions has been on the rise in recent years, this is only a pittance given the size of this market. In fact, the Netherlands has over 30,000 agencies, making the number of mergers and acquisitions only 0.5% of the total market size.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In the media, advertising and communications sector - which includes a marketing agency - an indicative EBITDA-multiple range of 3.3 to 4.0 is currently used, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
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Want to buy a business or sell a business in the Media, Advertising & Communications sector? With this Brookz Sector Monitor, we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in Media, Advertising & Communications. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
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Traditional media forms are largely a thing of the past, as advertising takes place primarily online, according to Rabobank. The sector is busy looking for new revenue models, which means that forces are being combined more often. One-person shops are specializing in a much sought-after service or are looking to collaborate with other marketing agencies. The past few years have confirmed that the only constant is change. Research company Nielsen agrees with this and does not see this uncertainty disappearing any time soon.
In figures, the number of marketing agencies in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes over the next few years, but also offer marketing agencies many growth and acquisition opportunities:
As marketing agencies have to look for new revenue models, the supply in digital subscriptions is also increasing, according to ABN Amro. According to the Amsterdam Internet Exchange, in 2020 there was 35% more data usage than the year before, and this increased again by 18% a year later, partly due to home workers related to covid-19 of course.
There are more zzp'ers in the advertising world, so competition is increasing. Entrepreneurs are being asked to specialize so that they stand out from the rest of the fish in the ocean. Also, Rabobank writes, it is wise to join forces and collaborate with other areas of expertise. This allows the client to choose an agency with great expertise or go for an in-house agency, where all disciplines are employed.
Where the retail and hospitality industry has come under terrible pressure in the last year and a half, there is room (and need!) to shift offerings from the store to the web shop. Where the number of physical stores decreased, a total of over 18,000 web shops were added in 2020 and 2021.
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