Acquisitions Are Hot Right Now: A Potential Growth Strategy For Your Agency

According to an article published in AdAge, the agency landscape is about to get flooded with mergers and acquisitions.

Just recently, Omnicom bought Flywheel Digital, and Globant now owns a majority in Gut, to name a few.

Madison Alley’s Michael Seidler is convinced this is just the beginning of a more significant trend in the agency industry. And he is not alone – AdAge spoke to 21 executives who agree with his prediction.

But what does that mean for agency owners around the world who are looking to sell? Andrew Essex said agencies specializing in ad tech, influencer marketing, design, performance marketing, and AI are in demand.

Additionally, Marla Kaplowitz said that “high-level data and tech skills especially related to AI and specifically, generative AI, as well as influencer marketing” are particularly interesting.

If your agency falls into that category, it’s useful to know how much you could ask for it – a tool like the Agency Valuations Calculator will calculate your approximate market value.
However, for some, selling is just not an option, and they might go in the opposite direction and merge with or even acquire a different agency. And surprisingly, it’s not always the big players that acquire independent agencies.

One of those people is Todd Neinkirk from Four Kitchens, an agency specializing in website building. Speaking on the Agency Mastery podcast, he said that while it may seem impossible initially, growing an agency through an acquisition was the right thing to do. Todd took a risk and bought the agency from his then-partner. It was a bold move, but it paid off quickly as the business became profitable soon after.

There is no magic formula, argues Todd, but the combination of leadership changes, improved marketing, and finding the right niche was crucial for the agency to get back on track.

In fact, the success of this acquisition made Todd approach an agency in Costa Rica with a proposal to acquire them, which helped with developer turnover, a significant problem for small to medium agencies.

The market will certainly look interesting in 2024: Some agencies will benefit from being guided by a larger organization and gain access to new markets, challenges and clients. On the other hand, merging with an another agency or acquiring is a an increasingly realistic possibility for medium sized agencies.