The desire for the ‘end to end’ agency model is driving M&A

The trend is clear. If end-to-end data driven, customer centric marketing is the goal, then the route agencies are taking is M&A. Not just because organic growth is hard to achieve at the moment, but it’s too slow to meet client demand for more joined up thinking and capability. The race is very much on.

The hope, of course, is to dramatically increase client tenure if you have true end-to-end capabilities across data driven marketing. The number of pitches in this space is already decreasing as agencies make themselves more ‘sticky’ and we’d expect this trend to continue.

The latest addition into in the end-to-end story has been digital media, not to mention how AI will help drive efficiency and effectiveness across it all.

And it’s not just here in the UK but in every major market in Europe that you will find the creation of mini groups all striving to build the necessary capabilities to deliver on this goal and support their clients as they, too, expand into new markets.

One major consequence of this activity is what happens next? To grow into other markets, these groups will struggle to find a suitable target as they will already have been taken by someone in that market who will equally be looking to come the other way. To get the best fish you have to be at the market when the boats come in!

The US is a natural territory for expansion given the size of the digital market, but the same applies there, to some extent. This would suggest that group acquiring group may be the next stage of M&A growth.

We’d expect that M&A’s will start to slow and then we’ll wait to see what happens next. Some will, no doubt, want to be the biggest while others want to do things differently and focus on a way of working that will attract certain clients. Each will take up their position.