The Digital Agency Landscape:

M&A activity in the digital agency market is on the rise again. In recent years, macroeconomic factors and a focus on integration led to a temporary slowdown. Highly acquisitive platforms shifted their attention to internal alignment, streamlining operations, optimizing synergies, and consolidating previous acquisitions. However, the sector is now experiencing renewed momentum in M&A, fueled by several key market trends:

• A shift towards comprehensive digital services: Clients are increasingly seeking agencies that provide end-to-end digital solutions, encompassing SEO, performance marketing, social media management, AI-driven analytics, development, and e-commerce services. Acquiring specialized agencies allows firms to quickly broaden their expertise and introduce new offerings to their existing client base, leveraging cross-selling opportunities while enhancing client retention. Furthermore, positioning as a full-service digital provider not only aligns with evolving client needs but also enhances the agency’s overall market value and growth potential.
• International expansion and market entry: As market players grow larger and domestic acquisition opportunities become scarce, international expansion is essential for enhancing multinational client servicing and ensuring sustained growth. Acquiring established agencies in different markets facilitates global expansion while mitigating the risks and costs associated with entering new regions.
• Adoption of artificial intelligence (AI): The integration of AI technologies is revolutionizing service offerings, enabling agencies to deliver personalized customer experiences and optimize marketing strategies. Agencies proficient in AI-driven data analysis and high-personalization are becoming highly sought after in the M&A market. 

The Dutch Digital Agency market

The Dutch digital agency market is undergoing rapid consolidation, driven by private equity-backed platforms pursuing aggressive acquisition strategies. With improving macroeconomic conditions and a maturing domestic market, leading firms are increasingly looking beyond national borders for expansion, seeking international opportunities to sustain growth and enhance their global reach.

In our latest platform mapping, Leads.io stood out as the most active acquirer, with at least six acquisitions in the past year. Backed by Egeria, the company continues to strengthen its international footprint, particularly in key European markets such as France and Spain.

Additionally, a new platform emerged as Newport Capital established the European Performance Agency Group by merging four digital agencies – OrangeValley, MvH Media, AdResults, and Increase – into a dedicated performance marketing services group. This aligns with the growing demand for data-driven, results-focused marketing solutions, further driving consolidation in the industry

Market Outlook

The global addressable market for digital advertising agency fees is expected to experience significant growth, with a projected compound annual growth rate (CAGR) of 12.7%, reaching approximately €411 billion by 2026. In Europe, the market is set to expand even faster, with a CAGR of 14.4% from 2023 to 2026, reaching an estimated €44 billion in 2026. This rapid expansion highlights the growing reliance on digital marketing as brands seek to enhance their online presence, optimize performance-driven advertising, and navigate an increasingly complex digital landscape. 

Valuation Insights

Following from our analysis we notice that agencies that position themselves as comprehensive digital service providers tend to receive higher valuations compared to traditional digital agencies. Investors increasingly favour firms that offer end-to-end marketing solutions, encompassing SEO, social media management, content marketing, email marketing, web development, and advanced data analytics. Additionally, agencies with broad service models benefit from diversified revenue streams, stronger cross-selling opportunities, and greater resilience to market fluctuation; all factors that contribute to higher investor confidence and premium valuations.

For more information and our full 2024 Digital Agency Report, which includes the mapping of PE-backed Buy & Build platforms in multiple countries, please contact Ron Belt or Maurits Odekerken.