"Within the marketing services sector, agencies with excellent digital capabilities were unsurprisingly in highest demand with digital agencies making up 53% of deals," noted the firm’s report.
Of this, full service digital agencies were the most in demand, accounting for one in five of transactions.
The return of the full service agency model is a trend Kingston Smith expects will continue into 2017 as clients demand a more joined-up service.
The second most popular digital sector were digital design shops which were being fought over by marketing services agencies, professional service firms, such as Accenture (which acquired Karmarama last year), and IT service companies such as Tech Mahindra (which acquired The Bio Agency).
Apart from digital agencies, sports marketing consultancies were in high demand. Dentsu, in particular, made two acquisitions in this space last year.
Key acquirers
WPP and Dentsu once again made the most UK acquisitions in the year with deals that centred on the digital marketing sector.
But the two giants have a contender in The Marketing Group, which has been building at top speed following its IPO in May 2016, ending the year with 24 subsidiaries.
Editor's Note: The Marketing Group clarified with Campaign that it only has 18 subsidiaries. Kingston Smith has not replied to a request to change the number originally provided.
Inbound activity dominates
The UK proved a popular place to shop with just over half the deals involving a cross-border transaction. North America was the nation’s top customer, accounting for 45% of all overseas deals.
Overall, the number of UK companies sold exceeded the number making acquisitions. Reasons for this, posit Kingston Smith, includes the quality of the UK media industry as well as the devaluation of the sterling, following Brexit – a trend the firm believes will continue into 2017.
.jpg)
