Image may be NSFW.
Clik here to view.
Ad industry mergers-and-acquisitions activity has bounced back over the past seven months after taking a big pandemic hit in 2020.
M&A deals rose 46% year-over-year by volume in the first half of 2021 with a focus on digital advertising and martech, according to advisory firm Ciesco. Even excluding the Discovery TimeWarner mega-merger, the total value of these deals more than doubled, from $25.2 billion in the first half of 2020 to $55.1 billion in 2021.
Ciesco CEO Chris Sahota said private equity firms led the way in the first half of 2021 with an 80% year-over-year increase in total deals.
Gone are the days when ad giants like WPP, Publicis, Omnicom, and Dentsu closed 30 or more deals in a single year, Sahota said. Consulting giant Accenture has become the industry's top buyer, acquiring 16 advertising businesses in 2019 and 12 in 2020. Upstart agencies like Jellyfish, S4 Capital, and You & Mr. Jones also regularly bid against PE firms.
But the big names have each announced splashy acquisitions in recent months as ad spend returns to pre-pandemic levels and organic growth hits double digits.
Insider identified 11 executives overseeing ad industry M&A activity outside the private equity world this year. They are listed in alphabetical order by employer.
All declined to comment unless otherwise noted.
Stuart Nicoll, senior managing director of corporate development, Accenture
Image may be NSFW.Clik here to view.
Stuart Nicoll is the top-ranking executive on Accenture's Corporate Development Team, which leads M&A and other investment activity for the consulting giant. All executives working on M&A efforts report to him.
Many of Accenture's acquisitions are in areas like cloud computing and IT that bolster its business transformation services. But since launching marketing division Accenture Interactive in 2009, the firm has gradually become more active in the advertising M&A space, buying 43 companies between 2018 and 2020.
Accenture made 12 ad industry acquisitions last year — more than any other company — despite a 30% drop in overall consulting firm M&A activity, according to Ciesco. Ciesco CEO Sahota said Accenture has now traded places with the big holding companies, whose acquisitions recently dropped to single digits.
Accenture's biggest purchase was that of Droga5, which it bought for just under $500 million in 2019. But it also targets smaller agencies around the world to expand its footprint and compete with WPP, Publicis and others for new business. It most recently bought Italian ecommerce agency OpenMind.
The firm spent $1.5 billion on 34 deals in 2020 and expects to hit $4 billion this year, according to Nicoll.
Laurence Hinz, global head of mergers and acquisitions, Dentsu International
Image may be NSFW.Clik here to view.
Laurence Hinz led global M&A for data marketing firm Merkle before being promoted to the same role at Dentsu, the Japanese ad holding company that acquired a majority stake in Merkle for an estimated $1.5 billion in 2016.
Dentsu bought the remaining 34% of Merkle shares just as the pandemic hit in early 2020, and Hinz was one of several execs who took on a more important roles at the ad giant following that deal.
He now simultaneously serves as Dentsu's global head of M&A outside Japan and CFO of customer experience management, one of three divisions created by company leadership in a huge late-2020 restructuring.
Dentsu went from 19 deals in 2018 to only six last year, but Ciesco's Sahota said it has long been the most acquisitive holding company.
Despite challenges stemming from its big investment in the Tokyo Olympics, Dentsu re-entered the M&A fray this summer with the $250 million acquisition of customer experience agency LiveArea, reinforcing a new strategy that centers on Merkle's data-based marketing.
Before joining Merkle in 2017, Hinz held executive roles in banking and IT.
Didier Rigal, director of mergers and acquisitions, Havas
Image may be NSFW.Clik here to view.
Havas is significantly smaller than rival holding companies, reporting $2.53 billion in 2020 revenue versus WPP's $16.7 billion and Omnicom's $13.1 billion.
But Havas, which became part of French media conglomerate Vivendi in 2017, has continued to buy small and mid-size agencies this year, acquiring Israel's Inbar Merhav G, Singapore-based firm BLKJ, and Australian ad-buying agency Hylanda. It also bought a majority stake in creative agency Camp + King in late 2020.
CEO Yannick Bolloré recently hinted at more deals to come. He said Havas wants to enter the Japanese market and expand its presence in India after buying three companies there in 2019.
Didier Rigal now leads global M&A alongside Bolloré, who is also chairman of Vivendi's supervisory board.
He joined the company in 2015 after working in M&A at finance and private-equity companies such as Credit Suisse, Deutsche Bank, and Platinum Equity.
Rigal succeeded André Pinto, who left Havas to join former CEO David Jones's new company, You & Mr. Jones.
Irene Whyte, SVP of corporate development, financial planning and analysis, IPG
Image may be NSFW.Clik here to view.
IPG promoted Irene Whyte to oversee M&A activity in April. The onetime PE exec has been with the company for more than a decade, helping its agencies grow through investment.
Whyte succeeded SVP of Corporate Development Hugh Boston, who spent 11 years at IPG before joining M&A advisory firm JEGI CLARITY in April.
Even before her promotion, Whyte played key roles in some of IPG's biggest deals. She helped now-CEO Philippe Krakowsky negotiate the $2.3 billion 2018 acquisition of data marketing firm Acxiom and led the launch of Kinesso and Matterkind, two new brands that sprung from the integration of that company.
Krakowsky told Insider in early 2021 that IPG would be less active than its competitors on large-scale M&A but said it was looking into smaller acquisitions to grow outside the US and expand its agencies' tech capabilities.
IPG's biggest recent move was combining the healthcare marketing divisions of its two largest agencies, McCann and FCB, to form IPG Health. It also made key divestments in 2020, selling Hispanic agency Casanova//McCann and MullenLowe Indonesia back to their principals.
Jeremy Molins, chief solutions officer, Jellyfish
Image may be NSFW.Clik here to view.
Jellyfish has been one of the most acquisitive agencies since French firm Fimalac invested $700 million in 2019.
Chief Solutions Officer Jeremy Molins, who oversees M&A, said Jellyfish looks for firms that specialize in areas where it has room to grow, like content production, retail marketing, and customer relationship management.
Geographical expansion also drives many of its acquisitions. For example, Chief Operating Officer Chris Lee said Jellyfish bought Australia's Data Runs Deep in February to establish a stronger Asia-Pacific presence.
Molins said Jellyfish doesn't need to scale by acquiring 500-person agencies because most of its growth comes organically, so he focuses on small and midsized operations whose expertise can be applied across the entire company.
Jellyfish most often bids against PE firms but also comes up against PE-backed agencies like Brainlabs as well as Accenture and S4 Capital, Lee said. This heightened competition has led the agency to treat M&A like business development, often reaching out to companies that aren't on the market.
Molins said Jellyfish's M&A process is more flexible than most because Fimalac is owned and run by entrepreneur Marc Lacharrière, who has final say on all deals.
Adrian Sapollnik, EVP, strategy and corporate development, Omnicom
Image may be NSFW.Clik here to view.
Adrian Sapollnik has overseen M&A for Omnicom, the second-largest ad holding company by revenue, since leaving the financial industry in 2009. During the pandemic, he was promoted to executive vice president of strategy and corporate development.
Sapollnik helps negotiate and close M&A deals along with CEO John Wren, CFO Philip Angelastro, and Omnicom Digital CEO Jonathan Nelson, who leads adtech and martech acquisitions.
One Omnicom insider called Sapollnik one of CEO John Wren's most-trusted lieutenants, and Wren said he'd been "a key player in all major decisions" during the pandemic, such as reducing Omnicom's real estate expenses.
Omnicom has been particularly active in recent months, buying pharma firm Archbow Consulting and digital customer relationship design agency Areteans while selling Icon, a barter company created to trade Omnicom's ad inventory for other businesses' unwanted goods.
On the company's second-quarter earnings call, Wren said Omnicom had two deals in the works and predicted more to come.
Unlike its rivals like Publicis Groupe, IPG, and Dentsu, Omnicom does not own a big data firm. Its primary areas of interest are martech, ecommerce, precision marketing, and healthcare.
Stéphane Estryn, mergers and acquisitions director, Publicis
Image may be NSFW.Clik here to view.
Stéphane Estryn has led Publicis' mergers and acquisitions for nearly a decade since board director and ex-CEO Maurice Levy promoted the former investment bank executive.
Publicis has since made some of advertising's largest acquisitions, paying $3.7 billion for digital agency Sapient in 2014 and $4.4 billion for data management firm Epsilon in 2019.
A former Publicis exec said Estryn is a proven operator who knows how to work with European regulatory agencies, which are generally stricter on M&A than their American counterparts.
Like most ad giants, Publicis has dialed down its activity in the last few years. But CEO Arthur Sadoun told analysts on a July earnings call that Publicis had recovered from its pandemic losses more quickly than expected, posting 17.1% organic revenue growth in the second quarter.
The company snapped back into M&A mode in early 2021, making several acquisitions such as PR firm Taylor Herring, commerce agency Balance Internet, and, most significantly, CitrusAd, a software company that helps brands buy ads on top retailers' platforms.
Sadoun has indicated that ecommerce is Publicis' top area of interest as analysts predict online retail ad spending to surpass broadcast TV by 2025.
Scott Spirit, chief growth officer, S4 Capital
Image may be NSFW.Clik here to view.
Sir Martin Sorrell launched S4 Capital months after his departure from WPP in 2018, and it quickly became one of the most active buyers of ad agencies around the world. Its biggest acquisitions were production company Media Monks and MightyHive, a firm that helps brands take their digital ad-buying business in-house.
In August, S4 combined the 24 acquisitions that had been folded into Media Monks and MightyHive to form a unified agency called Media.Monks.
Sorrell hired Scott Spirit in 2019 to help him expand the business through global M&A activity. Spirit has described his job as "[persuading] amazing entrepreneurs to join us and merge their companies into S4."
One insider said Spirit was very close to Sorrell while at WPP, where he led corporate strategy and helped manage Asia-Pacific investments from his home base in Singapore.
S4 has made several acquisitions in 2021, most recently Australian Salesforce specialty firm Destined. Executives at PE firms, ad holding companies, and up-and-comers like Stagwell and Jellyfish all told Insider they often bid against Sorrell's company.
Spirit says digital capabilities and organic growth are the two most important factors when picking targets. Sorrell has also spoken of expanding in Latin America and Asia, where S4 posted some of its best 2020 numbers.
Jason Reid, chief investment officer, Stagwell Inc.
Image may be NSFW.Clik here to view.
The newest ad holding company, Stagwell, is in M&A mode after shareholders approved the merger of Stagwell Group and MDC Partners on July 26, CEO Mark Penn told Insider.
Stagwell could add up to $65 million in revenue per year through deals led by CIO Jason Reid, Penn said.
Reid worked in investments at Microsoft while Penn was CMO and followed him to Stagwell Group in 2015. He succeeds David Ross, who spent more than 11 years at MDC Partners as general counsel and head of corporate development but recently left the company.
Penn said Stagwell will pursue a two-pronged M&A strategy to expand its presence outside the US and update its agencies' digital capabilities with smaller, add-on acquisitions. The company recently launched a network of international affiliate agencies that will help identify acquisition targets around the world, said Penn.
Stagwell targets companies generating between $25 million to $75 million in revenue and most frequently bids against private-equity firms and upstart agencies, though it has not been willing to pay the same prices as Martin Sorrell's S4 Capital, Penn said.
Both companies have been focused on the merger. But in January, Stagwell agency Code and Theory acquired digital design firm Kettle, and its PR firm Alison + Partners bought Sommerfield Communications.
Penn said Stagwell will also expand its ad-buying business so it can work on political campaigns in countries outside the US.
Andrew Scott, chief operating officer, WPP
Image may be NSFW.Clik here to view.
As the world's largest ad holding company, WPP was also once its most aggressive acquirer, buying dozens of ad agencies around the world and investing in research businesses like Comscore and media companies like Vice.
Andrew Scott has overseen WPP's M&A activity for more than 20 years. Insiders say he works closely with CEO Mark Read and CRO John Rogers to close deals that are often sourced by regional execs like Lance Maerov, who leads M&A in North America and led earlier investments in media businesses like Mic and the Weinstein Company.
After Mark Read took over from Martin Sorrell as CEO in 2019, WPP narrowed its focus to data and technology companies in an effort to build its digital practice. Read said his business was back in acquisition mode this year after a pandemic crunch, and WPP later pledged more than $200 million to help build its new data consultancy Choreograph.
An insider said WPP's primary areas of interest are ecommerce and data analytics, though it's also looking for smaller businesses, such as Brazilian software engineering firm DTI, that can enhance its tech capabilities and relationships with names like Adobe, Salesforce, and Microsoft.
André Pinto, partner, You & Mr. Jones
Image may be NSFW.Clik here to view.
André Pinto oversees M&A at digital network You & Mr. Jones along with founder and CEO David Jones after holding a similar role under Jones at holding company Havas.
Pinto told Insider he does everything from finding M&A targets to reviewing final contracts. He also handles all You & Mr Jones's non-recurring financial matters such as leading the search for new real estate.
Pinto said You & Mr. Jones does not consider total revenue, headcount, or geography when looking for targets, focusing instead on a firm's tech assets and its founders' personalities along with organic growth rates and profitability.
You & Mr. Jones is very picky with its M&A strategy, said Pinto, who estimated the company has turned down more than 500 offers for each completed acquisition. Deals above $30 million require approval from the company's board, but they've signed off on every one since You & Mr. Jones's 2015 launch, he said.
Its most recent acquisition was influencer agency Collectively in August 2020, but Pinto said several deals are currently in the works.
David Jones told Insider he plans to focus on a new practice that helps marketers take their ad-buying work in-house.