Ecommerce and digital marketing companies battle for the digital consumer in ‘an Amazon world’

  • E-commerce M&A value up by $20 billion 2018 vs. 2017
  • Digital marketing M&A total value achieved $11 billion in 2H2018, more than double first half value

London, UK – 28 February 2019. The latest E-Commerce and Digital Marketing M&A Market Reports from international technology mergers and acquisitions advisor, Hampleton Partners, reveal that 2018 recorded a $20 billion increase in disclosed e-commerce M&A value compared to 2017, boosted by mega-deals such as Walmart’s ambitious $16 billion purchase of Flipkart and Adobe’s acquisition of Marketo for $4.75 billion.

Private equity firms’ appetite for e-commerce has risen since the beginning of 2016, with PE funds now accounting for 15 per cent of transactions. Financial buyers are also paying increasingly more for their acquisitions, as demonstrated by deals such as Silver Lake Partners’ buyout of Zoopla for $3 billion at 26.4x EBITDA.

Ralph Hübner, sector principal, Hampleton Partners, said: “Both retailers and digital marketers are battling for consumers in an Amazon world. Amazon is both a giant competitor and a ‘frenemy’, creating opportunities for thousands of other companies to run successful e-commerce businesses by using Amazon advertising and services.”

Amazon Advertising had a momentous year and is now estimated to be the third-largest ad seller in the US behind Google and Facebook, holding a 4 per cent market share. The value of its ad business topped $2 billion for the first time in Q1 2018, reaching $2,8 billion in Q3 and recorded continued triple-digit growth year-on-year.

Ralph Hübner continued: “Meanwhile, the e-commerce start-up ecosystem is undergoing major transformations. On the one hand, for established e-commerce platforms, funding value is increasing: in November, the Korean e-commerce giant Coupang raised $2 billion, followed by Indonesian leader Tokopedia’s Series G round in December, which resulted in $1.1 billion investment from Alibaba and the Vision Fund.

“On the other hand, it is becoming noticeably difficult for start-ups to obtain early-stage capital without guaranteeing their ability to disrupt a specific vertical through a serious data-driven platform.”

Digital marketing M&A
As for the digital marketing sector, total disclosed transaction value achieved $10.91 billion in the second half of 2018, more than double the first half value, due to two mega-deals: Adobe’s acquisition of Marketo at nearly 15x EV/S and Interpublic Group’s acquisition of Acxiom.

Marketo will become part of Adobe’s Experience Cloud, providing a strong B2B marketing automation platform that converges analytics, content, personalisation, advertising and commerce capabilities with lead management and account-based marketing technology for B2B organisations, resetting the competitive playing field against the likes of Salesforce, Oracle and SAP.

Other key trends in e-commerce and digital marketing

  • Personalisation and the post-purchase journey: As the number of retail casualties and the cost of customer acquisition continue to rise, brand-building and a satisfying post-purchase journey become crucial for customer retention. Personalised messaging is a core component of that journey as retailers seek to build customer loyalty.

In July 2018, advertising agency Interpublic Group (IPG) acquired database marketing and management solutions company Acxiom (AMS) for $2.3 billion at above market value of 3.3x EV/S. Acxiom will allow IPG to deliver a foundation data asset to its clients that covers two-thirds of the world’s population. Acxiom claims it now recognises 2.2 billion consumers and manages 20 billion customer records.

  • Next-generation communication and innovation: the introduction of voice search, smart home devices, AR/VR is changing how customers can interact with brands and acquire goods and services. Artificial Intelligence (AI) is being used in search or filter functions, for data mining and content creation.

The future of e-commerce and digital marketing M&A
Ralph Hübner concluded: “E-commerce is set to be the biggest sales channel in the world by 2021, reaching an estimated $3 trillion in value.

“We are likely to witness more activity from strategic buyers keen to consolidate their offering and operations with next-generation technology and marketing software; and from venture and funding arms keen to capitalise on e-commerce start-ups with the potential to disrupt a unique vertical.”

ENDS

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Note to Editors:
Hampleton Partners’ E-Commerce M&A Market Report 1H 2019 is compiled using data and information from the 451 Research database (www.451research.com).

Download the full Hampleton Partners E-Commerce M&A Market Report:
https://www.hampletonpartners.com/reports/e-commerce-report/

Download the full Hampleton Partners Digital Marketing M&A Market Report:
https://www.hampletonpartners.com/reports/digital-marketing-report/

About Hampleton Partners
Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt and San Francisco, Hampleton offers a global perspective with sector expertise in: Automotive Technology, IoT, AI, Fintech, Hi-Tech Industrials & Industry 4.0, Cybersecurity, VR/AR, Healthtech, Digital Marketing, Enterprise Software, SaaS & Cloud and e-commerce.

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For more information visit https://www.hampletonpartners.com.

Source: RealWire

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