Media Buying Briefing: Some creator shops are ripe for agency M&A as market consolidates

Jeremy Goldman, senior director of marketing, commerce and tech briefings at eMarketer, said he sees more momentum as companies “[snap] up creator economy startups and influencer platforms left and right. … Through these deals, companies gain critical tools, talent and relationships to up their influencer marketing game.”

Elimination game: potential buyers

The three main ways to expand influencer efforts include acquiring smaller influencer marketing agencies, developing in-house solutions (sometimes powered by third-party technology) and purchasing established technology platforms and presenting it as your own, explained Sanja Partalo, cofounder and managing partner at venture capital firm S4S Ventures, which is aligned with S4 Capital.

By process of elimination, some players seem more obvious buyers, while others make for attractive targets. Partalo breaks them down into service-based influencer marketing agencies and technology-driven platforms, with the latter offering capabilities like payment processing, foreign exchange management and first-party data collection.

Holding companies have primarily acquired service-based agencies, while the next wave of M&A will likely target independent technology platforms, given their ability to handle large-scale, global influencer campaigns.

“[It will be a] very strategic decision that needs to be made at very senior levels because any sort of technology-based influencer marketing platforms … are not going to be cheap assets to buy,” said Partalo.

Amy Luca, global head of social at Monks, also mentioned being “aware of a couple of holding companies that are circling around a couple acquisitions on the creator technology.” She attributes this to how hard it is to run a business that is expert in both technology and services: “There’s only a very few companies that have been able to do that.”

Monks tries to straddle both the tech and services by being partner- and tech-agnostic, as opposed to consolidating one piece of tech — to Luca, that is “not the smartest way.”

Recapping major agency influencer investments to date

• Publicis acquired Influential in July for a reported $500 million. It also runs the Fluency practice, with influencer capabilities in media, creative, PR, affiliate and social.
• WPP bought influencer agencies Village Marketing in February 2022 and Goat in March 2023.
• Dentsu has not acquired any influencer businesses, but this September it launched the House of Creators initiative aimed at recruiting emerging creators and developing gaming and anime content. Overall, it focuses on integrating influencer programs across different agencies, like through creative network Dentsu Creative.
• Omnicom operates Creo, a full-service influencer agency offering campaign management, reporting and creator partnerships.
• IPG runs creative content studio MediaBrands Content Studio with an influencer marketing offering, but it has not been in acquisition mode. The studio’s practice is full-service in 18 markets globally.
• Havas does not have a single influencer arm, but launched influencer marketing service Sway in July 2023 as part of agency network Red Havas Group. Health communications agency Havas Lynx also released a health care influencer offering last month.
• Stagwell purchased Leaders in July, rolling the influencer agency capabilities into the Stagwell Marketing Cloud’s PRophet tech suite.

Thomas Markland, founder of creator company HYDP, said it makes sense Publicis and WPP would go the buying route to bolster their offerings — as their “their current offering of media-agency-led creator marketing doesn’t cut it. … As a result, they’re willing to pay a premium for businesses like Influential, not because they want to, but because they need to.”

However, it’s also possible that buyers include retail or tech giants, given how much social platforms and commerce impact influencer marketing revenues. In October, Amazon invested in a minority stake (of an undisclosed amount) in creator startup Spotter.

“I also think the buying universe is bigger than just the holding companies,” Partalo agreed. “If you think about [influencer marketing] as media, then the buying universe becomes much broader … Retail media has kind of brought in a whole new suite of players into the ecosystem.”

Biggest potential targets

In terms of companies of interest, Partalo mentioned influencer marketing platforms Captiv8 and CreatorIQ as growing companies that offer a range of creator products — others also pointed them out in June, along with Jellysmack, Upfluence and Traackr. Partalo also listed Grin, Tagger and Mavrck (rebranded to Later Influence) as probably farther down the list.

Digiday first reported in July that CreatorIQ hired software and analytics executive Chris Harrington as new CEO, focusing on boosting revenue and expanding its partnerships. It works with agency customers like Dentsu and Movers+Shakers.

While Harrington did not comment on selling CreatorIQ, he addressed the possibility of expanding the company through acquiring others in a statement provided to Digiday:

“We have definite opinions on where the market is headed when it comes to scale, brand safety, and development of industry standards, but because CreatorIQ’s role in the market is to provide critical data and software infrastructure for brands, agencies and commerce platforms, M&A activity generally doesn’t impact our business. We have the benefit of powering a huge diversity of enterprise use cases, so the maturation and growth propel our stickiness and scale. As the market grows, so does our business.”

Captiv8 declined to comment for this story.

Others give a broader outlook on investors’ wishlists. “Undervalued startups that raised Series A or earlier and haven’t secured new funding since 2021 are prime candidates,” said eMarketer’s Goldman. “Platforms centered on helping creators own audience data and foster direct connections are catching attention, as are companies that equip creators with the means to launch their own product lines. And as generative AI redefines content creation, tools that empower creators to scale content and expand their reach are looking increasingly attractive.”

Still, many economic factors and uncertainties lie ahead as a new Trump administration starts next year, along with ongoing antitrust regulations and ad-tech trends that could shape M&A decisions in the larger media industry.

“[Antitrust] is at the top of the top of things that need to be considered,” said Partalo. “From a venture capital perspective, the Biden administration really did not want American venture capital firms to be investing money in Chinese AI companies for obvious reasons. Will the Trump administration have a similar stance?”

Color by numbers

Ad-blocking has been around for about a decade now, brought about by the deluge of digital advertising thrust upon web surfers. So has digital advertising improved its game? A recent report from Harris Poll and ad-filtering tech firm Eyeo declared a resounding “no” on the issue. The two surveyed just over 2,000 consumers, who said that intrusive ads are a bigger problem than online security or privacy. Nearly 9 out of 10 respondents (89%) also believe there should be mandated limits on the amount of ads they’re exposed to in return for access to free content, as well as restrictions on their level of disruptiveness. Some stats: 

• Mobile browser users experienced even higher frustration with online mobile ads at 79%, versus 69% for lack of security and 68% for lack of privacy.
• On mobile apps, in-app online ads were the most frustrating, according to 81% of, compared to 76% for lack of security and 74% for lack of privacy. 
• 69% of connected TV users found online ads extremely, very or somewhat frustrating, beating out lack of security (55%) and privacy (57%).
• Online ads ranked most frustrating at 73% to desktop users, ahead of lack of security (65%) and privacy (64%).
• Tablet users also ranked online ads as their biggest frustration, at 74%, compared to 61% for lack of security and 59% for lack of privacy.

Takeoff & landing

• Havas CEO Yannick Bolloré outlined growth targets for the agency group, which plans to spin off into its own stock listing from parent company Vivendi. Although organic revenue is expected to be flat for this fiscal year, Bolloré expects to grow 2% in 2025. And he hopes to have cash flow margins land between 14%-15% by year end 2028.  
• Dentsu’s Merkle unit is partnering with Adobe to deploy Adobe’s Mix Modeler technology to help clients optimize spend and marketing investments.
• Account moves: Canadian home improvement chain Rona picked Cossette Media as it media agency … Johnson & Johnson spinoff Kenvue picked Publicis Media as its media agency for the APAC region … GoupM’s Mindshare picked up media planning and buying duties for Foot Locker in Australia and New Zealand … MG OMD in the U.K. picked up media duties for the Pets at Home retail chain. 
• Personnel moves: Steve King, who co-founded Zenith back in the day and eventually became European chair of Publicis Groupe, is stepping down at the end of the year …  Wpromote named Andrea Bendzick its new CEO, coming over from tech consultancy Astray …. Media consultancy Ebiquity named Ruben Schreurs its new director and CEO after Nick Waters announced he is leaving … Milwaukee-based agency Quad named Tim Maleeny its chief client strategy and integration officer, coming over from a similar position at Havas … Fellow Milwaukee agency Hanson Dodge named Kate Schroder its group media director, after consulting with the agency  …. Media by Mother named Tim Haarmann its managing director in New York.  

Direct quote

“Google’s search engine is 26 years old; Facebook’s social platform just turned 20; and Twitter, now X, debuted a full 18 years ago in 2006. Though these platforms have established themselves as the norm in their respective fields, they’ve also left many users frustrated with their perceived biases and limitations. A proliferation of alternatives, as long as it leads to better communication, should be seen as a good thing.”

— Damian Rollison, director of market insights at SOCi, discussing Bluesky’s growth surge following the presidential election. 

Speed reading

• Michael Bürgi wrote about Know Co. and its offshoot IKPN, which invests in small agencies to help them grow their tech offerings, personnel and business development. 
• I spoke with Monks’ head of social Amy Luca, who discussed the opportunities and challenges she faces in the creator economy. 
• Ronan Shields dug into the reactions across the industry to The Trade Desk’s move into the TV space with the launch of Ventura, its’ TV operating system.

https://digiday.com/?p=561391