Ecommerce and digital marketing M&A value up by $20 billion in 2018

Must Read

Why cybersecurity threats have increased during Covid-19 pandemic

Cybersecurity industry has never had more significant task to carry out than guarding strategic associations and businesses from digital assaults during the coronavirus pandemic

How to choose an effective DDoS mitigation plan

There are several flavours from which to choose when selecting an effective DDoS mitigation strategy. Most enterprises opt for one of the cloud protection flavours (always-on or on-demand)

Ensuring brand protection against cyber attacks

Companies across all industries and sizes must make sure that they are protected and safeguarded against all forms of cyberattacks today

The year 2018 recorded a $20 billion increase in disclosed e-commerce M&A value compared to 2017, boosted by mega-deals such as ’s ambitious $16 billion purchase of Flipkart and ’s acquisition of Marketo for $4.75 billion, said a report.

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, said the latest E-Commerce and M&A Market Reports from international technology mergers and acquisitions advisor, Hampleton Partners.

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.

“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,” said Ralph Hübner.

“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 said, “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.”

Subscribe to receive the day's headlines from Tech Observer straight in your inbox

Leave a Reply

*The moderation of comments is automated and not cleared manually by techobserver.in. Embedding of any link and use of abusive or unparliamentary language are prohibited.
- Advertisement -

Latest in TECH

Related Articles