Mergers and acquisitions in digital

Twelve months on and this prediction has proven to be absolutely on the money, with WPP’s mega-purchase of AKQA (reportedly valuing the consultancy at almost £350 million) Digit joining The Brand Union and LBi, the biggest independent group still available, in discussions with potential buyers, with Omnicom reportedly sniffing around.

Merron had identified the digital sector as having higher multiples on earnings than traditional marketing sectors, and the numbers being quoted for the deals and potential deals seem to bear this out.

Another key factor, particularly in the cases of AKQA and LBi, are well-established global networks and client rosters that include the likes of Heineken, Nike and Nissan (AKQA) and Sony, BT and LloydsTSB (LBi).

And hopefully now, nearly ten years on from the first digital feeding frenzy, networks are starting to understand what digital can do and how it can work for them and the consultancy.

Writing for Design Week back in 2010, Digit co-founder Andy Chambers reflected on his problems with Digit’s merger with ad group JWT, which he says saw the consultancy reduced to part of a ‘matching luggage’ strategy, where it was used simply to tick a digital box for potential clients.

But moves such as AKQA coming in at a high level at WPP, and Digit’s move from JWT to (hopefully more sympathetic environment of) branding consultancy The Brand Union suggest that as well as being happy to spend lots of money on digital consultancies, networks are beginning to understand how they should be run as well.