July 21, 2016 – Solganick & Co. has issued its latest Digital Media M&A update for Q2 2016. The following summarizes the report:

 

 

Digital Media M&A Drivers in 2016

 

Location-based Advertising: The advertising technology sector experienced high deal activity in the second quarter of 2016, and the industry will continue to see high deal flow as mobile audience modeling is becoming more sophisticated.  Location-based advertising technologies track the physical locations of consumers through their mobile devices and perform analytics to select which advertisements consumers might take interest in.  For example, if the technology notices that a person visits the gym frequently and eats at healthy restaurants often, it will show advertisements for products and services that will help the person further his or her healthy living.  The technology also covers capabilities for displaying advertisements to mobile users who have entered specified areas.  Location-based advertising technologies hinge on the ability to sift through large amounts of location data to choose a set of personalized advertisements based on assumed consumer interests.

 

Location-based advertisement platforms are already minimizing operational costs for companies in the retail, automotive, logistics and food processing industries.  These industries will likely see increased M&A activity in the near future.  We expect location-based technologies to continue to gain traction in other industries, especially as the expenses for location data analytics decrease and smartphones increasingly penetrate the global market.  According to Hampleton Partners, the location-based advertising industry in the first half of 2016 saw its highest EBITDA multiples since the second half of 2014.  One of the biggest deals yet in the industry was Gannett’s acquisition of ReachLocal, a company with a location-based advertising offering that was awarded Bronze in the 2016 American Business Awards competition.

 

Native Advertising: Native advertising is a method of presenting advertisements to consumers by integrating the advertisements into the user experience so that they are disguised and flow seamlessly with digital content.  Smaller brands are beginning to join large corporations in the search to incorporate native advertising into their marketing campaigns . Native advertising will soon be part of most marketing strategies, as it focuses on presenting advertisements tastefully, as opposed to the ubiquitous eye-sore advertisements that we are accustomed to.  The trend will continue to reshape the media marketing landscape and will prompt businesses to engage in M&A activities to better meet market demands.

 

You can download the complete report here: Solganick Digital Media MnA Update (Q2 2016)