Key Takeaways from COMvergence's 2024 Agency Acquisitions Report

The marketing communications (Marcom) industry is undergoing significant transformation, as evidenced by COMvergence’s 2024 Agency Acquisitions Report.

Since 2016, COMvergence’s annual study has provided unique insights into marcom agency acquisitions across digital, data, creative, and media by major international holding companies, leading management consultancies, and emerging independent networks.

In 2024, COMvergence recorded 52 agency acquisitions (including two of the 12 largest deals since 2016) marking a clear slowdown to 2019 levels, significantly below the 2016 peak of 127, with the Big 6 holding companies again leading activity over management consultancies.

Here are my key takeaways from the report and what they mean for advertisers looking to stay ahead.

A Deceleration in Acquisition Activity

• After a post-pandemic surge, 2024 witnessed a notable slowdown in agency acquisitions, totalling 52 deals - comparable to pre-pandemic levels in 2019 and significantly below the 127 acquisitions recorded in 2016.
• This deceleration suggests a more cautious and strategic approach by holding companies and consultancies, focusing on quality over quantity in their expansion efforts.

Emphasis on Digital & Data Capabilities

• Digital and data-driven agencies dominated the acquisition landscape, accounting for 70% of all deals in 2024.

• This trend underscores the industry’s prioritisation of agencies that offer advanced analytics, programmatic advertising, and e-commerce solutions.

• For advertisers, partnering with agencies that excel in these areas is becoming increasingly critical to drive performance and ROI.

Preference for Specialised & Agile Agencies

• Over 65% of acquired agencies had fewer than 150 employees, highlighting a strategic preference for nimble, specialised firms. 
• These agencies often bring niche expertise and innovative approaches, enabling advertisers to benefit from tailored solutions and faster adaptability in a rapidly changing market.

North America's Continued Dominance

• North America, particularly the United States, remained the epicentre of Marcom acquisitions, representing 44% of acquired revenue and 31% of total deals.
• This concentration reflects the region’s robust market dynamics and its role as a hub for innovation and investment in marketing services.

The Ascendancy of Management Consultancies

• Management consultancies, notably Accenture, have solidified their position in the Marcom sector.

• Accenture alone accounted for 42% of the total headcount acquired in 2024, signalling its aggressive expansion strategy and the blurring lines between traditional consulting and marketing services.

• Advertisers should recognise the growing influence of these entities in delivering integrated solutions that encompass strategy, technology, and creative execution.

Implications for Advertisers

Given these developments, advertisers are advised to:

• Evaluate Agency Partnerships: Assess current agency relationships to ensure alignment with digital and data competencies essential for modern marketing success.

• Consider Specialised Agencies: Explore collaborations with smaller, specialised agencies that offer agility and niche expertise, complementing broader strategic objectives.

• Monitor Industry Consolidation: Stay informed about major mergers and acquisitions, such as the potential Omnicom-IPG merger, to anticipate changes in service offerings and negotiate more effectively.

• Leverage Consultancy Capabilities: Recognise the expanding role of management consultancies in the Marcom space and consider how their integrated services might benefit your marketing strategies.

In conclusion, the 2024 COMvergence report highlights a pivotal shift towards digital specialisation and strategic consolidation within the Marcom industry.

Advertisers who proactively adapt to these changes by reevaluating partnerships and embracing innovation will be better positioned to thrive in this evolving landscape.

Want to know more?

Contact us and we will put you in contact with COMvergence, our strategic partner.