How ad industry M&A is shaping up in 2025

Likewise, WPP has invested hundreds of millions into buying InfoSum and Stability AI.

Granted, these deals will have been well underway before Trump took the top job. But regardless, from the outside, it seems that in advertising, at least, it’s very much business as usual.

We asked two global M&A specialists, Jegi Clarity’s Jonathan Davis and SI Partners’ Tristan Rice, for their assessment on the year ahead.

Thinking back to the second half of 2024, what was the M&A outlook for 2025?

Johnathan Davis: We saw a pickup in M&A volume in the second half of 2024 compared with H1. While overall market volume remained relatively low, high-quality assets were attracting outsized attention and valuations, whereas lower-growth businesses struggled to generate interest. Valuations were trending stronger in the second half and we saw that momentum carry into Q1 2025. Macro confidence was improving, in particular in the US where the assumption was that the new administration’s agenda of deregulation and tax cuts would drive growth, support stronger consumer and brand spend and allow planning ahead for larger, longer-term digital transformation. So, looking back at that time, there was a strong expectation that the M&A outlook for the sectors in 2025 would be increasingly positive.

Tristan Rice: It’s worth a quick watch or read of this for our predictions in December. Basically, the M&A industry was preparing for a bumper year driven by US investment under lower regulation and taxation in the US under Trump. We also expected a big year for private equity exits, as there were a lot of agency groups approaching five years under PE ownership. We expected most of these to be refinancings, in line with historical trends, but speculated that IPO could also be a route for some (Dept, Brandtech) if the market was favorable, as was expected.

How has Q1 of 2025 been for M&A activity?

JD: Our own activity – and the sentiment we’re picking up more broadly – suggests that Q1 2025 was up on the same period in 2024. Sub-sectors driving activity include AI, connected TV, social/influencer agencies and data analytics – all areas showing strong growth and heightened investor interest. Standout transactions for Jegi Clarity included Bridgepoint’s majority investment into social-first agency Samy Alliance, CloserStill’s acquisition of the world’s largest AI event Ai4, ECI’s investment into performance agency Croud, LDC’s investment into YouTube contextual analytics platform Precise TV and WestBridge’s investment into cutting-edge brand strategy and digital agency Koto – all reflecting investor appetite for growth-focused, future-facing businesses.

TR: We’ve had a very strong Q1 with five deals closed globally compared with one in the same period last year. Obviously, these were deals that were well-advanced before the recent market turmoil, but we also have a very strong pipeline of deals under offer and due to close in Q2 across the US, Europe, MENA and APAC. A few good PE exits.

How has the tariff situation impacted any ongoing deals?

JD: Deals that were already close to the finish line have largely managed to push through and complete and, indeed, we had two transactions close in the days following the tariff announcement. For those in earlier stages, we’re seeing strategic and PE buyers becoming more cautious, not pulling back, but closely evaluating potential secondary and tertiary impacts of tariffs, many of which remain unclear. We haven’t yet seen material repricing as a direct result of the tariffs, but we do anticipate possible delays or slowdowns in some cases as vendors evaluate the potential impact of tariffs on their own businesses and buyers and investors take a more cautious, drawn-out approach to decision making.

TR: So far, tariffs have not been a significant topic. We advise B2B service companies, so tariffs have an indirect impact – ie, if agency clients are affected (either by the tariffs or by a resulting recession) they may reduce their marketing spend, especially in the US. So far, that has not materialized on our live deals. However, we sense increasing caution in the market and expect to see buyers and investors taking fewer risks. That said, there are more buyers in the agency space today than at any time in history, so what this means in practice is that sellers need to navigate that market very carefully and ensure that nothing gets in the way of successful execution.

For the US, more concern around tariffs than elsewhere so far, especially among PE firms. Social commerce is expected to be a big growth segment for M&A

In Europe, the UK is seen as a strategic hub for strategic communications and innovation. Europe is increasingly a near-shore center for the US due to lower labor costs.

And in APAC, Australia is becoming the focus of M&A in the region as China is effectively ruled out and there’s nowhere else with agencies/consultancies of scale.

What are your predictions for M&A activity for the remainder of the year?

JD: Going into 2025, the pipeline was looking robust. That said, we’re staying watchful of how macro factors, in particular outside the US, begin to affect broader economic confidence and risk appetite. These may influence the timing of when vendors decide to go to market. Right now, given the geopolitical and economic volatility, the overarching sentiment seems to be “wait and see” in the hope that the macro risk settles down in the next month or two. Equally, many private equity funds are trying to balance this caution with ever-increasing pressure to exit investments and deploy capital, especially after leaner years in FY23 and FY24, which will undoubtedly drive a lot of competition for those high-performing businesses that do come to market.

TR: Obviously very hard to call, but the signals we’re getting from the market so far are surprisingly positive. There is increasing seller appetite and buyer demand is still very strong, notwithstanding that executional risks are likely to remain higher than usual for the foreseeable future as buyers have become more cautious.