The marketing and advertising agencies market comprises companies that develop, implement and monitor marketing and advertising strategies. We segmented the European market into agencies that offer (i) multimedia, (ii) digital marketing, (iii) customer loyalty, (iv) marketing consulting and (v) affiliate marketing services.

The European landscape is characterised by a medium degree of consolidation, with varying levels across geographical markets and verticals (e.g. concentrated customer loyalty market). Herein, the primary driver for consolidation is financial sponsors aggregating agencies specialised in niche markets to create one-stop-shop propositions. Due to the large number of market players and the sustained strong outlook for organic growth, we anticipate consolidation to continue in the future.

Sponsor-led interest has been significant, with ~72% of identified European assets being backed by financial sponsors (April 2023). Particularly, the digital marketing segment has attracted the greatest attention from investors (~86% of assets being backed). Investors attempt to capitalise on significant growth opportunities in certain market verticals (e.g. sustainable marketing campaigns) and seamless integrations of players into holistic agency networks that can serve blue-chip customers across multiple end markets. However, the high turnover of clients given low switching costs in a commoditising market must be taken into consideration by financial investors.

Relevant ESG topics primarily revolve around environmental and social issues. Players are expected to achieve sustainability goals outlined by the EU and incorporate topics around environmental protection in their campaigns. Furthermore, social matters are rooted in guaranteeing protection when handling client and customer data as well as implementing marketing strategies by promoting inclusiveness.