Consultancies have led the surge in M&A activity within the Digital Agency world for more than two years. At this point, tech consultants large and small boast digital marketing capabilities and commoditization is a growing concern. Differentiation now requires deeper expertise, either with enterprise marketing technology or with specialized content production. Meanwhile, buyer interest has grown in eCommerce consulting, a market that is still highly fragmented with smaller firms. So far technology partnerships have been a critical factor for buyers in determining where to invest M&A dollars related to eCommerce.
- Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
- Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
- Current EBITDA margin exceeds the average of the last 3 years EBITDA margin, a condition that may attract new entrants