Sector 01
Digital agencies
Digital, performance, technology and integrated agencies make up the largest part of the agency M&A market, and the part we know best. We have built, run and advised digital agencies through every stage, from first hire to sale, and we know what buyers reward and what they question.
- Business types
- Digital, performance and media agencies, web and product studios, CRM and data specialists, SEO and content performance agencies, integrated and full-service agencies.
- Published evidence
- Fanatic and Studio Kin
Business models
Different digital agencies, different value questions
Digital agencies share a model, selling expertise and time to clients, but the mix of work inside that model is what buyers look at first.
- Retained versus project. Performance, media and CRM agencies often run on retainers; build and product studios on projects. Each has its own version of revenue quality, and buyers price the difference.
- Media-heavy versus fee led. Agencies handling significant media spend need to present gross billings and net fee revenue clearly, because buyers value the fee and ignore the pass-through.
- Specialist versus integrated. Specialists are easier to describe and often attract buyers filling a gap. Integrated agencies offer scale and breadth, and are judged on how well the disciplines work together.
- Technology and product. Agencies that have built their own tools, platforms or data assets alongside client work can attract a different class of buyer, provided the product revenue is separated and real.
Issues founders and buyers consider
What the agency is worth, and to whom
The same agency can be worth more to a buyer filling a specific gap than to a general acquirer. Understanding the buyer market is part of understanding your value.
Founder dependence
Who wins the work and who holds the clients. The most common question in digital agency due diligence, and the one that takes longest to answer well.
Capability and fit
Whether the agency brings a capability the group lacks, how its team and tools integrate, and how its founders will be motivated after completion.
Quality of earnings
Revenue mix, client concentration, margin trends and the adjustments behind a normalised EBITDA figure.
How we help
Founders who have built digital agencies, advising digital agencies
We have built, bought, sold, scaled and invested in businesses in this market. Between us we have founded agencies, sold businesses of our own, and led the sale of many digital agencies as M&A advisors.
That experience shapes our advice: which growth buyers reward, how to present a digital agency to the people who buy them, and how to negotiate structure as well as price.
- Sell your agency: objectives, preparation, buyers, process, negotiation and completion.
- Buy an agency: criteria, market mapping, approach, assessment and transaction support.
- Strategic growth advisory: partner level support in four week sprints, long before a deal is in sight.
Related resources
Running a digital agency and thinking ahead?
A confidential conversation with a founding partner about where you are and what comes next.