The shaping of the ad industry mergers and acquisitions in 2025

The landscape of the advertising industry faced a period of uncertainty before transitioning into a potentially booming year of mergers and acquisitions (M&A). The initial expectations of increased M&A activity were set by the pro-business policies and declining interest rates during President Trump’s administration. Unfortunately, the sudden introduction and subsequent retraction of global tariffs caused market instability and led to a slowdown in M&A activities. Despite this setback, Arthur Sadoun, Publicis’s chief executive, confirmed that the company’s M&A plans remain unchanged, with deals like the acquisition of Lotame already finalized and resources available for more strategic acquisitions. In a similar fashion, WPP has made substantial investments in acquiring InfoSum and Stability AI, highlighting the resilience of the advertising industry in the face of economic fluctuations.

An outlook for M&A activity in 2025 was discussed by two global M&A specialists, Johnathan Davis from Jegi Clarity and Tristan Rice from SI Partners. Looking back at the second half of 2024, they noted an increase in M&A volume, especially for high-quality assets that garnered significant attention and valuations. Davis highlighted the stronger valuations in the latter part of 2024, which carried over into the first quarter of 2025. The overall market confidence, especially in the US, was on the rise, driven by the expectation of a deregulated environment and tax cuts promoting growth and consumer spending, as well as facilitating long-term digital transformations in businesses. Similarly, Rice emphasized the industry’s anticipation of a robust year in M&A driven by investments in the US accompanied by lower regulation and taxation under Trump’s administration.

Analyzing the M&A activity in the first quarter of 2025, Davis and Rice observed a positive trend with increased activity compared to the same period in the previous year. Certain sub-sectors such as AI, connected TV, social/influencer agencies, and data analytics showcased strong growth and garnered heightened investor interest. Notable transactions in this period included investments in social-first agency Samy Alliance, the acquisition of AI event Ai4, investments in performance agency Croud, YouTube contextual analytics platform Precise TV, and brand strategy and digital agency Koto, reflecting a keen investor appetite for growth-focused and forward-thinking businesses. Rice noted the closure of five deals globally in Q1, indicating a strong start to the year.

Despite the market turbulence caused by the tariff situation, ongoing deals were remarkably resilient, with those near completion managing to push through and finalize transactions. However, deals in earlier stages faced increased scrutiny from strategic and private equity buyers, who are being more cautious and closely evaluating potential impacts of tariffs on future deals. The repricing impact of tariffs on ongoing deals is still unclear, demonstrating a need for thorough evaluation in proceeding with M&A activities amidst uncertain market conditions.