Acquirers Capitalize on Channel Shift in the Marketing Services Market
Capstone’s latest Marketing Services Market Update reports that the Marketing Services sector has faced significant disruption as organizations have increasingly demanded shorter paths to purchase and heightened return on investment (ROI). To satisfy this demand, sector participants have migrated away from traditional mediums and cookie-based solutions to digital platforms with embedded or interactive advertising functions—collapsing the sales funnel from awareness to checkout. Total U.S. ad expenditures ticked up in 2025; however, select channels drew outsized spending. The continued monetization of digital channels is expected to accelerate revenue and merger and acquisition (M&A) opportunities in the Marketing Services market.
M&A volume in the Marketing Services market has exhibited a strong growth trajectory, rising each year since 2023 with an average year-over-year (YOY) increase of 4.7% between 2023 and 2025. This activity has continued in year-to-date (YTD) 2026, with sector dealmaking expanding 7.5% YOY. The Digital Marketing segment has led sector deal flow to date, mirroring historical trends. Digital Marketing segment M&A has risen 9.7% YOY to account for 39.5% of transaction targets YTD. However, deals targeting the Advertising, Experiential & Event Marketing, and Public Relations segments have all increased YOY—capturing market share from the Digital Marketing segment. Advertising segment transaction activity has recorded the largest YOY rise to date as participants with mobile application- and streaming-focused solutions have been in high demand.
Sponsors have increasingly penetrated the Marketing Services market, often targeting sector participants with low customer concentration, a high degree of recurring revenue, and advanced technology-enabled offerings such as artificial intelligence (AI). Private equity (PE) M&A has outpaced strategic buyer activity and total sector dealmaking on a YOY basis, rising 17.4% YTD. Sponsors have continued to prioritize add-on engagements, while platform formations to date have fallen compared to the prior year period. Favorable Credit market conditions and ample dry powder reserves are anticipated to reinvigorate PE buyouts throughout 2026. Strategic buyers have retained the majority (68.6%) of sector deals YTD, led by private strategic acquirers consolidating competitors to gain market share. Healthy sector deal flow will likely continue to be driven by strategic and financial buyer appetite for strong ROI, high attribution performance marketing capabilities, particularly via digital channels. Acquirers in the Marketing Services market have also placed an emphasis on targets that can shorten sales funnels and boost engagement with individual content creators and brands.
“Speed and efficiency have become paramount in the Marketing Services space as advertisers look to condense the path to purchase. This dynamic has also buoyed the sector’s M&A market, with acquirers increasingly deploying capital for targets that can shorten sales funnels and boost brand engagement with social media content creators—a trend likely to continue for the foreseeable future,” said Capstone’s Head of Business Services Investment Banking, Bob Balaban, the lead contributor in the newly released report.
Also included in this report:
Which marketing channels garnered the highest YOY increase in 2025 U.S. ad spending.
A breakdown of M&A multiples in the Marketing Services market compared to the broader Business Services industry.
How the middle market has remained a significant contributor to sector deal flow through YTD 2026.
Why equity financing activity in the Marketing Services market has shown signs of a recovery.
Capstone Partners’ Business Services Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the Marketing Services sector. Our team partners with leading mid-to-large sized businesses that serve growing end-markets.
For more information on the Marketing Services Market trends featured in this report or to speak with one of our Business Services M&A Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today.
