Summary:

Consolidation is continuing apace in digital marketing, as one of advertising’s big four agencies lines up to buy one of the last remaining large specialist digital ad outfits.

Mad Men
photo: BBC / AMC

Pretty soon, there may be few large digital marketing agencies left.

Big-four ad agency Publicis Groupe is taking the next step in sector consolidation by offering to acquire the Amsterdam-based digital group LBi for a hefty €416 million ($542 million) (announcement).

LBi is one of Europe’s largest remaining independent digital agencies and operates in 16 countries with 2,200 staff. Its website says: “To us, the unicorn symbolises the never-ending quest for digital mastery.”

These dedicated agencies are going to the big old boys as the big four ad groups acquire expertise in an ad industry that is increasingly digital.

  • Publicis already acquired Digitas in 2006, bought Razorfish from Microsoft in 2009 and acquired Rosetta in 2011.
  • Rival WPP – highly acquisitive in digital and emerging markets – bought one of the other big remaining digital outfits, AKQA, in June, with ambitions to turn it in to a Silicon Valley advertising development house.

LBi scored EBITDA of €19.9 million in 2011 on 12 percent higher revenue of €196.6 million. Its board has support for Publicis’ bid. LBi clients include Volvo, Johnson & Johnson and Coca Cola.

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