At Bondo Advisors we have spent several years advising on the sale and acquisition of companies in the Digital Marketing, AdTech and MarTech sector in Spain. We have participated in more than twelve transactions in this sector, both on the seller’s side and on the buyer’s side, with national and international counterparts.
This article summarises what we have learned in those processes: who buys digital marketing companies, at what prices, how deals are structured, and what differentiates the companies that achieve the best terms from those that do not.
Who buys digital marketing companies
There are six active buyer profiles in the Spanish market. Understanding their motivations and selection criteria is the first step to knowing whether your company is sellable and to whom.
1. Private equity funds: platforms and buy-and-build
Private equity funds build marketing groups through a consolidation strategy. The process has two phases: first they acquire a company of a certain size as a platform, and from that platform they execute acquisitions of smaller, more specialised companies.
To be a platform for a lower mid-market PE fund, the minimum EBITDA threshold is usually around 5 million euros. Below that figure, the company may be an add-on but will rarely be the starting point of a consolidation strategy.
In Spain there are several examples of groups built with this logic. t2ó, one of the country’s largest performance marketing consultancies, is backed by Aurica Capital, the private equity arm of Banco Sabadell. Samy Alliance has the backing of Bridgepoint. Soy Olivia Media Group is backed by Nazca Capital.
A variant of this profile is the special purpose vehicle: a structure created specifically to acquire one or several companies without the usual PE fund model. Induhold, which acquired Hispavista in a transaction we advised on, is an example of this type of buyer.
2. PE-backed marketing groups: the most active buyer in the mid-market
Once the PE fund has built the platform, the resulting group becomes an active buyer of smaller companies, frequently specialised in a particular discipline or new geography.
This profile is the most active in the 1-5 million euro EBITDA range. They do not have the size restrictions of the large listed groups nor the need to build a platform from scratch like PE funds. They look for specialisation, a solid team and a complementary client base.
In Spain, t2ó, backed by Aurica Capital, is one of the most active examples of this strategy, having integrated several companies in recent years. The Leadgenios deal, which we advised on, is a concrete example of this type of transaction.
Some of the European and international groups with this profile that have been active in acquisitions in Spain and nearby markets:
- Labelium, recently renamed Cosmo5, a Paris-based performance marketing consultancy backed by Charterhouse Capital Partners, a leading European fund. It acquired Jirada in a transaction we advised on.
- Incubeta, an international digital marketing group backed by The Carlyle Group.
- MSQ Partners, a British marketing services group backed by One Equity Partners.
- BrainLabs, a performance marketing agency backed by Falfurrias Capital Partners.
3. Technology consulting groups
There is a consolidated trend of integrating digital marketing agencies into IT Consulting groups, both national and international. The logic is clear: technology consultancies are looking for agencies that can serve as the front-end or back-end of broader digital projects, combining development capabilities with marketing execution.
The entry of major consultancies into this space became evident when Accenture acquired Shackleton, one of the most awarded and respected independent agencies in Spain, which had accumulated 35 Cannes Lions. Accenture Song, its creative division, has continued to be active in global acquisitions.
In Spain, Knowmad Mood, a technology consultancy listed on BME Growth, acquired Buzz in a transaction we advised on. VASS acquired Nateevo (digital marketing and data) and Tandem (Amazon Ads and marketplaces).
4. Media groups
Media groups have sought to strengthen their relationship with advertisers beyond the buying and selling of advertising space. The logic is that advertisers go directly to media groups looking for more complete solutions, and the media want to offer continuous, strategic services that go beyond one-off placements.
The type of agency that interests media groups most is the content-oriented one: branded content, social media, off-media marketing solutions. Media groups have established content teams and see opportunities to create solutions for advertisers outside traditional advertising space.
Prensa Ibérica acquired Publisuites, a branded content and link building platform, in a transaction we advised on. Grupo Godó and Vocento have also been active in acquisitions of this type.
As for the current moment, the most active acquisition cycle of media groups in Spain corresponds to the post-Covid period and has moderated significantly. The groups that had an agency or services strategy have already made the acquisitions they needed, or in some cases have chosen not to continue down that path. Opportunities with media groups still exist, but more selectively and for very specific company profiles.
5. Listed advertising groups
The large listed communication groups are selective but high-impact buyers. Not only the so-called Big 4 (Omnicom, WPP, Publicis, Dentsu) but also mid-sized groups listed on European markets such as Havas (Euronext Paris), S4 Capital, Stagwell, and players listed on secondary markets such as Brave Bison, LLYC, Making Science, M&C Saatchi, Next Fifteen Communications or ISPd.
Havas acquired Tidart, an agency specialising in Paid Media, in a transaction we advised on. Jungle, listed on BME Growth, acquired Rocket Digital, a specialist in media buying on Google and Meta, also in a transaction we advised on.
On the question of minimum size, it is important to distinguish between two very different categories within this profile.
For the major global listed groups (WPP, Publicis, Omnicom, Dentsu, Havas) the practical threshold is around 5 million euros of EBITDA. Their international M&A teams have limited capacity and do not want to dedicate resources to small transactions. The exception is when they are acquiring a specific capability they do not have and cannot realistically build internally. In that case, size may be secondary to specialisation.
For groups listed on growth markets and European secondary markets (BME Growth, AIM, Euronext Growth and equivalents), the size criterion is much more similar to that of PE-backed groups. They are active buyers in the 1-5 million euro EBITDA range and in some cases below. Their buying logic is more like a consolidator than a major communications group: they look for specialisation, complementary geographies and teams that add to their current proposition. The Jungle deal with Rocket Digital is a good example of this dynamic.
6. Independent groups in a consolidation process
There is an additional category that does not fit the previous profiles: independent groups, not listed and without PE backing, that are building a more complete proposition through acquisitions of specialists. Good Rebels, an independent digital consultancy, has made around five acquisitions in recent years, including that of ok,z, specialised in content for TikTok and Instagram, a transaction in which we acted on the buyer’s side.
Mergers between two or three agencies of similar size are also being seen in the Spanish market, without any cash changing hands, to form a stronger joint group. The founders of each company become shareholders of the new group with a percentage proportional to their contribution. There is no immediate liquidity for the founders, but the long-term value can be significantly greater.
Bondo Advisors transactions in Digital Marketing
Below is the detail of the transactions in which we have participated in this sector:
Sell-side:
- Rocket Digital acquired by Jungle — specialist in media buying on Google, Meta and other channels
- Buzz acquired by Knowmad Mood — native digital agency integrated into a technology consultancy listed on BME Growth
- Tidart acquired by Havas — agency specialising in Paid Media integrated into one of the world’s largest communications groups
- KeyContent acquired by MotionPoint — multilingual content agency integrated into an American digital localisation multinational
- Hispavista acquired by Induhold — pioneer of digital marketing in Spain acquired by a special purpose vehicle
- Leadgenios acquired by t2ó — performance marketing agency in Mexico integrated into a group backed by Aurica Capital
- Jirada acquired by Labelium — Spanish digital creative agency integrated into a French consultancy backed by Charterhouse Capital Partners
- Publisuites acquired by Prensa Ibérica — branded content and link building platform integrated into one of Spain’s leading communications groups.
Buy-side:
- MIO Group — advisory on IPO on BME Growth and subsequent scouting and acquisition of Artyco (CRM), Dendary (Amazon eCommerce) and Firma (Brand).
- ISPd — scouting and acquisition of Rocket PPC, specialist in Google Ads and performance marketing.
- Good Rebels — acquisition of ok,z, specialised in content for TikTok and Instagram.
The KPIs a buyer analyses in a digital marketing company
Digital marketing companies have a different financial logic to software or SaaS businesses. The first task before starting any sale process is to build a presentation of the numbers that correctly reflects the reality of the business. In our experience, this preparation work is more complex than it appears and has a direct impact on the final valuation.
The pass-through problem: the first adjustment that needs to be done properly
One of the most important characteristics of digital marketing companies is the existence of revenues that do not belong to the company itself but to its clients. These are known as pass-through or mediation revenues and their accounting treatment varies from one company to another.
In practice there are two models:
In the first, the agency purchases advertising space or services in its own name, puts them on its balance sheet, and subsequently re-invoices them to the client with a margin. In this case that purchase appears as both revenue and cost in the agency’s income statement.
In the second, the agency manages the purchase but the client pays the supplier directly, or the agency acts as an intermediary without the amount passing through its balance sheet.
A buyer will always adjust the financial statements to separate own revenues from pass-through. If an agency invoices 10 million euros but 7 million correspond to media purchases that it re-invoices to its clients, the own revenues are 3 million. The valuation is based on own revenues, not on total billings.
Presenting these figures clearly from the outset, with the separation between own fees, margins on media and pure pass-through, is one of the most important tasks in the preparation phase. A buyer who has to do that separation work themselves, or who finds inconsistencies in the numbers, loses confidence in the data and in the team.
Managed advertising investment volume
Although pass-through does not form part of own revenues, the volume of advertising investment that the agency manages on behalf of its clients is a strategic indicator highly valued by buyers. An agency that manages 30 million euros of annual advertising investment for its clients has a relevant position in those accounts, regardless of what its fee is. That volume is a proxy for the depth of the client relationship and the capacity to sell additional services.
Buyers, especially listed groups and PE-backed groups with an upselling strategy, pay close attention to this figure. It is one of the metrics that needs to be prepared and presented well in the Information Memorandum.
The KPIs that structure the financial analysis
Own revenues (Net Revenue or Gross Profit) The revenue figure after eliminating pass-through. This is the basis on which margin calculations are made and on which valuation multiples are applied. In digital marketing, comparisons between companies are always made on own revenues, not on total gross billings.
EBITDA margin on own revenues EBITDA divided by own revenues gives the real operating profitability margin of the business. In digital marketing, EBITDA margins on own revenues are typically between 15% and 30% in well-managed companies. Below 10%, the buyer will have doubts about the sustainability of the model. Above 25%, the company is well positioned.
Revenue mix: retainer vs project What proportion of own revenues comes from fixed-term retainer contracts versus one-off projects. Buyers value predictability highly. 70% or more of revenues in retainer is a sign of a solid business. A business based primarily on projects has less visibility and that is reflected in the multiple.
Client churn and portfolio age How many clients are lost each year and how long active clients have been in the portfolio. A portfolio with clients averaging 3-5 years of tenure and annual churn below 10-15% is a sign that the business has a real value proposition and consolidated relationships. High churn, even if compensated by new acquisition, raises questions about service quality and dependence on the sales team.
Client cohorts Beyond aggregate churn, sophisticated buyers ask to see revenue evolution by client cohort: how much does a client who joined three years ago invoice today compared to when they started. If clients tend to grow in spend over time, the business has an internal expansion engine. If they tend to decrease, there is a value retention problem that needs to be explained.
Client concentration What percentage of own revenues the ten largest clients represent. A concentration above 50% in the top three clients is a risk that any buyer will incorporate into the price or the deal conditions. The ideal situation is that no single client exceeds 15-20% of own revenues.
Revenue per employee An indicator of the productivity and scalability of the model. In digital marketing, ranges vary widely depending on the type of service: a content agency has a different ratio to a paid media agency with a lot of pass-through. What interests the buyer is the trajectory of this ratio over the last 2-3 years, not just the absolute value.
Number of active contracts and average duration The detail of the contracts: how many are current, which ones have upcoming expiry dates, what percentage have automatic renewal and which require active renegotiation. A contract with a relevant client expiring in the next six months, with no clear signs of renewal, is a risk that a buyer will manage in the price negotiation.
Cost structure: fixed vs variable What percentage of costs are fixed (own staff, offices, tool licences) versus variable (subcontracting, freelancers, third-party purchases). A model with a high proportion of variable costs is more resilient to a revenue decline. A model with a high fixed structure has greater operating leverage but also greater risk if the business loses relevant clients.
Data presentation in digital marketing
As with SaaS, building the correct data package for a sale process in digital marketing requires more work than it appears. Some of the common issues we encounter in the preparation phase:
- Clients that invoice under several legal entities of the same group and appear as different clients in the system, distorting the concentration and churn data
- Mix of own revenues and pass-through on the same invoicing line, without clear separation in the accounts
- Large one-off projects that inflate the revenue of a specific year and that need to be explained and isolated so the buyer understands the real level of recurring revenues
- Variations in the contracting model over time that make data from one year not directly comparable with the previous year without manual adjustments.
Handling all these cases rigorously before starting the process is what allows you to arrive at initial conversations with buyers with numbers that generate confidence and that withstand the scrutiny of due diligence.
How deals are structured in digital marketing
Transactions in digital marketing have specific characteristics that differentiate them from deals in other technology sectors. The most important is the dependence on the founding team.
In a software or SaaS company, value lies in the product, the contracts and the technology. A buyer can acquire the company and manage the transition with some flexibility. In a marketing agency, value is frequently in the people: in the founder’s relationship with clients, in the team’s knowledge, in the reputation the business has built. If the founder leaves the day after closing, the buyer may lose a significant part of the value they purchased.
This structural reality translates into deals with substantial variable components. There are two common models:
Partial acquisitions with a purchase option
The buyer acquires between 51% and 60% of the company. The founders retain the remaining 40-49%. Put and call mechanisms are established, exercisable over a period of 3 to 4 years, allowing the buyer to acquire the remaining capital at a price linked to the period’s results. The founders thus maintain a direct incentive to maximise value up to the moment of the second closing.
100% acquisitions with earnout
The buyer acquires 100% of the capital, but between 30% and 40% of the total price is contingent on the results of the 2-3 years following closing. The negotiation of earnout metrics, normally based on EBITDA or revenue, and of the founder protection mechanisms during that period, is one of the most delicate parts of the process.
In virtually all deals in the sector, regardless of the model chosen, there is a retention clause for the founders and key management team. In some cases this retention period is up to 3-4 years. This is one of the points where the quality of the M&A advisor makes the most difference: retention conditions, non-compete restrictions and earnout mechanisms are where the most value can be gained or lost in negotiation.
Valuation multiples in digital marketing
Multiples in digital marketing transactions in Spain are typically in the range of 5x to 8x EBITDA, and approximately 1x revenue. This is a narrower and lower range than for SaaS, reflecting the greater dependence on people versus product and the lower predictability of revenues.
Factors that move the multiple upwards:
- Clear specialisation in a high-demand discipline with few comparable quality competitors
- Retainer client base with stable contracts and low rotation
- Consolidated team that does not depend exclusively on the founder for client relationships
- Differentiated technology or data capability that goes beyond standard agency services
- Track record of revenue and EBITDA growth over the last 3 years
Factors that move the multiple downwards:
- High concentration in one or two clients
- Revenues based on one-off projects rather than retainers
- Low EBITDA margin due to heavy use of subcontracting
- Extreme dependence of the founder in the commercial relationship
- Small team with no management structure below the founder
To put these multiples in context, the main listed advertising groups on European markets currently trade at EV/EBITDA multiples of between 5x and 8x. WPP (LSE), the world’s largest communications group by revenue, trades at around 5-6x EBITDA. Publicis (Euronext Paris), the best positioned in the sector in terms of organic growth, trades at around 7-8x. Havas (Euronext Paris), which began trading independently in November 2024 after separating from Vivendi, trades at around 6x.
These multiples correspond to groups with billions of euros in revenue, fully diversified geographically and with full stock market liquidity. The private discount for smaller companies brings transaction multiples to the 5x to 8x EBITDA range for the best companies. The majority of deals in the Spanish market sit between 5x and 6x, with outliers above that range corresponding to companies with genuinely scarce specialisation or high-quality client profiles.
What needs to be prepared before selling
The preparation process in digital marketing has its own specificities compared to other sectors.
The most critical point is reducing the founder’s dependence. If clients renew because they have a personal relationship with the founder, and not because they value the team’s service or the company’s technology, any buyer will detect this and factor it into the price or the deal conditions. Building a management team with its own presence before clients is the most important work a founder who wants to sell well can do over the next 2-3 years.
The second point is revenue quality. Buyers pay more for recurring retainer revenues than for one-off projects. If the company has a mix of both, it is worth working actively to convert project clients into retainer clients before starting a sale process.
The third point is financial documentation. Digital marketing buyers expect to see a clear separation between direct and indirect costs, margins by client or by service line, and an income statement that allows the true profitability of the business to be understood without adjustments that are difficult to justify.
The timing of the process matters. The best valuation is achieved when the business has momentum: growth over the last 2-3 years, a stable or expanding client portfolio, and an EBITDA on an upward trajectory. Starting a process at the moment growth begins to slow is one of the most common mistakes founders make.
The role of the advisor in an agency sale
In digital marketing, the M&A advisor plays a particularly relevant role in two areas.
The first is identifying the right buyer. The universe of potential buyers is broad and heterogeneous, and the right buyer profile depends on the size of the company, its specialisation and what the founder wants for their team after the sale. A PE fund that wants to build a platform has a completely different logic to a listed group that wants a specific capability. Identifying which of the six profiles described in this article is most appropriate for each company, and within that profile which specific buyer has the greatest strategic value for the company, is a critical part of the work.
The second is the negotiation of the deal structure. In digital marketing, earnout, retention and non-compete clauses carry a much greater relative weight than in other sectors. The difference between well-negotiated conditions and poorly negotiated ones can amount to several million euros for the founder over the earnout period, regardless of the headline price.
If you are thinking about a sale in the next one or two years, you can contact us for an initial conversation with no commitment.