Small agencies are leading the current marcomms M&A market

driving today’s marcomms M&A landscape

Tony Walford recently discussed the evolving landscape of the marketing and communications mergers and acquisitions (M&A) market. While big agency deals often dominate headlines, Walford emphasized the significant role that smaller agencies play in generating volume, competition, and momentum in the current market.

In a recent panel discussion, Walford reflected on his earlier prediction that 2025 would be the year of independent agencies. While the previous year did see a surge in independent startups, he believes that 2026 will bring even more new ventures. As major networks focus on internal restructuring, adapting to AI, consolidating services, and improving margins, clients are increasingly seeking agile and creative solutions from smaller, more nimble agencies. These independent agencies are often more flexible, escaping the constraints of legacy processes and hierarchical structures.

In response to this demand, agency startups are branching out from larger networks, while smaller agencies are banding together in collectives like Beyond and Harbour. These collaborative efforts allow agencies to maintain their unique identities while gaining access to a wider range of marketing expertise, enabling them to take on diverse client projects that require multiple capabilities.

Walford also addressed the shifting landscape of the M&A market, highlighting a significant change in the size of deals and the types of buyers involved. Traditionally, the biggest deals involving large network and private equity-backed agency groups have dominated the M&A scene. However, in 2025, the market saw a transformation in the nature of buyers, leading to a more dynamic and diverse landscape.

Despite ongoing geopolitical and economic uncertainties that have historically impacted M&A activity in the sector, the M&A market has bounced back, with a notable focus on smaller agencies. While larger agencies with substantial revenue and employee numbers continue to draw attention, it is the smaller agencies with revenues up to £10 million, EBIT between £1 million and £3 million, and fewer than 100 employees that are driving the current momentum, competition, and velocity in the market.

From a practical standpoint, there is a higher volume of deals among smaller agencies due to their attractiveness to a wide range of potential buyers. Agencies valued below £15-£20 million appeal to strategic acquirers, private equity platforms, PE-backed bolt-on entities, entrepreneurial buyers, and passive financial investors, creating a highly competitive market with increased pricing and deal activity. In contrast, larger agencies with EBIT over £5 million face a narrower buyer pool, mainly comprising larger PE funds and a limited number of global strategic groups, resulting in fewer transactions despite higher individual deal values.

Overall, the increased interest and activity in smaller agencies within the marcomms M&A market underscore the growing importance of agility, creativity, and flexibility in meeting the evolving needs of clients in today’s rapidly changing industry landscape.