Momentum in the Digital Media & Marketing sector continued in Q3 2024, as M&A activity picked up for the third consecutive quarter following 2023’s dearth of dealmaking. Through Q3 of this year, scaled deal activity in the Digital Media & Marketing ecosystem rose 51% year-over-year. As the macro-economic environment continued to improve in Q3 – highlighted by the Federal Reserve’s first rate cut since the pandemic and sustained decreases in the rates of inflation – ad spend has endured and growth initiatives such as Data/Identity, CTV, Commerce Media, and Mobile continue to be areas of investment for the sector. The increase in deal-making has aligned with these growth areas, as well as an ongoing rationalization & consolidation of the Ad Tech and MarTech ecosystems – strategics and sponsor-backed companies adding capabilities and scale via M&A to bolster durability following 2023’s period of significant volatility.
The public markets were mixed in Q3 2024. While both LUMA.A and LUMA.M traded above market, there was a wider gap between top and bottom performers, with many companies showing either double-digit gains or losses. Within the Global VC market, investment activity reached $66.5bn, which is a decline of (16%) and (15%) QoQ and YoY respectively (Crunchbase). However, AI was the top sector by dollars invested in Q3 as funding reached $19bn, or 28% of all venture dollars, Crunchbase data shows. This is a positive signal given the increasing overlap in content generation, data & identity and marketing automation.
M&A Activity Highlights
- Q3 2024 deal volume rose significantly, +13% from Q2 2024, as deal activity rose across Ad Tech, MarTech, and Digital Content – with more material increases in Ad Tech & MarTech activity (+26% and +15%, respectively).
- Scaled deal activity (>$100mm) of 23 deals in Q3 2024 was +15% above an already solid Q2 and was largely driven by strategic deals in the Ad Tech & MarTech industries – accounting for 60% of scaled activity in the quarter (relative to 50% in Q2 2024).
Public Markets & LUMA Indices Highlights
- The LUMA.A indices +16.8% out-performed market benchmarks (S&P +5.2%, Nasdaq +2.6%) as 13 of the 24 names traded up in the double-digits this quarter, while the LUMA.M cohort traded up +6.5% on the quarter – above the broader technology market and with a larger number (11) of cohort companies declining in market value by more than -10%.
- The Ad Tech trading cohort continues to perform well through earnings season, as over 50% of the cohort beat on both Net Revenue and EBITDA during their most recent earnings announcements. MarTech companies similarly have tended to beat or meet expectations, but have not traded as favorably in the aftermath, due in part to general softness in the software market and challenged growth expectations into 2025.
Download the full report to get all the data on Ad Tech, MarTech, and Digital Content, including the following:
- Quarterly deal activity by sector
- Public market trends and the latest earnings detail for Ad Tech and MarTech
- Public valuation and operational benchmarking across Ad Tech and MarTech
- Highlighted private financing activity across the sectors
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