Welcome to the Q3 2017 edition of our Digital Services report – Results International’s quarterly market update for the digital services segment. The digital services sectors we track in this market overview include (i) Data & Analytics, (ii) Strategy, UX, Design & Build, (iii) Bespoke Software & Systems Integration, (iv) eCommerce and (v) Mobile App Development. We cover cyber services within our Cyberscope market review and the broader advertising and marketing services market in our quarterly infographics which you can find here.
The third quarter of 2017 saw a total of 72 deals completed, a small decrease on Q2, and a slowdown in the public markets with Marketing Communications companies in particular witnessing falling share price largely on the back of announcing weaker results and the sentiment from large advertisers looking to cut spend. Nevertheless, this has appeared to have little impact on M&A activity with the large holding companies (Dentsu, Havas, IPG, Publicis and WPP) completing 24 deals in the quarter collectively.
In the quarter, Accenture continued to strengthen their foothold in the space through making five acquisitions across the entire digital services landscape (one in Data & Analytics, two in Strategy, UX, Design & Build, one in Bespoke Software & Systems Integration and one in Mobile App Development) and Pitney Bowes acquired eCommerce software development and strategy company Newgistics for $475m in one of the largest transactions of the year. There continues to be plenty of interest from a diverse group of buyers and we expect this level of appetite to continue into Q4 and beyond – as a result now is a good time to be contemplating fundraising, exit or growth through acquisition in the Digital Services space and if you are, please do get in touch.
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We hope that you find this report informative and useful and look forward to discussing the data and underlying themes with you. We have also produced our view on the previous quarter’s proceedings in a series of other market reviews on: