Direct and digital marketing M&A deals poised to rocket.

Merger and acquisition (M&A) activity is set to soar in the interactive and direct marketing sectors more than any other marketing discipline, according to a new report, which predicts 2007 will be a boom year.

The M&A survey, carried out by WKS Results, points to an escalating growth in both sectors which were best represented with 33 and 29 per cent of responses compared to 20 per cent for sectors including advertising and database marketing.

The industry expects strongest growth in the digital sector, with specialist agencies the primary focus for M&A activity, followed closely by database and direct marketing. Some 66 per cent of respondents expect to see a growth in interactive, compared to 45 per cent for database marketing and 34 per cent for direct marketing.

Respondents say open media, online advertising, mobile marketing and search marketing will propel the growth in the sector, with 49 per cent looking to secure additional skills or services as the lead motive for M&A activity. Open media, which includes blogging and podcasting, is expected to be the fastest growing field of Internet marketing, according to 34 per cent of the respondents.

Mandy Merron, partner at WKS, says: "A number of established businesses are working hard to develop digital expertise and this survey suggests they are right to do so, although there is still a strong market for growing profitable businesses with strong management from any discipline."

Overall, increased activity is expected in the M&A market in 2007, with buyers expecting to be more active than sellers. Levels of enthusiasm for takeovers are rising, with 59 per cent of sellers and 83 per cent of buyers believing they should act now.

Keith Hunt, managing partner at Results International, says: "It is apparent from the survey that M&A activity in the marketing communications industry will remain strong through 2007. Web/interactive remains the sector to look out for, with agencies across the industry expecting stellar performance in both growth and acquisition activity."

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