The Growing Influence of Social Media

People now spend an average of 2 hours and 34 minutes a day on social media, and three out of four individuals in the UK and US are active on at least one major platform. With nearly 70% of users turning to social media for brand research and 1 in 5 following brands they might buy from, social platforms are key brand discovery tools. Rising investor interest and a broad pool of potential acquirers are driving the influencer marketing and social media space through a wave of M&A.

How Fast is the Social Media Marketing Industry Growing?

The social media marketing industry is experiencing rapid growth, driven by the expanding creator economy and the growing demand for influencer marketing. Goldman Sachs expects the creator economy to surpass $480Bn by 2027, with influencer marketing growing at 18% CAGR.

Marketers are increasingly leveraging social media platforms for social media campaigns, with Instagram (80% of marketers currently using the platform), Facebook (59%), TikTok (58%), and YouTube (45%) being the most utilized channels for influencer marketing. These platforms each boast substantial user bases, with Facebook leading at 3.1 billion monthly active users, followed by YouTube (2.5 billion), Instagram (2 billion), and TikTok (1.6 billion).

The proliferation of social media platforms has introduced greater complexity into the digital marketing landscape, increasing the demand for agencies that can navigate the environment. The positive outlook is further supported by the trend of brands, particularly smaller ones, outsourcing influencer marketing and amplifying their paid social efforts to scale their social media investments effectively.

Key Market Drivers

There are several other themes shaping the outlook across the social and influencer marketing landscape, such as rising expectations around transparency and pricing, growing competition, and technology innovation. Brands are seeking more clarity on how budgets are allocated—from creator fees to platform costs—and are looking for greater accountability on performance. At the same time, competition is increasing, with tech-enabled players entering the market and introducing new ways of working.

This is starting to reshape the market, not just by enhancing execution, but by potentially displacing parts of the value chain. A growing number of tech solutions are now serving functions that were once owned by agencies—automating workflows, enabling direct brand- creator relationships, and delivering measurable performance at scale. Deals like Later’s $250m acquisition of Mavely in January 2025 highlight this shift to platform-led models. This reflects how the market is shifting from manual services to scalable, tech-led ecosystems that connect creators, content, and conversion in one place. For agencies, the challenge and opportunity lie in finding the right mix of tools, talent, and strategy to help clients invest wisely and stay ahead in a fast-moving, data-driven landscape.

Why Investors are Paying Attention

As social gains share of digital budgets (estimated to account for 30-35% of total digital marketing spend in the UK and the US), investors are doubling down on high-growth influencer segments.

As a result, major players, including holding companies (HoldCos) and challenger agencies, are investing in these capabilities to align with a higher growth segment of the overall market.

Recent acquisitions and investments underscores both trade and private equity’s focus on the highest growth subsegments of the broader market:

• Bridgepoint’s investment in Samy Alliance
• WPP’s acquisition of Goat, Village, and Obviously
• Publicis’ investment in Influential
• Labelium’s acquisition of 1000heads

Market consolidation is expected to continue, as agencies pursue inorganic growth to expand service offerings and geographic reach. In addition, the revenue synergies that can be realized between social media specialization and broader marketing services further supports more M&A activity.

Social Media is complementary to broader marketing services, driving revenue synergies

Market Structure and Key Players

The social media marketing competitive landscape can be broken down into four main categories:

Given the fragmented nature of the market, we anticipate significant consolidation across all four categories as firms build out integrated social-led solutions in line with client demands.

Valuations: What Drives Value?

Recent transactions indicate that social and influencer marketing agencies command multiples in the range of low to mid-teens for scaled assets, with notable deals involving Goat, Influential, 1000heads, and Samy Alliance. Several key factors drive valuation in this space:

• Scale: Agencies generating over $15m in EBITDA achieve multiples 2-3x higher than those with EBITDA between $5m-£$15m.
• Tech-Enablement: The level of automation, data-driven decision-making (e.g., social listening), real-time performance tracking, and personalized marketing capabilities significantly enhance scalability and differentiation.
• Geographic Presence: Strong US market penetration correlates with higher valuation, given its size, growth potential, and broadening the pool of interested acquirers.
• Capability Expansion: Agencies with expertise in high-demand areas, such as social commerce and AI-driven marketing, attract greater interest.
• Cash Flow Management: Cash conversion challenges can negatively impact valuation, as working capital constraints can arise from the need to pay influencers upfront while clients pay post-campaign delivery.

Recent Transactions: A Growing Investment Landscape

We remain at the forefront of digital marketing M&A, advising global corporates, challenger agencies, and investors as they navigate the landscape. Our recent transactions highlight the increasing demand for a broad range of social media expertise:

• Bridgepoint’s investment in SAMY Alliance – Reinforcing the rise of social-first marketing agencies.
• SAMY Alliance’s acquisition of Intermate – Building scale in social media marketing across Europe.
• LDC’s investment in PreciseTV – Reflecting the shift toward video-led discovery and targeted advertising.
• ECI’s backing of Croud – Emphasizing AI-powered advertising and first-party data strategies.
• The sale of Strategus to CIVC Partners – Underscoring the growing demand for data- driven CTV solutions.

Explore our latest deals and see why social media marketing remains one of the most exciting areas for investment within the marketing services landscape. For further information, please contact Jonathan Davis or Daniel Hart.