Digital Deals On Par With 2012, Value Up

Deal activity in the local digital space in the first half of 2013 was in line with the year-earlier period, with mobile showing the highest growth. There were 144 local digital deals -- spanning M&A transactions and private equity investments -- totaling $7.2 billion in the first six months of the year, compared to 143 deals at $5.2 billion a year ago.

The findings come from the first of a new series of reports by local media research firm BIA/Kelsey tracking deals involving companies that have both digital and local components. That embraces small- to-medium-sized businesses focused on local markets as well as national brands targeting ad spending to local audiences.

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These companies are either digitally focused or have some type of digital business across online, social media, mobile or audio/video technology. “The definition of digital here is pretty wide,” said Jed Williams, vice president, consulting, at BIA/Kelsey, which plans to issue its new Local Media Investment Watch report monthly.

With that in mind, the firm found that mobile was the only category to see a gain in both deal activity and total dollars in the first half of 2013, rising from 31 to 37 transactions and more than doubling the dollar amount to $1.8 billion from $703.5 million.

A major factor in the dollar total spike was Google’s recent $1.3 billion acquisition of popular crowdsourced traffic app Waze. Along with its own $1 billion-plus deal for Tumblr in May, Yahoo under CEO Marissa Mayer has snapped up a series of mobile startups, including Summly, Ghostbird and Qwiki.

Other areas were roughly on par with a year ago. Deals in the online sector dipped to 66 in the first half of 2013 from 72, although the total likewise doubled to $3.6 billion from $1.6 billion. In social, deals dropped from 32 to 30, with the dollar value declining to $1.64 million from 2.64 million a year ago. The prior year saw a couple of major deals in the social space with Salesforce buying Buddy Media and Oracle acquiring Vitrue.

Deals in the smaller audio/video segment rose to 11 from 8, but the dollar total dropped to $107 million from $209 million.

Williams said that while the $1 billion or more deals may be outliers -- like Salesforce’s $2.3 billion purchase of cloud marketing firm ExactTarget last month -- may be outliers, they signal the market’s vibrance. “While they’re anomalies, they are also are representative of the robustness of the local digital space,” he said.

Going back further, BIA/Kelsey tracked a total of 742 deals from January 2011 to June 2013 with a reported value of $23.9 billion. The bulk of those were in the online arena, at 349 (with a total value of $11.9 billion), followed by social with 178 ($7.5 billion), mobile at 154 ($3.7 billion), and audio/video, with 61, totaling $859 million. 

1 comment about "Digital Deals On Par With 2012, Value Up".
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  1. Kerry Brown from BIA/Kelsey, July 25, 2013 at 9:22 a.m.

    What’s driving this growth and why is it occurring? On Aug. 7, BIA/Kelsey's Jed Williams and Jeanne Dattilo Dixon will review the first six months of 2013 and share analysis from the first installment of Local Media Investment Watch:
    https://www1.gotomeeting.com/register/650208784.

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