• Adweek, Friday, February 23, 2007 11 AM

The Internet marketing services sector is headed for more consolidation in 2007, according to a new industry survey. Spurred by rising demand for Web marketing services and expanding digital budgets, companies will expand their client lists and consolidate various departments by merging.

The survey, conducted by AdMedia Partners in New York, polled 3,200 advertising, marketing and private-equity professionals, 70% of whom felt strongly that the fragmented industry was ripe for consolidation. Among those most in demand are search, mobile, database, guerilla, buzz marketing and lead generation firms.

While the leading ad holding companies have paved the way in digital marketing consolidation, they now face stiff competition for the next round of mergers from private equity and media companies, according to the report. The best example of this is the majority stake taken in the interactive ad shop AKQA by private equity firm General Atlantic Partners.

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