Sectors: Creative, Media & Technology

Tony Walford argues that while the largest agency deals may dominate the headlines, it is smaller firms that are generating the greatest volume, competition and momentum in today’s marcomms M&A market. I had the pleasure of being on a panel at The Drum’s Predictions event a couple of weeks ago. I talked about how, last year, I was a bit early in saying 2025 was going to be the year of the independent agency. Looking back, 2025 was the year we saw many indies start up. But in 2026, I believe we’ll see many more. As the networks focus in on themselves, how they deal with the impact of AI, consolidate their offers and improve their margins, clients are looking for fleet of foot and the creativity that you get from small, nimble hot-shops, unburdened by legacy thinking, structures and hierarchy. And as we see more agency startups spinning out of the networks, we’ll also see more collectives forming. Groups of smaller agencies, like Beyond and Harbour, coming together to deliver on client briefs where different capabilities are required. These models allow agencies to retain their own identity and independence, while giving them access to a broad range of marketing skillsets and allowing them to grow. I was asked about what all this means for the M&A landscape, and it’s here we’re seeing a fundamental shift in size of deals and the nature of buyers, which got me thinking. For years, the assumption in marcomms M&A has been that the biggest deals tell the most important story. Large network and PE-backed agency groups buying global scale and scope have dominated the headlines. However, in 2025 the nature of buyers in this market changed, for several reasons. And, as the mist lifts on the start of 2026, we’re seeing a very different landscape emerge. Over the years we’ve got used to the constant cacophony and disruption of geopolitical and macro-economic risks. Think global credit crunch, Brexit, Isis, Covid, Trump v1.0 & 2.0, Ukraine, Gaza. While we’ve seen M&A activity in our sector vary concomitantly, it’s always bounced back, with the bigger agencies – over £10m revenue, £3m EBIT, 100+ people – being the most sought after. While the network groups have only ever formed a handful of available buyers, they are often looked upon as bellwethers of how the market is performing as a whole. In 2025, with the exception of Publicis and the challenger group Stagwell, the other networks published lackluster results. We have seen large-scale layoffs across WPP and Omnicom/IPG while Dentsu announced a retrenchment back to Japan to put its international arm up for sale, a move it’s now had to row back on in the absence of a buyer. That said, while there is still strong M&A interest for large independent agencies, particularly from PE-backed emerging groups, the real volume of deal activity today is happening at the smaller end of the spectrum. That’s agencies with up to £10m revenue, £1m–£3m EBIT and fewer than 100 employees rather than larger agencies generating £5m+ EBIT with workforces exceeding 200 people. While the latter still command attention, it is the former that are driving momentum, velocity and competition across the sector.

A widening gap in transaction volume

In practical terms, there are simply more deals taking place among smaller agencies than larger ones. This is not because smaller agencies are inherently better businesses but because they sit in a far more liquid part of the market. Agencies valued below £15–£20m attract interest from the widest possible buyer pool. Strategic acquirers, private equity platforms, PE-backed bolt-on vehicles, entrepreneurial buyers (such as Common Interest and Brave Bison), and even passive financial investors can all compete in this segment. As a result, demand materially outstrips supply, pushing both pricing and deal activity higher. Once agencies move into the £5m+ EBIT bracket, the picture changes. The buyer universe narrows sharply, primarily leaving larger PE funds and a limited number of global strategic groups with the balance sheets and integration capability to transact at that level. And fewer buyers inevitably means fewer transactions, even if individual deal values are higher.

Why entrepreneurial buyers are reshaping the market

One of the most significant drivers of small-agency M&A volume is the rise of the entrepreneurial buyer. A few years ago, agency acquisitions were largely the preserve of PE firms and major holding companies. Today, a growing cohort are acquiring agencies as their first platform investment. Often supported by structured financing, these buyers see agencies as an accessible entry point: asset-light, cash-generative and resilient. This influx of new buyers has dramatically increased competition for agencies in the £1m–£3m EBIT range, while having little impact on the larger end of the market, where deal sizes and risk profiles remain prohibitive for first-time acquirers. That said, buyers will always be cognizant of the risks commonly found in smaller agencies, those that are sub-£1m EBIT, reliant on one or two clients in their revenue stream or in an area which is competitive or commoditized. Agencies with these characteristics will always struggle to find an acquirer at any sort of premium.

Scale brings complexity, not speed

Larger agencies face a different reality. Transactions at this level are inherently more complex, involving layered leadership teams, international operations, legacy client concentration and often slower growth rates. Due diligence cycles are longer, integration risks are higher and valuation expectations are more tightly scrutinized. This doesn’t mean large agencies are unattractive. But it does mean fewer buyers are willing or able to transact – particularly as size can price many acquirers out, with a lot of buyers looking to spend less in what is currently seen as a riskier market – and deals take longer to execute. In contrast, smaller agencies benefit from clarity: simpler cost bases, tighter propositions and faster decision-making, all of which support higher transaction velocity.

Clarity beats size in today’s market

Another factor favouring smaller agencies is narrative clarity. Buyers consistently gravitate towards businesses with a clearly articulated proposition, whether that is a defined vertical focus or a specific capability. Smaller agencies are often better positioned to tell that story succinctly while larger businesses can struggle with diluted positioning as they grow, through service expansion or past acquisitions. As I mentioned at the start, it ’s this agility and ability to pivot that clients, and thus buyers, find attractive. Additionally, while a large full-service agency would appeal to PE buyers looking for a platform acquisition, many trade or PE-backed buyers may already have some of the disciplines on offer and so might only be interested in certain elements within the seller agency’s mix. Having clarity of offer translates directly into deal activity. Buyers can quickly assess strategic fit, underwrite growth and move forward with confidence.

What this means for the sector

While the largest agencies will always command headline valuations, the center of gravity for M&A activity in marcomms has shifted decisively towards smaller firms. The combination of a broad buyer pool, entrepreneurial demand and simpler deal dynamics means that agencies with £1m–£3m EBIT are now much more in demand than their larger peers. For founders the implication is clear: size alone doesn’t determine exit opportunity. In today’s market, focus, profitability and narrative clarity matter far more than headcount. For the industry as a whole, it’s the smaller end of the market that is setting the pace, even if the biggest deals continue to grab the spotlight. Read more

Just last week, Tony Walford, a partner at finance and M&A advisory firm Green Square Associates, told The Drum that “this year will certainly be the year of the indie.” Walford’s not the only one making that prediction – one that’s based on continued struggles for some of the marketing world’s biggest networks and ensuing organisational shifts, the fruits of which are yet to be proven. One of Walford’s more specific predictions is that independent agency groups may be increasingly able to cash in their agility, combined with the outsize impact of inter-agency collaboration to increasingly take work from major global incumbents in a trend that sees increasing bullishness for the rich constellation of formal groupings, informal collaborative agreements and everything in between that makes up the agency world’s bullish midmarket. One of those growing independent groups is the London-headquartered Tomorrow, led by chair Tina Judic. Styled as a ‘collective,’ Tomorrow comprises AI creative studio Seed, search agency Found, data shop Braidr, intelligence platform Luminr and influencer marketing agency Disrupt. Disrupt changes its complexion today with two announcements: a new managing director and a new subsidiary. Tomorrow has acquired qualitative research shop Imagen Insights, which will become part of Disrupt while its co-founder, Jay Richards, becomes Disrupt’s MD. Imagen co-founder Cat Agostinho will stay on to lead Imagen. It’s a busy week for Richards; as he steps into his new role, he’s not at his London desk but in Doha, hosting the ‘marketing summit’ at the third annual edition of Web Summit Qatar (his responsibilities include hosting a couple of sessions moderated by The Drum). When he sits down with The Drum fresh from an overnight flight, he says it’s “interesting” having a boss again. “I haven’t had that for seven years.” Who that new boss is is interesting. Not long ago, organisations like Imagen would have had one clear acquisition goal: a sale to one of marketing’s big six global networks. But that has changed; while the major holding companies still acquire agencies, they’ve been overtaken by private equity shops as the hungriest acquirers, with those independent groups also growing around the edges. Richards agrees that the landscape has shifted in the seven years since he co-founded Imagen. “100%, massive acquisition by a huge organization was always the north star” in the early days of the business, he says. “But the interesting thing around the midmarket is, having your business acquired, you feel like you have a little bit more control. If you go to one of those larger organizations, you’re just going to get swallowed into the group… It’s like, ‘Welcome to the beast.’ It’s kind of like the Roman Empire.” The alternative to the Roman Empire, Richards says, is a more collaborative approach. “There’s an element of, ‘We want to build with you,’ not just ‘Come in, we need your technology, we need your employees, we need your clients.’ It’s ‘What’s your vision? We want to build with you.’” Imagen’s specialism is qualitative research – a panel of 37,000 people in 111 markets ready to be called upon for research rapidly, Richards says, and accessible by an online tool enhanced by AI Q&A. It’s that qualitative focus, he says, that differentiates the new-look Disrupt from an industry that often focuses instead on amassing reams of quantitative data and churning out content to replicable formulae. “The problem we’ve got with a lot of brands is that we’ve pulled away from that real art of storytelling. We’re going, ‘Here are the four or five templates that we’ve got, we’re going to shove this down your throat, and you’re going to you’re going to enjoy it.’ It’s not the brand’s fault. From a platform perspective, we’ve designed this system where, OK, we’re all trying to get paid and, if we’re all going to get paid, here are the four or five ways that we need to do it to make sure we can all get everything we need out of it.” The costs of that approach to digital marketing that gets everyone paid with familiar formats and approaches? We all get bored of it, Richards says. “The audience has pulled back from that and gone, ‘Yeah, we get it. We hear you. But everything looks identical. Now, it just feels like deja vu every time I watch a video.’ To get genuine influence, you need to enable the person watching the video to feel like they’re watching somebody who knows how to tell a story, watching somebody who knows how to build a world.” And it’s qual, not just quant, that can get us to work that truly influences in a sustainable way, Richards argues. “The element of storytelling and world-building that creators can give at scale: that’s really rich and it’s qualitative. From a qualitative perspective, we understand what consumers want. If you understand what the consumer wants, then you can go, ‘OK, this is what the story should be around, here’s the initial idea, now go and build your world.’” The hope of the new kind of agency group is to build a set of capabilities that can compete with larger incumbents, while weaponizing the agility of smaller scale. With this addition of consumer-grounded research into a wider group that’s going hard on AI, Richards says, Tomorrow hopes it has found its “silver bullet.” “Now, not only do we understand brands internally, but we have the consumer data to see what they’re saying before we do anything and do it quickly. It’s not just going, ‘We’re the smart people internally.’ We’ve got smart people, but now we’re also bringing the consumer into the room and bringing their voice to then be heard.” Read more

Watch Green Square partner Tony Walford share his perspective on The Shape of Agencies to Come for The Drum Predictions 2026. As holding companies invest heavily in AI, streamline structures and cut headcount in the race for efficiency, the agency landscape is undergoing fundamental change. With legacy agency brands such as DDB and FCB set to disappear, what will 2026 mean for the future of agencies? In this timely conversation, leading marketers explored what consolidation means for creativity, capability and culture – and how these shifts will affect brands seeking choice, diversity and innovation from their agency partners. The panel offer frank insights on survival, reinvention and what the next era of agencies may look like. Watch here “I think I was slightly early when I said that 2025 would be the year of the indie,” says Tony Walford, a partner at finance and M&A advisory firm Green Square Associates. “But this year will certainly be the year of the indie.” It’s not just that there’s sustained interest from buyers (especially those from the private equity space) in smaller, agile indie agencies. It’s that the industry’s macrodrama – Omnicom’s enormous acquisition of IPG; attempted international divestiture by Dentsu; continued difficulties for WPP – is providing space for growth in the industry’s nimbler corners. “The big thing for me is the potential loss of creativity out the networks,” Walford said today at The Drum’s Predictions event in London. “The good people leave, they go and set up something else, and the networks are becoming a little bit homogenous.” Walford was joined on stage by Jon Goulding, chief executive of indie shop Atomic; Justin Thomas-Copeland, CEO of US trade org the 4As; and Gabrielle Ludzker, the recently departed chief executive of Omnicom agency Rapp. Ludzker knows the dynamics mentioned by Walford better than most, having spent the majority of her career at Omnicom agencies, most recently with that five-year stint at the helm of Rapp. As mergers and reshuffles have directly affected careers around hers, Ludzker sees these shifts as nothing short of a sea change. “It just feels like this merger is almost the end of an era. You can see now that size and scale are of the utmost importance,” Ludzker says. “I think it’s tough for clients in that environment, because clients want to know who the talent is that they’re buying and they form relationships with humans and people and individuals that they value and they see them as really integrated in their businesses and core strategic partners. But you don’t know who you’re buying any more.” A sea change is not a drop in the ocean; Ludzker expects Omnicom-IPG to be far from the last major agency consolidation. “This is a bit depressing,” she says, “But I think we’ll see the death of more amazing brands that we’ve known all our lives and that’ve done incredible work. That’s just not seen as valuable any more… What we’re seeing is that efficiency is now visible to the outside rather than under the surface – and as a result, more talent will leave.” These dynamics inevitably lead to a certain amount of bullishness among smaller independent agencies. But their successes will be as hard-won as ever, says the 4As’ Justin Thomas-Copeland. “A lot of new independents have sprung up,” he says. “Many are doing well, but many are struggling and they’re not struggling because there isn’t a market. They have to find their feet. They have to make some tough choices.” If the major networks have created space, in other words, other organisations will still have to innovate to fill that space. One trend Thomas-Copeland expects to expand in 2026 is indies filling that gap by coming together in looser networks and affiliations to provide an alternative operating model to incumbent networks, at a scale each wouldn’t be able to achieve on its own. “You see a lot of independents sort of coming together as collectives because they don’t have the money to invest and build it themselves. They’re being smart about how they come together. That seems to be working… I think those types of constructs will have their day in the sun.” Jon Goulding, chief exec at indie shop Atomic, agrees that “the indie agency scene is buoyant,” but also says that success will not be automatic. “There’s never been a better time to be an indie, but at the same time, it’s really difficult. The economy is difficult. It’s hard to be self-funded.”