Colonnade Securities LLC (“Colonnade”) released an updated report on the U.S. lead generation agencies industry. The report can be accessed here.
Today, marketers are searching for innovative solutions to break through the noise to reach consumers in meaningful ways. In this COVID-19 environment, more consumers are at home to receive mail and phone calls and browse digital materials aimed toward customer acquisition.
The lead gen industry now totals $26 billion, up 18% over 2018. The digital segment is growing faster (up 33% year over year) than direct mail and represents more than 60% of the overall lead gen market. The emphasis on digital lead gen solutions indicates that data analytics, rather than the data itself, is where the value lies. Companies that provide high value data analytics and tools are increasingly valuable and are in high demand.
M&A activity in the lead gen industry remains robust and has continued through COVID-19. There have been over ten lead gen M&A transactions since the pandemic started earlier this year.
Several high profile exits by private equity firms showcase the value of lead gen companies and the opportunity to maximize value by increasing scale and capabilities through add-on acquisitions.
Incumbent lead gen companies and private equity firms are investing in businesses in both the digital and direct mail channels. We expect robust acquisition activity over the next 18 months as strategic and financial acquirers demonstrate continued interest.