Media deals on the rise as marketing activity remains strong

The first half of 2012 has seen an increase of 6% in the total number of media and marketing acquisitions, according to Berkery Noyes, the New York-based investment bank.

Marketing accounted for 262 transactions from a total of 834, making it the most active sector in the industry: of this number, 47% were digital marketing deals. WPP Group was the most frequent purchaser.

Despite a 27% growth in the total value of transactions, leading to a total of $31 billion, the increase in purchases contrasted with an overall decrease in the average cost of media deals – from 10 times cash flow in 2011 to 7.8 times cash flow.

The average price of purchases also fell from 1.8 times the median revenue last year to 1.2 times the median revenue in the first half of 2012.

Meanwhile “entertainment” deals experienced a rise of 24%, and their fourth successive annual increase. Social gaming deals were up 50% and video games increased by 30%.

Commenting on the figures, Evan Klein, managing director at Berkery Noyes said: “Of the many possible means of monetising social games, enticing users to purchase virtual currency and other rewards continues to be the most lucrative model for generating revenue.”

Read the full MediaPost article here.