Influencer agencies are ripe for acquisition

Influencer agencies have become ever more popular in the last 3 or 4 years as Instagram’s dominance of social has spawned ever more professional and semi-pro influencers, even to the point that one of last years funniest memes of a young lady introducing herself as a model on instagram. Now with the seemingly overnight success of TikTok, influencer agencies are ever front of mind of brands and agencies alike. It seems that Influencer agencies are ripe for acquisition.

Influencer agencies, Instagram agencies

One of my favourite agencies in the world right now is the Goat Agency, I think these guys are really amazing. Annoyingly young and super knowledgeable in their field the Goats use LinkedIn to market themselves by producing a daily vlog 5 days a week (they’ve done it for over a year) that shows the ups and downs of running a marketing agency in the fast paced melee of the advertising industry in the central London. It lifts the lid, showing a behind the scenes and inner workings of their business and sheds a very favourable view of their business, even though there’s an element of warts and all.

The really interesting thing is they don’t use their website to do much except as a one pager explaining why influencers and then a contact form, they must have other channels that they use to market their services, but I don’t see them. It seems that a big chunk of their target market have also followed them on LinkedIn and are now happily hiring them to market their products as they have exponential growth and in many ways, at least for me, are the only influencer agency worth thinking about if you have a campaign to plan.

Influencer agencies replacing adtech platforms

That’s at least what I thought until Exit Agency was recently approached by an influencer self service platform to rep them for a sale of the business. Usually there’s an element of effort in getting responses from our network of contacts. “Hey Dave, I sent you an email last week about a Bolivian digital PR firm and you haven’t got back to me yet!”, just tumbleweeds… Anyway there was a definite uplift in responses this time out and I would hazard a guess that the ageing rockstars of the media world are in search of some fresh blood.

Influencer agencies are something interesting of themselves, we’ve seen some acquisitions in the space already, fairly recently was the high profile acquisition of IMA by MediaMonks and there have been others in London and LA in particular that seem to hint of the appetite within larger agencies and holding companies to acquire in the expertise for influencer marketing which is replacing other forms of digital marketing as more measurable and above board than adtech platforms and much more bang for your buck compared to Facebook’s spiralling prices.

Interest in acquiring influencer agencies

So we have a lot of interested buyers for this company and I don’t doubt we will get a very good price for the founders who having built the platform and spending several years growing its use amongst large agencies are now looking to cash out and enjoy some of their hard work.

That has certainly turned our heads at Exit Towers and we are on the lookout for more agencies that can fill the brief for the other interested parties. The difficult thing is, there are a lot of founders out there who entered the influencer game fully switched on to the idea that they would be able to sell their skills into a large agency much quicker through an influencer business than any other exit plan they had on the table, so the question really becomes: what is the value of an influencer agency Vs your regular talent agency or advertising platform.

Valuations for influencer agencies and platforms

I would certainly hazard a guess that EBITDA multiples for these types of businesses would be in the 4-6 range as larger businesses couldn’t hope to build this type of business from scratch and keep its credibility intact. The tech versions of the business, the ones who have built CRM platforms will no doubt be able to aim a bit higher still, as their IP will fetch a higher price than a service based business model. We know that tech platforms can garner multiples of top line revenues, starting at 1x but sometimes much higher, obviously this will depend on many other data points, but if there are multiple buyers out there for a single business then you would look to push the multiples up of either valuation model.

Influencer agencies ripe for acquisition

If influencer agencies are ripe for acquisition, then what is the best way for a founder to get their business to market and plan their exit from their agency? Well, there’s a couple of routes, first up, are you ready to exit, do you have your ducks in a row? No? Don’t know? Then you could do with an Exit Coach, someone to test the pulse on your business and take its blood pressure, talk you through the likely scenarios you can expect when selling an agency and help you form an exit strategy. If you’re ready to explore your exit now but want to go it alone and keep your costs low then the Exit Accelerator can show you how the control freaks and DIYists can approach a disposal. Finally, the premiere service is the Exit Advisory, an M&A expert who will find the buyers and get the job done for you. Spoilt for choice! Get in touch with the Exit Agency for a no commitment consultation with one of our Exit Experts.