Here’s what agency owners are seeing. More buyers. More conversations. More transactions closing. I’m fortunate that the investment thesis of Herringbone is unique and so I get to have a lot of conversations with owners (DM if you’d like to learn more about our thesis). But on those conversations, they share with me what they are feeling – the market for digital marketing agencies has shifted meaningfully. For owners who understand what’s driving it, the timing has never been more interesting.
Several forces are converging at once.
AI is reshaping what agencies are worth — in both directions.
The agencies that have embraced AI tooling are doing more with fewer people, expanding margins, and becoming significantly more attractive to buyers. Their valuations are going up, and buyers are moving quickly to acquire the agencies that will survive the AI transformation. And inverse is also true – owners who don’t want to take on AI are selling their agencies. So demand is up and so is supply.
A generation of founders is ready to move on.
A significant cohort of digital marketing agencies were founded in the 2010s by first-generation entrepreneurs who have now spent 10-15 years building their businesses. They’re not burned out — they’re ready for a next chapter. That demographic wave is real, and it’s showing up in deal flow across the sector.
Private equity has discovered the space.
For years, digital marketing agencies were considered too small and too people-dependent for institutional capital. That perception has changed. PE firms have now seen enough successful roll-ups to understand the model — and they’re deploying capital accordingly. More buyers competing for a relatively fixed supply of quality assets means stronger valuations for well-prepared sellers.
KEY TAKEAWAY: The window won’t stay open forever.
Markets move in cycles. The conditions that make this a strong moment for sellers — motivated capital, rising multiples, genuine strategic interest — are not permanent. Owners who understand that tend to make better decisions about timing than those who assume the window will always be there.
If you’ve been watching the activity in your space and wondering whether now is the right time to have a conversation — it probably is. Even if only to get educated about what your options actually look like.
Contact us if you’re and agency owner and have considered selling or joining something bigger.