At the recent Affiliate Summit West in Las Vegas, Dustin Engel had the privilege of representing WY Partners and sharing the stage with industry luminaries Sue Cho from Mountaingate and Michael Hirsch from JEGI Clarity. Our discussion dissected the current and future state of mergers and acquisitions (M&A) within the affiliate, content, and commerce ecosystems, and we covered various topics, from 2023 retrospectives to future strategies. 

Reflecting on 2023: A Year of Strategic Consolidation

The Year in Review

The dip in M&A activity in 2023 stood out sharply against the high of the previous two years, casting the year in a tough light. This downturn was shaped by a mix of declining market optimism, post-pandemic shifts in consumer behavior, supply chain adjustments, and wider economic factors like media spending trends and interest rate changes, cooling the interest of both buyers and sellers. Yet, when viewed against the backdrop of M&A activity in marketing services and tech since 2015, the recent drop seems less drastic, suggesting 2023's challenges are part of a broader, more moderate trend. 

Looking Ahead: 2024 Expectations

Corporate and Private Equity Perspectives

Moving into 2024, there's a sense in the market of anticipation building up. Both large corporate and private equity (PE) firms are preparing for an immediately unpredictable year, according to the Wall Street Journal. The deal-making scene will be uncertain. The reason? PE firms have significant capital (also called dry powder) they're eager to put to work, and strategic buyers with cash on hand and business momentum are also in a strong buying position. Firms see a less crowded market where the asking prices for businesses are more reasonable than they've been in a while. It's an opportunity they're keen to capitalize on, ready to navigate the uncertainties and take advantage of the growth opportunities that come their way.

Industry-Wide AI Integration

Adaptation as a Survival Imperative

A key takeaway from our conversation was the critical importance of integrating AI into business strategies. While not every business will center AI in its core offerings, it's becoming clear that every company must find ways to use AI to boost efficiency and profitability. This isn't just about keeping up with the latest tech trends; it's a fundamental shift in how businesses operate to stay ahead. Ignoring this shift could negatively affect your business's exit prospects and valuations. Forrester's insights into the changing landscape of agency models highlight this urgency—adopting AI isn't optional anymore. It's essential for enhancing operations, gathering and analyzing data, and refining marketing and sales efforts. In today's competitive environment, leveraging AI is a must-do to secure your company's future success and value.