An upturn in mergers and acquisitions (M&A) activity throughout the digital marketing industry has been forecasted by professional services firm, KPMG.

Structural challenges, the quickening pace of convergence and a recovering economic outlook are set to stimulate M&A activity in the media sector in 2014, which is a different story to this year.

In the first three quarters of 2013, the media sector witnessed 854 completed transactions globally, amounting to $28 billion. The net result was that deal activity fell compared to the same period in 2012 when 933 deals worth $46 billion were completed across the world.

Keeping ahead of the curve through acquisition

KPMG’s head of media, David Elms, feels there is now a ‘pent-up demand’ after 2013’s slim pickings, that could lead to an increased number of more valuable deals next year as companies look to stay ahead of the developing industry.

“The pace of change across the media sector is now so rapid that many businesses cannot adapt through a natural process of evolution – creating a market-leading proposition organically is becoming more difficult; companies need to make bold changes in strategy,” Elms said.

“Together these factors will mean that, in 2014, businesses that have been following a ‘wait and see’ position on M&A, are likely to have to act or get left behind.”