Technology: Expect M&A transactions in online advertising to pick up this year, a group of advisors has said.

Interest in European internet company mergers and acquisitions remained strong last year and is predicted to gain speed in 2014, particularly in online advertising, a paper by an international group of financial advisors has concluded.

“Despite ongoing economic tensions in Europe, the number of deals in the internet industry remained at its high level”, according to Globalscope, a network of boutique M&A consultancies that specialise in cross-border deals.

The sluggish economic climate brought “bargain hunters” to the table, said the European Internet Industry 2013 report, which was released on Friday.

Many firms simply “are not in the position to wait for market valuations to improve but are being forced to sell at a discount. Especially southern European countries appear to be affected, with more than 80% of the buyers being non-domestic”, the paper said.

Looking ahead, the group forecast that 2014-16 “must be payout time for investors’ bet” on digital marketing. “Online advertising has created many intermediaries who succeed provided no competitors provide an improved eCPM”, or the effective cost per thousand, a measurement commonly used by marketers.

Yet evolving technology means that competitive pressures remain constant.

“The display advertising market has already been transformed by the use of big data combined with realtime bidding, but the market is still highly fragmented even though the first signs of M&A activity can be seen”, Globalscope observed.

The report cited, among notable deals in 2013, a string of acquisitions by Axel Springer that moved the German publishing giant increasingly into digital media.

Media, big data deals expected in Belgium, France and Luxembourg

“France and Belux are no exceptions to the consolidation trend in the media segment and we see the exit of [private equity] funds as an opportunity for future deals: for example, Fimalac [based in France] integrated three French digital media companies (Allociné, Tfco and Webedia) in 2013,” Daniel Schneider of M&A advisory firm Tenzing Partners in Luxembourg, wrote in the report. (He sits on the board of directors of the company that publishes Delano.)

“We also see bright prospects for the internet privacy protection as well as for online advertising industries. Particular areas of interest are online payment and big data analysis respectively,” Schneider wrote.