‘The bridge between intuition and ROI’: The M&A race to own advertising’s last unmeasured lever

“Those businesses that have focused on truly developing the data and analytics software used in creative optimization and pre-test — those companies will be bought,” said Bruce Biegel, senior managing partner at Winterberry Group.

The deal flow of the last quarter reinforces that. 

In February, Havas acquired Ctrl Digital, a measurement and data activation specialist. A month later, Publicis Groupe acquired AdgeAI, a predictive creative analytics platform, paying a reported $100 million for the ability to identify which creative will perform before a campaign goes live. The same month, agency group Brave Bison took a 27% stake in System1, whose flagship product uses behavioral science to predict creative performance before a campaign goes live. Three deals, one bet: the intelligence layer around creative is worth owning.

“We’re very excited to be the biggest shareholder [in System1] and to own that 28%,” said Oliver Green, CEO of Brave Bison.

That Green — someone who built his business on performance advertising — is making this bet is telling. He, like a growing number of his counterparts, sees creative intelligence as the next major lever after audience and media intelligence. He added: “Over the last year or so we’ve begun to creep up the funnel and start thinking about brand building and storytelling. And therefore System1 becomes even more relevant.”

Gone are the days when targeting smarter audiences and negotiating better media was enough. That phase is maturing. Creative is the last major variable that hasn’t been brought under the same quantitative discipline, and the cost of that gap is measurable. Estimates suggest nearly half of all assets produced never get activated, resources spent upstream that never translate into working media. That’s the problem AI is now making it possible to solve. Once creative can be linked to outcomes at the asset level — before a campaign goes live not after — it stops being a production cost and becomes a performance variable. Once that happens those costs get absorbed into the working budget, priced against results and owned by whoever controls the measurement layer. Nobody has agreed on what that model looks like yet — platform licensing, asset volume and percentage of media spend all coexist — but the direction is clear. 

That’s especially true of the companies in the midst of it. Take DAIVID, for instance. The advent of AI, particularly its ability to handle the complex munging of multiple datasets, has dramatically accelerated demand to understand creative data.

“The need for creative data has moved out of the shadows at large brands,” said Barney Worfolk-Smith, chief growth officer and founder at DAIVID. “For years, this sat with crack teams of data wonks and data-minded marketers. Now it has executive-level sponsorship. ‘Getting more from less’ is the flavour du jour, and the media and sales uplift available from understanding creative at scale is well documented. Everyone is under pressure to apply AI to everything.”

The result, he continued, is a steadily growing demand from brands to holding companies and the broader industry. That rising hum has finally cut through the complexity of silos and cross-discipline ownership. The message, saidWorfolk-Smith  is simple: just get it done.

Granted, it’s still early days, and creative intelligence won’t be a dominant force in dealmaking anytime soon. It is, however, a notable one, not least because the market is already rewiring around it. Winterberry Group projects U.S. creative intelligence-powered creative spend growing at roughly 23% CAGR through 2028, reaching $11.47 billion. That’s the market the deals are chasing. 

Agencies are at the front of that race. The pressure on their businesses mean they don’t really have a choice. But they won’t be the only buyers. Ad tech vendors, marketing clouds and the platforms will follow, according to Winterberry Group, which has already begun briefing some of them on the space. 

“We believe this is an agency imperative — its is coming up in every single client conversation we’re having right now,” said Biegel. “DSPs would also make sense, and with that the marketing clouds could be natural buyers for the sort of companies we’re talking about.”

Skeptics might say this is just M&A advisors talking up a market they have a vested interest in talking up. And they wouldn’t be entirely wrong. But the numbers are harder to dismiss. Creative intelligence is already a top priority — ahead of personalization and measurement — according to the more than 120 creative and media agencies in the U.K. and U.S. who Winterberry Group surveyed. The sectors leading adoption are CPG and retail, two of the highest-spending categories in advertising, which between them account for more than 40% of current investment  in creative intelligence. 

“What we’re hearing from buyers is they want a practical application of AI for creative,” said Matthew Lacey, managing partner at Waypoint Partners, a company that is currently advising companies about how to grow their way through this shift. “The buyers we talk to are interested in how companies are able to connect data and insights together in a way that fast-tracks experimentation and concepting of creative.”

However it shakes out it won’t take long. Unlike programmatic, which took the best part of five years to reach broad market penetration, Winterberry Group expects creative intelligence to consolidate within three. The AI infrastructure is already being embedded, the models are already widely accessible. What’s coming next is the scramble for whoever owns the intellectual layer on top of them. 

“Creative Intelligence is the bridge between intuition and ROI,” said David Lerault at industry researchers COMvergence. “By acquiring agencies with deep data-and-AI layers, holding companies are effectively buying a risk-mitigation engine that ensures creative concepts are optimized for performance before the first dollar of media spend is even committed.”