‘The processes are continuing forward’: Advertising’s dealmakers press on with M&A despite Iran uncertainty

For now, the mood among advisors is cautious but not alarmed. 

What’s happening out there in the “real world hasn’t impacted any investor appetite or deal flow as yet”, said Charles Ping, managing director at M&A advisors Winterberry Group. “But deals take a long time to gestate, so an impact may be felt in the future. That said, we have a strong volume of sell side preparation work in VOD and market landscape work, which is early stage activity.” 

Will Jefferies, a partner at WY Partners, echoes that. He is currently advising a business with significant Middle East operations that is performing well despite the conflict. “We haven’t seen any deal slowed down, or any change in kind of outlook or sentiment in any of the fields we’re working on,” he said. The mood, he adds, is one of nervousness about the future rather than any immediate financial impact.

It’s a markedly different read from the one dealmakers had when Russia invaded Ukraine three years ago. With Ukraine, the scale and duration of what lay ahead was clear almost immediately. Iran feels different. Nobody yet knows what this is, how far it spreads, or how long it lasts. That uncertainty-about-uncertainty has made dealmakers reluctant to draw any firm conclusions, in either direction. For now, they are watching and waiting – and still dealing.

“The processes are continuing forward, but everyone’s keeping an eye out for it, and there’s a bit of cautiousness,” said Michael Seidler, founder of Madison Alley, an investment bank. “Where it really has more impact is on larger transactions – if your business is whatever, $100 million in revenue, and you’re considering buying something for $40 or $50 million, you’re going to be a lot more cautious about doing that because of the risk being taken on.”

If – and it’s a big if – there’s going to be any twitching, it will be among private equity. There’s already some tension over the prospect of rising interest rates, and with good reason. Higher rates mean higher borrowing costs, which compress the returns that make leveraged buyouts worthwhile in the first place. Should the conflict push energy prices higher and stoke inflation, central banks may have less room to cut — or may even be forced to raise. At that point, the math on deals that looked attractive at current rates starts to look a lot less compelling.

“Private equity groups are a lot more cautious about buying something that they think can get marginalized or commoditized by AI,” said Seidler. “The margins are being watched, and any compression on revenue — and also where there’s growth.”

In short, deals don’t get cancelled overnight. They slow, stall, get restructured, but rarely collapse entirely in response to even major shocks. The signal dealmakers actually watch for is simpler: are ad budgets holding? For now, they are. And several forces are still pushing dealmakers forward regardless: the race among holding companies to aggregate capabilities before rivals do; the pressure to own AI infrastructure before it becomes too expensive to acquire; the ongoing bundling of creative and media that is forcing consolidation up and down the supply chain.

Among those drivers is the scramble to own creative intelligence — the use of data and analytics to optimize creative in market, from which assets perform to which audiences respond to which channels convert. Winterberry Group sees it coming up in virtually every client conversation right now, drawing a parallel to the DSP era: fragmented point solutions, incoming standards, then a wave of consolidation as the software players move in. The likely acquirers — DSPs, marketing clouds, holding companies — are already circling. Agencies that don’t move risk being locked out of a capability that is fast becoming table stakes. Iran or no Iran.

“We think creative intelligence will become part of the broader ecosystem, like DSPs and SSPs did,” said Bruce Biegel, senior managing partner at Winterberry Group. “You will see agencies use more off-the-shelf components — and those that have focused on truly developing the data and analytics software used in creative optimization, those companies will be bought.”

That dynamic — structural consolidation driven by capability gaps rather than opportunism — is what makes this M&A cycle different. The macro noise is real but so is the underlying pull.

Or as David Lerault at industry researchers COMvergence put it: “We’re now in a dual-speed M&A environment: large-scale, platform-driven consolidation at the top, and highly targeted, capability-led acquisitions across the rest of the market, with increasing focus on data, AI and infrastructure, and much more disciplined deal-making overall.”