GP_Bullhound-2021年第一季度网络服务投资报告（英文）-2021.6-24页_1mb

Q1 2021 Digital Services Sector Summary

Core Content and Key Trends

Public Sector Transformation

• Digital transformation in public sector has been significantly accelerated by the pandemic, moving from a "nice to have" to a necessity.
• Digital natives within the public sector are pushing for continued change, including cloud adoption and remote working.
• The private sector and citizens have become more demanding of digital services, leading to a greater need for public sector transformation specialists.
• Three main pillars of transformation are being pursued: scaling digital infrastructure, building a more digital public workforce, and investing in citizen connectivity.
• Tyler Technologies acquired NIC in a $2.3bn deal, the largest in the industry.
• Accenture acquired Infinity Works (UK) and Cygni (Sweden), both focused on digital and cloud solutions for government and private sectors.

Digital Driving a Programmatic Revolution

• Adtech and programmatic specialists are in high demand due to increased screen time and connected TV growth.
• Connected TV (CTV) saw 100% YoY growth in Q4 2020, with 27% of US households planning to go connected-only in 2021.
• Digital Out of Home (OOH) is expected to be the second-fastest growing advertising medium in 2021, following the mobile internet.
• Digital OOH offers hyper-targeted, high-impact campaigns with real-time planning and location data integration.
• Ipsos acquired MGE Data, and Magnite acquired SpotX, both data-driven OOH platforms.

Social Platforms Coming of Age

• Social media has become a primary channel for consumer engagement, with over 4.7bn users globally.
• Influencer marketing has seen a ~50% YoY growth since 2016, with 66% of marketers planning to increase their influencer spend in 2021.
• Influencers offer high-quality creative talent, enabling better, faster, and cheaper content creation.
• Dept acquired Byte London, combining data, creativity, and media for enhanced social campaigns.
• You & Mr Jones acquired Collectively, integrating with its influencer platform to drive market consolidation.

Recent Transactions

Deal Volume and Market Performance

• Deal volume has recovered strongly in 2021, approaching pre-pandemic levels.
• Consultancies have been the most active acquirers in Q1 2021.
• The Digital Services index has seen EBITDA margins increase to 18-19%.
• Market cap of key public companies in the sector has been rising post-pandemic.

Key Companies and Their Performance

Key Players and Their Insights

• Barry Cuples, Global CEO: Highlights the digitisation of OOH and its dynamic potential for targeted advertising.
• Ed East, Co-founder & CEO of Billion Dollar Boy: Notes the growth of influencer marketing, driven by screen time and global reach.
• Josh Boaz, Co-founder & CEO of Direct Agents: Emphasises Polycultural marketing as a holistic approach to maximise reach and campaign effectiveness.

Conclusion

The Digital Services sector in Q1 2021 has experienced significant growth and increased M&A activity, driven by the acceleration of digital transformation due to the pandemic. Public sector transformation, adtech and programmatic capabilities, and social media marketing are at the forefront of this shift. Companies like Accenture, Tyler Technologies, and Dept have been leading the charge, with strategic acquisitions and investments reflecting the sector's evolving landscape. The Digital Services index continues to show strong performance, with increased EBITDA margins and rising market caps, indicating a positive outlook for the industry.