More agencies are competing for the same clients, and the cost of acquisition keeps rising. The stronghold agencies aren’t waiting for their clients to ask for new services - they’re staying ahead of the curve, leading marketplace expansion, optimizing profitability, and embedding themselves into a client’s revenue engine. A multi-channel strategy isn’t optional anymore. It’s the price of entry.

Acquisition isn’t limited to landing new clients - it’s become about acquiring entire agencies. The same aggressive strategies once used to win individual accounts are now being applied at scale. Ryan Craver, CEO of Commerce Canal, has assessed numerous agencies and notes that many have EBITDA levels below $300K, reflecting the challenges of scaling profitably. Churn rates hover between 20-30% annually, making client retention more critical than ever. Structured, long-term contracts and diversified client portfolios acting as key drivers in securing stronger financial outcomes and premium valuations. As Craver puts it, “The market is likely to get more active as agencies use acquisitions to step-change their EBITDA growth and smaller agencies look to join a larger partner for a double exit”. 

Mid-sized agencies are rolling up smaller firms, securing new client portfolios, and growing their service offerings overnight. Anil Kuruganti, Managing Director at Canaccord Genuity, notes that while M&A activity has been below trend in recent years, the market remains highly fragmented, creating an environment ripe for consolidation. Agencies that have taken proactive steps to stabilize their businesses by improving client retention, diversifying channels beyond Amazon, and integrating proprietary or third-party technology - are now positioning themselves as attractive acquisition targets.

Recently, D2E completed its purchase of Lunge Marketing. Channel Key acquired TrueHero, expanding its service capabilities. Hawke Media secured ARMR in a strategic acquisition, while Gr0 finalized its deal for DLVRD. In one of the most notable transactions, Havas acquired Channel Bakers, highlighting the growing demand for retail media capabilities in agency portfolios. These aren’t vanity plays - why should an agency fight to win a client when they could buy their competition and client book?

Juan Mejia, Managing Director at BrightTower, sees mid-sized agencies taking a “bolt-on” approach - buying firms with complementary capabilities to cross-sell services and increase revenue synergies. “We’re seeing more agencies looking for revenue synergies and cost reductions through acquisition, rather than relying on organic growth,” Mejia explains.

Denny Smolinski, CEO of beBOLD Digital, shares a similar perspective: "At beBOLD Digital, we’re actively seeking to acquire agencies that align both strategically and culturally with our vision. We’re not just looking for growth - we want partners who share our commitment to innovation, multi-channel excellence, and long-term client success.

Retention Is the Real Play

Business development teams are using free audits, marketplace expansion roadmaps, and hyper-detailed PPC breakdowns to make clients sticky. When you help a client scale across Amazon, Walmart, Target, and eBay, you create an interdependency that’s hard to walk away from. Kuruganti reinforces this point, noting that, "Ultimately, this dynamic environment will drive rapid innovation within the digital commerce ecosystem, and brands will increasingly rely on their vendor partners to grow profitably."

Retention is now about more than just performance. Consolidation. Mejia notes that brands are streamlining their vendor relationships, pushing Amazon agencies to expand their service offerings. Agencies that can offer multi-channel expertise, integrate advanced analytics, and provide holistic solutions are securing longer-term contracts and making themselves indispensable.

At the same time, holding onto clients is becoming more difficult. Craver has highlighted that churn rates hover between 20-30% annually, making retention strategies more important than ever. Mejia further notes that 8 out of 10 agencies have experienced flat or declining revenue growth in the past 24 months. As clients slash budgets, agencies are being forced to lower fees, expand service offerings, or find new ways to prove value.

Profitability: Not Every Client Is Worth It

High-caliber agencies won’t take on just any client - they vet them first. Their profitability needs to be assessed before the contract is signed. That means evaluating a client’s revenue mix, EBITDA growth, and operational capacity. If a client’s success is too reliant on a single product or marketplace, the long-term outlook isn’t promising. 

Craver emphasizes that agencies commanding top dollar have high retention, structured contracts, and diversified revenue streams. Those without these fundamentals struggle to sell at a premium.

Churn: The Canary in the Coal Mine

Churn isn’t sudden. The signs are always there - flat revenue growth, reluctance to test new marketplaces, and shifting priorities. But agencies should also be wary of their highest-performing clients. Mejia warns that success can sometimes work against an agency. When a client sees strong performance, they may assume they have outgrown their current agency, prompting them to explore alternative providers in search of better pricing, expanded capabilities, or a fresh approach.

If a client’s margin shrinks due to rising tariffs, supply chain costs, or increased ad spending, their ability to invest in agency services diminishes. Agencies that closely track profitability trends can adjust their strategies proactively, ensuring they remain embedded in their clients' long-term growth rather than becoming dispensable.

Winning With Data

Agencies that can’t quantify their impact don’t last. The best firms are leveraging forensic-level audits, exposing inefficiencies, and tying every decision back to measurable revenue impact. 

To get even closer to client performance and business health, agencies are evolving beyond basic reporting. Sophisticated analytics and reporting software are now essential tools, enabling them to provide deeper insights into profitability, ad spend efficiency, and overall business health.

Build, Buy, or Be Left Behind

The agency model is evolving and the urgency to adapt has never been greater. Some actions, like refining service offerings and adopting advanced analytics, can be made now. Others, such as positioning for M&A, require strategic foresight.

Agencies who embrace data, expand service offerings and integrate deeper into client operations will command the highest valuations and retention rates. Those that hesitate could find themselves boxed out - or acquired. The question for agencies is simple: Are you building, are you buying, or are you getting left behind?

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