EBITDA Multiples for Ad Agencies

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January 21, 2025

by a searcher from University of Florida in Jacksonville, FL, USA

Hi All - anyone have an idea of what EBITDA multiples I should be considering when looking at buying an ad agency? One of the targets has EBITDA of $1 million and the other has EBITDA of $4 million. I'm thinking 2-3x for the smaller 1 and maybe 4-5x for the larger one....Finding comps is tough. Thanks for any thoughts you can give.

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Reply by a professional
from Hofstra University in Nassau County, NY, USA
We've had clients in similar situations (marketing agencies and otherwise). They are often looking for 5-10x ebitda. But the real issue wasn't the multiple as much as their lack of trust in potential buyers. One client told me "they are going to lever up my business and then destroy it; if I wanted money I'd go borrow from a bank...what do I need them for?"

It's about showing them how they get more from a relationship with you than without...
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Reply by a searcher
from University of North Carolina at Chapel Hill in Austin, TX, USA
Hi Karsten- happy to chat as an ex-CMO working with both digital and offline marketing agencies. Definitely agree on the comment about client list, but would still later service offering (i.e. media they specialize in) and client verticals onto any kind of valuation multiple. Happy to chat more on the topic if you want to pick a marketer's brain.
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