How are buyers filtering genuine AI value from noise?
Growth
How are buyers filtering genuine AI value from noise?
As AI becomes a buzzword in the marketing industry, M&A buyers are increasingly scrutinising what constitutes real AI value versus marketing hype.
Key factors that buyers prioritise include:
Recurring Revenue & Proprietary IP: Agencies with AI-driven tools, unique machine-learning models, or proprietary data sets hold greater strategic value than those simply applying third-party AI solutions. Buyers are looking for agencies that have defensible assets—ones that cannot be easily replicated by competitors. Proprietary AI capabilities that improve marketing automation, predictive analytics, or customer segmentation are particularly attractive.
Technical Due Diligence: Acquirers are conducting in-depth assessments of an agency’s AI capabilities, requiring proof of concept, scalability, and real-world application. Buyers want to see workingAI models, performance data, and the agency’s roadmap for further AI development. Due diligence includes interviews with technical teams, a review of AI-driven methodologies, and an assessment of how well AI integrates with existing workflows.
Talent & Leadership Strength: As AI expertise becomes a sought-after skill set, acquiring AI consultancies has become a strategic move for agencies looking to bring AI expertise in-house. Buyers evaluate not only the technology but also the people behind it—ensuring that top AI engineers, data scientists, and analysts remain engaged post-acquisition.
However, sustainability remains a major concern. Buyers want to know: Can the agency adapt across different AI platforms? The AI landscape is rapidly evolving, with new advancements and models being introduced regularly. Over reliance on a single AI provider, such as OpenAI or Anthropic, creates risk. Buyers favour agencies that can pivot and integrate with multiple AI platforms to ensure long-term resilience.
Is there real proprietary value? Some agencies simply rebrand existing services with AI buzzwords without offering any substantial technological differentiation. Buyers scrutinise whether an agency has truly embedded AI into its core offerings or if it is merely using AI as a surface-level enhancement.
How will talent be retained? Retaining key AI and data science talent post-acquisition is critical for ensuring continued innovation. Many acquisitions are structured with earn-outs or equity incentives to keep top technical leads engaged and invested in the company's success.
How Milestone Uses AI in M&A (Lessons forAgencies): At Milestone, AI enhances our ability to analyse deals, identify trends, and provide insights faster. Agencies can apply similar AI-driven strategies in their own new business efforts:
Automated Due Diligence: AI-powered document analysis accelerates commercial and financial assessments, enabling faster decision-making in competitive deal environments.
Market Mapping & Target Identification: AI clustering tools help map adjacent markets and surface acquisition opportunities that traditional searches might overlook.
Competitive Intelligence: AI-driven valuation benchmarking allows for real-time comparisons of market multiples, making deal negotiations sharper and more informed.
New Business Development for Agencies: AI can revolutionise how agencies approach business development by automating pitch deck creation, analysing RFPs, and predicting client retention risk based on delivery performance, sentiment analysis, and budget allocations.
