Why Internet Marketers Need to Ready Themselves for Industry Consolidation

The Internet marketing industry is on the verge of a significant movement toward consolidation. After years of developing niche specialties in the industry, many SEM and Internet marketing providers are under pressure from clients to offer a fuller range of services.

In short, clients do not want to deal with a bunch of niche website specialists to meet their needs. Many prospects, particularly larger scale brands, want companies that can support a number of specialties, such as web design, SEO, copywriting, and Pay Per Click, to name a few..

Internet Marketers Moving Forward

In order to meet this challenge, there will be two options for companies in the SEM and Internet marketing industry. The first one will be mergers by small companies to form larger, more viable entities. Such an approach will work for companies like Havas and GroupM, which offer niche specialties in the web world.

The other strategy will be the acquisition of smaller website companies by larger organizations. Companies like Google, Bing and Facebook will seriously consider acquiring smaller boutiques to acquire the skills they need to meet the emerging needs of their clients.

Examples of Consolidation Movement

BoostCTR is one of the small providers that seem to be making themselves a target for acquisition because of their newly launched enterprise service - ad copy optimization. This program will increase the click through rates hence the return on investment for a search engine. The company is yet to name the big player in which they will be work with, but the company's CEO, David Greenbaum, noted that major search engine providers are looking for more specialized firms that can offer these capabilities.

The main driver behind the expected era of consolidation comes from the pressure from clients and the fact that there is too much fragmentation. Boost, BrightEdge, and Kenshoo are examples of niche providers with unique specializations. Calcalist, an Israeli publication, pointed that the drive towards consolidation is a sign that the website design and Internet marketing industry is entering its maturity phase.

Internet Marketers and website design companies alike are positioning themselves to ensure that the expected consolidation brings better fortunes. From niche web design boutiques to organic SEO firms, the shift is already apparent in many forms of web business.

So what exactly does this mean? Will a re-emergence of full-service ad agencies with core focuses in Internet marketing capabilities be the result?

What do you think? Let us know in the comments section below.