Devoted to online marketing, viral marketing, and web marketing

With the increasing demand for Internet marketing services, a new survey shows that it will lead to a growing consolidation of the sector, says an Adweek report citing the results of the survey.

The survey, which included 3,200 advertising and marketing executives, concluded that the industry is probably about to be consolidated in the midst of the fragmenting marketplace.

Those companies that are in strong demand include those offering "search and mobile advertising, database, guerilla and buzz marketing, and lead generation."

Of those responding, over 70 percent said that they believe that there will be a lot of merger and acquisition activity in the web marketing space.

With the growing migration to digital marketing, advertisers will need to integrate their services rather than have to count on a bevy of individual service providers.

There is also new, growing competition from private equity and media firms. "We’re finding there’s a ton of private equity money out there that’s interested in backing a new age marketing platform that will be modeled on aQuantive or Digitas,” said Greg Smith, managing director at AdMedia. "There’s just a ton of money out there."

The cost of acquiring marketing companies is going up, with normal cost being between 6-6.5 times earning before interest and taxes, 6 percent higher than last year. Internet marketing companies are even higher-priced, now getting about eight times earnings, in comparison to last years' seven times earnings numbers.