Pete Lock
Performance Marketing

How digital marketing & website due diligence identifies growth opportunities for private equity firms & investors

What is digital marketing & website due diligence?

Digital due diligence covers many different areas, from digital security and compliance right through to the online performance of the ‘digital footprint’ of a company….It’s website, social media presence, online advertising, email marketing, sales and leads funnels, amongst others.

It’s this digital footprint that is the focus of our due diligence work. It’s an area that we specialise in and we have performed many in-depth website and digital marketing due diligence projects for a number of UK private equity firms. Both for their existing portfolio companies and potential target companies. Marketing can sound subjective, so our digital tools, testing procedures and advanced reporting, add a numerical value to previously untested and costly activity.

With an increasing number of deals exeeding 10x EV/EBITDA (over 60% last year in the US according to Pitchbook) it’s vital for PE firms to utlise all potential levers of growth. Online sales and marketing optimisation, especially in mid market deals, is often underutlised and offers significant opportunities going forward.

The value of this type of digital analysis is increasing with the growth in the online presence of most companies, indeed Bain see this clearly “For diligence into a particular company, web scraping provides indicators of market share and growth momentum, such as web-traffic analysis”.

Further to this, savvy PE firms are starting to wake up to the potential and directly applying it to the marketing of their portfolio companies. According to Jim Howland, a Managing Director and Operating Partner at Morgan Stanley Capital Partners “Increasingly our value creation plans focus on working to accelerate top line growth by adopting a more sophisticated marketing strategy and making material investments in the function.”

The results of the due diligence work that we conduct always identifies new opportunities for growth and highlights areas of friction that require fixing. Being armed with this powerful knowledge and implementing it on portfolio companies has led to significant online performance improvements for our clients.

The Correlation Between Digital Adoption & Performance

A recent report by Mckinsey highlighted the strong negative correlation that nondigital company cultures have on economic performance. It’s worth noting that along with an aversion to risk and restrictive mindsets, a lack of digital culture is an accurate indicator of suboptimal company performance. Rather than viewing these situations as being negative, our approach targets the opportunities that are available once due diligence has been conducted and lays out a clear implementation plan to move forward.

Integrating creativity and data drives more growth

Connecting and integrating creativity and data for marketing appears to be the golden ticket for driving growth. Mckinsey carried out a major recent study where they surveyed over 200 CMO’s and senior marketing executives. Their aim was to measure the integration of creativity and data in marketing.

Their results demonstrated that what they refer to as “integrators” – those that unite data and creativity – grow their revenue at twice the average rate of companies in the S&P 500.

See the results below:
(Source: Mckinsey)

What are the benefits of digital marketing and website due diligence?

1) Discover How Your Tartget Company and It’s Competitors Are Really Performing Online

Data snapshots and general traffic reports only go so far. To drill down into the data that often contains the hidden gems of your online performance requires deeper analysis.

Being able to attach points of reference to your data, with both industry best practice and your competitors’ performance levels, allows you to see exactly where your company sits. From there high-impact recommendations are produced to target the gaps and opportunities which arise. These recommendations are concise, achievable and are fully tracked so that you can see the changes in performance once the changes begin.

2) See Exactly Why Your Competitors are Winning …and Losing

In highly competitive markets, it can be tough to keep up with what your competition is doing and how they are performing. We include your companies’ major competitors in our digital due diligence work. Even though we are taking an outside view of them, there is still a great deal of data available that we can present back to you. This easily shows you exactly how your competitors are performing in various critical areas.

3) Deep Data Analysis That Yields Growth Opportunities

Companies are often overwhelmed by the sheer amount of digital marketing data they have available to them. Knowing the exact metrics that can have a significant impact allows us to measure the data that really matters to your company. Rather than a one size fits all approach, we analyse each company individually based on its business model and sector. The due diligence is carried out by our experts using proprietary analysis tools specifically built for this purpose which then create fully bespoke reports.

Some of the areas we analyse:

  • Website design & conversion performance
  • Sales & lead funnel performance
  • Search engine performance
  • Paid search & display advertising campaign performance
  • Social media presence & engagement performance
  • Email marketing & CRM performance

4) High Impact Recommendations

Instead of wading through endless streams of data and recommendations or having bloated reports that sit gathering dust. We present you with a set of high-impact recommendations, based on the due diligence analysis that can be executed over 90  days or less to give optimum results.

5) Impartiality

Conducting due diligence externally ensures that all the intelligence that is gathered is impartial. This impartiality is critical because anyone connected, even loosely, to a company will have created their own set of opinions. These can be counterproductive as they are probably not based on the kind of agnostic detailed data analysis that we employ.

Being impartial allows us to deliver pure insights, untainted by internal opinions.

What levels of digital marketing & website due diligence reporting do we offer?

  1. Quick View DD – For investors and private equity firms assessing potential portfolio investments, we provide you with a one-page overview of a target company’s digital marketing performance. This gives an insight into critical marketing metrics and how the company performs in these areas against its main competitors. The report is designed for a swift turnaround and to easily fit within an investment report for quick reference, whilst also offering high-quality analysis in a concise format.
  2. Pre Deal DD
    A more indepth external view of a target company and it’s competitors. Key insights into brand representation, search engine, social media and online advertising performance, sales funnel effectiveness and competitor comparisions. The report includes high impact recommendations for future growth and a 1 hour consultancy call to discuss the results.
  3. Full Due Diligence Package – When a prospective investment is going ahead, has actually occurred or a higher level of due diligence is required, we conduct a more extensive and detailed analysis which includes competitor comparisons. From this, we create a set of high-impact recommendations that are likely to have the highest ROI impact and are generally achievable within a 90-day window. We discuss and explain these to you so that they are fully understood, and if required we can assist with the implementation of the actions.

Use digital sales and marketing to transform your portfolio companies. Book a free consultation now to discuss how we can help you:

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