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NEW YORK (AdAge.com) -- The year so far has been ripe with deals, but stay tuned: We're sure to see even more.

The merger-and-acquisition market in the media and marketing services sector was jolted awake late last year and has kept pace into 2010. The first six months saw more than 400 transactions totaling $21 billion, a deal value nearly triple that of the same period last year, according to investment-banking firm Jordan, Edmiston Group. By the firm's count, interactive media, marketing and technology (including mobile) propelled deals in the sector and accounted for 74% of activity in the first half.

So far, 2010 has seen a second publisher buy its way into digital-marketing services. Hearst acquired Scottsdale, Ariz., independent iCrossing, following rival Meredith's lead down the agency road. Meredith, a Des Moines-based broadcaster and publisher, has made a series of smaller acquisitions to build its marketing-services arm and most recently acquired mobile agency the Hyperfactory, after making a strategic stake in it last year. The last several months have also seen activity from overseas buyers such as Dentsu and Cheil Worldwide, which picked up Barbarian Group and 360i-parent Innovation Interactive, respectively.

Dentsu, a Japanese holding company that has made three acquisitions in the U.S. in as many years, is said to have an eye out for a media agency. Media appears to be the missing link in Dentsu's U.S. stable, which already includes a creative agency, McGarryBowen; a digital, search and analytics shop, Innovation Interactive; and a design firm, Attik.

And there are tempting media-agency targets out there. Horizon Media is the hottest independent media shop, with billings for 2010 coming in near $2.5 billion, according to CEO Bill Koenigsberg, who declined to comment on the agency's interest in a sale. Horizon has 600 employees in nearly 40 countries; its digital group brings in more than $150 million and direct accounts for $400 million. Other media shops to watch include KSL Media and TargetCast. KSL CEO Hank Cohen said, "People are calling a lot through intermediaries, but we're not there." And Steve Farella, CEO of TargetCast, said only that "good independent agencies are always sought after."

The combination of eager buyers and full private-equity coffers are stirring interest across the board. "I think we're going to continue on the same pace that we've observed thus far into 2010," said John Prunier, principal of investment bank Petsky Prunier. "That said, the deal volume and transaction volume might actually increase in the second half."

One digital agency, Rosetta, thought to be a target, is looking to buy rather than sell. The Hamilton, N.J.-based agency and AKQA are the only two independent interactive agencies left with revenue north of $90 million, according to Ad Age estimates. "Everybody comes knocking and calling and we're not really interested," said Chris Kuenne, Rosetta's chairman-CEO. "There's a race on in the agency world to assemble three key things: the right assets, the right people and the right culture. M&A takes care of part one, but has the potential to screw up the other two."

To become one of the next digital agencies of scale outside of the holding-company world, Rosetta is on the hunt. Mr. Kuenne said shops with annual revenue between $30 million and $50 million and expertise in mobile, customer relationship management and loyalty or search and social would make sense for his agency.

One loyalty marketing agency, Denali, was picked up in June by Minneapolis-based Olson in a deal that could bump the parent into the top 10 largest independent U.S. agencies. That agency is also said to on the lookout for an agency with PR expertise, or offices on the coasts or in Chicago.

Both Olson and Rosetta are examples of private-equity-backed agencies that are building on acquisitions to grow. KRG Capital has invested in Olson and Lindsay Goldberg in Rosetta. "One important trend is the increasing role of private equity," said Ad Media Partners' managing director, Seth Alpert. "They are buying a platform company and then buying add-ons."

Mr. Alpert said that other potential add-ons in the $30 million to $50 million range include Resource Interactive, IMC2 and Ascentium, the last of which recently sold off its information technology services, leaving behind ad services.

"There will certainly be a lot of relatively small to midsize acquisitions around the world but nothing of the magnitude of what happened in the past," Maurice Levy, CEO of Publicis Groupe, told Ad Age. The holding company acquired the Nos. 1 and 2 digital agencies by revenue, Razorfish and Digitas.

But agencies looking to build up scale through acquisitions aren't the only potential buyers. For one, other publishers are surely considering the path Meredith and Hearst have forged. "What is Conde [Nast] going to do now that Hearst has an agency?" asked investment banker Linda Gridley. Beyond publishers exploring new revenue streams, technology companies have also been making plays for agency services.

"I think the game is moving away from the ad-holding companies and also more toward technology-driven companies, whether it be Google or GSI Commerce," Ms. Gridley said. She was involved in a number of deals for GSI, a King of Prussia, Pa., company with heritage in e-commerce back-end tech. Ms. Gridley said GSI currently has a $200 million marketing business, but is working to grow that to $500 million. It's made two deals this year.

"They're ambitious," said Mr. Prunier about GSI. "When they see demand in the market, they want to be in position."

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Contributing: Michael Bush

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