Marketing due diligence is the pre-close evaluation of how a target company actually acquires customers: what demand really costs, how durable it is, who controls the infrastructure behind it, and whether the growth in the model can be delivered by the commercial engine as it exists. Deal teams underwrite revenue quality rigorously and audit financial controls to the decimal, then routinely accept a marketing narrative on a management slide at face value. That gap is where post-close surprises live.
Commercial due diligence answers the market questions: size, competition, customer stability. Quality of earnings answers the revenue-recognition questions. Neither typically opens the ad accounts, reads the agency contracts, or tests whether the CRM data underlying the pipeline story is real. Marketing sits in the seam between workstreams, and in mid-market deals it is often nobody's job. The irony is that the equity case usually depends on it: if the model says customer acquisition scales, someone should verify the machine that acquires customers.
Real acquisition cost, by channel. Not the blended number management quotes, and not the platform-reported figures, which systematically flatter the platforms. Reconcile spend to invoices and conversions to closed revenue. If that reconciliation cannot be done from the data available, that finding is itself the finding.
Channel concentration. A business acquiring most of its customers from one rented channel, one aggregator relationship, or one referral source carries risk the multiple should reflect. Concentration in acquisition is customer concentration one step upstream.
Who owns the infrastructure. Ad accounts, analytics, the website, tracking, and customer data held inside an agency's accounts rather than the company's own is a genuine transfer risk. We have seen platforms lose years of performance history in an agency breakup during a hold.
Attribution integrity. How does the company know where customers come from? If the honest answer is that it does not, the growth story is being navigated on instruments that do not work. One of our industrial engagements found double-digit shares of annual pipeline living in spreadsheets, invisible to every system of record. That case study is here.
Brand versus non-brand demand. Revenue that arrives because people already search for the company by name is durable. Revenue that exists only while paid campaigns run is bought. The mix tells you how much of the growth is owned.
Acquisition cost rising without explanation. A single channel carrying most of new revenue. Agency-controlled accounts and murky reporting. A pipeline that cannot be traced to sources. Marketing spend that moves inversely with reported performance. None of these kill a deal by themselves; all of them belong in the model as either a price adjustment or a funded fix.
The best use of marketing diligence is not a haircut but a head start. Findings convert directly into the first hundred days of the commercial plan: what to fix, what it costs, and what it unlocks. Pre-close, the work is outside-in and fast. Post-close, the same questions get answered from inside the systems as a commercial audit, with owners and a sequence attached. Sponsors who connect the two get paid twice: once in entry price, once in execution speed.
Marketing due diligence is the pre-close evaluation of how a target company acquires customers: real acquisition cost by channel, channel concentration, who controls the marketing infrastructure and data, attribution integrity, and the split between brand and bought demand. It tests whether the growth in the deal model can be delivered by the commercial engine as it actually exists.
Commercial due diligence answers market questions: size, competition, and customer stability. Marketing due diligence opens the engine itself: ad accounts, agency contracts, tracking, CRM data quality, and per-channel economics. In many mid-market processes it falls in the seam between commercial and financial workstreams and is nobody's explicit job.
Acquisition cost rising without explanation, most new revenue arriving from a single rented channel, ad accounts and analytics owned by an agency rather than the company, a pipeline that cannot be traced to sources, and revenue that only exists while paid campaigns run. Each belongs in the model as a price adjustment or a funded fix.
Immediately post-close. The findings convert directly into the first hundred days of the commercial plan, and the same questions answered outside-in during diligence get re-answered from inside the systems as a full commercial audit, with owners, costs, and sequencing attached.
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