Advertising and Marketing Technology Perspective
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Advertising and Marketing Technology Perspective - November 2013 ...

Advertising and Marketing Technology Perspective - November 2013
By Julie Langley, Managing Director at Results International Group LLP
Latest perspective on the advertising and marketing technology sector which looks at M&A and financing trends across areas such as marketing automation, analytics, e-commerce, social media, mobile and video.

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Advertising and Marketing Technology Perspective Advertising and Marketing Technology Perspective Presentation Transcript

  • Advertising And Marketing Technology Market overview and update For more information contact: Julie Langley Managing Director +44 (0) 20 7514 8247 jlangley@resultsig.com Mark Williams Manager +44 (0) 20 7514 8242 mwilliams@resultsig.com Disclaimer: November 2013 This document has been produced by Results International Group LLP (“Results”) and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of Results’ officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
  • Contents 01 About Us 02 Market Landscape 03 Public Markets Environment 1
  • Corporate Finance Advisors to the Adtech, Software & Marcoms Sectors An established team of sector experts… …with global reach • Results International is a market-leading M&A advisory firm founded in 1991 • Entrepreneurial and owner-managed • 40 person global team with over 250 completed transactions • Senior level attention on all transactions Selected clients and transaction counterparties Sector specialism (1) Adtech Software Marketing Services Digital Media (1) Some clients were advised by Results International MDs at prior firms 2
  • Selected Team Members- UK Keith Hunt Managing Partner • Joined Results in 2005 Previously Head of M&A at Ernst & Young • 20+years experience in corporate finance, including M&A, fundraising, IPOs, JVs, MBOs and MBIs • Clients include Figtree, Monitor Media, Spannerworks, Flip Media, Transactis, Punktilio, Flamingo, Brand X, and AIA Julia Crawley- Boevey Manager • • Andy Collins Senior Partner Joined Results in 2010 having spent over four years at BDO where she worked in both Audit and Corporate Finance Clients include The Group, Blue Rubicon, Virgo Health, Incite, and Crayon Joined Results in 2005 and has completed over 50 transactions, raised £150m of funding from private equity and the Capital Markets and provided strategic advice to a wide range of businesses • Clients include Abacus, Retail Eyes, Bridgehead International, Chemistry Communications, Latitude, and Total Healthcare Group • Mark Williams Manager • • Joined Results in 2012. He started his career at KPMG working in Financial Services M&A and moved to Ingenious Corporate Finance in 2010 Clients include Moonpig, St Ives, and Inflexion Jim Houghton Partner Julie Langley Managing Director Angela Lurssen Director • Joined Results in 2010, with over 10 years of M&A experience • Joined Results in 2012 to lead the tech and digital media practice • Joined Results in 2001 having previously worked client and then agency side • Prior to joining Results Jim led European M&A activity for the marketing services division of Omnicom (DAS) • • • Clients include Blue Rubicon, Virgo Health, Crayon, Iris, United News & Media plc, and BBC Worldwide 15 years M&A experience at Broadview then Jefferies, advising tech and digital media companies on M&A and fundraising • Advised on transactions with Oracle, Microsoft, Experian, Moody’s, IAC, Axel Springer, DMGT, and BT, amongst others Her current role is Director, where she is responsible for developing current and new business opportunities along with driving the marketing and knowledge functions • Clients include Punktilio, Monitor Media and AIA Harriet Rosethorn Analyst Sherif Hegazy Analyst Daniel Lee Analyst • Joined Results International in June 2012 • Joined Results International in July 2012 • Joined Results International in 2013 • She recently graduated with a first class BSc(Hons) in Chemistry from the University of Southampton • • Began his career at Investec Bank, spending 2 years in the Credit department before joining Results • Clients include Amaze Started his career at Crowe Clark Whitehill LLP, before moving to Parker Lloyd Group in 2011, a finance boutique firm based in Mayfair 3
  • Selected Team Members - International Asia Team Andrew Kefford Regional Director - APAC • Long career in marketing sector (Ogilvy & Mather, The Ball Partnership) • Managed the acquisition of SMART to McCann Worldgroup, CCG by Publicis Group to establish Digitas China, CIC by Kantar Media and The Upper Storey by Isobar Chris Beaumont Regional Director – North Asia • 16 years of experience consulting in Asia • For 10 years Chris was with McCann-Erickson in Asia; he was both Vice-Chairman of its operations in Tokyo and Chief Strategy Officer for WorldGroup across Asia Imad Kublawi Regional Partner - MENA USA Team Pierre-Georges Roy Partner • 27 years experience in the advertising sector, including as COO of JWT's Middle East Network • Co-founded GroupArgent in 2005. Closed $4.0 billion in cross-border transactions including several Canada-US • Joined Results International in 2008 and has since been engaged in a number of buy and sell mandates • Experience includes Telesystem International Wireless (NASDAQ: TIWI) sold to Vodafone, and buyout and exit representation for Canadian firms Caisse de Dépôt and Wynnchurch Sunil Gupta Area Liaison - South Asia • Spent 24 years at Hindustan Thompson (part of JWT), the largest ad agency in India • Other roles include COO at RK Swamy/BBDO and as advisor to companies in India, Pakistan & Dubai Maurice Watkins Partner • Co-founded GroupArgent in 2005 and has closed over 35 transactions totaling $0.75 billion • Prior to GroupArgent, Maurice worked at the Zanett Group, Morgan Stanley and IBM Hemavli Bali Executive Director • Joined Results in 2008 and has 13 years working in financial services, with over 8 years of experience as a corporate finance specialist • Previously worked at Nomura, Royal Bank of Canada and Ernst & Young • Clients include Abacus, Total Healthcare Group, Synergy, D2D and Retail Eyes Carl Izzi Managing Director • 15 years of experience in the global marketing services sector in management, M&A advisory and management consulting 4
  • Selected Transactions Across Technology, Marcoms & Digital Media has been acquired by has been acquired by has invested in has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has completed a joint venture with has been acquired by NOTE: Certain transactions were advised on by RI’s MDs at previous firms. 5
  • Content 01 About Us 02 Market Landscape 03 Public Markets Environment 6
  • Marketing Technology Landscape – Illustrative Companies Marketing Automation Subsegments • • • Omnichannel Campaign Management Marketing Automation Lead Management Social CRM / Social Software eCommerce Tech • • • • eCommerce Platforms Recommendation Software Personalisation Software eCommerce logistics • • • • • • Social Media Marketing Ratings & Reviews Monitoring & Intelligence Analytics Customer Service Solutions Enterprise social networking Digital Marketing Tech (Display & Search) • • • • • • Ad Network and Exchanges DSPs/SSPs/DMPs SEO/SEM Tools Targeting/Retargeting Revenue Acquisition Tracking, Tag Management Attribution Mobile • • • • Mobile Marketing Mobile App Platforms Mobile DSPs Mobile Ad Management/Ad Serving Video • • • • • OVP’s Video Sharing Ad Management Video Commerce/ Marketing Video Creation Tools Diversified Vendors Selected Representative Companies 7
  • Evolution of the Ad Tech Market Advertisers Still Allocate ¾ of Advertising Dollars to TV, Radio and Print 90%  Forecast to account for 45% of the US advertising budget in 2020 78% 80% % of Total US Advertiser Budget Allocations Continued growth of digital advertising: 85%  This growth continues to be driven by: 70% 66% - 60% On-going development of new formats and platforms (namely mobile and video) for online display advertising - Shift from PC to smartphone and rise of multi-device audience - Increasing global penetration of high speed broadband – increasing the need for more interactive communication and reducing the cost of delivering rich media content - Continued dominance of social networks capturing more consumer time spent than any other online vertical 55% 50% 45% 40% 35% 30% 23% 20% 15% 10% Impact on Adtech: 0% 2008 2011 2015E 2020E 2008 TV, Radio & Print 2011 2015E 2020E Desktop & Mobile Internet Source: eMarketer, IDC, Morgan Stanley Research (June 2012)  Increased corporate budgets - budgets for marketing technology are growing annually at 11%, c.2.5x faster than internal IT budgets, which are growing at 4.7% (Source: Chuck Schaeffer, CRM Search)  Increasing campaign complexity - brands have recognised the requirement for technology in order to successfully facilitate multidevice, multi-channel and multi-territory ad campaigns ‘For every dollar spent on online advertising, as much as 80 cents is estimated to be spent on digital technology versus the actual ad space’ Emily Steel, Financial Times  Increased awareness of importance of ‘big data’ – consolidating and analysing data captured across spectrum of digital channels gaining a full picture of the ‘digital shopper’ - ‘CMOs will control more IT spend than CIOs by 2017’ Laura McLellan, Gartner the need to understand the efficacy of digital versus traditional advertising strategy  Increased interest of both brands and consumers to receive personalised targeting/ recommendations based on browsing history to improve shopping experience 8
  • Strength Of The Global M&A Ad Tech Market 100 90 80 (# Deals) 70 60 50 40 78 61 30 20 49 43 36 32 34 Q3 2008 Q4 2008 10 26 34 55 43 78 89 88 65 48 Q4 2010 Q4 2011 Q1 2012 78 68 45 Q3 2010 64 73 70 0 Q1 2008 Q2 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q1 2011 Q2 2011 Q3 2011 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Sources: Press releases, CapitalIQ, Corpfin, and Results’ Analysis  Adtech consolidation continues at pace – however there is substantial VC funding going into the sector and the number of new start-ups is outpacing the number of acquisitions (Source: Luma Partners)  Key M&A drivers: - Established players have been acquiring new capabilities/ technologies to extend their existing product suites - Large internet conglomerates and technology companies continue to compete to remain ‘on top’ of new tech innovations and are competitively scouring the market for the best start-ups and talent - Yahoo, in particular, has been a prolific acquirer in 2013 making over 20 acquisitions to date  The IPO market has recently opened for adtech including YuMe, Tremor Video and Marin Software, however these parties have yet to use their currency to pursue acquisitions 9
  • Ecommerce Technology  Gartner calculates the eCommerce tech market to be worth in excess of $3bn ($ Billion) Devices used for eCommerce 500 - 400 434 300 385 339 0  And as the market has grown, eCommerce tech has become a key strategic focus for enterprise software, consultancies, and marcoms groups alike, although there has been a notable shift in the focus of M&A activity: - 226 195 259 39 53 71 92 2012 2013 2014 2015 2016 2017 Recent deals are more about managing and optimising the full spectrum of customer engagement across web, mobile, social, contact centre and other touch points 109 25 14 2011 Earlier eCommerce tech deals were focused on management of websites, store fronts, payments and shopping carts - 297 200 100 Matched with consulting and other services delivered alongside, the entire market could be worth 10x this amount US Retail mCommerce Sales US Retail eCommerce Sales Source: eMarketer (April 2013)  Focus of recent deal activity:  The development of eCommerce technology - Personalisation eCommerce facilitation Tag management and the ability to gather real time behavioural data on consumers  Taking captured data relating to each user and using it to personalise an online store to their individual preferences: - Data capture Marketing decision RichRelevance recently acquired Avail Intelligence Software and [x+1] acquired Ubertags, in order to track the consumer journey and optimise retailers eCommerce sites Yahoo has been acquisitive in this area buying recommendations software provider Jybe  Establishing a view of a universal user has become paramount as brands base online marketing and often trading decisions on an understanding of an entire customer journey, from in-store browsing, price comparison, review, mobile searching and eventual sale; the growth of omnichannel retail marketing 10
  • Ecommerce Technology – Selected Recent Deal Activity Selected M&A Activity Selected Funding Activity Size ($m) Description Wellington Management 76 Mobile payments and eCommerce platform Jul-13 Octopus Investments and Northstar Ventures 6 Multi-channel retail customer experience software eCommerce platform that places promotions (Buy Now) Jul-13 Revolution Growth 40 eCommerce platform for SMBs 8.8x eCommerce software Jul-13 TTV Capital, TechOperators, Nonami, Forte Ventures 3 eCommerce marketing platform for SME's n.a. n.a. Commerce and order management platform Jul-13 Yaletown Venture Partners 4 eCommerce software May-13 284 2.0x Digital marketing and eCommerce consulting May-13 Advance Digital, Cox Media, Gannett & others 9 Technology focused on local discovery shopping May-13 n.a. n.a. Online merchandising platforms May-13 First Round, Accelerator, 500 Startups, SoftTech VC, Joi Ito 1 Recommendation engine for product advertisements Mar-13 n.a. n.a. Recommendation software Mar-13 Lightspeed Venture Partners 1 Personalisation software for retailers Feb-13 n.a. n.a. Website tag management and deployment software Feb-13 Not disclosed 15 Personalisation software Feb-13 125 n.a. Retail data feeds and product optimisation for eCommerce Aug-12 RTP, Shea, Gray, Tugboat 8 Tracking & personalisation software for retailers Nov-12 33 n.a. Full service eCommerce advertising network Jul-12 Scottish Equity Partners and Delta Partners 2 eCommerce intelligence and data quality solutions Nov-12 6 n.a. Multi-channel retail management solutions Feb-11 Octopus Ventures 3 eCommerce content management platform Oct-12 21 n.a. Product recommendation software May-12 167 14.0x Rating and reviews software May-12 n.a. n.a. Customer buying analytics technology Date EV ($m) EV/REV Description Date Investors Aug-13 n.a. n.a. eCommerce solutions provider Aug-13 Jul-13 n.a. n.a. eCommerce app platform Jun-13 n.a. n.a. 1,100 Jun-13 Jun-13 Buyer SAP Target Target 11
  • Marketing Automation Marketing automation market forecasting steady growth  Marketing automation has historically been limited to email, however, customers are increasingly using social networks to provide recommendations, advice and price comparisons prior to purchase 5,000 4,500 - In these cases, marketing automation software becomes more reactive to consumer interest rather than proactive or campaign-driven - 4,000 In addition, brands are seeking solutions that react in real-time to customer activity and enable quick interaction with customers 3,500 3,000 2,500 4,697 2,000 1,500 2,831 3,098 3,449 3,798 4,214  Furthermore, marketing automation has greater efficacy when powered with the mass of data gleaned across all online and offline channels – leveraging the data captured across the complete customer journey to create targeted messaging 1,000 500 0 2011 2012 2013 2014 2015 2016 Source: Gartner (December 2012) Integration of Social CRM and marketing automation  Consequently, to facilitate seamless interaction with social media and to enable reactive real-time targeting, a marketing automation products need to be fully integrated with, and feed off of data captured by measurement (i.e. tagging) and social marketing tools - Marketing Automation Social CRM Responsive Targeted Multi-channel Engagement Interaction Monitoring Innovation and integration have been key drivers of M&A as software providers seek to differentiate their product suites with the newest and most innovative automation applications  Key recent deals exemplifying these trends have been: Silverpop – CoreMotives - Teradata – eCircle Driving development of targeted software designed to respond to real-time social interaction to drive highest impact, engagement and ROI - ExactTarget – Pardot - Oracle – Eloqua - Adobe – Neolane  Marketing automation deals have also derived some of the largest multiples – Oracle paid over 9x revenues for Eloqua 12
  • Marketing Automation – Selected Recent Deal Activity Selected M&A Activity Selected Funding Activity EV ($m) EV/REV Description Date Investors Size ($m) Description Aug-13 n.a. n.a. Marketing automation & demand gneration Sep-13 Partial close 4 Voice based marketing automation platform Jun-13 600 10.3x Cross-channel campaign management Sep-13 Southern Cross Venture, Tim Draper, Terry Garnett 2 Marketing & sales automation Jun-13 2,283 7.2x Cloud-based marketing automation Sep-13 Hallett Capital 1 Marketing automation software May-13 295 6.2x Lead generation and conversion software Aug-13 NEA, DAG, Lightbank, Andreessen, Cisco, 7-Ventures 12 Universal loyalty program to provide email campaigns May-13 n.a. n.a. Web-based email marketing system Jun-13 BDC Venture, GO Capital, Alan Shusterman, Feldman 2 Marketing automation and integration platform Dec-12 871 9.2x(1) Cloud-based marketing automation Apr-13 Escalate Capital Partners, SVB Capital 25 Cross-channel marketing automation technology Sep-12 n.a. n.a. Behavioural targeting & predictive analytics Jan-13 Goldman Sachs 54 Sales & marketing automation platform Oct-12 96 8.6x SaaS marketing automation platform Nov-12 Institutional investor, Altimeter, Cross Creek, previous investors 35 Inbound marketing software firm Oct-12 n.a. n.a. Marketing automation software Sep-12 Norwest Venture, Trinity Ventures, US Venture, Voyager Capital 16 Cloud-based marketing automation platform May-12 150 4.3x Digital messaging platform Jul-12 Private investors 4 Social nurturing marketing platform Mar-12 n.a. n.a. Marketing automation solution Mar-12 Ignition Partners, Battery, DFJ 20 Infrastructure automation platform Feb-12 169 3.5x Email and social media marketing solutions Jan-12 Northwater, Draper Triangle, DFJ Portage, CincyTech, Washington 8 Marketing optimization software and services Jan-12 108 1.8x Marketing analytics & campaign management Mar-11 Emergence Capital, Mohr Davidow, Accel, Deep Fork n/d Marketing automation & demand generation solutions Jun-11 n.a. n.a. Marketing automation software Date (1) Buyer Target Eloqua was on a revenue run rate of approx. $95m, 9.2x is the run rate revenue multiple Target 13
  • Social CRM / Social Software INTERNAL (at an Enterprise level) ($ Million) Worldwide Enterprise Social Software Revenue 3,000 2,749 2,500 2,305  However, solo, stand-alone software solutions are no longer preferred as companies are seeking solutions to be integrated within wider Enterprise applications 1,896 2,000 1,535 1,500 1,000  Corporates continue to invest in procuring the best social tools in order to optimise colleague interaction, the transference of ideas and sharing of information - 1,003 804 Enabling automatic response to workflow opportunities and other supporting tools identified via social interaction - 1,242 Many of the large enterprise software vendors have functionality in this area, e.g. Microsoft (Yammer and SharePoint), Salesforce (Chatter), IBM (IBM Connections, Sametime, Notes etc.), SAP (Jam) 500 EXTERNAL (customer engagement) 0 2011 2012 2013 2014 2015 2016 2017 Source: IDC (May 2013) ($ Million) Global Social Media Advertising Spend - 5,000 The continued growth of Facebook and Twitter advertising revenues is a sign of confidence in social marketing  Consequently, CRM solution providers have acquired social tech platforms to accelerate their capture of social market and offer brands another ‘touchpoint’ to reach and monitor customers 4,500 4,000 3,500  Fast, integration with wider solution has been a key occurrence: 48% - 3,000 2,500 2,000 1,500  Brands are increasing prominence of social media campaigns as a way to attract and engage with customers and extend brand reach 2,831 3,098 3,449 3,798 4,214 4,697 - Marketo integrating Crowd Factory provides integrate marketing automation activities i.e. lead generation, nurturing capabilities across social applications  Analytics and gaining intelligence from the consumers ‘social voice’ has also been a key focus of recent acquisitions, as seen by Twitter’s acquisition of Blue Fin Labs and Oracle’s acquisition of Collective Intelligence 1,000 500 0 2011 Oracle integrating Vitrue within Oracle’s Social Relationship Suite 2012 2013 Source: Comscore, Morgan Stanley (June 2012) 2014 2015 2016 14
  • Social CRM / Social Software – Selected Recent Deal Activity Selected M&A Activity Selected Funding Activity EV ($m) EV/REV Description Date Investors Size ($m) Description Jun-13 n.a. n.a. Platform for conducting social media analysis Aug-13 NorthCap, Target Partners 8 Social media management platform Apr-13 n.a. n.a. Social media listening and compliance Aug-13 CrunchFund, Core Ventures Group 3 Platform to track content on social media Feb-13 c.75 n.a. Social media monitoring for TV shows & commercials Jun-13 Scottish Equity Partners, Private Investors 2 Management & analytics cloud solution for Twitter Jan-13 n.a. n.a. Social media marketing suite for SMBs Jun-13 AEA Investors 68 Social software solutions for Facebook, Twitter, Tumblr Aug-12 40 n.a. Social media advertising services Apr-13 Fairhaven, SoftBank, RRE, AOL, betaworks, kbs+, Rand 10 Social media optimization technology Jul-12 350 n.a. Social media marketing software May-13 Gibraltar Business Capital, Blue Chip Venture Company 8 Social data and marketing technology company Jun-12 1,200 n.a. Enterprise social networking Mar-13 Flybridge Capital, Revel Partners, Rutledge Partners 4 Social media management platform Jun-12 n.a. n.a. Social media monitoring intelligence Feb-13 Intel Capital, Battery Ventures 15 Platform for social media management (SIREn) Jun-12 745 c. 19x(1) Social media marketing suite Jan-13 Shasta, Norwest , Redpoint, Trident 8 Social advocacy platform May-12 167 14.0x Rating and reviews software Jan-13 DoubleRock, Social Internet, Siemer, Signal, Silicon Valley 7 Social media advertising and analytics platform May-12 300 n.a. Social media page management Dec-12 Index Ventures, SEED Capital Denmark, Northzone 13 Provides online consumer reviews Feb-12 169 3.5x Email and social media marketing solutions Nov-12 Investor Growth, Goldman Sachs, Accolade & others 30 Drupal (open source CMS) Mar-11 345 9.8x(2) Social media monitoring and intelligence Nov-12 Index Ventures and Early Bird Venture Capital 6 Social media monitoring and digital analytics Jun-10 n.a. n.a. Web analytics software May-12 Jafco Ventures, DAG Ventures, Matrix Partners, Eden Ventures 24 Enterprise content collaboration software Date (1) (2) Buyer Target BuddyMedia generated approx. $25 million revenue in CY2011 (up 250% year-on-year). Based on Salesforce.com’s statements, the TTM revenue at the time of the deal was approx. $40 million. Radian6 was on a revenue run rate of $35m and projecting about $50m for the full year so 9.8x is the run rate revenue multiple Target 15
  • Mobile Advertising Market Global mobile ad revenue nearly doubled in 2012 (€ Million)  Innovation and development in mobile market underpinned by increasing tablet and smartphone penetration and the speed of mobile internet access are driving increasing mobile ad revenues 8,000 6,889 7,000 6,000  Whilst historic M&A was driven by mobile ad penetration and delivery, acquirers new focus on targeted advertising and delivery based on user engagement, e.g. Yahoo, Criteo, Media6 Degrees, [x+1] acquisitions 83% 5,000 3,769 4,000 3,000  Location based targeting has also been a significant focus of recent M&A activity, the number of local searches on mobile devices quadrupled in 2012, evident with acquisitions of AdMovate, Spindle and Pynt 2,000 1,000  Core limitations – the lack of cookies on mobile devices preventing tracking or tagging of user mobile internet activity 0 2011 2012 Source: IHS (July 2013)  Dominance of ‘app’ usage with core customer data owned and held by app owner rather than brands Facebook’s quarterly advertising revenue ($ Million) 2,500 1,600 2,000 1,457 1,245 1,500  Google is constantly looking to retain its leadership in this fast moving market and has made a number of acquisitions in order to do so, including AdMob (now integrated into AdWords), Motorola Mobility, and more recently investments in targeting technology (Adelphic) 1,090 1,000 500 0 153 Q3 2012  Google dominates mobile search market although Facebook and Twitter are rapidly growing presence having created native ad formats that seamlessly integrate with user experience generating higher value impressions 306 386 Q4 2012 Q1 2013 Mobile ad revenue Total ad revenue Source: ffforward (August 2013), Business Insider (October 2012) 656 Q2 2013  Whilst Facebook’s mobile advertising revenue grew 70% from Q1 to Q2 2013 social networks need to fear ‘over monetisation’ and carefully balance user engagement, number and frequency of ads and advertiser ROI 16
  • Mobile Technology – Selected Recent Deal Activity Selected M&A Activity Selected Funding Activity EV ($m) EV/REV Description Date Investors Size ($m) Description Sep-13 350 n.a. Ad inventory management platform for mobile publishers Sep-13 SoftTech VC, DFJ Esprit, Karlin Ventures, Siemo, Canyon Creek 7 Mobile DSP Aug-13 209(1) n.a. Mobile ad network - targeted advertising Aug-13 Private Equity 4 Mobile advertising network Jul-13 n.a. n.a. Personalised, hyper-local targeted offers on mobile Aug-13 DFJ, Vulcan, Gannet, Mezzanin, US Venture 8 Analytics ROI technology for mobile advertising Jul-13 n.a. n.a. Mobile advertising targeting Aug-13 Verizon Ventures 2 Mobile programmatic advertising technology Jul-13 n.a. n.a. Monitors advertising performance on apps Jul-13 Publicis 15 Mobile rewards platform Jun-13 n.a. n.a. Mobile app focused on location and check-in space May-13 Not disclosed (Partial close) 4 Location-based mobile advertising May-13 3 n.a. Platform that operates in mobile local search & ads Apr-13 North Atlantic Capital, Silicon Valley Bank 5 Mobile user acquisition network May-13 n.a. n.a. Mobile marketing campaign delivery Apr-13 MMC n.a. Mobile marketing agency and technology Mar-13 n.a. n.a. Acquired location based mobile marketing assets Feb-13 Samsung, Accel, Index, SAP, Mitsui & Co., Presidio, Cyber comms 25 Online advertising platforms Feb-13 n.a. n.a. Local-recommendations app Jan-13 Talus Holdings 8 Mobile advertising platform signup ads Jan-13 n.a. n.a. Create and manage mobile campaigns Dec-12 Google Ventures and Matrix Partners 10 Mobile advertising measurement specialists Jan-13 n.a. n.a. Mobile advertising network Nov-12 SingTel Innov8, NEA, and Jafco Ventures 13 Mobile video and media company Jan-13 n.a. n.a. Mobile marketing platform Nov-12 Kennet, Tengelmann, High-Tech Gründerfords 15 Data-driven mobile app marketing platform Jan-13 23 n.a. Mobile advertising network Nov-12 Crosslink, Menlo, Draper Fisher, InterWest & others 25 Mobile analytics and advertising company Jun-12 SingTel Innov8 10 Mobile ad exchange Date (1) Buyer Target Jumptap shareholders received 24.6m of Millennial Media shares, this EV is based in August 14 th share price of $8.5 Target 17
  • Video Advertising Market US TV vs. Digital Ad Spending ($ Billion) 80 70 66 65 61 60 75 73 70 69 60 57 53  US spend on video ads served to PCs and mobile devices will reach $4.14 billion this year, more than twice 2011 levels, and expected to double again by 2017 (Source: eMarketer) 48 50  Growth of video advertising driven by 43 37 40  Mobile video is growing at 112% vs. 35% for online video  Increase in connection speeds and broadband and introduction of 4G increasing consumption of video 32 30 20  Growth of second screen viewing 10  Growth of video-on-demand and consumption of PAY-TV; Netflix revenues forecasted to grow by 31% in 2013 since 2011 (using H1 2013 run-rate) 0 2011 2012 2013 2014 TV Source: eMarketer (March 2013) 2015 2016 2017 Digital  Increased appetite of brands to develop advertiser focused content embedded with other market initiatives, i.e. Red Bull ‘sky dive’ campaign US Digital Video Ad Spending* ($ Million) 10,000 9,060 9,000 8,040 8,000  Video M&A activity remains strong and is still largely driven by ad management platforms and networks adding video advertising networks/platforms to their display and search capabilities 6,990 7,000 5,750 6,000 5,000  Examples include AOL Networks/Adap.tv, WPP/Panache, Adconian/Smartclip, and MediaMath/tap.me 4,140 4,000 3,000 2,000 2,930  Still room for the market to evolve, with potential investments expected to cover the areas of social video, rights management, tracking & analytics and interactive content are likely to drive M&A activity 2,000 1,000 0 2011  Ability to target video advertising to individual users rather than broader demographically defined TV ads 2012 2013 2014 2015 2016 2017 *advertising that appears on desktop and laptop computers, mobile phones and tablets Source: eMarketer (March 2013) 18
  • Video Technology – Selected Recent Deal Activity Selected M&A Activity Selected Funding Activity EV ($m) EV/REV Description Date Investors Size ($m) Description Aug-13 490(1) n.a. TV advertising distribution unit of Digital Generation Aug-13 Not disclosed 4 Core infrastructure for the video advertising market Aug-13 405 n.a. Video advertising platform Jul-13 Nauta Capital, Lightspeed Ventures, Gemini Israel, Marker 8 Personalised video advertising technology May-13 n.a. n.a. Platform for social video advertising Jul-13 Not disclosed (Partial close) 3 Online video technology Apr-13 n.a. n.a. Video advertising network May-13 SingTel Innov8 10 Video ad buying platform Mar-13 n.a. n.a. Video advertising network May-13 Catalyst, NEA, Valhalla, Comcast, Pinnacle 60 Video advertising paltform Jan-13 n.a. n.a. In-stream video advertising optimization May-13 Ventech, ISAI 4 Video advertising network Dec-12 n.a. n.a. Video and mobile ad technology provider May-13 Spectrum Equity 50 Manage, execute & track ads across video Oct-12 n.a. n.a. Video advertising network Apr-13 Not disclosed (Partial close) 4 Targeting technology for video advertising Mar-12 13 1.4x Video advertising network Mar-13 Sequoia, Genesis, T-Venture, Vintage Investment 11 Video advertising and ad serving technology Jan-12 n.a. n.a. ‘InPlay’ Video analytics solutions from TubeMogul Mar-13 Data Point, Atlas, Freestyle, Boston Seed, Transmedia, Tribeca 3 Interactive television & video ad exchange Dec-11 n.a. n.a. Digital video advertising fulfilment software Feb-13 Institutional and individual investors 7 Social video advertising platform Nov-11 n.a. n.a. Multi-screen & brand advertising platform Feb-13 Viola Credit 11 Video advertising distribution platforms Nov-11 120 n.a. Provides online video advertising technology Jan-13 AGF Investments, Pinetree, Plazacorp, Cranson 18 Video social networking platform Sep-11 40 n.a. Owns advanced video search technology Jan-13 Insight Venture Partners 15 Video content and social platform Sep-11 n.a. n.a. In-Stream Video Ad Solutions Nov-12 Mitsui Global, Orix , Nexus, Intel,. 406, Avalon 25 Open source online video platform Date (1) Buyer Target EV includes extra consideration of $5m which is contingent on further investment not being required for the new company post acquisition Target 19
  • Content 01 About Us 02 Market Landscape 03 Public Markets Environment 20
  • Valuation Benchmarks Revenue growth (13-14E) EV/REV 2014E 25% 4.5x 23% 4.3x 4.0x 4.0x 21% 3.8x 3.6x 20% 3.5x 17% 17% 3.0x 2.5x 15% 2.5x 2.0x 10% 8% 8% 5% 5% 1.5x 1.3x 1.2x 1.0x 0.5x 0% 0.0x Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software Diversified Internet Marketing Technology EBITDA Margins 2014E 35% Video Mobile Social CRM Diversified Agencies Enterprise Software EV/EBITDA 2014E 25.0x 33% 31% 30% 20.0x 18.6x 25% 15.0x 20% 15.0x 12.9x 11.3x 16% 15% 13% 9.5x 10.0x 10.6x 10% 10% 6% 5.0x 5% N/A 0% 0% Diversified Internet Marketing Technology Video Mobile Social CRM n.a. 0.0x Diversified Agencies Enterprise Software Diversified Internet Marketing Technology Video Mobile Social CRM Diversified Agencies Enterprise Software Notes: EV = Enterprise Value Source: CapitalIQ 21
  • Selected Publicly Traded Companies usd millions, except per share data Company Price (30-Oct-13) Market Cap Net Debt Enterprise Value 1,030.42 32.57 36.18 49.01 224.11 361.08 52.73 344,250 33,657 2,931 119,355 26,760 165,279 68,872 (47,599) (1,657) (367) (8,753) (2,272) (4,646) (5,740) 296,651 32,000 2,564 110,602 24,488 160,633 63,132 Revenue CY2013 CY2014 Valuation Metrics EBITDA CY2013 CY2014 P/E CY2013 CY2014 Operating Metrics Rev. Growth EBITDA Margin CY13-14 CY2013 CY2014 Diversified Internet Google Inc. Yahoo! Inc. AOL Inc. Facebook, Inc. LinkedIn Corporation Amazon.com Inc. eBay Inc. 4.3 x 7.0 x 1.0 x 10.7 x 11.3 x 1.8 x 3.4 x 13.8 x 21.2 x 5.6 x 24.6 x n.m. 31.9 x 11.8 x 11.4 x 20.3 x 5.1 x 18.5 x n.m. 23.3 x 10.2 x 23.3 x 22.2 x 17.8 x 59.2 x n.m. n.m. 19.5 x 19.8 x 19.4 x 15.6 x 45.4 x n.m. n.m. 16.8 x 17.3% 2.6% 7.7% 35.7% 42.4% 22.2% 15.3% 36.4% 33.9% 20.3% 59.1% 24.6% 6.7% 33.4% 37.4% 34.6% 20.4% 57.8% 26.4% 7.5% 33.2% 3.0 x 5.0 x 10.9 x 25th percentile Median 75th percentile 5.0 x 7.2 x 1.1 x 14.5 x 16.1 x 2.1 x 3.9 x 2.6 x 4.3 x 8.9 x 12.3 x 17.5 x 23.7 x 10.5 x 15.0 x 19.8 x 19.5 x 22.2 x 23.3 x 16.8 x 19.4 x 19.8 x 11.5% 17.3% 28.9% 22.4% 33.4% 35.2% 23.4% 33.2% 36.0% Marketing Technology Experian plc Responsys, Inc. Marin Software Incorporated 20.41 16.18 11.87 20,034 920 419 3,087 (106) (115) 23,121 815 304 4.7 x 4.1 x 4.0 x 4.4 x 3.5 x 3.2 x 13.9 x 33.1 x n.m. 12.9 x 25.4 x n.m. 27.1 x n.m. n.m. 20.7 x 75.5 x n.m. 6.7% 18.9% 22.5% 34.0% 12.5% (37.0%) 34.4% 13.7% (26.5%) LivePerson Inc. Demandware, Inc. Vocus Inc. Digital River Inc. Interactive Intelligence Group Inc. Constant Contact, Inc. Marketo, Inc. Rocket Fuel Inc. Criteo SA PROS Holdings, Inc. 9.37 48.50 8.82 18.37 62.51 26.36 33.30 54.56 35.39 34.60 506 1,647 186 629 1,372 844 1,452 2,070 1,957 1,025 (75) (104) 43 (285) (76) (107) (133) (0) (48) (88) 431 1,542 229 344 1,296 737 1,319 2,070 1,909 936 2.4 x 15.4 x 1.2 x 0.9 x 4.3 x 2.6 x 14.0 x 9.2 x n.a. 6.5 x 2.1 x 11.3 x 1.2 x 0.9 x 3.7 x 2.3 x 10.6 x 5.1 x n.a. 5.3 x 21.6 x n.m. 9.5 x 9.7 x n.m. 16.1 x n.m. n.m. n.a. n.m. 16.2 x n.m. 8.5 x 7.3 x n.m. 12.7 x n.m. n.m. n.a. 32.7 x 49.3 x n.m. 43.7 x 32.6 x n.m. 36.3 x n.m. n.m. n.a. 68.0 x 35.4 x n.m. 32.3 x 33.2 x n.m. 28.1 x n.m. n.m. n.a. 61.9 x 14.2% 35.8% 2.4% (2.3%) 15.3% 12.8% 31.9% 81.0% n.a. 21.9% 11.2% (3.8%) 13.0% 9.0% 9.1% 16.1% (32.7%) (2.4%) n.a. 16.0% 13.1% 3.1% 14.2% 12.3% 8.5% 18.0% (18.3%) 0.1% n.a. 16.2% 2.5 x 4.2 x 7.1 x 2.2 x 3.6 x 5.1 x 10.8 x 15.0 x 20.2 x 10.6 x 12.9 x 20.8 x 33.5 x 40.0 x 47.9 x 30.2 x 33.2 x 48.7 x 11.3% 17.1% 24.8% (2.8%) 10.2% 13.8% 2.3% 12.7% 14.7% 4.0 x 4.4 x 2.2 x 1.8 x 3.4 x 3.4 x 1.7 x 1.7 x n.m. n.m. n.m. 6.1 x n.m. n.m. 31.9 x 5.4 x n.m. n.m. n.m. n.a. n.m. n.m. 52.4 x n.a. 15.8% 29.7% 31.2% 3.3% 4.5% 0.0% 2.7% 29.0% 6.5% 3.0% 5.2% 31.7% 2.1 x 3.1 x 4.1 x 1.7 x 2.5 x 3.4 x 6.1 x 6.1 x 6.1 x 12.0 x 18.6 x 25.3 x n.a. n.a. n.a. 52.4 x 52.4 x 52.4 x 12.7% 22.7% 30.0% 2.0% 3.6% 10.6% 4.6% 5.8% 12.8% 25th percentile Median 75th percentile Video Brightcove, Inc. Tremor Video, Inc. YuMe, Inc. Digital Generation, Inc. 15.24 9.17 8.32 12.51 25th percentile Median 75th percentile 465 454 284 349 (34) 137 53 339 431 592 337 688 Notes: EV = Enterprise Value Calendarised to December year end Source: Capital IQ 22
  • Selected Publicly Traded Companies Cont. usd millions, except per share data Company Price (30-Oct-13) Market Cap Net Debt Enterprise Value 0.26 7.06 2.41 64.02 12.42 23 600 7 199 1,609 12 (123) 3 (46) (70) 36 478 10 153 1,539 Revenue CY2013 CY2014 Valuation Metrics EBITDA CY2013 CY2014 P/E CY2013 CY2014 Operating Metrics Rev. Growth EBITDA Margin CY13-14 CY2013 CY2014 Mobile Velti Plc Millennial Media Inc. YOC AG 1000mercis Opera Software ASA 0.2 x 1.2 x 0.3 x 2.6 x 3.8 x n.m. n.m. n.m. 8.8 x 18.1 x n.m. 11.3 x n.m. 7.9 x 12.5 x n.m. n.m. n.m. 16.0 x 42.2 x n.m. 23.9 x n.m. 15.1 x 23.4 x 0.4% 52.6% (8.0%) 7.7% 34.1% (42.3%) 4.4% (18.2%) 31.6% 28.4% 0.6% 10.3% (3.0%) 32.5% 30.6% 0.3 x 1.8 x 2.8 x 0.3 x 1.2 x 2.6 x 11.1 x 13.4 x 15.8 x 9.6 x 11.3 x 11.9 x 22.6 x 29.1 x 35.6 x 19.2 x 23.4 x 23.6 x 0.4% 7.7% 34.1% (18.2%) 4.4% 28.4% 0.6% 10.3% 30.6% 3.8 x 6.0 x 3.2 x 4.8 x n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. 17.3% 24.8% (12.9%) (14.5%) (2.4%) (11.3%) 4.3 x 4.9 x 5.4 x 25th percentile Median 75th percentile 0.2 x 1.8 x 0.3 x 2.8 x 5.1 x 3.6 x 4.0 x 4.4 x n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 19.2% 21.0% 22.9% (14.1%) (13.7%) (13.3%) (9.1%) (6.9%) (4.6%) 0.6 x 1.2 x 1.1 x 1.4 x 2.0 x 1.9 x 0.6 x 1.2 x 1.1 x 1.4 x 1.8 x 1.8 x 13.3 x 7.7 x 9.2 x 9.6 x 10.6 x 10.9 x 11.4 x 7.3 x 8.1 x 9.1 x 9.9 x 10.3 x n.m. 16.2 x 20.5 x 17.7 x 17.0 x 16.3 x n.a. 14.7 x 15.9 x 16.0 x 15.6 x 14.8 x 7.0% 3.7% 4.4% 4.7% 5.8% 5.1% 4.5% 16.1% 12.5% 14.9% 18.4% 17.4% 4.9% 16.5% 13.5% 15.0% 18.6% 17.5% 1.2 x 1.3 x 1.8 x 1.1 x 1.3 x 1.7 x 9.3 x 10.1 x 10.9 x 8.4 x 9.5 x 10.2 x 16.3 x 17.0 x 17.7 x 14.8 x 15.6 x 15.9 x 4.4% 4.9% 5.7% 13.1% 15.5% 17.1% 13.9% 15.8% 17.3% Social CRM Bazaarvoice, Inc. Jive Software, Inc. 9.72 12.72 757 974 (85) (107) 672 867 25th percentile Median 75th percentile Diversified Agencies Dentsu Inc. Havas The Interpublic Group of Companies, Inc. Omnicom Group Inc. Publicis Groupe SA WPP plc 38.33 8.33 16.62 67.99 84.12 21.45 25th percentile Median 75th percentile 9,941 3,339 7,015 17,734 18,051 29,220 3,413 (237) 1,147 3,182 950 4,795 13,354 3,102 8,162 20,916 19,001 34,014 Notes: EV = Enterprise Value Calendarised to December year end Source: Capital IQ 23
  • Selected Publicly Traded Companies Cont. usd millions, except per share data Company Price (30-Oct-13) Market Cap Net Debt Enterprise Value 5.42 35.30 54.10 107.25 25.31 52.79 33.53 35.54 79.03 71.46 75.10 5,981 1,602 27,584 6,069 2,322 32,248 156,410 296,801 96,109 20,596 4,482 370 157 (1,644) (280) (235) 1,816 (14,569) (63,409) 2,818 (1,162) 67 6,351 1,759 25,939 5,789 2,087 34,065 141,841 233,392 98,927 19,434 4,549 Revenue CY2013 CY2014 Valuation Metrics EBITDA CY2013 CY2014 P/E CY2013 CY2014 Operating Metrics Rev. Growth EBITDA Margin CY13-14 CY2013 CY2014 Enterprise Software Sage Group plc Blackbaud Inc. Adobe Systems Inc. Concur Technologies, Inc. Qlik Technologies, Inc. Salesforce.com, Inc Oracle Corporation Microsoft Corporation SAP AG Intuit Inc. Open Text Corporation 25th percentile Median 75th percentile 2.8 x 3.5 x 6.4 x 10.0 x 4.5 x 8.6 x 3.7 x 2.9 x 4.2 x 4.5 x 3.3 x 2.8 x 3.2 x 5.9 x 8.0 x 3.8 x 6.7 x 3.6 x 2.7 x 3.9 x 4.2 x 3.1 x 9.6 x 17.0 x 21.8 x n.m. n.m. n.m. 7.8 x 7.7 x 12.3 x 12.2 x 10.8 x 9.3 x 14.9 x 19.0 x n.m. 32.2 x n.m. 7.0 x 7.3 x 10.9 x 10.6 x 10.1 x 15.1 x 29.2 x 39.7 x n.m. n.m. n.m. 13.8 x 15.3 x 17.4 x 24.3 x 19.0 x 13.8 x 26.1 x 33.1 x n.m. 60.6 x n.m. 11.0 x 12.7 x 15.5 x 19.1 x 12.6 x 2.2% 8.8% 8.5% 25.4% 18.0% 29.0% 4.2% 7.9% 7.7% 7.6% 4.5% 29.6% 20.6% 29.2% 21.6% 8.7% 13.1% 48.0% 37.4% 34.5% 37.1% 30.5% 30.1% 21.7% 30.9% 22.0% 11.8% 16.2% 51.7% 36.3% 36.0% 39.7% 31.2% 3.4 x 4.2 x 5.4 x 3.2 x 3.8 x 5.0 x 9.2 x 11.5 x 13.4 x 9.3 x 10.6 x 14.9 x 15.2 x 18.2 x 25.5 x 12.7 x 15.5 x 26.1 x 6.0% 7.9% 13.4% 21.1% 29.6% 35.8% 21.9% 30.9% 36.2% Notes: EV = Enterprise Value Calendarised to December year end Source: Capital IQ 24
  • IPO Case Study Company & IPO Overview  Based in California and founded in 2004, it was originally backed by Khosla Ventures and Accel Partners  It also offers video ad management software (YuMe for Publishers) that allows Publishers to monetize their video and app inventory  Its Connected Audience Network delivers smarter digital video advertising to TV-scale audiences watching PCs, smartphones, tablets and connected TV screens  SDKs technology resides in players and devices and collects a vast amount of screen and audience data  Placement Quality Index, or PQI, contextual scoring system uses data algorithms to assess the quality of ad placement IPO (August 2013)  Priced at $9 per share  Stock traded at a high of $9.85 and a low of $8.73, ending the day at an even $9 on its first day of trading USD Share price  Provider of digital video brand advertising solutions. Offers a range of solutions, all with the aim of maximising publishers video and app inventory and ensuring it reaches and targets the correct audience Share Price & Financials 12 12 11 11 Closed at $9 on its first day of trading, the same price at which it went out to market 10 10 9 9 Earnings release 8 Current share price: $8.32 IPO share price: $9 Current market cap: $284m Current EV: $337m EV/Rev 2013E: 2.2x EV/EBITDA 2013E: NM  Has since decreased 8% from its initial IPO price to $8.32 per share  Trading at a 50% discount to peer, Tremor Video, on EV/Rev Source – Capital IQ, Market Data as of 30th October 2013; Note – December year end 25
  • IPO Case Study Company & IPO Overview  Based in NYC, founded in 2005 and IPO in June 2013. 6 venture firms collectively owned 27.7m pre-IPO shares (68%) – largest of these were Canaan Partners and W Capital Partners  Does not own the advertising inventory it sells but purchases it from publishers on a yearly or spot bases to then sell on to advertisers  Has access to its own analytical platform, named Video Hub, which analyses in-stream video content, detects viewer and system attributes – helps optimize video advertising campaigns USD Share price  Video advertising network that enables advertisers to deliver high quality video ads across its network of premium publishers. Offers advertising across computers, smartphones, tablets and connected TVs Share Price & Financials 12 11 Closed at $9 on first day of trading, below the $10 opening price 10 9 8 7 Earnings release • As of Q1 2013 of its 500 premium websites and mobile applications partnerships , it has exclusive access to c.200 IPO (June 2013)  Priced at $10 per share  On first day of trading declined to $9  Has seen small movements with share price - slight decline of 8% to $9.17 6 Current share price: $9.17 IPO share price: $10 Current market cap: $454m Current EV: $592m EV/Rev 2013E: 4.4x EV/EBITDA 2013E: NM  Recent increase in share price followed - Issuing Q3 2013 guidance above analysts’ estimates - Launch of new demand-side platform, VideoHub Connect, to enable programmatic video ad buying platform, to rival Rocket Fuel’s proposition Source – Capital IQ, Market Data as of 30th October 2013; Note – December year end 26
  • IPO Case Study Company & IPO Overview  Based in San Francisco and founded in 2006, it was initially backed by Benchmark, DAG ventures and Temasek  Platform synchronizes with popular publishers (such as Baidu, Bing, Facebook, Google, Yahoo! and Yahoo! Japan) and third-party web and enterprise applications in order to measure the effectiveness of advertisements and the subsequent revenue generated USD Share price  Revenue Acquisition Management (RAM) multi-tenant SaaS platform that provides analytics, workflow, and optimization solutions for marketing professionals, allowing them to effectively manage their digital advertising spend across search, display, social and mobile channels Share Price & Financials 18 17 16 15 14 13 12 11  Revenues are primarily derived through subscriptions. Subscription contract terms range from six months to two years. A sticky customer base (>90% of revenue comes from existing advertisers) and over 100% renewal rates provide good visibility IPO (March 2013)  Priced at $14 per share  Rose 40% in opening hour, but closed at $16.26 on its first day (16% increase)  Has since declined 15% from its initial IPO price to $11.87 per share Closed at $16.26 on first day of trading, 16% increase on IPO price of $14 10 Earnings release 9 Current share price: $11.87 IPO share price: $14 Current market cap: $419m Current EV: $304m EV/Rev 2013E: 4.0x EV/EBITDA 2013E: NM  Recent increase in share price - Issuing Q3 2013 guidance above analysts’ estimates - Better earnings reported in Q2 2013 at 6.2% q/q revenue growth and 2.1% expansion in advertisers on platform - Revenue growth was primarily driven by new client wins, which included Ford and the US advertising division of Microsoft Source – Capital IQ, Market Data as of 30th October 2013; Note – December year end 27
  • IPO Case Study Company & IPO Overview Share Price & Financials  Leading mobile ad network provider, based in Baltimore, Maryland  Key product - MYDAS, technology and data platform, allows the connection of mobile application developers with advertisers, enabling publishers of games, music, and other content to offer free apps to smartphone and tablet users  Its targeting capabilities take into account 150 different audience targeting categories based on device usage, content consumption, and other variables, these metrics allow advertisers to specify location, demographics, affluence, intent, gender, interests and others to target their ad campaigns Share price  Founded in 2006 and initially backed by Bessemer Venture Partners, Charles River Ventures; Columbia Capital and New Enterprise Associates USD 26 24 22 20 18 IPO closed at $25 on its first day of trading (significantly above the $13 initial pricing) Patent lawsuit filed against Millennial Media Acquisition of Metaresolver 16 Acquisition of Jumptap 14 12 10 8  Key statistics: - 45% Q-on-Q revenue growth (as at Q2 2013) - Strong international revenue growth – over 200% y-on-y - 450m unique users globally per month Earnings release 6 IPO (March 2012)  Priced at $13 per share Current share price: $7.06 IPO share price: $13 Current market cap: $600m Current EV: $478m EV/Rev 2013E: 1.8x EV/EBITDA 2013E: NM  On first day of trading increased 92% to $25  Has since declined to $7.06, which is 46% below its IPO price  Recent decline attributed by analysts to: - Disappointing earnings in Q4 2012/Q1 2013 - Competition (Facebook & Google) offering single point of contact - Twitter entering market with MoPub acquisition Source – Capital IQ, Market Data as of 30th October 2013; Note – December year end 28
  • IPO Case Study Company & IPO Overview  Based in Austin, Texas and founded in 2005, it was originally backed by Austin Ventures and Battery Ventures Acquisition of PowerReviews May 24 USD Share price  Provides customer review and social commerce features for brands. Currently serves over 2,000 clients, including Costco, BestBuy, Home Depot, LG, Samsung, Vodafone and Microsoft Share Price & Financials 22 20 18 16  Offers its solutions through a SaaS conversations platform, enables clients to capture, display, and analyse online word of mouth, including consumergenerated ratings and reviews. It then syndicates that content across the Web and through the channel to reach shoppers IPO (February 2012) 14 12 10 IPO priced above the $8.00-$10.00 initial range Priced at $12.00 on Feb 24 Acquisition of Longboard Media Nov 5 Lawsuit filed against Bazaarvoice over Power Reviews acquisition 8  Priced at $12 Earnings release 6  IPO was well received by the market as the stock appreciated by c. 20% in the first month  Has since declined to $9.72, which is 19% below its IPO price  Recent increase in stock price can be mainly linked to - Conclusions expected shorty on the lawsuit filed against the company over Power Reviews acquisition - Current share price: $9.72 IPO share price: $12 Current market cap: $757m Current EV: $672m EV/Rev 2013E: 3.8x EV/EBITDA 2013E: NM Positive Q1 2014 results beating analysts’ estimates by 3% and increasing revenues y-o-y by 25% Source – Capital IQ, Market Data as of 30th October 2013; Note – Calendarised to December year end 29
  • Contact Us Julie Langley Managing Director Di: +44 (0) 20 7514 8247 E: jlangley@resultsig.com Mark Williams Manager Di: +44 (0) 20 7514 8242 E: mwilliams@resultsig.com 27 Soho Square, London, W1D 3AY t +44 20 7629 7575 | f +44 20 7629 2233 www.resultsig.com 30