LUMA's 2014 MMA Summit Keynote

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  • 1. SURVIVING MOBILE’S ROLLER COASTER FUTURE Terence Kawaja
  • 2. Why Are You Listening to an Investment Banker?
  • 3. Unlearning What They Teach You on Wall Street THE ! RED SUIT RULE!
  • 4. Mobile Becomes a Greater Part of Everyday Life Source: KPCB
  • 5. Greatest Advertising Opportunity is Mobile… Source: KPCB Dollars  vs.  Time  Spent  in  US   Mobile   Opportunity   5% 12% 38% 25% 20%19% 10% 45% 22% 4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Print Radio TV Internet Mobile Time Spent Ad Spend
  • 6. …And Spend Continues to Increase Source: KPCB $8.8   $17.8   $32.7   $49.7   $69.1   $88.6   $108.9   2012   2013   2014   2015   2016   2017   2018   CAGR:  52%   Global  Mobile  Ad  Spend  ($BN)  
  • 7. This is going to be awesome!
  • 8. 10 9 19 22 19 22 18 - 5 10 15 20 25 2008 2009 2010 2011 2012 2013 2014* Mobile M&A Deals Are Up
  • 9. 10 9 19 22 19 22 18 - 5 10 15 20 25 2008 2009 2010 2011 2012 2013 2014* Mobile M&A Deals Are Up, But Few Scaled Exits $100MM $230MM $350MM $240MM $321MM $275MM $675MM 7 of 110 DEALS
  • 10. $190 $287 $170 $628 $342 $218 $0 $100 $200 $300 $400 $500 $600 $700 2008 2009 2010 2011 2012 2013 Mobile Ad Tech Funding Continues to Decrease Source: BI Intelligence. Mobile  AdverFsing  Financings  ($  millions)  
  • 11. Layer Not a Channel
  • 12. Digital Marketing Channels Search Display Social Video Mobile ?
  • 13. Mobile is a Layer, Not a Channel Search Display Social Video
  • 14. Data Collection
  • 15. The Cookie-less World of Mobile No Cookies?! DEVICE ID
  • 16. Cross-Screen is Now a Marketing Imperative Logged  in  individuals   Direct  match  of     devices  to  people   Algorithmic  match   Perfect   Knowledge   DeterminisFc     Matching   ProbabilisFc   Matching   Types  of  Device  Matching  
  • 17. Creates“Walled Gardens”of First Party Data…
  • 18. …Continue Expansion Through 3rd-Party Networks
  • 19. 259%  Growth   2014   $32.7  Billion   Other   22%   47%   Mobile Advertising is Concentrating Source: eMarketer 2012   $8.8  Billion   Other   5%   53%  
  • 20. Marketers The  “Ad  Tech  Squeeze”   Publishers Commerce Large Digital Players Are In-Sourcing Ad Tech
  • 21. Bifurcated Market
  • 22. CPI  for  LTV   App  on  App   The Two Worlds of Mobile Advertising CPM  /  CPA   General  Marketers  
  • 23. Apps Continue To Dominate Time and Revenue $2 $3 $6 $14 $24 $38 $0 $10 $20 $30 $40 2008 2009 2010 2011 2012 2013 Mobile Web Apps ($  in  billions)   Mobile  Revenue   Source: BI Intelligence 86%  OF   TIME  SPENT   ON  MOBILE   APPS   ACCOUNT  FOR  
  • 24. Increasingly More Expensive to Acquire Loyal Users Fiksu  Cost  Per  Install  Index   $0.82 $1.28 $1.01 $1.31 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 Jan-13 Jan-14 iOS Android Source: BI Intelligence, FIiksu 34%  INCREASE  IN     COST  PER   LOYAL  USER   OVER  LAST   YEAR  
  • 25. Freemium Apps Continue to Gain Traction Source: KPCB 88% 90% 91% 92% 93% 94% 94% 12% 10% 9% 8% 7% 6% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014F 2015F 2016F 2017F Free Paid
  • 26. CPI  for  LTV   App  on  App   The Two Worlds of Mobile Advertising Cost  per  Re-­‐engagement   CPM  /  CPA   General  Marketers  
  • 27. CPI  for  LTV   App  on  App   The Two Worlds of Mobile Advertising CPM  /  CPA   General  Marketers  
  • 28. Inventing New Formats
  • 29. CPI  for  LTV   App  on  App   The Two Worlds of Mobile Advertising CPM  /  CPA   General  Marketers  
  • 30. Source: Garnter, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates, eMarkter US Mobile Video Viewers MillionsofViewers Mobile Video Explosion
  • 31. ConnecFvity  Entertainment   ProducFvity   PASSIVE   ACTIVE  ATTENTIVE   Consumer Modality Matters
  • 32. Mobile banner ads are ineffective
  • 33. …and disruptive ads annoy the consumer FACILITATIVE   INTERRUPTIVE   InformaFve   Intolerable  
  • 34. Mobile-first native formats are better for marketer and consumer Consumer in control – unobtrusive ad Experience within page; Engages the consumer Leverages data to effectively target Connects through various touch points
  • 35. Content Is Critical to Branding
  • 36. Bridges Physical and Digital Worlds
  • 37. CPI  for  LTV   App  on  App   The Two Worlds of Mobile Advertising CPM  /  CPA   General  Marketers  
  • 38. Mobile Bridges the Physical & Digital Worlds
  • 39. …and Facilitates the Path to Purchase Source:  BIA/Kelsey   LocaFon   PersonalizaFon   FacilitaFon  
  • 40. Search   90%   Take   AcFon   70%   Connect     66%   Visit   36%   Purchase   23%   Review   ONLINE  OFFLINE   Connect  online   (Maps/Direc=ons,  etc.)   Call   Visit  Website   Visit  Store   Online   In-­‐store   Online-­‐Review   WOM   52%   50%   26%   13%   50%   48%   21%   15%   Mobile Flattens the Purchase Funnel
  • 41. Opportunity Ahead
  • 42. Advertising $180bn Digital Advertising $51bn Sources: eMarketer, Forrester, Gartner, The Nilson Report, LUMA estimates Programmatic $10bn Reorienting the TAM Opportunity
  • 43. Communications $1,2000bn Commerce $4,430bn eCommerce $305bn mCommerce $58bn Marketing $432bn MarTech $181bn Advertising $180bn Digital Advertising $51bn Programmatic $10bn SaaS $17bn Sources: eMarketer, Forrester, Gartner, The Nilson Report, LUMA estimates Reorienting the TAM Opportunity Payments $88bn
  • 44. Strategic Buyer LUMAscape
  • 45. Significant Recent Digital M&A Activity
  • 46. LUMA’s Content Strategy: Substance and Fun! Over 300,000 views!
  • 47. Investment Banking. Evolved. New York – Palo Alto lumapartners.com Thank you.