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What's hot in marcoms? eCommerce

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As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in this rapidly evolving landscape.

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What's hot in marcoms? eCommerce

  1. 1. 1 Introduction 11 What’s hot in marcoms today? Q3 2014
  2. 2. What’s hot in marcoms? 2 As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in this rapidly evolving landscape. One of our key tools is our global deal tracker, which gathers the details of all completed deals in this sector, subcategorised and cross referenced by our team of analysts. This, along with the hundreds of conversations we have each month with both buyers and sellers, enables us to continuously identify emerging M&A trends. With the ever blurring boundaries between “marcoms” and “martech”, it is maybe unsurprising to see that the most talked about subsectors sit at their convergence points, namely : 1. Content marketing 2. Data & analytics, 3. eCommerce 4. Digital marketing; and 5. Mobile marketing This paper examines each subsector, the key trends and deal activity in 2014 YTD using both proprietary and third party data, which is referenced on page 55. Introduction
  3. 3. eCommerce Sector Overview Market Overview
  4. 4. 4 eCommerce Market Overview Back-end • Platform providers that offer the fundamental eCommerce technology platform • Product: re-usable software that can be implemented by a third party or in-house developers Integration • Systems integrators and front-end agencies with systems integration capabilities by own middleware or partnership • Service: bespoke eCommerce platforms to businesses’ specific enterprise systems Front-end • Digital design agencies with systems integration capabilities and pure front-end digital design agencies • Service: design the customer facing website – the front-end of an integrated eCommerce platform Full solution providers Use either third party or proprietary software as a starting point in delivering a fully functional online store Technology Marcoms services eCommerce value chain
  5. 5. 5 eCommerce Market Overview Other Demandware Hybris Magento Back-end Integration Front-end Market landscape: Illustrative
  6. 6. 6 eCommerce Market Overview 35% 32% 23% 4% 4% 2% APAC North America Western Europe Central & Eastern Europe Latin America Middle East & Africa Regional share of Global eCommerce sales 2014 Global eCommerce sales forecast 2012 - 2017 • Largest eCommerce market in the EU • Very mature: 39m people out of the UK’s 63.3m strong population already buy online • Online retail accounts for 13% of the UK economy UK • Total eCommerce sales in the USA are expected to grow 15.5% to $304b by the end of 2014 • Online retail is expected to account for 6.8% of all retail in 2014 and 9% by 2017 USA • In 2014 consumers in APAC will spend more online than those in North America • It is estimated that China will account for six in every ten dollars of the total APAC spend APAC 0 200 400 600 800 1000 1200 2012 2013 2014 2015 2016 2017 APAC North America Western Europe Rest of the World Key trends & global statistics (10)
  7. 7. 7 eCommerce Market Overview 1,058 1,251 1,505 1,771 2,053 2,357 22.3% 18.2% 20.3% 17.7% 15.9% 14.8% 2012 2013 2014 2015 2016 2017 Sales ($bn) YoY growth Global eCommerce customers Global eCommerce B2C sales forecast • Twice as much spent on mobile devices in Dec-2013 compared to Dec-2012 • Increases in services that utilise multiple channels driving growth • Such services include click/reserve and collect which accounted for 25% of multichannel retail sales 2013 • Expanding online and mobile user bases in emerging markets • Increasing mCommerce sales • Developing payment and shipping options • Pushing into new international markets Driving growth in 2014 • International B2C eCommerce sales are expected to reach $1.5tn in 2014 and $2.4tn in 2017 • Growth driven by an increasing internet ‘usership’ as emerging markets come online and an increasing proportion shop digitally Looking forward Key trends & global statistics cont’d. (11) 904 1,016 1,124 1,229 1,321 39.2% 41.3% 42.7% 44.3% 45.4% 2012 2013 2014 2015 2016 Number of global customers (millions) Digital buyer penetration
  8. 8. 8 eCommerce Market Overview Key trends (12) Trends • Tablet first design Default for responsive websites is still desktop – with tablets overtaking PCs in 2016 it is likely that responsive websites will be designed for tablet first • Cross-channel purchase journeys Currently cross-channel purchase journeys are being enabled by location and identification tools/solutions, i.e. iBeacons, and wearables such as Galaxy gear and the Apple Watch • Mobile payments won’t take off until 2015 Consumers still need a convincing reason to use mwallets and until then retailers are unlikely to invest in this technology. A large number of different mwallet technologies have come to market recently – still not known which of these will make the biggest impact • Consumers learning value of data and privacy Consumers are becoming more savvy about their digital presence and the value of their data to advertisers. Needs to be a clearer value exchange – so consumers are incentivised to provide eTailers with data about themselves and are aware of where that data is going • Mobile and tablet purchase points One in five store checkouts will take place on a mobile/tablet by 2015 • Reduce high return rates eTailers currently face high return rates. On average return rates are 25% but some eTailers face return rates of >50%. Solutions such as virtual changing rooms are attempting to combat this
  9. 9. eCommerce Sector Overview M&A Market
  10. 10. 10 eCommerce M&A Market Q3 Q1-Q3 2014 eCommerce deals (13) Target Region Deal Volume Major Buyers Deal Types Quarterly Split 2 1 UK Africa APAC Western Europe 7 North America 4 3 4 Cross Border PE Backed 6 2 11 5 3 1 3 1 Publicis WPP Dentsu Q2 Q1 19 Total Deals 1
  11. 11. 11 eCommerce M&A Market Date Buyer Target Target Location Target Description Sep-14 UK Multichannel eCommerce integrator specialising in Hybris Sep-14 USA Multichannel eCommerce integrator specialising Oracle and Demandware Sep-14 South Africa eCommerce integrator and application developer July-14 USA Web/enterprise content management and systems integration agency Jun-14 Japan eCommerce website design and build agency May-14 USA IBM Smarter Commerce division of Trifecta acquired; IBM WebSphere Commerce solutions consultancy May-14 UK Multiservice digital agency with eCommerce website design and build specialty Apr-14 France Sage France SA, eCommerce business acquired; France-based eCommerce business solutions provider Mar-14 USA Provider of mobile and multichannel commerce solutions and websites Jan-14 UK Retail and eCommerce systems integrator Q1-Q3 2014 selected transactions
  12. 12. Contents 01 Content Marketing 4 02 Data & Analytics 15 03 eCommerce 22 04 Digital Marketing 32 05 Mobile Marketing 42 06 References 54 07 About Results 56
  13. 13. 13 Mobile Marketing M&A Market References 1) Results Intelligence 2) Advantage Business Media’s digital road map, AdAge 3) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK 4) Nativeadvertising.com 5) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK 6) Content Marketing in the UK, Content Marketing in North America: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA 7) CapIQ, 451, OneSource, Results Intelligence 8) ExactTarget Marketing Cloud 2014 State of Marketing Survey, Deloitte Analytics Trends 2014, IBM, TechRepublic 9) CapIQ, 451, MergerMarket, Results Intelligence 10) eConsultancy (January 2014), eMarketer (January & April 2014), International Business Times (October 2013), eCommerce Week (January 2014), bpost International (January 2014) 11) eConsultancy (January 2014), IMRG (January 2014), eCommerce Week (January 2014), bpost International (January 2014), Statista (2014) 12) The Drum (February 2014), Talk Business Magazine (December 2013) 13) CapIQ, 451, MergerMarket, Results Intelligence 14) eMarketer (March 2014) 15) IAB Digital Adspend 2013 16) eMarketer (June 2014) 17) IAB/PWC Adspend 2013 18) IAB Digital Adspend 2013 19) CapIQ, 451, MergerMarket, Results Intelligence 20) Cisco VNI Mobile (2014), NPD DisplaySearch (February 2014), IDC Worldwide Quarterly Tablet Tracker (2014) 21) IAB Native Advertising Playbook (2013), BIA/Kelsey 22) eMarketer (July 2014), Gartner (2013) 23) Google & Nielsen (March 2013), Cisco VNI Mobile (2014), relevant press, company websites 24) Gartner (September 2014), relevant press, company websites, Results Intelligence 25) eMarketer (August 2013), Kenshoo (December 2013) 26) CapIQ, Companies House documents, Press, company websites, Results intelligence
  14. 14. 14 About Results Corporate Finance Advisors to the Marketing Services & Marketing Technology sectors Selected clients and transaction counterparties An established team of sector experts… • 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 • Winner of Cross-Border Deal of the Year 2014 (sale of We Are Social to Blue Focus) Software Marketing Services Marketing Technology Digital Media Sector specialism …with global reach
  15. 15. 15 About Results has been acquired by has been acquired by has been acquired by has been acquired by has been acquired by has invested in has been acquired by launched a new global creative network 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 Unrivalled expertise in the Marcoms sector
  16. 16. 16 About Results Mark Williams Director • Joined Results in 2010, with over 15 years of M&A experience • Prior to joining Results Jim led European M&A activity for the marketing services division of Omnicom (DAS) • Clients include We are Social, Blue Rubicon, Virgo Health, Crayon and Iris • 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 The Group, Figtree, Monitor Media, Spannerworks, Flip Media, Transactis, Punktilio, Flamingo, Brand X, and AIA • 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 Staffcare, Moonpig, St Ives, and Inflexion Julia Crawley-Boevey Director • 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 2012 to lead the tech and digital media practice • 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 • Joined Results in 2014, with over 15 years M&A experience • Prior to joining Results, Chris led the Technology M&A practice at KPMG. He previously spent 11 years advising tech companies at Arma Partners and JPMorgan • Recent clients include Zinc Ahead, Pushbutton and Irdeto James Kesner Manager • Joined Results in 2013 from Kingston Smith • ACA qualified, previously worked as a Finance Director for a London based brand consultancy • Clients include ID magazine, Not to Scale, Writtle, Adam and Eve Richard Latner Manager • Joined Results in 2014 after having spent 9 years at KPMG across audit, TS & M&A functions • Clients include: WRG, Irdeto and neoworks Selected Team Members Jim Houghton Partner Keith Hunt Managing Partner Julie Langley Partner Chris Lewis Managing Director
  17. 17. 17 About Results Selected Team Members – International • Long career in marketing sector (Ogilvy & Mather, The Ball Partnership) • Managed the acquisition of SMART by McCann Worldgroup, CCG by Publicis Group to establish Digitas China, CIC by Kantar Media and The Upper Storey by Isobar Andrew Kefford Managing Partner – Asia Pacific & MENA Chris Beaumont Managing Partner – 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 • Has closed over 35 transactions totaling $0.75 billion • Experience includes advising Hunt Mobile Advertising on its transaction with Opera Mediaworks • Maurice has previously worked at the Zanett Group, Morgan Stanley and IBM Maurice Watkins Partner • 27 years experience in the advertising sector, including as COO of JWT's Middle East Network • Joined Results International in 2008 and has since been engaged in a number of buy and sell mandates Imad Kublawi Regional Partner – MENA • 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 Sunil Gupta Area Liaison – South Asia USA Asia Pierre-Georges Roy Partner • Closed $4.0 billion in cross-border transactions • Experience includes advising Hunt Mobile Advertising on its transaction with Opera Mediaworks and Telesystem International Wireless (NASDAQ: TIWI) on its sale to Vodafone
  18. 18. For more information contact: Jim Houghton Partner +44 (0) 20 7514 8234 jhoughton@resultsig.com Julia Crawley-Boevey Director +44 (0) 20 7514 8239 jcrawley-boevey@resultsig.com Disclaimer: 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.

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