K^2 Presentation from Jordan Rohan of Stifel presented on February 13th, 2014.

1. 2020 Foresight
Jordan Rohan
jrohan@stifel.com
@jordanrohan
February 13, 2014
Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be
aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision.
All relevant disclosures and certifications appear on pages 23-25 of this report.

2. 2020 Foresight
Who am I?
Why am I here?
What do I hope to accomplish today?
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3. 2020 Foresight
Introduction
Media and marketing are changing in profound ways –
marketers need to invest, experiment, and adapt quickly.
Drivers of Change
Social
Local
Media and other forms of
influence-based marketing
Local digital marketing,
including proximity
Mobile
Programmatic
Proliferation of mobile
connected devices
Ability to target consumers using
programmatic approach
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4. 2020 Foresight
…What these buzzwords really describe
Context
Intent
Identity
Location and Proximity
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5. 2020 Foresight
Brief History of Advertising and Audience Targeting
1950s-70s – Broadcast television enables marketers to reach mass
audiences for the first time. Sponsorships emerge, aligning brands
with specific television programs.
Advertisers
Agencies
Networks
“The Big Three”
Shows
Very Basic
Audience
Segments
J. Walter
Thompson
NBC
McCann-Erickson
Young & Rubicam
CBS
Barton, Durstine &
Osborn
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Source: Company websites

6. 2020 Foresight
Brief History of Advertising and Audience Targeting (cont’d)
1970s – Segmentation advances: Cable television enables marketers to
narrow focus around targeted programs on specific channels
Television – dozens of large advertisers, working w/ a dozen large agencies
Agencies
Networks
Channels
Fourth network
Advertisers
50+ by 1990
J. Walter
Thompson
A Few
More
Audience
Segments
Young & Rubicam
NBC
Barton, Durstine &
Osborn
Leo Burnett
Ted Bates
Mostly based on
gender, age,
income
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Source: Company websites

7. 2020 Foresight
Brief History of Advertising and Audience Targeting (cont’d)
2000-2010 – Google turned advertising on its head, as it leveraged the
ultimate “database of human intent.” Keyword-based targeting emerged.
Advertisers
Several Million
Search
Destinations
Keyword Targeting Reigns
Harness Human
Intent
Major Corporations
Small/Medium-Sized
Businesses
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Source: Company websites

8. 2020 Foresight
Paid Search Driven by Google, Monetizing Intent
Google’s dominance driven by massive scale, intent, data, and a bit
of context and identity
Google
U.S.
Search
Revenues
% of Total
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Source: BI/Kelsey, Stifel estimates

9. 2020 Foresight
Brief History of Advertising and Audience Targeting (cont’d)
2010 and beyond – Millions of publishers offer inventory on dozens of exchanges with hundreds of
intermediaries using cookie-based tracking to combine intent with demographics
Facebook ushers in a new era of micro-segmentation of audience by verified personal information and
becomes the largest publisher
Agencies
DSPs
Exchanges
#1
Publisher
Networks
Intent-Aware Audience
Targeting Re-Emerges
Auto
Health
- Used/New
/Imported
car buyers
- Fitness buffs
- Individuals
on a diets
Lifestyle
- Football fans
- Singles
- Parents
- Ex-military
Travel
- Business/
vacation/
winter sports
travelers
Technology
- Early adopters
- Computer
shoppers
- Gadget lovers
Finance
- Loan seekers
- Stock traders
- Retirement
planners
Entertainment
- Book readers
- TV enthusiasts
- Comedy fans
- Video game players
Shopping
- Budget
conscious
- Affluent
consumers
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Source: Company websites

10. 2020 Foresight
Social Media Spend Driven by Facebook, Introducing Identity
Facebook’s growth driven by massive scale, identity, and data
Facebook
U.S. Ad
Revenues
% of Total
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Source: BI/Kelsey, Stifel estimates

11. 2020 Foresight
Local Businesses Adopting Digital Marketing
No clear leader in local advertising… yet
Digital
Local
Spending
% of Total
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Source: BI/Kelsey, Stifel estimates

12. 2020 Foresight
… That page again, with the category leaders
Context
Intent
Identity
Location and Proximity
No winner yet
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13. 2020 Foresight
Brief History of Advertising and Audience Targeting (cont’d)
2010+ – Facebook ushers in a new era of Micro-segmentation of Audience
by Verified Personal Information
Advertisers – Anyone and Everyone
Corporations
SMBs
Individuals
Publishers – Newsfeeds
Hundreds of millions of users log billions
of impressions in social media
newsfeeds on multiple devices
Audience Segments – Down to the individual regardless of device
The various “graphs” mapped by
major platforms can triangulate
specific, actionable characteristics
to create a robust identity that
marketers can target across any
device
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Source: Company websites, enterprise20

14. 2020 Foresight
Many Players Trying to Win in Local and Proximity-based Marketing
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Source: company websites

15. 2020 Foresight
But local and proximity-based marketing is not solely about
keywords and bid prices
The approach requires data-infused logic, testing and iteration, and
machine learning
And … “Situational Targeting”
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16. 2020 Foresight
Mobile Devices Make It Possible to Reach People Everywhere… Now what?
Smartphone shipments are expected to grow from 826 million to 2.5
billion units globally by 2020, an estimated 17% CAGR
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Source: Seo4Site.com, statista

17. 2020 Foresight
Internet Themes – Connected Devices
Connected Devices Now Outnumber People in the World By 2020, there could be
5-10 connected devices per person
millions
Smartphones
Computers
Tablets
Integrated Cars
Smart TVs
Video Game Consoles
Other Connected Devices
Total
Total Population
Number of Devices per Person
2006
Devices Penetration
328
5%
1,540
24%
500
8%
0
0%
0
0%
15
0%
13
0%
2,395
6,552
0.4
2013E
Devices Penetration
1,430
20%
2,200
31%
500
7%
23
0%
150
2%
250
4%
2,700
38%
7,253
7,098
1.0
2020E
Devices Penetration
5,037
66%
1,168
15%
1,095
14%
152
2%
537
7%
352
5%
40,000
NM
48,342
7,631
6.3
Other connected devices include household appliances, medical devices, wearable
technology, and automated systems (public transportation, security, automated
manufacturing, etc.) among many other categories
All statements in this report attributable to Gartner represent Stifel's interpretation of data, research opinion or viewpoints published as part of a syndicated
subscription service by Gartner, Inc., and have not been reviewed by Gartner. Each Gartner publication speaks as of its original publication date (and not as of the
date of this report). The opinions expressed in Gartner publications are not representations of fact, and are subject to change without notice.
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Source: Stifel estimates, Gartner, Statista, World Census, Various news articles

18. 2020 Foresight
Internet Themes – The Internet of Things
Situational Targeting of every person in every location based
on every available source of data
Transportation
Home Security
E-Commerce
Efficiency
Health
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Source: company websites

19. 2020 Foresight
How do we think about all this?
The best overall athlete wins
Lebron James Stats
Age: 29 years
Height: 6’ 8”
Weight: 245lbs
Wingspan: 7’
Body Fat: 6.7%
Points/Game: 26
* Sincere apologies to Warriors fans, after last night’s buzzer beater
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Source: NBA

20. 2020 Foresight
Characteristics of the Best Athlete
Five common characteristics of the leading
consumer-facing Internet platforms
1. Audience Dominance
2. Mobile Engagement
3. Facility with Big Data
4. Dual Platform Monetization
5. Attractive Margin Structure
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21. 2020 Foresight
The Dominant Digital dozen
Each of our Dominant Digital Dozen companies exhibits at least 4 out of 5 key traits
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Source: Company websites, Stifel estimates

22. 2020 Foresight
Future of Advertising
Minority Report
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Source: Twentieth Century Fox

23. 2020 Foresight
Conclusions
1. The proliferation of connected devices requires situational
targeting around location and proximity
2. Given that challenge, it is important to ally with the best
marketing “athletes”
3. Marketers and software platforms also need to invest in
proprietary data, tracking, and analytics
Context
Intent
Identity
Location and Proximity
22
Source: silabs.com

24. 2020 Foresight
Important Disclosures and Certifications
Important Disclosures and Certifications
We, Jordan E. Rohan and Michael B. Purcell, certify that our respective views expressed in this
research report accurately reflect our respective personal views about the subject securities or
issuers; and we, Michael B. Purcell and Jordan E. Rohan, certify that no part of our compensation
was, is, or will be directly or indirectly related to the specific recommendations or views contained
in this research report. For our European Conflicts Management Policy go to the research page at
www.stifel.com.
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25. 2020 Foresight
Important Disclosures and Certifications (Continued)
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26. 2020 Foresight
Important Disclosures and Certifications (Continued)
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