Advertising and Marketing Technology Perspective

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

•

in July 2012

•

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

•

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


6

Marketing Technology Landscape – Illustrative Companies
Marketing Automation

Subsegments

•
•
•

Omnichannel Campaign
Management
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 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
-


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


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)

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.

software

Sep-12

Norwest Venture, Trinity Ventures,
US Venture, Voyager Capital

16

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.

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.

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


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


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.


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.


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


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

May-13

n.a.

n.a.

Platform for social video
advertising

Jul-13


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.


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


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.


Apr-13


4

Targeting technology for
video advertising

Mar-12

13

1.4x


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

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


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


Calendarised to December year end
Source: Capital IQ

22

Selected Publicly Traded Companies Cont.
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


Source: Capital IQ

23

Selected Publicly Traded Companies Cont.
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%


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

 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


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)
 On first day of trading declined to $9
 Has seen small movements with share price - slight decline of 8% to $9.17

6

IPO share price: $10
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


26

IPO Case Study

 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


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)
 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 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


27

IPO Case Study


 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)

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


28

IPO Case Study

 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


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 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

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