The Program – New Media specialist Troy Centazzo reviewed the rapid trends in marketing and provided strategic insights into where marketers and investors should be focusing their attention. Attended by hundreds of media industry investors, companies, strategic firms, analysts, and others.

1. The State of Advertising –
Trends, Opportunities and Challenges
February 1, 2011
1:00 pm EST / 10:00 am PST

2. Overview
• About our Sector Snapshot Program
• Growthink’s Bottom Line**
– Mr. Troy Centazzo, Managing Director
• The View from the Trenches
– Mr. Mike Mothner, Founder and CEO,
WPromote
– Mr. Trevor Shanski, Founder and President,
eWORDofMOUTH
**See Bonus Pack in Back

3. About Our Sector Snapshot Program
1. 45 Minute Webinar
2. Questions/comments as we go:
– Type in utilizing GoToWebinar toolbar
3. After Call:
– Survey feedback
– Within 2 hours after the call, you will receive, via
email, copies of the reviewed slides
**This presentation does not constitute a general offering or
solicitation to purchase or acquire securities.

5. The Ad Universe (Pre-Internet)
Print Advertisements in Newspapers and Magazines; Short and Long-Form Commercials and Sponsorships on
Radio and Television; Billboards and Signs; Public Relations; Direct Mail and Catalogs; Tiny Classified Ads;
Network Marketing

6. Massive Opportunity for Emerging Firms:
Advertisers Have Not Yet Shifted Spend to Meet Consumer Behavior
• The Guru Speaks
Represents an
Represents an
Incremental $50B
Incremental $50B
Global Opportunity
Global Opportunity
Source: (Then) Morgan Stanley Analyst, Mary
Meeker, in her presentation at the Nov, 2010
Web 2.0 Summit
• Why?
• Advertiser concerns about social media and mobile ad ROI
• Natural lag time for ad spend to catch up with new offerings
• Internal disagreement over social media management (marketing? PR? IT?)
• Advertisers are now “drinking out of a fire hose” with so many options

7. Sector on Fire:
The M&A Wave and Venture Investment
Acquisition Experian Buys In To Social Media Marketing Jan 17, 2011 N/A
Venture Capital SnagFilms Raises $10 Million From Comcast, NEA; Will Expand Beyond Docs Jan 17, 2011 $10,000,000
Acquisition Travel Organizer TripIt Sold To Concur For Up To $120 Million Jan 13, 2011 $120,000,000
Acquisition RockYou Buys Social Game Developer Playdemic Jan 13, 2011 N/A
Acquisition After Absorbing Adify, Cox Digital Buys IB Local Jan 13, 2011 N/A
Acquisition LivingSocial Expands Abroad By Buying A Stake In Let’s Bonus Jan 13, 2011 N/A
Acquisition Daily Deals By Newspapers: Archant Buys A Local Groupon Clone Jan 13, 2011 N/A
Venture Capital Primesense Raises Undisclosed Amount From Silver Lake Partners Jan 12, 2011 N/A
Venture Capital Baynote Closes $13M From SingTel Innov8 Jan 12, 2011 $13,000,000
Venture Capital Formspring Raises Over $12 Million In First Round Jan 12, 2011 $11,500,000
Venture Capital Adknowledge Raises $200 Million In Debt, Equity Financing Jan 12, 2011 $200,000,000
Venture Capital Tumblr Raises $30 Million In New Round Led By Sequoia Dec 17, 2010 $30,000,000
Venture Capital As Regulatory Scrutiny Intensfies, Ad Targeter eXelate Adds To Second Round Dec 16, 2010 $16,000,000
Acquisition AOL Acquires Display Ad Tool Pictela; Project Devil Gets Full Roll Out Dec 16, 2010 N/A
Venture Capital Twitter Raises $200 Million In Funding Round Led By Kleiner Perkins Dec 15, 2010 $200,000,000
Venture Capital As Video Space Heats Up, SpotXchange Closes $12 Million Round Dec 15, 2010 $12,000,000
Venture Capital Social Net For Gay Men Fab Gets $1.75 Million More From WaPost, Others Dec 13, 2010 $1,750,000
Venture Capital Social Ad Targeter Media6degrees Raises $17 Million Second Round Dec 13, 2010 $17,000,000
Source: Content Next Media, Inc., Paid Content.org, http://paidcontent.org/deals/#item_4899, retrieved January 31, 2011.

8. Growthink’s Bottom Line
1. Emerging Ad Business Models We Like
2. Promising Strategies for Corporate Advertisers
3. Areas of Opportunity for Advertising and Marketing
Companies and Agencies

9. Emerging Ad Business Models We Like
• Technology and service providers that…
1 2 3 4
…help marketers …enable …can rapidly …provide video
sort through companies to scale with technology to
the thousands of upgrade their proprietary enhance online
options they now customer access to / / mobile
databases
have to assist technology presence and
and integrate
decision making for Facebook user experience
with
communicati Ads
ons

10. Promising Strategies for Corporate Advertisers
• There is still a significant opportunity to optimize a Web 2.0 platform
with limited investment
1 2 3 4
Search Engine Collecting Yes, social Video added to
Optimization customer info; media your website,
(SEO); CRM/Data campaigns, but mobile, social
Educational management; done right (not strategy
Content; Web- Loyalty just a Facebook
based lead gen; programs
page)
Public Relations
Large ROI Potential
We’re not really focused on the Fortune 1000+ here; they’re investing heavily in these areas.

11. Areas of Opportunity for Advertising and Marketing Companies
• A young company must cut through the crowded marketplace for
advertising and marketing offerings
1 2 3 4
Don’t Establishing Create channel Want to exit?
underestimate credibility partnerships Understand
the importance for prospective early with evolving
of hiring your customers – complementary strategies of
first head of client logos, firms with acquirers and
sales & PR, education, access to targets set milestones;
marketing content Advisory Board
Despite what the engineering team says, the coolest technology won’t sell itself.

12. Areas of Opportunity for Advertising and Marketing Agencies
• Continued willingness of enterprise-level clients to work with small, highly
creative agencies; huge need in middle market for integrated marketing and
“social media” advice
1 2 3 4
If you haven’t yet Develop Market your Want to exit?
integrated “white label” firm as well as Know the key
digital and channel you market your acquisition
social media partnerships clients – metrics of the
services, you’re with become the leading buyers
at risk of future technologies / industry and focus on
extinction services experts milestones.
Acquisition interest will likely be there upon reaching critical mass; there’s a
massive amount of capital available for acquisitions.

13. The Coming M&A Wave:
Unprecedented Capital for Sector Acquisitions
Who Doesn’t Want to Enter the Marketing, Advertising and Data Services Business?
And These Are Just the “Usual Suspects,” Not Tier 2 - 3 Buyers

14. Another Look:
The M&A Wave and Venture Investment
Acquisition Experian Buys In To Social Media Marketing Jan 17, 2011 N/A
Venture Capital SnagFilms Raises $10 Million From Comcast, NEA; Will Expand Beyond Docs Jan 17, 2011 $10,000,000
Acquisition Travel Organizer TripIt Sold To Concur For Up To $120 Million Jan 13, 2011 $120,000,000
Acquisition RockYou Buys Social Game Developer Playdemic Jan 13, 2011 N/A
Acquisition After Absorbing Adify, Cox Digital Buys IB Local Jan 13, 2011 N/A
Acquisition LivingSocial Expands Abroad By Buying A Stake In Let’s Bonus Jan 13, 2011 N/A
Acquisition Daily Deals By Newspapers: Archant Buys A Local Groupon Clone Jan 13, 2011 N/A
Venture Capital Primesense Raises Undisclosed Amount From Silver Lake Partners Jan 12, 2011 N/A
Venture Capital Baynote Closes $13M From SingTel Innov8 Jan 12, 2011 $13,000,000
Venture Capital Formspring Raises Over $12 Million In First Round Jan 12, 2011 $11,500,000
Venture Capital Adknowledge Raises $200 Million In Debt, Equity Financing Jan 12, 2011 $200,000,000
Venture Capital Tumblr Raises $30 Million In New Round Led By Sequoia Dec 17, 2010 $30,000,000
Venture Capital As Regulatory Scrutiny Intensfies, Ad Targeter eXelate Adds To Second Round Dec 16, 2010 $16,000,000
Acquisition AOL Acquires Display Ad Tool Pictela; Project Devil Gets Full Roll Out Dec 16, 2010 N/A
Venture Capital Twitter Raises $200 Million In Funding Round Led By Kleiner Perkins Dec 15, 2010 $200,000,000
Venture Capital As Video Space Heats Up, SpotXchange Closes $12 Million Round Dec 15, 2010 $12,000,000
Venture Capital Social Net For Gay Men Fab Gets $1.75 Million More From WaPost, Others Dec 13, 2010 $1,750,000
Venture Capital Social Ad Targeter Media6degrees Raises $17 Million Second Round Dec 13, 2010 $17,000,000
Source: Content Next Media, Inc., Paid Content.org, http://paidcontent.org/deals/#item_4899, retrieved January 31, 2011.

15. Opportunities for Early Stage Investors
• Trends in venture investing have been challenging for many traditional VCs, but
provide opportunities that have never existed before for:
• start-ups seeking capital, and
• angel investors seeking access to quality deals
• The AngelList provides first-of-its-kind access to angels and deals
• Requirements to join: Accredited; Active seed stage investor

16. “In The Trenches” – Q&A with Emerging Firms

17. WPromote - Online Advertising / Marketing Firm
• Interview with Mike Mothner, Founder and CEO
• Founded WPromote in 2001
• Provides online marketing services to clients ranging
in size from small businesses to the Fortune 500
• Rated as #1 Search Engine Marketing Firm
Worldwide (topseos.com) and winner of numerous
industry awards
• Competes with thousands of marketing services
agencies, consultants and other providers
• 60 employees
• 35,000 clients

18. WPromote – Representative Agency Clients

19. eWORDofMOUTH – Referral-based marketing services
• Interview with Trevor Shanski, Founder and President
• Founded eWORDofMouth in 2004
• Provides a software-based product (SaaS) for
companies to rapidly attract new customers and
contacts by sourcing them from their existing customers
• Customers receive a promotion through email to provide
their friends’ email and/or mobile info; they then receive
a promotion
• Fully managed solution with creative services –
reporting, ROI
• Leverages referrals and word of mouth
• Incorporates social media programs

20. eWORDofMOUTH – At a Key Inflection Point
• Recently focused on client acquisition after finalizing
software technology and raising seed round
• Clients and pipeline:

21. Conclusions
1. Massive changes in consumer behavior and most advertisers
have not been able to adjust quickly.
2. There are SO many opportunities / ways / means / to reach
out and interact with customers. This is good and bad.
3. Because of the global speed and reach of new media (i.e.,
Twitter’s coverage of Egypt), there will be bigger and faster
winners (i.e., Facebook, Groupon, et al.) and more
spectacular busts than ever before.

22. To Learn More
• Questions / Discussion
• Return our survey
• Contact:
– Stacey Polychronis: 310-954-2013
– Email: stacey.p@growthink.com

23. Bonus Pack
The State of Advertising –
Trends, Opportunities and Challenges

24. GT’s Brief History of Advertising
3.4 million years ago
Paleontologists recently
Paleontologists recently
discovered that hominid species
discovered that hominid species
likely showed each other how to
likely showed each other how to
use stone tools, leading to
use stone tools, leading to
countless Tupperware parties
countless Tupperware parties
4000 BC
Middle Ages
“Lost and Found” ads and
“Lost and Found” ads and
signs posted on papyrus in
signs posted on papyrus in
Signs posted with images to
Signs posted with images to Ancient Greece and Rome
Ancient Greece and Rome
th
17 Century represent services available
represent services available
Handbills and ads in weekly
Handbills and ads in weekly
newspapers
newspapers Web 1.0 – about 1.75
Web 1.0 – about 1.75
Oct, ‘94
1960s – 90s
19th Century
The start of the “Creative
The start of the “Creative
Mail order ads and the
Mail order ads and the Revolution,” the modern period
Revolution,” the modern period
first agencies appear
first agencies appear of advertising
of advertising
Early 20th Century The Last 3 Years
Sponsorships of radio programs; celebrity
Sponsorships of radio programs; celebrity
endorsements. Mary Pickford paves the
endorsements. Mary Pickford paves the
way for Kim Kardashian’s $10k tweets.
way for Kim Kardashian’s $10k tweets.
Audience Question!
? Sources: Wikipedia;
Growthink Research.

25. i, i Sir! Fastest Product Ramp Ever?
Infographic- Forecasting the Near Term Consumer Environment
(the US Example) Continued Macroeconomic Uncertainty:
Continued Macroeconomic Uncertainty:
* Unemployment, real estate values,
* Unemployment, real estate values,
government deficits and spending cuts,
67% government deficits and spending cuts,
Consumers increasingly rely on
the Internet to make buying Google dominates search, with a 67% The Coming Year of Mobile: Smartphone
decisions: 56% to inform share (ComScore, Dec. 2010) Share to 50%, Apps, Location-based, Instant
Ads, Commerce, Banking
their buying decisions and 11%
use the Web and smartphones to 35 hrs of new content / min (source: Morgan Stanley)
find lowest price (Cisco, 1/11).
How People Spend
How People Spend
Their Time:
Their Time:
UNPRECEDENTED UNPRECEDENTED UNPRECEDENTED •TV
•TV
• Internet -500 Million Users
-500 Million Users
…data …tools for ...calls for • Internet
• Social Media
Social Media -$50B valuation
-$50B valuation
collection on advertisers to privacy and the •
• Mobile -$50M in bank
-$50M in bank
and understand protection of • Mobile
• Games -OpenGraph
-OpenGraph
“crunching” of customer consumer • Games
-Person of Year!
-Person of Year!
consumer behaviors and information
behavior target them
Word of Mouth recommendations from
friends are still by far the most trusted form of advertising
Still The Fastest Growing Company Ever?
Americans continue to spend less time reading printed newspapers, books,
magazines, phone directories and maps. They also spend less time
listening to radios and seeing movies in traditional movie theaters.

26. Consumer Behavior, 2011

27. Consumers and “Traditional” Media – Drifting Apart?
Change in Average Time Spent Per Day with Media Types by US Adults
2009: -13.2% Includes Video
2010: -9.1% 2009: -3.9% 2009: +5.1%
2009: -12.0% 2010: -2.0% 2010: -1.1%
Flat Over Last 5
2010: -9.1% Years
Source: eMarketer, Dec. 2010.

28. So What Are Consumers Spending Their Time Doing?
For the first time, Americans now spend as much time on the Internet
as they do watching TV (13 hours per week)*
45% Have a DVR Up 121% Over Last 5 Years
Share of Time Spent on Internet (2010)
Share of Time Spent on Internet (2010)
(on PCs and Laptops)
(on PCs and Laptops)
Social Networks / Blogs: Games: Email:
22.7%, up 43% from 2009 10.2%, up 10% 8.3%, down
from 2009 28% from 2009
* Note: A recent meta-study by eMarketer concluded that US adults spent 40% of their time with media watching TV and 24% on the
Internet. Sources: The Nielson Company; eMarketer (2010).

29. So What Are Those Consumers Spending Their Time Doing?
Time spent on mobile devices – increasingly smartphones and tablets –
is rising the fastest compared to other media
Share of Time Spent on Smartphones (US & UK)
Share of Time Spent on Smartphones (US & UK)
Research Has Shown Much Diversity:
• 50% of time spent keeping in touch with
others (email, text, phone calls)
• 20% - media (music, videos, pictures)
and games)
• 12% browsing the internet
• 2% on “productive” activities
Sources: eMarketer (2010); Falaki, Hossein et al. 2010. Diversity in Smartphone Usage. MobiSys’10

30. So What Are Those Consumers Spending Their Time Doing?
The Rapid Rise of Cell Phones (and now Tablets) in the US and Around the World
Mobile Subscriptions per 100 Inhabitants (2000-10)
US = ͠100%
US = ͠45%
Projected Growth of Tablet Sales, US Adults
Sources: ITU World Telecommunications; Forrester Research, Inc.; Nielson; Forrester Research, Inc.

31. The Bottom Line:
This ‘Aint the Consumer You Marketed to….Three Years Ago
2008 2011

32. The State of the Media and Advertising Industry

33. What the %$#* Just Happened?
Recent Carnage Across the Traditional Media Industry
Source: Media Finder, Growthink research.

34. A Partial Shift to Online:
What Sector Analysts Predict for the Advertising Industry
On Right: Survey of US CPG Manufacturers, August, 2010.
Sources: eMarketer (Dec, 2010); StrongMail (Nov, 2010), AdWeek (Sept.,2010); Booz & Co. and Grocery Manufacturers Association, 11/10

35. About Growthink

36. Comprehensive Service Offerings for Early‐Stage Clients
• Strategy and Management Consulting
and Execution; Business Planning
• Help Clients Raise Capital
• Help Clients Sell their Businesses and
Non-core Business Units
• Market Research
• Help Clients Find Business
Partners and Alliances
• SEO & SEM Strategy and Consulting

37. Experienced, Senior Team – Founding Partners
World Renown Experts in the Fields of Online Marketing, Web 2.0 and Social Media
Growthinkʹs co‐founder and CEO, Jay has led A co‐founder of Growthink, Dave has
Growthinkʹs emergence as the countryʹs managed more than 150 client engagements
largest strategic advisory and investment across all of Growthinkʹs practice areas,
banking firm to emerging and middle market with a specialty practice and expertise in
companies. marketing. He also leads the firm’s
Publishing Division.
In his 17 years of experience in corporate finance and
Jay Turo capital formation, Jay has worked with dozens of growth Dave Lavinsky
Dave was the founder and President of Emerge Juice
CEO and middle market companies, including clients such President & Nutrition Systems, a health food manufacturing and
Porsche AG, Paramount Pictures, Infospace, Deutsche marketing firm. Dave also launched the Marketing
Bank and McKesson. Services division of New York‐based consulting firm
PIRA Energy Group. At PIRA, Dave helped develop
Jayʹs entrepreneurial experience was gleaned from the original business plan for KeySpan Energyʹs
building and selling two companies: Hyannis Ice Cream, Energy Service Division, which now has revenues
Inc., and Least Cost Routing, Inc. At Hyannis Ice Cream, exceeding $1 billion annually.
Jay built and then sold a small seasonal startup into a
leading regional distributorship with over an 80% share Dave also has professional management consulting,
in its market niche. At Least Cost Routing, Jay positioned marketing consulting and market research experience
the firm to profit from the Telecommunications Act of with FIND/SVP, BPA International and The NPD
1996, building the firmʹs switch and operational Group.
infrastructure. He lives in Los Angeles with his wife and
two sons Education
Education • MBA, Anderson School of Management, UCLA
• BA, University of Virginia
• MBA, Anderson School of Management, UCLA
• BA, Stanford University (with Distinction and with
Departmental Honors)

38. Experienced, Senior Team
Troy is a Managing Director at Growthink,
where he leads the investment banking
practice and also consulting engagements for
the firm’s clients. Troy brings to Growthink
more than 15 years of experience advising
corporations at all stages of development, from
Troy start‐up firms to Fortune 500 companies.
Centazzo
Troy joins Growthink’s Los Angeles office after serving as
Managing
the founding Principal of MBL, an advisory and
Director; investment firm that assisted clients in all areas of
Practice Lead, business, including developing their strategies and raising
Venture capital. Also a seasoned entrepreneur, he helped found,
Investment manage and invest in several start‐up companies,
primarily in the New Media , consumer products, and
Banking &
technology sectors while at and before MBL.
Strategy
Troy additionally worked as an Associate in the
Investment Banking and Merchant Banking Divisions at
Donaldson, Lufkin & Jenrette (DLJ, now CS First Boston).
Education
• JD, Law School; MBA, Darden School, University of
Virginia (Winner, The Faculty Award; Raven Society)
• BA, Brown University (Honors; Class Co‐President)

39. CONVERGENCE: Digital Marketing and Lead Gen / Ad Tech / Social Media / Gaming –
Recent Engagements and Hands‐On Experience*
Chinese MMOG
Developer
(85 Employees)
Social Shopping Business / Growth Developer of Social Designed, Funded and
Technology Currently creating Media Games Launched the first
Strategy, Lead Gen Business Plan and Wellness Channels on
Web 2.0 Publishing Presentation for VCs YouTube, Twitter,
Investment Banking / Business Strategy, Plan,
Group Facebook, MySpace
Financial Advisory FM – Secured Funding
Regional Mobile App
Theater Client
Chain Inspired Instruments
App for Venue /
Co‐Founder, Business Ticket Sales Led sale to American Digital/MIDI/Gaming
Plan and Cap Raise for Capital Partners Guitar
Market Strategy Integrated Movie/Gaming Business Strategy,
New Production Release Plan (ACP)
Entertainment Centers Corporate Advisory
Evaluated
The Communications
Board
cute Tech Leading
Game
$20M Build‐Up of
Referral‐based Social
Client Developer Video Chat Technology
PR Agencies
Media Marketing System for Social/Mobile
Social Media Strategy, Business Strategy,
Business Plan, Capital Full Partnership – Capital, IB, Strategic Business Model Business Plan, Financials,
Raise Strategy, Sales, Branding Restructuring and Market Investor Presentation
Options, Branding Strategy; Financing
* Note that several of these engagements involved Growthink professionals at affiliate or additional firms.

40. CONVERGENCE: Digital Marketing and Lead Gen / Ad Tech / Social Media / Gaming –
Recent Engagements and Hands‐On Experience*
cute
Web Portal for Car
Enthusiasts Film Exhibition / Digital
Conversion of Theaters Nick on the Go
Domain Parking and
Developed strategy Monetization
Business Plans and
resulting in industry‐
Executed Joint Business Plan for $1B Executive Summaries
Business Plan; IR
Venture (M&A) Debt/Equity for Investors
leading site traffic Acquired in 2009
Digital “Want Ad” Platform
for Social Media/Mobile
Social Media Mobile Game
Business Plan, Financials, Platform Monetization Platform
Investor Presentation Business Model;
Business Plan, Deck
Ongoing Capital Raise
* Note that several of these engagements involved Growthink professionals at affiliate or additional firms.