8. The Market Manifestation of Ad Tech’s Challenges
Source: Capital IQ, market data as of 9/1/2017
-100%
-50%
0%
50%
100%
150%
Millennial Media Tremor Video YuMe Rocket Fuel TubeMogul MaxPoint Interactive NASDAQ
9. The Market Manifestation of Ad Tech’s Challenges
Source: Capital IQ, market data as of 9/1/2017
-100%
-50%
0%
50%
100%
150%
Millennial Media Tremor Video YuMe Rocket Fuel TubeMogul MaxPoint Interactive NASDAQ
$1.00
$2.08
$0.37
10. The Market Manifestation of Ad Tech’s Challenges
Source: Capital IQ, market data as of 9/1/2017
-100%
-50%
0%
50%
100%
150%
Millennial Media Tremor Video YuMe Rocket Fuel TubeMogul MaxPoint Interactive NASDAQ
$1.00
$2.08
$0.37
11. The Great Ad Tech Cleanup
Ø By Q1 2018, all public I/O business model ad tech companies will be gone from the markets
leaving only platform companies
Ø This remaining cohort should make for better comps for platform businesses seeking an IPO
Average LTM Revenue Multiple: 0.6x Average LTM Revenue Multiple: 3.4x
0.8x
0.3x
ND
0.7x
0.7x
2.2x
NM
0.8x
7.1x
DSP
I/O-Based Ad Tech Companies Acquired Remaining Platform Ad Tech Companies
(1) Divested I/O business, rebranded SSP platform as Telaria.
(2) Revenue multiple metric represents net revenue.
Source: Capital IQ, market data as of 11/10/2017.
(1)
(2)
(2)
(2)
16. Digital Media Continues its Rapid Growth
Source: eMarketer
36% 49%
33%40%
Monetization
20172012
Usage
Time Spent Across Media in U.S. Total Ad Spend in U.S.
Digital TV Other
($ in billions)
$37 $43 $50
$60
$72
$83
$128 $128 $126
$123
$124
$124
$0
$30
$60
$90
$120
$150
$180
$210
2012 2013 2014 2015 2016 2017
Digital Other Ad Spend
17. But the Duopoly is Taking Nearly All of the Growth
Source: eMarketer, IAB, Company Filings, LUMA
*Google Advertising Revenue reflects Advertising Revenue Ex-TAC
($ in billions)
U.S. Digital Ad Spend
35% 39% 40% 41% 40% 42% 41% 41%
0% 4% 5% 6% 7% 11% 14% 19%
35% 43% 45% 47% 47% 52% 55% 60%
Share %
Total %
Google U.S. Advertising Revenue* Facebook U.S. Advertising RevenueU.S. Digital Ad Spend ~90%
~10%
U.S. Incremental Ad Spend
$23 $26
$32
$37
$43
$50
$60
$72
$0
$20
$40
$60
$80
2009 2010 2011 2012 2013 2014 2015 2016
18. But the Duopoly is Taking Nearly All of the Growth
Source: eMarketer, IAB, Company Filings, LUMA
*Google Advertising Revenue reflects Advertising Revenue Ex-TAC
($ in billions)
U.S. Digital Ad Spend
35% 39% 40% 41% 40% 42% 41% 41%
0% 4% 5% 6% 7% 11% 14% 19%
35% 43% 45% 47% 47% 52% 55% 60%
Share %
Total %
Google U.S. Advertising Revenue* Facebook U.S. Advertising RevenueU.S. Digital Ad Spend ~90%
~10%
U.S. Incremental Ad Spend
$23 $26
$32
$37
$43
$50
$60
$72
$0
$20
$40
$60
$80
2009 2010 2011 2012 2013 2014 2015 2016
30. Market Dynamics Favor a Select Few Players
N
D D
Ø Numerator larger: the total
addressable market is growing
rapidly as dollars shift to digital
and programmatic and TV spend
becomes addressable
The result will be substantial wealth creation for a few companies
Ø Denominator smaller: the number
of sustainable, scaled companies
with omni-channel capabilities is
shrinking as the sector matures,
rationalizes and consolidates
N
32. Digital Advertising Supply Chain Challenges
1. Transparency
2. Measurement
3. Latency
4. Privacy
5. Viewability
6. Fraud
7. Adverse Context
8. Ad Blocking
9. Digital Duopoly
10. Fragmentation
TRUST
33. Digital Advertising Supply Chain Challenges
1. Transparency
2. Measurement
3. Latency
4. Privacy
5. Viewability
6. Fraud
7. Adverse Context
8. Ad Blocking
9. Digital Duopoly
10. Fragmentation
34. Lifecycle of a Media Impression
M
E
D
I
A
I
M
P
R
E
S
S
I
O
N Bot Impression
(Fraud)
Ad Blockers
No Ad
Served
MARKETER
LOST VALUE
MARKETER PAYS
PUBLISHER PAID
Ad
Served
CONSUMER SEES
Engagement
Impression Only PUBLISHER
LOST VALUE
Conversion
Viewability
Standards
Not Viewable
Viewable
35. Advertising’s Issues Have Real Consequences
“We didn’t see a reduction in
[P&G’s] growth rate. The spending
we cut was largely ineffective.”
Jon Moeller, CFO, P&G
36. Need to Limit Vulnerability to Exogenous Forces
iOS
AD FRAUD
37. GDPR as an Opportunity
“Another area where we will differentiate is
around GDPR, which is not just a European
problem. It is a US brand problem as well if
you deal with European customers.”
Marcus Ruebsam, SVP, SAP
$350M Acquisition
38. MarTech Healing Ad Tech
MarTechIndustry
Ads.txt
Fraud
Viewability
Verified
43. Ad Tech MarTech
Drive More Revenue
Fraud-free
Viewable
Verified
Identity
Data
Orchestration
The Right Time The Right PersonThe Right Message
Optimize the Customer Experience
48. Key Market Need: Single View of the Customer
Source: “Marketing Technology 2017 – It’s More than Just the Stack,” eMarketer, 3/2/17
Marketer Survey: Importance of a Single Customer View
31%
39%
23%
6%
Extremely Important
Very Important
Important
Not Important
49. Key Market Need: Single View of the Customer
Source: “Marketing Technology 2017 – It’s More than Just the Stack,” eMarketer, 3/2/17
Only 5% of respondents
have a single platform to
manage data across
channels
55. The Customer Data Platform
Collects & Models Unifies Segments Syndicates
Email
Mobile
Social
Website
Commerce
Advertising
IoT
Deal
Seeker
High
Value
New
VisitorUnique ID: 138AB125
Name: John Doe
Email: jd@gmail.com
Last Purchase: 11/17/17
Attributes: Male / Athlete
59. Marketing Orchestration: Data + Identity + A.I.
CRM / Data Hub
Identity
Orchestration Sensei
When companies claim they're in
A.I., 'most of the time it's just
nonsense'.
Mark Hurd, CEO, Oracle
November 14, 2017
61. B2B Marketing
Key Trends:
1. Account Based Marketing
- Right Message at Right Time
to Right Accounts
2. Predictive Analytics
- Identify Prospects
- Intelligent Lead Scoring
3. Convergence of MarTech &
Sales Tech
MQL
Raw Leads
MQL
Lead Accepted
Meeting
Proposal
Negotiation
Close
DMS West 16
67. "Marketing tech is actually a unique segment
within all of enterprise software… this market
really favors best-of-breed. In all other
software segments, there's actually a
structural advantage to buying an integrated
suite. You wouldn't go buy a general ledger
system and an AP system from two different
vendors… But in marketing, you want to buy
the best social system, you want to buy the
best AB testing. Why? That incremental
conversion lift matters. It drives dollars.”
Neeraj Agrawal
The Case for Best-of-Breed
68. $1.0B
$1.2B
$1.4B
$1.6B
$2.0B
$0.4B
$0.5B
$0.7B
$0.9B
$1.2B
2013 2014 2015 2016 2017E
Adobe Marketing Cloud Revenue Salesforce Marketing Cloud Revenue
Marketing Cloud Revenue by Company
The Case for the Marketing Cloud
CAGR
26%
* Represents ExactTarget 2013 revenue guidance
** Annualized from last six months revenue of 2017
Source: Company filings
Marketing Cloud Revenue Marketing Cloud Revenue
CAGR
14%
*
**