1030 omma adnets joshua wepman
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Display Advertising 2.0: New Perspectives on a Changing Landscape July 18, 2011 Joshua Wepman GCA Savvian Advisors
Transcript of 1030 omma adnets joshua wepman
Display Advertising 2.0:New Perspectives on a Changing Landscape
July 18, 2011
Joshua WepmanGCA Savvian Advisors
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Creative Optimization
Targeted Networks / AMPs
Video / Rich Media
SSPs
Ad Networks
Vertical Custom
Performance
Mobile
PUBLISHERS
AUDIENCE
ADVERTISERS
Ad Exchanges
DSPsMedia Buying Desks
Agencies
Publisher Tools
Ad Operations
Ad Servers
Ad Servers
Sharing Data/ Social Tools
Data Suppliers
DMPs and Data Aggregators
Media Planning and Attribution
Media Mgmt Systems
Verification
Retargeting
Measurement and Analytics
Where We Are Today
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Targeted
Video / Rich Media
Horizontal
Yield Optimization
Ad Networks
Vertical
Performance
Mobile
PUBLISHERS
Data Exchanges / Aggregators
Creative Optimization
Data Optimization
AUDIENCE
ADVERTISERS
Ad Exchanges
DSPsMedia Buying Platforms
Agencies
Publisher Tools
Data Suppliers
Ad Ops / Infrastructure
Ad Servers Ad Servers
Verification / Attribution
Sharing Data / Social Tools
Analytics
Trading Desk
Landscape Observations
Data Suppliers
24 categories
Over $3.0 billion invested260 companies
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Q1 2011 Was Highest Q1 Ever
$7.3 Bn
The display advertising market is forecast to grow over 30% more than the overall online advertising market from 2009 to 2014
Notes:Source: Interactive Advertising Bureau (IAB).
Online Advertising Accelerating …
Creative Optimization
Targeted Networks / AMPs
Video / Rich Media
Yield Optimization
Ad Networks
Vertical Custom
Performance
Mobile
PUBLISHERS
AUDIENCE
ADVERTISERS
Ad Exchanges
DSPsMedia Buying Desks
Agencies
Publisher Tools
Ad Operations
Ad Servers
Ad Servers
Sharing Data/ Social Tools
Data Suppliers
DMPs and Data Aggregators
Media Planning and Attribution
Media Mgmt Systems
Verification
Retargeting
Measurement and Analytics
2010A 2011E$0.0
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Display Advertising Exchange-Based Buying
($B
n)
Exchange-Based Buying Market
Despite doubling YoY, exchange-based ad buying is expected to continue to be a small part of the overall display ad market
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… But Exchange-Based Buying is Still a Small Market
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Brands increasingly moving their ad spend online
The rise of private exchanges, proprietary data sets and premium ad networks
Brands fully embrace digital video and social
Google (and others) continue to march across the display advertising landscape
Agencies and ad networks recognize the challenges and respond
Appearance of comprehensive marketing solutions providers
Notable Trends
High impact formats (video, rich media and new, engaging formats)
Increasing transparency and sense of brand safety
Following the audience (time spent)
Real ROI
DRIVERS:
CAGR: 24%
Brands Moving Online …
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Brand
Awar
enes
s
Purch
ase
Inte
nt
Likeli
hood
to R
ecom
men
d
Favor
abilit
y
Conve
rsion
Rat
es
Recall
Click
Throu
gh
Unique
Visi
tors
Mes
sage
Ass
ociat
ion
Ad Im
pres
sions
/View
s
Time
Spend
on
Page
Inte
ract
ion R
ate
View T
hrou
gh
Engag
emen
t Tim
e0%
10%
20%
30%
40%
50%
60%
Pe
rce
nt
of
Re
sp
on
de
nts
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What brand marketers want
What brand marketers get
Notes:Source: Bain & Company
Which metrics are most valuable for brand-building campaigns?
… But There Are Challenges
Awareness
Opinion
Consideration
Intention
Sales
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Brands focused here Brand Awareness Favorability
Current metrics and new technologies focused here Clickthrough Time spent Interaction Conversion / sales
The metrics that brands care about correspond to “top of funnel” activities rather than conversion and click throughs
Brands Care About the Top of the Funnel
By buying on longer tail sites, audience targeting exposes brands to the potential to advertise against questionable content
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Brands Care About Inventory Quality
High quality properties
Brand-safe inventory
Engaging formats
Premium Networks
Professional video content
In-stream ad units Access to inventory
at scale
Video Networks
Leading publishers and advertisers
RTB capabilities Proprietary,
differentiated data
Private Exchanges
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Brand-Oriented Solutions Offer Quality and Safety
Premium publisher inventory & data
Optimized Pricing
Real time biddable inventory
Transparent
“Category 5” Private Exchange
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Private exchanges enable brands to buy safe, targeted inventory while enabling publishers to enter RTB market and protect CPMs
The Rise of Private Exchanges
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US Online Video Ad Spending ($Bn) (1)
Format2010 Ad
Spend ($Bn)2015 Ad
Spend ($Bn)2010 ~ 2015
CAGR
Search $12.0 $21.5 12%
Banner Ads 6.2 11.7 14%
Classifieds and Directories
2.6 4.3 11%
Rich Media 1.5 1.7 2%
Video 1.4 7.1 38%
Lead Generation 1.3 1.5 3%
Sponsorships 0.7 1.5 15%
Email 0.2 0.2 2%
Total $26.0 $49.5 14%2010 2011 2012 2013 2014 2015
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CAGR: 3
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Video is Growing and Outpacing Other Formats
US Online Ad Spending Growth by Format (1)
Notes:Source: Wall Street Research.
Delivery / Content Management EnablersContent Creators MonetizationPublishing Tools
Aggregation / Portals
Like display, there are several areas across the video value chain that will benefit from the growth in online brand advertising
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Video Value Chain Fragmented Like Display
vs.
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Audience viewing habits changing; moving to time-shifted media consumption
Video streaming represents 32% of time spent online
Online video advertising more engaging than TV
Video advertising promotes greater brand recall
Beginning to draw from TV budgets
Improved targeting technology
Online Video Growth Drivers
Awareness
Sales
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Social is a key component of online brand advertising campaigns
Social media is altering the purchase funnel and creating a closed loop between awareness & branding
Data from Facebook, Twitter, reviews, comments and other social platforms being used by marketers to drive branding and conversion
Building a social presence is of increasing importance to brands
Impact of Social Media
Consideration
Intention
Opinion
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Agencies Recognizing the Challenges
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Creative Optimization
Targeted Networks / AMPs
Video / Rich Media
SSPs
Ad Networks
Vertical Custom
Performance
PUBLISHERS
AUDIENCE
ADVERTISERS
Ad Exchanges
DSPsMedia Buying Desks
Agencies
Publisher Tools
Ad Operations
Ad Servers
Ad Servers
Sharing Data/ Social Tools
Data Suppliers
DMPs and Data Aggregators
Media Planning and Attribution
Media Mgmt Systems
Verification
Retargeting
Measurement and Analytics
Mobile
Google Gets It
Networks creating new offerings, pivoting or acquiring businesses that bring desired capabilities
Some ad networks have attempted to transform their core business models to address new needs
Others have acquired desired capabilities
Networks need to evolve to survive and succeed
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Targeted Networks / AMPs
Video / Rich Media
Ad Networks
Vertical Custom
Performance
Mobile
Media Mgmt Systems
So Do Ad Networks
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Who Else is Meeting the Needs of Brands?
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CMO
RTBCreative
OptimizationVendors
RetargetingData Management
Platforms
Display Ad Tech Point Providers
While the landscape is full of point providers, today’s CMO is looking for comprehensive solutions providers that can drive efficiencies
Integrated Display Advertising Optimization Solution Provider
The Quest for Integrated Solutions
CMO
Focus has moved from CTO’s office to CMO’s office in quest to grow business while maximizing ROI
Ever increasing options for the CMO across multiple channels (TV, radio, print, online display, digital video, search, etc.)
Increasing complexity and proliferation of technologies designed to drive “efficiency”
Ever-evolving landscape with alphabet soup of vendors
In today’s constrained environment, the CMO is tasked with finding creative ways to grow top line while maximizing bottom line
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Decade of the CMO
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Marketers are demanding comprehensive solutions to managing their online marketing spend
Current landscape is too fragmented and confusing
New entrants, such as large cap enterprise software providers and ad networks, are becoming more active in ad tech M&A
Large technology companies have record amount of cash on balance sheet and are looking to deploy it for growth
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Notes:(1) GCAS database.
Digital Media M&A Transactions
Consolidation is Inevitable
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Recently, there has been an up-tick in private-to-private M&A deal activity
Larger private companies using M&A to:
– Increase scale in advance of IPO or other event
– Broaden suite of product offerings to meet needs of advertisers
– Evolve business
– Take advantage of price capitulation
Acquired
October 2010
Acquired
October 2010
Acquired
July 2011
Acquired
February 2011
Acquired
December 2010
Acquired
November 2010
Acquired
November 2010
Acquired
November 2010
Acquired
February 2011
Acquired
April 2011
Private-to-Private Transactions Increasing
Billions invested in ad tech landscape over last few years
Focus on investment returns may drive near-term consolidation
Time is important element of determining investment returns
Returnn( )
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Return Formula … More Important Now
Marketing
Network / Data
Technology
Agency Targets
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Ad Networks
Diverse Strategic Interest in Ad Tech Innovators
Ability / Willingness to Pay
Strategic Fit
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Diverse Strategic Interest in Demand-Side Ad Tech
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Exchange-based buying will be an important component of display … but only a component
Real revenue will continue come from direct buys and brand-oriented solutions
Private exchanges and programmatic premium buys will continue to proliferate and grow
Video and social will become dominant branding markets
Maybe agencies and networks will be okay
The CMO needs help and comprehensive solutions
This will continue to be a strategically important market
Thank You
Key Takeaways
• Leading investment banking firm with over 200 professionals worldwide
• Services include advice on mergers and acquisitions, private capital finance and restructurings
• Advised on over $70 billion in transactions since 2006
• Leading advisor to media companies new and old
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TOKYO • SAN FRANCISCO • MENLO PARK • CHICAGO • NEW YORK • LONDON • MUMBAI • SHANGHAI
GCA Savvian’s Digital Media Advisory Business
31Offices in San Francisco, Menlo Park, Chicago, New York, London, Mumbai, Shanghai and Tokyo
Preferred Equity Investment andCredit Facility
$75MM$500MM
Acquired by
$448MM
Acquired byAcquired by
$5.9Bn
to
$493MM
Sold Stake in Acquired by
$1.3Bn
Acquired by
$300MM
Tender Offer
$9Bn
TOB of Common Stock of
$10.8Bn
Acquired by
$747MM
Formation ofJV with
Acquisition of
Semiconductor Business
$522MM$150MM
Divestiture of U.S. Venture
Portfolio
Acquired by
$1.6Bn
Acquisition of
GmB H – Automotive
ATE Operations
Acquisition of
$400MM
Acquired byAcquired by
Formation ofJV with
$690MM
Selected Cross-Border Transactions
Acquisition of
$1.1Bn
Acquisition of Acquisition of
Next Gen. Mobile Comm. Systems Assets
Select OP-1 Assets &Manufacturing Facility
Acquisition of
Acquisition of
PVOH Business
Acquisition of
Acquired by
$125MM
Yamakawa Trading Co.
Over 50 successful cross-border transactions representing nearly 15 different countries
Leading Global Independent Advisory Firm
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Acquired By Acquired By Sale of Subscription Acquisition of JV from Sale of Business Unit Secondary Preferred Stock Acquired by Acquisition ofMusic Service to Mogae Consultants Six Apart KK to Sale
We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Buyer We Advised the Seller We Advised the Founders Financial Advisor We Advised the Seller We Advised the Buyer
May 2011 April 2011 March 2011 January 2011 January 2011 January 2011 December 2010 December 2010 November 2010
Preferred Stock Acquired by Acquisition of Preferred Stock Acquired by Acquired by Acquired by Acquired by Acquired by
Financial Adviser We advised the seller We Advised the Buyer Financial Advisor We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller
October 2010 October 2010 October 2010 August 2010 July 2010 June 2010 June 2010 June 2010 January 2010
1UP Digital NetworkSold Stake in
Preferred Stock Acquired by Preferred Stock Preferred Stock Acquired by Minority Preferred Preferred Stock Preferred Stocka Subsidiary of Investment in
to
Financial Advisor We Advised the Seller Financial Advisor Financial Advisor We Advised the Seller Financial Advisor Financial Advisor We Advised the Seller Financial Advisor
October 2009 April 2009 February 2009 January 2009 January 2009 November 2008 November 2008 October 2008 August 2008
Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock Acquired by Preferred Stock Preferred Stock Acquisition of& Recapitalization
Mobile Services BusinessFinancial Advisor Financial Advisor Financial Advisor Placement Agent Financial Advisor We Advised the Seller Placement Agent Placement Agent We Advised the Buyer
July 2008 July 2008 June 2008 April 2008 March 2008 February 2008 January 2008 January 2008 December 2007
Acquired by Acquired by Acquired by Acquisition of Acquired by Senior Credit Facility Preferred Stock Merger with Minority Investmentin
We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Buyer We Advised the Seller Financial Advisor Placement Agent We Advised INTAC Financial Advisor
December 2007 December 2007 December 2007 October 2007 October 2007 October 2007 October 2007 October 2007 August 2007
FRONTLINEMANAGEMENT
Proven Leadership in Digital Media Transactions
