What’s hot in marcoms today?

INTRODUCTION

As specialist advisors to the marketing communications and technologies industry, we strive to ensure that we are continually on top of key trends in this rapidly evolving landscape. One of our key tools is our global deal tracker, which gathers the details of all completed deals in this sector, subcategorised and cross referenced by our team of

analysts. This, along with the hundreds of conversations we have each month with both buyers and sellers, enables us to continuously identify emerging M&A trends. With the ever blurring boundaries between “marcoms” and “martech”, it is maybe unsurprising to see that the most talked about subsectors sit at their convergence points, namely : 1.Content marketing

2.Data & analytics, 3.eCommerce 4.Digital marketing; and 5.Mobile marketing This paper examines each subsector, the key trends and deal activity in 2014 YTD using both proprietary and third party data, which is referenced on page 55.

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

Disclaimer:

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.

Content Marketing

Sector Overview

Market Overview

Content

Sector Overview

5

Content Marketing Market Overview

Creation Curation & Recommendation Planning & Optimisation

Market landscape: Illustrative

6

Content Marketing Market Overview

Ecosystem

Content

App integration

In-feed

Social

Native ad platforms

Publishers

Video &

Mobile

Social

Networks Brands

News &

Sharing

Search

7

Content Marketing Market Overview

Key trends (1)

Small deals Publishers reinventing

Local deals

• Majority of content marketing firms are

small operations

• Deal sizes typically less than $5 million

• The $18 million consideration paid by Lin

Digital Media for Federated Media

Publishing being one of the bigger deals

seen in the space

• Firms have began developing stronger

connections with content producers to ensure

improved ROI

• For example, McLaren, through its spin-off

McLaren Animation, formed a long-term

partnership with Framestore

• Their first collaborative effort established itself as

a media property, eventually being broadcast

on Sky in its own right

Long-term partnerships

• Knowledge of the specific culture very

important

• Only 5 cross border content deals have

occurred since 2013 – 2 of which involved PE

buyers

• Little to no strategic interest in foreign

companies

• Firms with no previous experience in content

marketing aggressively pursuing acquisitions

• E.g. Fuel FX and Ideon Media, both multiple

buyers in the last year, buying small content firms

based in the same country (US and Canada

respectively)

Fast growing national players

• Epitomised by Advantage Business

Media, a PE-owned publisher

• From 2006 to 2011 digital revenues rose

from 11% to 50% (2)

• New York Times also has a documented

strategy to improve its readership

through content marketing

8

Content Marketing Market Overview

Key trends & challenges (3)

Trends

Challenges

• 42% of marketers rarely or never use responsive design, despite up to 50% of their customers opening emails on mobiles

• Calculating content marketing ROI

• Producing enough content that engages the consumer

• 60% of businesses are engaging in some form of content marketing, with 93% of B2B marketers now using content

marketing

• 44% of B2B marketers have a defined content strategy in place

• 78% of marketers are creating more content than they did last year

9

Content Marketing Market Overview

Native Ads: A comparison with traditional advertising (4)

0%

5%

10%

15%

20%

25%

30%

Banner ads Native ads Content

0%

20%

40%

60%

Banner ads Native ads

Native ads have been shown to attract more viewer

attention than editorial content itself

26% of consumers view native ads against 24% for

editorial content, with traditional banner ads lagging

behind on 20%

0

1

2

3

4

5

Banner ads Native ads

Native ads significantly outperform their banner

counterparts in fostering purchase intent

Contribute to a 52% lift in buyer purchasing intent

The amount of times a visitor’s eye is drawn to each

type of ad is also significantly different

Native ads draw almost twice the amount of views

per session

Engagement

Buying

intent

Average

views

10

Content Marketing Market Overview

87% 86% 85% 82%

77% 76% 73%

69%

57% 57% 55%

48% 45% 45% 45% 43%

40% 38% 38% 35% 34% 32% 31%

26% 25% 24% 20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UK firms on average use 14 of these content marketing distribution channels

Marketers in the UK utilise almost all of these channels to a greater extent than their North American and Australian

counterparts

In-person events, white papers, webinars and online presentations were the only categories North American marketers used

more frequently than UK marketers

Content marketing usage in the UK (5)

Distribution channels

11

Content Marketing Market Overview

Role of social networks in content marketing (6)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UK

USA

Marketers use of social media platforms in content distribution

Global research findings

• Marketers use an average of 6 social media platforms to distribute content

• In the UK, Twitter is used most often, at 87%

• In the US, LinkedIn is used most often, at 91%

• UK marketers regarded LinkedIn as the most effective platform, with Instagram viewed as the least effective in the

UK

Content Marketing

Sector Overview

M&A Market

Content

Sector Overview

13

Content Marketing M&A Overview

Deal Volume

16

3 6

1

Cross Border

PE Backed

Target Region

Major Buyers Deal Types

Q1-Q3 2014 Content Marketing deals (7)

Quarterly Split

Q2

Q1

Q3

North America

UK Western Europe

Africa

2 2

Ideon Media FuelFX

5

4

16

3

11

1

South America

30

Total Deals

3

APAC

14

Content Marketing M&A Overview

Q1-Q3 2014 selected transactions

Date Buyer Target Target Location Target Description

Sep-14 USA Media company powering the creation and

sharing of video content

Jul-14 USA Specialises in producing digital content

Jul-14 UK Content marketing agency developing omni-

channel content

Apr-14 UK Video production company

Feb-14 USA 3D and interactive multimedia marketing

content producer

Feb-14 USA Graphics designer and developer

Feb-14 USA Digital, print & creative solutions

Feb-14 Netherlands Entertainment programming & content

creation

Feb-14 USA Digitally focused media company

Jan-14 USA Conversational content for brand marketers

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

Data & Analytics

Sector Overview

Market Overview

17

Data & Analytics Market Overview

Typ

ica

lly f

or

dire

ct

ma

rke

tin

g p

urp

ose

s

Typ

ica

lly f

or

ove

rall

ca

mp

aig

n p

urp

ose

s

Data Quality Management Data Driven Marketing Database Marketing Agency

Full Service Agencies with Specialist Data Services

Marketing Performance Data & Analytics

Market landscape: Illustrative

18

Data & Analytics Market Overview

Key trends & challenges (8)

• Visualisation technologies Low cost visualisation applications have made data reporting and business intelligence understandable and easily accessible to almost everyone

• Machine learning Semi-automated development of predictive and prescriptive models are getting better over time – software learns how to better fit the data, separating meaningful signals from meaningless noise

• Rise of Chief Analytics Officers, Chief Data Officers, Heads of Big Data There are many examples of organisations that have successfully folded analytics into other C-level jobs and are increasingly creating dedicated roles for analytics e.g. Facebook, AIG, Chubb and XL Group

• Development of data products running amok For online companies such as Google every offering is a data product. However, the development of data

products and services is taking place even in industrial and manufacturing organisations (e.g. embedded sensors in gas, turbines and medical devices)

• Hadoop products overtaking enterprise data warehouses Hadoop platforms, an open source software framework for data storage, offer a much cheaper alternative to traditional enterprise data warehouses. In addition, Hadoop platforms can perform substantial process tasks and analytics besides data storage

Trends

Challenges

• Talent – companies are struggling at almost every level of analytics recruiting today

• Keeping pace with the ever-increasing changes in the market landscape

Data & Analytics

Sector Overview

M&A Market

20

Data & Analytics M&A Overview

2

1

Q1-Q3 2014 Data & Analytics deals (9)

Deal Volume Target Region

Major Buyers Deal Types

Quarterly Split

12

1

3

5

North America

UK

APAC

Western Europe

Cross Border

PE Backed

7

6 8

4

10

1

1 1

1

Ebiquity Dentsu Aegis GTCR Teradata

1 Eastern Europe

Q2

Q1

Q3

22

Total Deals

21

Data & Analytics M&A Overview

Date Buyer Target Target Location Target Description

Sep-14 USA Data analytics marketing agency

Sep-14 USA Provider of data science and engineering

services

Aug-14 USA Analytics and database integration agency

for financial institutions

Jul-14 New Zealand Provider of database resources for marketing,

research and analysis

Jul-14 Australia

Business marketing database offering lead

generation, sales prospects and marketing

support data

Jun-14 USA Real-time predictive analytics and

personalisation

Apr-14 USA Data and intelligence platform

Mar-14 Canada Web analytics across media buying, SEO and

social media

Feb-14 UK Provider of consumer data solutions, software

and analytics

Jan-14 Hong Kong Media buying agency engaged in KPI data

measurement and continuous improvement

NexGraph

Q1-Q3 2014 selected transactions

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

eCommerce

Sector Overview

Market Overview

24

eCommerce Market Overview

Back-end

• Platform providers that offer the

fundamental eCommerce

technology platform

• Product: re-usable software

that can be implemented by a

third party or in-house

developers

Integration

• Systems integrators and front-

end agencies with systems

integration capabilities by own

middleware or partnership

• Service: bespoke eCommerce

platforms to businesses’ specific

enterprise systems

Front-end

• Digital design agencies with

systems integration capabilities

and pure front-end digital

design agencies

• Service: design the customer

facing website – the front-end

of an integrated eCommerce

platform

Full solution providers Use either third party or proprietary software as

a starting point in delivering a fully functional

online store

Technology Marcoms services

eCommerce value chain

25

eCommerce Market Overview

Ma

ge

nto

H

yb

ris

De

ma

nd

wa

re

Oth

er

Back-end Front-end Integration

Market landscape: Illustrative

26

eCommerce Market Overview

35%

32%

23%

4% 4% 2%

APAC

North America

Western Europe

Central & Eastern Europe

Latin America

Middle East & Africa

Regional share of Global eCommerce sales 2014

Global eCommerce sales forecast 2012 - 2017

• Largest eCommerce market in the EU

• Very mature: 39m people out of the

UK’s 63.3m strong population already

buy online

• Online retail accounts for 13% of the

UK economy

UK

• Total eCommerce sales in the USA are

expected to grow 15.5% to $304b by

the end of 2014

• Online retail is expected to account

for 6.8% of all retail in 2014 and 9% by

2017

USA

• In 2014 consumers in APAC will spend

more online than those in North

America

• It is estimated that China will account

for six in every ten dollars of the total

APAC spend

APAC

0

200

400

600

800

1000

1200

2012 2013 2014 2015 2016 2017

APAC

North America

Western Europe

Rest of the

World

Key trends & global statistics (10)

27

eCommerce Market Overview

1,058

1,251

1,505

1,771

2,053

2,357

22.3% 18.2% 20.3%

17.7% 15.9% 14.8%

2012 2013 2014 2015 2016 2017

Sales ($bn)

YoY growth

Global eCommerce customers

Global eCommerce B2C sales forecast

• Twice as much spent on mobile

devices in Dec-2013 compared to

Dec-2012

• Increases in services that utilise

multiple channels driving growth

• Such services include click/reserve

and collect which accounted for 25%

of multichannel retail sales

2013

• Expanding online and mobile user

bases in emerging markets

• Increasing mCommerce sales

• Developing payment and shipping

options

• Pushing into new international markets

Driving growth in

2014

• International B2C eCommerce sales

are expected to reach $1.5tn in 2014

and $2.4tn in 2017

• Growth driven by an increasing

internet ‘usership’ as emerging

markets come online and an

increasing proportion shop digitally

Looking forward

Key trends & global statistics cont’d. (11)

904

1,016

1,124

1,229

1,321

39.2% 41.3% 42.7% 44.3% 45.4%

2012 2013 2014 2015 2016

Number of global

customers (millions)

Digital buyer

penetration

28

eCommerce Market Overview

Key trends (12)

Trends

• Tablet first design Default for responsive websites is still desktop – with tablets overtaking PCs in 2016 it is likely that responsive websites will be designed for tablet first

• Cross-channel purchase journeys Currently cross-channel purchase journeys are being enabled by location and identification tools/solutions, i.e. iBeacons, and wearables such as Galaxy gear and the Apple Watch

• Mobile payments won’t take off until 2015 Consumers still need a convincing reason to use mwallets and until then retailers are unlikely to invest in this technology. A large number of different mwallet technologies have come to market recently – still not known which of these will make the biggest impact

• Consumers learning value of data and privacy Consumers are becoming more savvy about their digital presence and the value of their data to advertisers. Needs to be a clearer value exchange – so consumers are incentivised to provide eTailers with data about themselves and are aware of where that data is going

• Mobile and tablet purchase points One in five store checkouts will take place on a mobile/tablet by 2015

• Reduce high return rates eTailers currently face high return rates. On average return rates are 25% but some eTailers face return rates of >50%. Solutions such as virtual changing rooms are attempting to combat this

eCommerce

Sector Overview

M&A Market

30

eCommerce M&A Market

Q3

Q1-Q3 2014 eCommerce deals (13)

Deal Volume Target Region

Major Buyers Deal Types

Quarterly Split

2

1

UK

APAC Africa

Western Europe

7

North America 4

3

4

Cross Border

PE Backed

6

2 11

5

3

1

3

1

Publicis WPP Dentsu

Q2

Q1

19

Total Deals

1

31

eCommerce M&A Market

Date Buyer Target Target Location Target Description

Sep-14 UK Multichannel eCommerce integrator

specialising in Hybris

Sep-14 USA Multichannel eCommerce integrator

specialising Oracle and Demandware

Sep-14 South Africa eCommerce integrator and application

developer

July-14 USA Web/enterprise content management and

systems integration agency

Jun-14 Japan eCommerce website design and build

agency

May-14 USA

IBM Smarter Commerce division of Trifecta

acquired; IBM WebSphere Commerce

solutions consultancy

May-14 UK Multiservice digital agency with eCommerce

website design and build specialty

Apr-14 France

Sage France SA, eCommerce business

acquired; France-based eCommerce business

solutions provider

Mar-14 USA Provider of mobile and multichannel

commerce solutions and websites

Jan-14 UK Retail and eCommerce systems integrator

Q1-Q3 2014 selected transactions

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

Digital Marketing

Sector Overview

Market Overview

Digital Marketing Market Overview

34

2012 2013 2014 2015 2016 2017 2018

North America 38.0% 38.5% 39.1% 39.9% 40.5% 40.9% 41.3%

Asia-Pacific 29.2% 29.1% 28.6% 28.2% 27.9% 27.8% 27.7%

Western Europe 25.1% 24.1% 23.2% 22.4% 21.6% 20.9% 20.2%

Central & Eastern Europe 3.5% 3.8% 4.0% 4.0% 4.0% 4.0% 4.0%

Latin America 3.2% 3.4% 3.8% 4.0% 4.2% 4.4% 4.6%

Middle East & Africa 0.9% 1.1% 1.4% 1.6% 1.8% 2.0% 2.3%

Total 100% 100% 100% 100% 100% 100% 100%

$104.58 $119.84

$137.53

$154.29

$171.08

$187.65

$204.10

20.4% 14.6% 14.8% 12.2% 10.9% 9.7% 8.8%

20.8% 23.2% 25.3% 27.0%

28.4% 29.8% 31.1%

2012 2013 2014 2015 2016 2017 2018

Digital ad spending % change % of total media ad spending

Digital ad spending share worldwide by region 2012-2018 (14)

Digital ad spending worldwide 2012-2018 (14)

• Digital ad spending will reach $137.5 billion in 2014, up 14.8%

over 2013 levels

• USA still biggest spender on digital ads, at 39% compared with

28.6% in Asia-Pacific – where share is dropping slightly

• Western Europe accounts for nearly one-quarter of all digital

spending around the world

• UK has highest share of total media spending on digital

channels, at 47.5% expected this year compared with 27.9% in

the USA

Summary

Digital ad spending share worldwide by region 2014 & 2018 (14)

% of total

Note: includes advertising on desktop and laptop computers as well as mobile phones

and tablets, and includes all various formats of advertising on those platforms; excludes

SMS, MMS and P2P messaging based advertising

39.1%

28.6%

23.2%

4.0%

3.8% 1.4%

41.3%

27.7%

20.2%

4.0% 4.6%

2.3%

2014

Total = $137.5 billion

2018

Total = $204.1 billion

North

America

North

America

Asia-Pacific Asia-Pacific

Western

Europe

Western

Europe

Digital advertising spending on track to hit $137.5 billion this year

Digital Marketing Market Overview

35

6.6

4.6

2.8

1.4 1.2

0.8 0.9 0.6 0.6

7.4

4.7

3.5

1.7

1.3

0.9 0.9 0.7 0.6

0

1

2

3

4

5

6

7

82012 2013

Western Europe digital adspend by country, 2012 -2013 (€bn) (15)

• UK remains by far the largest market in Western Europe

• UK continues to grow faster than any other country in region at c.16% YoY despite being the largest market in Europe

UK remains the largest market in Western Europe

Digital Marketing Market Overview

36

5,416

6,300

7,245

7,970

8,647

9,252

12.6%

16.3%

15.0%

10.0%

8.5%

7.0%

2012 2013 2014 2015 2016 2017

UK Digital Ad Spending (£m) YOY Growth

Search remains the leading category within digital ad spending (17) UK digital ad spending, 2012 - 2017 (16)

• In 2013, spending on digital ad formats in the UK rose 16.3% to

reach £6.3 billion

• This year, digital ad spending will slow to 15.0% but that’s still

much faster than total media ad spending at 6.6%

• Digital will account for half of all paid media ad spending in

the UK next year, according to eMarketer

• More than half of all digital ad spending will go toward search

formats, while spending on display formats will amount to one

third of the UK’s digital ad market

• This year mobile will account for nearly 30% of all UK digital ad

spending, with this figure rising to more than half by 2016

Total Digital

Adspend, 2013

£6.3bn

14%

30% 55% Paid for search

Classified

Display

1% Other

Category 2012 Share

Search 58%

Display 24%

Classified 16%

UK digital advertising market continues growth

Digital Marketing Market Overview

37

345

590

£m

2012 2013

71%

• Mobile was up 95% in the UK in 2013, reaching £1bn for the first

time

• Adspend on social channels exhibited the next strongest

growth at 71% year on year to c.£600m

• Video adspend also showed strong growth at 63% reaching

£325m in 2013, as video continues to proliferate across different

devices

529

1,031

£m

2012 2013

95%

200

325

£m

2012 2013

63%

Mobile Social

Video Summary

Key growth drivers (18)

Digital Marketing Market Overview

38

• Lack of digital skills, resource and funding

• Increasing complexity of digital landscape

• Managing big data

• Multichannel “integrated marketing”

Customers no longer use just one channel to complete a purchase. 2014 will see this trend accelerate, with retailers offering a multi-channel experience being the most successful

• Prime time for “real time” Real-time marketing ranges from mobile advertising that uses GPS and beacon technology to deliver location-based ads to customizing campaigns based on latest trends

• Micro-video

With the increasing popularity of photo and video sharing on social media sites, image and video based content such as infographics and micro-videos will play a key part in 2014

• Growth in paid media Facebook’s organic reach is gradually declining and Twitter also needs to grow revenues following their IPO last year. Expect both to be pushing forward with their own paid media strategies

• Content interactivity & storytelling Consumers are increasingly looking for power, personalization and control over content. As such, brands and

publishers are creating interactive content that puts the audience into the story

Key trends & challenges

Trends

Challenges

Digital Marketing

Sector Overview

M&A Market

Digital Marketing M&A Market

40

Q1-Q3 2014 Digital Marketing deals (19)

Deal Volume Target Region

Major Buyers Deal Types

Quarterly Split

34

11

3

North America

UK

APAC

Western

Europe

29

3

Cross Border

PE Backed

15 Eastern

Europe 3

10 Africa

South America 2

Q3

Q2

Q1

18

29

31

6

6 3

2

2 2

WPP Publicis Omnicom IPG Havas Thoughtwire

78

Total Deals

Digital Marketing M&A Market

41

Date Buyer Target Target Location Target Description

Sep-14 France Provides digital marketing services

Aug-14 UK Full service digital marketing agency

Jul-14 UK Integrated marketing and advertising agency

May-14 UK Digital advertising agency

May-14 South Africa Provides digital marketing services

May-14 UK Digital advertising agency

Apr-14 Brazil Provides advertising services

Apr-14 Brazil Provides digital marketing services

Feb-14 South Africa Offers integrated digital marketing services

Jan-14 UK Provides digital marketing services

Q1-Q3 2014 selected transactions

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

Mobile Marketing

Sector Overview

Market Overview

44

Mobile Marketing Market Overview

22

36

58

88

127

177

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017 2018

Co

nn

ec

ted

We

ara

ble

Un

its

(m)

250

315

360

405

455

0

100

200

300

400

500

600

2013 2014 2015 2016 2017

Tab

let

PC

Un

it S

hip

me

nts

(m

)

Global growth of tablets (20) Growth of global connected wearable devices (21)

Growth slowing quarter on quarter, Apple noticeably suffering

Strong price elasticity, cheaper alternatives to high end models are

gaining market share

Dominated by consumers (89% in 2013), enterprise targeted as a

growth sector

Potential high growth sector, currently in the early stages of

adoption

Particular focus in 2014 as Apple announce Watch, Google

Glasses go on sale for the first time and Samsung continue to

develop their range

Mobile redefined

45

Mobile Marketing Market Overview

UK mobile adspend to increase 96% in 2014, an

increase of nearly a £1bn from 2013

This will represent nearly 30% of all digital advertising in

the UK. Mobile adspend is forecast to increase as a

percentage of digital (and total media adspend)

and eventually dominate digital adspend in 2018 with

a 70% share

526

1,031

2,021

3,233

4,462

5,756

6,907

9.7%

16.4%

27.9%

40.6%

51.6%

62.2%

70.4%

3.9%

7.3%

13.4%

20.5%

27.1%

33.7%

39.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013 2014 2015 2016 2017 2018

% o

f to

tal d

igita

l/m

ed

ia a

dsp

en

d

UK

mo

bile

ad

spe

nd

(£

m)

UK mobile adspend % of total digital adspend % total media adspend

Globally, mobile adspend will increase from an expected $13.1bn in

2013 to $41.9bn in 2017, representing a CAGR of 33.7%. North America

is projected to take the lion’s share of growth. However, the UK is

expected to grow at a CAGR of 53.7% over the same period

Video is expected show the highest growth, with display formats

expected to make up the most revenue. Display is predicted to shift to

mobile web display away from in-app display

UK mobile adspend predictions (22)

46

Mobile Marketing Market Overview

Native Mobile Advertising

Native advertising site examples

• Native advertising is establishing itself as new trend in the mobile

marketing industry

• Difficult to define – “native in the eye of the beholder”

• Small screen means disruptive advertising does not work

• Whether it is in story or video format, the aim is to make an ad

blend inconspicuously into the experience of the consumer.

• Facebook, Twitter and most recently Instagram are pioneers of

the technology

• Future trends for native advertising:

• Standardisation

• Regulation

• Data-driven

IAB’s ‘Core Six Native Ads’

In-Feed Units Paid Search Units Recommendation Widgets

Promoted Listings In-Ad (IAB Standard) with

Naïve Element Units

Custom / “Can’t Be

Contained”

USA native social ad revenues

Mobile - Native Display (21)

1.6

2.9

4.6

0

1

2

3

4

5

2012 2013 2014 2015 2016 2017

USA

na

tiv

e s

oc

iall

ad

re

ve

nu

e (

$b

n)

47

Mobile Marketing Market Overview

Mobile marketing – Video

• Two main uses:

- Within a mobile app install unit to drive app downloads

- Embed into a sponsored post for a page

• Mobile video views increased 300% between 2012-2013

• Tablets are fuelling the growth

• Key driver in the ‘Big Data’ trend

• Content creation that detects the device, delivering the right size

and style of video delivers best growth

• Emerging markets – cheaper average cost per click:

- India, Pakistan and Tanzania: 1 cent

- UK: 5.4 cents

The completion rate of videos by spot position

Completion rate is the single most-important metric when

talking about mobile video

Growth in global mobile video internet traffic

Mobile video consumption has increased 532% since 2012

Facebook – the video pioneer

• October 2013 – Facebook introduces mobile video marketing

• Users will ‘click play’ to watch the video about their app before

being led to the app installation page.

- Increases installation rates and decreases the overall cost per

installation

• December 2013 – In-feed video ads trialled and introduced on

mobile

• Focus on brand promotion and mCommerce

Mobile – Video (23)

0

2000

4000

6000

8000

10000

12000

2013 2014 2015 2016 2017 2018

Pe

tab

yte

s p

er

mo

nth

of

inte

rne

t tr

aff

ic

59% Post-roll

59% Pre-roll

88% Mid-roll

48

Mobile Marketing Market Overview

• There are over a million apps available, which generate over $26 billion of

revenue p.a., and this is constantly growing

• There were 102 billion downloads in 2013

• Money is increasingly made through advertising and in-app purchases, fewer

developers are charging for the initial download to achieve a greater

audience

• Tablet app adspend is catching up with smartphone devices; by 2017, the

tablet/smartphone app adspend split will be almost 50/50

• Consumers spend the majority of their time on apps when using their

smartphone devices; the split is 80:20, app:browser

• Strategy around how to climb the app store rankings is becoming a key part of

mobile marketing – high costs associated with climbing the ‘top charts’ have

meant it has become increasingly difficult to promote an app without

significant cost

App advertising Paid for apps

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2011 2012 2013 2014 2015 2016 2017

% o

f a

pp

sto

re r

ev

en

ue

s

Re

ve

nu

e fro

m p

aid

do

wn

loa

ds

($m

)

Paid-for apps % of app store revenues

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2011 2012 2013 2014 2015 2016 2017

% o

f a

pp

sto

re r

ev

en

ue

s

Re

ve

nu

e fro

m in

-ap

p p

urc

ha

ses

($m

)

In-app purchases % of app store revenues

In-app purchases

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

-

2,000

4,000

6,000

8,000

10,000

12,000

2011 2012 2013 2014 2015 2016 2017

% o

f a

pp

sto

re r

ev

en

ue

Ad

ve

rtis

ing

re

ve

nu

e (

$m

)

Advertising Revenue % of App Store Revenues

Mobile apps (24)

49

Mobile Marketing Market Overview

65.6%

17.7%

16.7%

79.5%

11.8%

8.7%

USA digital ad spend 2011-2017 – Search

Global paid search spend by device

Computer

Phone

Tablet

14.4 15.1 15.3 14.9 13.9 12.6 10.3

0.7 2.2 4.3

6.7 9.3 12.2 15.3

0

5

10

15

20

25

30

2011 2012 2013 2014 2015 2016 2017

US S

ea

rch

Ad

Sp

en

d (

$'b

ns)

PC & Laptop Mobile & Tablet

2012 2013

Computer

Tablet

82.8%

68.5% 65.7% 64.1% 64.2%

50%

60%

70%

80%

90%

2012 2013 2014 2015 2016

Phone

Search (25)

Why is search on mobile a good tool?

• Increased mobile usage: Searches on mobile devices are expected to surpass desktop

searches by the end of 2014

• Facilitation of local search: 97% of consumers go online to research products or services in

their local area

• mCommerce on the rise: 74% of mobile users utilise a search engine during their

purchasing process

• Strong conversion statistics: 73% of mobile searches trigger additional action and

conversion (purchase, visit of website, visited store)

• Click through rates second only to video

Mobile Search Marketing – Key Considerations

• 81% of mobile searches are driven by speed & convenience

- Mobile user experience improved through mobile friendly website

- Mobile page load speeds

• Understanding and interpreting mobile user’s intent

• Expanding search mechanisms - augmented reality, conversational and voice

• Google Adwords – shift to integrated (desktop & mobile) search approach

Google losing market share

• Search isn’t restricted to browsers – innovative apps allow consumers new ways to

monetise search

Google as a % of total USA mobile search ad spending

50

Mobile Marketing Market Overview

Key trends

• Definition of “Mobile Marketing” – 2014 is becoming the year of the wearable, with mobile marketing evolving

beyond smartphones and tablets

• Programmatic buying in mobile media is shaping the way marketers are thinking and implementing mobile

campaigns and this will only evolve as technology becomes more sophisticated

• Inevitable innovation of ad formats – Native has been a revelation in 2014 and with the rise of mobile video and

improvements in location targeting tech new ad formats taking advantage of this will undoubtedly follow

• Big data – The increased integration and usage of data in mobile marketing is rapidly quashing the myth that

mobile customers are typically difficult to target

• Increased intelligent in-app marketing – Apps are where the user spends the majority of their time on mobile, and

with Snapchat and Instagram introducing advertising into their apps the bar is being raised as to how to maximise

return on investment, whilst minimising intrusion

• New sensory functionality in apps – Apple’s new health update for example will mean new innovation on a new

mobile platform resulting in a new way for marketers to raise brand awareness

• Mobile first marketing – Budgets will begin to shift to target mobile as a primary marketing route with improved

yields and engagements metrics vs. more traditional channels

Trends

Mobile Marketing

Sector Overview

M&A Market

52

Mobile Marketing M&A Market

Q1-Q3 2014 Mobile Marketing deals (26)

Q3

Deal Volume Target Region

Major Buyers Deal Types

Quarterly Split

Cross Border

PE Backed

18

2 25

11

12

Q2

Q1

21

2 North America

UK

1

South America

Middle East 1

4

2

WPP DMI

48

Total Deals

1

APAC 11

Africa

8

Western Europe

Eastern Europe 3

53

Mobile Marketing M&A Market

Date Buyer Target Target Location Target Description

Aug-14 UK Mobile app development

Aug-14 USA Mobile app development

Jul-14 USA Mobile app development

Jun-14 Australia Mobile sites and app development

Jun-14 Sweden Full service mobile marketing

Jun-14 Hong Kong Mobile advertising

May-14 Turkey Full service mobile marketing

Apr-14 USA Full service mobile marketing

Mar-14 UK Full service mobile marketing

Jan-14 South Africa Full service mobile marketing

Q1-Q3 2014 selected transactions

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

55

Mobile Marketing M&A Market

References

1) Results Intelligence

2) Advantage Business Media’s digital road map, AdAge

3) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK

4) Nativeadvertising.com

5) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK

6) Content Marketing in the UK, Content Marketing in North America: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA

7) CapIQ, 451, OneSource, Results Intelligence

8) ExactTarget Marketing Cloud 2014 State of Marketing Survey, Deloitte Analytics Trends 2014, IBM, TechRepublic

9) CapIQ, 451, MergerMarket, Results Intelligence

10) eConsultancy (January 2014), eMarketer (January & April 2014), International Business Times (October 2013), eCommerce Week (January 2014),

bpost International (January 2014)

11) eConsultancy (January 2014), IMRG (January 2014), eCommerce Week (January 2014), bpost International (January 2014), Statista (2014)

12) The Drum (February 2014), Talk Business Magazine (December 2013)

13) CapIQ, 451, MergerMarket, Results Intelligence

14) eMarketer (March 2014)

15) IAB Digital Adspend 2013

16) eMarketer (June 2014)

17) IAB/PWC Adspend 2013

18) IAB Digital Adspend 2013

19) CapIQ, 451, MergerMarket, Results Intelligence

20) Cisco VNI Mobile (2014), NPD DisplaySearch (February 2014), IDC Worldwide Quarterly Tablet Tracker (2014)

21) IAB Native Advertising Playbook (2013), BIA/Kelsey

22) eMarketer (July 2014), Gartner (2013)

23) Google & Nielsen (March 2013), Cisco VNI Mobile (2014), relevant press, company websites

24) Gartner (September 2014), relevant press, company websites, Results Intelligence

25) eMarketer (August 2013), Kenshoo (December 2013)

26) CapIQ, Companies House documents, Press, company websites, Results intelligence

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

57

About Results

Corporate Finance Advisors to the Marketing Services & Marketing Technology sectors

Selected clients and transaction counterparties

An established team of sector experts…

• 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

• Winner of Cross-Border Deal of the Year 2014 (sale of We

Are Social to Blue Focus)

Software

Marketing Services

Marketing Technology

Digital Media

Sector specialism

…with global reach

58

About Results

has been acquired

by has been acquired

by

has been acquired

by

has been acquired

by

has been acquired

by has invested in

has been acquired

by

launched a new

global creative

network

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

Unrivalled expertise in the Marcoms sector

59

About Results

Mark Williams Director

• 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 Staffcare,

Moonpig, St Ives, and Inflexion

Julia Crawley-Boevey Director

• 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 2012 to lead the

tech and digital media practice

• 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

James Kesner Manager

• Joined Results in 2013 from Kingston

Smith

• ACA qualified, previously worked

as a Finance Director for a London

based brand consultancy

• Clients include ID magazine, Not to

Scale, Writtle, Adam and Eve

Richard Latner Manager

• Joined Results in 2014 after having

spent 9 years at KPMG across

audit, TS & M&A functions

• Clients include: WRG, Irdeto and

neoworks

Selected Team Members

• 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 The Group, Figtree,

Monitor Media, Spannerworks, Flip

Media, Transactis, Punktilio,

Flamingo, Brand X, and AIA

Keith Hunt Managing Partner

Julie Langley Partner

• Joined Results in 2014, with over

15 years M&A experience

• Prior to joining Results, Chris led

the Technology M&A practice at

KPMG. He previously spent 11

years advising tech companies

at Arma Partners and JPMorgan

• Recent clients include Zinc

Ahead, Pushbutton and Irdeto

Chris Lewis Managing Director

60

About Results

Selected Team Members – International

• Long career in marketing sector (Ogilvy & Mather, The Ball

Partnership)

• Managed the acquisition of SMART

by McCann Worldgroup, CCG by

Publicis Group to establish Digitas

China, CIC by Kantar Media and

The Upper Storey by Isobar

Andrew Kefford Managing Partner –

Asia Pacific & MENA

Chris Beaumont Managing Partner –

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

• Has closed over 35

transactions totaling $0.75

billion

• Experience includes advising

Hunt Mobile Advertising on its

transaction with Opera

Mediaworks

• Maurice has previously

worked at the Zanett Group, Morgan Stanley and IBM

Maurice Watkins Partner

• 27 years experience in the

advertising sector, including

as COO of JWT's Middle East

Network

• Joined Results International in

2008 and has since been engaged in a number of buy

and sell mandates

Imad Kublawi Regional Partner –

MENA

• 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

Sunil Gupta Area Liaison –

South Asia

USA

Asia

Pierre-Georges Roy Partner

• Closed $4.0 billion in cross-

border transactions

• Experience includes advising

Hunt Mobile Advertising on its

transaction with Opera

Mediaworks and Telesystem International Wireless (NASDAQ:

TIWI) on its sale to Vodafone

For more information contact:

Keith Hunt Partner +44 (0) 20 7514 8232 keithhunt@resultsig.com

Disclaimer:

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.

Julia Crawley- Boevey Director +44 (0) 20 7514 8239 jcrawley-boevey@resultsig.com

Julie Langley Partner +44 (0) 20 7514 8247 jlangley@resultsig.com