company presentation - themarker · 2016-10-05 · this presentation . various other risks and...
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Confidential
Company PresentationSeptember 2016
Confidential
This presentation contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words “will”, “believe,” “expect,” “intend,” “plan,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, among others, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this presentation . Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2014 filed with the SEC on April 16, 2015. Perion does not assume any obligation to update these forward-looking statements..
SAFE HARBOR
Non-GAAP financial measures, including adjusted EBITDA, consist of GAAP financial measures adjusted to exclude acquisition related expenses, other non-recurring expenses, share-based compensation expenses, accretion and gain from the reversal of acquisition related contingent consideration, impairment of goodwill, amortization and impairment of acquired intangible assets and the related taxes thereon, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
NON-GAAP MEASURES
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2016 Expected EBITDA Margin
14%
Q2‘16 Revenue
$78M
Q2’16 EBITDA
$10.8M
1. Current market leader, with scale
2. Profitable for 10+ years
3. Poised to take advantage of multiple industry growth drivers
4. Strong partnerships with:
5. Seasoned and successful management team
Complete solutions for advertisers & publishers:
Outstanding Creative Formats
SuperiorExecution
Exclusive Inventory
Data-driven Technology
Enhanced Engagement
Programmatic Buying at Scale
Investment highlights
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Perion is a Global Leader in Two Major Categories
intent-based solutions for publishers
high-impact brand advertising
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Leader in intent-based solutions for publishers
01
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Syndicating intent-based search& driving incremental revenue to publishers
Search providers
Monetize publishers’ products
Drive traffic to searchproviders & increase their
market share
Publishers
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Number 2 reseller of intent-based Search, with high profitability
Perion has reacted quickly to market dynamics achieving stability and marginal growth
• Strong management and focused strategy
• Solid long-term partnerships
• Complies with all market regulations
IAC69%
Perion17%
Blucora (infospace)
14%
Competitors market share (%), Q1 2016
Source: companies publications, Perion analysis
42.940.8
45.543.1
40.543.
Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
Search monetization revenue ($M)
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The intent-based business is built upon strong assetsWhat makes CodeFuel a strong industry player?
Long term partnerships with Bing, Yahoo & Google provide scalable demand inventory, specific to intent key-words & category
Strong partnerships
Wide search data enablesperformance (RPM) optimization & user intent extraction
Intent know-how & big data
Innovative tech teams & infrastructure gives search know-how backed by vast experience in monetizing client assets
Proprietary technology
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Intent-basedCustomized native formats for superior UX
Balancing engagement & monetization
Focusing on end-user preferences, based on ongoing user feedback
A complete solution for content publishers
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In-Video
In-Feed
In-SearchIn-Image In-Tag
Customized native formats
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KW ranking based on machine-learning engineOptimize for best RPM based on predictive CTR
Balance monetization & engagement
Identifying user intent and balancing monetization & engagementUsing top proprietary technologies
Advertiser Publishers
BIG DATA from 10m searches a dayPage screening w/ smart tag algorithmAdded data signals
Identify user intent
Real time delivery of adsDashboard that tracks performanceNon-human traffic detection
Programmatic demand delivery
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Leader in high-impact brand advertising
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CAPTURING CONSUMER ATTENTIONIS DIFFICULT
Average AttentionSpan of 7 Seconds
See 7000 MarketingMessages a Day.
3.3 Devices on Average. Millennials Have 4
Source: Forrester Research, "The State of Consumers and Technology Benchmark 2014 US" as cited in company blog, Jan 16, 2015
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WE HELP BRANDS
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With high-impact ads that deliver results
153%Greater Ad Reca l l
50X CTR Versus Standard Disp lay
61% More L ike ly To Share V ia
Soc ia l Networks
46%Higher Overa l l
L ikeabi l i ty
DRIVES ACTION BRAND RECALL
EARNED MEDIALIKEABILITY
Sources: High Impact Advertising Across Screen: An Undertone & Ipsos Joint Research Project, 4/15; Nielsen “The New Digital Consumer” 2/14
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Driving Intent For A Luxury Auto Brand
Build awareness for new, more affordable luxury car model and to engage affluent men, taking over sales from luxury competitors.
Campaign Objective
Tactics
Creative: Page Grabber
Targeting: M35-64; HHI $220K, Investable
Assets $500K+, Luxury Car Owners or In-
Market for Luxury Car; Auto, Business, Tech,
Sports, Luxury Channel targeting.
+200%Lift In Purchase Intent
Among Men A35+ Exposed
To Page Grabber
+45%Lift In Aided Brand
Awareness among
M35-64
Results:
Source: Millward Brown
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17.5% Map Completion
Rate
285%
82.3%Interaction Rate
With The Product
Carousel
Greater Map
Completions Than
Benchmark
Higher Carousel
Interaction Rate than
CPG benchmark25x
Engaging Consumers With Store Locators of a Beauty Brand
Increase awareness of a cosmetics company promotional offer among beauty-conscious women & drive in-store traffic with store locator functionality.
Creative: Expandable Half Page Rich
media Mobile w/ in-unit store locator.
Targeting: W25-54, BT to frequent luxury
department store shoppers, Purchased-
based targeting (Offline Beauty buyers)
Tactics
Campaign Objectives
Source: Spongecell FY13 Benchmarks
Results:
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Tactics
Increase Consumer Loyalty and Drive Offline Sales for a Coffee Chain
Increase in-store sales during Holiday Season among potential brand “switchers” and establish the coffee chain as the holiday destination for consumer coffee needs.
Creative: Page Grabber, In-Stream
Video, Half Page 300x600
Targeting: Demo to A18-34, Behavioral
targeting to Family Oriented, Coffee
Shop Visitors (Holiday), Gifters, Indulgent
Seasonal Drink Buyers
Source: Nielsen NBI Study
+$5.91In Incremental Sales for
every $1.00 Spent on
Undertone media
98.0%of brand’s incremental sales
during Holiday driven by
Undertone ads
Campaign ObjectiveResults:
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Engaging cross-screen creative
Data-driven programmatic platform
Exclusivequality media
Engaging consumers requires more than a beautiful ad
A complete solution for brands
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Stunning cross-screen creative
Full screen, inherently viewable format that’s built with responsive design to allow for a seamless experience across devices
PAGE GRABBER
Custom built for highly engaging brand experiences
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FACEBOOK CANVAS• Mobile in-app• In feed to full screen experience • Fast loading High Impact• Flexible creative
Leveraging our social expertise with high impact canvas on Facebook
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Comprehensive solution in growing channels
Quality Pre-Roll Video
• Direct publisher video inventory
• Video ad before video content
• High viewability & completion
Full Screen Video
• Full screen viewable video
• Largest video real estate
• Vertical video functionality
In Line Video
• In line viewable video
• User scroll (TBD)
• Leave behind creative (TBD)
COMPREHENSIVE VIDEO SOLUTIONS
A R R I V I N G 2 H 2 0 1 6
MOBILE VIDEO TEASER TAPESTRY UMOTION
PROPRIETARY MOBILE FIRST
• Full screen storytelling format using playful
mashups of static images and animated GIFs
• User controls the pace of the brand story by
tapping to proceed
• Takeover format that leverages
native smartphone capabilities
for a unique, participatory ad
experience
• Prompted by the user with a
simple tilt, twist, shake or pan
motion
• Captures attention with a 7-10 second
auto play video teaser
• Can house vertical or horizontal video,
and includes branded skins and social
overlays
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Proprietary technology enables the best delivery of high-impact ads to the target consumers
HTML 5Creative libraryRich media delivery
Adcreation
Insights & Optimization that drive higher consumer engagement
Right context
Programmatic buying platformProgrammatic buying for all formatsIntegration with key DSPs
Right audience
Data platformUser profiles & targetingReporting & analytics
Publishers
Advertiser
Right ad
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192.3 Million Uniques in content publishers>$200M annual spend on social networks
Brand safe, quality network
Source: Comscore May 2016, Cross Screen Reach
192M uniquevisitors in content publishers
100% YoY growth in annual spend onsocial networks
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Our Quality Standards Are Reflected in Our Verified Human Traffic
% VERIFIED HUMAN TRAFFIC
85.9%Networks & Exchanges
96.3%Direct Publishers
98.4%Undertone
source: Ad fraud percentages, Integral Ad Science, Q2 2015
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We help top brands stand out
AUTO CPG PHARMACEUTICAL RETAIL TECH/TELECOMFIN SERVICES
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Unified value proposition
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Leader in high-quality & intent-based advertising solutions for brands and publishers
Creative
- High-impact- Social- Native
- Intent-based- UDMS
- Self-serve (MMR – FB, TW, IG) - Bing API- Private marketplace
ProgrammaticData
Consumer minded
Advertiser Publishers
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Financialinformation
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DIVERSIFIED REVENUES with strong growth trajectory
From 84% search revenue in Q2 2015 to a more balanced 53% in Q2 2016:
53%42%
5%
Search Advertising Product
84%
7%9%
Q2‘15
$40.8$45.5 $43.1
$40.5 $41.7
$7.8 $7.1
$24.5 $35.3 $36.3
Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16E
Advertising & other Search
$78-81
Q2’16
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Growing EBITDA trend
$13.8
$11.5$12.0
$8.8
$10.7
$12-13
EBITDA, ($M) Q2’15-Q3’16E
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2016 Expected EBITDA Margin
14%
Q2‘16 Revenue
$78M
Q2’16 EBITDA
$10.8M
1. Current market leader, with scale
2. Profitable for 10sraey +
3. Poised to take advantage of multiple industry growth drivers
4. Strong partnerships with :
5. Seasoned and successful management team
Complete solutions for advertisers & publishers:
Outstanding Creative Formats
SuperiorExecution
Exclusive Inventory
Data-driven Technology
Enhanced Engagement
Programmatic Buying at Scale
Investment highlights