luma digital brief 009 - market report q2 2016
TRANSCRIPT
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Q2 2016 Market Report
Digital Brief 009
22
Mobile
LUMA’s Singular Focus on Digital Media
Technology
Media
Marketing MarTech
DigitalContent
AdTech
Ø LUMA’sexpertiseisattheintersectionofMedia,MarketingandTechnology
Ø Atthisintersectionexists:§ DigitalContent: contentsites,MCNs,gamepublishers,aggregators
§ AdTech: display,search,video,mobile,social,contentmarketing/native,connectedTV
§ MarTech: data,analytics,salesandmarketingautomation,email,predictivetools,commercetechnology,shoppermarketing,payments
Ø Mobile proliferationhasamajorimpactonthesemarketsandLUMAisdeeplyknowledgeableonmobile
33
Overall Commentary on Consolidation
Ø InourlastQ12016MarketReport,wereported72mergersandacquisitionsindigitalmediaandmarketing
Ø Thedealswetrackinthisreportfallintooneoffourcategories:§ Large(over$500mm)§ Medium($100– $500mm)§ Small($20– $100mm)§ Sub$20mmexitsareconsideredtechandteamdeals,
capitulations,orundisclosed
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U.S. Digital Media M&A Activity by Sector
Source: LUMA
#ofTransactions
Ø WithventurecapitalfundingactivitycoolingoffandatepidIPOmarket,M&Aremainsabrightspotinthishighlyfragmentedenvironmentasdealactivitycontinuestogrowonarobustpace
Ø AdTechM&AactivitynotablyslowedthisquarterwhileMarTechM&AsawanuptickinactivitywithmajordealsincludingtheacquisitionsofDemandware,Marketo andSitecore
20 18 1019 12
21 2622
15 24
2832
2734 35
01020304050607080
Q22015 Q32015 Q42015 Q12016 Q22016
AdTech MarTech DigitalContent
55
9%
9%
13%
43%
9%
4%13%
ConsumerInternetCommerceTelcoMediaMarketingTechTechServicesInternetOriginalsCRMSoftwareMarketingData
Digital Media M&A Activity by Strategic BuyersQ22016
StrategicBuyersTransactions
Ø Inthesecondquarter,buyersfromMedia,TelcoandCRMSoftwareledM&Aactivity
Ø TheDreamworks andSupercellacquisitionsheadlinedthesignificantconsolidationinMediathisquarter
Ø ThemarketingcloudwarsareheatingupwithSalesforce,OracleandAdobemakingnotableacquisitionsacrosse-commerce,data,andcontentengagementtechnology
Source: LUMA
66
Ad Tech M&A Activity#ofTransactions
Ø Observations§ AdTechM&Avolumeanddeal
valuefellthisquarterreflectingadeclinebothq-o-qandy-o-y
§ Despitethedecline,weexpectmoreconsolidationduetoincreasingfragmentationinthespaceandagrowingpoolofbuyers
Ø LookingAhead– People-basedMarketing§ People-basedmarketinghas
emergedtodeliveradstorealusersbasedoffoffirst-partydata
§ Leveragingthistechnologyenablestrueone-to-onemarketingacrossdevices
Source: LUMA
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1 2 2
18 13
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0
5
10
15
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25
Q22015 Q32015 Q42015 Q12016 Q22016
Over$100M Under$100M
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Ad Tech – Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
Source: Crunchbase; Capital IQ
N/A N/A Samsung acquiredCanadianDSP/adserverAdGear tohelpitspushintoadvertisingwhereitcanmonetizeeffectivelyacrossTVandmobile
NASDAQ $157M Gannetthasagreedtoacquirelocal digitalmarketingcompany,ReachLocal,tobolsterthepublisher’sgrowingdigitalbusiness
$6M >$100M Comcastacquired StickyAds,avideoSSPbasedoutofFrance,asitbuildsoutitsprogrammaticTV/digitalvideoadvertisingbusiness
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MarTech M&A Activity#ofTransactions
Ø Observations§ Itwasthequarterofprivate
equitydealswithEQT,MarlinEquityandVistaallactivebuyers
§ VistawasthesurprisebuyerforMarketo,rumoredtobeatargetforSAPandMicrosoft,payingastrategic6xrevenuemultiple
§ Teradataexitedthemarketingsoftwarebusinessfor$90MM,afterpaying$525MMfortheassetsfromAprimo in2010
Ø LookingAhead– PrivateEquityBuyers§ Privateequitybuyersare
becomingmoreactiveandpayingstrategicmultipleforthequalitytargets;lookforthistocontinue
Source: LUMA
5 5 4 3 5
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0
5
10
15
20
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30
Q22015 Q32015 Q42015 Q12016 Q22016
Over$100M Under$100M
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MarTech – Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
$5M $50M ByacquiringCrosswise,Oracleaddscross-devicetechnologytoitsDataCloud,furtherstrengtheningthetechgiant’sdataassetsandcapabilities
NYSE $2.7B LeadingCRMplatformSalesforce.comacquiredDemandware,theleadingenterprisecloud-basede-commerceplatformprovider,tocreateitsnewCommerceCloud
NYSE $170M|$315M OpenTextacquiredHP’sCustomerManagementandCustomerExperiencesoftwareassets(formerlyInterwoven)tocomplementitsowncustomermanagementofferings
$67M N/A AdobeacquiredLivefyre,acontentmarketingandengagementplatform,andwillintegrateits technology intotheAdobeExperienceManager
NASDAQ $1.7B Marketo,amarketingautomationcompanywithover4,600customers,willbetakenprivatebyVistaEquityPartners
N/A $1.1B TCV’spositioninSitecore,awebcontentmanagementsystem,wasacquiredbyEQTPartnersforastrategicmultipleasitplanstoexpanditsdigitalmarketingcapabilities
NYSE $90M TeradatadivesteditsmarketingsoftwareassetstoMarlinEquityforasignificantlylowerpricethanthe$525MMTeradatapaidtoacquiretheassetsinthe2010fromAprimo
CustomerExperience CMS
Marketing Software
CustomerManagement
Source: Crunchbase; Capital IQ
1010
17 4 7 7
26
2523
27 28
0
5
10
15
20
25
30
35
40
Q22015 Q32015 Q42015 Q12016 Q22016
Over$100M Under$100M
Digital Content M&A Activity#ofTransactions
Ø Observations§ TheSupercell,Dreamworks and
LinkedInacquisitionswerethehighlightsofthequarterwhileacquisitionsofComplexMediaandFusionandmanyothernichepublisherswerethetrend
Ø LookingAhead– VirtualReality§ ContinuedinvestmentandM&A
activityinvirtualrealityisevidenceofamaturingindustry
§ Fromincumbentstonewstartups,theentiremediaecosystemisfocusedonexploringnewpossibilitieswiththisrichandengagingmedium
Source: LUMA
1111
Digital Content – Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
$61M $250M VerizonandHearstjointlyacquiredComplexMedia,amale-focusedmediacompany,togainitscovetedaudienceasComplexbecomesmorevideo-centric
NASDAQ $4.1B NBCUniversal (Comcast)acquiredDreamworksAnimationstobolsteritsportfolioofentertainmentfranchisesacrossTV,film,anddigitalproperties
$25M $250M GermanmediagiantAxelSpringeracquiredmarketresearchfirm eMarketerasthecompanyexpandsitsdigitalpresenceintoEnglish-speakingmarkets
N/A N/A UnivisionacquiredDisney’sstakeinFusion,aTVanddigitalmediapublisher,and iscreatingFusionMediaGrouptohouseitsgroupofmediaproperties
NYSE $26.2B ByacquiringLinkedIn,MicrosoftaddstheubiquitousprofessionalnetworkanditsdiverserevenuemodelstoMicrosoft’s“professionalcloud”
N/A $10.2B ChinesemediagiantTencentHoldingsacquiredamajoritystake inthemassivelyprofitablemakerofthepopularmobilegamingfranchiseClashofClans
Source: Crunchbase; Capital IQ
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-40%
-20%
0%
20%
40%
60%
80%
4/1/16 4/15/16 4/29/16 5/13/16 5/27/16 6/10/16 6/24/16
TUBE RUBI TRMR MXPT YUME FUEL CRTO MRIN NASDAQ
Q2 2016 Stocks Performance – Ad Tech
Market Data as of 6/30/16
Ø AdTechStumblesinQ2§ AdTechstocksreturnedto
negativeterritoryafterapositiveQ1,falling2%collectivelyor11%withoutincludingMXPT’sperformance
Ø Highlights§ Followingitssuccessfulreverse
stocksplit,MXPTfinishedabove57%attheendofthequarter
§ ExcludingMXPT,onlyCRTOshinedafterreportingstrongrevenuegrowthof36%andmobileadvertisingmakingupover50%ofrevenueforitsQ1performance
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40%
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100%
4/1/16 4/15/16 4/29/16 5/13/16 5/27/16 6/10/16 6/24/16
CRM MKTO HUBS BCOV BV DWRE JIVE NASDAQ
Q2 2016 Stocks Performance – MarTech
Ø MarTech Rebounds§ MarTech reboundedafterapoor
Q1,soaring15%,excludingMKTOandDWRE’sperformance
§ BCOVcontinuestohavegreat2016,gaining43%afterrisingover4%inthepriorquarter
Ø Highlights§ TwomajorMarTech players,
MKTOandDWRE,wereacquiredfor$1.8billionand$2.8billionrespectively
§ MKTOandDWREacquisitionmultipleswere7.5xLTM,6.2xCYrevenueand10.5xLTM,8.8xCYrevenuerespectively
Market Data as of 6/30/16
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Q2 Key Startup Financings to WatchLead Investor Capital Raised Valuation Comments
Source: Crunchbase
$50M ~$300M Meta,anaugmentedrealitystartup,raisedfundingtocontinuedevelopmentofitsnewestMeta3headsetandsoftwaretools
$50M $600M PublishingplatformMediumisbuildingtowardsitsvisionasapublishingnetworkaftersigningmajorpublisherstoitsplatform
$100M $500M Themusicvideocreatorapppopular withyoungteensisgrowingrapidlywithover60millionusersasitbecomesafull-fledgedsocialnetwork
N/A $45M N/A Contentrecommendation engineOutbrain isusingnewfundingtobuildtoolsforpublisherstomaximizerevenueandimprovecontentdiscovery
$50M N/A Showpad,asalesenablementplatform,hasdoubled revenueoverthelastfouryearsandservesover850customers
$50M N/A Withits latestroundoffunding,socialmarketingplatformSpredfast willmake apushintoplanningandcontentcreation,andexpandintegrations
$100M N/A RidesharingcompanyViaisexpandingintonewcities asitbringsitsdifferentiatedmodel– flatfeepricingandsharedrides– tomoremarkets
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LUMA’s Recent Content
StateofDigitalMediaPresentedatDMS16
Ø Atour8th annualDigitalMediaSummit,wepresentedtheStateofDigitalMedia,whichprovidesourviewsonthemarketandsignificanttrendsindigitalmedia
LUMADigitalBrief008ScapeofCards
Ø “ScapeofCards”explainstheissuesfacingthedigitaladvertisingecosystemandtheimplicationsforallthekeyconstituents
StateofDigitalMarketingPresentedatDMSWest15
Ø AttheUpfrontSummit,wepresentedtheFutureofTV,whereweexplainedtheconvergenceofTVanddigitalvideoandwheretheindustryisheadednext
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LUMA’s Funny Business
MeekerforMillennials
Ø WeparodiedEminem’sLoseYourselftohelpexplainMaryMeeker’sInternetTrendsdeckattheCodeConference.Thoselyricswerehard– newfoundrespectforrap!
CannesYachtLUMAscape
Ø ThecontinuedproliferationofrentedyachtsbythetechecosystemseemedliketheperfectopportunityforaLUMAscape
CannesCarpoolKaraoke
Ø SinceCannesLionsisaboutcreativity,weadoptedJamesCorden’spopularCarpoolKaraokeformattofeaturetheenthusiasmofdigitalleaders,startingwiththeinimitableCarolynEverson
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LUMA’s Differentiated Value Proposition
1. PeerlessIndustryKnowledge2. StrategicApproach
3. ExecutionExcellence
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LUMA’s Content-Driven, Expert-Based Approach
ConferenceKeynotes
Publications(over3millionviews)
CorporateTeach-ins
LUMAscapes(over6millionviewsfrom211countries)
CompletedDeals
DigitalBriefs
DISPLAY MOBILE VIDEO SOCIAL NATIVE SEARCH MARTECH COMMERCE GAMING STRATEGICBUYERS
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