1

Introduction

1 1

What’s hot in marcoms today?

Q3 2014

2

What’s hot in marcoms?

2

As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned 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.

Introduction

Content Marketing

Sector Overview

Market Overview

Content

Sector Overview

4

Content Marketing Market Overview

Creation Curation & Recommendation Planning & Optimisation

Market landscape: Illustrative

5

Content Marketing Market Overview

Ecosystem

Content

App integration

In-feed

Social

Native ad platforms

Publishers

Video &

Mobile

Social

Networks Brands

News &

Sharing

Search

6

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

7

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

8

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

9

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

10

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

12

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

13

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

14

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

15

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

16

About Results

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Unrivalled expertise in the Marcoms sector

17

About Results

Mark Williams Director

• Joined Results in 2010, with over 15 years of M&A experience

• Prior to joining Results Jim led

European M&A activity for the

marketing services division of

Omnicom (DAS)

• Clients include We are Social,

Blue Rubicon, Virgo Health,

Crayon and Iris

• 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

• 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

• 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

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

Jim Houghton Partner

Keith Hunt Managing Partner

Julie Langley Partner

Chris Lewis Managing Director

18

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:

Jim Houghton Partner

+44 (0) 20 7514 8234

jhoughton@resultsig.com

Julia Crawley-Boevey Director

+44 (0) 20 7514 8239

jcrawley-boevey@resultsig.com

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