Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Marketing & Tech Investment Landscape
presented by
Wilma Jordan, Founder & CEOThe Jordan, Edmiston Group, Inc.
January 21, 2014
AdExchanger – Industry Preview 2014
2AdExchanger – Industry Preview 2014
About JEGI
The Jordan, Edmiston Group, Inc. (“JEGI”)
The Leading Independent Investment Bank Serving the Media, Information, Marketing and Technology Sectors
ExperienceFounded in 1987, JEGI has completed more than 500 transactions, spanning media, information, marketing and technology companies.
Industry LeadershipJEGI has deep relationships among global, middle-market and emerging media, information, marketing
and technology companies, enabling it to anticipate trends and provide valued advice.
Primary FocusJEGI focuses primarily on executing sell-side assignments, conducting efficient,
highly effective processes to meet the needs of the client and achieve maximum value.
IndependenceJEGI is committed to the success of each client assignment, with no sales and trading, lending or private equity investing to conflict with the firm’s advisory clients' priorities.
ResultsJEGI’s team-driven process achieves the highest transaction success rates and
enthusiastic endorsements from the firm’s satisfied clients.
3AdExchanger – Industry Preview 2014
JEGI – Leading The Market
#1 8th Consecutive Year
JEGI – The Consistent Market Leader in Transactions Completed Among the Sectors It Serves
*Source: 451 Group
4AdExchanger – Industry Preview 2014
Industry-Leading Domain Expertise
27 Transactions in 2012/13; Over $2 Billion in Enterprise Value
In each transaction listed above, JEGI’s client is mentioned first.
5AdExchanger – Industry Preview 2014
Media, Marketing and Technology M&A Driven by Lots of Small Deals
M&A Overview
6AdExchanger – Industry Preview 2014
Industry SectorNo. of Deals
Value (millions)
No. of Deals
Value (millions)
No. of Deals
Value
B2B Online Media & Technology 57 $601 84 $11,957 (32%) (95%)
B2C Online Media & Technology 219 $6,197 252 $10,088 (13%) (39%)
Business‐to‐Business Media 34 $452 34 $411 0% 10%
Consumer Magazines 37 $1,703 43 $277 (14%) 515%
Database & Information Services 69 $6,029 59 $11,450 17% (47%)
Education Information, Technology & Training 81 $6,954 64 $5,255 27% 32%
Exhibitions & Conferences 64 $3,751 50 $874 28% 329%
Healthcare Information & Technology 209 $10,458 156 $10,461 34% (0%)
Marketing & Interactive Services 479 $45,079 485 $20,501 (1%) 120%
Mobile Media & Technology 145 $7,398 124 $3,468 17% 113%
Total 1,394 $88,623 1,351 $74,742 3% 19%Source: JEGI Transaction Database
Media, Information, Marketing & Technology M&A Activity
2013 2012
January ‐December January ‐ December % Change
Marketing Services & Technology –Remains Most Active M&A Sector
M&A Volume and Value by Sector
7AdExchanger – Industry Preview 2014
Five “Hot” Trends Driving Marketing/Tech M&A
1
Consulting Firms Becoming Marketing Services FirmsConsulting Firms Becoming Marketing Services Firms
Non-Tech Companies Buying Tech Start-upsNon-Tech Companies Buying Tech Start-ups
5
2 Acqui-HiresAcqui-Hires
Continued Rise of Mobile AdvertisingContinued Rise of Mobile Advertising3
Building Out the “Stack”Building Out the “Stack”4
8AdExchanger – Industry Preview 2014
Non-Tech Cos Buying Tech Start-ups
Retail – traditional retailers actively acquiring technology, to compete with e-commerce sites, such as Amazon
• Walmart (Walmart Labs), Target, Staples and others are already actively acquiring
Technology start-ups enable expanded customer reach, to a younger demographic
Customer loyalty is key – interaction and personalization important
To help boost sales and customer interaction
• Companies collecting vast amounts of data (big data) need to acquire the tools to analyze and utilize the data
Companies have developed Labs to house acquisitions – key is the ability to retain talent
1
Key Trends
9AdExchanger – Industry Preview 2014
Non-Tech Cos Buying Tech Start-ups
1
Recent examples of non-tech companies acquiring tech start-ups:
Monsanto acquired Climate Corporation (big data weather tech) for $930 million
Under Armour bought MapMyFitness (fitness tracking app) for $150 million
Staples acquired e-commerce personalization company Runa
First Data acquired mobile loyalty start-up Perka and mobile payments start-up Clover
E.W. Scripps acquired Newsy (delivers news via devices) for $35 million
Ford Motors bought Livio, an in-car music app, for $10 million
Live Nation acquired Meexo, a mobile start-up for connecting people more meaningfully
Walmart acquired Tasty Labs, a social software developer
Securing Talent & Technology to Compete
10AdExchanger – Industry Preview 2014
Acqui-Hires2
Corporations, especially high-growth digital media/marketing/tech companies (e.g., Google, Facebook, Apple, Yahoo!, Twitter) acquiring for talent
Typically, valuation based on price per head – mostly cash deals, possibly some stock, but earn-outs usually avoided
• “Talent deals are a horribly expensive way to get talent – 10 to 100 times as much as we’d pay a recruiter. But it’s a necessity.” David Sobota, Director, Corp Dev, Google
Companies prefer acqui-hires of companies that have not raised much capital…VCs/investors need to get a decent return
Companies focused on making acquisitions work and have institutionalized the process of integrating acquisitions
• “For every deal we do, the sponsor on the corp dev team has to do a check-in 30 days in to catch stuff early, and also six-month and one-year look-backs.” Jessica Verrilli, Corp Dev Principal, Twitter
Talent Acquisition
11AdExchanger – Industry Preview 2014
Acqui-Hires2
Recent examples of acqui-hires:
Facebook acquired SportStream, social sports app enables users to connect over games
Yahoo acquired Ptch, a social media application that enables users to create short videos
Yahoo acquired Quik.io, a three-person app that sends videos, music, etc. to iPad
Square acquired Viewfinder, a NY-based photo sharing app
Square acquired Evenly, a four-person mobile payments app
Twitter acquired Locomatix, real-time stream and analytic data processing
Apple acquired SnappyLabs, a one-man photo technology app
Google acquired Behavio, allows mobile devices to sense and react to human behavior
Securing Talent to Compete
12AdExchanger – Industry Preview 2014
Continued Rise of Mobile Advertising
3
Global mobile ad market growing 57% in 2014, to $26.3 billion
Facebook’s share of global mobile ad revenue continues to expand, but Google still the “800 pound gorilla” – more than 50% of global mobile ad revenue
US mobile ad spending forecasted to grow 56% this year, to $15 billion
Source: eMarketer
Mobile – A Very Hot Market
Global Mobile Ad Spend
13AdExchanger – Industry Preview 2014
Continued Rise of Mobile Advertising
Target Overview: Mobile ad exchange helps mobile publishers manage ad inventory
Twitter Rationale Driving significant revenue from mobile; deal vaults Twitter to forefront of race to combine
effective targeting and mobile ad-buying• Pre-acquisition, Twitter expected to account for nearly 2% of 2013 global mobile Internet ad revenue1
3
Case Study – Twitter Acquires MoPub for $350 million
Insider View“We look at this deal as a big bet on the mobile ecosystem, which is growing incredibly quickly…mobile advertising is in the early stages, and Twitter and MoPub together give us the opportunity to help drive what mobile advertising becomes.”
Kevin Weil, VP, Revenue, Twitter
1 eMarketer
14AdExchanger – Industry Preview 2014
Building Out the “Stack”4
It’s All About Enterprise Marketing Management
DAM/MAM
WCM
CRM
MCM
CEM
Analytics
BI
EMM Stack High rate of technology adoption by CMO’s – a tremendous market opportunity for enterprise technology vendors
The “Stack” comprises systems that help marketers manage and measure ongoing interactions with their customers
Rapid technology adoption within marketing function has significantly impacted marketing services providers
Business Intelligence
Analytics
Customer Experience Mgmt
Multi-Channel Marketing
Customer Relationship Mgmt
Web Content Mgmt
Asset Management
EMM STACK
15AdExchanger – Industry Preview 2014
Building Out the “Stack”4
$30 Billion in M&A Value, 2010 to 2013
Three of largest transactions in media/marketing/technology for 2013 were marketing automation deals to help enterprise software companies build the marketing stack
Salesforce acquired ExactTarget for $2.5 billion
Oracle bidding for Responsys for $1.6 billion
Adobe acquired Neolane for $600 million
16AdExchanger – Industry Preview 2014
5Consulting Firms Becoming
Marketing Services Firms
Acquisitions of marketing services firms bring needed talent to consulting firms (e.g., digital strategists, designers, analysts, technologists)
Marketing services provide creative/new capabilities for consulting firms (e.g., customer experience, customer interaction, design, measurement, targeting, insights)
Marketing services enable consulting firms to offer clients a more holistic group of services (a key differentiator) and higher levels of customer satisfaction and loyalty
Consulting firms able to keep more revenue in-house – providing more actionable services to clients, expanding market share and growth
Investing in Marketing Services for Growth
Insider View
“These sophisticated digital creative strategists, when coupled with PwC’s broad range of global business and industry consultants, strengthen our ability to deliver holistic, end-to-end business transformation around the world.”
Miles Everson, PwC US Advisory Leader
17AdExchanger – Industry Preview 2014
Consulting Firms Becoming Marketing Services Firms
5
Recent examples of consulting firms acquiring marketing services groups:
PWC acquired BGT, a digital creative consultancy
PWC acquired Ant’s Eye View, community building and management
Deloitte acquired Banyan Branch, a digital and social media agency
Deloitte acquired Ubermind (mobile app developer) for $50 million
Accenture acquired Fjordnet, digital design services
Accenture acquired Acquity Group (e-commerce and digital mark services) for $285 million
IBM acquired Urbancode, push out updates via mobile, social, cloud, etc.
IBM acquired Tealeaf, mobile commerce analytics
KPMG acquired Link Analytics, big data analytics solutions
Keeping More Revenue In-House
18AdExchanger – Industry Preview 2014
Predicting the Future
Predictions
1. Lines continue to blur, as publishers become agencies; agencies become content creators and sometimes publishers; and brands are content creators
Can Everyone Play Well in the Sandbox?
AgenciesPublishers
Agencies Content Creators
Brands Publishers
19AdExchanger – Industry Preview 2014
Predicting the Future
Predictions
1 JP Morgan
2.Sponsorship spending estimated at $20.6 billion in 20141 and will continue to have a major impact on advertising
3.
Native advertising (60% of Facebook’s revenues in 2013) is the major driver of advertising spend for the foreseeable future
20AdExchanger – Industry Preview 2014
Transitioning Advertising Model
PUBLISHERADVERTISER CONSUMER
BRANDVOICE
21AdExchanger – Industry Preview 2014
Predicting the Future
Predictions
4.By 2016, programmatic will drive an estimated 35% of all digital advertising spend
…and, finally…
5.Over the next few years, large corporations ($250+ million of revenue) will drive M&A, further consolidating emerging marketing and tech companies
22AdExchanger – Industry Preview 2014
Predicting the Future
Thank you.
Wilma Jordan, Founder & CEOThe Jordan, Edmiston Group, Inc.
Marketing & Tech Investment Landscape
presented by
Wilma Jordan, Founder & CEOThe Jordan, Edmiston Group, Inc.
January 21, 2014
AdExchanger – Industry Preview 2014