The Jordan, Edmiston Group, Inc (JEGI)hosted its eighth annual Media & TechnologyConference on January 19th, coinciding withthe firm’s 25th anniversary serving the fast-changing and dynamic media, information,marketing services and technology sectors.Given the high level of interest in this event,JEGI moved the setting this year to the ele-gant, and significantly larger, Time WarnerCenter in New York City.

JEGI’s annual conference includes an after-noon of highly relevant, actionable program-ming, featuring a roster of dynamic speakers,and networking with more than 250 seniorlevel executives from across the key sectors thatJEGI serves. This year’s event was focused on“Rebooting for Growth in the Digital Age”.As the media and technology markets contin-ue to evolve and converge at a torrid pace, theconference brought together a mix of compa-nies and investors seeking ways to drivegrowth and generate new revenue streams.

As always, JEGI is extremely grateful to theevent’s sponsors for their support: The BostonConsulting Group; Econsultancy; GE Capital;The Howard-Sloan-Koller Group; Intralinks;and Morgan Lewis, as well as the associationsponsor – Software & Information IndustryAssociation (SIIA). JEGI would also like tothank the A-list of speakers who contributedtheir time and effort to the conference pro-gram. Bios for all speakers and the full confer-ence program can be found here:http://bit.ly/yX04oZ

The following provides key insights fromselect speakers:

keynote speaker: George Colony, Chairman& CEO, Forrester Research

three social thunderstormsAfter thirty years in technology, I’ve come tosee that this business is driven by what I call“unpredictable thunderstorms”. These arenot gradual changes, but happen very quicklyand unexpectedly. I’d like to talk about threepotential thunderstorms that Forrester sees onthe horizon.

I – Death of the Web

While this may be a controversial thing to say,the death of the Web is driven by a few factors.First, processing speeds now double every 1.5years, and storage capability doubles on a perdollar of cost basis every year. However, thenetwork, while improving in number of bytesper second per dollar, is moving slower thanthese other technologies.

This means that if you depend on your net-work for your future architecture, you will bewasting all this extraordinary processing powerand storage. At the same time, there is bur-geoning power at the periphery of the network– the phones we carry, the iPads we use, theAndroid devices. Their explosive growth hasresulted from being small and portable, whilehaving the same power level as gigantic proces-sors of the past.

In our view, this means the PC model is dead,because it does not leverage this extraordinarypower at the center of the cloud. However, youwould also be on the wrong track if you wentfor a totally cloud based model, because it isnot leveraging the extraordinary peripheralpower.

So, a new model is emerging – the App/InternetModel. The future architecture is going tocombine the amazing power in the cloud andthe Internet with powerful local devices run-ning very powerful applications. And these willinteract in a seamless way. In fact, you may noteven know where the processing is taking place.You may not even know where the file isstored. When it is done correctly, the interpo-lation will be completely transparent.

We’ve sized this APP/Internet market ataround $2.2 billion dollars worldwide, grow-ing 85% a year. Apple and Google are nowshipping a billion apps a month. This is goingto be very big business, and it will spawn a newservice sector to support it.

While Apple is currently the clear leader in theApp/Internet market, we see three competinge-cosystems. The Apple iOS, Google’s Android

(continued on page 7)

JEGI Media and Technology ConferenceRebooting for Growth in the Digital Age

March 2012 Independent Investment Banking for Media, Information, Marketing Services & Technology

In This Issue...

JEGI Media and Technology Conference- Three Social Thunderstorms . . . . . . . .1

JEGI 2012 Sector Trends . . . . . . . . . . . . .2

Fireside Chat . . . . . . . . . . . . . . . . . . . . . . .3

Credit Markets . . . . . . . . . . . . . . . . . . . . .3

Using Customer Data . . . . . . . . . . . . . . .4

The Media Equation:Paid+Owned+Earned . . . . . . . . . . . . . . .5

Legal Update . . . . . . . . . . . . . . . . . . . . . .5

The Continuing Rise of Big Data . . . . .6

The Talent Imperative . . . . . . . . . . . . . .6

2nd Annual Media Growth SurveyResults . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Getting Close to the Consumer withSmarter Data . . . . . . . . . . . . . . . . . . . . . .8

2011 M&A Overview . . . . . . . . . . . . . . . .8

To subscribe to JEGI’s Client Briefing Newsletter: http://bit.ly/AF3BtY

(from left) George Colony, Chairman & CEO,Forrester Research; Wilma Jordan, Founder &CEO, JEGI; and Charles Engros, ManagingPartner, Morgan Lewis.

Follow JEGI on Twitter:http://twitter.com/JordanEdmiston

For more information visit:www.jegi.com

JEGI’s Media and TechnologyConference

January 19 at The Time Warner Center, NYC

2 JEGI Client Briefing – March 2012

Richard Mead, Managing Director B2B Marketing SolutionsTolman Geffs, Co-President Online AdvertisingDavid Clark, Managing Director Marketing ServicesScott Peters, Co-President Direct to Consumer

B2B Marketing Solutions – Richard MeadThe Evolution of B2B Media JEGI sees a new golden age for B2B companies,as they evolve into full-service marketing solutions providers, offering anintegrated suite of must use, branded products for their customers. Thebroadened landscape includes extensive market knowledge; efficient, cus-tomized marketing channels; integrated work flow solutions; performancemeasurement; and stronger customer partnerships.

Initiative, Innovation, and Investment As B2B companies adapt and retool,those with strong, innovative management teams and ample funds toinvest will take market share from their weaker competitors, resulting in aB2B industry consolidation. The VSS Communications Forecast sees a 6%aggregate growth rate for the industry through 2015. Leading B2B compa-nies should exceed that, combining post recessionary catch up with newproduct introductions, increased pricing power and acquisitions.Online Display Advertising – Tolman GeffsDisplay advertising is the core of the online marketing ecosystem, and thattrend will continue. The key to success will be effective data that allowsmore individual targeting throughout the purchasing funnel. M&Agrowth will be focused on major players in the management, deploymentand optimization of this data. Big Five Dominate Online Display Advertising Online display revenue isexpected to reach $14.8 billion in 2012, up 85% since 2009, but there istremendous market concentration. Today, 70% of the online display rev-enue is controlled by the big five (Google, Facebook, AOL, Yahoo, Microsoft),with everyone else fighting for the remaining 30%, or only $2 billion of the$6.8 billion in growth. Constrained by Weak Ad Formats Online display advertising doesn’t havethe emotive quality or appeal of TV or print. The big five players have atleast been able to deliver reach and frequency, even with a lesser experi-ence. The rest of the industry cannot match their scale and efficiency. Sowhile time spent with mobile and Internet has increased, ad dollars are notkeeping up. Data Getting Smarter Data makes online advertising a much smarterbrand advertising medium. But only if the data can follow a personthrough the classic purchase funnel of awareness, consideration, prefer-ence, purchase and retention, using appropriate data throughout the cycle.More effective data comes from leveraging first party data, where a mer-chant or publisher has a close relationship with a consumer, and supple-menting it with third party data. M&A will be focused on the major playersthat manage, deploy and optimize all of this. Integrated Marketing Services – David ClarkToday’s integrated marketing services sector is a lot more dynamic than itslabel would imply. By 2015, revenue from interactive and below the linespending will reach almost $200 billion. To capture those dollars, publish-ers and marketers have expanded their business models. A new class of

vendors and enterprise technology firms has emerged, and robust M&Acontinues to shape the sector.Publishers Building Marketing Platforms Major publishers have the assetsand skills (e.g., database marketing, content creation, consumer apps) todeliver distinctive marketing services. The challenge lies in taking theseassets to market in a way that translates into meaningful new revenue.JEGI believes many publishers will be successful in doing so.Brands Becoming Publishers Big brands are transforming into multi-media, multi-channel publishers. They realize that consumers have cometo expect compelling and personalized content wherever they interactwith a brand. By providing this experience, marketers gain direct access toconsumer data and ultimately, consumer influence, the most precious cur-rency of the day. Nonetheless, agencies continue to benefit from the diffi-culties for publishers in executing digital and integrated marketing strate-gies at scale. As a result, agency revenue is strong, growing 14% in 2011.They continue to acquire critical talent through M&A, with nearly 200acquisitions and investments in the past year.Enterprise Marketing Technology Data for these large scale, integrated mar-keting programs will be sourced from massive CRM, ad serving and transac-tion databases, and campaign management, customer intelligence and cus-tomer care applications are rushing to the cloud. Players like IBM, Adobe,Oracle and SalesForce, in large part through M&A, have swiftly transformedthemselves into enterprise marketing and digital brand solution powerhous-es. In 2011 alone, we saw $11 billion in deals at these companies. With $26+ bil-lion in cash on hand between them, we expect to see more.

Direct to Consumer – Scott PetersThe direct to consumer sector is being transformed by the need of majorbrands to engage their customers directly. New skills and investment arerequired, especially as social media becomes the primary communicationsmedium. There is increasing pressure for CMOs to understand the fullmulti-channel marketing mix, to drive better ROI on their marketingspend. New technologies are entering the fray and data driven insights aremaking cross media optimization a reality. Engaging the Consumer The need to interact directly with the consumer isdriving significant media spending from other media channels to “belowthe line”, forcing a more holistic approach to marketing. An integratedmarketing strategy dictates a global brand message, consistent pricingand, when it comes to a brand like Nike selling on its own website, the needto offer unique products that are not competitive with products soldthrough other retail channels. eCommerce technology decisions becomecritical. Brand CMOs are facing incredibly complex issues to make this hap-pen. This positions digital agencies in the forefront, adding value to theirholding companies.Social Media At the Core One-to-one engagement with the consumer is atthe core and produces unprecedented amounts of data. Social media dataand analytics providers, previously unknown, have become important tothe media equation. Companies like Klout and Dachis Group, Radian6 andDataSift are putting together gigantic server farms to analyze correlations.Their importance will grow. ■

JEGI 2012 Sector Trends

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Providing One-Stop Sourcing for B2B Marketing Solutions

3JEGI Client Briefing – March 2012

moderator: John Rose, Senior Partner andManaging Director, The Boston ConsultingGroupkeynote speaker: Thomas Quinlan, President& CEO, R.R. Donnelley & Sons

The topic of “Rebooting for Growth” is partic-ularly relevant for RR Donnelley (RRD), whoseapproach to growth has been multi-faceted, butcenters around some basic questions: In whatdirection are our customers going? Where ispublishing going? The answers have drivenRRD’s direction and will continue to do so.

RRD believes there are three basic premises intoday’s media environment: 1) Attractive andcompelling content, a storehouse of informa-tion, is the key foundation around which every-thing is built. 2) Companies have to monetizetheir content. ‘Free’ is not a sustainable model.We have all heard the phrase “print dollars fordigital dimes”, but this equation needs tochange. 3) How do you take the content andmonetize it in a cost efficient manner?

Online content is not cheap. Whereas we usedto have daily, weekly and monthly media fre-quency, now there is “real time”. And, as aresult, there are extra costs and extra resourcesthat are needed. RRD’s goal is to have technol-

ogy tools that allow its customers to monetizetheir content and make the additional costs ofmonetization a variable expense.

On the front end, the key is the ability todeploy content across all channels in a way thatmaintains a brand’s integrity. You need theright channel at the right time, through print,digital, mobile, or any other device. The acqui-sitions RRD has made, including Helium, Press

Plus, Nimblefish and LibreDigital, provide itwith the capability to take a file and disseminateit to any device. Physical content has alwaysbeen RRD’s backbone. The fact that it can nowoffer digital logistics is critical.

At the same time, data makes it possible to sendthe right content to the right person. RRD’sclients have very rich data that can lead to inte-grated communications. For example, know-ing behavior patterns and recent purchases

allows a cell phone message to be sent, followedby a personalized printed piece. In fact, theProteusJet press allows for personalized print.Another example is a food retailer, which sendsa coupon electronically, showing the customerwhat they purchased over the past month. Thisback end capability allows RRD to help clientstrack return on investment.

Another question we asked was whether ourclients would want to build the infrastructurefor these services in-house. We don’t think so,because the second issue is scale. If a companydoesn’t have enough scale, what does that do-it-yourself approach mean for its cost structure?

Finally, how much time, money and employeesdoes a company want to dedicate to these serv-ices? We believe it makes sense for the publish-ing industry to stay with their current model ofoutsourcing these non-core competencies, justas they have with printing and distribution inthe past.

RRD’s mission is to continue to improve thedelivery of content in whatever form it takes,reduce the total cost of ownership for its cus-tomers and improve their return on investment.That is the model that we feel is key to anycompany that is Rebooting for Growth. ■

JEGI Media & Technology Conference – Fireside Chat

2011 ReviewIn 2011, credit volume overall was up 60%, to $373 billion, versus 2010, mark-ing the third largest year on record. In terms of sectors and use of the pro-ceeds, it was very diverse, which is a sign of a positive market. For the mediamarket, debt volume reached $25 billion, with refinancings accounting for59% of the volume; acquisitions 16%; spinoffs 9%; and dividend recaps 6%.The year ended with an average yield of7.3%. While the European situationslowed activity in Q4, the market con-tinues to be strong.Pricing varied greatly in 2011, with sec-ond lien pricing remaining high by his-torical levels. Europe caused concern, asinvestors worried about committinglarge amounts of capital for long peri-ods. This primarily affected large deals,as mid-sized deals remained stable. 2012 ExpectationsBarring any macro level events, it isexpected that M&A activity will increasein 2012. If markets remain stable, lenderswill offer higher leverage on deals, whichshould help increase purchase prices andmultiples. However, we anticipate themarket starting slowly, as companiesand lenders exercise some caution, dueto prevalent economic and geopoliticalfactors. Most importantly, financing opportunities will be readily available for grow-ing, sustainable businesses across the media and information markets.

What are Lenders Looking For?As lenders evaluate the media, information, marketing services and technol-ogy sectors, they are looking to understand exactly what a company doesand how the company differentiates itself from its competitors. Beforegoing into the market, business owners and management should focus onthe following key areas to get the most favorable financing terms:

• Barriers to Entry• Competitive Differentiation• Product Diversification• Customer/End Market Concentration• Renewal Rates• Contracted Revenue• Capital Expenditures• Revenue Visibility

Size and scale matter, as smaller companies(those with less than $10 million of EBITDA) havefewer lender options, at higher interest rates.Key TakeawaysIt’s important that businesses in the media andtechnology sectors become more mainstream inthe credit market. Another important trend is theeffect of technology on our daily lives. Most banks that have been active, long-termlenders to the media industry have traditional

media holdings. These businesses continue to be important to the market-place, and many are quite profitable, with strong cash flow characteristics.Still, there is a need for lenders to diversify their portfolios to protect againsteconomic downturns as much as possible. ■

Credit Markets: 2011 Review and 2012 OutlookBy Daniel Damon, Managing Director, GE Capital Markets

“…clearly making a transition inthe underlying basis of RRDonnelley from a printing com-pany to a marketing servicesand technology company…”

Refinancing, 59%

Spinoff, 9%

Acquisition, 16%

Exit Financing, 0%

LBO, 1%MBO, 1%

Merger, 1%

Recap/Dividend,

6%

Recap/General Recap, 6%

Recap/Stock Repurchase, 1%

2011 Volume: $24.9B[Source: S&P LCD]

media sector debt volume by purpose

4 JEGI Client Briefing – March 2012

Speaker: David Williams, Chairman & CEO, Merkle

For over 20 years, Merkle has been heavily involved in how information isbeing used across the marketing enterprise. Merkle’s real core comes out ofdatabase marketing – building marketing technology platforms, providingan analytics and strategy layer, and transforming them to enterprise levelassets for our clients. We serve over 150 world class clients and manageover 125 marketing databases that inform $10 Billion in marketing decisionsevery year.

How Data is Transforming Customer Strategy From a direct marketing context, there has always been data. And, it isincreasing exponentially. For example, a daily Omniture feed from a clienttoday is the size of its entire marketing database six years ago.

This creates an ability problem, as we see the marked gap between theavailability of data and the ability to monetize it. We tend to look at this asa real opportunity. For the first time since the creation of national brandsand mass media in the 1950s, marketers have the ability to create longterm sustainable competitive advantage in their organizations.

In the 1950s, the leading national brands (Tide, Budweiser, Chevrolet, etc.)used national media and mass marketing to dominate their markets. Thiswas very much brand to consumer marketing. Starting in 1995, the Internetand eCommerce revolutionized how consumers engaged with brands, cre-ating a consumer-to-brand strategy. Although there were clear winners,like Amazon and Netflix, most marketers didn’t have the technology orbusiness acumen to capitalize on this new paradigm. Starting in 2010, theonslaught of social networks and digital media enabled a very low cost,one-to-one targeting and engagement model, focusing on consumer toconsumer. This new era creates an opportunity. The question is: will mar-keters be able to capitalize on it? With the customer at the center of busi-ness strategy, who will the winners be?

The New Marketing Competencies and OrganizationI would argue that there are six competencies (I call them the Six Abilities)needed in this customer focused era. Marketers must be able to:

• Create and manage a 360 degree view of the customer;

• Identify, segment and manage high value customers;

• Micro target, customize and personalize media and channel experience;

• Create metrics as currencies and measure the incremental impact ofeach marketing activity;

• Allocate resources that optimize ROI and long term customer value;and

• Organize in a fashion that allows a response to changes in customer,competitor or marketplace behaviors faster than the competition.

Marketing functions are both brand and customer focused. As CMO, theapproach that makes sense is having a brand focused team, supporting theuniversal message and a customer focused team dealing with incrediblygranular and unique information related to the segment and individual.Between these is the Media team, delivering interactive, mass, and directavenues to implement the strategy. We call this new approach TheConnected CRM. A robust technology platform, database skills and clearlydefined CRM management system are the key enablers of a Connected CRM.

Connected CRM becomes increasingly complicated, as channels and mediaoptions grow. Yet, customer information coming in through various opti-mized channels can inform not only media choices, but pricing strategies,call center strategies, all of our business decisions. This is the competitiveadvantage.

How the Market Is RespondingAll of this shows the complex problems faced by companies today. From anindustry perspective, there are some big shifts.

• The customer is at the center of the strategy;

• Line managers want point solutions; the executive suite wantsbusiness results;

• The volume of “interesting capabilities” has increased, necessitating alaser focus on which produce profits;

• Since data is key to sustainability, there is more enterprise mentalityand CIO involvement; and

• Organizational design, computer systems and business process con-tinue to be major constraints.

CRM Transformation – Business Models MatterMassive differences exist in the way industries are addressing these chal-lenges. This is largely driven by the relationship with the customer. Forexample, do I have an identified or non-identified relationship with my cus-tomer? In other words, when the transaction takes place, am I able to cap-ture a name?

Another difference is in direct or indirect relationships. A bank would havea direct relationship with the customer, but an insurance carrier might dealwith the client through an agent. Looking at this, Consumer PackagedGoods (CPG) probably have the worst scenario from a CRM perspective.The grocer or retailer is the intermediary, and the customer does not haveto give a name in the transaction.

When you go into retail, it’s all about identification at the point of sale. Thatis why Apple asks for your email address. Once they have a direct relation-ship, they can engage you going forward. In CPG, their emphasis is onengagement. Three years ago, this phrase wasn’t around, but today,engagement is like a new marketing discipline spawned by Facebook andother social media. While the economic return on this isn’t clear, the beliefis that it transfers at some point.

The End GameUltimately, technology, analytics and insight are what will determine win-ners in the CRM industry. Companies are looking for ways to know theirconsumer, engage them in a relationship and monetize their consumerinteractions, while reducing costs. While there are significant challenges intechnology and organization to get there, the next five to ten years shoulddetermine how the game plays out. ■

Using Customer Data to Create Sustainable Competitive Advantage

Outsourcing/ System

Integration

DbM/MSP

Digital

ServicesDigitalAgency

DM/CRMAgency

Strategy

Consulting

Data driven,technology

enabled,customer centric

marketing HARTEHANKS

competitive landscape

THE CONNECTED CRMA systematic way to identify, serve and retain high valuecustomers better than competitors by delivering customerinteractions that improve financial results, create competi-tive advantage and drive shareholder value.

JEGI Client Briefing – March 2012

JEGI Media & Technology Conference – The Media Equation: Paid+Owned+Earned

moderator: Rishad Tobaccowala, ChiefStrategy & Innovation Officer, VivaKipanelists: Deanna Brown, CEO, FederatedMediaDon Scales, President & CEO, iCrossing Jamie Tedford, Founder & CEO, BrandNetworksVivaKi: Tell us a bit about your company andthen tell us what we should know to be smartabout the topic of paid, owned and earnedmedia.Federated: We are a top ten media companythat represents the best of what we call theindependent web at scale for brands and pub-lishers. We teach companies like AmericanExpress, Intel and Microsoft how to becomepublishers in a very social way. We believequality content matters in a very social andengaging consumer marketplace.

Paid, owned and earned media travel togetherand need to stay together. Paid on its own onlyreturns so much on investment. Owned isobviously important in a digital universe, andearned comes from great paid, owned and con-tent strategy.

iCrossing: We are a global digital mediaagency, owned by Hearst Corporation. Theybought the company, because the role of thepublisher and consumer brands is changing,

and Hearst wanted to implement a strategythat allowed them to support their client base.

Integrated marketing means you can’t think onan individual basis any more when consideringpaid, owned and earned.

Brand Networks: We are a Facebook pre-ferred developer consultant and recentFacebook API partner. My view is thatFacebook is the perfect ecosystem of paid,earned and owned. They get $7 out of every$10 in social ad dollars spent, about half ofwhich is used to acquire fans or likes.

Once you’ve bought a fan, you own it and havethe rights to publish to the fan, so you becomea publisher through that paid process. By pub-lishing to your fans, you reach additionalfriends of that person, and that is your earnedmedia, your incremental reach that resultsfrom creating an owned model. In my opin-ion, it’s not only the perfect ecosystem, but alsothe only way to do it at scale.

So, paid is what traditional media was about,like spending money to buy TV or magazineads. Then, there is a group of owned assets,which are basically any asset the marketerowns, regardless of channel. Earned assetsalways existed with word of mouth, but digitaland social media have given it a different scale.

We believe that paid will decline, and owned

and earned will grow in importance, and theshift will go from 80% paid, 18% owned and2% earned to something like 60%, 30%, 10%,respectively.

VivaKi: Can you give an example of a clientusing the new media equation in a smart way?

iCrossing: Our Live Media Studio providedan online financial services client with real-time marketing to help them connect withtheir customers. After conducting marketresearch to develop a content strategy thatwould resonate with the audience, our teamcreated the custom content, then populatedthe content across the client’s online properties,as well as social channels in real time. Theresult was thousands of earned media conver-sions across Facebook and Twitter and analmost 40% increase in social media mentionsfor the client in 2011.

Brand Networks: We were brought in to helpcreate a platform for American Express calledLink Like Love, which is simple in concept. Itbasically links your Facebook account withyour Amex card so that things you do onFacebook can go back and benefit you on yourcard and give you 20% off instantly as a bonus(i.e., paperless coupons). We didn’t realize wewere transforming the industry. An article ranin Tech Crunch saying AmEx just out-Grouponed Groupon. ■

5

Legal Update: 2012 – The New NormalBy Charles Engros, Managing Partner, Morgan Lewis

Given the disruption in the financial markets, the changes in technology,media and information, the usual discussion of what’s market for a transac-tion is really hard to figure out.

Blurring the Line between Public and Private DealsPrivate deals are becoming increasingly like public deals and that trend willlikely continue, particularly in the media and information industries. A num-ber of private companies being acquired are relatively early in their develop-ment and have already gone through several rounds of financing. Shareshave been given to employees, and there are numerous shareholders. Thesecompanies are not public companies, but they have many of their attributes.

The crossover of public company deal terms to private transactions includes:

• Reverse Break-Up Fees – such fees are now being asked for when thereare financial bidders and/or auction transactions.

• Fiduciary Outs – boards want the option to pursue and possibly accepta higher bid, even if it comes in after a deal is signed.

• Material Adverse Effect (MAE) Bringdowns – by negotiating thethreshold of what is considered an adverse condition, sellers lessen thepossibility of deal termination or litigation.

Private Deal Trends In addition to incorporating areas previously reserved forpublic companies, private deals are reflecting decreased conditionality aswell as exclusivity and deal stealing.

Public Deal Trends An interesting phenomenon has emerged in the past year,where public deals have looked a bit more like private deals. The courts haveallowed top up options, which previously had been something they wereagainst. And legal rulings are more reflective of the real world. The Delaware

courts have changed their position on how they view market test, fairnessopinions and the position of large shareholders.

Follow the MoneyNo matter what is going on, no matter how uncertain the market, the keything in any transaction is to follow the money. There are four principalplaces where money changes hands that people need to pay attention to:

1) Purchase Price can be affected by cash, debt, and debt like items, which arealways contentious. Additionally, employee bonus payouts and other factorsshould be addressed.

2) Purchase price adjustments should not be left in the hands of lawyers. I’veseen no other clause with as much potential to derail a deal at close. It’simportant to identify clearly what is being measured in working capital, netassets, all these areas.

3) Earn outs have become important, particularly in early stage companiestrying to bridge the value gap. They can be problematic to buyers and sellersif unforeseen events surface, so all eventualities and possibilities should beclearly written in the contract.

4) Escrows and holdbacks are critical in terms of money. Obviously, holdbacks really tilt the playing field. Escrows are much more important andharder for the seller to resist, particularly if you are willing to pay interest. ■

“Private and public deals are becomingincreasingly alike, particularly in themedia and information industries.”

6

(from left) John Rose, Senior Partner & ManagingDirector, The Boston Consulting Group; Wilma Jordan,Founder & CEO, JEGI; and Tom Quinlan, President &CEO, R.R. Donnelley & Sons.

moderator: Anthea Stratigos, Co-Founder &CEO, Outsellpanelists: Frank Bober, CEO, StyleSight Charles Kaminski, Senior Director, Technology,LexisNexis Yuchun Lee, VP & GM, IBM EnterpriseMarketing Management GroupOutsell Introduction: Fortune recently predict-ed that by 2020, Internet connected deviceswill grow from 400 million today to 50 bil-lion. These devices will be talking to eachother and to the Internet. By 2020, it is alsopredicted that our smart phones will have thecapability of storing and accessing as muchinformation as IBM’s Watson and super-com-puters can. So, this is about very Big Data,which is going through enormous change.Outsell: How do you define and think aboutBig Data in your business?LexisNexis: When we use the term Big Data,it usually means that a client either has somuch data that it is difficult to process prop-erly and in a timely fashion or the data is suf-ficiently complex to need a specialized systemto bring that data to market quickly.

Stylesight: Big Data is not new. But data forproduct development is much more importantnow than ever, and we rely on it for that pur-pose. The questions that should always beasked are “What are you actually going to dowith the data?” and “How are you going toextract it?” And, you need to determine whichcompanies can help you in the process. Our

goal is to help the CEO identify and useactionable data.

IBM: The Big Data paradigm poses anopportunity for businesses. IBM did in depthinterviews with 1,700 CMOs. The numberone identified gap in their ability to managethe future is the complexity of serving theircustomers. Big Data is a hot topic right now,because the traditional way of processing, ana-lyzing and managing data is starting to breakdown at the core level. That is why some ofthe cloud based technologies are becomingmore relevant, because they can help in thisregard.Outsell: How do you actually serve customersor use Big Data in your operations? LexisNexis: We have technology that we havebeen using for the past ten years to do com-plex analytics. It is the underpinning of ourrisk business and is quite cost effective.Recently, we have chosen to open source thisplatform as HPCC Systems, to stay relevant interms of technology. Outsell: How do you use it in your marketingworld?IBM: Two ways. First, Big Data is only rele-vant when it adds business value and opportu-nity. For the past decade, companies havebeen accumulating data in what we call a sys-tem of record. Those who survive going for-ward will also have systems of engagement,which start with evaluating how you can havea relevant conversation with each individual

customer across all channels. And insuringyou have the analytical capability and the datato support that analysis. That is where thelinkage is between the system of record data tosystem of engagement.

On the technology side, we believe the futureof handling this volume lies in leveraging thecapability of the cloud. A lot of the analysis isdone behind a firewall, but the analysis, plat-form and architecture is really a hybrid. Thatis how you solve the problem and get the mostvalue out of the data.

Outsell: How do you think about the talentyou need to support these initiatives andwhere do you find that talent?Stylesight: We look for people who can talkabout the business and the value propositionand how to bring that to market. Of course,we want technical expertise, but business acu-men is the differentiator.

LexisNexis: We don’t identify a specific skillset. The key factors are intelligence and curios-ity. Being able to absorb new concepts veryquickly and implement them, as well as thecuriosity to dive into the data and ask ques-tions that someone in the business group isn’tgoing to ask. We also have a mentoring pro-gram to insure we cover the technical aspectswhen we bring people in.

IBM: I agree. At IBM, teams have becomemuch more balanced in the left brain/rightbrain attributes. ■

JEGI Media & Technology Conference – The Continuing Rise of Big Data

Everyone knows that talent is critical to success in today’s fast moving business climate.The key components of a successful program to recruit, develop and retain key manage-ment talent:Start at the Top The CEO and Board of Directors must view developing and keeping tal-ent as a key leadership imperative. Align Business and Talent Decisions Make talentdecisions part of your annual plans, semiannu-al reviews and budgets. Incorporate employeeincentives that speak to your company’s busi-ness needs. Have a Rigorous Assessment Process Develop anongoing process to identify critical roles, assessincumbents, determine development gaps, andanalyze compensation and incentives. Integrate the Process into the Corporate Culture Create and cultivate the environmentyou want – one that fosters career planning and growth opportunities, as well as ongo-ing conversations with employees about their development and personal goals. Build Succession Slates A key question to ask is: Are we relying too much on a small groupof people? Talent benches need to be deep. Build a Robust Black Book Meeting outside talent should be a continuous process. Byknowing who the stars are in your sectors and building relationships, you will be pre-pared when someone leaves. ■

Speakers: Karen Danziger, Managing Partner, The Howard-Sloan-Koller Group andSusan Quackenbush, VP, Human Resources, DMG Information & Events

The Talent Imperative

“Develop an ongoing processto identify critical roles,assess incumbents, deter-mine development gaps, andanalyze compensation andincentives.”

JEGI Client Briefing – March 2012

(from left) Don Scales, President & CEO, iCrossing; RishadTobaccowala, Chief Strategy & Innovation Officer, VivaKi;Deanna Brown, CEO, Federated Media; and Jamie Tedford,Founder & CEO, Brand Networks.

JEGI’s 8th Annual Media andTechnology Conference

7JEGI Client Briefing – March 2012

A survey of more than 300 media industry executives shows that seniorexecutives are focused on new product development and acquisitions todrive growth; talent is the number one challenge.

Media industry executives are cautiously optimistic about 2012, as theyexpect growth to be driven by new product development, acquisitions andentering new markets and verticals, according to the second annual MediaGrowth Survey from JEGI and Econsultancy, a digital publishing and trainingcompany for Internet professionals. The findings are based on researchresults from a survey of nearly 325 industry leaders (89% of whom are c-levelexecutives), followed by one-on-one interviews.

#1 Challenge to Growth – Attracting and Keeping TalentThe freedom for companies to act is slowed by the number one challengefacing most organizations – the ability to attract and keep talent. As theCEO of a marketing services provider noted, “The key is growing peoplefrom within, investing in our own education to develop the experts weneed in the digital world, since there aren’t enough as it stands today.”

Companies Actively Looking to AcquireLarger and mid-sized companies (above $50 million in revenue) were espe-cially bullish about making one or more acquisitions in 2012. Many organ-izations have been sitting on cash through the economic downturn, andare now ready to put that capital to use to propel growth.

These conditions are providing a wealth of potential deal opportunities foremerging companies. Of course, challenges exist, and an ongoing gap invaluation expectations is cited as the primary obstacle to completingacquisitions. The credit crunch is expected to be less of an issue in 2012.

Twofold ConclusionAs one CEO noted, “It’s twofold, isn’t it? You’ve got to recruit and developthe talent that can grow the business internally, but also look for the rightacquisition opportunities.”

Skills for 2035When respondents were asked to speculate on the skill or trait they woulddevelop in a small child today to prepare him/her for the business world of2035, knowledge of the Chinese language and culture dominated theresponses. Click here for the complete Media Growth Survey Report:http://bit.ly/A50yUZ. ■

2nd Annual Media Growth Survey Results

and the third, which is just arriving, Amazon’sSilk running on the Kindle Fire. It is possibleMicrosoft will provide a fourth ecosystem, withthe success of Windows 8.

What is interesting about the competingecosystems is that two of them have your cred-it card data, and that gives them a huge advan-tage. Apple gets your credit card for music, andAmazon gets it for books. The problem forGoogle is that they don’t, and this is a majordisadvantage for Google.

II – Social Saturation

We are all using social media. In fact, in termsof hours, social exceeds time spent volunteer-ing, worshipping, talking on the phone, writingemail and snail mail, even exercising. So socialis running out of hours and is running out ofpeople. In the US, 86% of the population usessocial (compared to 70% in Europe and 88%in Canada). Urban centers in China, Russiaand India show up to 98% social adoption.

We are also seeing people question the value ofthe time they spend on social media. We are ata saturation point and in a bubble for social,much like the Web in 2000. A lot of this mar-ketplace is going to disappear forever, just likePets.com.

So, I believe we are moving to what I call a postsocial world (POSO). Think of it as the Web

post 2003, when we got rid of the junk andstarted to replace it with things we could reallyuse, like Google.

In the post social world, I believe that a lot ofthe legacy players like Facebook (and potential-ly Twitter) will be replaced by new social tools,likely using App/Internet, that are faster andmore efficient.

While we think of Facebook as being impene-trable, it is really just 750 million people whohave gone there in the past five years. Don’timagine that they will be there forever. In fact,Forrester did some research on what a Facebookfan is worth. The answer is zero.

III – Enterprise

When Forrester asked its clients, who mainlyhave over $1 billion of revenue, what theirplans were for adopting a social media plat-form, fully 72% answered they have alreadyadopted social or are interested in doing so.*This is a massive move. The primary reasonsfor the interest in social were:

Better Customer Interaction (31%) Their cus-tomers are social, so companies think they mustbe social. A perfect example of how advancedcompanies are embracing social is Jet Blue’s useof Twitter to help with baggage handling.

Customer Self Service (19%) Having a social sitethat customers can use to make the experiencefaster and easier (i.e., interacting with them in away they prefer).

Fosters Internal and External Collaboration(18%) The new social enterprise shift will see amove away from a high reliance on SharePointsolutions, as companies like Jive become thenext wave of social opportunity. It is also open-ing up a rich and growing professional servicesmarket to serve the corporations. Finally, weexpect to see an ever increasing collaboration ofmarketing and business technology in order forit all to work.

The New Social World

In the end, we will have a new social platformcalled App/Internet. The Web won’t go away,any more than AM radio did, but will serve amore basic function. New social players arecoming, and to make this happen, we will see anew wave of enterprise systems. In short, it’s anexciting time to be part of the media and tech-nology space. ■*Source: Forrsights Global Budgets and Priorities TrackerSurvey, Q2 2011

JEGI Media & Technology Conference – Three Social Thunderstorms(continued from page 1)

0 20% 40% 60% 80% 100%

77%

35%37%

41%

70%61%

82%65%

76%

32%

36%35%

41%35% 2012

2011

New in 2012

New in 2012

Launching new products/services

Expansion of market share withinexisting markets

Hiring new key management/employees

Making an acquisition

Expansion into new geopgraphic markets

Entering new vertical markets

Investing in new IP/software technologies

Organic Growth

KEY GROWTH DRIVERS IN 2012 v. 2011

By Stefan Tornquist, Vice President, Research (US), Econsultancy

“In the end we will have a newsocial platform called App/Internet. The Web won’t go away,any more than radio did, but willserve a more basic function.”

JEGI Media & Technology Conference - Getting Close to the Consumer with Smarter Data

(from left) Tom Cox, Vice President, CorporateDevelopment, Gannett; Tolman Geffs, Co-President,JEGI; Rich Tarrant, Founder & CEO, MyWebGrocer.

moderator: Tolman Geffs, Co-President, JEGIpanelists: Russell Glass, CEO, Bizo Eric Roza, CEO, DatalogixEric Stein, EVP, Online Solutions, Epsilon DataManagementJEGI: What data do you gather, and how do youview quality of data?Epsilon: We work primarily with the databaseand loyalty programs of Fortune 500 compa-nies. As we try to maximize the marketing mix,both first and third party data are important.From a quality standpoint, online is a real issue.Data doesn’t translate as easily into the onlinespace from offline, so you have to think aboutnormalizing the data.

Datalogix: Our focus is on aggregating con-sumer purchasing data. While 85% of con-sumers’ money is spent offline, 35% of theirtime is spent online, so we are focused on bridg-ing the gap with the biggest purchases con-sumers make offline. Our role is to integrateinformation from databases into the digitalecosystem, which can then be used for anony-mous targeting. First and third party data areimportant in meeting this goal. Our dataenables the vast majority of impressions anddigital campaigns to be measured back to actu-al in-store sales or other activities. We thinkthat is the ultimate arbiter of data quality.

Bizo: Bizo focuses on the business audienceside of online data. Today, we reach approxi-mately 80% of the US business audience that isonline. Compared to most industries, we arevery rapidly moving away from quality being aproblem, because everything in our industry ismeasurable. That puts a lot of pressure on dataproviders to create high quality data and con-tinue to improve it. JEGI: Big brands are becoming content ownersand relationship managers, which means theymust be cultivating and curating customer data.

How are mass market companies doing this?Datalogix: Big CRM databases are relativelynew to the digital marketing scene. The bestsources of competitive intelligence for digitalmarketing only became available recently, whencompanies like Datalogix fused digital anddirect marketing DNA, data, technology andanalytics for the first time. Then, once the datais assembled, the question evolves to how youleverage this data to improve the effectivenessand accountability of digital media.

Epsilon: We host a lot of mass market compa-nies as well. For example, with P&G, we have450 different brand/country combinations. Atthat scale, taking data online really starts toimpact media planning. JEGI: Bizo gathers data from registration data,so it is highly accurate. Why does that work andwho does it work for?Bizo: Most of our data is gathered from regis-trations, and we use it to then ensure accuracyacross the data set. We have systems in place tovalidate a profile. The reason this is so impor-tant to marketers is that everything is targeted.Rather than reach 100% of an audience, mar-keters are looking for the right 40%. JEGI: How do big brands more effectively buildand manage consumer data? How do theyeffectively move offline shopping and promo-tional spend online?Epsilon: Part of that is getting the mechanicsin place to migrate the data from offline toonline and working with partners to under-stand best practices in doing that. Increasinglythat is done by mass brands in a consistent fash-

ion so that they maximize the audience poten-tial. When a new brand comes out, a market-ing program can be launched that leverages thatdata. Over time, it scales.

Datalogix: More and more marketers arelicensing data management platforms (DMPs),enabling them to synthesize online data andcreate a control panel to monitor where anycustomer goes on any web site they own. TheDMP’s are beginning to work with companieslike Datalogix to add in their CRMdata,through a process we call the DLXOnRamp™, as well as third-party offline pur-chasing data. A DMP with offline and onlinedata integrated provides the marketer with apowerful integrated console for segmentationand insights.

Bizo: The ability to utilize data to enhancemarketing is moving across all media, includingmobile, video, digital TV, which are rapidlybeing integrated into media buys. As marketersstart to control online data, they’re going to beable to incorporate these different media typesinto the buys as well.

JEGI: Can you talk about privacy in all of this?Epsilon: Customers ought to expect twothings from companies in the privacy arena: (i)transparency in how the data is being collectedand used; and (ii) choice as to whether youwant to opt-out and a mechanism for doing so.Companies have to adopt a privacy policy sothey can gear their marketing programs aroundconsumers and demonstrate that they are deliv-ering value when consumers provide informa-tion. Transparency, trust and reciprocity will bethe cornerstones going forward.

JEGI: What’s the best example of a client whohas done a great job getting a desired resultwith data and at scale? Bizo: Salesforce.com was unable to make dis-play advertising work until they started to applydata, which enabled them to drive 35% brandlift on all their new chatter, 80% lift in brand-ed search terms, 350% increase in engagement,and 35% rise in form converts. By applyingdata and making sure they were hitting theright audience, they were able to drive a signif-icant increase in marketing ROI. ■

“If you don’t have quality data,you have real issues trying tomeet business or customerexpectations.”

As a leader in secure enterprise collaboration, including virtual data rooms, IntraLinks is at thecenter of many deals (more than $19 trillion worth of transactions have gone across its platformover the past 15 years). Each quarter, IntraLinks publishes The Deal Flow Indicator, a report thataggregates M&A data and provides a trajectory of the market. 2011 Major FindingsGlobal deal activity in 2011 was up 20% compared to 2010. Asia Pacific and Latin America led theway, with North America growing 14% year-over-year. The fourth quarter saw softness in AsiaPacific and Latin America, but continued growth in North America. Telecom & Media saw 9% growth in 2011, and there was acceleration in technology deals in Q4,which bodes well for 2012. Potential Trends in 2012

• Technology deals are expected to be strong in Q1, building off the increase at the end of 2011;

• Asia Pacific and Latin America are ripe for continued growth in telecom M&A; and

• EMEA deal volumes are offset by distressed activity. ■

2011M&A OverviewBy Wade Callison, SVP, Product Marketing & Management, IntraLinks

8 JEGI Client Briefing – March 2012

Contact Us to Discuss the Marketplace and Your Company’s M&A Strategy.

150 East 52nd Street, 18th Floor New York, NY 10022 (212) 754-0710 www.jegi.com

JEGI’s client is mentioned first in each of the above transactions.

a leading global social media agencyF R O M C O N T E N T T O C O M M E R C E ™

has been sold to

a unit of

a leading provider of social media insights via search,

monitoring and measurement

has been sold to

has sold

to

a division of DMGT plc

a leading producer of trade showsserving the U.S retail markets for gifts, home furnishings,action sports and antiques

for $180,000,000

the leading provider of consumershopping predictive targeting data

a divison of

has been sold to

a leading Australia-based online community for parents

has been sold to

the leading SaaS platform for retail transaction optimization solutions

has been sold

to

has sold

a leading financial informationand investing education website

to

for $42,000,000

has acquired

a global digital marketing services company

a leading European display ad exchange for premium unsold inventory

has been sold

to

a unit of

has been sold

to

a provider of content, data, advertising, and career services

for the oil and gas industry

for $39,000,000

Tom PechtManaging Director

tomp@jegi.com

Scott PetersCo-President

scottp@jegi.com

Richard MeadManaging Directorrichardm@jegi.com

Wilma JordanFounder & CEOwilmaj@jegi.com

David ClarkManaging Director

davidc@jegi.com

Bill HitzigCOO

billh@jegi.com

Tom CreaserEVP

tomc@jegi.com

Tolman GeffsCo-President

tolmang@jegi.com

Adam GrossCMO

adamg@jegi.com

Amir AkhavanDirector

amira@jegi.com

For the 6th Consecutive Year, JEGI Ranked #1by Bloomberg for U.S. Media, Internet, and Marketing Services M&A Transactions.