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TECHNOLOGY FOCUS. BROAD REACH. OPTIMAL RESULTS.
Market Thoughts: Personalization in Digital Marketing
Spring 2013
Peter Falvey
Managing Director
P. 1.617.598.0437
Jason Myler
Managing Director
P. 1.617.598.0438
Jeffrey Cook
Vice President
P. 1.617.598.0439
2
Market Overview
Multi-channel personalization is among the top priorities for CMOs. Many solutions
vendors from diverse segments of the market are attempting to address the demand.
Considerations
Important Sector: Personalization is currently among the most critical objectives of
marketers. Demand for personalization technologies is creating an increasingly attractive
market and many companies are ramping revenues quickly
Growing Number of Vendors Moving into Personalization: Vendors from several,
diverse market segments are taking different approaches to deliver multi-channel, real-
time personalization for marketers
Significant Investment in Leading Vendors: A significant amount of venture capital has
recently poured into the space as leaders try to take advantage of a rapidly growing
market opportunity
Consolidation on the Horizon: We believe larger players will begin to consolidate the
market in the next 12-18 months as they react to growing customer demand for
personalization tools
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Personalization Becoming a Battleground
The value of marketing solutions is closely tied to the ability to personalize content
across channels, attracting entrants from diverse market segments
TESTING & ANALYTICS PROVIDERS
- Testing and analytics tools increasingly moving into
personalization as automation and more diverse testing
CONTENT MANAGEMENT
- Deep integration with existing enterprise systems
- Would argue that they are best positioned as they hold the
“pane of glass” between the user and channel
E-COMMERCE INFRASTRUCTURE
- Many e-commerce vendors moving from recommendation
engines towards omni-channel personalization
- Larger players releasing new products (e.g. Hybris)
DIVERSIFIED ENTERPRISE SOFTWARE
- Personalization initiatives leveraging investments in
marketing software and BigData / analytics
Multi-Channel
Personalization
4
Testing & Analytics Players are Well-Positioned to Win
We believe that the testing and analytics players will emerge as the leaders among the
growing number of personalization technologies
Solution Offering Basic Enterprise
Sc
ale
S
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lle
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er
TESTING & ANALYTICS MARKET MAP
Personalization = Data: Personalization is
becoming an exercise in BigData, and testing
and analytics platforms are already handling
the core of the corporation’s marketing data
End customer the same: Corporate users of
testing and analytics platforms are the same
consumers driving growth of personalization
technologies
Measurement is critical: Testing and
analytics vendors provide critical measuring
tools to complement personalization
Natural product extension: Effective
personalization automate and optimizes the
historical testing process
WHY TESTING & ANALYTICS PLAYERS WILL WIN
5
Funding Landscape Among Leading Independent Vendors
We anticipate competition from vendors will ratchet in the coming months as
companies deploy significant amounts of capital that has been raised recently
$50M+
$25M - $50M
$10M - $25M
<$10M
Unfunded
6
Targets and Offering Map
MRM/Automation Social Web Analytics eCommerce WCM Sales CRM Online Testing E-mail
in 2012 for $870M in 2012 for $300M in 2010 for $1B in 2011 in 2011 for $1.5B
in 2010 for $480M in 2010 for ~$600M in 2010 for $1.4B
in 2011 for $400M in 2009 for $1.8B in 2010 for $240M
in 2012
in 2013
via Autonomy in 2011 for $11B
via ExactTarget in 2012 for $689M via ExactTarget in 2013 for $2.2B
Acquirer
Platform Players Will Start to Consolidate Personalization Tools
We believe consolidation activity will be catalyzed by the larger marketing platform
players as they continue to build their portfolios
No offeringStrong offering Some offering
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Target Date Amount / Total Raised Investors
April 2013 $28M / $31.2M Benchmark Capital, Bain Ventures, Battery Ventures, Google Ventures
February 2013 $15M / $36M OpenView Venture Partners, Rose Tech Ventures
February 2013 $15M / $34M Bain Capital Ventures, TL Capital
February 2013 $18M / $34M OpenView Venture Partners, Austin Ventures
January 2013 $60M / $79M Goldman Sachs, Arthur Ventures
December 2012 $20M / $36M Northgate Capital, Trinity Partners
November 2012 $25M / $69M Mitsui Global, Orix Ventures
November 2012 $20M / $39M New Enterprise Associates, Sequoia Capital
November 2012 $30M / $69M Investor Growth Capital, Tenaya Capital, North Bridge Ventures
November 2012 $35M / $101M Altimeter Capital, Cross Creek Capital , Undisclosed Investors
October 2012 $25M / $41M New Enterprise Associates, Lightspeed Venture Partners, Bain Ventures
September 2012 $16M / $31M Norwest Venture Partners, Trinity Ventures
September 2012 $20M / $35M General Catalyst Partners, Floodgate
June 2012 $39M / $67M Norwest Venture Partners, Nexus Venture Partners
June 2012 $32M / $38M LLR Partners
June 2012 $50M / $76M Northgate Capital, Summit Partners
May 2012 $70M / $70M Accel Partners, Sequoia Capital
May 2012 $26M / $47M Sequoia Capital, Hummer Winblad
April 2012 $33M / $80M New Enterprise Associates, DFJ, Walden Internationals
January 2012 $12M / $14M Investor Growth Capital, Pentech Ventures
Recent Investment Activity
High profile capital providers are showing interest in the broader marketing software
sector through significant investment
Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, Pitchbook
8
Recent M&A Activity
The consolidators are paying attractive prices for the emergent leaders in digital
marketing to fill in product offering holes
Source: Company Press Releases, SEC Filings, Wall Street Research, CapitalIQ, Pitchbook
Target Acquirer Date EV Revenue / EV
Jun 2013 N/A N/A
Jun 2013 2,250M 7.1x
Jan 2013 N/A N/A
Dec 2012 N/A N/A
Dec 2012 $870M 9.7x
Oct 2012 $95.5M 8.7x
Oct 2012 $21M N/A
Jul 2012 $350M ~7.8x – 10x
Jul 2012 N/A N/A
Jun 2012 $745M ~14.9x – 18.6x
May 2012 $500M 10.0x
May 2012 $300M 3.0x
Feb 2012 $169M 3.4x
