Siemer online advertising winter 2014 master

Embedded

Specialized

Accomplished

Online Advertising Report
Winter 2014

Siemer & Associates
Siemer & Associates LLC is a global boutique merchant bank dedicated to offering candid insight and guidance to digital media, software
and Internet companies throughout their business life cycles. Composed of industry veterans who have worked both inside and out of

technology enterprises, S&A has successfully completed more than 50 transactions that aggregated over $3 billion in sell-side mandates
and surpassed $1.5 billion in equity capital. Headquartered in Los Angeles with offices in London, Singapore and Hong Kong, S&A offers
exceptional corporate capital raising, financial advisory services and M&A, specializing in complex cross-border transactions.

Committed to expanding the international technology ecosystem, Siemer & Associates promotes innovative entrepreneurs through its
relationship with early-stage investment firm, Siemer Ventures, and its incubator, WaveMaker Labs. One of the most active investment
funds in Southern California, Siemer Ventures supports close to 100 active portfolio companies and makes an average of 20-30 new
investments each year in digital media and software startups. Based in Singapore, WaveMaker Labs is an "approved technology
incubator" under the Technology Incubation Scheme (TIS) of the Singaporean government's National Research Foundation (NRF).

2

Table of Contents
Section I

Summary Observations

Section II

Online and Mobile Advertising Market

Appendix

Select S&A Ad Tech Experience
Public and Transaction Comparables
Ad Tech IPO Trends

3

Winter 2014

S&A Market Observations
Clear trends have emerged in the M&A and capital raising environment for companies in the broad online and
mobile advertising markets

Only a handful of ad tech businesses have truly gained scale and / or differentiation in the marketplace
− Not enough revenue / profit in the market to accommodate the many solutions that have been funded
 Every dollar of agency spend nets a publisher $0.45 on average
 Remainder gets cut up among trading desks, DSPs, exchanges, networks, data suppliers, data aggregators, ad
verification, tag management, retargeters, optimization, SSPs, etc.

− Too many point solutions funded, leading to overlap amongst relatively undifferentiated offerings 
consolidation is likely to increase

Agencies used to be able to manage multiple vendors – now they want to consolidate vendor
relationships
Twitter’s acquisition of MoPub, in addition to recent acquisitions over the summer made by Criteo,
Media6Degrees, X+1, and Yahoo, highlight the extent to which cross-device targeting capabilities have
become a key aspect of differentiation in the eyes of buyers and investors
Mobile remains among the most active areas of the ecosystem with incumbents now seeking to fill the
gaps in their offering with those who have already achieved significant scale
− Programmatic demand-side features (i.e., real-time bidding platforms), and auction-based exchange platforms
for mobile are of particular interest, especially those directly integrated with media buying desks

5

Winter 2014

Consolidation of Point Solutions toward Broader Offering
We believe that the market will coalesce around broad, all-encompassing platforms serving either the
buy-side or sell-side of the ecosystem
Currently, a host of solutions, ranging from trading desks, demand-side platforms and data
management platforms service the buy-side, while an array of publisher tools and supply-side platforms
currently service the sell-side
Consolidation on the supply-side is likely to lead to platforms that have the following attributes:
− Access to both premium publishers and ad networks
− Multiplatform/multichannel (video, social, mobile)
− Integration of both behavioral and contextual targeting

Due to the inefficiencies and costs of fragmentation, S&A sees the buy-side ecosystem eventually
being served by consolidated dynamic ad intelligence platforms
− Such a platform will centralize all major features and functionalities valued by media buyers, including:


Centralized ad server



Optimization of campaign creative for multiple formats and channels



Re-targeting capabilities



Data management, analytics and reporting capabilities

6

Winter 2014

The current ecosystem has become “over-segmented” without offering real differentiation

DSP

SSP
DMP
INFRASTRUCTURE

Source: LUMA Partners

7

Winter 2014

The resulting consolidation will see only a handful of players reach the size and / or scale to pursue a
meaningful exit, with other large Ad Tech players or large online media companies stepping up and
playing the role of consolidators

This trend has begun to play out in earnest, with several large acquisitions occurring over the past year
such as Twitter’s acquisition of MoPub, Millennial Media’s acquisition of Jumptap, and AOL’s
acquisition of Adap.tv
More recently, and indicative of continuing consolidation, Neustar acquired Aggregate Knowledge, a
DMP, while digital workflow specialist Centro acquired SiteScout, a DSP, to offer alongside their
existing programmatic display ad server
− Centro has already signaled their intention to acquire a data management platform (“DMP”) in 2014 to enable
easy use of predictive analytics for both guaranteed buys and RTB on a single platform

Other potential consolidators within the Ad Tech space include:
Company

Capital Raised

Investors

Comments

RocketFuel

$107.9M (IPO, Sep 2013 )

Mohr Davidow, Summit, Northgate, Nokia

• Multichannel DSP

AppNexus

$75.0M (Jan 2013)

TCV, Venrock, Tribeca

• DSP

Videology

$68.3M (May 2013)

NEA, Comcast, Valhalla, Pinnacle, Catalyst

• Video Ad DSP

Turn

$61.1M (Aug 2012)

Norwest, Trident, Shasta, Focus

• DSP

TubeMogul

$53.2M (Jun 2013)

NSV, Knights Bridge, Trinity, Northgate, SingTel

• Video Ad DSP

PubMatic

$45.0M (Jun 2012)

August, DFJ, Nexus, Helion

• SSP

8

Winter 2014

Additional Emerging Trends
Certain sub-themes within the online and mobile advertising markets are continuing to develop

Mobile / Tablet App Download Marketing is becoming more sophisticated with the rise of Universal
Buyside SDK solutions
− Attribution is a key issue and platforms enabling tracking of app downloads are seeing significant investor
interest
− App marketing throughout the lifecycle of app usage is emerging as a theme – peak monetization of user
believed to occur at time of install and follows a lifecycle from there
− App user “reactivation,” “re-engagement” driving more creative in-app ad formats and driving higher CPIs

Native advertising is gaining further traction as a preferred ad format to engage online with customers
especially on mobile, where intrusive banners have proven difficult to monetize
− Native changes the online advertising ecosystem by creating new opportunities for both publishers (new
inventory) and advertisers (new ways to connect and create awareness)
− While effectiveness is currently rated based on measuring engagement, exact metrics and expectations
continue to evolve

Awareness around impression fraud has become more prominent with several companies attempting to
quantify lost ad spend
−

Integral Ad Science (formerly AdSafe) is one such firm seeking to evaluate and advise on ad safety, and estimates that
impression fraud costs approximately $6.0bn a year

9

Winter 2014

ONLINE & MOBILE ADVERTISING TRENDS

Real-Time Bidding
Online ad buying has rapidly evolved from insertion orders (one-to-one negotiations for specific inventory) to
programmatic buying (real-time bidding)
Real-time buying allows advertisers to buy inventory for a defined target audience instead of just buying pre-defined
display slots online
Advertisers bid against each other for inventory through a process in which they determine if the combined publisher
data on users and inventory matches their desired criteria
−

This occurs in the split-second it takes to load the image on the user’s web page

−

This process allows advertisers to bid on individual ad impressions to targeted users rather than pre-defined slots

There are two major benefits to Real-Time Bidding:
−

Increased Effectiveness: Purchasing inventory on an impression basis allows advertisers to maximize their effectiveness as
advertisers value impressions on a highly relative basis

−

Increased Efficiency: Efficiency is also increased as advertisers are able to target specific audiences across multiple websites

Real-time bidding ad spend will increase nearly 75.0% this year – well above the overall online ad growth rate of
17.1%

Ad
Opportunity
Arises

Ad Request
Sent Out by
Publisher

Data from
Impression
Sent Out

Value of
Impression
Calculated

Bids
Formed and
Evaluated

Winning Ad
Published

Source: Wall Street Research, eMarketer

11

Winter 2014

Real-Time Bidding Continues to See Robust Adoption
Consolidation of point solutions will drive growth in the RTB market, which is expected to grow from $1.9bn in
2012 to $8.0bn by 2016
$10,000.0

160.0%

148.9%

$7,975.0
120.0%
$6,645.5
97.0%

$6,000.0
75.0%
$4,000.0

$3,408.1

$5,112.2
80.0%

50.0%
43.8%

$1,947.5

$2,000.0
$396.2
$0.0

4.1%
1.5%
2010A

35.9%
25.8%

3.1%

5.2%

7.8%

49.8%
40.0%

30.0%
20.0%

16.0%

$986.0
8.9%

Growth Rate

Real-Time-Bidding Ad Spend (in $ mm)

$8,000.0

10.2%

11.6%
12.3%
0.0%

2011A

Real-Time Bidding

2012A
Y / Y Growth

2013E
RTB as a % of Total Display

2014E

2015E

2016E

RTB as a % of Total Online Advertising


12

Winter 2014

Private Exchanges and Real-Time Bidding
Private ad exchanges are a way for publishers to participate in real-time, auction-based selling without
allowing third party ad networks and other vendors to eat into their margin
Because exchanges are third-party marketplaces and publishers are forced to surrender control of their
inventory, large portions of revenue generated go to the various vendors across the tech stack rather
then the agency or the publisher
To retain more revenue, some publishers are setting up private exchanges for their online inventory,
and by managing their own “premium inventory” they can maintain and guarantee a higher price
Through private exchanges, sellers can maintain control over their most valuable inventory, but take
advantage of RTB auctions to create competition for each impression sold, thereby increasing eCPMs
without the overhead and inefficiencies of manual, direct sales
Recent examples of private exchanges include:
− Hearst, a private magazine publisher, created a private ad exchange 12 months ago and generates 19.0% of
its real-time bidding ad sales through the platform

− News Corp. created a private exchange for all digital inventory, rather than allocating only a portion to the
exchange as is typical

Downsides of private exchanges:
− Complicates concerns as to whether the publisher is cannibalizing premium inventory
− Concern that buyers who might have bought direct will buy cheaper inventory listed in the exchange

13

Winter 2014

Increasing Concern Around Bot-Driven Traffic
Impression fraud has long been an issue in the online advertising industry, though lately buyers, sellers and
vendors have sought to quantify the problem

Despite efforts by ad verification companies – including Integral Ad Science, DoubleVerify, Spider.io,
WhiteOps and Solve Media – to expand their respective responses to combat bots that leave phony
impressions, their attempts are hindered by a lack of regulatory action and complacency by some
marketers and publishers concerned about the appearance of losing scale
Advertisers will turn to platforms that have massive ad inventory but that can also offer guarantees
against rip-offs; there are only a handful of them – with Facebook atop the list
− Facebook Exchange (“FBX”) is effectively fraud-free as brands bid, in real-time, to retarget users on Facebook
based on their browsing history
− FBX stands out from traditional exchanges because it functions more like a curated department store than a
bazaar, i.e., not just anyone can dump ad inventory into their exchange, thus removing the possibility of
participation by the people who control botnets

In the wake of Yahoo’s steady decline in the display ad business, Facebook has emerged as the only
real rival to Google’s dominance of the online ad space
−

If the fraud fears persist, the two giants will likely consolidate their lead even more at the expense of the other exchanges

−

In Facebook’s case, it will further squeeze out the smaller ad-tech companies that have helped it build its exchange

Source: Wall Street Research, GigaOM, Digiday, NY Times

14

Winter 2014

Increasing Concern Around Bot-Driven Traffic
There is a consensus among industry professionals that blacklisting suspect sites would be
counterproductive, thus fraud-prevention vendors are well-positioned as key players in the ecosystem
in order to help buyers understand and identify when the ‘consumer’ is not actually human

Estimated Impression Fraud by Format Type
Exchanges: 25%

Networks: 20%

Publisher Direct: 2%

Total Advertising: 15%

Bid Requests: 30%

Source: Integral Ad Science, AdExchanger

In-Banner Video: 40%

Pre-Roll: 3%

% Fraudulent Impressions

15

Winter 2014

Emerging Mobile Ad Solutions
The past year has seen the emergence of the Universal Buyside SDK, or “Meta DSPs”

Large mobile app advertisers work with multiple DSPs or networks in order to reach and target against
as broad an audience as possible; in a mobile app environment this presents a unique challenge
In order to track effectiveness and attribution, DSPs and networks need to have their SDKs installed in
the mobile app being advertised. As a result, mobile apps often integrate multiple buyside SDKs in their
apps, causing end-user performance issues
A Universal Buyside SDK allows mobile app developers to replace all buyside SDKs with a single
“universal” SDK connecting to multiple networks / DSPs via API integrations, minimizing end-user
performance issues
Early focus for Universal Buyside SDKs was on attribution; now moving into trafficking, RTB,
consolidated buying across multiple DSPs – the emergence of the “Meta DSP”
− Over time, media buyers will use “Meta DSPs” to adjust and execute advertising budgets

The emergence of this category of companies will drive more ad dollars into the mobile app ecosystem
− Increased buy-side transparency
− Smaller mobile ad networks and DSPs will have an easier time reaching scale
− Re-targeting on mobile becomes a reality now

− No longer needing to build SDKs, the large online (desktop) DSPs can now allocate spend to mobile more easily

16

Winter 2014

Internet Giants Positioned to be Powerful Data Platforms
Major players are best positioned to leverage massive user data and footprint to track and target users for
advertising across devices and on- and off-network

Twitter, Facebook and Google and potentially others with as large a user base (with unique login data)
are positioned to use this data to monetize not just within their own network but "off-network" as well
− Twitter's acquisition of MoPub affords them the opportunity to target users within MoPub's network of mobile
apps and sites with data on those users mined from Twitter's data feeds
− Facebook has just resumed activity on its own off-Facebook ad network after a nine month hiatus
− Google is, unsurprisingly, aggressively moving toward having its users adopt Google+ when interacting with its
suite of services including YouTube and Photos, in an effort to be able to track these users as they use these
services in desktop and mobile environments

Additionally, Google AdID is a way of creating a unique identifier / cookie that is uniquely tied to Google
login data which could disrupt the entire environment for DSP players
− This allows them to track their users not only within Google's network, but within any publisher site - desktop
online or mobile - that is using Google for monetization or any of its social widget tools (i.e., Google+).
− Additionally, publishers using DFP will be in this network of targetable users
− Even if not within the targetable universe, third-party cookie information on such users can be used to generate a
unique Google AdID which will allow Google to target that user for the time being until or unless an AdID is
generated with Google specific data

17

Winter 2014

DMP Trends
DMPs have become fragmented as well – there is a need for a DMP for DMPs / DSPs to emerge
– Validate and “cleanse” data from multiple DMPs / DSPs
– Provide mediation across various DMPs / DSPs in order to maximize targeting accuracy, reach
– Provide integrated DCO, tag management, ad verification capabilities as part of solution

Key trend is the separation of the data layer from the execution layer in the marketing stack
– Brands want to leverage learnings of their audience profiles and customer data and apply that to all marketing
and consumer touch-points – online and offline

Biggest opportunity for growth lies in ability to use accurate data profiles across all consumer marketing
channels
– Huge opportunity in using data to inform offline media buying
– Important areas of focus also include social, video and mobile

Current implementation efforts are focused on the core purpose of targeted media buying
Long-term potential for DMPs to be integrated into core business software systems to facilitate datadriven decision making on sales, product development and financial management
DMPs will also garner interest from large e-commerce players given the higher value that their data has
for retargeting users who are looking to transact
– DMPs in emerging markets are additionally being evaluated as foundational platforms to build out international
affiliate and merchant businesses
18

Winter 2014

DMP Trends
Generally Supported Applications by Existing DMPs

Priority Applications for Future DMPs

Targeted Media Buying

82.0%

Customer Insight
Development

Customer Insight Development

78.0%

93.0%

Targeted Media Buying

90.0%

Channel Optimization

45.0%

Campaign Channel Attribution

Campaign Channel
Attribution

44.0%

Multichannel Integration & Optimization

84.0%

Emerging Channel Deployment

84.0%

Channel Optimization

83.0%

Multichannel Integration &
Optimization

40.0%

Advertising Yield
Optimization

37.0%

CRM Program Optimization

36.0%

Site Content Optimization

CRM Program Optimization

32.0%

Creative Content
Optimization

32.0%

Emerging Channel
Deployment

Creative Content Optimization

Site Content Optimization

23.0%
0%

20%

Advertising Yield Optimization
40%

86.0%

60%

80%

0.0%

76.0%

73.0%

69.0%

59.0%
20.0% 40.0% 60.0% 80.0% 100.0%

Survey conducted by IAP & Winterberry Group

19

Winter 2014

Emergence of Native Advertising
Native Advertising is gaining further traction as a preferred form of marketing for brands to engage
more directly with customers and target audience
− Breaks down the previous constraints created by traditional banner ads
− Merges both paid and owned media into a form of converged media

Native changes the online advertising ecosystem by creating new opportunities for both publishers
(new inventory) and advertisers (new ways to connect and create awareness)
− Brands want to leverage learnings of their audience profiles and customer data and apply that to all marketing
and consumer touch-points – online and offline
US Publishers that Offer Native Advertising on Their Site

Likelihood Marketers Spend on Native Advertising in Next 6 Mo.
60%

17%
Considering offering
one this year

10%
73%

48%

50%
40%

No

30%
20%

Yes, currently

27%
17%
8%

10%
0%
Very Likely

Somewhat Likely

Not Very Likely

Not At All Likely

Source: Wall Street Research

20

Winter 2014

Native Advertising Trends
Exact use and definition of native advertising continues to evolve in eyes of advertisers and publishers
− While perhaps new in some circumstance such as promoted “tweets” or pins, some traditional publishers see
native advertising as simply a new title for activities they’ve been undertaking for several years.
− “Native” vs. Advertorial vs. sponsored/branded/custom content

While effectiveness is currently rated based on measuring engagement, exact metrics and
expectations continue to evolve
Definitions of Native Advertising According to US Publishers
Integration into the design of the publisher's site
and lives on the same domain

93%

Content provided by, produced in conjuction with or
created on behalf of advertisers that runs within the
editorial stream

79%

10%

Editorial value to the reader and conforms to the
reader's expectations

68%

Contextually relevant, nonstandard advertising
units

Highly automated advertising content such as
sponsored stories, publisher tweets, etc

17%

86%

Clear delineation and labeling as advertising
content

Content marketing such as sponsored games,
infographics, sites, etc.

% of US Digital Professionals Buying Native Mobile Ads

73%

64%
61%

54%

Considering offering one this year

No

Yes, currently

Source: BusinessInsider, eMarketer

21

Winter 2014

Native Advertising Trends
Native Advertising: Pros
Publishers

Social Networks

Brands & Agencies

Users opt-in to content/pull strategy







New revenue streams







Life/reach/efficacy of owned media





Better paid-owned-earned media integration



Higher engagement



Strong potential for mobile platforms





Potential for deeper behavioral/contextual data





Reinforce or even improve UX





Amplification beyond fans/followers









Social Networks

Brands & Agencies

Native Advertising: Cons
Publishers
Scale/labor-intensive

X

Lack of landscape clarity, still evolving

X

Metrics/KPIs not fully defined

X

X

X

X
X
X

Requires strong content ability
Education/training required

X

X

X

Sales team training/pushback (more complex sales cycle)

X

Transparency/disclosure issues

X

X

X

Voice, context, environment, authenticity

X

X

X

Source: Wall Street Reporter

22

Winter 2014

Mogreet Case Study
Mogreet Acquired by
payvia in May 2013

Mogreet is a leading mobile marketing company, providing mobile
video and rich media messaging capabilities.
S&A was retained by Mogreet as its exclusive financial advisor in
evaluating strategic alternatives for the Company. S&A conducted
a highly targeted solicitation process and approached a select
group of potential acquirers deemed to be a strong strategic fit.
S&A introduced Mogreet to payvia. Payvia has the largest direct
carrier connected messaging and mobile payments platform in the
U.S., covering 120mm unique mobile users and processing billions
of mobile messages every year.
payvia’s mobile payments and authentication platform works with
merchants and developers to integrate a customized smart
checkout experience.

has been acquired by

Mogreet’s mobile video marketing platform, which delivers high
quality video to virtually any mobile phone, will provide payvia’s
clients with tools to drive customer acquisition and revenue
generation.
The combined entity will be the only fully integrated end-to-end
product solution for mobile engagement and payments to
enterprises of all sizes.
Leveraging its strong relationships and expertise in the mobile
space, S&A generated a "home run" outcome for Mogreet and
found the perfect partner for the business to scale its technology.

25

Winter 2014

TapIt! Media Group Case Study
TapIt! Media Group Acquired by
Phunware in December 2012

TapIt! is a leading global independent mobile advertising platform.
S&A was retained by TapIt! as its exclusive financial advisor to
evaluate strategic alternatives for the Company. S&A conducted a
highly targeted outreach process and approached a select group
of potential acquirers deemed to be a strong strategic fit for the
Company.

S&A introduced TapIt! to Phunware and CEO, Alan Knitowski.
Phunware is a leading fully integrated services platform enabling
brands to engage, manage and monetize users on mobile.
Phunware clients include major film and TV studios and highly
visible brands such as the NFL, NASCAR, CBS, NBC Universal,
The CW, ESPN, E!, OWN and Univision.
Phunware issued an LOI to acquire TapIt! in November 2012 and
the S&A team worked diligently to drive the acquisition to a close in
late December 2012.


Through the acquisition of TapIt!, Phunware will now be able to
provide mobile advertising as part of its Mobile-as-a-Service
(MaaS) monetization platform for iOS and Android mobile
publishers.

Leveraging its strong relationships and expertise in the mobile
space, S&A was able to generate a "home run" outcome for TapIt!
and find the right home for the business to allow it to scale its
activities by leveraging Phunware's large development resources
and access to sales channels into premier brands and advertisers.
26

Winter 2014

Select Siemer Ventures Ad Tech Exits







27

Winter 2014

Select Siemer Ventures Ad Tech Investments

Social media advertising and
promotional platform

Multi-channel digital distribution
platform

Marketing automation for local
businesses

Natural language search and
analytics

Audience analytics and crosschannel connection platform

Social video distribution and
seeding platform

Publisher loyalty tools and offerings

Lead generation for financial
advisory firms

Native advertising platform

28

Winter 2014

Select Siemer Ventures Ad Tech Investments

Integrated services platform for
mobile

Player engagement platform

Hispanic targeted advertising
platform

Collaboration platform for marketers
and agencies

Social sharing tools for user
aquisition

Integrated online media and ad
network

Mobile demand side platform

29

Winter 2014

PUBLIC & TRANSACTION COMPARABLES

S&A Market Observations
Social and mobile ad companies with strong technology, unique publisher access and ad formats, high
engagement and scaleability are attracting significant interest from strategic buyers and investors

Mobile

Online

Strategic Interest / Priority

Social

SMS / MMS
Marketing

In-App
Display

In-App
Video

CPI
Marketing

Agency

FB Game
Ads

Local /
SMB

Self-Serve
Platforms
Native

Search

RTB Auction
Exchanges
DSPs

Ad Networks
Affiliate Networks
Display

Low

Interest / Valuation

31

High

Winter 2014

Public Online Advertising Valuation Comps
(figures in millions of $USD, except per share)

Company Name
Online Media & Advertising
AOL Inc.
Apple Inc.
Blinkx plc
Criteo SA
Demand Media, Inc.
Digital Generation, Inc.
Facebook, Inc.
Google Inc.
IAC/InterActiveCorp
Marin Software Incorporated
Microsoft Corporation
Naspers Ltd.
Renren Inc.
Rocket Fuel Inc.
Sohu.com Inc.
Tremor Video, Inc.
ValueClick, Inc.
Yahoo! Inc.
YuMe, Inc.

Video Platforms
Akamai Technologies, Inc.
Amazon.com Inc.
Brightcove, Inc.
Limelight Networks, Inc.
Netflix, Inc.
Youku Tudou Inc.
Source: Capital IQ and S&A proprietary research

Share Price as of
1/9/2014
$45.97
543.46
3.41
31.90
5.50
13.39
58.23
1,141.23
70.33
10.68
35.76
101.38
3.36
62.29
78.55
5.01
22.80
41.02
7.74
Mean
Median
$46.68
401.92
11.33
2.22
340.99
33.55
Mean
Median

Market
Cap

Enterprise
Value (EV)

EV / CY 2013E
Revenue
EBITDA

EV / CY 2014E
Revenue
EBITDA

LTM Annual
Revenue Growth

$3,536.5
485,065.8
1,359.9
1,764.0
493.7
374.7
147,916.6
381,270.6
5,858.1
348.5
298,523.3
40,135.8
1,272.8
2,044.4
3,007.9
248.8
1,522.1
41,612.4
247.1

$3,474.4
461,435.8
1,289.3
1,726.8
437.2
700.9
139,163.6
333,671.6
5,755.8
243.9
235,114.3
42,291.2
364.3
1,946.0
2,497.2
152.5
1,662.5
39,880.3
184.2

1.5x
2.7x
5.6x
NA
1.1x
1.8x
18.2x
5.6x
1.9x
3.2x
2.8x
NA
2.1x
8.4x
1.8x
1.2x
2.9x
9.0x
NA

7.4x
8.3x
37.6x
NA
5.0x
6.0x
30.8x
15.5x
9.8x
NM
7.4x
NA
NM
NM
10.0x
NM
7.6x
26.3x
NA

1.4x
2.5x
4.5x
NA
1.1x
1.8x
13.4x
4.8x
1.8x
2.6x
2.7x
NA
2.3x
4.6x
1.5x
1.0x
2.7x
8.8x
NA

6.8x
7.8x
29.1x
NA
5.0x
5.7x
23.1x
12.9x
8.4x
NM
7.5x
NA
NM
NM
8.4x
NM
7.1x
25.3x
NA

3.3%
9.2%
49.9%
0.0%
10.8%
-2.4%
48.2%
23.8%
16.4%
34.5%
11.1%
30.4%
20.3%
0.0%
29.6%
0.0%
24.7%
-4.1%
0.0%

$78,686.4
$2,526.2

$70,656.0
$2,221.6

4.4x
2.8x

14.3x
9.0x

3.6x
2.5x

12.3x
8.1x

17.0%
13.7%

$8,354.6
183,972.4
326.0
215.9
20,206.3
5,606.5

$7,788.3
179,326.4
291.9
104.7
19,571.3
5,083.3

5.0x
2.4x
2.7x
0.6x
4.5x
10.3x

11.4x
35.7x
NM
44.4x
56.0x
NM

10.2x
26.4x
NM
NM
34.9x
68.2x

15.2%
22.5%
27.2%
-1.1%
17.1%
88.1%

$48,217.2
$4,340.3

$46,877.8
$4,040.1

2.7x
2.5x

30.5x
35.7x

18.3x
18.3x

15.9%
18.8%

32

4.4x
2.0x
2.3x
0.6x
3.8x
7.3x
2.3x
2.1x

Winter 2014

Public Online Advertising Valuation Comps
(figures in millions of $USD, except per share)

Company Name
Mobile Media & Advertising
Acotel Group SpA
Hipcricket, Inc.
InternetQ PLC
Kongzhong Corp.
Mandalay Digital Group, Inc
Millennial Media Inc.

Ad Agencies
The Interpublic Group of Companies, Inc.
MDC Partners Inc.
Omnicom Group Inc.
Publicis Groupe SA
WPP plc

Share Price as of
1/9/2014
$29.64
0.30
5.11
9.12
3.10
7.36
Mean
Median
$17.52
26.03
71.51
89.51
21.98
Mean
Median

Market
Cap

Enterprise
Value (EV)

EV / CY 2013E
Revenue
EBITDA

$121.9
46.3
198.6
382.6
96.9
781.7

$101.3
42.8
191.4
225.0
89.2
660.5

NA
1.4x
NA
NA
4.2x
2.5x

NA
NM
NA
NA
NM
NM

$271.3
$160.2

$218.4
$146.3

2.7x
2.5x

NM
NM

$7,292.6
1,228.8
18,403.9
19,086.6
29,620.9

$8,439.6
1,865.2
21,585.9
20,024.4
34,533.9

1.2x
1.6x
1.5x
NA
1.9x

9.5x
11.7x
9.9x
NA
11.0x

$15,126.5
$18,403.9

$17,289.8
$20,024.4

1.5x
1.5x

10.5x
10.5x

EV / CY 2014E
Revenue
EBITDA
NA
0.0x
NA
NA
1.9x
1.6x
1.2x
1.6x
1.1x
1.5x
1.4x
NA
1.8x
1.5x
1.5x

LTM Annual
Revenue Growth

NA
0.0x
NA
NA
15.9x
23.7x

17.4%
15.4%
36.9%
-3.2%
184.0%
42.9%

13.2x
15.9x

48.9%
27.1%

8.4x
10.5x
9.5x
NA
10.4x

1.4%
11.2%
2.4%
10.9%
4.4%

9.7x
10.0x

6.1%
4.4%

Source: Capital IQ and S&A proprietary research

33

Winter 2014

Selected Online Advertising Acquisitions
(figures in millions of $USD)

Date Announced
11/15/2013
11/05/2013
11/01/2013
10/25/2013
10/01/2013
08/05/2013
08/05/2013
07/17/2013
07/16/2013
07/15/2013
07/02/2013
07/01/2013
04/17/2013
04/09/2013
03/13/2013
03/12/2013
03/11/2013
02/28/2013
02/14/2013
12/31/2012
12/28/2012
12/21/2012
12/16/2012
12/07/2012
10/15/2012
10/10/2012

Target
Emediate
SiteScout
Digital Window
Aggregate Knowledge
41st Parameter / AdTruth
Adap.tv, Inc.
Grab Media
Wireless Developer Agency
Everyscreen Media
AD-X
IgnitionOne
Adaptive Media, Inc.
Digital Broadcasting Corp
Dedicated Media, Inc.
Tru Measure
OLX, Slando.ru
Amaze
Atlas DMT
Volt Media
Media Whiz
TapIt! Media Group
Massive Media
Ströer Interactive, freeXmedia
Carview
ZAO Begun
Vertis

Acquirer
Cxense
Centro
Zanox
NeuStar
Experian
AOL
Blinkx
[x+1]
Media6Degrees (nka: Dstillery)
Criteo
ABS Capital Partners; Persimmon Capital
Mimvi, Inc.
Alloy Digital
LIN Media
The McClatchy Company
Avito.ru
St Ives Marketing Services
Facebook
Alphabird Australia
Matomy Media Group
Phunware
Meetic
Ströer Media
Yahoo Japan
Vieli Enterprises
Quad/Graphics

Implied EV
$10.0
40.0
NA
119.0
324.0
405.0
10.7
NA
NA
NA
NA
2.6
NA
NA
NA
570.0
37.9
NA
NA
10.0
23.0
24.6
71.1
0.7
30.6
267.0

EV / LTM
Revenue
EBITDA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
3.5x
NA
1.0x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1.4x
NA
NA
NA
NA
NA
0.1x
NA
NA
NA
NANA
NA
NANA
NA
NA
0.1x
NANA
NA
NA
NA

Source: Industry estimates, Capital IQ and S&A proprietary research

34

Winter 2014


Date Announced
10/04/2012
10/02/2012
09/25/2012
09/10/2012
08/21/2012
07/12/2012
07/04/2012
06/29/2012
06/26/2012
06/04/2012
05/31/2012
03/23/2012
03/14/2012
01/31/2012
12/31/2011
12/28/2011
12/26/2011
12/22/2011
12/15/2011
12/06/2011
12/05/2011
11/22/2011
11/21/2011
11/14/2011
11/14/2011
11/14/2011

Target
Iris Associates
Viewdle
Synaptic Digital
Sou Yi Lian Mei Network Technology
BLiNQ Media
Aegis Group
Tro Media
LookSmart
Adverline
Onet.pl
OrangeSoda
Beyond D
TVC Group
RealGravity
RJ Palmer
Call Genie
GMO Searchteria
Krush
Sou Yi Lian Mei Network Technology
Panache
Enswers
Nami Media
Interface
Webxu Media
Mr. Youth
LesPAC

Acquirer
Weare 2020
Motorola Mobility
Definition 6
Network Technology
Gannett Digital Marketing
Dentsu Inc.
Beyond Investments
Platinum Management
Financière Adverline
Ringier Axel Springer Media
Deluxe
Beyond International
The Economist Group
Scripps Networks Interactive
MDC Partners
VoodooVox
GMO AD Partners
Boston Seed Capital, Raptor Ventures
Network Technology
24/7 Media, Inc.
KT
LIN TV
incuBeta Intelligent Marketing
Webxu
LBi International
Mediagrif Interactive Technologies

Implied EV
$3.9
45.0
25.0
11.2
40.0
4,764.2
8.2
9.4
64.9
404.5
26.7
3.3
10.7
28.3
25.0
2.8
5.2
4.5
16.0
NA
39.9
8.3
12.0
31.9
40.0
71.3

EV / LTM
Revenue
EBITDA
NA
13.3x
NA
NA
NA
NA
1.6x
3.8x
NANA
NA
2.6x
14.8x
2.1x
20.5x
NM
NM
2.1x
18.9x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
15.0x
NA
NA
NA
NA
NA
1.7x
NA
NA
NA
5.8x
8.2x


35

Winter 2014


Date Announced
11/09/2011
10/31/2011
10/18/2011
10/06/2011
09/20/2011
09/13/2011
09/06/2011
08/30/2011
08/18/2011
08/08/2011
08/01/2011
07/24/2011
06/15/2011
06/13/2011
06/13/2011
05/23/2011
05/16/2011
04/25/2011
04/11/2011
04/07/2011
03/12/2011
03/02/2011
02/14/2011
02/04/2011
01/31/2011

Target
Prime Visibility Media Group
interclick
Auditude, Inc.
smartclip AG
Sometrics
AdoTube
Digital & Direct Communications
chors, EyeWonder
CC Media
IndieClick Media Group
Dotomi
Adperio
MediaMind
AdMeld
ACTSoft
BzzAgent
5to1
Aspen Marketing Services
Tatto
Burst Media
Adenyo
Juno Internet
Business.com
Reply!
GoViral Limited


Acquirer
Blinkx
Yahoo!
Adobe Systems
Adconion Media
Serve Virtual Enterprises
Exponential Interactive
Sapientnitro
Digital Generation
APN News & Media
Demand Media
ValueClick
Matomy Media Group
Digital Generation
Google
NEOWIZ Games
DunnhumbyUSA
Yahoo!
Epsilon Data Management
Ozura World
Blinkx
Motricity
Axel Springer
Resource Nation
Saints Capital
AOL
Mean
Median

36

Implied EV
$36.0
250.9
NA
NA
30.0
19.6
64.0
58.3
12.6
13.0
278.2
30.0
422.7
400.0
14.3
60.0
26.4
345.6
60.0
30.1
139.5
53.4
10.5
10.0
91.7
$157.9
$30.1

EV / LTM
Revenue
EBITDA
1.2x
NA
2.0x
23.6x
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
5.6x
NA
0.6x
NA
5.0x
28.5x
NA
NA
NA
NA
NA
NA
NM
NM
1.4x
NA
NA
NA
0.8x
NM
10.6x
NM
NA
NA
NA
NA
NA
NA
7.4x
NA
3.7x
14.6x
2.1x
14.8x
Winter 2014

Selected Mobile Advertising Acquisitions

Date Announced
12/03/2013
09/09/2013
08/13/2013
04/26/2013
04/25/2013
04/26/2013
04/11/2013
04/11/2013
03/26/2013
02/14/2013
01/15/2013
12/28/2012
10/17/2012
10/10/2012
10/01/2012
08/10/2012
08/06/2012
05/23/2012
05/14/2012
03/16/2012
03/05/2012
11/14/2011
08/03/2011
07/20/2011
04/21/2011

Target
Rhythm NewMedia
MoPub
Jumptap
E-surfing Media
Parse
Wavii
mia
Pulse
Summly
Skyfire Labs
Redmas
TapIt! Media Group
SPiRE, Inc
ThinkNear
e-machi town
Howmark Mobile
Innity Corporation
MobSmith
Buongiorno
Social Hour
Amobee
Mobile Interactive Group
HipCricket
JAGTAG
Greystripe

Acquirer
Blinkx
Twitter
Millennial Media
China Telecommunications Corp
Facebook
Google
Mandalay Digital Group
LinkedIn
Yahoo
Opera Software
Adsmovil
Phunware
motionBEAT
Telenav
Hikari-Tsushin
MOKO.mobi
DA Consortium
The Rubicon Project
DOCOMO Deutschland
PlayPhone
SingTel
Velti
Augme Technologies
Augme Technologies
ValueClick

Implied EV
$65.0
350.0
261.3
242.1
85.0
30.0
8.2
90.0
30.0
155.0
NA
23.0
23.0
22.4
25.9
4.9
20.4
10.0
336.0
51.5
321.0
62.2
55.8
6.1
70.6

EV / LTM
Revenue
EBITDA
4.7x
NA
NA
NA
4.1x
NM
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
12.0x
NA
NA
NA
NA
NA
NA
NM
NA
NA
0.2x
2.2x
2.4x
NA
1.6x
16.9x
NA
NA
1.1x
11.4x
NA
NA
10.7x
NA
3.1x
NA
6.7x
NM
4.3x
NA
2.8x
NA


37

Winter 2014

Selected Mobile Advertising Acquisitions
EV / LTM


Date Announced
04/19/2011
03/12/2011
03/03/2011
09/30/2010
01/20/2010
01/05/2010
11/09/2009

Target
Where
Adenyo
Adsparq
Mobclix
AdMarvel
Quattro Wireless
AdMob

Acquirer

Mean
Median

Revenue
7.9x
10.6x
NA
NA
2.6x
6.9x
12.5x

EBITDA
NA
NM
NA
NA
NA
NA
NA

$114.7
$55.1

eBay
Motricity
Mobivity Holdings
Velti
Opera Software
Apple
Google

Implied EV
$135.0
139.5
$7.4
54.1
23.0
275.0
582.2

4.9x
4.1x

10.2x
11.4x


38

Winter 2014

Select Transaction Case Studies
Acquires

Acquires

Date Announced: September 9, 2013

Date Announced: August 7, 2013

Target Description: MoPub is an ad serving
platform for mobile application publishers to
manage their ad inventory on iOS and Android
devices.

Target Description: Adap.tv offers a technology
platform that automates the process of buying and
selling video advertising on the Web, mobile
devices and connected TVs.

Implied Enterprise Value: $350.0mm


Implied EV / Revenue Run-Rate Multiple: 3.5x

Implied EV / Revenue Multiple: 3.5x

Deal Commentary / Rationale:








Twitter’s acquisition of MoPub capitalizes on
the explosion in mobile device usage and the
industry-wide shift toward programmatic and
RTB





The combination of AOL On video network
and Adap.tv will give AOL an end-to-end
solution and video stack for publishers and
advertisers, including monetization



Twitter intends to incorporate MoPub’s
technology into its own ad platform, allowing
advertisers to easily automate and serve their
ad buys while also significantly expanding
their reach

AOL features a considerable amount of
premium video content (in-house or
distributed through content partnerships)

AOL will be able to offer its unsold inventory
to be monetized via the Adap.tv Exchange

Twitter now has the scale in mobile to offer
retargeting of its users as they traverse the
desktop/different mobile web and within apps

39

Winter 2014

Select Transaction Case Studies
Acquires

Acquires

Date Announced: August 13, 2013

Date Announced: July 15, 2013

Target Description: Jumptap, Inc. operates a
mobile audience targeting platform that provides
audience-centric advertising solutions to reach
mobile users in the United States and
internationally.

Target Description: AD-X offers real time
analysis reports via dashboard or API to integrate
into a system. It analyses advertising
effectiveness in driving downloads.


Implied EV / Revenue Multiple: NA


Implied EV / LTM Revenue Multiple: 4.1x







40

The AD-X acquisition is intended to address
the major lacking component (mobile) in their
platform capabilities on their path to an IPO



The Jumptap deal was likely driven by the
rise of online DSPs / RTB platforms and the
pressure the online branded advertising
networks are seeing, which has led to a
continuing decline in eCPMs

The combination of AD-X and Criteo will give
mobile marketers the ability to target and
deliver relevant ads across smartphones and
tablets, and then track results



Millennial Media adds expertise in
programmatic buying, third-party data and
performance marketing as it looks to build a
mobile advertising platform capable of
competing with Google and Facebook

AD-X is one of the earliest providers of a
universal SDK solution and has 120+
advertisers including, eBay, Expedia and
Priceline

Winter 2014

Selected Online Advertising Private Placements
Date

Company

Nov. 2013

Signpost

Nov. 2013

Multichannel

Nov. 2013

Run

Oct. 2013

Revenew

Oct. 2013

Komli Media
India

Sep. 2013

YD Group B.V.

Sep. 2013

Revenew

Aug. 2013

Jebbit

Jul. 2013

Adtheorent

Description

Spark Capital Partners, OpenView Venture
Partners, Scout Ventures

NA

Amount
Raised ($M)
10.0

Dmitry Fedotov, Hong Kong Government,
Kevin Ng

NA

3.0

Verizon Ventures

A

1.5

IllinoisVENTURE, Tgap Ventures, Allos
Ventures

B

5.0

Draper Fisher Jurvetson, Norwest Venture
Partners, Peepul Capital, Nexus Venture
Partners, Helion Venture Partners
Partech International, Active Venture Partners,
SGECR
IllinoisVENTURES, Tgap Ventures, Allos
Ventures

NA

29.8

NA

6.1

A

6.0

Boston Seed Capital, Data Point Capital

NA

1.3

Mogility Capital, OmniCapital Group, Verizon
Ventures

NA

4.9

Round Investors

Operates an online advertising platform
that connects local businesses with new
customers in the United States
Aids marketers in automating online
advertising with its cloud-based
advertising manager
Offers on-demand access to digital ad
inventory and optimization techniques
Enables a network of manufacturers,
resellers and industry groups to promote
brands
Offers solutions across lead acquisition,
targeting, rich media, audience
measurement and brand measurement
Provides performance display
advertising technology and services
Enables a network of manufacturers,
resellers and industry groups to promote
brands
Creates brand awareness among
college students
Develops real-time bidding-enabled
mobile ad networks

Round

1 Does

not include some undisclosed funding

41

Winter 2014

Date

Company

A

Amount
Raised ($M)
68.3

Insight Venture Partners

NA

35.8

OpenView Venture Partners

NA

5.0

Battery Ventures, Western Technology
Investment, Javelin Venture Partners
Crede CG

NA

8.0

NA

3.4

Hummer Winblad Venture Partners, Iris Capital,
Sequoia Capital, General Catalyst Partners,
Conde Nast Americas

C

9.0

CommonAngels, Kirshenbaum Bond Senecal,
Neu Venture Capital, New Atlantic Ventures,
RRE Ventures
Accel Partners, Samsung Venture Investment
Corporation, Cox Media Group
Ventech, Isai Gestion

Description

NA

5.0

NA

20.0

B

4.0

Round Investors

Jul. 2013

Affec.Tv

Improves the relevancy of online
advertisements

Octopus Investments Limited

Jul. 2013

Mediaspectrum

Jul. 2013

Balihoo

Provides a cloud technology platform for
mobile advertising
Provides web-based local marketing
automation technology and services to
brands with local marketing needs

Jun. 2013

Boost Media

Jun. 2013
Jun. 2013

Interntainment
Media
Flite

Jun. 2013

Yieldbot

May 2013

Collective

May 2013

StickyADStv

Operates a platform that enables
advertisers to optimize advertisments
Engages in developing technologies
and social media platforms
Develops a cloud-based advertising
platform that enables advertisers,
publishers and marketers to deliver
campaigns
Provides relationship mapping in an
analytical and graphical nature of visitor
intent
Provides multi-screen advertising
solutions
Operates an online video advertising
network

Round

1 Does


42

Winter 2014

Date
May 2013
May 2013

Apr. 2013

Apr. 2013
Apr. 2013

Apr. 2013
Apr. 2013

Apr. 2013
Apr. 2013

Company

Round Investors

Round

North Atlantic Capital, Spark Capital Partners,
Foundry Group
New Enterprise Associates, Comcast
Ventures, Valhalla Partners, Catalyst Investors,
Pinnacle Ventures
Iris Capital, Tiger Global Management, Jabbar
Internet Group

NA

Amount
Raised ($M)
6.0

D

68.3

NA

3.0

Meditor Group Limited, Violette Company
Limited
Institutional Venture Partners, Sequel Venture
Partners, General Catalyst Partners, Costanoa
Venture Capital
Northzone Ventures, Conor Venture Partners

NA

3.0

B

25.0

B

3.0

iTech Advisors

A

3.5

Avalon Ventures

A

5.8

NA

10.0

Description

Triggit

Offers a toolset that enables advertisers
to optimize advertisements
Videology
Provides online video advertising
solutions via the Videology Addressable
Audience Platform
Ikoo Media
Provides a digital advertising solution for
various advertising campaigns and
options
Phorm
Offers solutions for engaging in
behavioral online advertising
DataLogix
Develops and delivers purchase-based
audiences models targeting to drive
online and offline sales
Sticky AB
Provides a platform to make sure that
display advertisements are seen
Garpun
Develops online and management tools
for digital agencies and coporate
advisors
Nanigan
Operates an application programming
interface for Facebook advertisements
Moment Systems Provides digital advertising solutions for
advertisers and agencies

Redpoint Ventures, CBC Capital, WPP Digital,
KPCB China

1 Does


43

Winter 2014

Date

Company

Mar. 2013

Demandbase

Mar. 2013

Zamplus
Technology

Mar. 2013

Innovid

Mar. 2013

AdzCentral

Mar. 2013

OpenX

Mar. 2013

Wantr

Mar. 2013

Turn

Feb. 2013

Virool

Feb. 2013

Samba

D

Amount
Raised ($M)
15.0

NA

20.0

Sequoia Capital, T-Venture Holding GmhH,
Genesis Partners, Vintage Investment Partners

C

11.0

Electric Sheep, Digital Media Partners

A

3.2

Samsung Venture Investment, Accel Partners,
Index Ventures, SAP Ventures, Mitsui,
Presidio Ventures
SEED Capital Denmark and Other Angels

E

25.0

NA

0.6

NA

NA

3.6

Draper Fisher Jurvetson, Menlo Ventures,
Phenomen Ventures, #DominateFund, Various
Investors, Thomvest Ventures
Initial Capital, 500 Startups, e.Bricks Digital,
Rhodium

NA

6.6

NA

0.5

Description

Round Investors

Provides business contact and lead
generation solutions for B2B marketing
and sales professionals
Provides professional data service
solutions to the digital advertising
industry
Provides interactive video advertisment
solutions that enable advertisers and
publishers to add interactive elements
Provides advertising technology tools
and expertise to improve clients’ digital
media spending
Provides integrated enterprise digital
and mobile advertising technology

Altos Ventures, Sigma Partners, Sutter Hill
Ventures, Scale Venture Partners, Adobe
Ventures, Costanoa Venture Capital
Intel Capital, Northern Light Venture Capital

Allows users to discover products and
shop online
Delivers real-time insights for advertising
agencies and marketers
Operates as a viral video advertising
network
Provides content management and
distribution solutions online

Round

1 Does


44

Winter 2014

Date

Company

Description

Draper Fisher Jurvetson, Norwest Venture
Partners, Peepul Capital, Nexus Venture
Partners, Helion Venture Partners
Seedfund

NA

Amount
Raised ($M)
29.8

NA

3.0

August Capital, Morgenthaler, Onset Ventures,
QuestMark Partners, Thayer Ventures

NA

20.0

Time Warner Investments, Avalon Ventures,
Union Square Ventures
Bain Capital Ventures

NA

6.0

A

15.0

Cava Capital, Extreme Venture Partners,
Verizon Communications, Webb Investment
Network, Advancit Capital
Mark Cuban, David Cohen, Scott Banister,
Peter Weck, Tod Sacerdoti, Don Hutchison,
Jared Kopf, Jason Seats, William Lohse,
Savan Devani, Shriraj Gaglani, I/O Ventures
Bayern Kapital, LBBW Venture Capital, HighTech Gründerfonds, Mountain Super Angel,
BayBG Bayerische Beteiligungsgesellschaft
Atlas Venture, Flybridge Capital Partners,
Infocomm Investments, Menlo Ventures,
Thomvest Ventures

NA

1.5

NA

0.8

NA

5.0

NA

27.0

Round Investors

Oct. 2013

Komli Media
India

Feb. 2013

Banyan Netfaqs

Feb. 2013

Adara Media

Feb. 2013

Simulmedia

Feb. 2013

Persado

Feb. 2013

LocalResponse

Offers solutions across lead acquisition,
targeting, rich media, audience
measurement and brand measurement
Provides media, marketing, and digital
advertising services
Provides an audience platform for digital
advertisers to reach highly-targeted
traveler and hospitality audiences
Provides a digital advertisement platform
for linear television
Provides marketing persuasion
technology solutions
Operates a social advertising platform

Feb. 2013

VidIQ

Provides YouTube video marketing suite

Feb. 2013

Crealytics

Specializes in performance search
engine marketing

Jan. 2013

DataXu

Provides multi-channel demand side
platform for online, video, and mobile
advertisers

Round

1 Does


45

Winter 2014

Date
Jan. 2013
Jan. 2013
Jan. 2013
Jan. 2013
Jan. 2013

Company

Provides social marketing-as-a-service
programs
ADmantX
Provides advertising solutions based on
semantic technology
Wanderful Media Provides a local search platform where
consumers can find the best local deals
Adyoulike
Provides interactive advertising formats
to global brands and agencies
Optimal
Provides audience-based advertising
technologies

AppNexus

Jan. 2013

Celtra

Jan. 2013

PinYou

Jan. 2013

Prosper
Marketplace

B

1.0

NA

5.0

Banexi Ventures Partners

A

1.2

Silicon Valley Bank, Siemer Ventures, WGI
Group, Neu Venture Capital, DoubleRock,
Signal Ventures, The Social Internet Fund,
Social Starts, Stonnington Asset Allocation
Technology Crossover Ventures, Venrock,
Tribeca Venture Partners

B

4.5

D

75.0

NA

27.0

NA

20.0

NA

20.0

Round Investors

Extole

Jan. 2013

C

Amount
Raised ($M)
7.6

Description

Offers cloud-based real-time advertising
platform for global ad networks and
demand-side platforms
Provides a web-based self-service
platform for advertising optimization
Operates as a digital advertisement
wireless network technology company
Operates as a peer-to-peer lending
marketplace to originate loans and notes

Shasta Ventures, Norwest Venture Partners,
Redpoint Ventures, Trident Capital
Atlante Ventures, Mezzogiorno
NA

Thomvest Ventures, Atlas Venture, Flybridge
Capital Partners, Menlo Ventures
CBS Capital, Vangoo Investment Partners,
Fude Capital
Accel Partners, Draper Fisher Jurvetson,
CrossLink Capital, Sequoia Capital, Atlanticus
Holdings, Omidyar Network, Volition Capital,
Tomorrow Ventures. QED Partners
Median

Round

$6.0

1 Does


46

Winter 2014

Tremor Video (TRMR)
IPO Date:

6/26/13

Founded: 2005

Company Size: 287 Employees

IPO Price:

$10.00

CEO: William Day

Total Revenue: $125.5mm

Proceeds Raised:

$69.8mm

Stock Price

Equity
Value

Closing Price at Day 1

$8.50

$420.1

$395.6

3.5x

Closing Price at 1 Month

$8.67

$428.5

$403.0

3.6x


$10.04

$497.4

$634.9

5.2x

Year-End Closing Price

$5.80

$288.0

$191.8

Description: Provides technology-driven video advertising solutions that
enable brand advertisers to engage consumers in various Internetconnected devices

Enterprise EV/LTM
Value
Rev

1.5x

VC Investors & Owners: Canaan Partners, Draper Fisher Johnson,
EDB Investments, European Founders Fund Management, Flybridge
Capital Partners, General Catalyst Partners, Keating Capital, Masthead
Venture Partners, Meritech Capital Partners, Relay Ventures, SamStella,
SAP Ventures, Triangle Peak Partners, W Capital Partners

Historic Stock Price: From IPO to Year-End

Public Commentary
“The company has seen a substantial increase in demand for in-stream ads,
but also recently launched a bidding and buying feature available through its
video advertising platform called VideoHub Connect. Even more interesting,
the company has formed partnerships with video inventory suppliers such as
DoubleClick AD Exchange, LiveRail, and SpotXchange. The ability to grab
some of the huge growth in RTB should boost an already robust growth rate.
The recent second-quarter results showed a strong 41% growth rate as
advertisers and brands continue to push forward with video ads that offer a
higher level of interactivity with the consumer. Tremor generated a gross
margin of 46.5% or roughly in line with Rocket Fuel.”
-Wall Street Research

$12

$10
$8
$6

$4
$2
6/26/2013

08/02/2013

09/10/2013

10/16/2013

11/21/2013

12/31/2013

Sources: Capital IQ, Yahoo Finance, CrunchBase, The Street

48

Winter 2014

Rocket Fuel (FUEL)
IPO Date:

9/19/13

Founded: 2008


IPO Price:

$29.00

CEO: George John


Proceeds Raised:

$107.9mm

Stock Price

Equity
Value


$56.10

$1,822.9

$1,822.8

11.4x


$64.93

$2,109.8

$2109.7

13.2x


$56.83

$1865.2

$1766.8

9.1x


$61.49

$2,018.2

$1,919.7

Description: Provides artificial-intelligence digital advertising solutions
built on its real-time optimization engine and computational infrastructure
to deliver measurable digital advertising campaigns

Enterprise EV/LTM
Value
Rev

9.8x

VC Investors & Owners: Comerica Bank, Cross Creek Advisors, DLA
Piper, Labrador Ventures, Mohr Davidow Ventures, Nokia Growth
Partners, Northgate Capital Group, Summit Partners, Western
Technology Investment, Wilson, Sonsini, Goodrich & Rosati


Public Commentary
“Most market analysis agrees that demand for all forms of digital advertising is
going to explode over the next few years whether mobile, social, or video. The
companies that can bridge that conversion will make huge gains for
shareholders…one potential winner could be Rocket Fuel based on recent
results. MAGNA Global forecasts that the real-time bidding, or RTB, segment
of the market will explode from roughly $4 billion spent in 2012 to $16 billion by
2016….The CAGR rate and the recent growth rates in excess of 100% is what
drove the IPO of Rocket Fuel to double during the first day of trading. The
other ad tech stocks are seeing more modest growth in the 30% range that
hasn't attracted investors seeking the extremely fast growth companies. In
addition, Rocket Fuel is involved in the intersection of key buzzwords of
Artificial Intelligence and Big Data that likely grabbed the attention of
investors.”

$70

$60
$50
$40
$30
$20
9/19/2013

10/09/2013

10/29/2013

11/18/2013

12/9/2013

12/30/2013


49

Winter 2014

Marin Software (MRIN)
IPO Date:

3/21/13

Founded: 2006


IPO Price:

$14.00

CEO: Chris Lien


Proceeds Raised:

$97.7mm
Description: Operates a cloud-based digital advertising management
platform for large-scale advertising campaigns
Stock Price

Equity
Value

Enterprise EV/LTM
Value
Rev


$16.26

$502.6

$481.9

8.1x


$14.61

$451.6

$430.9

7.2x


$10.41

$324.0

$214.5

3.4x


$10.24

$334.1

$229.5

3.2x

VC Investors & Owners: Amicus Capital, Benchmark Capital, CrossLink
Capital, DAG Ventures, Temasek Capital, Triangle Peak Partners


Public Commentary
“As digital advertising becomes more complex, Marin offers a solution that
allows advertisers to manage across different platforms, including Google and
Facebook, from one entry point. The cloud-based platform allows those
advertisers to measure, manage, and optimize their advertising investments
while also saving time and improving outcomes. Currently, the platform
generates 90% of revenue from search, but mobile is quickly becoming an
additional focus with the increased complexity due to fragmentation among
devices and operating systems.
The company reached 584 active advertisers during its 2013 second quarter,
compared to 487 in the same period last year. The solid growth and subdued
stock price should attract more investors in the months ahead. Not to mention,
the stock lock-up period from the IPO ended on September 18, providing less
fears of massive insider dumping.”

$18

$16
$14
$12
$10
$8
3/21/2013

05/16/2013

07/12/2013

09/06/2013

10/31/2013

12/27/2013


50

Winter 2014

YuMe (YUME)
IPO Date:

8/6/13

Founded: 2004


IPO Price:

$9.00

CEO: Jayant Kadambi


Proceeds Raised:

$42.9mm

Recent Acquisition: Crowd Science on January 15, 2013

Stock Price

Equity
Value


$9.00

$286.2

$260.4

2.1x


$8.16

$260.8

$314.1

2.4x


$8.00

$255.7

$309.0

2.3x


$7.45

$238.0

$175.0

Description: Provides technology-driven video advertising solutions
which enables brand advertisers to find and target audiences across
Internet-connected devices and digital media properties

Enterprise EV/LTM
Value
Rev

1.2x

VC Investors & Owners: Accel Partners, DAG Ventures, Felicis
Ventures, FLOODGATE, Intel Capital, Khosla Ventures, Menlo Ventures,
Samsung Venture Investment Corporation, TransLink Capital,
WestSummit Capital


Public Commentary

$14

YuMe’s PQI already provides composite inventory grading for factors such as
video player size, content association and device type, while improving brand
lift, video completion rate (VCR) and a number of other measures, including
fraud detection. However, this latest improvement will give advertisers
additional transparency into inventory quality. This is all possible because of
the software YuMe embeds across its inventory partner screens – the YuMe
SDK.

$12

$10


$8

$6
8/6/2013

9/6/2013

10/6/2013

11/6/2013

12/6/2013


51

Winter 2014

Millennial Media (MM)
IPO Date:

3/28/12

Founded: 2006


IPO Price:

$13.00

CEO: Paul Palmieri


Proceeds Raised:

$111.2mm

Recent Acquisition: Jumptap on August 13, 2013

Stock Price

Equity
Value


$25.00

$1,872.3

$1,855.5

17.9x


$18.97

$1,420.7

$1,404.0

13.5x


$12.75

$970.1

$1,040.1

9.0x


$7.27

$772.2

$651.0

Description: Provides mobile advertising solutions for advertisers and
developers in the Unites States and internationally

Enterprise EV/LTM
Value
Rev

3.0x

VC Investors & Owners: Acta Capital, Bessemer Venture Partners,
Charles River Ventures, Columbia Capital, New Enterprise Associates


Public Commentary
“[Millennial] guided to between $80 million and $85 million in third quarter 2013
for the combined entity, yet it was unwilling to break out the Millennial only
portion. This raised concerns among analysts that the company was struggling
to reach growth targets…The reason it might not matter is the company guided
between $340 million to $350 million for the full year. Considering the
combined companies generated $230 million in revenue for 2012, the growth
forecast of at least 48% should appease investors. Either the Millennial part
will continue strong growth or the new Jumptap programmatic platform will
boost the growth rate…Not to mention, one has to wonder if all these expected
growth gains were coming from Jumptap why it would agree to a stock based
buyout at a low revenue multiple.”

$30
$25
$20
$15

$10
$5
3/28/2012

9/4/2012

2/11/2013

7/21/2013

12/28/2013


52

Winter 2014

Criteo (CRTO)
IPO Date:

10/29/13

Founded: 2005


IPO Price:

$31.00

CEO: Jean-Baptiste Rudelle


Proceeds Raised:

$233.7mm
Recent Acquisition: AD-X Limited on July 15, 2013

Stock Price

Equity
Value


$35.39

$1,957.0

$1,907.6

4.2x


$36.10

$1996.3

$1,959.1

3.7


NA

NA

NA

NA


$34.20

$1,819.2

$1,854.0

Description: Provides pay-per-click performance display advertising
solutions by enabling e-commerce companies to leverage large volumes
of granular data to engage and convert their customers

Enterprise EV/LTM
Value
Rev

3.5x

VC Investors & Owners: Adams Street Partners, Bessemer Venture
Partners, Elaia Partners, Fourvest Sarl, IDInvest Partners, Index Venture
Associates IV Limited, Index Ventures, SAP Ventures, Softbank Capital,
YJ Capital


Public Commentary
“Criteo is one of a number of companies, including Google and Facebook, to
benefit from the on-line ad boom, the result of major companies following their
audience to the web and away from newspapers and magazines… The
company developed a technology known as "re-targeting" which catches users
who have visited a shopping website without buying anything, and then
showing them ads for similar items on other sites to tempt them back…
Criteo has roughly doubled its revenues every year since 2010 to reach 271.9
million euros in 2012. It made a profit of 800,000 euros last year but swung to
a loss of 4.9 million in the first six months of 2013 because of increased
investments.
-Reuters

$40

$35

$30

$25
10/29/2013

11/13/2013

11/28/2013

12/13/2013

12/28/2013


53

Winter 2014

Contact Information

Siemer & Associates, LLC ● Member FINRA/SIPC
1333 2nd Street, Suite 600
Santa Monica, CA 90401
Phone: (310) 861-2100
Fax: (310) 861-2125
www.siemer.com

Siemer online advertising winter 2014 master

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