The Evolution of Marketing & Interactive Services and Where Companies Are Investing for Growth

Transcription

1 The Evolution of Marketing & Interactive Services and Where Companies Are Investing for Growth SIIA Midmarket Growth Conference presented by Tolman Geffs and Scott Peters, Co-Presidents The Jordan, Edmiston Group, Inc. July 20, 2011

2 Headlines The marketing and interactive services sector presents an excellent opportunity for middle market private equity investors Strong underlying growth characteristics Technology is driving efficiency and accountability across many forms of marketing and advertising Early stage investors have planted the seeds and many high growth, profitable and sustainable businesses have emerged (these are not dot com vaporware models) Senior and mezzanine debt providers are beginning to get comfortable in the sector Many large global media and marketing companies will need to invest significant capital in M&A to transform legacy models (large and healthy strategic buyer demand for the foreseeable future) 2

3 Marketing Services Overview The U.S. marketing services industry generated approximately $215 billion in revenue in 2010 Institutional Spending B2B Magazines and Media Business Information Services Professional, Ed & Training Media TV Programming INSTITUTIONAL $259.5 ADVERTISING $191.9 Advertising B2B Magazines Broadcast Television Cable & Satellite Television Consumer Internet Consumer Magazines Newspaper Outdoor/Out-of-Home Radio Yellow Pages Consumer Spending Cable & Satellite TV Access & Services Consumer Internet Access & Content Consumer Books Consumer Magazine Subscriptions Entertainment Newspaper Subscriptions Satellite Radio Subscriptions CONSUMER $230.7 Source: VSS Communications MARKETING SERVICES $215.5 Marketing Services Direct/Database Marketing Interactive Marketing Services Consumer Promotion B2B Promotion PR & Word-of-Mouth Event & Entertainment Marketing Outsourced Custom Publishing 3

4 Marketing Services Key Trends and Drivers Shift in marketer focus from advertising content to customer conversation, and from branding and awareness to true purchase funnel impact Secular Marketers turning to below-the-line spending on multi-channel campaigns and programs to enhance ROI Interactive agencies (and digital assets) taking a lead role in overall marketing and brand strategy across channels Cyclical Segment Technical B2B and B2C marketers are dedicating a higher percentage of post-recession budgets to online campaigns Targeted, measurable and deemed more cost efficient Expectations for engaging online experiences continue to favor video and rich media ad units and capabilities Marketers need for reach will drive greater adoption of social media programs On the front-end, marketers still looking for high production values and expertise with multichannel and multi-media outlets, including social and mobile and the ability to target customers and optimize marketing spend On the back-end, marketers looking for technical expertise with targeting and analytics and integration of campaign data into enterprise marketing and CRM systems 4

5 Table of Contents Marketing & Interactive Services Industry Strategic Companies Investing for Growth Marketing & Interactive Services M&A About JEGI Appendix 5

6 Forces at Work Secular Shift Advertisers are targeting growth sectors vs. B2B and traditional brand media channels Consumer and B2B Ad and Marketing Spend $180 $160 CAGR = 7.8% $140 $120 Billions $100 $80 $60 $40 CAGR = 2.0% CAGR = (1.9%) $20 $ B2B Media Growth Sectors Traditional Brand Media Source: VSS Communications Industry Forecast, Excludes Cable. Traditional Media: Newspapers, Broadcast Television, Radio and Consumer Magazines. B2B Media: Trade Shows, B2B Magazine, E-Media, Outsourced Custom Publishing Growth Sectors: Consumer Promotion, Direct Mail, and Internet Advertising. 6

7 Media Consumption Changing Rapidly In 2010, 36% of media consumption time is being spent on the Internet, versus 19% in 2005 Media Consumption Time TV 39% Magazines 8% Newspapers 11% TV 35% Magazines 5% Newspapers 7% Radio 17% Radio 23% Internet 19% Internet 36% Source: Forrester 7

8 Strong Growth Ahead for Online Advertising There is a wide gap between time spent on the Internet and online advertising spend 40% 35% 36% 35% 33% 30% 25% 20% 15% 10% 5% 5% 9% 7% 14% 17% 9% 16% ~ a $35 billion ad opportunity 0% Magazines Newspapers Radio Internet TV Time Spend % Ad Spend % Sources: Forrester; Barclays Capital 8

9 Strong Growth Ahead for Online Advertising Online advertising is expected to grow strongly to close the gap in ad spend v. time spend Online advertising i is expected to double its share of total advertising i spend by 2012 Second largest ad category behind TV (network, cable and local) Online Advertising Quarterly Revenue Growth Trends Online advertising reached $7.3 billion in Q1-2011, a 23% increase over Q and the highest Q1 revenue ever Sources: IAB and PWC 9

10 Interactive Marketing Services at Forefront Marketers plan to greatly increase the use of interactive marketing tactics Stay the same Decrease Not applicable Interactive marketing tactics Created social media Online video Search engine optimization (SEO) Mobile marketing Paid placement in social media marketing Paid search listings Online classifieds or directory listings Display ads through ad networks Display ads through publishers Increase Stay the same Decrease Not applicable Traditional marketing tactics Direct mail Television Magazines Outdoor Telemarketing Radio Newspapers Yellow pages 0% 20% 40% 60% 80% 100% Source: U.S. Interactive Marketing Forecast Online Survey, Forrester Research,

11 International Markets Shifting Online Currently, only 30% of the world s population (seven billion) have Internet access China has the most Internet users, with 450 million, but only 34% penetration India has 81 million Internet users, but only 7% penetration Sources: Internet World Stats; emarketer; Barclays Capital 11

12 Mobile Internet Key Growth Driver Mobile Internet will surpass all prior computer/internet-based evolutions Computing Growth Drivers Over Time, F Sources: ITU; Mark Lipacis; Morgan Stanley Research 12

13 Mobile Opportunity is Here Smartphone shipments surpassed PC shipments for first time in Q Rapid mobile Internet adoption US Mobile Phone Subscribers and Internet Users Network speeds and capacity are increasing Data plans are more affordable Devices are more capable Global Smartphone Shipments as a Percentage of Total Handsets Source: emarketer millions) (m Sources: Gartner and Barclays Capital 13

14 Efficiency of Mobile Mobile is emerging as a compelling channel for marketers Efficacy of Mobile vs. Other Advertising Media Source: Chetan Sharma, January

15 Continued Growth of Social Engagement via social networks is growing 81% of Internet users visit a social network each month, and social networks account for 17% of the total minutes spent online Facebook commands nearly 700 million users globally Top 5 Domestic Web Properties by Share of Total Minutes Source: comscore 15

16 Social Ad Spend Increasing Spending on social network advertising is expected to reach nearly $3 billion in 2011, or 24% of display and 10% of total online ad spend Social sites amass large amounts of user data, which can be utilized for ad targeting Marketers are increasingly devoting a greater percentage of their budgets to this segment Facebook s share of US online display ad revenues is forecast to grow to 17.7% 7% in 2011, up from a 12.2% last year Growth of U.S. Social Network Advertising Revenue Sources: emarketer and Barclays Capital 16

17 E-Commerce is Expanding Increasing shift of dollars from retail stores to online shopping Domestic e-commerce market accounted for 8.4% of total retail sales, or $176 billion, in % of Internet users shop online Growth will come from greater share of wallet, offline retailers and brands coming online, and new e-commerce vehicles, such as mobile commerce, flash sales and group buying ($ billions) Growth of US Online Retail Sales as % of Total US Retail Sales Sources: Forrester Research and Barclays Capital 17

18 The Rise of Mobile Commerce Mobile commerce is growing fast and is expected to reach $5.7 billion in 2011, up 95% from 2010 levels The rapid adoption of smartphones (28% of handsets in the US and 19% globally) and the proliferation of tablet PCs are driving mobile commerce Retailers are increasingly building mobile compatible sites 21% of smartphone users made a purchase on their smartphones during the 2010 holiday season Growth of US Mobile Commerce Sales Sources: ABI Research; Coda Research; Barclays Capital 18

19 Increasing Mix of E-Commerce Channels Directly entering a URL to make a purchase online has declined from 75% of sales generation in 2000 to 9% in 2010 Marketplaces and Search have carved out strong positions as drivers of a majority of sales (71% in 2010) on the Internet Mobile and Social are emerging sales channels for online retailers and now account for 10% of online sales Comparison Shopping Engines (CSE) account for approximately 10% of online sales E Commerce Channel Mix Source: Channel Advisor 19

20 Growing Reach of Local Local US ad market is expected to grow from $130 billion in 2010 to more than $150 billion in 2015 Mobile Internet penetration and group buying services have driven local online advertising sales (expected to reach 24% of local ad spending by 2015) Geo-targeting/location-based targeting of ads/promotions is the holy grail for local businesses Strained small business budgets during the economic downturn have led local merchants to look for more cost effective customer acquisition methods US spending on local advertising 20

21 Users are Watching More Internet Video In 2011, Internet video advertising is expected to surpass $2 billion and is the fastest growing online advertising category Content availability is growing online consumption of video reached 45 billion streams in 2010, and approximately 182 million people watch online videos every month 86% of the U.S. online population has streamed a video, and online video streaming represents 32% of time spent online (m millions) $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $324 Growth in Online Video Advertising CAGR of 35%, 2010 to 2015 $734 $997 $1,406 $2,039 $2,855 $3,854 $5,010 $6, E 2012E 2013E 2014E 2015E Sources: emarketer and Barclays Capital 21

22 Table of Contents Marketing & Interactive Services Industry Strategic Companies Investing for Growth Marketing & Interactive Services M&A About JEGI Appendix 22

23 Case Study Examples Media companies are investing in marketing services to better assist their customers and capture more revenue Advertising Subscription Data Marketing Services Marketing services accounting for an increasing % of total revenue 23

24 Agencies Retool Advertising agencies, data MSP s, diversified direct marketing and traditional print service providers are retooling via investment in integrated and interactive marketing solutions Mighty Net! 24

25 Case Study Meredith Marketing solutions are now a pillar of media companies, with services including: Integrated Marketing Video Solutions Database Solutions Data & Analytics Measurement & Insights Mobile Marketing Social Marketing Integrated marketing services businesses are evolving primarily through acquisitions Enables teams to work together to capture new revenue Valuations increasing for adoption of digital disciplines and 360 degree approach Meredith Integrated Marketing 25

26 New Market Entrants Technology companies are aggressively entering the market, investing in analytics, optimization and digital advertising solutions for the enterprise 26

27 Table of Contents Marketing & Interactive Services Industry Strategic Companies Investing for Growth Marketing & Interactive Services M&A About JEGI Appendix 27

28 Marketing Services Public Company Comparisons Public company multiples have rebounded strongly since the Dow reached bottom on March 9, 2009 Public Company Comps Median Values LTM Revenue Multiple LTM EBITDA Multiple Market Sector 10/1/2007 3/9/2009 7/18/ /1/2007 3/9/2009 7/18/2011 Customer Contact BPO 0.9x 0.5x 0.8x 8.4x 4.4x 6.9x Diversified Agency Services 1.4x 0.8x 1.2x 10.1x 5.2x 8.6x Business and Marketing Information 2.7x 1.6x 2.9x 11.6x 7.0x 10.6x Marketing Automation 4.6x 1.4x 3.4x 26.3x 7.2x 25.6x Source: Capital IQ as of 07/18/2011 Multiples tend to expand based on recurring revenue stream/subscription-based models; software/technology-based products; strong margins; and outlook for growth 28

29 Valuations Highest for Interactive The interactive market continues to exhibit the strongest valuations Recent M&A Multiples by Sector 16x 14x 12x 10x 8x 6x 4x 2x Consumer Magazines Business Magazines Newspapers B2B Events Traditional Marketing Services Database & Information B2B Online Media Consumer Online Media Interactive Marketing Services Revenue Multiple EBITDA Multiple Source: JEGI Transaction Database. Note: Values for Newspaper sector reflect current public trading multiples due to lack of recent transactions. 29

30 Recent Marketing Services M&A Transaction Comps DATE BUYER (PARENT) SELLER (PARENT) BRIEF DESCRIPTION Pending Asian Buyer EUROPEAN ONLINE ADVERTISING PROVIDER A pending JEGI transaction. Pending B2B Media Company B2B LEAD GENERATION PROVIDER A pending JEGI transaction. Jul 11 Publicis Groupe Big Fuel A social media agency. Jun 11 DG Fast Channel MediaMind Digital advertising solutions. Jun 11 Google AdMeld Technology that helps online publishers sell ad inventory. Jun 11 Dowden Healthcare (High Road Capital) Priority Integrated Marketing A leader in healthcare and financial services marketing. Jun 11 New Mountain Capital SymphonyIRI (Symphony Technology Group) Software and services for market research and measurement. May 11 Publicis Groupe Rosetta Marketing Group A global interactive agency. Apr 11 Alliance Data Systems Corporation Aspen Marketing Services A marketing services agency. Mar 11 Merkle Impaqt A search marketing firm Mar 11 Salesforce.com Radian6 A social media monitoring service. Mar 11 Miles Media Weaver Multimedia Group Integrated marketing solutions. Feb 11 Convio StrategicOne Analytics, predictive modeling and database marketing. Jan 11 Dentsu West (Dentsu) FirstBorn An indie digital marketing agency. Jan 11 Adobe DemDex A leading data management platform company. Jan 11 Pamlico Capital Clearlink Technologies Technology driven customer acquisition marketing company. Dec 10 Teradata Aprimo Marketing automation software. Dec 10 WPP Blue State Digital Social media marketing services platform. Nov 10 Apax Partners Advantage Sales and Marketing (J.W. Childs/BAML) A sales and marketing agency for consumer goods. M&A Transaction multiples for this recent set of Marketing & Interactive Services Deals: Revenue Multiple EBITDA Multiple Nov 10 KBM Group (WPP) I Behavior Behavioral targeting and database marketing business. Mean x 14.9x Nov 10 Engine USA (Halyard Capital) Deep Focus An interactive marketing agency. Oct 10 Yellow Pages Group Enquiro Search marketing agency. Oct 10 Investment Technology Group Majestic Research An alternative research firm. Oct 10 Specific Media (Francisco Partners) BBE Online video ad network. Sep 10 KIT Digital Accela Communications Video marketing technology company. Sep 10 IBM Netezza Corp. Data analytics and warehousing. Sep 10 Rosetta Marketing (Lindsay Goldberg) LEVEL Studios Digital marketing and technology services agency. Aug 10 IBM Unica Enterprise marketing management and on demand solutions. Jun 10 ZelnickMedia (ZM Capital) Alloy Media and marketing programs for youth targeted segments. Jun 10 Hearst Corporation icrossing A global digital marketing company. Jun 10 Alliance Data Systems Corporation Direct Marketing Services Division ( Equifax ) Data driven, integrated marketing services. Jun 10 GSI Commerce FetchBack Re targeting marketing solutions. May 10 Lithium Technologies Scout Labs Social media tracking and monitoring. May 10 The Corporate Executive Board Iconoculture Consumer research and advisory company. Mar 10 Ipsos OTX Online consumer market research and consulting services. Jan 10 Dentsu Holdings USA (Dentsu) Innovation Interactive (ABS Capital Partners) A digital marketing services company. Jan 10 Unica Pivotal Veracity E mail delivery optimization solutions. Jan 10 TA Associates ecircle Software and services for digital dialog marketing. Dec 09 Limelight Networks EyeWonder (BIA Digital Partners) Online video advertising provider. Median 2.3x 10.8x Source: JEGI Transaction Database. Note: Companies highlighted in red represented by JEGI 30

31 Select Relevant Q Financings Investors continue to provide capital to companies in the e-commerce, group buying, mobile, online video and social media markets (millions) Company Description Amount LivingSocial Daily deal/group buying site $400.0 Ideeli Flash sales site $41.0 fclub.cn Online flash sales clothing retailer $40.0 Dealfind Canadian daily deals/group buying web site $31.0 BlackArrow Advertising solutions for new TV platforms $27.0 Jumptap Mobile advertising network $25.0 BeachMint Next generation e commerce $23.5 Next Peformance Online advertising network $23.0 Media6Degrees Social targeting company $20.0 OpenX Online advertising technology $20.0 Branchout Connects Facebook users with job opportunities $18.0 Videosurf Video discovery company $16.0 Jobvite Leverage social media to find new employees $15.0 TellApart Analytics technology for e commerce providers $13.0 Digitalsmiths Online video search and discovery $12.5 GoldSpot Media Mobile rich media and video ad solutions $12.0 (millions) Company Description Amount Ticketfly Social ticketing company $12.0 Act On Software Cloud based online marketing platform $10.0 Lot18 Invitation style site to purchase wine $10.0 Power Reviews Social commerce SaaS solutions $10.0 Taykey Targets audiences across social media $9.0 Digby Mobile commerce platform $8.0 VuClip Mobile video viewing and sharing $8.0 Aisle Buyer Mobile commerce and self check out technology $7.5 SocialFlow Social media ad optimization $7.0 Zozi Deals on unique local things to do $7.0 Cognitive Match Predictive targeting solutions $6.0 Uber Media Twitter apps builder $5.6 Tabbedout Pay restaurant or bar tabs with smartphone $3.7 Everloop Social network for kids $3.1 Copious Social marketplace $2.0 Shopobot Helps users purchase expensive items online n.a. Total lfinancing i = $846 million Source: JEGI Transaction Database 31

32 M&A Transactions and Value M&A deal activity and value continuing to increase In 1H-2011, total M&A activity is up modestly and value is up 15% vs. 1H-2010 Strategic buyers continue to dominate Have strong balance sheets and need to accelerate growth via acquisitions Retooling business models to leverage technology and online platforms Private equity firms have $400+ billion of capital overhang Debt markets are improving i Deal activity likely to continue rising 32

33 M&A Activity by Sector Marketing & Interactive Services continues to be the most active M&A sector Media, Information, Marketing Services & Technology M&A Activity January June January June % Change No. of Value No. of Value No. of Industry Sector Value Deals (millions) Deals (millions) Deals B2B Online Media & Technology 39 $3, $363 50% nm B2C Online Media & Technology 130 $4, $2,977 5% 53% Business to Business Media 8 $23 23 $87 (65%) (74%) Consumer Magazines 16 $2, $78 33% nm Database & Information Services 21 $3, $9,283 (45%) (67%) Education Information, Technology & Training 32 $1, $2,491 23% (49%) Exhibitions & Conferences 11 $ $58 (8%) 184% Healthcare Information & Technology 54 $2, $714 59% 187% Marketing & Interactive Services 129 $5, $3,163 (1%) 81% Mobile Media & Technology 44 $1, $1,041 (4%) 29% Total 484 $23, $20,254 3% 15% Source: JEGI Transaction Database 33

34 Marketing Services M&A Transactions and Value Marketing & Interactive Services M&A deal activity flat and value up 81%, in 2011 vs Large diversified ad agencies continue to invest in interactive marketing services Large technology and media companies also in acquisition mode, as are PE firms Marketing & Interactive Services M&A Transactions and Value 300 $ $ $ $ $12.3 $11.2 $10.3 $6.1 $6.4 $5.7 $ H H 2011 $20 $15 $10 $5 $0 (billions) # Deals Value Source: JEGI Transaction Database 34

35 Marketing Services M&A Transactions and Value Strong investment in Ad and Digital Agencies, Ad Networks, Data & Analytics, Market Research and Technology and Social Media Marketing Source: JEGI Transaction Database 35

36 Marketing Services M&A Value Market Research, Ad and Digital Agencies accounted for approximately 50% of Marketing Services M&A value in 1H-2011 M&A Value by Marketing Services Sub Sector, 1H % = $5.7 billion Total M&A Value Social Media Marketing 4% Measurement /Monitoring 7% Data & Analytics 8% Ad Networks 11% Search Marketing 1% Marketing Technology 12% E mail Marketing 1% Digital Agency 14% PR Agency 1% Other 2% Market Research/ Consulting 25% Ad Agency 14% In 1H-2011, total Marketing Services M&A value was $5.7 billion, up 81% over 1H-2010 Market Research and Ad and Digital Agencies were the two dominant areas of investment Marketing Technology and Ad Networks captured 20+% of investment dollars Increasing investment into Data & Analytics, Measurement/Monitoring and Social Media Marketing Source: JEGI Transaction Database 36

37 Top 30 Recent Marketing Services Transactions DATE BUYER (PARENT) SELLER (PARENT) BRIEF DESCRIPTION VALUE (millions) Nov-10 Apax Partners Advantage Sales and Marketing (J.W. Childs/BAML) A sales and marketing agency for consumer goods. $1,800 Sep-09 Adobe Systems Omniture Online business optimization products and services. $1,800 Sep-10 IBM Netezza Corp. Data analytics and warehousing. $1,700 Jul-09 IBM SPSS Predictive analytics software and solutions. $1,200 Jun-11 New Mountain Capital SymphonyIRI Group (Symphony Technology Group) Software and services for market research and measurement. $800 May-11 Publicis Groupe Rosetta Marketing Group A global interactive agency. $575 Aug-09 Publicis Groupe Razorfish (Microsoft) An interactive advertising agency. $530 Dec-10 Teradata Aprimo Marketing automation software. $525 Jun-11 DG Fast Channel MediaMind Digital advertising solutions. $524 Aug-10 IBM Unica Enterprise marketing management and on-demand solutions. $480 Jun-11 Google AdMeld Technology that helps online publishers sell their ad inventory. $400 Jul-10 Automatic Data Processing Cobalt (ABS Capital Partners) A digital marketing service agency. $400 Jul-10 Aegis Group Mitchell Communications Group An independent communications company. $363 Apr-11 Alliance Data Systems Corporation Aspen Marketing Services A marketing services agency. $345 Mar-11 Salesforce.com Radian6 A social media monitoring service. $326 Jun-10 Hearst Corporation icrossingi A global l digital i marketing company. $325 Jan-10 Dentsu Holdings USA (Dentsu) Innovation Interactive (ABS Capital Partners) A digital marketing services company. $220 Nov-09 Groupe Aeroplan Carlson Marketing Group (Carlson Companies) Designs and delivers sales and marketing programs. $175 Feb-10 LBi Bigmouthmedia Search engine marketing and advertising company. $150 Nov-09 Mill Road Capital Cossette Communication marketing services. $150 May-10 Affinion Group (Apollo Management) Connexions Loyalty Travel (Travel Acqs Group) Travel solutions for loyalty and incentive programs. $135 Oct-09 e-rewards (TA Associates) Research Now Online fieldwork and access panels for market research. $132 Jun-10 ZelnickMedia (ZM Capital) Alloy Media and marketing programs for youth targeted segments. $127 Jul-10 Silver Lake Allyes (Focus Media) Online advertising agency services. $124 Jun-10 Alliance Data Systems Corporation Direct Marketing Services Division ( Equifax ) Data-driven, integrated marketing services. $117 Sep-10 Rosetta Marketing (Lindsay Goldberg) LEVEL Studios Digital marketing and technology services agency. $110 Dec-09 Limelight Networks EyeWonder (BIA Digital Partners) Online video advertising provider. $110 Nov-10 KBM Group (WPP) I-Behavior Behavioral targeting and database marketing business. $100 Jan-10 TA Associates, Inc. ecircle AG Software and services for digital dialog marketing. $88 Jan-11 Pamlico Capital Clearlink Technologies Technology-driven customer acquisition marketing company. $85 Source: JEGI Transaction Database 37

38 Select Recent PE Investments in Marketing Services Private Equity firms are investing in a wide array of marketing services companies, from research and technology to services and analytics 38

39 Table of Contents Marketing & Interactive Services Industry Strategic Companies Investing for Growth Marketing & Interactive Services M&A About JEGI Appendix 39

40 About JEGI The Jordan, Edmiston Group, Inc. ( JEGI ) The Leading Independent Investment Bank Serving the Media, Information, Marketing Services and Related Technology Sectors Industry Leadership With deep relationships among global and emerging media, information, marketing services and related technology companies, JEGI anticipates trends and provides valued advice to the sectors it serves. Independence JEGI is committed to the success of each client assignment, with no sales and trading, lending or private equity investing to conflict with the firm s advisory clients' priorities. Primary Focus JEGI focuses primarily on executing sales and divestitures with integrity, conducting an efficient, highly effective auction process to achieve maximum value for the firm s clients. Experience After 23 years and nearly 500 transactions spanning media, information, marketing services and related technology companies, JEGI consistently delivers successful outcomes. Results JEGI s team-driven process achieves the highest transaction success rates and enthusiastic endorsements from the firm s satisfied clients. 40

41 JEGI Market Position Direct insight into M&A market conditions, o valuation drivers and buyers hot-buttons o Unparalleled network of strategic media, information, marketing and technology companies 41

42 Diverse Buyers and Premium Valuations Sector knowledge, buyer insights and strong negotiating skills drive premium valuations Seller Sector Buyer Blue State Digital Social media marketing WPP I-Behavior Investopedia icrossing Predictive targeting Financial information Interactive marketing WPP ValueClick Hearst Corporation Acerno Circles Behavioral targeting Customer care Akamai Sodexo Congressional Quarterly Cymfony Klipmart Legislative data Social media analytics Online video advertising Economist Group TNS DoubleClick KnowledgeStorm Lead Generation TechTarget 42

43 Select JEGI Marketing Services Transactions In each transaction listed above, JEGI s client is mentioned first. 43

44 Table of Contents Marketing & Interactive Services Industry Strategic Companies Investing for Growth Marketing & Interactive Services M&A About JEGI Appendix 44

45 Appendix: Customer Contact BPO Public Company Comps ($ millions) Customer Contact BPO Financial Data Valuation Multiples Company Market Cap Enterprise Value LTM Revenue LTM EBITDA YoY Rev Growth EBITDA Margin EV / LTM Revenue EV / LTM EBITDA Pitney Bowes Inc. 4,644 8,542 5,400 1,103 (2%) 20% 1.6x 7.7x Teleperformance 1,796 1,803 2, % 13% 0.6x 4.9x Convergys Corporation 1,655 1,672 2, (6%) 11% 0.8x 6.7x Valassis Communications Inc. 1,433 1,928 2, % 12% 0.8x 6.7x TeleTech Holdings Inc. 1,140 1,041 1, (3%) 13% 0.9x 7.1x Sykes Enterprises, Incorporated , % 12% 0.6x 5.3x APAC Customer Services Inc % 14% 0.7x 5.0x Mean 7% 14% 0.9x 6.2x Source: Capital IQ as of 06/21/2011 Median 4% 13% 0.8x 6.7x 45

46 Appendix: Diversified Agency Public Company Comp ($ millions) Diversified Agency and Research Services Financial Data Valuation Multiples Company Market Cap Enterprise Value LTM Revenue LTM EBITDA YoY Rev Growth EBITDA Margin EV / LTM Revenue EV / LTM EBITDA WPP 14,979 18,369 15,134 2,230 7% 15% 1.2x 8.2x Omnicom Group 13,193 15,562 12,774 1,892 7% 15% 1.2x 8.2x Publicis Groupe 10, , , ,391 20% 18% 1.3x 7.2x IPG 5,771 6,194 6, % 11% 0.9x 8.7x Aegis Group 3,034 3,514 2, % 10% 1.5x 14.6x Havas 2,217 2,096 2, % 15% 0.9x 6.1x GfK Aktiengesellschaft 1,892 2,503 1, % 15% 1.3x 8.8x Ipsos 1,650 1,934 1, % 13% 1.2x 9.3x MDC Partners % 9% 1.2x 13.6x Mean 15% 13% 1.2x 9.4x Source: Capital IQ as of 06/21/2011 Median 10% 15% 1.2x 8.7x 46

47 Appendix: Business and Marketing Information Public Company Comps ($ millions) Business and Marketing Information Financial Data Valuation Multiples Company Market Cap Enterprise Value LTM Revenue LTM EBITDA YoY Rev Growth EBITDA Margin EV / LTM Revenue EV / LTM EBITDA Experian plc 12,058 13,735 4,239 1,343 9% 32% 3.2x 10.2x McGraw-Hill Companies 12,389 12,376 6,260 1,612 4% 26% 2.0x 7.7x Nielsen 10,942 17,804 5,232 1,283 7% 25% 3.4x 13.9x IHS Inc. 5,718 5,765 1, % 24% 5.1x 21.6x Alliance Data 4,741 10,640 2, % 28% 3.7x 13.3x Equifax Inc. 4,231 5,179 1, % 32% 2.7x 8.6x Informa plc 4,070 5,334 1, % 26% 2.7x 10.2x Dun & Bradstreet Corp 3,725 4,541 1, % 29% 2.7x 9.2x United Business Media 2,049 2,876 1, % 21% 2.0x 9.6x Acxiom 1,018 1,240 1, % 21% 1.1x 5.1x comscore, Inc % 7% 4.1x 56.2x Keynote Systems Inc % 15% 2.7x 18.7x Mean 12% 24% 3.0x 15.4x Source: Capital IQ as of 06/21/2011 Median 8% 25% 2.7x 10.2x 47

48 Appendix: Marketing Automation Public Company Comps ($ millions) Marketing Automation Financial Data Valuation Multiples Company Market Cap Enterprise Value LTM Revenue LTM EBITDA YoY Rev Growth EBITDA Margin EV / LTM Revenue EV / LTM EBITDA Digital River 1, (9%) 13% 2.4x 18.7x Blackbaud Inc. 1,174 1, % 19% 3.4x 17.6x Rightnow Technologies 1, % 11% 5.0x 45.7x Constant Contact % 7% 3.2x 48.5x Live Person % 21% 5.1x 24.9x Vocus Inc (1) 17% (1%) 4.4x na Alterian plc (3%) 2% 1.5x na Mean 13% 10% 3.6x 31.1x Source: Capital IQ as of 06/21/2011 Median 17% 11% 3.4x 24.9x 48

49 The Jordan, Edmiston Group, Inc. 150 East 52 nd Street 18th Floor New York, NY Phone: (212) Fax: (212) jegi.com