Since 1987 JEGI Sector Insights: Transforming the Marketplace 2015 JEGI Media & Technology Conference Time Warner Center New York, NY www.jegi.com January 15, 2015
Bronx Tolman Geffs JEGI HQ Everything Has Changed
Web Giving Way to Mobile Apps 3
Web Giving Way to Mobile Apps Time and attention shifting to mobile devices Global Internet Device Sales (mm) PCs Smartphones Tablets 2000 2004 2008 2012 2016F Time Spent on Smartphones/Tablets Apps ascendant for most key tasks 51% 49% Apps Mobile Web 20% 13% 80% 87% Source: IDC, Flurry and emarketer 2010 2013 2014F 4
Web Giving Way to Mobile Apps Global Internet Device Sales (mm) Apps are PCs Smartphones Tablets walled castles 2000 2004 2008 2012 2016F No links Do not share data Secure (and spam free) Time Spent on Smartphones/Tablets Apps Mobile Web 20% 13% 51% 49% 80% 87% Source: IDC, Flurry and emarketer 2010 2013 2014F 5
Web Giving Way to Mobile Apps Apps Commerce Web Cat Memes Everything else that matters Monty Python Fan Clubs Is the open web where data is shared going the way of ham radio? 6
Mobile World Dominated By Gatekeepers Google and Apple own mobile app distribution Number of Apps Available in Leading App Stores (mm s) 1.3 1.2 0.3 0.2 0.1 Source: emarketer Google Play Apple App Store Windows Phone Amazon Store Appstore Blackberry World 7
Mobile World Dominated By Gatekeepers Google and Apple own mobile app distribution And Google and Facebook in turn own mobile ads 2014 US Mobile Ad Revenue Share 37.2% 55%! 17.6% 3.6% 3.2% 3.0% 2.7% 2.6% We Love A Duopoly! Source: emarketer 8
Holy Grail: Reaching People Across Screens Marketers and publishers can now measure content + ads by individual person across screens And then link to identity and purchases Driving wave of M&A and investment 9
Holy Grail: Reaching People Across Screens Marketers and publishers can now measure content + ads by individual person across screens And then link to identity and purchases Driving wave of M&A and speculation 10
Holy Grail: Reaching People Across Screens Marketers and publishers can now measure content + ads by individual person across screens And then link to identity and purchases Aided by cross device user registration, which Facebook and Google have at massive scale Another Duopoly! 11
Glass Half Empty? Everyone now works for Google, Apple and Facebook your revenue is taxed, your flexibility limited, and they know a lot about your business which they use to improve theirs (at your expense) 12
Or Very Full? Marketers can do much more vs. five years ago Much richer investment opportunity set Especially by bringing cross screen attribution to TV! Publishers Media easier to consume Ad space more valuable Marketers Reach target audience, spend more efficient Marketing Services Add value with richer analytics (everything looks like search) Technology Providers Automate vast chunks of marketing especially TV 13
Or Very Full? Marketers can do much more vs. five years ago Much richer investment opportunity set Especially by bringing cross screen attribution to TV! Publishers Media easier to consume Ad space more valuable Marketers And the $500 billion question: If media finally becomes more efficient, then Reach target audience, spend more efficient do marketers spend more because advertising is Technology Providers cheaper with better / measurable ROI Automate vast chunks of or less because they marketing can reach especially their TV audience more efficiently or about the same? Marketing Services Add value with richer analytics (everything looks like search) 14
Bronx Amir Akhavan Machine Intelligence Queens
1960 s Enterprise Software Over Time 2015 and Beyond! Industry Leaders: Enterprise Software Inventory Mgt & Control Material Requirements Planning Enterprise Resource Planning & CRM Enterprise App Suite & Cloud Solutions Big Data Database Management Data Mining & Science Predictive Analytics Algorithmic Intelligence Enterprise Apps + Big Data + Machine Intelligence 16
Evolution of Machine Intelligence Machine Intelligence NATURAL LANGUAGE PROCESSING KEYWORD BASED SENTIMENT 17
Machine Intelligence Landscape Source: Shivon Zilis, BloombergBETA 18
So What s Happening? Marketing: Smarter CRM Media: Personalization HR: Talent Analytics Legal: Research Health Care: Watson Analytics Retail: Conversion Financial Services: High Frequency Trading 19
Recent Transactions Software Media & Marketing 20
Sam Barthelme Industry Cloud Queens Brooklyn
JEGI Industry Cloud Transactions 22
Move to Industry Cloud Cloud Industry Cloud Client Server Applications Mainframe Customizing Horizontal Apps is Difficult and Costly Rise of Meaningful Big Data Applications Industry Cloud: Domain Expertise; Efficient Sales and Marketing 23
Industry Focus = Efficient Sales & Mktg Spend Horizontal SaaS Vertical SaaS 49% 24% Spend Sales & Marketing Spend 45% Revenue Growth 18% Revenue Growth 9.3x Forward Revenue Multiple 5.6x Forward Revenue Multiple The issue is TAM: Holds back growth and trading multiples Source: CapIQ (% Revenue) 24
Industry Cloud Model VeevaCase Study Research and Development Commercial Regulatory Clinical Trials Quality and Manufacturing Medical Marketing Sales Veeva Vault Veeva CRM (force.com) Source: Veeva Systems Investor Presentation Veeva Network 25
Big Industries, Big Industry Cloud Opportunities Leaders: Acquisitions by Leaders over last 24 months: 4 2 27 9 8 Representative Challengers: 7 $1,300 $1,330 $620 $776 $781 $280 Events Grocery Agriculture Auto Logistics Education 26 Source: BEA, FMI, PwC U.S. Industry Size ($ bn)
Manhattan Scott Peters Corporate Live Events Brooklyn
Why are Tradeshows Highly Valued? Digital can t replace face to face engagement High EBITDA margins Excellent cash flow characteristics Strong growth and more resilient in down markets 2009 5 7x EBITDA Multiples 2014 8 13x 28
Recent Trade Show Transactions acquires acquires acquires acquires acquires acquires acquires 29
Market Spend U.S. Meetings & Events Market = $280bn U.S. Meeting & Events Spend ($bn) Event Execution Travel & Hospitality U.S. Meeting & Events Participants Corp Events & Mtgs Tradeshows & Conferences $130 $150 39% 61% Corporate event industry is large and highly fragmented Much of the spend has been below the line and managed in house A shift to external providers is underway Source: PWC 30
U.S. Meeting & Events Participants Corp Events & Mtgs Tradeshows & Conferences Market Spend U.S. Meetings & Events Market = $280bn 39% 61% Source: PWC 31
Advertising Budget Corporate Events Optimized Other TV Print Radio Out of Home Direct Mail Data and Analytics for channel attribution and ROI Public Relations Content Marketing Corporate Events Tech Enabled Online Email Search Marketing Mobile Advertising Mobile Apps 32
Advertising Budget Corporate Events Optimized TV Print Radio Out of Home Direct Mail Content Marketing Online Email Search Marketing Mobile Advertising Mobile Apps Corporate Events CRM CMO ROI understood and optimized 33
Representative Service Providers Creative and Strategy Event Apps Event Logistics & Audio/Visual Marketing and Promotions Registration Travel and Housing Enterprise Event Mgmt Full Service Agency 34
What s the Opportunity? Corporate Events market is a growing and dynamic sector Market highly fragmented, no clear leader New technologies enhancing ROI measurement Scale enhances growth and profitability margins What s Next? Intelligent consolidation led by PE firms and ultimately sold to strategic buyers 35
Manhattan Time Warner Center Jeff Becker Convergence of Capital
Later Stage Tech Options are Changing Long term investors Competing agendas Constraints Lack of growth capital Shrinking strategic buyer set Later Stage Tech Co USS Growth Equity Recap 37
Investor Landscape Morphs Maturity of Target Company Traditional Venture Capital Growth Equity Recap Traditional Private Equity Fund Size 38
What Created This? Broader Understanding of Tech Sectors Adoption of SaaS/Recurring Revenue Models Focus on Generating Cash Flow Earlier Lenders Willingness to Adapt Acquisition / Consolidation Acceptance 39
Impact on Later Stage Tech Companies CHOICES Strategic Buyers + Growth Equity Recap Investors LIQUIDITY For Founders and Long time Investors MARKET Very Active New Market Creates Leverage GROWTH Growth Will Help Drive Valuation HAPPY COMPANIES AND INVESTORS 40
Since 1987 JEGI Sector Insights: Transforming the Marketplace 2015 JEGI Media & Technology Conference Time Warner Center New York, NY www.jegi.com January 15, 2015