More Related Content Similar to Outlook on Online Display Advertising Trends by Clipperton Finance (20) Outlook on Online Display Advertising Trends by Clipperton Finance1. LONDON
PARIS
Clipperton Ad-Tech White Paper
PART I:
OUTLOOK ON ONLINE DISPLAY ADVERTISING TRENDS
September, 2012 About Clipperton Finance
Clipperton Finance is a leading European corporate finance
Nicolas von Bülow, nvonbulow@clipperton.net boutique exclusively dedicated to the HighTech and Media
industries. Clipperton Finance advises high growth
Antoine Ganancia, aganancia@clipperton.net
companies on financial transactions, fundraisings, capital
increases and Mergers & Acquisitions. With a team based in
London and Paris and an international reach, Clipperton
Finance is a European leader in the sector.
PARIS: 10 Rue Du Mont Thabor, Paris 75001
LONDON: 15 Stratton Street, London, W1J 8LQ Disclaimer:
This document has been produced by Clipperton Finance (“Clipperton”) and is communicated to you solely for your information and
should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments. See more details page 50.
LONDON: 15 StrattonMont Thabor, Paris 75001
PARIS: 10 Rue Du Street, London, W1J 8LQ Clipperton Finance Limited is authorised and regulated by the Financial Services Authority. Registered No. 523695
© 2012 Clipperton Finance Limited.
2. Executive Summary
Insolent Online Advertising Spending have displayed insolent growth over the last 10 years and analysts
Growth expect this trend to continue
But a large discrepancy persists between Internet time allocation in total “media time” & online
advertising revenues…
Untapped Online advertising growth has been historically led by performance-based marketing
Potential We believe that tapping into the huge reservoir of “branding-oriented” marketing spend
will be key in closing the media discrepancy
This will be done by further blurring the lines between branding & performance marketing
through the use of innovative formats, measuring technologies and improved targeting
New Players We have selected a list of European ad tech companies that will be contenders in the
coming battles. Question is: who will emerge as winners and leverage the vast
inefficiencies of today’s online advertisement market?
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© 2012 Clipperton Finance Limited.
3. Table of Content
I. Overview of Internet Display Ad Spending
II. Which Levers to Close the Media Time vs Ad Spend Discrepancy ?
III. Notable Transactions in Ad Tech Landscape
IV. Focus on Key European Players
V. About Clipperton Finance
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© 2012 Clipperton Finance Limited.
4. Online Advertising Spending has exhibited strong growth over recent years
CAGR 12-14:
+17%
CAGR 02-11:
+24%
Source: Zenithoptimedia, JPMorgan "Nothing But Net"
Online advertising spending has grown by a factor of 7x between 2002 and 2011
Forecasts predict double digit growth in online ad expenditure reaching close to $100B in 2014
The leading segment in online advertising remains “search” (~60% vs. ~40% for display), a segment dominated by
Google. Analysts expect the current split between search and display to remain constant until 2014
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© 2012 Clipperton Finance Limited.
5. This growth largely stems from strong market pull
1 Ever more Internet users… 2 … browsing from more devices… 3 … and spending more time online
Internet Smartphones Tablets
>2,2x in 5 years
Source: World Bank Source: Clipperton Finance analysis, World Bank, Nielsen Source: Forrester Research
Internet audience and usage are growing at a fast pace, a mechanic pull factor on online advertising
In 2011, 2 billion individuals used the Internet on a regular basis, representing a 30% global online penetration
The increasingly ubiquitous nature of the Internet supports the growth in time spent online by each individual
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© 2012 Clipperton Finance Limited.
6. Internet usage seems to be growing at the same pace as online ad spending
Usage = market pull Ad Spending & Pages Viewed growth is very similar (base 100 in 2002)
345
1 341
An increasing Pages Viewed
number of Internet
users in the world
Display Ad Spending
2
A growing number
of access points 100
3
An increasing
amount of time 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
spent online Source: Clipperton Finance analysis, JPMorgan, Zenithoptimedia
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© 2012 Clipperton Finance Limited.
7. But…
… Page Views is of course far too
rudimentary as a metric to gauge
the Internet advertising potential
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© 2012 Clipperton Finance Limited.
8. How big is the discrepancy between Internet usage time & online advertising
revenue?
2010 Media Time vs Ad Spending discrepancy
Internet displays a low time to
advertising spending ratio
compared to traditional media
Discrepancy
For a given amount of time,
mature media like TV,
newspapers or radio show
higher monetization:
Newspapers feature a time
to ads spending 5x higher
than Internet
TV time to ads ratio is 2x
higher
Momentum
Source: Clipperton Finance analysis, Forrester, Magna Global, IAB, Barclays Capital
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© 2012 Clipperton Finance Limited.
9. So…
… Is today’s Internet usage truly
comparable to traditional media
such as TV and radio?
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© 2012 Clipperton Finance Limited.
10. Problem: Internet doesn’t fit the traditional definition of media
The Internet has long surpassed its initial function as pure “media” delivery tool to become a fully-fledged and
multi-faceted digital replication of the traditional world where one can communicate with friends, networks and
professionals, watch videos, work, spend money, create, learn, consume media and services
Social Networks have enabled and expanded online social interactions of
all types and natures
Social Although SNs account for a large amount of online display ads, total time
Interactions spent on SN far exceeds the allocated proportion of ad spending
Value of basic ads on SN is structurally lower than on premium media
But social targeting can lead to massive conversion value
E-Commerce mimics/improves the traditional shopping experience
Transactions Advertising is not the business model of transaction sites and their
audience will remain hard to monetize with traditional advertising
Productivity usage doesn’t offer favourable ground for advertisers
Productivity Mail services like Yahoo or Gmail monetize via ad placement but mostly
serve as entry doors to more lucrative adjacent services
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© 2012 Clipperton Finance Limited.
11. Top sites are not necessarily “advertisable”
One third of Top 50 US sites are not available to advertisers
Top 50 US Properties 2011
Rank Property
1 Google Sites
2 Microsoft Sites
A significant portion of In 2011, as much as 27% of the
3 Yahoo! Sites Top 50 sites are not ad- top 50 US properties were non
4 Facebook.com based (or marginally)
ad-based or marginally only
5 Amazon Sites
6 AOL, Inc.
Hardly accessible to advertisers
7 Ask Network
with conventional advertising
8 Turner Digital
9 Wikimedia Sites Time spent online is not
10 Glam Media necessarily “media-related”
11 CBS Interactive
Users make significantly
12 NYTimes Digital
broader use of the Internet
13 Apple Inc.
and “non-media” time also
14 Viacom Digital
needs to be taken into account
15 eBay
49 WebMD Health
50 Technorati Media
Source: Comscore
* Amazon Sites include pure media ad-based
sites + performance based product advertising
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© 2012 Clipperton Finance Limited.
12. Half of the time spent online is not advertisement friendly
• Internet users are only receptive to ads for
less than 50% of the time they spend online
• Contrary to conventional wisdom, media-
related activity conducted through the
Internet is relatively limited
Ad Friendly Not Ad Friendly Source: Clipperton Finance Analysis, Nielsen
… and the surge of mobile has a two-fold negative
effect on branding advertising:
1. It drives the amount of time devoted to media-
related activity even lower
2. Screen-size is not well adapted to Branding ads
Ad Friendly Not Ad Friendly
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© 2012 Clipperton Finance Limited.
13. So what’s the real opportunity?
A golden opportunity to grab
Online usage is always expanding to new activities,
meaning new pools and forms of audience
Total
Successfully bridging the discrepancy will be supported by Addressable Discrepancy
technology to better adapt to use cases (multi-device, Discrepancy
video, e-commerce), objectives (Branding/Direct Response)
and consumer experience (far too sacrificed today)
The opportunity is massive to further pull branding dollars
into online advertising:
Value: a multi-billion dollar addressable market
Differentiation: by addressing more effectively the
needs of advertisers and consumers, new business
models and new players will come up, new leaders
will emerge
Source: Clipperton Finance analysis
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© 2012 Clipperton Finance Limited.
14. Although only a portion of the
media time / Ad spending
discrepancy can be addressed, it
still makes a massive opportunity
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© 2012 Clipperton Finance Limited.
15. Table of Content
I. Overview of Internet Display Ad Spending
II. Which Levers to Close the Media Time vs Ad Spend Discrepancy ?
III. Notable Transactions in Ad Tech Landscape
IV. Focus on Key European Players
V. About Clipperton Finance
15
© 2012 Clipperton Finance Limited.
16. Future growth will be driven by 2 key drivers: Market Pull & Advertising Push
Will Ad Spending manage to outgrow usage?
1 MARKET PULL
Ad Spending
Strong and robust growth in Internet usage will
Source: Clipperton Finance analysis, JPMorgan, Zenithoptimedia
continue to create a pull effect on online
advertising investments
New consumer-led Internet usage (mobile,
video) will open more innovative ad placement
Internet Usage
+
2 ADVERTISER PUSH
Push through innovation: tools, exchanges,
measurement and formats
Will performance and branding grow closer?
“Branding”: historically less
performance based and home turf of
traditional media and agencies
Ad spending and Internet usage have been growing at the same pace
“Direct response”: historically brutal
and ROI driven. But consumers grow Push drivers will be key to further fuelling growth in online spend
more complex
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© 2012 Clipperton Finance Limited.
17. 1- Branding has yet to become a growth driver – The US example
2009 US
Total Media Spend: $147B Online Advertising Penetration Growth Break-down (US)
Branding
2009 US >7pt
$91B Online Media Spend:$24B
(62%) (16% of total Ad Spending)
Online = 6% of $6B Direct 16%
Branding spending (25%) <4pt Response
Branding
Response
Direct
5%
$55B Online = 33% of $18B
(38%) Direct Response (75%)
spending
2003 2009
Source: Brand.net analysis, Barclays Capital, Think Equity Partners and DMA Source: Clipperton Finance Analysis, TNS Media Intelligence, IAB, JP Morgan
Internet differs from traditional media in terms of “Branding” contribution to online penetration is limited
“Branding” vs. “Direct Response” structure: Growth in online advertising has been historically led by direct
Branding = 60%+ of all ad spending… response marketing:
… but only 25% of online ad spending one to one user link allowed for performance based marketing
Search as key growth driver, rather than display
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© 2012 Clipperton Finance Limited.
18. 2- Direct Response growth will continue to be challenged by a declining CTRs
0.34%
Standard Banner CTR Evolution
0.25%
0.20%
0.20%
0.12%
0.09% 0.09%
0.07%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Clipperton Finance Analysis, MediaMind, eMarketer, Pearson
Social Netw. yield poor CPM rates Traditional display out-dated More ads displayed per page
$2.43
$2.99 Traditional ad formats and US Growth ‘09-’10
placements have led to increasing
$0.53 Ad Impressions +23%
“ad blindness”
WHY? Pages Views +10%
Average CPM Avg CPM w/o Urgent need to push innovative Source: CF analysis, Comscore, Zenithoptimedia
Social Networks formats, placement and targeting
Source: Comscore May 2010 to sustain reasonable CTR Ad Impressions are growing 2x
Social networks dragging global Endorsement by the market faster than content
CPM down due to very low CTRs (advertisers, agencies, etc.) is key Further pushes for lower CTRs
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© 2012 Clipperton Finance Limited.
19. So, what will be done to sustain
and accelerate the growth of
online advertising?
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© 2012 Clipperton Finance Limited.
20. 1- Direct Response: How can advertisers improve CTR ?
1- Direct Response
Click Through Rate (US)
0.61%
Studies have shown that display ads have a much higher CTR on
alternative devices like mobile phones or tablets
Access Points 0.07%
These devices are gaining a lot of traction from users at the
Standard Banner Mobile Standard Banner moment but will it be enough to sustain global CTR?
0.50%
0.25%
Targeting 0.10% New ad technology enables advertisers to better target their
0.07%
audience which ultimately leads to higher CTRs
Tools
Standard Interest-Based Contextual Retargeting
Banner
1.19%
Higher Performance: Rich Media ads outperform standard banner
0.07% 0.19% 0.17% 0.16% with higher CTR and engagement rates
Ad Formats
Standard Expandable Expandable Floating Push Down User experience: Rich Media ads do not force the user to leave
Banner Banner Strip Expandable Banner the site
Rich Media
Sources : Clipperton Analysis, MediaMind Research
DoubleClick for Advertisers, Criteo
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© 2012 Clipperton Finance Limited.
21. 2- Branding: What are the untapped growth drivers ?
2- Branding
Higher interaction rate: Increased interaction delivers significant
uplifts in brand awareness, message association and purchase intent
Rich Ad Brand awareness: Rich Media ads increase brand awareness for
Formats online advertisers more effectively than other online ad formats
Rich Media ads are measurable and scalable: Rich Media ads can
empower advertisers to track and measure a variety of important
browsing behaviors (beyond traditional CTR & impressions)
Source : Forrester Research
Digital technologies offer more sophisticated targeting
Innovative & customization capabilities than traditional media
Contextual/
Ad Tech players need to leverage these possibilities to
Targeting Tools create tailored & highly-focused branding campaigns
Branding campaigns lack adequate measuring tools
The typical indicators used online (CTR, CPA, conversion rate, etc)
New
are suited for direct marketing and e-commerce, not for branding
Measuring
Tools “ARS Persuasion Score” New branding-focused players are emerging
Integrated campaigns are becoming common (TV and online). There
“Netratings measurement”
is a need for cross-media strategies
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© 2012 Clipperton Finance Limited.
22. Conclusion
Take-aways on Online Advertising Trends (1)
Online advertising has been primarily driven by performance-based marketing
Branding Direct response spending will continue to grow, both mechanically and thanks
to new avenues for innovation and improved, deeper analytics tools
&
But Internet will aggressively tap into the huge reservoir of branding-
Performance oriented marketing spend…
Convergence ... and technology will push for refined measurement and
performance-based branding offerings
Momentum shift: new generations of technologies, improved standardization, decline of
traditional players and maturing executives should further accelerate changes
As the distinction between TV and the Internet continues to blur, we expect the main
Opportunity growth driver of this evolution will be video in the broad sense:
Online video streaming
Mobile video
Catch-Up TV
Commoditisation of IPTV
Connected TVs (Google TV, Apple TV, proprietary OS, …)
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© 2012 Clipperton Finance Limited.
23. Take-aways on Online Advertising Trends (2)
Closing the media time vs online advertising discrepancy means leveraging new
technologies and formats to further develop and standardize a comprehensive set of
measurement tools. Who will be able to achieve this?
Will traditional online ad performance tools like CTR, CPC
Open or CPA slowly be put aside?
Questions Can branding-based spending ever reach the same
market share as in traditional media?
How blurry will the boundary between performance
and branding be?
Leaders of the first online advertisement generation or new comers?
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© 2012 Clipperton Finance Limited.
24. Table of Content
I. Overview of Internet Display Ad Spending
II. Which Levers to Close the Media Time vs Ad Spend Discrepancy ?
III. Notable Transactions in Ad Tech Landscape
IV. Focus on Key European Players
V. About Clipperton Finance
24
© 2012 Clipperton Finance Limited.
25. Selected M&A transactions – 2011/12
Date Target Acquirer Deal Target EV/Rev Rationale
Value Rev
Vizu acquisition will complement Nielsen's cross-
platform advertising solutions by adding real-time
Jul-12 - - - online effectiveness measurement.
Real-time data will improve advertising efficiency
Ad Effectiveness by enabling in-flight optimization.
Measurement
Build a total customer experience management
Jun-12 $745m $100m
(est. 2012 rev.)
7x solution to stay competitive after Oracle
Social marketing acquisition of Vitrue
Vitrue offers customers an unified experience for
$100m social marketing campaigns
May-11 $300m (est. 2012 rev.) 3x Secure a first-mover position in the social
Social marketing marketing space
Leverage Yahoo’s reach with improved targeting
technologies
Nov-11 $270m $130m 2x Optimize Yahoo’s advertising strategy with concise
Ad network audience data and analytics
Expand Adconion’s inventory with Smartclip
Nov-11 - - - network of in-stream and connected TV
distribution partners
Video ad network Accelerate Adconion’s deployment in European
emerging markets
Benefit from enhanced multi-channel analytics
and campaigns optimization solutions to challenge
Nov-11 c$400m $60-80m 5-6x Comscore offer
Ad exchange / Social Mkt Add social advertising buying capability for FB
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© 2012 Clipperton Finance Limited.
26. Selected M&A transactions – 2011/12
Date Target Acquirer Deal Target EV/Rev Rationale
Value Rev
Strengthen Adobe’s Digital Marketing division
(after Omniture acquisition)
Nov-11 $120m - - Adobe is able to offer an end-to-end solution on
Video Monetization the video segment (from creation to broadcasting
to monetizing)
Consolidate Velti’s mobile advertising dominance
in Europe by acquiring MIG rich client base
Nov-11 $59m $20m 3x (Vodafone, Skype, M&S …)
Use Velti’s recent acquisition of Zaypay to leverage
Mobile Solutions MIG m-commerce and billing techs
Build an all-in-one solution for advertisers
Aug-11 $30m $5m 6x Tap into branding-focus players’ offline spending
by providing them with adequate measuring &
Ad Verification verification tools
Expand TV business online to lever existing client-
base
Jun-11 $414m $100m 4x Generate value by enabling easier cross-media
Ad Campaign Mngt campaigns for advertisers
Following Omniture acquisition, Adobe adds a
behavioral targeting brick to its Online Marketing
Suite
Jan-11 c$60m - - Compete with Comscore to become a major
Behavioral Data player in the high-end “Swiss army knife”
advertising solution
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© 2012 Clipperton Finance Limited.
27. Selected European Adtech Fundraisings – 2011/12
Invest. Founded Sum Invested
Company Name Nat. Description Investors
Date Year (M€)
Sep-12 Mister Bell DE 2010 Ad Network A+ Finance, Omnes Capital 3.5
Sep-12 Gamned FR 2009 Ad exchange platform Individual (Fréderic Chevalier) 1.5
Aug-12 Semasio DE 2010 Ad data platform Bertelsmann DMI, Holtzbrinck, Project A, Gründerfonds n.a.
Jul-12 Widespace SW 2007 Premium mobile advertising network Northzone, Industrifonden 3
Jun-12 Kiosked SW 2010 Content activation platform Individual (Rovio Chairman) 5
Jun-12 Ividence FR 2008 Innovative solutions fo E-mailing Campains Omnes Capital, A Plus Finance 3
Apr-12 Les Nuages FR 2011 Digital and mobile marketing Sigma Gestion, Promelys Participations 2
Apr-12 Adeven DE 2012 Mobile analytics & ad verification Target Partners n.a.
Apr-12 TAPTAP Networks SP 2010 Premium mobile advertising network Nauta Capital, Undisclosed Firm 3.5
Mar-12 MyThings UK 2005 Personalized display advertising T-Venture, Iris Capital, Carmel Ventures, Accel 12
Jan-12 Crossvertise DE 2011 Cross-media advertising marketplace High-Tech Gruenderfonds, Bamboo Ventures 1
Jan-12 Brainient UK 2008 Interactive video advertising platform Credo Ventures, Atlas Venture, Estag Capital, 500 Startups 1.4
Jan-12 StrikeAd UK 2010 Mobile demand side platform DFJ Esprit 2.4
Jan-12 Unruly Media UK 2006 Social video advertising platform Van den Ende & Deitmers, Business Growth Fund, Amadeus 19
Jan-12 VideoPlaza SW 2007 Video ad-serving Innovacom, Qualcomm 10
Nov-11 MNG Mobile Network Group FR 2003 Mobile marketing solutions TIME Equity Partners 4
Nov-11 Skimbit UK 2008 Affiliate marketing 500 Startups
, Sussex Place Ventures
, NESTA, Bertelsman 3.5
Nov-11 MADS BV NL 2006 Targeted campains for mobile OTM Investments BV 1
Oct-11 madvertise DE 2008 Mobile ad network Blumberg Capital Ventures, Earlybird Venture Capital 8
Sep-11 AD4SCREEN FR 2010 Performance network for mobile ads Backbone, Undisclosed Firm 4.5
Sep-11 Apprupt DE 2008 Performance network for mobile ads T-Venture Holding, Neuhaus Partners n.a
Sep-11 Ezakus FR 2010 Audience targeting service Idinvest Partners SA 2
Aug-11 Ebuzzing (former Wikio) LX 2006 Platform for seeding branded content Lightspeed Venture Partners
, GIMV, Gemini Israel Funds 17
Aug-11 Brandtone IR 2009 Voice-based mobile platform Enterprise Ireland
, Unilever Ventures, Verlinvest, Vision 10
Jul-11 SupersonicAds UK 2008 Social in-game advertising platform Greylock Partners 3
Jun-11 Burt SW 2009 Analytics and data technology Stiftelsen Industrifonden, Undisclosed Firm 1.6
May-11 Next Performance FR 2008 Retargeting Solutions Kennet Partners 16
Mar-11 Qriously UK 2010 Real-time public sentiment Accel Partners, Undisclosed Firms 1.2
Feb-11 SponsorPay DE 2009 Cross-platform advertising solution Hasso Plattner, Kite, Nokia Growth, Team Europe, IBB 4
Feb-11 Applifier FIN 2008 Cross-promotion network for social games & apps Individuals, Lifeline, MHS, PROfounders, Tekes 1.6
Jan-11 Celltick UK 2000 Mobile marketing solutions Amadeus Capital Partners, Elwin Capital, Noventi 6
Source : Thomson One Banker, Press Releases 27 >€10m
© 2012 Clipperton Finance Limited.
28. Listed Advertising Comparables: Aging Models Lead to Low Valuations
amongst Listed Web Medias Companies
Scale 1,000,000
Currency USD
Last Period Market Cap - Enterprise Sales Sales Sales EBITDA EBITDA EBITDA EV/Sales EV/Sales EV/EBITDA EV/EBITDA
Name Ticker Count.
End Date Consolidated Value TTM 2012E Year/Year TTM 2012E Margin%¹ TTM 2012E TTM 2012E
GOOGLE GOOG-US USA Jun-12 226,369 189,043 43,018 42,769 29.6% 14,235.00 19,257.2 33.1% 4.4x 4.4x 13x 10x
FACEBOOK FB-O USA Jun-12 41,626 32,144 4,327 4,925 53.2% 1,050.00 2,655.2 24.3% 7.4x 6.5x 31x 12x
BAIDU BIDU-US CHN 37,470 35,470 2,895 3,586 (4.5%) 1,660.00 2,007.2 57.3% 12.3x 9.9x 21x 18x
YAHOO! YHOO-O USA Jun-12 17,959 16,222 4,980 4,445 (10.6%) 1,310.00 1,487.3 26.3% 3.3x 3.6x 12x 11x
Yandex YNDX-O RUS Jun-12 6,892 6,524 748 888 54.7% - 401.9 45.0% 8.7x 7.3x - 16x
TRIPADVISOR TRIP-O USA Jun-12 5,036 5,242 699 758 27.3% 297.54 339.1 42.5% 7.8x 6.9x 18x 15x
IAC/INTERACTIVECORP IACI-O USA Jun-12 4,569 3,825 2,435 2,735 35.8% 346.03 492.6 14.2% 1.6x 1.4x 11x 8x
AOL AOL-N USA Jun-12 3,110 1,763 2,169 2,148 60.0% 302.00 381.3 13.9% 0.8x 0.8x 6x 5x
PANDORA MEDIA INC P-N USA Jul-12 1,674 1,591 338 430 66.4% (26.58) (1.5) (7.9%) 4.7x 3.7x NEG NEG
YELP YELP-N USA Jun-12 1,604 1,481 107 136 67.7% (13.48) 1.0 NEG 13.8x 10.9x NEG -
VALUECLICK VCLK-O USA Jun-12 1,247 1,331 632 685 32.6% 178.79 214.2 26.1% 2.1x 1.9x 7x 6x
ZILLOW Z-O USA Mar-12 1,186 1,103 78 115 113.3% 11.65 22.1 15.0% 14.2x 9.6x 95x 50x
OPENTABLE OPEN-O USA Jun-12 1,063 991 150 162 22.0% 45.47 68.3 30.2% 6.6x 6.1x 22x 15x
MILLENNIAL MEDIA MM-N USA Jun-12 1,041 808 132 178 79.2% (4.06) (1.3) (1.0%) 6.1x 4.5x NEG NEG
DEMAND MEDIA DMD-N USA Jun-12 861 767 345 358 15.9% 58.89 100.0 17.1% 2.2x 2.1x 13x 8x
ANGIE'S LIST ANGI-O USA Jun-12 631 570 119 154 71.1% (55.81) (52.4) (46.9%) 4.8x 3.7x NEG NEG
VELTI LIMITED VELT UK/US Jun-12 524 487 232 - - 31.31 31.0 13.5% 2.1x - 16x -
DIGITAL GENERATION DGIT-O USA Jun-12 304 702 382 396 45.7% 99.23 128.5 26.0% 1.8x 1.8x 7x 5x
Tom orrow TFA-XE DEU Jun-12 250 256 175 197 0.6% 24.56 31.0 14.0% 1.5x 1.3x 10x 8x
TradeDoubler Aktiebolag TRAD-SK SWE Jun-12 98 72 345 366 (18.2%) 11.47 12.7 3.3% 0.2x 0.2x 6x 6x
WEBORAMA ALWEB-FR FRA Dec-11 90 85 29 35 47.5% 6.87 8.3 23.6% 2.9x 2.4x 12x 10x
ADVERLINE ALADV-FR FRA Dec-11 61 63 32 - 6.5% 7.20 6.0 22.3% 1.9x - 9x -
¹TTM Average 27% 19% 5.1x 4.5x 18.2x 12.6x
Sources: Thomson, Yahoo Finance Median 41% 20% 3.8x 3.7x 12.4x 10.0x
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© 2012 Clipperton Finance Limited.
29. Table of Content
I. Overview of Internet Display Ad Spending
II. Which Levers to Close the Media Time vs Ad Spend Discrepancy ?
III. Notable Transactions in Ad Tech Landscape
IV. Focus on Key European Players
V. About Clipperton Finance
29
© 2012 Clipperton Finance Limited.
30. Clipperton List of Selected European Ad Tech Players
Stars & emerging
companies with a
claim on new and
existing online
advertisement
markets
30
© 2012 Clipperton Finance Limited.
31. Table of Content: Selected European Ad Tech Players
ADVERTISING PLATFORMS DEVICE & FORMAT ADVERTISING TECHNOLOGIES
Branding Mobile Measurement DSP/SSP
37 45 32 47
37 45 47
32
46 48
Social Advertising Video Targeting Ad Serving
40 43 33 41
43 33 41
34
Ad Network & Analytics Widgets RTB
38 34 42
44
38 35
44
39 35
39 36
31
© 2012 Clipperton Finance Limited.
32. Selected European Players - Measurement
Key Figures Presentation Key Figures Presentation
Founded: 2007 Alenty provides ad-exposure Founded: 2009 Analytics and measurement
efficiency measurement and platform for publishers and brand
Nationality: FR Nationality: SW
optimization technologies (how advertisers
long is the ad viewed, etc.) for ad Application Suite with 5 apps
Rev. 2011: €1.2m Rev. 2011: n.a.
networks & agencies
Rev. 2010: €800k Rev. 2010: n.a. Flagship product is Rich - a web
Strong focus on branding-based analytics platform for advertising
Funding: €400k online campaigns Funding: €2.7m allowing publishers to better
monetize content & advertisers to
Investors: BAs Competitors include Adxpose Investors: Industrifonden increase the visibility and impact
(bought by comScore in 2011) Founders / Tornstaden of their digital campaigns
Context & Positioning Context & Positioning
Alenty solves a recurring issue that brand advertisers experience: display ads Billed as an “Omniture focused on web ads” not sites, Burt is a SaaS platform
are priced by impression where TV ads are priced by exposure time. that helps brands and ad agencies measure and analyze online advertising by
The company’s technology enables agencies and ad networks to provide their looking at where ads are displayed and which ads have been seen by users.
clients with insightful reports on campaigns such as how long users have been
exposed to the ad, what’s the optimal exposure time, etc. Measurement technologies will be key: as online advertising shifts away
from pure performance to branding, advertisers expect to have more
The comScore/Adxpose deal illustrates the importance of the measurement qualitative information on their campaigns.
brick in the consolidating adtech ecosystem.
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© 2012 Clipperton Finance Limited.
33. Selected European Players – Targeting [1/4]
Key Figures Presentation Key Figures Presentation
Founded: 2010 Branding-oriented Semantic Founded: 2005 Leading Retargeting Player
Advertising Web Service
Nationality: Nationality: FR Criteo collects information
Matches ads with similar about user online behavior
Rev. 2011: <€1m (est.) emotional appeal thanks to Rev. 2011: (what product they look at on
€150-200m
content analysis & real-time retailers sites, etc.) & generates
Rev. 2010: n.a. monitoring Rev. 2010: €50-60m dynamic banners in real time to
fit a particular customer profile
Funding: €3.2m As ADmantX provides semantic
Funding: €17m
analysis on the content of a site Founded in France but now
Investors: Atlante and not the user, the solution is Investors: Index, headquartered in Palo Alto, CA
Ventures cookie-less Bessemer, Idinvest,
Elaia, 123Venture
Context & Positioning Context & Positioning
One barrier to branding advertising online is the fact that it is With its retargeting technology, Criteo is able to achieve very high CTR rates
difficult for brands to be sure that their ads appear next to pieces (4-5x that of traditional banner ads). The company leverages this arbitrage
opportunity by buying ad inventory on an CPM basis & selling on a CPC basis
of content they want to be associated with:
EG: Porsche wants its ads to appear next to « Fashion Week » content, but not Criteo aims to make display advertising perform like search on a pure CPC
next to an article involving a car crash…) pricing model (and not CPM) thus providing an innovative and disruptive
approach to display advertising
ADmantX has developed a leading semantic technology and
Probably Europe’s fastest growing adtech player (~$400m rev. in 2012) with a
seems well positionned to succeed in this new segment
significant opportunity in N. America (75% rev. are still Europe-based)
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© 2012 Clipperton Finance Limited.
34. Selected European Players – Targeting [2/4]
Key Figures Presentation Key Figures Presentation
Predictive targeting using Founded: 2005 Performance-focused
Founded: 2009
personalization algorithms personalized targeting provider
Nationality: UK Nationality: UK
Matches individual preferences Propels acquisition through
with content in real time using Rev. 2011: retargeting, pre-targeting and
Rev. 2011: <£50m (est.) $30-50m (est.)
artificial intelligence and semantic look-alike targeting
Rev. 2010: <£20m (est.) technologies Rev. 2010: $10m (est.)
Extensive network of RTB
3 targeting products: AdMatch, providers (Google DoubleClick,
Funding: £6.2m Funding: £22.4m
SiteMatch & Media Solutions Appnexus, Rubicon and AdMeld)
Investors: Dawn Capital, Investors: Accel, Iris,
Founded in London, is now Top tier clients (PriceMinister,
Antrax capital headquartered in New-York Dotcorp, Carmel, T-Ventures Orange, Microsoft, etc.)
Context & Positioning Context & Positioning
Personalization and automation are two strong underlying trends in MyThings is positioned at crossroad of 3 fast growing segments:
display advertising: publishers started showing the same ad to every personalized targeting, display advertising & real-time bidding (RTB)
users, then came targeting and retargeting The company has taken a pure performance-led approach to display
Cognitive Match is able to go one step further in personalization advertising similar to its main competitor Criteo
& automation through complex targeting algorithms (that uses With its recent massive round – $15m led by Iris (Orange-Publicis) –
psychology mathematics and semantic technologies) MyThings is in a great position to challenge Criteo internationally
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© 2012 Clipperton Finance Limited.
35. Selected European Players – Targeting [3/4]
Key Figures Presentation Key Figures Presentation
Dynamic Retargeting Player Founded: 2007 Ad Personalization Platform
Founded: 2008
Nationality: Nextperformance also offers Nationality: UK Allows advertisers to target new,
other value added services such prospective and existing
as social audience or real time Rev. 2011: customers with personalized and
Rev. 2011: €20-50m (est.) <£50m (est.)
targeting (however dynamic relevant advertising messages
Rev. 2010: <€10m (est.) Rev. 2010: £10-15m (est.) that are created and customized
retargeting still accounts for 70%
of revenue) in real time.
Funding: €16m Funding: £5.3m
Claims to deliver 12 times higher
High profile clients (Cdiscount, Investors: Pentech, click through rates than standard
Investors: Kennet
Etam, Orange, Spartoo, etc.) retargeted ads
Reed Elsevier & Allen & Co.
Context & Positioning Context & Positioning
Next Performance is based on the same model as Criteo: buy on a CPM basis & With the declining click-through rate trend, publishers & advertisers
sell on a CPC basis – monetizing the delta through innovative (re)targeting will actively look into new solutions that enable them to maintain
technology The company is able to transform display inventory into display advertising CTR at a high rate
lucrative performance-based inventory
Struq’s innovative technology allows advertisers both to create
Aims to rapidly scale internationally – with a strong focus in Europe
sharp users profiles and to dynamically create personalized ads in
The size of Kennet round shows that investors believe Next Performance can real-time leading to much higher CTRs than traditional display ads
be a serious contender to Criteo’s dominant position in the retargeting space
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© 2012 Clipperton Finance Limited.
36. Selected European Players – Targeting [4/4]
Key Figures Presentation
Founded: 2011 Audience targeting software
providing precise and real-time
Nationality: UK social profiling
Rev. 2011: <€1m (est.) Seasoned entrepreneurial team:
Rev. 2010: founders also founded Steek, a
n.a.
Cloud pioneer acquired by F-
Secure in 2009 for $39m
Funding: €2.2m
Investors: IDInvest
Context & Positioning
Early-stage funding enabled a significant technological edge in
terms of profiling granularity, a key differentiating factor as
current offerings do not match rising market expectations.
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© 2012 Clipperton Finance Limited.
37. Selected European Players – Branding
Key Figures Presentation Key Figures Presentation
Brand-Oriented Video Ad
Founded: 2008 Brand-Oriented Video Founded: 2009 Network (focus on social games)
Advertising Player (retargeting &
Nationality: RO interactive video advertising) Nationality: DE GlipHippo leverages the rise of
social gaming by distributing pre-
Rev. 2011: n.a. Tools that help agencies turn Rev. 2011: <€5m (est.) roll video ads embedded in social
existing video ads into interactive games, blogs or casual gaming
Rev. 2010: n.a. experiences Rev. 2010: n.a.
sites
Two flagship products: Funding: n.a. The teams traditional ad agency
Funding: £2.2m
o Brainads: personalized video roots translate into brand-
Investors: Arts Alliance, retargeting Investors: n.a.
oriented analytics for customers
500 Startups, Credo o Brainrolls: interactive video
Ventures, Estag, BAs advertising Strong presence in Scandinavia
Context & Positioning Context & Positioning
Internet is in the process of becoming the first consumer channel GlibHippo is positioned on a advertising “sweet-spot”, at the
for video: there is a vast amount of potential advertising junction of strong secular trends: branding advertising online,
inventory to tap and today’s video adtech is still in it’s infancy social gaming & video ads
Brainient intends to play a major role in this transition by offering
clients brand-focused turn-key solutions to make their video ads Audiences that were once captured by TV, in a single location, are
more effective (through retargeting & interaction) now spreading over multiple sites
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© 2012 Clipperton Finance Limited.
38. Selected European Players – Advertising Platforms [1/3]
Key Figures Presentation Key Figures Presentation
Web, mobile and social analytics Founded: 1998 Ad Network with strong tech
Founded: 1995
provider, including real-time and components integrating analytics
Nationality: FR multi-channel audience Nationality: UK & audience profiling services, ad
measurement, performance serving & media services
Rev. 2011: €10m monitoring, and e-reputation Rev. 2011: €22m
Leveraged its 90m profiles
Rev. 2010: €9m Rev. 2010: €15m
Network of 3,500+ customers database to form a behavioral
and 350,000 audited websites in targeting ad network of 200,000
Funding: €4m more than 20 countries Funding: Listed sites generating 34M UVs/month
Investors: ICSO/ Investors: N.A.
Mkt Cap (as of 07/12/12): €65m
IRDI Group
Context & Positioning Context & Positioning
AT Internet is recognized as a European leader in Web Analytics Focus on R&D in behavioral targeting (1st geolocalized service)
solutions, particularly known for the quality of its partnership Leveraged its technology through M&A: Acquired ad newtork C-
network, which forms a community of 350,000 users Marketing in 2007, rich-media solution Adrime in 2010, and merged
The company expects to double its sales in 2012 with 40% of sales with ad exchange Hi-Media in the UK in 2011. The recent (May-12)
coming from outside France. They currently have a strong focus on acquisition of Datvantage combines Weborama’s user profiling
Germany, Austria and Switzerland with customers including Axel expertise with a data collection and management platform
Springer, Deutsche Telekom, SoundCloud and Netto Q2 2012 revenue grew 37% yoy. to €5.6m
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© 2012 Clipperton Finance Limited.
39. Selected European Players – Ad Network & Analytics [2/3]
Key Figures Presentation Key Figures Presentation
Founded: 2005 Independent global audience Founded: 2008 Preference-based advertising
UK and content network Nationality: DE network (using targeting tools)
Nationality:
(advertising distribution Boasts very high CTR (>7%)
Rev. 2011: £200-300m platform delivering targeted ads Rev. 2011: €30-50m (est.)
and content across display, Strong presence in German
Rev. 2010: ~£150m email, social, in-banner and in- Rev. 2010: €10-20m (est.) speaking countries (over 40
video) million visitors per month in the
FTEs: ~80 DACH region alone)
Funding: £70m
Reaches nearly 700 million Funding: €2.8m+ Experienced founders: Matyka
Investors: Index Venture,
unique users across 17 launched Hiclip.tv (sold to
Wellington, S. Valley Bank countries Investors: CAPE, NWZ, Adconion in 2008) & is engaged in
HTGF, Dumont, BAs a number of DE tech start-ups
Context & Positioning Context & Positioning
As a holding group, Adconion owns a portfolio of companies Plista is building its success thanks to a user-friendly platform,
spanning numerous growing segments such as Smartclip (online innovative preference-based display ads as well as a strong
video network, all stock acquisition), Joost (video and content network of advertisers & publishers in German speaking countries
syndication), and Redlever (brand integrated content)
Adconion is already leveraging it’s acquisitions as Smartclip partners The use of innovative display ad formats along with precise
with Playjam (smart tv gaming platform) to ensure Adconion is also targeted preference-based technology allows the company to
active in ad distribution for connected TV display very high CTR rates of 7% - well above industry standards
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© 2012 Clipperton Finance Limited.
40. Selected European Players – Advertising Platforms [3/3]
Key Figures Presentation
Founded: 2006 Technology platform delivering
social video campaigns for
Nationality: UK global brands
Reaches an audience of over
Rev. 2011: £10-20m (est.)
725m MAUs, distributing
Rev. 2010: <£5m (est.) campaigns across platforms
including YouTube, Facebook
Funding: £16m and Twitter
Investors: BGF, Van den Competitors include GoViral
(acquired by AOL for nearly
Ende, Amadeus $100m) & French eBuzzing
Context & Positioning
Video shares are experiencing exponential growth rising from 40m
video shares per month during October 2010 to 270m shares
during October 2011. Branded video content is making up an
increasing proportion of these shares
Unruly currently has over 14,000 distribution partners globally
launching social video campaigns for blue chip brands including T-
Mobile, Samsung and Skype
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© 2012 Clipperton Finance Limited.
41. Selected European Players – Ad Serving
Key Figures Presentation Key Figures Presentation
Provides ad serving and audience Founded: 2007 Video ad-serving platform
Founded: 2008
measurement technologies to
Nationality: BE CDNs, agencies, ad networks and Nationality: Enables sales and delivery of
online audio publishers. video advertising beyond in-
Rev. 2011: n.a. Rev. 2011: <€15m browser video (PC) to the New IP
Adswizz enables the creation of delivered TV, whenever and on
Rev. 2010: €1-5m (est.) Rev. 2010: n.s.
online ad campaigns across whichever devices users wish to
audio, video and display formats consume it
Funding: €2m with social media integration Funding: €13m
Investors: Angel Investors: Northzone,
funding Creandum, Qualcomm, Innovacom
Context & Positioning Context & Positioning
Adswizz has a strong presence in the online audio marketplace allowing Television remains the dominant advertising media attracting
on-line radios / ad networks to fully monetize their internet radio $160m of global ad spend in 2010
audience.
Ease of use and breadth of content is leading to rapid growth in online
Meanwhile, the industry transitions from the linear broadcasting
audio positioning Adswizz for strong growth going forward
Adswizz is currently entering the US and Canadian markets having model to dynamic IP delivered content and Videoplaza intends to
recently partnered with online audio streaming service StreamOn play a leading role in this new IP delivered TV ad server space
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© 2012 Clipperton Finance Limited.
42. Selected European Players – Real Time Market Place
Key Figures Presentation
Founded: 2007 Online advertising market
enables real-time bidding (RTB)
Nationality: DE for ad impressions
Rev. 2011: €30-50m (est.) In 2011 sold just under 55bn ad
impressions with it’s online
Rev. 2010: <€20m (est.)
market reaching 52% utilisation
(5% greater than 2010)
Funding: €5m
Investors: Time Equity Currently deal with more than
1,400 advertisers placing ads on
Partners around 5,000 websites
Context & Positioning
With CPM’s rising on average 10% between 2010 & 2011, effective
targeting is increasingly important
RTB will play an important role in this change (estimates
suggesting RTB will account for >20% of display market volume in
the next three years). Adscale already puts two thirds of its
available inventory through its RTB platform (180m ad impressions
per day)
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© 2012 Clipperton Finance Limited.
43. Selected European Players – Format: Video
Key Figures Presentation Key Figures Presentation
Premium multiscreen video ad In-stream ad server providing
Founded: 2010 Founded: 2009
network and server, providing multiscreen ads, geolocalization,
Nationality: FR targeting services and analytics Nationality: ad selection across multiple brand
offers, and interactive ad players
Rev. 2011: €5-10m (est.) Targets urban upper class Rev. 2011: <€10m (est.)
audience from more than 200 Connects 150+ premium
Rev. 2010: <€3m (est.) publishers, and provides Rev. 2010: n.a. publishers to 200+ advertisers,
verticalized offers (entertainment, generating 100m views/month
Funding: - news, youth, men, women etc.) Funding: €1.25m
Investors: - Investors: ISAI
Context & Positioning Context & Positioning
Strong R&D strategy: launched Le Lab in 2011, a center dedicated to
innovative video ad formats Tablet, connected TV and social media usage is booming in
Europe, pushing online video market growth
Rising demand / limited competition: with 75m in-stream ads seen
monthly, already accounts for 10% French video content market
Meets strong demand for engagement drivers: provides
Advideum is well placed in a growing segment with 63% of advertisers multiscreen, geolocalized and interactive players, and features ad
expecting to use video in 2012 and viewers 20 times more likely to click on selection offer across multiple brands
in-stream ads compared to banners (according to Mediamind)
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© 2012 Clipperton Finance Limited.
44. Selected European Players – Format: Widgets
Key Figures Presentation Key Figures Presentation
Provides Transactional
Founded: 2008 Founded: 2010 Innovative affiliation platform
Advertising Tools for Advertisers
Nationality: CH Nationality: through e-commerce widget
Platform allows e-commerce Allows advertisers to link their
transactions to be conducted products to relevant images
Rev. 2011: <€5m (est.) Est. Rev. 2012: >€1m
inside banner advertising units and multimedia within online
Rev. 2010: <€1m (est.) (which can be deployed on Rev. 2011: €200k content, so that consumers can
traditional websites, blogs, buy those items directly
Funding: <€1m Facebook, etc.) Funding: €4.5m
Publishers can monetize their
Investors: BAs 6 products in total Investors: Tekes, content by becoming brands
Flagship product is nextpromote affiliates
(promotion tool in Facebook Fanpage Kaj Hed (Rovio’schairman)
Context & Positioning Context & Positioning
Until recently, online transactions were limited to the sole “sandbox” of Brands look for new ways to engage consumers through display
e-commerce site. advertising
NextWidgets is disrupting the market by opening up new online sales Publishers are also looking for smarter and innovative ways to
channels for e-retailers: monetize their audience
This is done by creating new ad formats that allow e-commerce
transactions to be done “in-banner” (often on social sites thus Ambition is to turn any media content (image, video…) into a
maximizing the impact of social media marketing for advertisers) monetizable digital storefront for consumers.
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© 2012 Clipperton Finance Limited.
45. Selected European Players – Mobile [1/2]
Key Figures Presentation Key Figures Presentation
Founded: 2008 Global mobile advertising The fastest growing mobile
Founded: 2008
marketplace advertising marketplace in the
Nationality: UK Nationality: German-speaking markets
Maximises display advertising
Rev. 2011: £1-3m (est.) campaigns and mobile traffic Rev. 2011: <€5m (est.) Targeted advertising – delivers 2
results billion ad impressions monthly
Rev. 2010: £0.8m Rev. 2010: €1m (est.)
across Europe (DACH, FR, UK, SP)
Offices in London, New-York,
Funding: £5m Paris, San Francisco, Madrid Funding: €7.3m Successful App Store rankings
Investors: Gordon Investors: EarlyBird, booster service
Shields Team Europe, Blumberg
Context & Positioning Context & Positioning
Strong recent focus on data analytics to monitor and boost ad inventory A leading European mobile advertising marketplace covering social,
performance (for example, providing an engagement score for each ad gaming and premium content
based on metrics such as CTR and time spent watching). In April 2012, the company acquired Turkish mobile ad company
Adfonic has recently launched its first video ad units – unique in that Mobilike who covers 60% of the Turkish mobile ad market. The
they play in the native iOS or Android player rather than needing to open acquisition positions Madvertise to enter the Middle East
separate apps such as YouTube Madvertise also provides app ranking optimisation through the
Currently receives 35bn ad requests per month averaging 4000 brand "Katappult" service which guarantees a top 25 app ranking listing in a
campaigns p/month, reaching a global audience of 200m mobile users specific category for fixed price within 3 business days
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© 2012 Clipperton Finance Limited.
46. Selected European Players – Mobile [2/2]
Key Figures Presentation
Founded: 2010 Mobile performance marketing
solutions for app monetization,
Nationality: UK leads and downloads acquisition,
audience retention and global
Rev. 2011: <€5m (est.) mobile strategy
Rev. 2010: n.a.
Experienced founders: launched
the online marketing agency
Funding: €4.5m+ Directinet, sold for $42m in 2006
Investors: Backbone
(Agregator Capital) Competitors include Velti or Yoc
BAs (UK-based)
Context & Positioning
Aims to be active across the entire mobile marketing value chain:
following the acquisition of app sponsoring network Bemyapp.
Recent funding fuels their external growth strategy, starting with
mobile marketing agency Systeme Polaire in 2012
Has a total of more than 125 customers including Procter &
Gamble, Yellow Pages, Renault, Orange and Nokia
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© 2012 Clipperton Finance Limited.
47. Selected European Players – DSP/ SSP [1/2]
Key Figures Presentation Key Figures Presentation
Founded: 2002 Demand-Side Platform (DSP) Sell Side Platform allowing
Founded: 2008
integrating campaign planning, ad publishers to build their own private
Nationality: serving, optimization, and reporting Nationality: FR ad exchanges
Rev. 2011: n.a. Incorporates rich media, video, n.a. Automated Real Time Bidding
Rev. 2011:
mobile, dynamic ads, and prioritizes auctions and allocates
Rev. 2010: n.a. personalized targeting Rev. 2010: n.a. views to the best paying buyers
Funding: NA Offices in 18 countries - most NA Works with over 50 website owners
Funding:
recently entering Portugal (where (including RTL, eBay and Sanoma
Investors: Via Venture the ad space was previously Investors: Van den Ende Media) in 6 languages
dominated by Spanish players)
& Deitmers Forecasting 70% growth in 2012
Context & Positioning Context & Positioning
First pan-European DSP, with international footprint: delivering Audience based media buying methods such as RTB are growing 10 times
campaigns to over 3,000 clients across 7,500 global web publishers faster than standard media buying
in more than 35 countries The company claims to be the only platform that has the capability to
combine RTB, non-RTB ad network optimisation and direct performance
Real Time Bidding integration with leading ad exchanges
campaigns in one environment
Adform has recently partnered with Microsoft to offer its rich
Looking to fundraise in order to improve the platform and expand
media display ad formats alongside the Microsoft offering geographically (including a new UK sales team)
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© 2012 Clipperton Finance Limited.