luma digital brief 012 - market report q4 2016
TRANSCRIPT
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Q4 2016 Market Report
Digital Brief 012
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Mobile
LUMA’s Singular Focus on Digital Media
Technology
Media
Marketing MarTech
DigitalContent
AdTech
Ø LUMA’sexpertiseisattheintersectionofMedia,MarketingandTechnology
Ø Atthisintersectionexists:§ DigitalContent: contentsites,MCNs,gamepublishers,aggregators
§ AdTech: display,search,video,mobile,social,contentmarketing/native,connectedTV
§ MarTech: data,analytics,salesandmarketingautomation,email,predictivetools,commercetechnology,shoppermarketing,payments
Ø Mobile proliferationhasamajorimpactonthesemarketsandLUMAisdeeplyknowledgeableonmobile
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Overall Commentary on ConsolidationØ InourlastQ32016MarketReport,wereported
62mergersandacquisitionsindigitalmediaandmarketing
Ø Thedealswetrackinthisreportfallintooneoffourcategories:§ Large(over$500mm)§ Medium($100– $500mm)§ Small($20– $100mm)§ Sub$20mmexitsareconsideredtechandteamdeals,
capitulations,orundisclosed
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U.S. Digital Media M&A Activity by Sector
Source: LUMA
#ofTransactions
Ø RobustM&Aactivityacrossdigitalmediaisreflectiveofthegrowingpoolofstrategicbuyers,mostnotablynewentrantsfromthetelecomindustryaswellasinternationalandprivateequitybuyers
Ø Thisphenomenahasresultedinmanylargescaledexitsfordifferentiatedcompaniesatverystrategicmultiples
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72 77
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2015 2016
AdTech MarTech DigitalContent
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U.S. Digital Media M&A Activity by Sector
Source: LUMA
#ofTransactions
Ø Inthefourthquarter,scaledexitsinAdTechwasamajorstorywithindustryleadingcompaniesfocusedonvideo/TVanddatabeingacquired
Ø Weexpectmomentumfrom2016tocontinueintothenewyearasnewmarketdynamicsandincreasedcompetitionwilldrivefurtherconsolidationacrossthesesectors
2012 14 10
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Q12016 Q22016 Q32016 Q42016
AdTech MarTech DigitalContent
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A Growing Pool of Strategic Buyers
DATA
INTERNET ORIGINALS
TECH SERVICES
TELCO
INTERNATIONAL
PRIVATE EQUITY
MEDIA
MARKETING
CONSUMER INTERNETCOMMERCE
MARKETING TECH
CRM SOFTWARE
Right Time Decisioning of
Consumer Data
(Ad Tech and MarTech)
Ø Thepoolofstrategicbuyerscontinuestogrowwithprivateequitybecomingactiveacquirersinthisspace
Ø Privateequitybuyershavenotonlybecomeveryacquisitiveindigitalmarketing,butarealsopayingstrategicmultiplesfortheseassets
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9%
26%
6%27%
8%
5%
5%6%
6%
2%ConsumerInternetCommerceTelcoMediaMarketingTechTechServicesInternetOriginalsCRMSoftwareMarketingData
Digital Media M&A Activity by Strategic Buyers2016
StrategicBuyersTransactions
Ø In2016,buyersinCommercewereveryacquisitivewiththeaimofacquiringstrategicassetsfortheircorebusinessandtoenhancetheirdigitalmarketingcapabilities
Ø BuyersinMediaincludingTimeWarner,UnivisionandZiffDaviswerealsoparticularlyactivethisyearwithpublishersbuildingtheirportfolioofbrandsasengagementonlinecontinuestogrow
Source: LUMA
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Ad Tech M&A Activity#ofTransactions
Ø FullYearObservations§ Thesecondhalfof2016sawmany
scaledexitsinAdTechincludingtheacquisitionsofAppLovin andMedia.net inQ3aswellasHookLogic,INVIDI,Operative,TriadRetailMedia,andTubeMogul inQ4
§ Telcos andMarketingCloudswereparticularlyacquisitiveinAdTechthisyearfromAT&TtoAdobe
Ø LookingAhead– TV§ Weexpecttoseeanincreasein
M&AactivityinTVadvertisingfollowingtheacquisitionsofINVIDIandOperativeinQ4
Source: LUMA
1 2 4 4
19
1010
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0
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10
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25
Q12016 Q22016 Q32016 Q42016
+$100M <$100M
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Ad Tech – 2016 Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
Source: Capital IQ; Crunchbase
$4M $1.4B Chineseprivate equityfirmOrientHontai Capitalhas agreedtoacquireamajoritystakeinthefast-growingmobileadnetworkAppLovin
$39M $250M Criteo willboostitsperformancemarketingplatformbyleveragingHookLogic’s uniquerelationshipswithbrandmanufacturersandretailers
$132M N/A AconsortiumledbyAT&Thasannouncedplans toacquire INVIDI,aleadingproviderofaddressableTVadvertisingsolutions
$45M N/A MediaoceanhasacquiredInvision,anAdTechcompanyofferingworkflowsolutionstobroadcastersandMVPDs,toaddsell-sidetoolstoitscorebuy-sidebusiness
N/A $900M Media.net,anAdTechcompanypoweringYahooBingContextualAds,willbeacquiredbyaChineseconsortiumledbyBeijingMitenoCommunicationTechnology
$34M $360M NorwegiantelecomoperatorTelenoracquiredcross-deviceadvertisingcompany Tapad tobolsteritsdigitalmarketingcapabilities
NASDAQ $540M Adobehasagreed toacquireTubeMogul,aleadingvideoDSP,andcombineitwiththeAdobeMarketingCloudasthecompanydivesdeeper intomediaexecution
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MarTech M&A Activity#ofTransactions
Ø FullYearObservations§ TheacquisitionsofDemandware,
Marketo,NetSuiteandNeustarheadlinedabusyyearinMarketingTechnology
§ PrivateEquitybuyerswereveryactivethisyearinMarTech,payingmultiplestypicallyassociatedwithstrategicbuyers
Ø LookingAhead– Identity§ Identityisakeyindustryfocus
sinceitiscriticaltoenabletrue1:1marketing
§ MarketingCloudsandstartupsalikearebuildingrobustidentitysolutions
Source: LUMA
25 3 4
12
1717 17
0
5
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Q12016 Q22016 Q32016 Q42016
+$100M <$100M
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MarTech – 2016 Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
NYSE $2.7B LeadingCRMplatformSalesforce.comacquiredDemandware,theleadingenterprisecloud-basede-commerceplatformprovider,tocreateitsnewCommerceCloud
$50M $700M ByacquiringDMPKrux,Salesforce’sclientswillbeabletoperformmoregranularsegmentingandstrongeraudiencemanagementfromwithinitsMarketingCloud
NASDAQ $1.7B Marketo,amarketingautomationcompanywithover4,600customers,wastakenprivatebyVistaEquityPartners
NYSE $8.7B SoftwaregiantOracleacquiredNetSuite,theSaaSERPleader(withmarketingtechnologyassets)
NYSE $2.9B GoldenGateCapitalhasagreedtoacquireNeustar,anindustryleadingproviderofinformationservicesanddigitalmarketingcapabilities
NASDAQ $2.6B Businessintelligenceanddatavisualizationplatform,Qlik,hasbeentakenprivatebyThomaBravo
N/A $1.1B Sitecore,awebcontentmanagementsystem,wasacquiredbyEQTPartnersasitplanstoexpandSitecore’sdigitalmarketingcapabilities
Source: Capital IQ; Crunchbase
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Digital Content M&A Activity#ofTransactions
Ø FullYearObservations§ Acquisitionsintraditionalmedia
(Dreamworks,TimeWarner)anddigitalmedia(ComplexMedia,EverydayHealth,GawkerMedia)highlighteddigitalcontentin2016
§ GamingcompaniesSupercell andPlaytika hadtwoofthelargestexitsinthesectorallyear
Ø LookingAhead– PublisherConsolidation§ Amidthegoldenageofcontent,we
expecttoseefurtherconsolidationamongpublishersinordertoofferabroadervarietyofcompellingcontentacrossverticalsandattractlargeadvertisers
Source: LUMA
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Q12016 Q22016 Q32016 Q42016
+$100M <$100M
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Digital Content – 2016 Notable DealsAcquirer Capital
RaisedEnterprise
Value Comments
NASDAQ $4.1B NBCUniversal (Comcast)acquiredDreamworksAnimationstobolsteritsportfolioofentertainmentfranchisesacrossTV,film,anddigitalproperties
$245M ~$800M NetmarbleGameshasacquiredKabam’sVancouver-basedstudio,thedeveloperofpopularmobilegamestitles including“MarvelContestofChampions”
NYSE $26.2B ByacquiringLinkedIn,MicrosoftaddstheubiquitousprofessionalnetworkanditsdiverserevenuemodelstoMicrosoft’s“professionalcloud”
N/A $4.4B AconsortiumofChinesebuyershasagreedtoacquirePlaytika,thesocialcasinogamingunitofCaesarsEntertainmentitoriginallyboughtin2011
N/A $10.2B ChinesemediagiantTencentHoldingsacquiredamajoritystake inthemassivelyprofitablemakerofthepopularmobilegamingfranchiseClashofClans
NYSE $105.6B AT&ThasagreedtoacquireTimeWarnertoowncontentanddistributionasthetelecomgiantaimstopushmediaandadvertisingtoitsgrowingusernetworks
NASDAQ $4.8B FollowingitsacquisitionofAOL,VerizonhasagreedtoacquireYahoo’scorebusiness,whichincludesitsdigitalmediapropertiesandscaledAdTechcapabilities
Giant(ChineseConsortium)
Source: Capital IQ; Crunchbase
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TUBE RUBI TRMR MXPT YUME FUEL CRTO MRIN TTD NASDAQ
Ad Tech – 2016 Stocks Performance
Market Data as of 12/31/16
Ø AdTechWeighedDownbyIndustryIssues§ Headerbiddingishavingastrongimpacton
AdTechasinvestorsquestionthefutureofthesefirmsunderthisnewmarketdynamic
§ ArecentanalysisconcludedthatFacebookandGooglecapturedallofthegrowthindigitaladvertisingin2016,raisingmanyconcernsabouttherestoftheindustry
Ø AdTechIPO’s§ TTD’ssuccessfulinitialpublicofferingin
SeptemberwasamajorboostforAdTechandcouldserveasacatalystformoreIPO’s
§ AppNexus isexpectedtogopublicinQ2of2017afterfilingconfidentiallyforanIPO
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CRM MKTO HUBS BCOV BV DWRE JIVE NASDAQ
MarTech – 2016 Stocks Performance
Market Data as of 12/31/16
Ø MajorAcquisitions§ Twoindustryleaders,MKTOandDWRE,were
acquiredfor$1.8billionand$2.8billionrespectively
§ MKTOandDWREacquisitionmultipleswere7.5xLTM,6.2xCYrevenueand10.5xLTM,8.8xCYrevenuerespectively
Ø MarTech ContinuesitsSteadyGrowth§ MarTech stockscollectivelygainedover7%
in2016withBCOVenjoyingalongpositivestretchtotheendofyearafterQ1
§ Aftergrowing34%and68%respectivelyin2015,CRMandHUBShaveseensomeheadwindsthisyear,falling11%and14%respectively
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2016 Key Startup Financings to WatchLead Investor Capital Raised Valuation Comments
Source: Crunchbase
$555M $30B Airbnb recentlyunveileditsambitiousnewlineofbusiness“Trips”asitlooksforgrowthoutsideitscorerentalhomeoffering
$200M $1.7B Followingits$200millionraiselastyear,BuzzFeed hasreceivedanother$200millionfromNBCUniversal togrowitscontent/advertisingpartnership
$794M $4.5B Augmentedreality (AR)startupMagicLeap’sSeries Croundoffundingwillenablethesecretivecompanytobringitsfirstproducttomarketsoon
$1.8B $20B SnapInc.,theparentcompanyofSnapchat,hasnowraisedover$2.6billioninfundingasitpreparesforitseventualIPOnextyear
$150M $9B DigitalpaymentscompanyStripenearlydoubleditsvaluationasitbuildsuponaleadingpositioninthefastgrowinge-commercespace
$181M $1.5B Unity,oneoftheleadinggameengineplatforms,hasraisedcapitaltocontinuebuildingtechnologyforvirtualandaugmentedrealityexperiences
$430M $16B WeWork,thepopularco-workingspacestartupthathas50,000membersin21cities,raisedfundingtoentertheAsianmarketasitcontinuestogrow
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LUMA’s 2016 LUMAscapeØ 2016wassuchabusyyear
forLUMA,wemadeaLUMAscapeoutofallouractivitygroupedbyourthreevaluepropositions:
Access -WehostedseveralexclusiveeventsfromourCEODMSseriestofundinnersandlaunchedLUMACorporatePartners
Insights – Wepublishedlotsofgreatcontentthatattractedaudiencesinthemillions
Execution – Weannouncedtransactionsvaluedat$3billionforourclients
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LUMA’s Differentiated Value Proposition
1. PeerlessIndustryKnowledge2. StrategicApproach
3. ExecutionExcellence
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LUMA’s Content-Driven, Expert-Based Approach
ConferenceKeynotes
Publications(over3millionviews)
CorporateTeach-ins
LUMAscapes(over6millionviewsfrom211countries)
CompletedDeals
DigitalBriefs
DISPLAY MOBILE VIDEO SOCIAL NATIVE SEARCH MARTECH COMMERCE GAMING STRATEGICBUYERS
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Access. Insights. Execution.
New York | Palo Alto