real time bidding in online advertising
TRANSCRIPT
REAL-TIME BIDDING IN ONLINE ADVERTISING
THE DEATH OF THE MAD MEN
The big bang of online advertising is taking place right now
Just as the financial sector transitioned from trading via hand signals and slips of paper
to automated buying and selling, Real-Time Bidding (RTB) is rapidly transforming the
online advertising market, by enabling automated and transparent trading of display
inventory, eyeball by eyeball.
Efficiency gains driving substantial market growth
Both buyers and sellers will ultimately benefit from efficiency gains and we expect as a
result that online advertising will steal a greater share of the advertising pie than
previously anticipated. Global RTB ad spend is expected to grow at over 50% per
annum to over $20 billion in 2017.
On the cusp of the next market phase – the ramp-up to mass market adoption
Over $1.3 billion has been invested into RTB platforms with over half of this in the last
two years. With the infrastructure now in place, we expect that online display sales via
RTB could increase towards 50% of the market in the US over the next 5 years, with
key Western European economies catching up quickly.
Europe currently lags behind the US but could benefit the most
Europe is a fragmented digital media market, but RTB enables advertisers to efficiently
buy across publishers audiences in different geographies and languages. While US
entrants are first movers in scalable tech platforms, we see a significant opportunity for
customised technology, data analytics and service layers in Europe as the ‘one-size fits
all’ platform technologies commoditise. We expect European RTB penetration rates will
start to catch up with the US and that Western Europe could see RTB ad spend reach
$4bn in 2017.
Data is king, but not all data is made equal
The availability of quality data is key on both sides of the market. Advertisers that can
leverage their first party data will have an advantage over those reliant on third party
data sources, whilst publishers that use data to better understand their audience will be
able to maximise their yields.
Mobile and Video are key drivers of growth
Mobile RTB is exploding due to the rich data now being provided on users and
significant investments in tracking technology. Video RTB is also growing rapidly and
cross device campaigns will have a significant impact on the landscape as brand
advertisers adopt RTB as a method of delivery.
Consolidation is coming
As RTB now ramps up to mass-market adoption, and increasingly well-funded RTB
players jockey for position, we expect to see a wave of consolidation. M&A will be
driven by the need for scale, customers, multi-channel capability, internationalisation
and late entrants acquiring RTB expertise.
INDEPENDENT TECHNOLOGY RESEARCH SECTOR UPDATE NOV 2013 DIGITAL MEDIA
SIMON NICHOLLS [email protected]
London: +44 207 101 7574
ALISTAIR MALINS
[email protected] London: +44 207 101 7587
MALCOLM HORNER
[email protected] London: +44 207 101 7573
Important disclosures appear at the back of this report
GP Bullhound LLP is authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority
GP BULLHOUND – REAL-TIME BIDDING: THE DEATH OF THE MAD MEN
2 GP Bullhound LLP
Table of Contents
INTRODUCTION .................................................................................................................................. 3
The ‘Big Bang’ of the advertising marketplace...................................... 3
RTB is driving huge efficiencies in the ad marketplace ........................ 3
Benefits to both buyers and sellers can drive the overall market .......... 3
The ‘Rise of the Machines’ ................................................................... 3
The ‘Death of the Madmen’? ................................................................ 6
TECHNOLOGY AND APPLICATIONS ................................................................................................ 7
How does RTB work? ........................................................................... 7
It’s all about the data ............................................................................ 7
Cookie monsters ................................................................................... 7
Not all data is created equal ................................................................. 7
Demand Side Platforms ........................................................................ 8
Agency Trading Desks ......................................................................... 9
The ‘Publisher’s Dilemma’ .................................................................. 10
Sell Side Platforms ............................................................................. 10
Private Exchanges .............................................................................. 11
A DYNAMIC GLOBAL MARKET ....................................................................................................... 13
Key geographies in focus ................................................................... 15
NEW MARKETS AND TECHNOLOGIES ........................................................................................... 19
Mobile: real-time location-based advertising....................................... 19
Video advertising: the big prize for RTB ............................................. 21
CAPITAL INVESTMENT AND CONSOLIDATION ............................................................................ 23
Investment into RTB ........................................................................... 23
Venture and growth capital ................................................................. 23
Europe in focus ................................................................................... 24
Recent IPOs and potential candidates for the future .......................... 25
M&A and consolidation in the sector .................................................. 26
Where next for M&A? ......................................................................... 27
APPENDICES .................................................................................................................................... 28
GP BULLHOUND – REAL TIME BIDDING: THE DEATH OF THE MAD MEN
3 GP Bullhound LLP
INTRODUCTION
The ‘Big Bang’ of the advertising marketplace
The ‘big bang’ of the advertising market place is taking place right now in real-time bidding for online and
mobile display inventory.
Real-time Bidding (or RTB) is an automated method of buying digital-display advertising in real-time via an
auction between buyer and seller on an Ad Exchange for individual impressions eyeball-by-eyeball. Our
report focuses on RTB and also address the wider programmatic buying market where trades can be
automated but not necessarily in real-time or on an impression-by-impression basis.
Not that long ago the Square Mile and Wall Street transitioned from trading via hand signals and slips of
paper to automated buying and selling. The online advertising market has undergone a similar
transformation in recent years. Up until relatively recently, online advertising has been bought and sold in a
surprisingly similar way to traditional media. The norm was for agreements in advance to acquire
packages of ad inventory based on limited data about the actual audience that will see the ads. However,
trading in online inventory via RTB is now becoming increasingly automated, liquid, transparent and
efficient as RTB gains momentum in both web and mobile advertising.
RTB is driving huge efficiencies in the ad marketplace
With substantial advances in liquidity, as more publishers adopt RTB, and in the sophistication of ad-
trading platforms, advertisers are gaining the ability to assess and reach their target audience far more
effectively than ever before.
Real-time audience data including location, age, gender and so on, married to real-time pricing, provides
greater transparency in the underlying market. Through impression-level real-time auctions, advertisers
are coming closer than ever before to solving the conundrum of knowing what half of their advertising
money is being wasted. By transitioning from manual media buying to automated or programmatic
platforms, participants are also able to recognise significant cost efficiencies.
Benefits to both buyers and sellers can drive the overall market
Whilst there will initially be losers as well as winners, ultimately buyers and sellers of online advertising
should both benefit from a more efficient marketplace.
The benefits to advertisers are widely recognised and Demand Side Platforms (or DSPs) have proliferated
to drive this side of the marketplace. Publishers, in particular ‘premium’ publishers, have been more
reluctant to accept RTB, but Sell Side Platforms (or SSPs) have helped overcome initial barriers and drive
wider adoption. In our view these new online advertising models will further the transition from offline to
online, with online stealing a greater share of the advertising pie than perhaps previously anticipated.
The ‘Rise of the Machines’
RTB has grown rapidly in a relatively short period of time. The landscape emerged in the early noughties
as publishers increasingly moved audiences online and sought to monetise their digital inventory (or
impressions) via display advertising. Initially this was all done manually by hard-coding ads onto the
publisher’s sites and the whole landscape was slow, inefficient and difficult for advertisers to navigate.
With technological advances in ad serving, Ad Networks soon emerged to aggregate inventory from
publishers and sell it on to advertisers. They would deliver ad impressions through a centralised Ad Server
responding to a website once a page is called. However, advertisers would need to manually optimise and
4 GP Bullhound LLP
rate the performance of their ads based on the responses they received. They had a limited understanding
of the audiences they were accessing and, as a result, the success of their campaigns couldn’t be
measured in a very reliable manner.
Ad Exchanges eventually emerged as tech-enabled marketplaces allowing the trading of ad impressions
between buyers and sellers in real-time. The first large Ad Exchange was launched by RightMedia (now
part of Yahoo) and matched buyers and sellers with a bid and ask much like you would on a stock
exchange. DSPs emerged soon after, allowing advertisers to acquire this inventory in increasing scale and
in real-time using programmatic bidding strategies.
Initially RTB was limited to lower quality inventory as premium publishers were mindful of potential erosion
in CPMs (see The ‘Publisher’s Dilemma’). It wasn’t, however, until SSPs became widespread that
publishers were able to actively manage their ad inventory and the market started to see significant
growth. SSPs are now providing much needed inventory and liquidity to stimulate growth in the underlying
market.
F I G U R E 1 – E V O L U T I O N O F RTB
Source: GP Bullhound
The landscape has become increasingly sophisticated with significant growth in the number of DSPs and
the increasing adoption of SSPs by mainstream publishers. Media trading has evolved towards RTB as
advances in technology have allowed the matching of buyers and sellers in a matter of milliseconds, with
billions of ads traded every day. RTB has rocketed in popularity as advertisers have sought to bypass the
‘black box’ of the Ad Networks, which have historically occupied a profitable niche in the value chain by
arbitraging between buyer and seller in an inefficient market. Figure 2 illustrates the perceived value
leakage historically due to the number of intermediaries between buyer and seller in the market.
Initial development of RTB
technology through growth of Ad
Exchanges
Development of initial DSPs to
serve advertisers (e.g. [X+1], Turn)
2000-2006 2007-2010 2011-2013 Soon
Early Tech Buy-side Growth Supply-side Growth Mainstream Adoption
Proliferation of DSPs as advertisers
look to take advantage of
technological advances
“Publisher’s Dilemma” limits the
availability of premium inventory
SSPs emerging but RTB focused
on non-premium inventory
Mass-market liquidity starting to be
provided by SSPs
Premium publishers adopt RTB
and programmatic sell-side
techniques as they seek to
preserve and optimise yields
Initial growth in Direct
Programmatic sales channels
Growth of new channels as mobile
and video formats standardise
First IPOs (e.g. Rocket Fuel,
Criteo)
RTB starts to ramp to mass-market
adoption and multi-channel in
Europe as well as US
Industry consolidation as multiple
ad-tech platforms scale and late
entrants to the market acquire
capabilities
IPOs and exits for major DSPs,
SSPs and tech providers
Non-RTB ad networks and ad-tech
intermediaries suffer from pricing
pressure and lack of growth
5 GP Bullhound LLP
F I G U R E 2 – V A L U E L E A K A G E I N T H E D I S P L A Y A D V E R T I S I N G MA R K E T
Source: IAB (2010)
Despite the disintermediation of some of the Ad Networks by RTB platforms forcing them to rethink their
business models, the landscape remains bewilderingly complex with many intermediaries remaining
between publishers and advertisers. Although there is more transparency in the system, many participants
are still acting like Ad Networks and arbitraging between buyer and seller. We only see this as sustainable
where real competitive advantage has been created and a clear ROI for advertiser and/or publisher is
being demonstrated.
Figure 3 shows a basic summary of the RTB ecosystem and examples of some of the key players with the
flow of advertising dollars running from left to right.
F I G U R E 3 – T H E RTB E C O S Y S T E M , I L L U S T R A T E D W I T H S E L E C T E D P L A Y E R S
Source: GP Bullhound
$5.00
$1.80
$0.50
$2.00 $0.25 $0.35 $0.10
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Advertiser Agency Ad Network DataProvider
Ad Exchange Ad serving /Rich Media
Publisher
SSPs
Ad Exchanges
Ad Networks
DSPsTrading Desks
Data Partners Retargeting Optimisation Tools
AD
VE
RT
ISE
RS
6 GP Bullhound LLP
The ‘Death of the Madmen’?
So will RTB cause the ‘Death of the Madmen’? Well it’s clear these developments are driving greater
efficiency in the system at the expense of human-based interaction. Advertisers are increasingly relying on
independent specialists (e.g. Infectious Media, YD), agency trading desks (e.g. Xaxis, Accuen) or even
buying in their own talent to run programmatic buying strategies. There will always be a need for strategic
thinking in the direct sales force but as the ecosystem becomes increasingly connected we anticipate that
the majority of global online display advertising will eventually be traded programmatically with more than
50% via RTB.
We’re anticipating a step-change in the industry as more and more devices are connected to the mobile
Internet and IP Connected TVs and outdoor displays deliver customised ad formats at the right time, to the
right person in the right location. Mobile and video RTB are exploding as more inventory is pushed towards
Ad Exchanges and increasing amounts of premium inventory are traded programmatically. We’re not quite
there yet but the era of data-led marketing is dawning. Don Draper take note. The marketing geeks will
inherit the earth.
7 GP Bullhound LLP
TECHNOLOGY AND APPLICATIONS
How does RTB work?
The market for RTB is facilitated by a series of transactions which take place in fractions of a second
between the time you click on a link to a website and when the page loads onscreen. Online users
generate data about their browsing history and preferences which can be recorded using cookies and
shared with third parties. This data can be used in isolation or combined with additional data (whether
owned or bought) to determine whether an advertiser wants to target that user with an ad and how much
they want to pay to do so. Where impressions are made available via an Ad Exchange, advertisers can
place bids on these impressions based on specific criteria including not only cost, but, age, location,
gender and so on. The highest bidder for an impression gets the placement so the quality and accuracy of
data is key to ensuring the right price is paid.
It’s all about the data
RTB enables marketers to apply algorithmic buying strategies in their purchasing decisions. Rather than
accessing an audience en-masse via a publisher or network using large bulk ordering and broad targeting
parameters, RTB technologies allow a buyer to pick and choose impressions as they come in. A key
benefit of this is the ability to learn, optimise and change a campaign instantly through a programmatic
buying strategy. A large portion of RTB spend is based around such strategies using proprietary first party
data alongside data acquired from third parties or picked up from cookies.
Cookie monsters
Cookie data is intrinsically important to the RTB process. By using cookie IDs advertisers can find out if
that user has recently been on the publisher’s site, how often and where they have visited. The cookie
data can be combined with other information about the user from third party data sources (e.g. Experian,
Callcredit) as well as with their own first party customer data allowing for highly targeted programmatic
trading strategies. Advertisers can also match this with cookie data generated from recent campaigns so
that, for example, they have an indication of whether that user has clicked on a particular advert in the
past. As a result, Data Management Platforms (or DMPs) have emerged to help advertisers merge and
manage data in large volumes in order to make better buying decisions. Publishers are also increasingly
using third party data providers and DMPs to better understand the value of their inventory.
Not all data is created equal
Views diverge, but arguably the most valuable data to advertisers currently is their own first party customer
data. For example, when targeting an audience with a particular campaign incorporating first party
customer data will ensure you’re not targeting individuals that are already customers with offers that they
already have and that existing customers can be targetted with offers that are relevant on past behaviour
or buying patterns.
Cookie data declines rapidly in value, often in the space of a couple of days, as it becomes obsolete as
soon as users refresh their browser history. Proprietary customer data is more valuable as it has a much
longer effective shelf life than cookie data, which is based on media inventory that is burned through
relatively quickly. There is then a raft of third party data available, some of which can be very valuable, but
one issue is that the real value of much of this data is often not transparent until it has been applied at
scale, tested and learned from.
8 GP Bullhound LLP
Demand Side Platforms
DSPs allow advertisers to use data to target their desired audience more effectively using algorithims to
optimise buying strategies and bid on the most relevant impressions, at the right time, in scale and across
multiple devices, formats and properties. DSPs interface with inventory sources like Ad Exchanges to
provide advertisers with the ability to run programmatic bid strategies.
There are three key characteristics of a DSP that determine its value to advertisers:
(i) Usability – all about the functionality and ease of use of the software user interface for the
advertiser or agency;
(ii) Reach – the extent and breadth of acess to media sources (whether desktop, mobile or video); and
(iii) Data – integration with data providers and applications that can assist with programmatic buying
strategies.
We see DSPs as broadly split between two types: the first is a one-size-fits-all interface that is all about the
scale and breadth of both media and data integrations. The other is a specialist DSP offering a customised
interface with deep first party data integration for its clients. The former approach requires scale to
succeed and is exemplified by large players such as Turn, MediaMath, and AppNexus that operate a
‘platform approach’ and are increasingly looking to offer an end-to-end solution across the stack. The
specialist DSP approach involves building bespoke buying platforms to satisfy individual client or industry
segment needs with a more significant managed service layer on top, and has been successfully
championed by European players such as Infectious Media in the UK and YD in the Netherlands. The
rationale is that not only does this allow valuable first party data to be fully utilised but the third party data
integrations and tools provided can focus on specific data sets relevant for optimisation in certain
industries (e.g. online travel). While arguably less scalable, this model has the benefit of significant
integration and ‘stickiness’ with its clients.
The implication for the ‘platform approach’ is that DSPs that don’t achieve scale or offer technology across
the stack will struggle to succeed due to increasing competition and the commoditisation of the technology
over time. The DSP arena is becoming a relatively crowded space and this report lists more than eighteen
significant players that are already operating in Europe (see Figure 15). The fragmented European market
will ensure smaller localised platforms with local media sources and data integrations will be able to
compete with the larger US entrants on local ground.
Figure 4 illustrates the dominance of the larger DSPs in the US market with the top three commanding
50%+ of the market. It also indicates how quickly things can change with a significant fluctuation in market
share over the course of just two quarters.
9 GP Bullhound LLP
F I G U R E 4 - DSP M A R K E T S H A R E B Y S P E N D (US)
Source: Casale Media Index (2013)
Agency Trading Desks
The first agency trading desks emerged as Ad Exchanges became common place, providing access to
inventory in greater scale and with greater transparency. The trading desks have reduced the inefficiencies
in the complex and costly task of media planning and buying, by pooling consumer and media data at
scale and using sophisticated analytics to execute more ‘informed’ trades.
The major global agencies (e.g. WPP, Publicis, Omnicom, Dentsu/Aegis, Interpublic) have all developed
agency trading desks (Xaxis, Vivaki, Accuen, Amnet, Cadreon) to aggregate their RTB activities. Earlier
this year, Maurice Levy, CEO at Publicis, highlighted the importance of economies of scale in media
buying as a strong rationale for the proposed Publicis/Omnicom merger. If the ‘Publicom’ merger
completes, the combined entity could represent up to 40% of digital media volumes (according to RECMA)
which could provide a meaningful competitive advantage. However, some industry participants think that
there is a potential conflict of interest as the global agencies act simultaneously as both buyers and sellers.
Since the trading desks earn a margin on CPMs, whilst the media agencies earn volume-based rebates,
this has also led to concerns in some quarters over the pricing dynamic. Trading desks claim that such
issues are more perception than reality.
Another interesting trend is that some very large advertisers have started to set up their own trading desks
(e.g. P&G, Unilever) and are now competing with the agency trading desks for talent to build their own in-
house RTB capabilities. The advantages for these ‘super advertisers’ are that they can keep their
proprietary data confidential, reduce costs (which for large media campaigns can be significant) and take
ownership of the media data produced via each campaign. While most advertisers will not want to invest in
an in-house capability in a market moving so rapidly, the desire for retention and protection of proprietary
data is a factor that could play into the hands of the independent trading desks and specialist DSPs with
real expertise in data-driven buying. This could in turn provide a counterpoint to the power and scale of the
big agency trading desks.
DSP 135%
DSP 213%DSP 3
12%
DSP 411%
DSP 57%
DSP 66%
DSP 74%
DSP 84%
DSP 94%
DSP 101%
Other3%
Q1 2013Q1 2013
DSP 121%
DSP 217%
DSP 313%
DSP 412%
DSP 57%
DSP 67%
DSP 76%
DSP 85%
DSP 94%
DSP 103%
Other6%
Q2 2013Q2 2013
Top 3 DSPs = 60% of market
Top 3 DSPs = 51% of market
10 GP Bullhound LLP
While a number of larger US-based players are focusing on providing technology at an industrial scale
there is likely to be real value created by specialist RTB service providers aiming to get the most out of the
available technology for their clients. We expect to see strong growth for tech-enabled service providers
that focus on customised data integrations and analytics to differentiate from one-size-fits-all tech
providers.
The ‘Publisher’s Dilemma’
In contrast to the push from a fully data-enabled demand side keen to utilise the power of RTB, many
publishers have initially been reluctant to release their inventory into the market for fear of declining CPMs.
While publishers have been quick to use RTB to improve the yield on their tier 2/3 inventory, their concern
in relation to tier one inventory has primarily been around erosion of CPMs and, particularly for premium
publishers, brand safety from undesired advertisers buying inventory on their site.
Arguably, premium publishers have historically benefited from a less liquid and transparent market that
allowed them to bundle and sell large chunks of their inventory at premium prices. One of the risks of
impression-level buying is that buyers will ‘cherry-pick’ the best inventory and leave some audience as
remnant that was hitherto sold as premium. As a result large swathes of inventory have been witheld from
these markets, decreasing liquidity from some key media sources. This is now starting to change, thanks
in part to the development of SSPs, Private Exchanges and Direct Programmatic Sales.
Sell Side Platforms
SSPs first emerged to help to improve the ability of publisher’s to categorise, segment and sell their ad
inventory via Ad Exchanges and maximise CPMs. SSPs provide software that analyses and categorises
the publishers properties to better understand audience data and actively manage and optimise the yield
on their ad inventory in an automated (or programmatic) way, just as DSPs do for advertiser buying
strategies.
The key battleground today is over the source and analysis of data with ownership of rich audience data
providing a significant advantage for publishers. Advertisers are willing to pay a premium for transparency
and rich data as illustrated by Figure 5 which shows that inventory sold with cookie and third party data
can command a premium of up to twice that sold without. This bodes well for data-rich sellers (e.g.
Facebook) who control access to, and have a high degree of understanding of, their audiences.
F I G U R E 5 – P R E M I U M P A I D F O R T R A N S P A R E N C Y
Source: Cookie State (2013), cited in Casale Media Index (2013)
100
78
51
Cookie & 3rd Party Data Cookie & No 3rd Party Data No Cookie
Winning bid price index
11 GP Bullhound LLP
Through algorithmic analysis of audience data, SSPs help publishers determine which channel their
inventory should be sold through, whether it be actively through direct sales, via a private exchange or
RTB exchange or passively through an Ad Network in order to optimise the yield of the portfolio (see
Figure 6).
F I G U R E 6 – M A R K E T P L A C E S I N T H E RTB E C O S Y S T E M
Source: PubMatic (2011)
Private Exchanges
Private Exchanges have played a key role in the publisher adoption of RTB as they enable publishers to
sell their inventory programmatically but with a greater element of control over the marketplace. Private
Exchanges (or Private Marketplaces) allow publishers to make a portion of their inventory available to a
restricted set of advertisers and to set controls on pricing (e.g. pricing floors). By controlling these
parameters and participants in the market, publishers can better protect pricing of their premium inventory
and optimise yields.
As a result, the lines between direct and indirect sales are beginning to blur. The distinction is becoming
less about premium inventory versus remnant inventory, and more about active selling versus passive
selling.
IDC estimates that 1% of global premium ad revenue was traded in Private Exchanges in 2013. Figure 7
illustrates the slow initial growth of ‘Direct’ RTB sales in comparison to the more mature ‘Indirect’ sales
market, with rapid growth expected over the next four years. The majority of growth in the market over the
next four years will come from ‘Direct’ sales executed programmatically as the market matures and
becomes more sophisticated.
SPONSORSHIP SALES
PRIVATE EXCHANGES
REAL-TIME BIDDING
REMNANT AD NETWORK
PA
SS
IVE
SA
LE
S Au
ctio
n
Pro
gra
mm
atic
AC
TIV
E S
AL
ES
Ab
ove
th
e A
uctio
n
12 GP Bullhound LLP
F I G U R E 7 – ‘ I N D I R E C T ’ V S ‘D I R E C T ’ RTB -B A S E D O N L I N E D I S P L A Y S A L E S I N F O U R K E Y
G E O G R A P H I E S ($ M )
Source: IDC (2013), Excludes Mobile and Video RTB and includes US, UK, Germany and France
Figure 8 illustrates the emerging publisher models as they progress towards RTB adoption across all of
their inventory. In phases four and five we see increasingly smart, multi-channel sales techniques as
publishers increasingly adopt RTB technology and more multi-channel active management of their
inventory.
F I G U R E 8 – P U B L I S H E R A D O P T I O N C Y C L E
Source: Forrester 2011
- - 39 95368
1,085
2,625
5,305
2010 2011 2012 2013 2014 2015 2016 2017
UK France Germany US
144%
148%
157%
176%
2013-17 CAGR 174%
'Direct' Display Sales
390
1,259
2,258
3,338
4,128
4,777
5,317
5,790
2010 2011 2012 2013 2014 2015 2016 2017
15%
13%
18%
15%
2013-17 CAGR 15%
'Indirect' Display Sales
Publisher RTB Maturation Spectrum
Phase 1: No active publisher participation
Phase 2: Publisher incorporates multiple RTB vendors into monetisation partner suite
Phase 3: Publisher consolidates vendor strategy and executes private deals and/or sales with arbitrary price floors
Phase 4: Publisher actively manages smart, variable price floors informed by data; managed by strategic team within publisher organisation
Phase 5: Publisher looks holistically at all sales channels and optimises yield across both direct and indirect/RTB sales channels
Current models
Emerging models
13 GP Bullhound LLP
A DYNAMIC GLOBAL MARKET
Global spend on online display advertising via RTB was estimated by IDC to be $2.7bn in 2012 and is now
expected to grow at a 50% CAGR between 2012 and 2017. Global growth has been significant in the last
three years averaging 159% per annum 2010-12. This is significantly above growth rates forecast in the
global online display advertising market. This growth is principally being driven by three key areas:
Growth of online display – Online display is forecast to grow at a CAGR of 19% 2012-171 and
RTB will ride this wave.
Online Mobile and Video – Mobile and Video RTB ad spend are both forecast to grow at around
or in excess of 100% p.a. over the next few years across the US, UK, France and Germany, as
smartphone penetration rates continue to rise and 4G network speeds aid rapid video streaming.
This will drive further RTB-traded inventory.
Publisher adoption – Increasing adoption of programmatic selling by publishers via SSPs and
Private Exchanges (see Figure 8).
F I G U R E 9 – G L O B A L RTB D I S P L A Y A D V E R T I S I N G MA R K E T ($ M )
Source: IDC (2013), Includes Rich Media, Mobile and Video display
1 IDC (2013)
404 1,382
2,697
4,488
6,726
9,865
14,498
20,820
2010 2011 2012 2013 2014 2015 2016 2017
14 GP Bullhound LLP
F I G U R E 10 – G L O B A L RTB D I S P L A Y A D V E R T I S I N G MA R K E T I N C O N T E X T ($ M )
Source: IDC (2013), GP Bullhound (2013)
Figure 10 illustrates the global opportunity in online display, with a global market of $34bn in 2012 and
$80bn by 2017. IDC forecast the $2.7bn of RTB-based ad spend in 2012 will increase to $21bn by 2017.
In 2010, industry estimates2 suggested that around 65% of online ad spend was being retained by
intermediaries between advertiser and publisher. If we assume the same percentage of RTB ad spend is
retained as net revenue by RTB platforms and service providers then the market share for these players
was around $1.8bn in 2012. If we estimate that the percentage retained by intermediaries will then
decrease to 50% in 2017, as greater efficiencies are generated between publisher and advertiser, then
consequently the market size for intermediaries would be approximately $10bn globally in 2017.
2 IAB (2010)
Global RTB Display Ad Spend
$80bn
$34bn
2012 2017
$1.8bn
$10bn$2.7bn
Global Share of RTB Display Ad Spend taken by intermediaries
Global Online Display Ad Spend
$21bn
15 GP Bullhound LLP
Key geographies in focus
F I G U R E 11 – US RTB D I S P L A Y P E N E T R A T I O N F O R E C A S T S
Source: eMarketer (Aug-13), IDC (2013)
Forecast penetration rates can vary significantly between industry experts. IDC and eMarketer both
estimate penetration of RTB as a percentage of overall display in the US to be 19% in 2013 but forecast
29% and 41% respectively in 2017. Magna Global recently forecast an RTB display penetraton rate of
52% in 2017 for the US3, reflecting increasingly bullish views on the potential of RTB. If the current trend in
publisher adoption continues we can foresee the UK reaching similar levels (i.e. 40-50%) over the next five
years.
F I G U R E 12 – RTB D I S P L A Y A D V E R T I S I N G B Y G E O G R A P H Y ($ B N )
Source: IDC (2013) Includes Online Display, Mobile and Video
As the largest market worldwide, the US has the highest penetration rate for RTB, as a percentage of
online display advertising. Higher growth rates in Western Europe and the Rest of World illustrated in
Figure 12 indicate these markets are starting to catch up with the US. The UK is considered the leading
geography for RTB in Europe, with the remainder of Europe also experiencing rapid growth rates and
rising penetration.
3 Magna Global (2013)
13%
19%
22%
25%
28% 29%
14%
19% 23%
28%
34%
41%
2012 2013 2014 2015 2016 2017
eMarketer IDC
0.4 1.4
2.7 4.5
6.7
9.9
14.5
20.8
2010 2011 2012 2013 2014 2015 2016 2017
ROW Western Europe US
58%
54%
49%
2012-17 CAGR 51%
16 GP Bullhound LLP
F I G U R E 13 – E U R O P E A N RT B A D S P E N D A N D P E N E T R A T I O N
Source: IDC (2013)
With growth at over three times that of the overall online display market, European RTB penetration is
forecast to increase dramatically over the next four years as the fragmented media landscape provides a
long tail of inventory ripe for monetisation. The fragmented and disparate market of publishers and
advertisers in Europe makes for substantial potential cost savings from consolidation onto public
exchanges. RTB opens up the opportunity to buy inventory across multiple geographies and languages in
real-time and for advertisers to target pan-European consumers based on relevance.
1%
3%
7%
11%
13%
17%
22%
27%
2%
5%
12%
15%
17%
22%
27%
1%
6%
8%
14%
17%
20%
25%
30%
2010 2011 2012 2013 2014 2015 2016 2017
France Germany UK
0.0 0.2
0.4
0.7
1.1
1.5
2.3
3.3
2010 2011 2012 2013 2014 2015 2016 2017
UK Germany France Rest of Western Europe
46%
72%
50%
2012-17 CAGR 54%
49%
17 GP Bullhound LLP
We see significant potential in Western Europe for further growth in RTB as publishers adopt RTB-enabled
trading technologies from the US and drive more inventory into the system. We can see a potential ‘upside
case’ for penetration rates in the UK, France and Germany where they start to catch up with those in the
US and reach 30-40% in the next few years, as premium ‘direct’ sales take off and mobile and video RTB
start to gain traction. This will likely be lead by the UK, which has already demonstrated its propensity to
adopt advertising technologies and catch up and even overtake the US in digital penetration rates. The UK
currently has the highest proportion of digital ad spend as a percentage of total ad spend in Europe4 (40%
in 2012) and this is expected to reach 51% by 2017. France and Germany are expected to increase to
25% and 27% respectively over the same period (currently 18% and 20%) whilst digital ad spend as a
share of total ad spend in the US is expected to increase from 25% to 31%. If we assume the RTB
penetration rates under the ‘upside case’ as set out in Figure 14 below, then this would result in a Western
European market totalling $4bn by 2017.
F I G U R E 14 – E S T I M A T E S O F T H E S I Z E O F T H E E U R O P E A N RTB MA R K E T ($ B N )
IDC Forecasts GPB Upside Case
2017 Penetration (%) 2017 Penetration (%)
UK 1.0 29% 1.4 40%
France 0.4 27% 0.5 32%
Germany 0.6 27% 0.7 32%
Rest of Western Europe 1.2 - 1.4 -
Western Europe 3.3 - 4.0 -
Source: IDC (2013) GP Bullhound.
The UK is the largest market outside of the US and currently represents 38% of the Western European
RTB. IDC forecast the UK RTB market to be worth $1bn by 2017 and 29% of UK display ad spend. The
UK is well-suited to rapid adoption of RTB which is evident in both the number of players setting up in the
UK (Figure 15) and market penetration second only to the US globally. Several large US players have
been attracted by the size of the UK digital market and economy and additionally we are seeing the
emergence of some innnovative UK-born players such as Infectious Media, Switch and Grapeshot.
RTB penetration in Germany has lagged behind much of Western Europe with only 7% in 2012, primarily
due to a legacy of independent direct sales houses. These sales houses have consolidated the number of
buying points for advertisers making it is easier for publishers to sell direct to advertisers than in
otherEuropean markets. As a result there is less of an incentive for publishers to sell off inventory via RTB.
The German market is reaching an inflection point for RTB penetration with RTB-based spending
anticipated to hit $157m in 2013 (an 82% increase on 2012) and a penetration rate of 12%.
France is also growing rapidly with RTB penetration up to 11% in 2013 from 7% in 20125. Local publishers
are staking their claim in the space with the collaborative joint ventures La Place Media which launched in
May 2013 and Audience Square in 2012. The joint ventures provide sell-side services, acting as a form of
4 eMarketer (2013)
5 IDC (2013)
18 GP Bullhound LLP
sales house plugging into the major exchanges and trading platforms. This could be considered a step in
the right direction with regards to RTB adoption in France
F I G U R E 15 – E U R O P E A N RT B MA P – S E L E C T E D P L A Y E R S
Source: GP Bullhound
Figure 15 reflects the substantial presence of both home-grown and US RTB players in Europe with a
concentration in the larger economies, particularly the attractive UK market.
We see Europe as a hotbed of activity in RTB and, although somewhat behind the US in terms of market
size and adoption, there is potential for rapid expansion of RTB. With large-scale technology infrastructure
for RTB already imported from the US, we expect to see European success stories come from the
application of innovative additional technologies, predictive data analytics and specialised service
providers that generate further optimisation and efficiencies for both buy and sell-side.
Legend
Exchange
DSP
SSP
Trading Desk
Other
Video specialist
Mobile specialist
Norway
3 Opera Media Works
Spain
8 MediaSmart
Denmark
7 Adform
1
1
1
1
1
1
Netherlands
4 161 Media
5 FlxOne
2 Improve Digital
2 YD
UK
1 AdJug (Dentsu)
1 GDM Digital
1 Glow Digital Media
1 Grapeshot
2 Infectious Media
2 Iponweb
3 myThings
3 StrikeAd
1 Switch
4 VisualDNA
Germany
5 Adnologies
2 AdScale
3 RevenueMax
6 Sociomantic
France
6 AdXperience
4 Audience Square
7 Criteo
5 La Place Media
Sweden
4 Admeta
8 Delta Projects
US
9 [x+1]
3 Accordant Media
4 Accuen
5 Adap.tv
5 Amnet
10 AppNexus
9 AudienceScience
6 Brightroll
6 Cadreon
11 DataXu
7 Digilant
7 Doubleclick
8 FBX
9 Liverail
12 MediaMath
6 MoPub (Twitter)
10 OpenX
7 PubMatic
11 PulsePoint
12 Right Media (Yahoo)
13 Rocket Fuel
8 Rubicon Project
13 SpotXchange
10 The Trade Desk
14 Triggit
15 TubeMogul
16 TURN
8 Varick
17 Videology
9 Vivaki
10 Xaxis
1
2
2
3
3
3
3
3
3
3
3
3 14
4
5
2
2
2
2
2
2
5
52
36
6
6
6
64
5
7
7
7
7
7
3
4
8
8
8
8
7
7
7
77
77
7
8
4
4
4
4
4
4
4
4
4
45
5
5
5
5
5
5
10
10
10
9
9
6
6
6
6
6
11
11
11
11
11
11
7
779
12
10
7
7
7
11
12
12
13
13
13
13
13
13
13
8
8
813
10
10
15
16
1616
16
16
17
17
17
9
9
9
9
9
910
Other
18 Brandscreen
15 Casale MEDIA
9 Admeld
14 Doubleclick
11 Invite Media
19 GP Bullhound LLP
NEW MARKETS AND TECHNOLOGIES
Mobile: real-time location-based advertising
Mobile RTB is rapidly gaining traction in the US and is forecast to explode into Western Europe over the
next few years. Smartphone penetration rates in the G5 economies are forecast to top 50%6 this year,
driving an increasing amount of inventory on mobile devices and interest from advertisers in running
mobile campaigns as a result. Smartphones and tablets are generating vast amounts of data about
consumer behaviour which can be used to target an audience, and investment in new tracking
technologies is enabling media campaigns to be executed across multiple devices and targeted in real-
time.
F I G U R E 16 – US M O B I L E RTB S A L E S ( $ M )
Source: IDC (2013)
It is estimated that location-based targetting through mobile is up to 2.3x more effective than the industry
average click through rate (CTR)7. Mobile RTB is a huge opportunity, which is evident in forecast growth
rates over the next few years of over 100% p.a. in the US and nearly 200% p.a. in Western Europe (from a
smaller base), illustrated in Figure 16 and Figure 17 respectively.
F I G U R E 17 – M O B I L E RTB S A L E S I N T H R E E K E Y E U R O P E A N G E O G R A P H I E S ( $ M )
Source: IDC (2013)
The market for mobile inventory is distinctly different from desktop. Cookies aren’t enabled in 90% of
mobile devices so tracking users has been a problem for the industry. A number of tracking technologies
6 Comscore (2013) 7 Verve Mobile (2013)
0.1
0.4
1.1
1.9
3.0
2013 2014 2015 2016 2017
8
62
150
344
549
2013 2014 2015 2016 2017
Germany France UK
191%
191%
170%
2013-17 CAGR 184%
20 GP Bullhound LLP
have now emerged to provide a solution using device fingerprinting and in-app analytics (e.g. Drawbridge,
HasOffers, Ad-X (acquired by Criteo) and Somo’s mobile ad-tech suite).
Most publishers have traditionally lacked scale in mobile inventory so have historically delegated sales to a
mobile Ad Network to aggregate inventory and sell it on their behalf. This is almost a carbon copy of the
online display market in the last decade where there wasn't enough individual reach from publishers to
justify a marketplace. However publishers are experiencing rapidly growing traffic on their properties,
particularly from in-app browsing which is now driving a rapid move into mobile RTB.
The few companies that have the scale and cross-platform user base to be able to track across devices
using login details (e.g. Facebook, Twitter and Apple) are also at a competitive advantage as their vast
collection of rich audience data across channels drives higher CPMs, and therefore mobile ad revenues.
Facebook and Google top the US display advertising revenue charts and the FB-X (Facebook’s Ad
Exchange) is becoming a de facto destination for sophisticated mobile RTB campaigns. The secret sauce
is Facebook’s rich pool of social audience data combined with a mobile first understanding of audience
monetisation which is evident in its explosive growth over just five quarters where mobile has gone from
14% to almost half of Facebook’s ad revenue illustrated in Figure 18.
F I G U R E 18 – F A C E B O O K MO B I L E A D R E V E N U E ($ M )
Source: Company filings (2013), includes all mobile ad revenue
With circa 40% of tablet and smartphone users using their devices when watching television, the potential
reach of the ‘second screen’ is vast. In the US During the last Super Bowl over 100 million people were
estimated to have watched the half-time ads, with tens of millions checking their mobile devices providing
a significant audience for targetted campaigns. We believe the convergence of mobile, locational and
cross-device technologies with the digitisation of the TV and outdoor markets is one of the most exciting
trends in the market
152
306
375
656
882
14%
23%
30%
41%
49%
Q3 2012 Q4 2012 Q1-2013 Q2-2013 Q3-2013
Facebook mobile advertising revenue Mobile % of total ad revenue
21 GP Bullhound LLP
Video advertising: the big prize for RTB
The online video display advertising market is also growing rapidly. Consumers are spending an
increasing amount of time watching online video content, particularly on mobile devices. As a result,
viewer impressions are growing rapidly along with the amount of advertising dollars spent on video ad
inventory. Global online video advertising is expected to reach $3.6bn in 20138, growing at 26% p.a. from
2011 to 20178. Online video represents a big prize for RTB because it has the potential to unlock large
brand advertising budgets into RTB. This is primarily because brands are attracted to rich media formats
which provide a more engaging advertising experience. Video RTB will also be driven by advances in ad
serving technology and investment in the video RTB infrastructure.
F I G U R E 19 – US V I D E O RTB G R O W T H ($ B N )
Source: Forrester (2013)
RTB video advertising spend is greatest in the US, however Europe is expected to catch up, growing at
127% p.a. across UK/France/Germany in the next few years compared with the US at 88%.
F I G U R E 20 – V I D E O RTB A D V E R T I S I N G R E V E N U E F O R S O M E K E Y E U R O P E A N G E O G R A P H I E S ( $ M )
Source: IDC (2013)
Advertisers are increasingly using programmatic trading to buy online video advertising but there is a
reluctance for premium publishers to ‘play ball’. Buyers are seeking video advertising at real-time prices
but, as with standard display formats, publishers are reluctant to allow buyers to ‘cherry-pick’ their
inventory. As a result the market is bifurcating with a split into bid-based public marketplaces for non-
premium inventory and private market places for premium inventory.
8 Forrester (2013)
0.1
0.4
0.8
1.3
1.7
2013 2014 2015 2016 2017
6
30
58
111
152
2013 2014 2015 2016 2017
Germany France UK
138%
131%
109%
2013-17 CAGR 127%
22 GP Bullhound LLP
F I G U R E 21 – B U Y E R M O D E L S F O R B U Y I N G V I D E O A D V E R T I S I N G V I A RTB
Source: Forrester (2013)
Video adtech players (e.g. Liverail) have designed the infrastructure to publish inventory at scale and in
real-time. As a result of these advances, advertisers are now able to reach a targeted, brand-receptive
audience across a wide range of devices. This, combined with social media activity, means RTB can be
used to target an engaged audience in real-time when they are interacting with brands.
Global TV advertising net revenue is forecast to hit $219bn by 20189, and with such high budgets at stake,
IP connected television could drive the potentially game-changing phenomenon of RTB TV advertising in
due course. Why should you be served the same advert in your living room at half time during Manchester
United vs Arsenal, as your neighbour in his?
9 Digital TV Research (2013)
Bid-based Public Market places
• Prevalent among mid-to-long-tail inventory
• Premium publishers testing RTB bids in
competition with traditionally sold inventory
• Pricing being determined dynamically via
bidding
• Optimised based on audience, engagement,
and direct-response metrics
Direct Deals and Private Market places
• Growing among premium publishers as a
way to automate buys and maximise sell-
through
• Pricing being determined through a
combination of pre-negotiated rates and
dynamic bidding
• Optimised based on cost audience reach and
brand survey metrics
23 GP Bullhound LLP
CAPITAL INVESTMENT AND CONSOLIDATION
Investment into RTB
With such a large market migrating to and being enabled by RTB technologies, it is no surprise to see
significant capital inflows into the sector. We estimate over $1.3bn has been invested in RTB over the last
ten years of which more than half has been invested in the last two years alone as the RTB market has
started to gain critical mass and 2013 has seen the IPOs of Criteo and Rocket Fuel (raising a combined
$367m).
F I G U R E 22 – S E L E C T E D F U N D R A I S I N G I N T H E RTB S P A C E ($ M )
Source: Capital IQ, Crunchbase, GP Bullhound Note: Includes Criteo and Rocket Fuel IPOs
Venture and growth capital
DSPs have consistently attracted investment since 2008 with AppNexus ($75m), DataXu ($27m) and
OpenX ($25m) ensuring 2013 is set to be a record year for VC funding. In contrast, SSPs have only begun
to receive really substantial funding in more recent years, with 2012 a record year including a $45m raise
by Pubmatic.
$8
$104
$60 $47
$141
$87
$145
$75
$163
$538
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Other Exchange SSP DSP
24 GP Bullhound LLP
F I G U R E 23 –S E L E C T E D P R I V A T E P L A C E M E N T S I N T H E R TB S P A C E F R O M T H E L A S T T H R E E Y E A R S
($ M )
Source: Capital IQ, Crunchbase, GP Bullhound
Only three SSPs have raised substantial (>$10m) capital in total compared with seven DSPs, which may
explain why there is such competition on the demand side as mentioned earlier in this report. Independent
Trading Desks have also gained traction with funders in recent years as investors see value in sectors
outside the now hyper-competitive DSP space, closer to the advertiser data.
Europe in focus
Fundraising in the sector has been dominated by the US players, with significant sums raised to date. It is
notable that over the last four years Europe has seen increased activity relative to the US in terms of
volume of companies funded, up to 35% from 26% of fundraisings by volume (see Figure 24). This is due
to a drop in the number of transactions in the US coinciding with an increase in European volumes,
indicating a maturing of the funding market in the US, whilst Europe has been woken up by the arrival of
well-funded US tech platforms driving wider spread RTB penetration. The average size of fundraising in
the US has been two-and-a-half times that of Europe over the same period.
F I G U R E 24 – S E L E C T E D P R I V A T E P L A C E M E N T S B Y G E O G R A P H Y
$7m Average Raise in Europe 2010-13YTD
$16m Average raise in US 2010-13YTD
Source: GP Bullhound, Capital IQ, Crunchbase
$228 56%
$45 11%
$57 14%
$77 19%
DSP SSP Exchange Other
7% 11%
78% 71%
15% 18%
2004-2009 2010-2013YTD
AMOUNT RAISED
7% 9%
67% 56%
26% 35%
2004-2009 2010-2013YTD
VOLUME OF RAISES
2004-2009 2010-2013YTDEurope US Other
25 GP Bullhound LLP
Recent IPOs and potential candidates for the future
On top of substantial private capital inflows, there have been a number of IPOs in the Ad-Tech space in
recent months. The recent IPOs of Criteo and Rocket Fuel have been well received as their scale,
proprietary technology capabilities, and positioning in the disruptive and rapidly growing RTB market are
seen as key competitive differentiators. Combined, they have raised $367m of capital in 2013 taking the
total capital raised in 2013 to $538m in public and private markets combined.
F I G U R E 25 - R E C E N T A D -T E C H I P O S
Source: Capital IQ, Crunchbase, GP Bullhound
The warming of the IPO markets and recent success of Criteo and Rocket Fuel will have been watched
with a keen eye by a spate of other adtech companies in the RTB ecosystem, who may be potential IPO
candidates.
F I G U R E 26 – P O T E N T I A L A D -T E C H I P O C A N D I D A T E S
Source: Capital IQ, Crunchbase, GP Bullhound
Adams Street, Bessemer, Elaia,
Fourvest, IDInvest, Index, SAP,
SoftBank , YJ
Private: $60m
IPO: $251m
Leading global retargeting platform
Floated Oct-13 with an offer price of $31 per share, above its
upwardly revised $27-29 range and providing a market cap of
approximately $1.7bn
Share price rose 40% from its debut and was approximately $36 a
share as at 18-Nov-13 and 16% up on the IPO
Northgate, Summit, Cross Creek,
Nokia Growth Fund, Labrador
Private: $77m
IPO: $116m
Leading Demand Side Platform
Floated Sep-13 at a share price of $29 valuing the company at
close to $1bn
Share price doubled in its first week of trading and as at 18-Nov-
13 was $54.20 approximately 90% up on the IPO
Recently Announce / Completed IPOs
Company Investors DescriptionRaised
First Round, Khosla, Kodiak,
Venrock, Microsoft, Tribeca, TCV$140m
Real time ad exchange/deliver system
Rumoured to have been approached by AOL and Microsoft in
Aug-10
Atlas Venture, Flybridge, Menlo
Ventures, Thomvest Ventures$45m
Real-time campaign management platform across mobile and
video channels
Acquired MexAd in Sep-12
Clearstone, IDG, Mayfield,
Standford, Berkeley, Peacock,
Fox
$50m
Sell side platform
Acquired Others Online, SiteScout, Fox Audience Network and
MobSmith
Trident, Scale, Adams Street,
True ventures, Comerca Bank,
KPG
$46m Video ad network and demand side services
Accel, Samsung, Cox Media,
iNovia, Greycroft, Comerica Bank$56m
Audience targeting and data/ media management
Acquired Tumri, OggiFinogi, and Personifi
DPJ, Helion, Nexus, August, SVB $63m
Supply side platform helping publishers automated selling of
inventory
Acquired MobiPrimo and ReviNet
European Founders, QED,
Safeguard, SVB, SJF, Catalyst
Investors
$24m Large scale demand side platform
Acquired TapMe
Norwest, Shastra, Trident, Focus $61m Large scale demand side platform
IPO Candidates
Candidate Investors DescriptionRaised
26 GP Bullhound LLP
M&A and consolidation in the sector
We see an oncoming wave of consolidation in the market which will help to drive a series of transactions
over the next few years. With substantial growth in RTB ad spend still to come, a fragmented European
market and the need for differentiated technologies and capabilities, we believe the market is ripe for
consolidation, which will be a further key driver of scale and efficiency in the market.
F I G U R E 27 – S E L E C T E D M& A V O L U M E I N T H E RTB S P A C E
Source: Capital IQ, Crunchbase, GP Bullhound
M&A activity has picked up considerably in the space in the last three years as strategically important
capabilities are acquired (e.g. Twitter’s recent acquisition of MoPub), or as a consolidation play with
players such as Google, AOL and Yahoo looking to own the entire value chain.
F I G U R E 28 - G O O G L E & Y A H O O S H O W I N G A H I G H L E V E L O F A C T I V I T Y
Source: Capital IQ, GP Bullhound
Yahoo and Google have been two of the most active acquirors in the sector in recent years and have been
making a play to own large parts of the value chain given the strategic importance of advertising revenue
to both.
1
7
9 9
11
2009 2010 2011 2012 2013
DSP SSP Exchange Other
27 GP Bullhound LLP
Where next for M&A?
M&A activity has been fairly muted in Europe compared with the US. We see M&A activity picking up with
a number of potential drivers of consolidation:
Scale – as the technology commoditises, additional M&A will be required to leverage efficiencies
from owning the full ‘stack’ of technologies and client data at scale.
Customers – M&A could be driven by the acquisition of customer concentrations and proprietary
technologies in individual verticals (e.g. ecommerce, online travel).
Multi-channel – as the market matures and new high growth areas emerge (e.g. direct, mobile
and video) larger acquirors may look to add to their cross-channel capabilities.
Internationalisation – a key driver to penetrate new markets especially where the barriers to
entry are high or scale is difficult to achieve organically.
F I G U R E 29 – P O T E N T I A L S T R A T E G I C A C Q U I R O R S I N T H E A D T E C H S P A C E
Source: GP Bullhound – Example companies are illustrative only
Potential future acquirors include the following:
Internet Giants – those heavily reliant on ad revenues will look to ensure they have the core
competencies and technology stack in-house. The importance of RTB in mobile advertising was
evident in Twitter’s recent acquisition of Mo-Pub (Sep-13). Google has made a big play on the
space with its acquisitions of Doubleclick, Invite Media and Admeld ensuring it has coverage
across the technology stack. We expect more from the likes of AOL, Microsoft, and Yahoo.
Global Agencies and Networks – we expect the global agencies will look to ensure they are
well positioned in the space and we see them as key potential acquirors. We also expect to see
Ad Networks acquiring technology and skills as the pace of change in the sector continues
unabated, exemplified by Millenial media’s acquisition of Jumptap (Aug-13).
Software providers – M&A activity has been high in the CRM software space with Adobe’s
acquisition of Neolane (Jun-13) and Salesforce’s acquisition of ExactTarget (Jun-13). These
software providers may now look to integrate these platforms with RTB capabilities. The benefits
to such organisations could be big, with a fully integrated RTB-enabled display advertising and
CRM platform, providing a single dashboard for multiple advertising channels.
Consolidation of existing RTB players – in a market with competing technology platforms we
expect to see significant consolidation as business models evolve to compete. Early examples of
this include Criteo’s acquisition of Ad-X (Jul-13), Rubicon Project’s acquisition of mobile
capabilities in MobSmith (Mar-12), and DataXu’s acquisiton of Mexad (Dec-11). We expect to see
mergers and acquisitions of complementary technology capabilities and local customers driving
internationalisation. Finally we see data players (e.g. Experian) as a further key category of
acquirors as they seek to leverage their data assets and analytics capabilities across the
landscape.
Internet GiantsCRM Software
Providers
Global Agencies
& Ad NetworksExisting RTB Players
28 GP Bullhound LLP
APPENDICES
SELECTED COMPANY PROFILES – D E M A N D S I D E
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2010
Investors: Privately Held
N/A
50
Independent media trading desk
Display, video, mobile, social, email, in-
stream audio and out-of-home channels
Co-founded by digital agency execs Art
Muldoon and Matt Greitzer
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2007
Investors: First Round, Khosla, Kodiak,
Venrock, Microsoft, Tribeca, Crossover
$141m
N/A
Platform for buying real-time online
advertising
Offers a proprietary gateway to premier
ad exchanges and ad inventory
aggregators
Completed $75m series D in May-13
Rev: Raised:
Employees:
N/A
HQ: Boston Founded: 2009
Investors: Atlas Venture, Flybridge,
Menlo Ventures, Thomvest Ventures
$45.8m
N/A
Real-time campaign management
platform for digital advertising campaigns
across online, mobile and video channels
Combines automated media buying,
optimization and analytics
Raised $27m in Series C funding in Feb-
13
Acquired MexAd in Sep-12
Rev: Raised:
Employees:
€30m
HQ: Copenhagen Founded: 2002
Investors: Via Venture Partners
N/A
200
Multiscreen DSP incorporating display
ad serving, rich media, video, mobile,
dynamic ads, personalised targeting,
and real-time bidding through
integrations with major inventory
players
Rev: Raised:
Employees:
N/A
HQ: Paris Founded: 2009
Investors: Privately Held
N/A
N/A
Mobile media trading desk
In-house bidding and optimisation
system
95% of its activity outside of France
Rev:
EBITDA:
Raised:
Employees:
N/A
N/A
HQ: Sweden Founded: 2002
Investors: ND
N/A
55
Efficiency-focused online advertising
solutions with real-time planning, buying,
optimisation and reporting.
DSP and DMP technology solutions and
a managed buyside service
29 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – D E M A N D S I D E
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
$50m
HQ: New York Founded: 2007
Investors: European Founders, QED,
Safeguard, SVB, SJF, Catalyst Investors
$24.4m
125
Offers cross-exchange advertising
management services and technology
Media buying service provides the
technology, strategy, services and
insights to trade effectively across the
leading display advertising exchanges
and supply sources on behalf of
agencies
Acquired Tap.Me in Dec-12
Rev: Raised: N/A
Employees:
N/A
HQ: London Founded: 2007
Investors: -
50
Delivers customised real-time advertising
campaigns for leading advertisers
Combines analytics with proprietary
targeting and optimisation tools to power
real-time display advertising
Customised DSP to maximise benefit of
first party advertiser data
Marketing intelligence and media trading
company
Produces market intelligence that
identifies the strengths and weaknesses
of each individual platform in market
Benchmarks across both price and
performance metrics
Rev: Raised:
Employees:
N/A
HQ: London Founded: 2007
Investors: Privately Held
N/A
N/A
Rev:
EBITDA:
Raised:
Employees:
N/A
N/A
HQ: London Founded: 2010
Investors: Private individuals
N/A
70
Next generation performance trading
specialist
Empowers agency partners with
predictive analytics in big data for online
display inventory trading
Rev:
EBITDA:
Raised:
Employees:
N/A
N/A
HQ: Netherlands Founded: 2012
Investors: Greenhouse Group
$900k
N/A
Empowers real time advertising
specialists with analytics and
optimization technology to buy and sell
ads more effectively
Integrated with Doubleclick and
AppNexus
Rev:
EBITDA:
Raised:
Employees:
N/A
N/A
HQ: Germany Founded: 2012
Investors: ZANOX.de
N/A
N/A
RTB buyside platform
Allows advertisers to make impression-
based marketing decisions
Provides flexible and customised
solutions for intelligent and highly-
personalized digital marketing strategies
30 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – S U P P L Y S I D E
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: Berlin Founded: 2009
Investors: -
N/A
N/A
Develops RTB solutions for advertisers
Platform that enables users to bid for
individual user impressions in real-time
auctions
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2010
Investors: eValue, DFJ Esprit, Karlin
Ventures, SoftTech
$9.1m
55
Leading mobile DSP providing a single
console through which users can run
global mobile RTB campaigns
Three Series A funding rounds since
Jun-12 for a total raised of $9.1m
Rev: Raised:
Employees:
$159.6m
HQ: Memphis Founded: 2007
Investors: Mohr (35%), Nokia (8%),
Nothgate (6%), Public (28%)
$77m*
465
Data-focused programmatic media
buying platform
Went public on Sep-13 and sold 4 million
shares at a price of $29, raising a total of
$116 million at a valuation of nearly $1
billion
* Pre-IPO
Rev: Raised:
Employees:
N/A
HQ: Amsterdam Founded: 2008
Investors: TOHARU Ventures, Partech
Ventures, Active Venture Partners
$5.9m
60
DSP providing bespoke software
allowing advertisers to optimise ads
based on real-time insights into
audience reach, acquisition price,
revenue and conversion attribution
Rev: Raised:
Employees:
N/A
HQ: Redwood City Founded: 2004
Investors: Greenspring Assoc, Norwest,
Trident, Shasta, Focus Ventures
$57m
N/A
Integrated, end-to-end platforms for data
and media management
Offers media expertise, client services
and a geographically distributed
infrastructure
Raised $20m in Jan-12 in a round led by
Greenspring Associates
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 1999
Investors: Echelon, Hudson, Blue Chip,
WS, WallerSutton, Advanced, Intel
$39m
60
Data-driven multi-channel platform
offering based on its Predictive
Optimization Engine
Raised $17m of debt from Ares capital
in Apr-13
Acquired UberTags in Feb-13 and WDA
in Jul-13
31 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – S U P P L Y S I D E
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: Redwood City Founded: 2006
Investors: DPJ, Helion, Nexus, August,
SVB
$63m
380
Helps publishers automate the process
of evaluating and selling their advertising
inventory
Real-time media selling platform for
managing revenue and brand strategy
Raised $45m in Series D funding Jun-12
Rev: Raised:
Employees:
N/A
HQ: Los Angeles Founded: 1998
Investors: Clearstone, IDG, Mayfield,
Standford, Berkeley, Peacock, Fox
$51m
300+
The largest independent supply-side
RTB trading platform for digital
advertising used by more than 500 of the
world’s premium publishers to transact
with over 100,000 advertising brands
globally
Acquisitions include SiteScout, Fox
Audience Network and MobSmith
Rev: Raised:
Employees:
N/A
HQ: Amsterdam Founded: 2008
Investors: PubliGroupe (85%)
N/A
60
Provides a real-time advertising platform
to the owners of digital media
Enables media owners to build, grow,
manage, control, and optimize their own
environment driving revenues
PubliGroupe acquired 85% stake in Oct-
12
Rev: Raised:
Employees:
N/A
HQ: Paris Founded: 2012
Investors: Amaury Medias, FigaroMedias,
Lagardère Publicité and TF1 Publicité
N/A
N/A
SSP/ Private Adexchange founded by
four French media leaders
120+ premium publishers’ partnerships
for a specific audience target
Partnership with Microsoft Advertising
since Nov-12
Launched a mobile Adexchange in May-
13
Operates as a mobile monetization
platform, providing ad serving,
optimization, and new ad experiences
for mobile applications
Had over 250 active publishers in July
2011
Closed $18.5m series B round in Sep-
12
Acquired by Twitter Sep-13 for $350m
Rev: Raised:
Employees:
N/A
HQ: San Francisco Founded: 2010
Investors: Twitter (100%)
$18.5m
45
Rev: Raised:
Employees:
N/A
HQ: Southampton Founded: 2008
Investors: Privately Held
N/A
60
Digital advertising solutions for
publishers
Single platform adserver, RTB and data
driven optimisation
2nd fastest growing UK tech company,
(Sunday Times Hiscox TechTrack 100)
Innovation in partnership with
Southampton University's Web Science
Faculty
32 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – A D E X C H A N G E S
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2005
Investors: Google (100%)
N/A
1,541
Provides digital ad serving technology
and services
Services display, video, search and
affiliate marketing
Acquired by Google in Apr-07 for $3bn
Rev: Raised:
Employees:
N/A
HQ: Menlo Founded: 2012
Investors:-
N/A
N/A
Allows marketers to use their own real-
time consumer insight data to reach an
audience on Facebook
Advertisers and agencies use cookie-
based targeting through DSPs to reach
their audience on Facebook in real time
Rev: Raised:
Employees:
N/A
HQ: Gothenburg Founded: 2002
Investors: Chalmers Innovation AB, KL
Ventures, Layline Partners
$5m
40
Private Ad Exchange offering online
advertising platform solutions for
advertisers and publishers in Europe
Provides a yield optimization platform for
publishers and a networks Web based
campaign management platform for
agencies and advertisers
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2003
Investors: Yahoo! (100%)
$45m
134
Digital advertising exchange platform
Auction marketplace for buying and
selling online inventory
Connects digital advertising companies
and provides an opportunity for these
participants to reach their audiences on
their own terms
Acquired by Yahoo! In Apr-07 for $850m
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2011
Investors: DFJ, Gold Hill, Investor
Growth Capital, New Atlantic, Updata
$3m
150
Ad exchange and SSP providing a
spectrum of services including data
management, media mix optimisation,
content distribution, and contextual ad
exchange capabilities
Formed in 2011, from a merger between
Contextweb and Datran Media
Rev: Raised:
Employees:
N/A
HQ: Pasadena Founded: 1998
Investors: First, Index, Mangrove,
Mitsui, Accel, DAG, SAP, AOL, Cyber
$50m
305
Independent provider of digital
advertising technology that enables
businesses to manage and maximize
their ad revenue
Comprehensive revenue generation
platform by combining ad serving with a
unique ad exchange
Closed $25m Series E funding in May-11
33 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – C R O S S P L A T F O R M T E C H N O L O G Y / T A R G E T I N G
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: London Founded: 1992
Investors: IQ Capital Partners LLP
$2.45m
N/A
Contextual advertising tool for display
media
Uses probability algorithms to optimise
the placement of content and
advertisements online
Helps publishers to create virtual
channels specific to each advertiser’s
contextual needs.
Rev: Raised:
Employees:
N/A
HQ: Hamburg Founded: 2006
Investors: ViewPoint Capital Partners
N/A
N/A
Provides a full stack of RTB-enabled
technologies
Functions and services include DSP,
DMP, Ad Serving, Data Exchange, SSP,
dynamic creative and dynamic video that
fully integrate into the first end-to-end
data-driven advertising platform
Rev: Raised:
Employees:
N/A
HQ: London Founded: 2000
Investors: Privately Held
N/A
140
RTB infrastructure and technology
provider
Provides real time data analysis for
targeting consumers through custom
engineered, intelligent, scalable, media
trading platforms
Powers over 40 online ad platforms
across the world
Rev: Raised:
Employees:
N/A
HQ: London Founded: 2003
Investors: Iris, Accel, t-ventures, Carmel
$37m
17
Performance based display advertising
solutions for online advertisers in Europe
and internationally
Enables merchants to stay in touch with
prospects after they leave the site, and
delivers an optimized message for each
user
Winner of the 2011 E-consultancy
Innovation in Affiliate Marketing Award
Rev: Raised:
Employees:
N/A
HQ: Bellevue Founded: 2003
Investors: 19
$100m
135
Offers online behavioural targeting
platforms and marketplace for the digital
media industry
Targets relevant audience for advertisers
through its data-driven platform
Rev: Raised:
Employees:
N/A
HQ: Paris Founded: 2005
Investors: VCs (34%), Individuals (16%),
Corporations (11%), Public (39%)
$60m*
700
Provides pay-per-click performance
display advertising solutions in France
and internationally
Platform leverages large data sets to
target relevant users in real time
Went Public on Nasdaq in Oct-13
* Pre-IPO
34 GP Bullhound LLP
SELECTED COMPANY PROFILES ( C O N T . ) – V I D E O A D E X C H A N G E S / A D S E R V E R S
Source: GP Bullhound, eMarketer, Crunchbase, Capital IQ
Rev: Raised:
Employees:
N/A
HQ: New York Founded: 2006
Investors: AOL (100%)
$48.5m
205
Online video advertising platform
Provides buyers and sellers with
automated tools to plan, buy and
measure across linear TV and online
video
Acquired by AOL for $405m in Aug-13
Rev: Raised:
Employees:
N/A
HQ: San Francisco Founded: 2006
Investors: Trident, Scale, Adams Street,
True ventures, Comerca Bank, KPG
$46m
70
Online video advertising platform
Enables advertisers to execute digital
video campaigns across a pool of web
and mobile video inventory
100 million monthly unique viewers
Raised $30m in Series C Funding in
Nov-11
Rev: Raised: €2.88m
Employees:
N/A
HQ: Austin Founded: 2009
Investors: Videology (100%)
Mobile marketing platform
Provides media optimization services to
publishers and advertising networks for
enabling targeting on mobile devices
Was acquired by Videology in Jun-12
Rev: Raised: $8.5m
Employees: 110
N/A
HQ: San Francisco Founded: 2008
Investors: Cleartide Limited, Pond
Ventures
Online video advertising
The company’s platform provides
solutions that range from RTB and on-
boarding custom data to campaign
management, analytics, and
streamlined client billing
Raised $4m in Series C funding in Jun-
13
Rev: Raised: $53.2m
Employees:
N/A
HQ: Emeryville Founded: 2006
Investors: NSV, Bee, Knight Bridge,
Trinity, Foundation, Northgate, SingTel
N/A
Online video ad buying platform
Advertisers only pay when someone
chooses to watch their video and they
see which sites their ads ran on, how
their ads performed and who watched
them
Raised $10m in Series C Funding in
Jun-13
Rev: Raised: $134m
Employees: 180
N/A
HQ: Baltimore Founded: 2007
Investors: Boulder, New Enterprise,
Valhalla, Comcast, Catalyst, Pinnacle
Online video advertising platform
Predictive targeting product that
improves advertisers' ability to reach
their intended audience
Acquired ColliderMedia Jun-12 and
LucidMedia Oct-12
Raised $60m in May-13
35 GP Bullhound LLP
SELECTED FUNDRAIS ING TRANSACTIONS
Source: GP Bullhound, Capital IQ, Company press releases, ND = Not Disclosed
Date Target Target HQ
Funds
Raised($m) Investors
Sep-13 Action Exchange US 3 SoftBank Capital; AOL Ventures; Lerer Ventures; Verizon Ventures; Golden Venture Partners, Inc.
Sep-13 StrikeAD UK 7 DJF Esprit, Siemer Ventures, SoftTech VC
Sep-13 YD Netherlands 6 Partech International; Active Venture Partners, SGECR, S.A
May-13 Triggit US 6 Foundry Group, North Atlantic Capital, Spark Capital
May-13 TubeMogul US 8 Singtel
Apr-13 AudienceScience US 9 ND
Feb-13 DataXu US 27 Atlas Venture, Flybridge Capital Partners, Infocomm Inestments Pte, Menlo Ventures, Thomvest Ventures
Jan-13 AppNexus US 75 TCV, Venrock, Tribeca
Jan-13 Glow Digital Media UK 1 Avonmore Developments Ltd , Project A Ventures GmbH & Co. KG
Jan-13 OpenX Canada 25 Accel, Cyber Communications, Index, Mitsui & Co, Presidio STX, Samsung Venture, SAP Ventures
Jan-13 PulsePoint US 3 DFJ, Investor Growth Capital, Vantagepoint, Updata
Dec-12 TubeMogul US 29 Northgate, Trinity, Foundation
Nov-12 Triggit US 7 Foundry Group, Spark Capital
Oct-12 Brandscreen Singapore 11 Macquarie Capital Grup, SingTel Ventures, Southern Cross Venture Partners
Sep-12 Criteo France 40 Adams Street Partners, Bessemer Venture Partners, Index Ventures, SAP Ventures, SoftBank Capital, YJ Capital
Jun-12 PubMatic US 45 August Capital, Draper Fisher Jurvetson, Helion Venture Partners, Nexus Venture Partners, SVB Silicon Valley Bank
Mar-12 MyThings UK 15 Accel Management, Carmel Ventures, GP Bullhound, Iris Capital, T-Venture Holding, Viola Private Equity
Feb-12 XPLUSONE US 5 Hudson Ventures
Jan-12 Visual DNA UK 10 ND
Dec-11 RevenueMax Germany ND High-Tech Gruenderfonds Management GmbH
May-11 OpenX Canada 20 Accel, AOL Ventures, DAG Ventures, Index, Mitsui & Co, Global Investment, Presidio STX, SAP Ventures
Apr-11 PulsePoint US 9 ND
Apr-11 Improve Digital Netherlands ND Van den Ende & Deitmers
Mar-11 MediaMath US 14 Safeguard Scientifics, Inc
Jan-11 StrikeAD UK 1 eValue AG
Jan-11 XPLUSONE US 10 Advanced Technology Ventures, Blue Chip Venture Company, Hudson Ventures, Intel Capital
Jan-11 Turn US 20 Focus Ventures, Greenspring Associates, Norwest Venture Partners, Shasta Ventures, Trident Capital
Dec-10 Brandscreen Singapore 3 Adventure Capital Pty
Dec-10 SpotXchange US 12 H.I.G. Growth Partners LLC
Dec-10 Admeta Sweden ND Chalmers, KL Ventures, Layline Partners
Nov-10 MyThings UK 6 Accel Management , Carmel Ventures, GP Bullhound, T-Venture Holding, Dotcorp
Nov-10 Admeta Sweden ND Chalmers, KL Ventures, Layline Partners
Nov-10 The Rubicon Project US 18 Clearstone Venture Partners, IDG Ventures, Mayfield Fund, News Corporation, Peacock Equity Fund
Oct-10 AppNexus US 50 First Round Capital, Kodiak Venture Partners, Microsoft Corporation, Venrock
Sep-10 TubeMogul US 10 Foundation Capital, Knight's Bride Capital Partners, Trinity Ventures
Jun-10 Triggit US 4 Foundry Group, Spark Capital
Jun-10 adscale Germany 6 TIME Equity Partners
May-10 AudienceScience US 8 ND
May-10 Criteo France 6 Bessemer Venture Partners
Apr-10 PubMatic US 8 Draper Fisher Jurvetson, Helion Venture Partners, Nexus Venture Partners
Mar-10 The Trade Desk US 3 Founder Collective, IA Ventures, Wider Wake Networks
Mar-10 DataXu US 11 Atlas Venture, Flybridge Capital Partners, Menlo Ventures
Jan-10 Adform Denmark ND Via Venture Partners A/S, Via Venture Partners Fund I
Dec-09 Grapeshot UK 2 IQ Capital Partners
Nov-09 AppNexus US 5 Kodiak, Venrock, First Round Capital
Oct-09 AudienceScience US 15 Integral Capital Partners, Mayfield Fund, MeriTech Capital Partners, Mohr Davidow Ventures
Sep-09 The Rubicon Project US 9 Clearstone Venture Partners, Mayfield Fund, Peacock Equity Fund
Aug-09 MediaMath US 13 SVB, European founders fund, QED, Safeguard Scientifics
May-09 OpenX Canada 10 Accel Management, DAG Ventures, First Round Capital, Index Ventures, Mangrove Capital Partners
Apr-09 DataXu US 8 Atlas Venture, Flybridge Capital Partners, Menlo Ventures
Apr-09 The Rubicon Project US 5 Clearstone Venture Partners, IDG Ventures, Mayfield Fund
Mar-09 TubeMogul US 3 Trinity Ventures
Mar-09 PubMatic US 4 Draper Fisher Jurvetson, Helion Venture Partners, Nexus Venture Partners
Feb-09 Visual DNA UK 14 Northzone, Atomico, Horizons Ventures
Sep-08 AppNexus US 8 First Round Capital, Khosla Ventures, Kodiak, Venrock
Sep-08 MyThings UK 8 Accel Management, Carmel Ventures, GP Bullhound, Dotcorp
Aug-08 Turn US 15 Focus Ventures, Norwest Venture Partners, Shasta Ventures, Trident Capital
May-08 XPLUSONE US 16 Advanced Technology Ventures, Blue Chip Venture Company, Hudson Ventures
Mar-08 AdJug UK 7 Balderton Capital, Tomorrow Focus AG (DB:TFA)
Mar-08 Turn US 15 Norwest Venture Partners, Shasta Ventures, Trident Capital
Mar-08 Unica US 18 Balderton Capital, Tomorrow Focus AG (DB:TFA)
Feb-08 YD Netherlands ND Toharu & Angel
Feb-08 SpotXchange US ND Angel Investors
Feb-08 TubeMogul US 2 Knight's Bride Capital Partners
Jan-08 The Rubicon Project US 15 Clearstone Venture Partners, IDG Ventures, Mayfield Fund, Stanford University, University of California Berkeley
Jan-08 adscale Germany ND European Founders Fund Magagement GmbH, Holtzbrinck Ventures GmbH
Jan-08 Triggit US 1 Bay Partners
Jan-08 OpenX Canada 16 Accel Management Co, First Round Capital, Index Ventures, Mangrove Capital, O'Reilly Alpha Tech Ventures
Jan-08 Criteo France 10 AGF Private Equity, Elaia Partners, Index Ventures
Jan-08 PubMatic US 7 Draper Fisher Jurvetson, Helion Venture Partners, Nexus Venture Partners
Jan-08 Admeta Sweden 5 Sjaette AP-fonden
Dec-07 AppNexus US 3 First Round Capital, Khosla Ventures, Various Angels
Oct-07 TubeMogul US ND NetService Ventures
Oct-07 The Rubicon Project US 4 Clearstone Venture Partners
Jun-07 OpenX Canada 5 First Round Capital, Index Ventures, Mangrove Capital Partners, O'Reilly SlphaTech Ventures
May-07 Visual DNA UK 5 Northzone
Mar-07 MediaMind Technologies US 30 BRM Group
Oct-06 Right Media US 45 Redpoint Ventures, Yahoo! Inc. (NasdaqGS:YHOO)
Apr-06 MyThings UK 8 Accel Management, Carmel Ventures
Mar-06 Criteo France 7 AGF Private Equity, Elaia Partners
Nov-05 AudienceScience US 24 Integral Capital, Mayfield Fund, MeriTech , Mohr Davidow, Second Avenue
Jun-05 Right Media US 12 Redpoint Ventures
Apr-05 PulsePoint US 60 VantagePoint Venture Partners (nka:VantagPoint Capital Partners)
Jan-05 Turn US 8 Norwest Venture Partners, Trident Capital
Aug-04 XPLUSONE US 8 Blue Chip Venture Company, Echelon Ventures, Hudson Ventures, WS Capital
Dec-03 MediaMind Technologies US 8 Insight Venture Partners
Mar-02 AudienceScience US 15 American Express, Angel Investors, Cedar Grove , Deutsche Bank, Gulf International, Kellett, Mayfield, Mohr
Jan-02 XPLUSONE US 1 ND
Apr-01 XPLUSONE US 3 Echelon Ventures, Hudson Ventures
Sep-00 AudienceScience US 20 Cedar Grove Investments LLC, Kellett Investment Corporation, Mayfield Fund, Second Avenue Partners
Apr-00 AudienceScience US 5 Angel Investors, Cedar Grove, Deutsche Bank, Investment Arm, Kellett, Madrona Venture, Second Avenue
Jun-97 DoubleClick US 40 ABS Capital Partners, Bain Capital Private Equity, Canaan Partners, Greylock Partners, Venrock, Peck & Greer Venture
36 GP Bullhound LLP
SELECTED M&A TRANSACTIONS
Source: GP Bullhound, Capital IQ, Company press releases, ND = Not Disclosed
Date Target
Target
Geography Acquirer EV ($m) Target Description
Nov-13 Tedemis US Criteo 20 Email re-targeting
Nov-13 Sitescout US Centrico 40 RTB demand side platform
Sep-13 Mopub US Tw itter 350 Supply side platform for mobile adds
Sep-13 Gradient X US Amobee (Singtel) ND RTB platform for mobile ads
Aug-13 Jumptap US Millenial Media 209 Mobile DSP
Aug-13 Adap.tv US AOL ND Full RTB technology stack for video
Jul-13 AdMovate US Yahoo ND Mobile ad targeting platform
Jul-13 Ad X Tracking UK Criteo ND Mobile ad tracking platform
Jul-13 Matiro France 1000mercis 3 Media trading platform for online advertisements
Jul-13 IgnitionOne, Inc. US ABS Capital Partners, Persimmon Capital Partners ND Digital marketing technology
Jan-13 Akamai Decisions Solutions US MediaMath ND Advertising decisions platform
Jan-13 Mobvalue France Prisma Media ND Mobile advertising netw ork and platforms
Dec-12 adscale Germany Stroer ND Platform for buying real-time online advertising
Dec-12 TapMe US MediaMath ND Mobile and video in-game ad platform
Oct-12 JumpTime US OpenX Technologies ND Content optimisation technology
Oct-12 Improve Digital Netherlands PubliGroupe ND Supply Side Platform
Jun-12 Collective intellect US Oracle ND Automated real-time mining & analytics softw are for social CRM
Apr-12 Peer39 US DG MediaMind 16 Data provider to improve relevance and effectiveness of online display advertising
Mar-12 MobSmith US the Rubicon Project 10 Location-based mobile advertising platform
Mar-12 Amobee US Singtel 321 Mobile advertising solutions for operators
Jan-12 Mexad Germany DataXu ND Demand Side Platform
Nov-11 Interclick US Yahoo! 273 Data management and analytics platform
Oct-11 Smartclip Germany Adconion 168 Online video advertising netw ork
Aug-11 AdJug UK IgnitionOne / Dentsu ND Platform for buying real-time online advertising
Aug-11 Dotomi US ValueClick 295 Interactive digital marketing
Jun-11 Mediamind US DG Fastchannel 414 Digital advertising campaign mgt infrastructure
Jun-11 Admeld US Google 400 Digital advertising platforms
May-11 ReviNet US PubMatic ND Netw ork optimization services for online publishers
Apr-11 Adbuyer.com US MediaBank ND Platform for buying real-time online advertising
Apr-11 Adenyo US Motricity (nka Voltari) 140 Digital and mobile marketing
Feb-11 Oggif inogi US Collective Media ND Real time video ad platform
Feb-11 Transpera US Tremor Media ND Mobile video technology
Nov-10 ScanScout US Tremor Video 65 Streaming ad server
Nov-10 FAN US the Rubicon Project ND Online marketplace for digital advertising
Oct-10 MobClix US Velti 54 Mobile Ad Exchange
Jun-10 Invite Media US Doubleclick 40 Buying platform for display media
May-10 SiteScout US the Rubicon Project ND Cloud-based publisher protection platform
Mar-10 adscale Germany Various investors ND Exchange platform for buying real-time online advertising
Jan-10 AdMarvel US Opera Softw are 23 Mobile advertising platform services
Jan-10 Quattro US Apple 275 Mobile advertising netw ork
Aug-07 Chintano US Datran Media (nka PulsePoint) 20 Ad server
May-07 Right Media US Yahoo 850 Display advertising exchange
Apr-07 DoubleClick US Google 3,110 Platform for buying real-time online advertising
37 GP Bullhound LLP
DISCLAIMER
No information set out or referred to in this research report shall form the basis of any contract. The issue of this research report shall not be deemed to be any form of binding offer or commitment on the part of GP Bullhound LLP. This research report is provided for use by the intended recipient for information purposes only. It is prepared on the basis that the recipients are sophisticated investors with a high degree of financial sophistication and knowledge. This research report and any of its information is not intended for use by private or retail investors in the UK or any other jurisdiction.
You, as the recipient of this research report, acknowledge and agree that no person has nor is held out as having any authority to give any statement, warranty, representation, or undertaking on behalf of GP Bullhound LLP in connection with the contents of this research report. Although the information contained in this research report has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by GP Bullhound LLP. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the accuracy, completeness or reasonableness of any projections, targets, estimates or forecasts contained in this research report or in such other written or oral information that may be provided by GP Bullhound LLP. The information in this research report may be subject to change at any time without notice. GP Bullhound LLP is under no obligation to provide you with any such updated information. All liability is expressly excluded to the fullest extent permitted by law. Without prejudice to the generality of the foregoing, no party shall have any claim for innocent or negligent misrepresentation based upon any statement in this research report or any representation made in relation thereto. Liability (if it would otherwise but for this paragraph have arisen) for death or personal injury caused by the negligence (as defined in Section 1 of the Unfair Contracts Terms Act 1977) of the GP Bullhound LLP, or any of their respective affiliates, agents or employees, is not hereby excluded nor is damage caused by their fraud or fraudulent misrepresentation.
This research report should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall they, or the fact of the distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. The information contained in this research report has no regard for the specific investment objectives, financial situation or needs of any specific entity and is not a personal recommendation to anyone. Persons reading this research report should make their own investment decisions based upon their own financial objectives and financial resources and, if in any doubt, should seek advice from an investment advisor. Past performance of securities is not necessarily a guide to future performance and the value of securities may fall as well as rise. In particular, investments in the technology sector can involve a high degree of risk and investors may not get back the full amount invested.
The information contained in this research report is based on materials and sources that are believed to be reliable; however, they have not been independently verified and are not guaranteed as being accurate. The information contained in this research report is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by GP Bullhound LLP, its members, directors, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information in this research report nor should it be relied upon as
such. This research report may contain forward-looking statements, which involve risks and uncertainties. Forward-looking information is provided for illustrative purposes only and is not intended to serve as, and must not be relied upon as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions.
Any and all opinions expressed are current opinions as of the date appearing on the documents included in this research report. Any and all opinions expressed are subject to change without notice and GP Bullhound LLP is under no obligation to update the information contained in this research report.
The information contained in this research report should not be relied upon as being an independent or impartial view of the subject matter and for the purposes of the rules and guidance of the Financial Conduct Authority (“the FCA”) this research report is a marketing communication and a financial promotion. Accordingly, its contents have not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. The individuals who prepared the information contained in this research report may be involved in providing other financial services to the company or companies referenced in this research report or to other companies who might be said to be competitors of the company or companies referenced in this research report. As a result, both GP Bullhound LLP and the individual members, directors, officers and/or employees who prepared the information contained in this research report may have responsibilities that conflict with the interests of the persons who access this research report. GP Bullhound LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned in this research report and may provide financial services to the issuers of such investments.
The information contained in this research report or any copy of part thereof should not be accessed by a person in any jurisdictions where its access may be restricted by law and persons into whose possession the information in this research report comes should inform themselves about, and observe, any such restrictions. Access of the information contained in this research report in any such jurisdictions may constitute a violation of UK or US securities law, or the law of any such other jurisdictions. Neither the whole nor any part of the information contained in this research report may be duplicated in any form or by any means. Neither should the information contained in this research report, or any part thereof, be redistributed or disclosed to anyone without the prior consent of GP Bullhound LLP.
GP Bullhound LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in the information contained in this research report. Accordingly, information may be available to GP Bullhound LLP that is not reflected in this material and GP Bullhound LLP may have acted upon or used the information prior to or immediately following its publication. In addition, GP Bullhound LLP, the members, directors, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this research report and may from time-to-time add or dispose of such interests.
GP Bullhound LLP is a limited liability partnership registered in England and Wales, registered number OC352636, and is authorised and regulated by the Financial Conduct Authority. Any reference to a partner in relation to GP Bullhound LLP is to a member of GP Bullhound LLP or an employee with equivalent standing and qualifications. A list of the members of GP Bullhound LLP is available for inspection at its registered office, 52 Jermyn Street, London SW1Y 6LX.
In the last twelve months, GP Bullhound LLP is or has been engaged as an advisor to and received compensation from the following companies mentioned in this report: Visual DNA
For US Persons: This research report is distributed to U.S. persons by GP Bullhound Inc. A broker-dealer registered with the SEC and a
member of the FINRA. GP Bullhound Inc. is an affiliate of GP Bullhound LLP. This research report does not provide personalized advice or recommendations of any kind. All investments bear certain material risks that should be considered in consultation with an investor’s financial, legal and tax advisors. No employees of GP Bullhound Inc. were involved in writing this report. GP Bullhound Inc. engages in private placement and mergers and acquisitions advisory activities with clients and counterparties in the Technology and CleanTech sectors.
38 GP Bullhound LLP
London HQ 52 Jermyn Street London SW1Y 6LX Tel: +44 207 101 7560 Fax: +44 207 101 7561 Authorised and regulated by the FCA and the PRA
Berlin Oberwallstr. 20 10117 Berlin Tel: +49 30 610 80 600 Fax: +49 30 610 80 6029
San Francisco One Maritime Plaza Suite 1940 San Francisco CA 94111 Tel: +1(415) 986 0191 Fax: +1(415) 986 0180 Member of FINRA
Stockholm Birger Jarlsgatan 5 111 45 Stockholm Tel: +46 8 545 07 414 Fax: +46 8 545 07 401