The Next Big Idea:

VCs Weigh in on Their Big Bets

for the Future

The Next Big Idea

Moderator: Jeff Crowe, General Partner, Norwest Venture Partners (NVP)

Panel:

Mark Siegel, Managing Director, Menlo Ventures

Indy Guha, Senior Associate, BainCapital Ventures

Key Themes

Key themes we will be covering today:

1. Big Data

2. Social / Mobile

3. Personalization + Scale

The Next Big Idea: Big Data for Marketers

How machine learning is unlocking deep customer insights and revenue for next gen marketers

Indy Guha

We have Big Data. Now what?Data is the future… and marketers want more than ever

“By 2017, a CMO will spend more on IT than the CIO.” —Gartner Group

… but are unable to optimize our business around it

“Despite the large quantity of data that marketers may acquire, 42% said it was still too difficult to tie that data back to individual customers, and 45% said personalizing marketing communications—closely related to linking data to customers—was a major challenge.”

Answer: Cloud Marketing Solutions

Goal – Go beyond data. Deliver revenue and profitability.

DNA – Data mining, analytics and machine learning.

Improving product search and discoverability

Personalized user reengagement & retargeting

Personalized optimization of marketing & merchandising

Mobile app user acquisition platform

The Solution

Real-time, algorithmic natural search discoverability product

Relevant content gets discovered via natural search traffic revenue

Dynamic routing and optimization of landing pages

Increases the ratio of paid clicks to conversions

The Tech

Web Relevance Engine 1B+ web pages crawled.1B+ user interactions interpreted. 1K+ Hadoop jobs.All daily.

Intelligent Page Router with real-time, dynamic content creation

Results

80% more traffic

50% better ROI on advertising

Custom

ers

The Solution

Transactional retargeting - using machine learning to identify most valuable shoppers and serve highly personalized ads / coupons

Personalization includes:• Showing ads based on

user’s browse/buy history• Keeping inventory in sync -

products imported real time• Managing impression

frequency

The Tech

In Dec 2011: Handled 9.5B web requestsMore than 10K requests per second at peak traffic

Reached 23MM unique users

Received clicks from 9 out of every 100 users

Results

5%+ revenue growth / 10s of millions of $$

Personalized ads are an extension of the UX 10x better click through rates

Custom

ers

The Solution

Turnkey marketing platform for mobile app ecosystem without complexity of managing multiple sources:• Ad networks & exchanges• Incentivized download

networks• Email and SMS

The Tech

SEM-inspired algorithmic optimization across 3 dozen sources for paid downloads

Algorithm tuned over 140MM downloads and over 6.5B app opens

Results

100+ clients / 150+ apps / 140MM+ downloads

10X+ sales growth YoY

Custom

ers

The Solution

Personalized optimization of marketing (channel, promotion) & merchandising

Sample output (for each user)• Top X favorite brands • Price / offer sensitivity• Relevant merchandise• Optimal media touch points

The Tech

Taste Cube – aggregate transaction data, product attributes, reviews, web logs, etc. to drive deep modeling of customer behavior

Modeling on 3 dimensions• Product (attributes, feedback)• Price / value (sensitivity to promotions)• Time (seasonality, trends)

Evoke different ways to engage the user

The Next Big Idea:Monetizing Social and Mobile

Mark Siegel, Managing Director, Menlo VenturesMark@menlovc.com

@msiegel11

Social/Mobile are fastest growing Ad segments…

2011 U.S. Ad Spending vs. Consumer Time Spent by Media

Sources: VSS, Mary Meeker (KBCB), comScore, Alexa, Flurry Analytics

Ad Spend Per Media Time Spent per Media

29%

…but Conventional Advertising Doesn’t Work

Source: Microsoft Tag

Social Media Use Mobile Phone Use

Source: IBM Institute for Business Value analysis, CRM Study 2011

• Mobile Analytics

• Audience segmentation

• App promotion

• Targeted advertising with broad reach

• Look-alike targeting in display advertising

• Now applied to social graph

• Brand affinity with new customers

• Social Promotions

• Audience engagement

• Campaign management

• Analytics

Will TV Lose Share of Ad Revenue?

• 30-40% connected TV penetration in 2012

• Over-the-Top content delivery WILL happen

• A new licensing and advertising model

The Next Big Idea:Personalization + Scale

Jeff Crowe

General Partner

Norwest Venture Partners (NVP)jcrowe@nvp.com

Personalization + Scale

• The combination of personalization and scale together drives greater value for consumers and consequently more valuable companies

• As consumer scale grows, the personalization becomes more valuable, which in turn drives more scale

• This applies to e-commerce, digital couponing, online publishing, digital advertising

Online Publishing

Since launch, company more than 10 X‑ed average click through rate on the network (from about 0.6 percent to over six percent)

Currently serves more than 20 billion links to content each monththrough placement on premium content sites

Outbrain offers publishers the ability to deliver personalized content to readers on the fly and at scale in order to increase recirculation and generate more revenue

E-commerce

Enables crowd-sourced product conceptualization, design and commercialization that results in more popular consumer products to sell online and through retail

195k Global Community Members

1500+ Idea submissions per week

7,000: Number of retail doors Quirky products can be found in worldwide (Target, Bed Bath & Beyond, The Container Store)

70 Employees (up from 27 in April 2010)

Digital CouponingWhaleshark Media and its consumer site, RetailMeNot, drive increasingly personalized coupons and deals to consumers at scale.

Better results lead to better deals from merchants, which in turn leads to more traffic and increased scale.

Monthly visits (U.S.): 30 million

# Coupons: 500,000+

# Merchants: 100,000

GMV: $1.7 billion

Revenue (2011): $80 million

Online Advertising

Turn, utilizes massive scale and machine learning to target increasingly refined audience segmentation and personalized brand, video and mobile advertising

700 million uniques

500,000 decisions per second

30 billion transactions per day

1 petabyte of campaign performance data stored

1.5 trillion customer attributes managed