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