Clipperton's presentation for the ad tech mini-conference that took place in London on Oct 23, 2012. Trends in Online Advertising and Ad technologies

1. Ad Tech Event
London
October 23rd, 2012
15 Stratton Street
London W1J 8LQ, United Kingdom
10 rue du Mont Thabor
75001 Paris, France

2. Who IS
CLIPPERTON FINANCE ?

3. Who are We ?
Values TOMBSTONES
Multi-LOCAL Research

4. Who are We ?
Independence
Loyalty
Intuitu Personae
Selectiveness
TOMBSTONES
Multi-LOCAL Research

5. Who are We ?
Values TOMBSTONES
Multi-LOCAL Research

6. Who are We ?
$150 million
Values $10 million
Multi-LOCAL Research

7. Who are We ?
Values TOMBSTONES
Multi-LOCAL Research

8. Who are We ?
Values TOMBSTONES
Research

9. Who are We ?
Values TOMBSTONES
Multi-LOCAL Research

10. Thought Leadership
Research papers Transactions
Research paper on
E-COMMERCE EU E-Commerce Private Sales
eCommerce
Second hand fashion
Social Commerce (Groupe Casino)
Acquires
Private Placement Private Placement Buy-Side Buy-Side
Research paper on
SOCIAL GAMING
Online gaming
Social gaming Social Casual Social Mobile Secondary placement
Gaming Gaming Seller
Nicomvest
Private Placement Private Placement Sell-Side Sell-Side
Research paper on
AD-TECH Nov-09
sold to
Travel Affiliation
Ad Technologies
New TV sell-side Audio Video Ad
platform Server &
measurement
Private Placement Private Placement Private Placement Sell-Side

11. Why Focus on
AD TECH &
Online Advertising ?

12. Strong & Steady Usage Growth…
2005 2011 CAGR
2005-11
Internet
Users (worldwide) 0.9bn 2.1bn +15%
Access
POINTS (worldwide) 0.16 0.39 +16%
Time Spent
Online (US) 6h 13h +14%
Online
Buyers (EU) 18% 34% +11%

13. … Has Attracted an Increasing
Amount of Advertising Dollars Online
Online Advertising Revenue & Forecasts (2003-2014)
CAGR 2003-14
+25%
105
94
82
71
60
49 52
39
29
14 20
9
2003 2004 2005 2006 2007
2008 2009 2010 2011 2012
2013 2014
Source: Clipperton Finance analysis, JPMorgan, Zenithoptimedia

14. … Which in turn Led to Sustained Investments
(but subject to economic stress)
Private Placements in Digital Advertising Businesses
(number of $10m+ transactions)
65
62
58 56
51
45 Q4’12
62 Est.
34
52 57
51
20 39
31 35
19
1 6 6 5 3 5 3 3
2005 2006 2007 2008 2009 2010 2011 2012
N.. America Europe

15. … AND An ever more
COMPLEX ECOSYSTEM!

16. Yesterday’s Ad Tech Ecosystem
Advertisers Ad Networks
Publishers
Agencies
Publishers
Publishers

17. Today’s Ad Tech Ecosystem
Advertisers Ad Networks
Analytics
Publishers
Analytics
SSPs
Agencies
DSPs
Publishers
Ad Exchanges
Ad Servers
Analytics
DMP
Publishers

18. What Happens
NOW ?

19. What Trends are Driving the Market?
INNOVATION
 Innovative tools
 New formats
 New devices
CONVERGENCE
Convergence between
“Performance” & “Branding”,
Devices & Consumer “timeline”
AUTOMATION
Strong demand for automated
solutions that increase overall
market efficiency
CONSOLIDATION Ad tech space features active
consolidation mechanics

20. What Trends are Driving the Market?
INNOVATION
 Innovative tools
 New formats
 New devices
CONVERGENCE
Convergence between
“Performance” & “Branding”,
Devices & Consumer “timeline”
AUTOMATION
Strong demand for automated
solutions that increase overall
market efficiency
CONSOLIDATION Ad tech space features active
consolidation mechanics

21. New Tools Empower Advertisers
TARGETING & Customization
 Sophisticated targeting &
customization capabilities
 Create tailored & highly-
focused branding campaigns
Measurement & Analytics
 Need for cross-media strategies
 Branding campaigns lack adequate
measuring tools
 The typical indicators are suited for direct
marketing, less for branding

22. New Formats: Video running the Show
Display Advertising Market will be … a segment in which Start-Ups
led by Video & Rich Media… have a card to play
($B, 2010-2017)
Video ad reach in the US – oct. 12
$30
Total Internet 54%
$25
BrightRoll 42%
$20
Specific Media 34%
$15
ADAP.TV 31%
$10 /
Google Sites 30%
$5 TubeMogul 24%
$0 Tremor Video 21%
2010 2011
2012 2013 2014
Videology 20%
2015 2016 2017 SpotXchange 20%
Video Rich media (excl. video) Auditude 17%
Static image Text ads
Hulu 7%
Source: Forrester Research Online Display Advertising Forecast, Source: Comscore

23. New Devices enable New Possibilities
Mobile Advertising Market Smartphone Tablet Connected TV
($B, 2010-2015)
Rest of the world
20.6
+66%
5yr-CAGR
15.6
11.3
New Possibilities in Sight
6.8 Geo-localized Ads
1.6
3.3
Interactive Formats
LOCAL Ads
In-App Display
Augmented Reality
Source: Gartner, Deutsche Bank
…

24. What Trends are Driving the Market?
INNOVATION
 Innovative tools
 New formats
 New devices
CONVERGENCE
Convergence between
“Performance” & “Branding”,
Devices & Consumer “timeline”
AUTOMATION
Strong demand for automated
solutions that increase overall
market efficiency
CONSOLIDATION Ad tech space features active
consolidation mechanics

25. “ Advertisers need greater confidence that their
online investments are helping them achieve
their brand goals. ” Nielsen, “Beyond click & impressions”

26. “Interactive Is Ready To Lead Brand Campaigns”
The old model of branding revolves around TV*
Nate Elliott, Forrester:
Performance Radio
Internet
“ It's time for marketers to wake up to
the brand building potential of
Advertising
TV
interactive channels because: Branding Print
1. Interactive marketing is proven
to create brand impact
2. Interactive tools offer marketers Tomorrow’s branding model will be interactive
new ways to tell stories
3. People trust what they learn
about brands online
” Internet
Advertising
Performance
Branding Website
TV
Radio
Print
Source : Adaption of Nate Elliott’s diagram published in “The Interactive Brand Ecosystem”

27. What Trends are Driving the Market?
INNOVATION
 Innovative tools
 New formats
 New devices
CONVERGENCE
Convergence between
“Performance” & “Branding”,
Devices & Consumer “timeline”
AUTOMATION
Strong demand for automated
solutions that increase overall
market efficiency
CONSOLIDATION Ad tech space features active
consolidation mechanics

28. “ The adoption of automated solutions
will wreak havoc on existing
”
media-buying economics. Shar VanBoskirk, FOrrester

29. Reallocation of Advertising Dollars: towards
the Death of Ad Networks?
“ Ad networks will transform or die. […] We bet broad, mass-
reach ad networks will disappear as DSPs crush ad network
margins.
” Shar VanBoskirk, Forrester
Current Value breakdown Future breakdown: ad networks are gone ?
(CPM, $) (CPM, $)
$5.00 $4,20
An $10B+
$0,50 opportunity?
$0,40
$0.50
$2.00 $1.80 $0.75 $2,15
$0.25 $0.30 $0.10
$0.35
$0.10
Advertiser Agency Ad Data Ad Ad Publisher Advertiser Agency DSP Data Ad Ad Publisher
Network Provider Exchange Serving Provider Exchange Serving
Source : Tradedoubler “Digital Day”

30. What Trends are Driving the Market?
INNOVATION
 Innovative tools
 New formats
 New devices
CONVERGENCE
Convergence between
“Performance” & “Branding” ,
Devices & Consumer “timeline”
AUTOMATION
Strong demand for automated
solutions that increase overall
market efficiency
CONSOLIDATION Ad tech space features active
consolidation mechanics

31. Today’s Ad Tech Ecosystem
Advertisers Ad Networks
Analytics
Publishers
Analytics
SSPs
Agencies
DSPs
Publishers
Ad Exchanges
Ad Servers
Analytics
DMP
Publishers

32. Today’s Ad Tech Ecosystem
Advertisers Ad Networks
Analytics
Publishers
1st Wave: 2007-2008
Analytics
SSPs
Agencies
Ad Networks buy Ad Exchanges
DSPs
2008
Publishers
2007
2007
Ad Exchanges
Ad Servers
Analytics
DMP
Publishers

33. Today’s Ad Tech Ecosystem
Trad. Software Vendors
Advertisers Ad Networks 2nd Wave: 2009-2012
External Software Vendors
Analytics
Publishers
Analytics
SSPs
Agencies Enter the Ad tech game
2012
DSPs
2012
2011 Publishers
2009
Ad Exchanges
2009
Ad Servers
Analytics
DMP
Publishers

34. Today’s Ad Tech Ecosystem
Advertisers Ad Networks
3rd Wave: 2013-2015
Analytics
Publishers
Analytics
SSPs
Agencies
 Vertical Consolidation Strategy?
DSPs
 Transversal Integration (mobile, video, …) ?
Publishers
 Continued Consolidation of Tools, SSPs/DSPs
by Traditional Software Vendors. And more?
Ad Exchanges
Ad Servers
Analytics
DMP
Publishers

35. Selected M&A transactions in Social Web
Total Funding DEAL VALUE CASH on CASH
(Venture, $m) ($m)
buys 14 350 25x
buys 90 689 8x
buys 33 300 9x
buys 54 321 6x
buys 18 270 15x
buys 15 400 27x
buys 38 120 3x
buys - 59 -
buys 38 414 11x
Source: Thomson One, Venture Source, Crunchbase, Clipperton Finance estimates

36. Panel discussion
Jonathan Wolf Martijn Hamann
Chief Product Officer Partner - Board Director of Unruly,
Smartclip & Improve Digital
Sorosh Tavakoli Mark Read
CEO CEO WPP Digital