1.
Display Advertising 2.0:
Opportunities in the New World Order
July 19, 2010
Joshua Wepman
GCA Savvian Advisors

2.
Display Advertising – Yesterday
AOL and Yahoo! Portals
http://www.hotwired.com
First Online
Banner Ad!
(10/24/94)

3.
Display Advertising – Today
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
Horizontal
Trading Desk
A P
D U A
Video / Rich Media Yield
V Optimization
B U
E L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

4.
Carving Up the Stack - Network World World
DSP / Exchange
$5.00 CPM
$5.00 Efficiency from
Optimized Media Buying
$4.20 CPM
($0.50)
$4.00
($0.40)
($0.50)
$3.00
(CPM)
(C PM)
($0.75) $2.15 CPM
($2.00)
($0.30)
$2.00 ($0.25) ($0.10) $1.80 CPM
($0.35)
($0.10)
$1.00
$0.00
Advertiser
Advertisers Agency Ad DSP
Network Data Provider Ad Exchange
Ad Exchange Ad Serving /
Serving Publisher
Rich Media
Rich Media

5.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded Marketplace
Horizontal
Trading Desk
A P
ries
D U A
Yield
ego
Video / Rich Media
V Optimization
B U
E
R 24 cat L D
I
ies I
Vertical
pan
T E
S N
I
2c om ted
Targeted Publisher H C
ves
S Tools
19
Data
Creative
Optimization
Data
Optimization
Exchanges / E E
n in
Aggregators
E R
illio
Performance
R S
S
Ad Servers $2 .5 b Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

6.
Display Advertising Technology Landscape
Agencies Media Buying Ad Ad Networks Sharing Data
DSPs
Platforms Exchanges / Social Tools
Horizontal
Trading Desk
A P
D U A
Video / Rich Media Yield
V Optimization
B U
E L D
R I I
T $8 B Vertical
E
I
i llion S
N
Targeted Publisher
H C
S Creative Data
Data
Exchanges /
Tools
E E
Optimization Optimization
E Aggregators
R
R Performance
S
S
Ad Servers
Ad Servers
Analytics Verification / Mobile
Data Suppliers
Attribution
Ad Ops / Infrastructure
Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082

7.
Search Advertising Technology Landscape
SEM
Agencies SEM SEO Providers /
Tools Search Engines
Agencies Tools
A P
D U A
V B U
E L D
R
$17 I I
T
I Billi S
E
N
S
E
on Data
Optimization
Data
Exchanges / Performance
H
E
R
C
E
R Aggregators
S
S
Analytics Verification Data Suppliers
Mobile

8.
Carving Up the Stack - Consolidation Opportunity
$5.00 CPM
$5.00
$4.20 CPM
($0.50)
$4.00
($0.40)
($0.50)
$3.00
$2.30 CPM
(CPM)
(C PM)
($0.75) $2.15 CPM
($2.00)
($1.50) ($0.30)
$2.00 ($0.25) ($0.10) $1.80 CPM
($0.35)
($0.10)
Point solutions:
$1.00 consolidation likely
$0.00
Advertiser
Advertisers Agency Ad DSP
Network Data Provider Ad Exchange
Ad Exchange Ad Serving /
Serving Publisher
Rich Media
Rich Media

9.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
2. Publishers threatened
A P
D U A
Video / Rich Media Yield
V Optimization
B U
E L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

10.
Online Display Advertising Accelerating …
Q1 2010 Was Highest Q1 Ever
$7 $5.9 Bn
$6
$5
$4
($Bn)
$3
$2
$1
$0
02
01
01
02
03
03
04
04
05
05
06
06
07
07
08
08
09
09
10
3'
1'
3'
1'
1'
3'
1'
3'
1'
3'
1'
3'
1'
3'
1'
3'
1'
3'
1'
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
Q
The display is forecast to grow over 30% more than the overall
online advertising market from 2009 to 2014

11.
… But Not Everybody Benefits
Sites Audience
Male Age 30-45
$100,000+
Lives in NY
Income
Looking to
Single
Buy New Car
CAGR: 5%
$3.5
$9.0
R: 35% $2.9
CAG
$8.0 $3.0
$6.9
$7.0 $6.3 $6.5
$2.5 $2.2
$6.0
$2.0
($Bn)
($Bn)
$5.0 $1.6
$4.0 $1.5
$3.0
$1.0
$2.0
$0.5
$1.0
$0.0 $0.0
2009 2010E 2011E 2009 2010E 2011E
Notes:
Source: eMarketer, Wall Street research and GCA Savvian estimates.

12.
Are All Sites Created Equally?
Audience can be
targeted on cheaper
website
Audience targeting threatens to devalue premium inventory by
removing context from the display advertising equation

13.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
2. Publishers threatened
A P
D 3. Google moving aggressively into
U A
V display Video / Rich Media Yield
Optimization
B U
E L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

14.
Display Advertising Technology Landscape
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
Horizontal
Trading Desk
A P
D U A
Video / Rich Media Yield
V Optimization
B U
E L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

15.
Display Advertising Technology Landscape
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
Horizontal
A P
D U A
Video / Rich Media Yield
V Optimization
B U
E L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

16.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
2. Publishers threatened
A P
D 3. Google moving aggressively into
U A
V display Video / Rich Media Yield
Optimization
B U
E 4. Data is the new currency L D
R Vertical I I
T E
S N
I Targeted Publisher H C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

17.
All Data is Not Created Equal
Data Hierarchy Example Companies
Social
Sharing
Value Search Intent
Retargeting
Publisher Cookie
Segmentation

18.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
A 2. Publishers threatened P
D U A
Yield
V 3. Google moving aggressively into B
Video / Rich Media
Optimization
U
E display L D
R Vertical I I
T 4. Data is the new currency E
S N
I Targeted Publisher H C
S Data 5. Agencies threatened
Data Tools
E
Creative
Optimization Optimization
Exchanges /
Aggregators
E
E R
Performance
R S
S
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

19.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
A 2. Publishers threatened P
D U A
V 3. Google moving aggressively into B
Video / Rich Media Yield
Optimization
U
E display L D
R Vertical I I
T 4. Data is the new currency S
E
N
I Targeted Publisher H C
S 5. Agencies threatened
Data Tools
Creative
Optimization
Data
Optimization
Exchanges /
Aggregators
E E
E
R 6. Publishers need to leverage their R
Performance
S
S advantages
Ad Servers Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

20.
Data Opportunities
Ad Networks Sharing Data /
Horizontal Social Tools
P
Video / Rich Media Yield
U A
Optimization
B U
L D
Publishers can make data I
Vertical I
work for them E
S N
• Sell it raw (additional revenue)
Targeted Publisher H C
• Brand it (value of context) Tools
E E
• Target better (higher CPMs)
R
• Reduce # of mouths to feed Performance
S
(capture greater margin)
Ad Servers
Mobile
Ad Ops / Infrastructure

21.
Video Opportunities
vs.
Video …
Promotes more engaging ad content
Has 5-6x higher yield than display advertising
Is growing more quickly than display
Is starting to attract TV dollars
Is standardizing
Is a hot area for investment

22.
Video Value Chain
Delivery / Content Aggregation /
Content Creators Publishing Tools Management Enablers Monetization Portals

23.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
A 2. Publishers threatened P
D U A
V 3. Google moving aggressively into B
Video / Rich Media Yield
Optimization
U
E display L D
R Vertical I I
T 4. Data is the new currency E
S N
I H
5. Agencies threatened
Targeted Publisher C
S Creative Data
Optimization
Data
Exchanges /
Tools
E E
Optimization Aggregators
E 6. Publishers need to leverage theirR
Performance
R advantages S
S
Ad Servers 7. Networks need to adapt Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
Ad Ops / Infrastructure

24.
Ad Network Observations
Ad Networks
Horizontal
Undifferentiated ad networks run the risk
of being made less relevant with the
advent of optimized media buying and
proliferation of data utilization
Video / Rich Media
Several ad networks have attempted to
transform their core business models
Vertical
Targeted
Performance
Performance advertising is not valued
strategically by the market
Infrastructure / technology is most
Mobile
valuable

25.
Landscape Observations
Agencies Media Buying Ad Ad Networks Sharing Data /
DSPs
Platforms Exchanges Social Tools
1. Overcrowded marketplace
Horizontal
Trading Desk
A 2. Publishers threatened P
D U A
V 3. Google moving aggressively into B
Video / Rich Media Yield
Optimization
U
E display L D
R Vertical I I
T 4. Data is the new currency E
S N
I H
5. Data
Agencies threatened
Targeted Publisher C
S Creative Data
Optimization
Exchanges /
Tools
E E
Optimization Aggregators
E 6. Publishers need to leverage theirR
Performance
R advantages S
S
Ad Servers 7. Networks need to adapt Ad Servers
Analytics Verification / Data Suppliers Mobile
Attribution
8. Consolidation is inevitable
Ad Ops / Infrastructure

26.
Diverse Strategic Interest in Ad Tech Innovators
Marketing
Agency
Targets
Technology
Network / Data
Ad Networks

27.
Return Formula
Billions invested in ad tech landscape over last few years
Focus on investment returns may drive near-term consolidation
Time is important element of determining investment returns
1
n( t-1
)
Return =
d

28.
Strategic M&A and Investment Activity
2007
Over $13
billion of
investment
activity from
all buyer 2009
groups
= Acquisition
= Investment
2010

29.
Diverse Strategic Interest in Demand-Side Ad Tech
Strategic Fit
Ability / Willingness to Pay

30.
The Ad Tech Optimization Scorecard
Advertisers
Publishers
Agencies
Ad Networks
DSPs
Data Providers

31.
GCA Savvian’s Digital Media Advisory Business
• Leading investment banking firm with over 200
professionals worldwide
• Services include advice on mergers and acquisitions,
private capital finance and restructurings
• Advised on over $60 billion in transactions since 2006
• Advisor to media companies new and old

32.
Leading Global Independent Advisory Firm
Tender Offer
Notes & Acquired by
Membership Units Divestiture of U.S.
Venture Portfolio Acquired by
$600MM $5.9Bn $150MM $9Bn
Acquired by
TOB of Common Acquired by
Preferred Equity Stock of
Investment and
Sold Stake in Credit Facility
Acquired by Acquired by $448MM
to $10.8Bn $747MM
$75MM
$500MM
$300MM $493MM $1.3Bn
Acquired by
$1.6Bn
Offices in Tokyo, San Francisco, New York City, Chicago, Menlo Park, London and Mumbai (Strategic Partnership)

33.
Proven Leadership in Digital Media Transactions
Acquired by Acquired by Acquired by Acquired by Acquired by Preferred Stock Acquired by Preferred Stock Preferred Stock
a Subsidiary of
We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Seller Financial Advisor We Advised the Seller Financial Advisor Financial Advisor
Pending June 2010 June 2010 June 2010 January 2010 October 2009 April 2009 February 2009 January 2009
1UP Digital Network
Sold Stake in
Acquired by Minority Preferred Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock Preferred Stock
Investment in
to
We Advised the Seller We Advised the Seller Financial Advisor Financial Advisor Financial Advisor Financial Advisor Financial Advisor Financial Advisor Placement Agent
January 2009 October 2008 November 2008 November 2008 August 2008 July 2008 July 2008 June 2008 April 2008
Preferred Stock Acquired by Preferred Stock Preferred Stock Acquisition of Acquired by Acquired by Acquired by Acquisition of
& Recapitalization
Mobile Services Business
Financial Advisor We Advised the Seller Placement Agent Placement Agent We Advised the Buyer We Advised the Seller We Advised the Seller We Advised the Seller We Advised the Buyer
March 2008 February 2008 January 2008 January 2008 December 2007 December 2007 December 2007 December 2007 October 2007
Acquired by Senior Credit Facility Preferred Stock Merger with Minority Investment Preferred Stock Acquired by Acquired by Acquired by
in
FRONTLINE Innovation Interactive
MANAGEMENT Management
We Advised the Seller Financial Advisor Placement Agent We Advised INTAC Financial Advisor Financial Advisor We Advised the Buyer We Advised the Seller We Advised the Seller
October 2007 October 2007 October 2007 October 2007 August 2007 June 2007 June 2007 May 2007 May 2007
Preferred Stock Sale of its CDN Acquired by Preferred Securities Notes & Acquisitions of Acquired by Acquired by Acquired by
Services Business to Membership Units
We Advised the Majority
Financial Advisor We Advised the Seller We Advised the Seller Financial Advisor Financial Advisor & Agent We Advised the Buyer We Advised the Seller Shareholder of IGN Ent. We Advised the Seller
April 2007 January 2007 October 2006 September 2006 March 2006 December 2005 November 2005 November 2005 September 2005