1. Advertising
October 2012
Brian Wieser, CFA
brian@pvtl.com
212-514-4682
1

2. About Us
• Independent media equity research boutique
• Founded in 2010
• Personal background:
– Media investment banking (Lehman Brothers)
– Cable/satellite equity research (Deutsche Bank)
– Advertising Industry (Interpublic)
– Advertising technology venture-backed start-up (Simulmedia)
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3. Life or Death for Premium Web
Advertising?
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4. Premium Display Is Structurally Weak
75%
Annual Ad Revenue Growth
65%
Yahoo (Display)
55%
45%
35% New York Times
(Media Group -
25% Digital Advertising)
15% AOL (US Display)
5%
-5% 4Q11 1Q12 2Q12 3Q12 WebMD
-15% (Advertising and
Sponsorship)
-25%
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5. Ad Networks / Non-Premium Are Growing
75%
A n n u a l A d R e ve n u e G ro w th
65%
G o o g le (D is p la y )
55%
45%
35%
25% D e m a n d M e d ia
(C o n te n t &
15% M e d ia )
5%
-5 % 4Q 11 1Q 12 2Q 12 3Q 12 A O L T h ird P a rty
N e tw o rk
-1 5 %
-2 5 %
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6. Why? Flat Budgets
100.0 Number of Large Companies
3,000
(Assets >$2.5 Billion)
Average Advertising Expenditures Per
90.0
Number of Large Companies (Assets
2,500
Large Company (MIllions of $)
80.0
70.0
2,000
>$2.5 billion
60.0
50.0 1,500
40.0
Average Advertising Spending 1,000
30.0 Per Large Company
20.0
500
10.0
- -
2001 2002 2003 2004 2005 2006 2007 2008
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7. Why? Limited New Category Creation
20.0%
Nominal Personal
15.0% Consumption
Expenditures Growth
10.0%
Industrial Production
5.0% Growth
0.0%
1981A
1983A
1985A
1987A
1989A
1991A
1993A
1995A
1997A
1999A
2001A
2003A
2005A
2007A
2009A
2011A
2013E
2015E
2017E
Historical + Pivotal
-5.0% Forecast Growth
-10.0%
-15.0%
-20.0%
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8. Why? Limited Further Shifts to Web
Monthly Reach of Media in United States (Audiences 2+ in mm)
310.0
290.0
270.0
250.0
230.0
210.0
190.0
170.0
150.0
Watching TV In The Home Using Internet on a Computer
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9. Why? Limited Further Shifts to Web
TV and Internet - US Average Weekly Use (in Hours) By Age
50.0
45.0
40.0
35.0
30.0 Traditional TV
25.0
20.0
15.0 Internet on Computer
10.0
5.0
0.0
2-11 12-17 18-24 25-34 35-49 50-64 65+
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10. Why? People, Not Pages
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11. Why? Ad Tech Allows Aggregation
Agency
Agency 1 Exchange 1 Ad Network 1 Publisher 1
Trading Desk 1
Agency
Agency 2 Exchange 2 Ad Network 2 Publisher 2
Trading Desk 2
Agency
Agency 3 Exchange 3 Ad Network 3 Publisher 3
Trading Desk 3
Key Buy-Side Tools Key Sell-Side Tools
• Supplier Management: Demand Side Platform (“DSP”) • Inventory Management: Supply Side Platform (“DSP”)
• Traffic Management: Buy-Side Ad Server • Traffic Management: Sell-Side Ad Server
• Book-Bill-Pay Tools • Book-Bill-Pay Tools
• Audience Data • Audience Data
• Marketer Data Management and Other Third Party Data
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12. Why? Agency Trading Desks

13. Why? Better Buyer Negotiating Position
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14. Thank you
Please Contact Us:
Brian Wieser, CFA
brian@pvtl.com
212-514-4682
14