LUMA Presents Digital Brief 012 - Market Report Q4 2016

1. 1
Q4 2016
Market Report
Digital
Brief 012

2. 2
Mobile
LUMA’s Singular Focus on Digital Media
Technology
Media
Marketing
MarTech
Digital
Content
Ad Tech
Ø LUMA’s expertise is at the intersection of Media,
Marketing and Technology
Ø At this intersection exists:
§ Digital Content: content sites, MCNs, game
publishers, aggregators
§ Ad Tech: display, search, video, mobile, social,
content marketing/native, connected TV
§ MarTech: data, analytics, sales and marketing
automation, email, predictive tools, commerce
technology, shopper marketing, payments
Ø Mobile proliferation has a major impact on these
markets and LUMA is deeply knowledgeable on
mobile

3. 3
Overall Commentary on Consolidation
Ø In our last Q3 2016 Market Report, we reported
62 mergers and acquisitions in digital media and
marketing
Ø The deals we track in this report fall into one of
four categories:
§ Large (over $500 mm)
§ Medium ($100 – $500 mm)
§ Small ($20 – $100 mm)
§ Sub $20 mm exits are considered tech and team deals,
capitulations, or undisclosed

4. 4
U.S. Digital Media M&A Activity by Sector
Source: LUMA
# of Transactions
Ø Robust M&A activity across digital
media is reflective of the growing pool
of strategic buyers, most notably new
entrants from the telecom industry as
well as international and private
equity buyers
Ø This phenomena has resulted in many
large scaled exits for differentiated
companies at very strategic multiples
59 56
72 77
78
112
0
50
100
150
200
250
300
2015 2016
Ad Tech MarTech Digital Content

5. 5
U.S. Digital Media M&A Activity by Sector
Source: LUMA
# of Transactions
Ø In the fourth quarter, scaled exits in
Ad Tech was a major story with
industry leading companies focused
on video / TV and data being
acquired
Ø We expect momentum from 2016 to
continue into the new year as new
market dynamics and increased
competition will drive further
consolidation across these sectors
20
12 14 10
14
22 20
21
28 30 28
26
0
10
20
30
40
50
60
70
Q1 2016 Q2 2016 Q3 2016 Q4 2016
Ad Tech MarTech Digital Content

6. 6
A Growing Pool of Strategic Buyers
DATA
INTERNET ORIGINALS
TECH SERVICES
TELCO
INTERNATIONAL
PRIVATE EQUITY
MEDIA
MARKETING
CONSUMER INTERNET
COMMERCE
MARKETING TECH
CRM SOFTWARE
Right Time
Decisioning of
Consumer Data
(Ad Tech and MarTech)
Ø The pool of strategic
buyers continues to
grow with private equity
becoming active
acquirers in this space
Ø Private equity buyers
have not only become
very acquisitive in digital
marketing, but are also
paying strategic
multiples for these
assets

7. 7
9%
26%
6%
27%
8%
5%
5%
6%
6%
2%
Consumer Internet
Commerce
Telco
Media
Marketing Tech
Tech Services
Internet Originals
CRM Software
Marketing
Data
Digital Media M&A Activity by Strategic Buyers
2016
Strategic Buyers Transactions
Ø In 2016, buyers in Commerce were
very acquisitive with the aim of
acquiring strategic assets for their
core business and to enhance their
digital marketing capabilities
Ø Buyers in Media including Time
Warner, Univision and Ziff Davis
were also particularly active this
year with publishers building their
portfolio of brands as engagement
online continues to grow
Source: LUMA

8. 8
Ad Tech M&A Activity
# of Transactions
Ø Full Year Observations
§ The second half of 2016 saw many
scaled exits in Ad Tech including
the acquisitions of AppLovin and
Media.net in Q3 as well as
HookLogic, INVIDI, Operative, Triad
Retail Media, and TubeMogul in Q4
§ Telcos and Marketing Clouds were
particularly acquisitive in Ad Tech
this year from AT&T to Adobe
Ø Looking Ahead – TV
§ We expect to see an increase in
M&A activity in TV advertising
following the acquisitions of INVIDI
and Operative in Q4
Source: LUMA
1 2
4 4
19
10
10
6
0
5
10
15
20
25
Q1 2016 Q2 2016 Q3 2016 Q4 2016
+$100M <$100M

9. 9
Ad Tech – 2016 Notable Deals
Acquirer
Capital
Raised
Enterprise
Value
Comments
Source: Capital IQ; Crunchbase
$4M $1.4B
Chinese private equity firm Orient Hontai Capital has agreed to acquire a
majority stake in the fast-growing mobile ad network AppLovin
$39M $250M
Criteo will boost its performance marketing platform by leveraging
HookLogic’s unique relationships with brand manufacturers and retailers
$132M N/A
A consortium led by AT&T has announced plansto acquireINVIDI, a leading provider of
addressable TV advertising solutions
$45M N/A
Mediaoceanhas acquired Invision, anAd Tech company offering workflow solutions to
broadcasters and MVPDs, to add sell-side tools to its core buy-side business
N/A $900M
Media.net, an Ad Tech company powering Yahoo Bing Contextual Ads, will be acquired
by a Chinese consortium led by Beijing MitenoCommunication Technology
$34M $360M
Norwegian telecom operator Telenor acquired cross-device advertising
company Tapad to bolster its digital marketing capabilities
NASDAQ $540M
Adobe has agreedto acquire TubeMogul, a leading video DSP, and combine it with the
Adobe Marketing Cloud as the companydives deeperinto media execution

10. 10
MarTech M&A Activity
# of Transactions
Ø Full Year Observations
§ The acquisitions of Demandware,
Marketo, NetSuite and Neustar
headlined a busy year in
Marketing Technology
§ Private Equity buyers were very
active this year in MarTech,
paying multiples typically
associated with strategic buyers
Ø Looking Ahead – Identity
§ Identity is a key industry focus
since it is critical to enable true
1:1 marketing
§ Marketing Clouds and startups
alike are building robust identity
solutions
Source: LUMA
2
5
3 4
12
17
17
17
0
5
10
15
20
25
Q1 2016 Q2 2016 Q3 2016 Q4 2016
+$100M <$100M

11. 11
MarTech – 2016 Notable Deals
Acquirer
Capital
Raised
Enterprise
Value
Comments
NYSE $2.7B
Leading CRM platform Salesforce.comacquiredDemandware, the leading enterprise
cloud-basede-commerce platform provider, to create its new Commerce Cloud
$50M $700M
By acquiring DMP Krux, Salesforce’s clients will be able to perform more granular
segmenting and stronger audience management from within its Marketing Cloud
NASDAQ $1.7B
Marketo, a marketing automation company with over 4,600 customers, was taken
private by Vista Equity Partners
NYSE $8.7B
Software giant Oracle acquired NetSuite, the SaaS ERP leader (with
marketing technology assets)
NYSE $2.9B
Golden Gate Capital has agreed to acquire Neustar, an industry leading
provider of information services and digital marketing capabilities
NASDAQ $2.6B
Business intelligenceand data visualization platform, Qlik, has been taken private by
ThomaBravo
N/A $1.1B
Sitecore, a web content management system, was acquired by EQT Partners as it plans
to expand Sitecore’sdigital marketing capabilities
Source: Capital IQ; Crunchbase

12. 12
Digital Content M&A Activity
# of Transactions
Ø Full Year Observations
§ Acquisitions in traditional media
(Dreamworks, Time Warner) and
digital media (Complex Media,
EverydayHealth, Gawker Media)
highlighted digital content in 2016
§ Gaming companies Supercell and
Playtika had two of the largest exits
in the sector all year
Ø Looking Ahead – Publisher Consolidation
§ Amid the golden age of content, we
expect to see further consolidation
among publishers in order to offer a
broader variety of compelling
content across verticals and attract
large advertisers
Source: LUMA
6 6 6
3
22 24 22
23
0
5
10
15
20
25
30
35
Q1 2016 Q2 2016 Q3 2016 Q4 2016
+$100M <$100M

13. 13
Digital Content – 2016 Notable Deals
Acquirer
Capital
Raised
Enterprise
Value
Comments
NASDAQ $4.1B
NBCUniversal(Comcast) acquired DreamworksAnimations to bolster its portfolio of
entertainment franchisesacross TV, film, and digital properties
$245M ~$800M
NetmarbleGames has acquired Kabam’sVancouver-based studio, the developer of
popularmobile game stitlesincluding “Marvel Contest of Champions”
NYSE $26.2B
By acquiring LinkedIn, Microsoft adds the ubiquitous professional network and its
diverse revenue models to Microsoft’s “professional cloud”
N/A $4.4B
A consortium of Chinese buyers has agreed to acquire Playtika, the social
casino gaming unit of Caesars Entertainment it originally bought in 2011
N/A $10.2B
Chinese media giant TencentHoldings acquired a majority stakein the massively
profitable maker of the popular mobile gaming franchise Clash of Clans
NYSE $105.6B
AT&T has agreedto acquire Time Warner to own content and distribution as the
telecom giant aims to push media and advertising to its growing user networks
NASDAQ $4.8B
Following its acquisition of AOL, Verizon has agreed to acquire Yahoo’s core business,
which includes its digital media properties and scaled Ad Tech capabilities
Giant
(Chinese Consortium)
Source: Capital IQ; Crunchbase

14. 14
Ad Tech – 2016 Stocks Performance
Market Data as of 12/31/16
Ø Ad Tech Weighed Down by Industry Issues
§ Header bidding is having a strong impact on
Ad Tech as investors question the future of
these firms under this new market dynamic
§ A recent analysis concluded that Facebook
and Google captured all of the growth in
digital advertising in 2016, raising many
concerns about the rest of the industry
Ø Ad Tech IPO’s
§ TTD’s successful initial public offering in
September was a major boost for Ad Tech
and could serve as a catalyst for more IPO’s
§ AppNexus is expected to go public in Q2 of
2017 after filing confidentially for an IPO
-100%
-50%
0%
50%
100%
1/4/16 2/4/16 3/4/16 4/4/16 5/4/16 6/4/16 7/4/16 8/4/16 9/4/16 10/4/16 11/4/16 12/4/16
TUBE RUBI TRMR MXPT YUME FUEL CRTO TTD NASDAQ

15. 15
MarTech – 2016 Stocks Performance
Market Data as of 12/31/16
Ø Major Acquisitions
§ Two industry leaders, MKTO and DWRE, were
acquired for $1.8 billion and $2.8 billion
respectively
§ MKTO and DWRE acquisition multiples were
7.5x LTM, 6.2x CY revenue and 10.5x LTM,
8.8x CY revenue respectively
Ø MarTech Continues Steady Growth
§ MarTech stocks on average grew 17% of
value during 2016, but the declines of CRM
and HUBS weighed down the sector
§ After growing substantially in 2015, CRM
and HUBS shed nearly 10% of their market
value in 2016, while SHOP added nearly
100% of value during the year
-80%
-40%
0%
40%
80%
120%
1/4/16 2/4/16 3/4/16 4/4/16 5/4/16 6/4/16 7/4/16 8/4/16 9/4/16 10/4/16 11/4/16 12/4/16
CRM MKTO HUBS BV DWRE JIVE MRIN LPSN SHOP NASDAQ

16. 16
2016 Key Startup Financings to Watch
Lead Investor Capital Raised Valuation Comments
Source: Crunchbase
$555M $30B
Airbnb recently unveiled its ambitious new line of business “Trips” as it looks
for growth outside its core rental home offering
$200M $1.7B
Following its $200 million raise last year, BuzzFeed has received another
$200 million from NBCUniversal to grow its content / advertising partnership
$794M $4.5B
Augmented reality (AR) startup Magic Leap’s Series C round of funding will
enable the secretive company to bring its first product to market soon
$1.8B $20B
Snap Inc., the parent company of Snapchat, has now raised over $2.6 billion
in funding as it prepares for its eventual IPO next year
$150M $9B
Digital payments company Stripe nearly doubled its valuation as it builds
upon a leading position in the fast growing e-commerce space
$181M $1.5B
Unity, one of the leading game engine platforms, has raised capital to
continue building technology for virtual and augmented reality experiences
$430M $16B
WeWork, the popular co-working space startup that has 50,000 members in
21 cities, raised funding to enter the Asian market as it continues to grow

17. 17
LUMA’s 2016 LUMAscape
Ø 2016 was such a busy year
for LUMA, we made a
LUMAscape out of all our
activity grouped by our three
value propositions:
Access - We hosted several
exclusive events from our CEO
DMS series to fun dinners and
launched LUMA Corporate
Partners
Insights – We published lots of
great content that attracted
audiences in the millions
Execution – We announced
transactions valued at $3 billion
for our clients

18. 18
LUMA’s Differentiated Value Proposition
1. Peerless Industry Knowledge
2. Strategic Approach
3. Execution Excellence

19. 19
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LUMA’s Content-Driven, Expert-Based Approach
Conference
Keynotes
Publications
(over 3 million views)
Corporate
Teach-ins
LUMAscapes
(over 6 million views
from 211 countries)
Completed
Deals
Digital Briefs
DISPLAY MOBILE VIDEO SOCIAL NATIVE SEARCH MARTECH COMMERCE GAMING STRATEGIC
BUYERS

20. 20
Access. Insights. Execution.
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