BAIRD’S MARKETING TECH & SERVICES SECTOR OVERVIEW TABLE OF CONTENTS
Industry Overview 1 Industry Trends & Update 2 Market Landscape 3 A. Advertising B. Digital Experience C. Customer Journey Management D. Social & Relationships E. Customer Experience F. Data & Insights Appendix 4 A. Baird Overview B. Valuation Perspectives
Page 1 INTRODUCTION TO MARKETING TECHNOLOGY & SERVICES
We are excited to share with you our first edition of Baird’s Marketing Technology & Services industry report, which details our views on the industry, including segmentation, sizing, key market players and trends impacting various segments. Marketing means different things to different people. For us, we generally view marketing as the business process of identifying, anticipating and satisfying customers needs and wants. Marketing spans many customer or business-facing activities, which cross other functions that we did not cover in this report. Here, we addressed marketing technology and services that are utilized to identify, attract, engage, convert and retain customers. We have segmented the market into six core segments, including advertising, digital experience, customer journey management, social and relationships, customer experience, and data and insights. We further segmented the industry into 31 sub-segments, all of which we cover in detail herein.
Marketing is mission critical and one of the cornerstones of business management and commerce. Every company, whether B2C or B2B, must appropriately engage customers to grow. As a result, companies spend billions of dollars annually on third party technology and outsourced services to define and execute their marketing strategies which has created an ecosystem of thousands of companies to address a broad range of needs. These needs are not one time in nature, they are recurring and support strong demand for software and services within these core segments and sub-segments. In total, we estimate that global marketing spending (total paid media and marketing people / data / tech services) was approximately $1.5 trillion in 2019. Growth varies significantly by category, but the core segments and sub-segments in this report are by nature growth-focused areas of marketing and represent a continued, massive secular shift of dollars from traditional legacy channels to digital and innovative omni-channel strategies.
______Sources for information on this page: BMO Digital Marketing Hub v4.1 report. Page 2 INTRODUCTION TO MARKETING TECHNOLOGY & SERVICES (CONT.)
The landscape for marketing technology and services is significantly impacted by the end customer and their process for making purchasing decisions. Today’s path to purchase, whether B2C or B2B, has never been more fragmented than it is today. Decision makers have many options to choose from to discover products or services, to try them, and to eventually decide to purchase them. The path to purchase is not linear and varies widely by end market, geography, and unique customer.
There are select trends we see as significantly impacting the path to purchase and therefore the types of technologies and services required to market to and win over customers. These include:
1. Significant changes in communications infrastructure and consumer behavior driving an undeniable shift to a digitally focused engagement
2. Mobile opening up a continually evolving set of new marketing experiences
3. The intersection of e-commerce and online advertising - the rise of Amazon has a formidable challenger to the Google/Facebook duopoly
4. Demand for a seamless, personalized experience across every channel and touchpoint in the customer journey
5. While temporarily on hold given COVID, experiential will remain a long-term secular trend
6. Data collection and usage, against an increasingly strong push for regulations of privacy
7. The use of artificial intelligence and machine learning to harness the massive quantities of data to reach and engage with consumers in more effective ways
Page 3 INTRODUCTION TO MARKETING TECHNOLOGY & SERVICES (CONT.)
As these trends play out, many new technologies and services have been or are being developed to address new marketing needs. This has resulted in a significant infusion of venture capital and growth equity to support emerging players that are investing in product/service line expansion to meet these customer needs and their own sales and marketing efforts. We estimate that over the past year, $13B has been raised for more than 130 marketing technology and services related companies. At the same time, more established corporates in the space are looking to M&A to build scale, add to their capabilities and create more fulsome solution suites to better serve their customers. In 2019, we estimate over 200 transactions (vs. ~150 transactions in 2018).
We expect interest in the industry to remain high, provided the mission critical and recurring nature of this universal need. And with that, we’re excited to share our views on the industry and look forward to your feedback and future discussion helping you consider investments within the space
All the best, the Baird team.
Robert W. Baird & Co. Incorporated 227 West Monroe Street, Suite 2100 777 East Wisconsin Avenue 1211 SW 5th Avenue Chicago, IL 60606 Milwaukee, WI 53202 Portland, OR 97204 Fax: (312) 609-4950 Fax: (414) 765-3912 Fax: (503) 603-3065
Eric Winn Rhett Braunschweig Evan Mueller Managing Director Director Director [email protected] [email protected] [email protected]
Simon Pearson Justin Prichard Martin Luen Managing Director Managing Director Managing Director [email protected] [email protected] [email protected]
Andrew Snow Brady Blackett Managing Director Director [email protected] [email protected]
______Sources for information on this page: Capital IQ, 451 Research, Pitchbook, Gartner. Page 4 MARKETING TECHNOLOGY & SERVICES SECTOR BREAKDOWN
Page 5 SUMMARY OBSERVATIONS: COVID-19 IMPACT ON MARKETING TECH & SERVICES
COVID-19 has significantly accelerated a decade-long shift to digital. Consumer and corporate mindsets and purchasing habits will never be the same which will have a dramatic impact on the marketing technology & services market
COVID-19 implications: The unique combination of COVID-19 precautions – shelter-in-place, work-from-home, travel restrictions, store and restaurant closures, etc. – are driving dramatic changes in consumer behavior in a very short period of time. Many of these changes are an acceleration of decades-long shifts to e-commerce and engaging with and acquiring customers through digital channels. We believe many of these consumer behavior changes will be lasting and habits created during the pandemic will remain.
Near-to-medium term impact: Historically, marketing spend is impacted by downturns as companies pull back marketing spend against lower demand from existing and prospective customers. The magnitude of the decline and how it impacts each channel will depend on how and where demand falls off and where each unique marketing technology/channel is in its maturity and market penetration. Unlike past downturns, the drop-off in demand is more severe, with certain verticals like retail, restaurants, and travel/hospitality shut down, and certain marketing mediums legally prohibited, e.g., large scale events. While digital is weathering the storm better than many channels, it is not immune. There have been rapid declines in spend across most digital channels, with overall industry growth in the U.S. expected to be roughly flat (~2% in 2020) vs. the 15-20% growth expected pre-COVID.
Gradual recovery: While marketing spend is cyclical, it’s also one of the first areas to bounce back as the economy improves, as companies look to acquire customers as demand returns. Checks suggest that the gradual recovery in digital ad marketing continues, benefitting from high user engagement levels and improving pricing trends. While still far from its historic levels, current growth in e-commerce is helping to stabilize the digital ad market. Digital share of spend is expected to increase meaningfully at the expense of print, out of home, radio and TV. On page 8, we have laid out the various marketing segments and sub-segments and detailed the severity of the impact of COVID-19 on each.
______Source for information on this page: eMarketer U.S. Digital Ad Spending Update Q2 2020. Page 6 SUMMARY OBSERVATIONS: COVID-19 IMPACT ON MARKETING TECH & SERVICES (CONT.) COVID-19 has significantly accelerated a decade-long shift to digital. Consumer and corporate mindsets and purchasing habits will never be the same which will have a dramatic impact on the marketing technology & services market
Where to invest: There are areas of marketing technology and services that have remained resilient during COVID-19 and are likely to weather most downturns. The segments that we predict will continue to perform irrespective of demand are infrastructure related and support basic marketing efforts vs. volume-based, discretionary spend. Examples include largely subscription based spend on CRM, CDP, content management and customer experience management systems. These systems are foundational and required to execute a base level of business during a downturn including serving existing customers, vs. trying to acquire new customers. They are not easily switched off and on. There also has been, and will continue to be, a flight to performance-oriented marketing that has a clear, and attributable ROI.
Where do we go from here: There are reasonable questions to ask regarding the sustainability of higher growth and engagement in these digital channels and when these markets will begin to show signs of the recession (some already are). However the step-function changes in ecommerce and digital marketing share are unlikely to recede as consumers do not go back to their old ways and a "new normal" emerges in which the offline and online worlds are more intertwined than ever before. Increased digital engagement and purchasing activity will have marketers spending more on digital to win new customers. Increased competition for eyeballs and conversion will require companies to invest in technology that improves targeting, by identifying and segmenting customers based on their unique attributes and tailoring marketing messages to each on an individualized basis. We expect digital mediums and related platforms for managing customer data and optimizing digital content will see significant growth over the next cycle.
Page 7 SUMMARY OBSERVATIONS: COVID-19 IMPACT ON MARKETING TECH & SERVICES (CONT.)
Summary Perspectives: Degrees of COVID-19 Severity
Group Sector Sub-sector Covid-19 Impact Impact
SEO / SEM Mostly recurring revenue software business models, which have been relatively Personalization less impacted, experiencing limited churn (outside of customers in verticals Digital directly impacted) but impacted by lower new bookings / sales pipeline Experience Digital Asset Management Content Mgmt. Systems Many of these solutions are related to a company’s web presence, which has been mission-critical in this environment CRM Platforms E-mail Marketing Mostly recurring revenue software business models, which have been relatively Mobile Marketing less impacted, experiencing limited churn (outside of customers in verticals Customer Content Marketing directly impacted) but impacted by lower new bookings / sales pipeline Journey Mgmt. Channel / Partner Marketing CRM, email and mobile are foundational systems/channels, and those and Multi / Omnichannel many others are as much about digital communication with existing customers Automation as acquiring new ones Marketing Resource Mgmt. Mostly recurring revenue software business models, which have been relatively Ratings & Review less impacted, experiencing limited churn (outside of customers in verticals Customer Customer Experience directly impacted) but impacted by lower new bookings / sales pipeline Community Experience Loyalty Retention and loyalty is paramount to businesses in the current environment, Reverse Logistics collecting and addressing customer feedback in a digital manner is more important than ever Mix of software and transactional models – purchase of audience data more correlated with online advertising spend which has been more negatively Audience & Marketing Data impacted and project-based offerings like market research are going to be Data Customer Data Platforms more negatively impacted as well & Insights Marketing Analytics Marketing Research Software models that are providing real-time insights into customer behavior and analytics around marketing spend, attribution, etc. should sustain demand and increase in importance as more customer interactions shift to digital Experiential & Events Events and related Experiential Marketing were immediately impacted by stay- Webinars at-home ordinances; and continue to be limited due to social distancing Social & Pre-sales / Support restrictions Relationships Social Media Mgmt. Certain subsegments that are more software driven will be less impacted, Account-based marketing experiencing limited churn (outside of customers in verticals directly impacted) (ABM) but impacted by lower new bookings / sales pipeline Digital Agencies Out-of-home All Advertising sub-sectors felt an immediate and deep impact of COVID-19 Advertising Online Ad Tech We’ve seen a bottoming out in Q2 in digital, and a gradual return to growth Search & Performance suggesting a continued gradual recovery benefitting from higher user Promotion & Pricing engagement and improving pricing trends In-store
Level of Impact: Low High
Page 8 INDUSTRY TRENDS AND UPDATE 1. THE SHIFT TO DIGITAL CONTINUES
The basic underpinning of any digital business model is connectivity; massive changes in infrastructure and adoption have taken place over the last 20 years, which are continuing at a rapid pace and will drive a continuous evolution of digital experiences – ~4B Internet Users represents approximately half the world's population, most of the remaining growth is in APAC and other developing regions – Network capacity has advanced rapidly and with the advent of 5G on the horizon, there will be an ability to create richer, faster experiences
At the edges of these networks are a rapidly evolving set of devices or endpoints, all of which represent potential outlets for connecting with customers – Consumers have evolved from PC’s to ever-present mobile devices and other devices have come online including connected TVs, automobiles and out of home billboards – The advent of 5G will allow for the rapid transmission of data to the "outer edges" of the Internet to include Internet of Things (IoT) and an endless range of possibilities
A massive generational demographic shift is underway in which "digitally native" consumers are becoming the majority of the audience – Considerable demographic growth to digital based engagement is being driven by entire generations in which digital, mobile and connectivity are ubiquitous
Global Internet Penetration Global Internet Users 55% 2009: ~1.6B 2018: ~4.6B 45% 51%
35% 2.5x Global % 24% Penetration 25% Increase
15% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
______Sources for information on this page: BOND Internet Trends 2019 report and Statista. Page 9 1. THE SHIFT TO DIGITAL CONTINUES (CONT.)
These changes in network capacity, consumer adoption and behavior have created an unprecedented amount of digital data, that is growing exponentially
This rise and collection of digital data has been a critical ingredient to the success of many of the fastest growing and most successful companies in marketing – Context-rich data helps businesses provide their customers with personalized products and services that can often be obtained at lower prices and delivered more efficiently, which in turn, drives higher customer satisfaction – This data is being applied to any and every channel where the business can meet its customer along their journey
While most offline channels will remain important, it is undeniable that a shift has happened and it will continue
New Data Captured and Replicated (1)
32% Structured / 200 ZB Tagged Data
100 ZB 16% Structured / Replicated Tagged Data Data 10% 9% Structured / Structured / Tagged Data Data Volume, Annual, Global (ZB) Global Annual, Volume, Data Tagged Data Original Data
2005 2010 2015 2020E 2025E
______(1) BOND Internet Trends 2019 report. Note: 1 petabyte = 1M gigabytes, 1 zeta byte = 1M petabytes of new data created / captured each year. The orange area in the graph represents data generated, not stored. Structured data indicates data that has been organized so that it is easily searchable and includes metadata and machine-to-machine data. Replicated data = data that is a copy of the original. Page 10 2. MOBILE HAS BECOME THE MOST IMPORTANT CHANNEL
The smartphone revolution changed consumer behavior and in 2019 eclipsed time spent on all other media types, signaling a paradigm shift in the world of marketing
Mobile has moved from a secondary screen to the primary one and with over 3.5B smartphone users in the world, is the easiest way to reach consumers globally
Smartphone adoption created a need for marketers to think "mobile first" for some time and are increasingly thinking "mobile only" as consumers bypass PCs and laptops for mobile devices
Mobile devices carry almost every aspect of users’ lives and can provide multi-layered insights on consumers, providing unique opportunities for cross-channel marketing and personalization
Transformative for many areas such as in-store marketing, in which retailers largely controlled the marketing messages within their four walls
Mobile empowers users to compare prices on the go forcing retailers to look to mobile to re-engage consumers at a critical point in the purchase decision making process
Consumers expect businesses to engage with them where and how they prefer
SMS and chat platforms create personalized, two-way communication channels and have the opportunity to become the default channel of B2C communication – texting is the most-used mobile app with nearly 100% of Americans using once per day
Time Spent on Digital Media (U.S.)
Daily Hours Spent w/ Digital Media Per Adult User Television & Mobile Daily Time Spent (Non-Deduped)
4.3 266 3.9 3.5 3.2 0.7 226 2.9 0.4 0.6 2.6 0.4 1.9 0.3 0.3 1.1 0.3 216 0.8 2.8 3.1 3.3 3.6 0.3 1.6 2.3 2.6 0.4 0.8 0.4
2.6 2.4 2.5 2.3 2.2 2.2 2.2 2.1 2.0 20
2010 2011 2012 2013 2014 2015 2016 2017 2018 Average Daily Time Spent (Minutes) 2009 2011 2013 2015 2017 2019E Desktop / Laptop Mobile Other Connected Devices Mobile Television ______Sources for information on this page: eMarketer and SimiCart. Page 11 2. MOBILE HAS BECOME THE MOST IMPORTANT CHANNEL (CONT.)
Social commerce and shoppable ads will become a new mobile battleground – Product sales through social media have been relatively small to date, but with the large social platforms battling for commerce dollars, it could be become a more mainstream shopping channel over the next several years – Marketers can integrate commerce and content allowing marketers a new opportunity to engage with users on the go and offer a new revenue stream
When will 5G materialize? – There has been a lot of hype and a long-delayed roll-out, but as carriers roll-out the services, consumers are likely to adopt it quickly – A significant driver of the demand, are data-heavy entertainment services that require faster speeds and better coverage
Streaming services and mobile video consumption will continue to accelerate driving marketers towards the streaming platforms
5G would better power augmented reality experiences, which have failed to move beyond gimmicky to date
Businesses have the opportunity to use personalized messages to communicate everything from marketing, transactions and customer service - across the entire customer lifecycle
Mobile Share of eCommerce Spend (Global) U.S. Internet Advertising Spend
$120B
$1.36 $3.56 Trillion Trillion $60B (Mobile) (Mobile) Internet Advertising Spend Advertising Internet
2017 2021 $0B '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 58.9% 72.9% Desktop Advertising Mobile Advertising ______Sources for information on this page: eMarketer and SimiCart. Page 12 3. THE INTERSECTION OF E-COMMERCE AND ONLINE ADVERTISING
Google and Facebook have dominated the online advertising ecosystem for much of the last decade, accounting for over 60% of all online ad spend in the U.S. and nearly all of the growth
Amazon has emerged as a new disruptive entrant into the digital ad ecosystem, growing advertising revenue to over $14B in 2019, up from ~$4.5B in 2017 – Amazon's advantage and moat in advertising is created by an enormous set of purchase level data that is very relevant for both endemic and non-endemic advertisers – Over 50% of product searches now originate on Amazon, who surpassed Google in 2015
Many other retailers including Wal-Mart, Target, Kroger, etc. are developing advertising strategies given they also have proprietary first party customer/purchase data and brand relationships – Amazon has a big advantage over these retailers in terms of its position as the most dominant ecommerce platform and it's built a highly sophisticated, self-supported advertising business over the last several years
Growth in Global Digital Ad Spending Growth in Global E-Commerce ($ in billions) ($ in trillions) $518 $6.5 $479 $436 $5.7 $385 $4.9 $333 $4.2 $283 57% 59% 61% $3.5 54% $2.9 50% 22% 46% 21% 19% 17% 20% 23% 13% 16% 10% 14% 18% 16% 15% 21% 8% 12% 18% 16%
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Digital Ad % of Total Media Retail eCommerce % of Total % Change % Change Spending Ad Spending Sales Retail Sales
______Sources for information on this page: eMarketer and BMO Capital Markets Media & Internet reports. Page 13 3. THE INTERSECTION OF E-COMMERCE AND ONLINE ADVERTISING (CONT.)
In response, both Google and Facebook are innovating their platforms to create a more seamless shopping experience for consumers and drive more value for their ecommerce advertisers
Massive opportunity for these platforms and retailers to capture hundreds of billions of trade promotion spending that has been traditionally earmarked for in-store – Tactics such as product placement, couponing and special offers are well adapted to digital and mobile – Buy-online and pick-up/return in store drives increased foot traffic from a strongly engaged user base, creating synergy between online and on-premise spending
Top E-Commerce Companies Many Players Battling to Capture Share-Shift as a % of U.S. Sales (2018) of Trade Promotion Dollars Coming Online $526.1B of total U.S. e-commerce sales (2018)
39% 5% 5% 4% 2% 2% 1% 1% 1% 1%
______Sources for information on this page: eMarketer Retail E-commerce Share 2020. Page 14 4. ORCHESTRATING THE CUSTOMER JOURNEY AND PERSONALIZING EXPERIENCES IS KEY TO WINNING STRATEGIES
In B2C and increasingly B2B, we are seeing more touchpoints with consumers and decisions makers before a purchase decision, provided there are more ways to shop today than ever before
What’s clear is that shoppers want a consistent experience across all channels and they want to be treated as a unique individual customer, not just any customer – 21 is the average number of touchpoints before a consumer makes a purchase – 73% of consumers say they are more likely to buy from companies that personalize their shopping experience – 84% of retailers worldwide said that creating a consistent customer experience across channels is important to them – 50% of customers surveyed said they turned to a competitor after a bad customer experience
Gartner rightly states, “vendors will become the nucleus for managing customer’s experience – regardless of discipline or touchpoint”
Many companies have emerged to address the challenges companies face in creating a consistent and personalized customer experience across channels – and expect more to emerge, as no one company has perfected the approach
Shoppers Engage Numerous Times Before Personalized Recommendations, In Making a Purchase Particular, Drive Impulse Purchases
Number of Pre-Purchase % of Shoppers Who Have Made an Impulse Behaviors Shoppers Perform Buy in Last 90 Days Percentage of Shoppers Who Have Made an Impulse Buy in the Last 90 Days 11 63% 46% 6 5 26%
Mono-Channel 2 Channel 3+ Channel Milennials______Gen X Boomers Shoppers Shoppers Shoppers Source: Segment.
______Sources for information on this page: eMarketer, Business Insider, Forbes, Forrester. Page 15 4. ORCHESTRATING THE CUSTOMER JOURNEY AND PERSONALIZING EXPERIENCES IS KEY TO WINNING STRATEGIES (CONT.)
A key driver of the movement towards managing the customer experience and journey is Amazon – Amazon has conditioned consumers to expect a highly personalized experience, irrespective of the retailer or brand – This standard has translated to all facets of an individuals’ purchase behavior, B2C or in the business setting – If a brand doesn’t recommend a customized list of products in market messages, 47% of consumers will move from the brand’s website to Amazon
Significant opportunity remains for technology to seamlessly identify customers across channels, identify their intent, customize marketing messages, and deliver a unique customer experience for them that results in a purchase and loyalty
Key players today in this market include the likes of Adobe, Salesforce, Kibo on the personalization side, Adobe, Thunderhead, Kiteweel on customer journey orchestration and SAP / Qualtrics, Medallia, and InMoment on the back end of experience management
Many more players will emerge to try to address breaking down silos on the path to purchase and building a credible journey orchestration and personalization platform for omni-channel
Demand for Personalization: Level of Involvement vs. Personalization
Active 2. Active consumer involvement / mass personalization Consumer Food & 1. Active consumer involvement / bespoke groceries Furniture, homeware Hotels & DIY Fashion Flights Holidays Electrical products Restaurants accessories Clothing & jewellery Footwear Books, music & Beauty products entertainment
Beers, wines & spirits Soft drinks
Passive 2. Passive consumer involvement / mass personalization Health & wellness Consumer Mass Personalization Bespoke
______Sources for information on this page: eMarketer, Business Insider, Forrester and Deloitte. Page 16 5. EXPERIENTIAL MARKETING & EVENTS DRIVE ENGAGEMENT AND PURCHASE ACTIVITY
Despite the current environment, and accelerating shift to digital advertising mediums, experiential marketing remains the single most efficient method of connecting, communicating and engaging with customers
Experiential marketing and events allow prospective customers the opportunity to experience products, technology or services firsthand; in the case of B2B, it also allows sellers to establish relationships and build rapport with prospective customers, at scale
– In a recent survey, 47% of respondents said in-person events were one of their top-three channels; of that group, 46% said it was the most effective at driving early stage engagement, while 44% said it was the most effective at driving conversion later in the funnel
– About 65% of consumers say that live events and product demonstrations helped them fully understand a product better than any commercial or other method could
– 93% of consumers claim that live and experiential events have a larger influence on them than TV ads
The near-term disruption with in-person events has prompted many information and marketing services companies to pivot to digital, including ads and in the case of B2B, short-form webinars
– Many newcomers to webinars are realizing their benefits, as efficient, less costly and more scalable
– That said, webinars do not yield the same absolute profits, as live events do; many players will have to push on other sources of revenue to maintain absolute levels of profitability
Events Are, and Will Continue to Be, Very Important
Average Annual Personal Consumption Expenditure Growth 95% believe live events provide valuable opportunities to form in-person connections in an increasingly digital world
6.3% 4.7% 3.7% 1.6% 41% consider live events to be the most Total Personal Total Goods Total Services Experience-Related critical marketing channel in achieving Consumption Services business outcomes Expenditure
______Sources for information on this page: STR / Tourism Economics, PCMA COVID-19 Survey, American Express 2020 Global Meeting & Events Forecast report, L.E.K. market study, Bizzabo Event Marketing 2019 report. Page 17 5. EXPERIENTIAL MARKETING & EVENTS DRIVE ENGAGEMENT AND PURCHASE ACTIVITY (CONT.)
Smaller scale events have largely been rescheduled, though larger annual events have in many instances been cancelled altogether; event providers have offset some impact by incentivizing pre-paid sponsors to roll their sponsorship dollars into rescheduled or next year’s events, but nevertheless, are being hit very hard – It remains to be seen if large-scale events will return anytime soon, until either a vaccine or herd immunity is built – If COVID keeps events from returning soon, some organizers and industry participants will have to consider shutting down; this will create opportunity for larger scaled, well capitalized providers that can weather the storm and capture share when events return
We do believe over the very long term, experiential marketing will remain a growth segment of marketing technology and services – We expect a modest shift in industry spend to targeted, smaller scale, hyper-local events vs. large trade shows – We expect higher participation rates and engagement in these smaller formats, and higher ROI
Why do we feel so strongly about events returning and thriving? One, interactions and experiences are paramount to human activity – people want to get back to being with others; two, events uniquely drive activity, engagement and purchasing activity, the way digital cannot – 74% of customers indicated engaging with branded marketing experiences makes them more likely to buy – 60% of industry professionals said that events and experiences generate second-hand digital or social content that is critical in reaching non-physical attendees – 98% of event attendees create digital or social content at an experience or event and share it
Continued Spending and Overall Long-Term Industry Growth Despite COVID-19
$1.1T Postponed Events Moving Face-to-Face Will Digital Cannibalize Global Events due to COVID Events to Virtual Face-to-Face? Industry in 2018 Yes 10% 66% No CAGR Yes, 30% Other No Portions 14% No 34% 52% Yes 62% $2.3T 18% Yes Global Events 24% Industry by 2026 ______Sources for information on this page: STR / Tourism Economics, PCMA COVID-19 Survey, American Express 2020 Global Meeting & Events Forecast report, L.E.K. market study, Bizzabo Event Marketing 2019 report. Page 18 6. EMBRACING THE TENSION BETWEEN THE POWER OF DATA AND PRIVACY IN GDPR / CCPA ERA
Marketers are dealing with a conundrum: never have customer expectations been so high, yet loyalty so fleeting – 70% of loyalty is constantly up for grabs and 77% of consumers now retract loyalty faster than three years ago
Massive amounts of data are created by all customer touchpoints requiring advanced technology to understand the customers’ intent
Companies must deliver better, richer customer experiences in a more personalized, targeted manner while providing a consistent, omnichannel message
At the same time, companies must do so in a data-compliant way with better use of 1st and 3rd party data – 84% of consumers have declined to do business with companies that required too much personal information
Growing importance of data ethics, access, and security (GDPR and CCPA) require more scrutiny for how “data machines” procure data
Growing Global Data Collection & Usage
Expanding Volume of Data Leads to Increased Data Set $169B 13% CAGR $274B Complexity Big Data and Big Data and Business Analytics Business Analytics Global Data Generated in Zettabytes Industry in 2018 Industry by 2022 79.4
Growth in IoT Analytics & Wearables ( in millions)Number of Connected Wearable Devices Globally (Millions) 13.6 1,105 929 835 2018 2025 722 593 Fast-growing mobile data traffic, cloud computing traffic, as well as the rapid development of technologies such as AI and the Internet of Things all contribute to the increasing volume and complexity of 2018 2019 2020 2021 2022 data sets
______Sources for information on this page: Cognetik, Statista 2020; Cisco Systems, Braze.com, Accenture. Page 19 6. EMBRACING THE TENSION BETWEEN THE POWER OF DATA AND PRIVACY IN GDPR / CCPA ERA (CONT.)
Data privacy has emerged as a key strategic differentiator for brands to establish trust with customers – 69% of data users report their organizations are taking steps to build and / or implement strategies to govern their use of audience data – 94% of marketing executives agree data privacy is vital
Business performance after GDPR took effect found that GDPR-compliant organizations had outperformed non- compliant companies by an average of 20%
Privacy regulations have thus far had a limited direct impact on data investments, as the increased scrutiny on consumer data has driven a wave of demand and investment in technology and infrastructure to provide data security, governance and transparent utilization
90% of consumers feel that companies must be more proactive about data protection, requiring marketers to be more forward leaning on cyber security and collaborating with IT Teams to ensure the right steps are being taken
The tension between the requirement of hyper-personalized solutions and data privacy is creating opportunities for security, compliance and privacy-minded vendors
Actions Companies are Taking to Address Current CCPA Compliance Data Privacy Concerns (% of firms) (% of firms) Currently compliant 30% Will be compliant by the end of 2019 18% Strengthened and / or clarified our Will be compliant sometime in 2020 27% consumer opt-in policies and disclaimers 56% Will be compliant sometime after 2020 13% Revised policies governing how we use No plans to be compliant 12% and share data internally 43% Revised policies governing how we source data from third parties 42% Extended our legal and / or data How Prepared are Organizations with 36% governance teams GDPR Compliance Developed (and / or revised) central (% of firms) data-use strategies 35% Extremely prepared Invested in new technology to support 9% compliance requirements 24% Moderately prepared 32% Reduced our spending / reliance on Somewhat prepared 32% 16% certain kinds of data Slightly prepared 16% Not prepared at all 11% ______Sources for information on this page: eMarketer, Braze.com, Winterberry Group. Page 20 7. HARNESSING AI AND ML TO DRIVE MARKETING OUTCOMES
The use of artificial intelligence and machine learning enable the harnessing of a massive quantity of data to reach and engage with consumers in more effective ways
Increasing usage of AI / ML to make it easier for users to build and create solutions for the modern marketing landscape, personalized at every stage – By the end of 2020, 90% of large enterprises will be running pilot or production-level machine learning applications – 20% of business content will be created by AI in 2020 and 95% of companies expect to integrate AI in the next 2 years – 88% of CX professionals believe AI will enhance, not replace, agents – Top-performing companies are more than twice as likely to be using AI for marketing
AI / ML enable the promise of modern (social, video, voice) and future (AR / VR) customer touchpoints in a way that other incumbent technologies fail to do
Adoption of AI / ML have created advanced analytic solutions that can discover segments of customers through patterns or anomalies that lead to conversion failure or success – Autonomous marketing systems will issue more than 50% of multichannel marketing messages by 2022 – Visualization and graph analytics tools help marketers visualize data, allowing for better predictions and prescriptions – Analysis of unstructured data allow marketers to use data to perform micro-targeting / micro-segmentation strategies
AI Investment Priorities AI Usages by Sector (% of firms) (% of companies using AI for this function) B2B B2B B2C B2C Currently Using Planning to Use No Plans to Use Activity Overall Product Svcs. Product Svcs. Content personalization 56.5% 57.1% 62.2% 61.9% 40.9% Audience targeting 47% 34% 19% Predictive analytics for customer insights 56.5% 54.3% 48.6% 61.9% 68.2% Targeting decisions 49.6% 37.1% 40.5% 61.9% 72.7% Audience segmentation 45% 35% 20% Customer segmentation 40.9% 34.3% 32.4% 61.9% 45.5% Programmatic & media buying 38.3% 31.4% 29.7% 42.9% 59.1% Dynamic creative 42% 27% 31% Optimizing marketing content and timing 33.9% 31.4% 35.1% 28.6% 40.9% Campaign planning and Conversational AI for customer services 25.2% 22.9% 24.3% 19.0% 36.4% modelling 41% 30% 29% Next best offer 14.8% 5.7% 21.6% 9.5% 22.7% Media speed optimization 39% 31% 30% Augmented and VR 10.4% 11.4% 10.8% 9.5% 9.1% Autonomous objectivity systems 2.6% 2.9% 0.0% 4.8% 4.5% Personalized offers 38% 35% 27% Facial recognition and visual search 1.7% 2.9% 2.7% 0.0% 0.0% Biometrics 0.0% 0.0% 0.0% 0.0% 0.0% ______Sources for information on this page: The CMO Survey, Forbes, Deloitte State of AI in the Enterprise. Page 21 7. HARNESSING AI AND ML TO DRIVE MARKETING OUTCOMES (CONT.)
Domain-specific usage of AI is unlocking enormous growth in key sub-segments of the MarTech landscape. Examples include: – DAM: AI enables auto-tagging / flagging, transcribing speech, emotion recognition from images and verifying identity – CRM: AI is accelerating the sales cycle and solving many client problems through data analysis, embedded behavioral analytics and conversational tools (chatbots and RPA) – Omnichannel: Driven by smart devices and mobile usage, voice is no longer optional in customer engagement and content marketers must optimize content for voice search (AI-powered Alexa / Siri) – User Experience: moving beyond static A/B testing to create automated, continuous testing of the user experience in a way brute force human intervention could never do – Marketing Automation: self-help requirements drive automation 75% of customers prefer self-help for issue resolution which drives requirements for true multi- / omnichannel automation Marketers use of emerging automation technologies continues to proliferate (Chatbots, use of Predictive Personalization)
The AI & Machine Learning Renaissance
Spending on Artificial Intelligence Systems ($ in B) Every human on the planet will $52.2 create 1.7 megabytes of 1.2 trillion Google searches annually data per second in 2020
IoT and wearable devices $7.8 Each minute, of 300 hours produce 5 quintillion bytes video are uploaded to YouTube of data daily 2016 2021
CAGR 16A – 21E 12% 99.5% of data collected today never gets used or analyzed due to lag in computing power required to synthesize the information ______Sources for information on this page: Forbes, Gartner, IDC, Mckinsey, New Voice Media, Nuance and Cisco. Page 22 SUMMARY TRANSACTION INFORMATION INCREASING MARKETING TECHNOLOGY INVESTMENT AND M&A ACTIVITY
Marketing Tech & Services M&A Activity
2019 was a very active year as deal count spiked across many sectors and the number of scaled transactions ($100M+) were also up significantly
We expect continued consolidation in advertising tech and services given venture funding remains a challenge, but the pace has slowed significantly from the 2014 – 2015 timeframe as many of the larger players have built out their stacks – We will see activity around new emerging areas such as CTV, digital OOH and audio, as well as larger pure-play ad-tech providers looking to build scale and acquire additional capabilities
We see continued large-scale M&A in marketing technology to continue as these capabilities become increasingly important in the enterprise stack – Several $1B+ deals in 2019 and a strong mix of buyers ranging from marketing clouds, private equity and newer entrants in brands (McDonalds, Mastercard, etc.) acquiring technology to bring in-house – Private equity has been much more attracted to the growth, predictability and operating leverage of the more software-oriented marketing technology models and has become the most active buyer in the space over the last few years
Number of Marketing Tech & Services M&A Transactions
213 <$100M EV >$100M EV 38 146 141 131 133 139 30 37 20 25 22 175 104 111 108 117 116
2014 2015 2016 2017 2018 2019
______Sources for information on this page: Pitchbook, CapitalIQ as of 03/20/2020, 451 Research, Gartner. Page 23 CONTINUED INVESTMENTS FROM PRIVATE EQUITY INVESTORS
Significant Investors
PE Firm Targets
______Sources for information on this page: Pitchbook, CapitalIQ, 451 Research. Page 24 THE MARKETING TECHNOLOGY DASHBOARD – SUMMARY OF LARGEST TRANSACTIONS
Top 10 Funding Rounds – Since 2019 ($ in millions)
Date Target Deal Size ($ in M) Deal type 7-Feb-20 $479 Series B 03-Oct-19 400 Growth 12-Jun-19 227 Growth 20-Feb-20 210 Series B 21-Jan-20 210 Series D 19-May-20 190 Series D 2-Apr-19 175 Series D 30-May-19 (1) 150 Growth 8-Apr-19 150 Series B 6-Aug-19 150 Series D
Top 10 M&A Deals – Since 2018 ($ in millions) Date Target Acquiror Enterprise Value 10-Jun-19 $16,322 4-Feb-20 13,000 11-Nov-18 8,000 24-Feb-20 7,000 20-Mar-18 6,607 17-Jan-18 6,164 20-Sep-18 4,750 14-Apr-19 4,400 20-Nov-19 4,000 22-Oct-19 2,783 ______Sources for information on this page: Pitchbook, CapitalIQ, 451 Research and Gartner as of June 30, 2020. (1) Foursquare announced a planned merger with Factual on April 6, 2020. Page 25 MARKETING TECH COMPANIES IN THE PUBLIC MARKETS
Large strategic acquirors have been active in buying best of breed solutions for existing marketing tech platforms
Strategic Targets
______Sources for information on this page: Pitchbook, CapitalIQ, 451 Research. Page 26 MARKET LANDSCAPE Advertising DIGITAL AGENCIES
Working with marketers to strategically build and execute campaigns across digital channels to tell a cohesive and compelling story to their customers
Key Market Trends
A majority of overall agency business has become digital and the share has more than doubled since 2009, with digital representing over $30B of revenue for 2018
Growth amongst the larger holdcos has slowed significantly, but the large share shift in digital and the broader digital ad trends have created an environment where independent digital agencies experienced strong growth and captured share
Consultancies have been a strong entrant into the space through acquisition and have taken share
Digital agencies leverage the power of the large online ad platforms, while utilizing their own proprietary technology and processes to develop more granular insights on their clients’ customers as well as improve and streamline their own internal processes
We expect vertically focused agencies to outperform over the long run vs. larger agencies that lack vertical expertise & capabilities
Global Market Sizing ($ in billions) Global Ad Agency Digital Revenue $35 CAGR 15A – 20E $21 10%
2015 2020
______(1)SourcesMarket for information sizing per marketsandmarketson this page: BMO .Digital Marketing Hub v4.0 and v4.1. Page 27 DIGITAL AGENCIES (CONT.)
Key Market Trends (Cont.) Select Digital Agencies Landscape Independent Agencies have inherently less technology risk than their ad-tech brethren, but are subject to the same flight risk of key human capital assets as in other professional service businesses
Performance marketing has been the strongest and most active category for Holdco / Acquired independent digital agencies, as they can more easily tie clients marketing investments to business outcomes and measurable goals
______Sources for information on this page: BMO Digital Marketing Hub v4.0 and v4.1. Page 28 ONLINE AD TECH
Online advertising technology covers a range of technology, tools and managed services that brands and agencies use to strategize, set up and manage online advertising
Key Market Trends
Massive market opportunity, that has been chased by a significant amount of funding; over $15B went into the sector from 2008 – 2018 in over 1,200 companies
The market is uniquely dynamic, with the pace of technological change advancing rapidly leaving many companies behind
The mostly transactional nature of the business model is inherently more volatile and leaves companies exposed to bigger swings in revenue and earnings
Google, Facebook and now Amazon have emerged as the dominant platforms for online advertising capturing 2/3 of the market in the U.S. and nearly all the incremental growth
Privacy regulation has had a limited direct impact to date, but actions taken by the large platforms in response are creating significant uncertainty across the industry
Global Market Sizing ($ in billions) Global Digital Ad Spending $518 CAGR 18A – 22E $333 12%
2018 2022
______Sources for information on this page: PubMatic 2019 Global Digital Ad Trends report, LUMA Market reports, 451 research, Capital IQ. Page 29 ONLINE AD TECH (CONT.)
Key Market Trends (Cont.) Select Online Ad Tech Landscape
Programmatic, video and mobile are Advertisers Publisher / Native leading the growth of the digital advertising market – The convergence of linear and digital T.V. will drive significant activity as the biggest companies in technology and media fight for their share
Ad-tech has seen a more difficult exit environment as there has been a supply / demand imbalance amongst sellers / buyers and the public markets have not been an option in most cases
Management / Measurement
Page 30 SEARCH & PERFORMANCE MARKETING
Generate digital leads on a pay-for-performance basis and focus on large, information- intensive industries where relevant and targeted media offerings can help consumers make better buying decisions
Key Market Trends
Performance marketing includes a variety of methodologies, including search, online lead generation and affiliate marketing
A variety of models are deployed including search-engine marketing, vertically focused educational content, review sites, price comparison, etc. in order to engage and drive consumers to purchase who have shown some intent
Inherent measurability and payment being directly tied to consumers converting into customers for marketers creates a clear and strong value proposition for performance marketing
As a result, performance marketing is one of the last pieces of advertising budget to be decreased or cut if the channel is providing the desired results
There have been large shifts in desktop and mobile display into performance marketing as banner ads surrounding content as consumer calls to action based on retargeting prior users’ activities online, will now become more challenged given the death of third-party cookies
Global Market Sizing ($ in billions) Global Digital Marketing Software (search / social media / email marketing, marketing automation, etc.)
$152 CAGR 19A – 27E
$44 17%
2019 2027
______Source for information on this page: GrandView Research Digital Marketing Software market report Page 31 SEARCH & PERFORMANCE MARKETING (CONT.)
Key Market Trends (Cont.) Select Search & Performance Marketing Landscape
Vertical specific businesses create value Vertical Healthcare Financial Services through niche or vertical leadership, creating higher quality leads than / generalist companies; as companies scale, they have the capacity to target a
broader spectrum of verticals or use Insurance Retail Other M&A for vertical expansion (Travel)
(Self-storage) The broader ecosystem is highly fragmented and the asset-light business (Wedding) models creates strong cash flow Multi-Vertical characteristics leading to a high degree of M&A activity from both strategics and financial sponsors
Page 32 OUT OF HOME
Engaging consumers and business decision makers through marketing signage outside the home, largely located in high traffic outdoor areas, transportation corridors and large indoor public venues
Key Market Trends
Out of home advertising: largely consists of print and digital signage located in high traffic areas via billboards, large format signs or highly fitted/customized signage
Increasing prevalence of digital: Digital offers brighter colors, enables live video/movement and allows for more content and thus greater monetization potential. Digital will continue to replace printed billboards/signage and capture greater spend. Digital out of home media is expected to grow at 16% p.a. vs. total OOH at 6-7% p.a.
Programmatic will change the landscape: programmatic capabilities, especially when combined with mobile attribution, is opening the door for new players
High fragmentation remains: even with some large, established global providers, many regional and local providers exist; industry is further fragmented with firms specializing in specific spaces/channels
Global Market Sizing ($ in billions) Global OOH & Digital OOH Spending (All visual advertising media outside of the home) $33 CAGR 19A – 21E
$29 7%
2019 2021
______Sources for information on this page: Broadsign, Nielsen, Ocean Neuroscience and OAAA. Page 33 OUT OF HOME (CONT.)
Key Market Trends (Cont.) Out of Home Displays in the U.S. (2018)
STREET PLACE- Continued emphasis on Omni-channel BILLBOARDS TRANSIT FURNITURE BASED OOH journey orchestration research shows significant ties between offline and Bulletins: 164,370 Bus Shelters: 63,239 Airports: 29,476 Arena & Stadiums: Digital Billboards: Urban St. Furniture: Digital Airport: 2,350 961 online activity, supporting increased 8,100 39,128 Buses: 1.05 million Cinema: 35,800 Posters: 147,029 Bus Benches Rail / Subway: Digital Place-based: collaboration between OOH efforts and Junior Posters: Newsracks 365,113 1.25 million 19,818 Newsstands Digital Rail / Interior Place-based: those of online channels Wall Murals: 2,289 Phone Kiosks Subway: 5,454 Convenience Stores, Urban Panels Digital Transit: 7,847 Health Clubs, – Research from Ocean Digital St. Furniture: Mobile Billboards: Restaurants / Bars 5,742 514 Exterior Place- NeuroScience found that Taxis: 44,008 based: Digital Taxis: 33,800 Airborne, Marine, “consumers are 48% more likely to Truckside: 3,501 Resorts & Leisure Shopping Malls: click on a mobile ad after being 21,700 exposed to the same ad on an out- of-home ad first” – Similarly, Nielsen and the OAAA found that 46% of surveyed adults had conducted an online search after first seeing the object of their Activations from OOH in past 6 months search in an OOH ad. Similar (as a % of U.S. adults) results were also seen with leading 46% social networks 38% 23% 25%
Search Facebook Twitter Instagram
“OOH provides the highest rate of online activation per dollar of any offline media” – Nielsen Study
______Sources for information on this page: Broadsign, Nielsen, Ocean Neuroscience and OAAA. Page 34 OUT OF HOME (CONT.)
Select Out Of Home Segment Landscape
Media Provider Landscape
Content Management
Media Management / Operations
DSP / SSP
Page 35 PROMOTION & PRICING
Use of promotional marketing to convert customers to trial / sampling and eventually loyal customers, in parallel with pricing execution
Key Market Trends
Continued shift to digital promotions and coupons, delivered in myriad of ways; traditional digital coupons delivered online or via email, in app programs, via third party technology providers and their platforms and via others
Increasing use of DMPs / CMSs and software to personalize and optimize promotional campaigns and pricing execution
Periodic disruption driven by changing consumer behavior and customer purchasing patterns
Despite newer shopping channels and a full economic cycle later, there’s an absence of promotional platforms of scale well positioned to capitalize on a potential downturn
Expect new entrants to emerge to fill a void for high value digital promotions that capture the attention & loyalty of consumers
Global Market Sizing ($ in billions)
Other Consumer Promotion Shopper Marketing 3% 7% 8% $4B+ Traditional Ads Pricing & Promotion 13% $225B Optimization Software Market 2020E CPG Trade Promotion SPEND 46% Digital Ads 23%
______(1)SourcesMarket for information sizing per marketsandmarketson this page: Marketing. Charts, L.E.K. Pricing, Promotion, Markdown Management and Optimization market study and Baird estimates.. Page 36 PROMOTION & PRICING (CONT.)
Key Market Trends (Cont.) Select Promotion & Pricing Landscape
Couponing / Promotion Solutions Newer shopping channels and a full economic cycle later, there’s an absence of promotional platforms of scale well positioned to capitalize on a potential downturn Sweepstakes / Incentives Platforms Award Programs
Payment / Gift Card Platforms
Trade Promotion Optimization
Pricing / Promotion Management / Optimization
B2B
Page 37 IN-STORE
Engaging prospective customers just prior to the moment of truth through experiential marketing, including signage, music or video messaging and scent; in-store marketing services also includes outsourced service specialists, including brokers and support service providers
Key Market Trends
The physical world still accounts for the majority of revenue, irrespective of channel and will remain a critical venue for experiences, service and support and now inventory and delivery / pick-up
Many successful platforms we see across the in-store marketing landscape are going beyond retail and servicing other large in-person customer services businesses
Key examples include hotels, casinos, restaurants, fitness facilities, automotive dealerships / services, beauty salons / spas, financial services outlets, and more
Digitization of in-store marketing mediums, from physical signage to wi-fi marketing, supports increased subscription like recurring services and technical support opportunities
Expect continued disruption of traditional retail models; likely to accelerate within retail and also expect some disruption amongst non-retail physical outlets, amid the rethinking of the physical model due to COVID-19
Global Market Sizing (1) ($ in billions)
$35 In-Store Support Services $26 $10 CAGR 19A – 24E Scent Marketing $8 $11 6% $10 Digital Signage $14 $8 2019 2024
______(1) Market sizing per Baird estimates and proprietary Baird market study. Page 38 IN-STORE (CONT.)
Key Market Trends (Cont.) Select In-Store Marketing Landscape
Winners in the space will be those that In-Store Signage Merchandising Systems successfully integrate online/offline campaigns, through consistent branding, digital connectivity, and seamless engagement and experience
The space remains highly fragmented, with limited platforms of scale; however, the benefits of scale are significant, Digital Signage and Diversified Experiential Marketing including operating leverage, differentiated capabilities and real technology infrastructure / platforms
Marketing / Support Services
Technology
Page 39 Digital Experience PERSONALIZATION
Creates a relevant, individualized interaction between a company and its audiences to enhance the individual’s experience and supports marketing, digital commerce and customer experience
Key Market Trends
Enables marketers to personalize and optimize multiple critical steps on the path to purchase including messaging and content, search results and product recommendations across digital and in-store channels
Consumers demand and expect a seamless omni-channel experience and to be communicated with in a personal, timely and consistent manner online and in-store
The proliferation of digital touchpoints creates convenience for consumers but also a non-linear path to purchase that is unique for every individual consumer
Digital has a large and increasing influence in offline activity across several end markets including retail, restaurants, travel, healthcare and financial services
Massive amounts of data are created by these customer touchpoints requiring advanced technology to understand the customers’ intent
Global Market Sizing ($ in billions) 7% 73% $2B+ Global Personalization Market 20% Multi-Channel Shoppers CONSUMER SHOPPING In-store Only Shoppers “Over the next few years, $800 billion PREFERENCES in sales will shift to e-retailers that use (U.S.) site personalization, and away from Online Only Shoppers those that don’t” – Kiran Mani, Managing Director, Google
______Sources for information on this page: Harvard Business Review, Statista and Baird internal research. Page 40 PERSONALIZATION (CONT.)
Key Market Trends (Cont.) Select Personalization Landscape
While the market opportunity is very large and personalization is a top investment priority, the market has not created a "break-out" stand-alone company that has achieved real scale
The competitive landscape consists of several smaller-sized pure-plays as well as larger businesses that have personalization embedded as part of a broader application such as content management, multi-channel marketing / or digital commerce
/
Page 41 DIGITAL ASSET MANAGEMENT (DAM)
Digital asset management (DAM) systems help marketers to manage their content easily. Through integrations and automation, DAM systems can also deliver digital assets to any channel, including the web, social networks and mobile, to facilitate immersive marketing experiences
Key Market Trends
The proliferation of marketing touchpoints are driving the need for more orchestrated content development and storage (DAM)
Achieving personalized marketing across channels at scale is a top priority for all marketers and DAM is a key enabler – As technologies advance and channel options proliferate, the need for centralized marketing management systems has never been more important – DAM offers marketers brand consistency, compliance and centralization tools through automation, planning, distributing marketing materials and project management
DAM is increasingly seen as the digital marketing hub / brand portal – While marketing is still the biggest use case of DAM, its acceptance in other areas (such as supply chain) and cloud adoption have made it more mission-critical to an overall organization – Integration and support with other marketing systems within an organization is critical for any solution
Global Market Sizing ($ in billions)
$4.0 CAGR 17A – 20E $2.4 18%
2017 2020
______Sources for information on this page: Markets and Markets, Finance Digest, Deloitte, Gartner and IBM. Page 42 DIGITAL ASSET MANAGEMENT (DAM) (CONT.)
Key Market Trends (Cont.) Select DAM Landscape
The buyer’s journey is evolving as customers desire speed; marketers must be nimble: – 90% of B2B buyers say they will find you when they are ready – 85% of customer interactions will be automated by 2020 Artificial Intelligence is alive and well in / DAM as features such as auto-tagging / flagging, transcribing speech, emotion recognition from images and verifying identity proliferate – 95% of companies expect to integrate AI in the next two years
/
______Sources for information on this page: Finance Digest, Deloitte, Gartner and IBM. Page 43 CONTENT MANAGEMENT SYSTEMS (CMS)
Software application that manages the creation and modification of digital content
Key Market Trends
Content continues to be a fast-growing area for organizations of all sizes, making a strong content management system essential
A traditional CMS comprises a database where content resides, a back-end where content is created, an application where publishers / designers create design schema, and a front-end display of published content
Wordpress is still the dominant force in the industry, powering ~35% of all websites on the internet
Emergence of cloud-based “headless CMS” which are built from the ground-up, utilizing APIs, that makes content accessible for display on any device and removes the “front-end” (such as Drupal, Wordpress)
28% of marketing budgets today go to infrastructures such as CMS and Web Content Management Systems
Global Market Sizing ($ in billions)
$124
CAGR 18A – 26E
$36 17%
2018 2026
______Sources for information on this page: Zion Market Research Global Content Management Software market report, Wordpress.org, ContentStack.com. Page 44 CONTENT MANAGEMENT SYSTEMS (CMS) (CONT.)
Key Market Trends (Cont.) Select Content Management Systems Landscape
Increasing usage of AI to make it easier
for users to build and create (Svanaco) – By the end of 2020, 90 percent of large enterprises will be running pilot or production-level machine learning applications – 20% of business content will be created by AI in 2020
Robust, “big-ticket” M&A activity highlights importance of the broad CMS space to PE (Acquia / Vista, Episerver / Insight, Sitecore / EQT)
Content / Product Experience
______Sources for information on this page: Gartner, Deloitte, Forbes. Page 45 SEARCH ENGINE OPTIMIZATION (SEO) / SEARCH ENGINE MARKETING (SEM) Search engine marketing is a form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages primarily through paid advertising
Key Market Trends
SEO / SEM markets are mature, with growth in the high single digits SEO efficacy dominates PPC: 70% of marketers believe SEO is more effective than PPC but usage of the two together can be more effective than either standalone Google still the dominant force in Search (75% market share) and any SEO / SEM strategy must start with Google front and center – 2019 BERT algorithm change sent tidal waves through the industry and marketers work to get their sea legs: more intent-matching and focus on content delivery – Google focused on E-A-T (Expertise, Authority and Trustworthiness) raises the bar and requires high quality content and link building with customers Zero-click searches make up 50%+ of searches and makes usage of rich and featured snippets important at driving traffic and conversion Given increasing complexity, SEO / SEM strategies require more and more automation (reporting, bidding, to automatic ad creation) A successful SEO / SEM strategy built around data and intent-based intelligence is essential in driving revenue post- COVID (traffic down + conversions down + CPC relative unchanged = increase in cost per conversion)
Global Market Sizing ($ in billions) $1.1 CAGR 17A – 22E $0.5 13%
2017 2022
______Sources for information on this page: Borrell Associates, Hubspot.com, SearchEngineLand.com, Statista, eMarketer. Page 46 SEO / SEM (CONT.)
Key Market Trends (Cont.) Select SEO / SEM Landscape
Increasing importance of Voice Search and mobile-first are shifting the equation towards a more multi-channel SEO / SEM toolkit – 221m mobile search users in U.S. in 2020 – Developers increasingly taking mobile-first and then desktop compatible approach – “Where to buy” and “near me” mobile queries have grown 200% y/y – 50% of all searches will be voice searches in 2020
Continued importance of local SEO, with a core focus on mobile – 80%+ of smartphone shoppers conduct “near me” searches – 88% of consumers interact with a local business <24 hours of searching for it on a mobile device
While Social Media is a growing marketing channel, Search engines drive 10 times more traffic to shopping sites
than social media ______Sources for information on this page: Hubspot.com, Statista, comScore, Forbes, Social Media Today. Page 47 Customer Journey Management CRM PLATFORMS
CRM has evolved from a tool to collect, store and manage a database of customer information in order to retain customers and enhance sales to include the creation and maintenance of relationships and interactions with potential and existing customers
Key Market Trends
CRM growth driven by requirement for highly personalized experiences, access to data in real-time, continued move to the cloud and general requirements in a multichannel world – 91% of companies with >10 employees now use a CRM – 81% of users are now accessing their CRM software from multiple devices
Mobile CRM solutions continue to flourish and these portable / edge solutions drive greater efficiency and access to information
AI in CRM has accelerated the sales cycle and is solving many client problems through data analysis (unstructured), embedded behavioral analytics and conversational tools (chatbots and RPA)
Self-service CRM (automation) is on the rise in helping prospects answer purchase decision questions, increasing customer conversion
Global Market Sizing ($ in billions) Largest Software Market in the World and Expected to Reach More than $80 Billion in Revenues by 2025 CAGR 18A – 25E $80+ $48 8%
2018 2025E ______Sources for information on this page: Gartner, AgileCRM.com, Superoffice.com. Page 48 CRM PLATFORMS (CONT.)
Key Market Trends (Cont.) Select CRM Platform Landscape
Marketers have adopted social media Vertical CRM solutions to engage customers to improve products as well as (Travel) communicate with customers more directly (Non-Profit) (Education)
“CRM at the Edge” – IoT in CRM is (Insurance) gaining traction, as CRM is able to handle customer service better and (Fitness) faster as everything becomes more
connected at the edge of the network (Real Estate) Verticalization of CRM has arrived in a big way and has created massive market opportunities in many different verticals Horizontal – Domain expertise used to differentiate products, drive high market share and ability to expand TAM – Creates stickier relationships with retention measurably higher than horizontal CRM platforms – Hundreds of companies created in very large (healthcare, insurance) to very niche (pest control, funeral homes) end markets
______Sources for information on this page: Gartner, AgileCRM.com, Superoffice.com. Page 49 MULTICHANNEL / OMNICHANNEL AUTOMATION
Multichannel Automation platforms offer the ability to create and automate contextual multichannel (email, social, mobile, direct mail) marketing campaigns that are hyper- personalized for each user. Omnichannel takes it one step further by providing unified, streamlined messaging capabilities across multiple channels
Key Market Trends
Rising customer experience expectations requires an increased volume of interactions through an expanding group of channels
Marketers today are focused on offering customers a consistent, streamlined (omnichannel) experience – optimizing customer shopping experience across multiple channels and devices (multichannel) – 15 years ago, the average consumer typically used 2 touchpoints when buying an item, but today use an average of ~6 – Businesses adopting omnichannel strategies achieve 91% greater y/y retention rates vs. those that don’t – Employing 2+ communication channels increases the engagement levels by 166% compared to single-channel outreach models
Marketing automation is increasingly used more often for the entire customer lifecycle – not just for lead generation
83% of consumers state that the ability to move from one channel to another is desirable, but only 50% of businesses support such interactions
eCommerce
Social Networking Online Marketplace
Customer
Word of Mouth Brick and Mortar Store
______Sources for information on this page: Forbes, Customer.com, WebEngage.com. Page 50 MULTICHANNEL / OMNICHANNEL AUTOMATION (CONT.)
Key Market Trends (Cont.) MultiChannel / OmniChannel Landscape
Self-help requirements drive automation: – 75% of customers prefer self-help for issue resolution which drives requirements for true multi- / omnichannel automation – Marketers use of emerging automation technologies continues to proliferate (Chatbots, use of Predictive Personalization using AI / ML, RPA) – Spending on Marketing Automation tools will grow rapidly, reaching $25.1 billion annually by 2023 – 75% of marketing professionals are already using at least one type of Marketing Automation tool in their strategy
Significant M&A activity (headlined by Adobe / Marketo) expected to continue as platforms look to add marketing tools to help customers achieve a strong multichannel experience
______Sources for information on this page: Forbes, Customer.com, Nuance, Email Monday. Page 51 MOBILE MARKETING
Mobile marketing platforms help marketers manage and activate marketing campaigns that target consumers with direct marketing on their mobile device
Key Market Trends
Mobile has become the personalization experience hub for the customer relationship today – Mobile represents ~60% of digital media “time‐spent” and has surpassed TV – 92% of survey respondents list smartphones as primary devices – 40 million Americans are “mobile‐only” internet users – Key trends of social, location‐aware targeting and AR / VR require a mobile‐native approach
SMS and chat platforms create personalized, two-way communication channels and have the opportunity to become the default channel of B2C communication
The dominance of mobile‐first social commerce in Asia is a portend of things to come in the U.S.
Rapid growth in “m‐commerce,” as mobile‐driven sales are projected to reach $284 billion in 2020 – ~45% of the total US e‐commerce market
Global Market Sizing ($ in billions) $25
CAGR 19A – 24E $11 19%
2019 2024
______Sources for information on this page: Markets and Markets, eMarketer, Marketing Charts, Pew Research Center, Business Insider and Statista. Page 52 MOBILE MARKETING (CONT.)
Key Market Trends (Cont.) Select Mobile Marketing Landscape
The trend towards “moments‐based marketing” requires an effective mobile marketing strategy and requires a built out mobile martech stack
Mobile data privacy has emerged as a key strategic differentiator for brands to establish trust with customers
Mobile is expected to drive more than 80% of digital ad growth in 2020
______Source for information on this page: eMarketer Mobile Trends report. Page 53 CONTENT MARKETING
Content Marketing is a strategic marketing approach focused on creating and distributing consistent content to attract and retain a clearly defined audience — and to drive profitable customer action
Key Market Trends
Marketers recognize that quality vastly outperforms quantity in an era where we are drowning in information but starved for meaningful content
There is a wide expectations gap between authenticity perceived by brands: – 92% of marketers believe most of their content resonates as authentic with customers – 51% of consumers believe <50% of brands create content that resonates as authentic
Video and live-streaming are essential to content marketing to keep audiences engaged longer than any other type of content (Instagram, YouTube, TikTok, Snapchat, Twitch) – 55% of 25-44 year-olds want to see more video content from brands – Millennials have negligible interest in branded email – 85% of consumers find UGC more influential than brand content
Community engagement is table stakes in building authenticity and loyalty – 90% of most successful content marketers put their audience’s information needs over their promotional message – Increasing importance of conversational marketing allows customers to engage with audiences in real-time— human-to-human or via chatbot
Global Market Sizing ($ in billions)
$9.6 CAGR 17A – 23E
$3.4 19%
2017 2023
______Sources for information on this page: Markets and Markets, MarTech Advisor, Stakla, Offerpop, Hubspot, Content Marketing Institute. Page 54 CONTENT MARKETING (CONT.)
Key Market Trends (Cont.) Select Content Marketing Landscape
Driven by smart devices and mobile usage, voice is no longer optional in customer engagement and content marketers must optimize content for / voice search – AI-powered assistants like Alexa and Siri have driven explosive use of voice search – Smart speaker adoption grew ~40 y/y and >25% of all U.S. adults have a smart speaker / Topic-focused content and expertise drive earned media and fervency in / customer / user base
Personalized, dynamic content delivery is a differentiating capability, so as not to be providing a monolithic message to a collection of unique customers
______Source for information on this page: TechCrunch. Page 55 MARKETING RESOURCE MANAGEMENT (MRM)
Marketing resource management (MRM) is the software infrastructure that supports marketing operations – the technology, creative and logistic processes, and internal teams used to deliver marketing activities
Key Market Trends
MRM spans the behind-the-scenes tools that help marketers plan, coordinate, and track activities – <10% of companies called their solution MRM, with the rest using project management system, campaign development tool, or marketing studio vernacular
Because of MRM's broad definition, the market includes a diverse set of companies and solutions. To narrow the field, marketers must define a goal for the solution: content creation? Financial management? Brand consistency? – The scale, pace, and change of marketing have presented challenges that traditional MRM solutions have not been able to answer – Modern MRM solutions incorporate work, performance and asset management – Data-driven access to real-time feedback, resource tracking / approval, integrated strategic planning and content governance – Seamless integration with other components of the martech stack – “MRM 2.0” solutions demand the agility, flexibility, message consistency of a cloud-based solution versus legacy on-prem solutions
Global Market Sizing ($ in billions)
$9
$6 CAGR 17A – 20E 15%
2017 2020
______Sources for information on this page: Markets and Markets, Aprimo and Forrester research. Page 56 MARKETING RESOURCE MANAGEMENT (MRM) (CONT.)
Key Market Trends (Cont.) Select MRM Landscape
Forrester defines the key workstreams of a modern MRM solution: – Financial Functionalities: (budget planning, performance monitoring, etc.) – People Management: project management tools, collaboration features, dynamic calendaring – Content Asset Management (creative production workflows, DAM, etc.) – Brand Management (marketing fulfilment, channel marketing automation, etc.) – Marketing Performance Management – User Experience Management
Many MRM solutions increasingly evolving to include DAM and Performance Management solutions to meet the requirements of a modern solution
Strong appetite for M&A to integrate modules to create a richer, integrated solution in an effort to be the “marketing stack system of record” (Percolate / Seismic, Aprimo / ADAM)
______Source for information on this page: Forrester. Page 57 CHANNEL / PARTNER MARKETING
Aims to reach customers at various brand touchpoints and maximize lifetime value by finding partners to distribute products around different markets and grow the customer base
Key Market Trends
Channel marketing strategies are mainly aimed at boosting the reach and revenue of these two groups, vendor organizations and their channel partners through planning, channel demand creation, lead nurturing, partner enablement and engagement programs Enabling channel partners to leverage content, messaging, branding, and demand generation initiatives in their local markets is key to driving solid partnerships and creating winning customer experiences Most channel partners lack marketing capabilities of their own, particularly when it comes to digital tactics like optimizing search and social
In the coming year, companies are expected to make significant investments in their partner programs and marketing automation will be one of their key areas of interest – Forrester Research predicts the sales of through-channel marketing automation technology to rise at a CAGR of 25.2%, reaching $1.2 billion through 2023
Global Market Sizing
THROUGH-CHANNEL MARKETING AUTOMATION (TCMA) 1
PARTNER RELATIONSHIP MANAGEMENT (PRM) 2
CHANNEL INCENTIVES & PROGRAM MANAGEMENT (CIPM) 3
CHANNEL DATA MANAGEMENT (CDM) 4
CHANNEL ENABLEMENT 5
CHANNEL FINANCE & PRICING 6
$100M $200M $300M ______Sources for information on this page: Forrester Channel Software report and Forrester Through-Channel Marketing Automation report. Page 58 CHANNEL / PARTNER MARKETING (CONT.)
Key Market Trends (Cont.) Select Channel / Partner Landscape
According to IDG and 360insights, complete channel solutions are critical to success: 71% of channel marketers Agility Unite prefer a single solution; 92% say it would be easier to coordinate between programs and 86% say they could leverage data analytics to optimize Brand Builder performance
Callidus Channel
______Sources for information on this page: IDG and 360insights. Page 59 E-MAIL MARKETING
Software and services to support the use of e-mail to engage and convert customers and maintain loyalty
Key Market Trends
E-mail remains the top used digital marketing tool amongst B2B and B2C marketers, more than digital display ads, social media, video and SMS / text messages
59% of marketers say e-mail generates the highest ROI amongst digital marketing tools (68% for B2B marketers)
Expect B2B and B2C marketers to increase the use of personalization tools within e-mail, along with segmentation and A/B testing
Which Digital Marketing Channel Generates The Most ROI ~4.4B 59% E-mail users in 2023
21% 15% 5% 1% ~350B Daily e-mails sent / Email Marketing Social Media Display Ads Video Mobile received by 2022
Global Market Sizing ($ in billions)
$22 CAGR 16A – 25E
$5 20%
2016 2025
______Sources for information on this page: Transparency Market Research, Finances Online 141 Compelling Email Marketing Statistics 2020 report, Hubspot, Statista. Page 60 E-MAIL MARKETING (CONT.)
Key Market Trends (Cont.) Select E-mail Marketing Landscape
Expect e-mail to be a key element of E-mail Management multi-channel / omni-channel campaigns, complementing spend in social, digital display ads, loyalty and other efforts; providers who seamlessly integrate with other systems, will gain share and be attractive acquisition targets
Expect continued consolidation amongst a fragmented market and continued M&A as a means to extend e-mail platforms to cover other channels
Complementary Software
Page 61 Social & Relationships EXPERIENTIAL MARKETING & EVENTS
Experiential marketing includes face to face and digital programming that allows brands / businesses to connect with target customers in a live setting, fostering education, brand building, networking and buying / selling
Key Market Trends
Near term disruption of COVID: while we expect a short term shift in spend to other channels and a natural hesitancy towards travel/face to face engagement in the months immediately following COVID, we believe events/experiential marketing will continue to capture a greater share of sales and marketing budgets over the very long term provided high impact on purchasing decisions and thus ROI
Market Characteristics: – Large, global industry with many lanes to pursue: $1T global industry; spend in North America alone was $381B in 2017 – Tangible ROI vs. other mediums: according to LinkedIn market research, live events are considered the most effective lead gen method vs. all other mediums – Highly fragmented and ripe for consolidation: top four B2B organizers have <10% market share and dozens of platforms with scale are actively pursuing consolidation – Benefits of scale: even more so than most industries, scale provides meaningful advantages in network effects and technology differentiation – Recurring in nature: despite COVID’s impact, we expect events to be recurring in nature in the future and to yield high retention; core focus post COVID will be which events are “must attend” vs. “nice to attend”
“Of the 47% that said in-person events were one of their top-three channels, 46% said it was the most effective at driving early stage engagement, while 44% said it was the most effective at driving conversion later in the funnel.”
______Sources for information on this page: Ceros DGR’s Demand Generation 2019 report, proprietary Baird market study and Baird estimates. Page 62 EXPERIENTIAL MARKETING & EVENTS (CONT.)
Which Channels Have Been the Most Effective in Key Market Trends (Cont.) Driving Early Stage Engagement
Key trends to watch for: 54% – Events that represent critical 46% 42% 42% business activities will garner 36% greater interest and higher values – Emphasis on smaller scale, hyper local or targeted events vs. large trade shows Email In-Person Website Search Social Events / Trade – Greater emphasis on balanced Shows offerings and digital complements – Expect more conservative leverage levels going forward, which may temper values In 2018, Which Tactics Were Most Successful in Helping to Convert and Accelerate Leads at Middle and Late Stages of the Funnel?
64% 63% 58% 48% 40%
Events Case Studies Lead Nurturing Webinars White Papers Campaigns
______Source for information on this page: Ceros DGR’s Demand Generation 2019 report. Page 63 EXPERIENTIAL MARKETING & EVENTS (CONT.)
Select Experiential Marketing & Events Landscape
Vertical Specific
Healthcare Travel / Leisure Legal Consumer Oriented Events
Retail / Foodservices Real Estate Finance Business Networks
Large Diversified
Other Access to the Space (Agencies / Outsourced Services)
Page 64 WEBINARS
The use of technology, including live video and demonstrations, to facilitate information sharing, networking and marketing of one’s thought leadership, branding and / or offering
Key Market Trends
Use cases are broadening but often include: eLearning / continuing education, training, product demonstrations, customer onboarding, corporate communications, lead generation, account management/customer retention, branding/reputation management, and panelist discussions, among others
While often overlooked, webinars/live digital engagements are critical to generating and closing leads: – According to InsideSales.com, 73% of marketing and sales leaders say webinars are one of the best ways to generate quality leads – According to Content Marketing Institute, webinars are a top 5 technology that B2B organizations utilize to manage their content marketing efforts; webinars are also a top 5 channel for distributing content to targeted audiences – 67% of a buyer’s journey today, according to SiriusDecisions, is digital; webinar tools are an effective means for facilitating live demos, a key tactic in closing new sales
Global Market Sizing ($ in millions)
$800 CAGR 16A – 23E $479 8%
2016 2023
______Sources for information on this page: Kenneth Research Global Webinar, Webcast Market report, Content Marketing Institute, SiriusDecisions and InsideSales.com. Page 65 WEBINARS (CONT.)
Key Market Trends (Cont.) Select Webinars Landscape
Demand Gen Report’s 2019 Content Preferences study revealed that: – 39% of marketers said webinars are one of the top types of valuable influencer content formats – 63% said they are willing to share information to access webinars – 63% are willing to spend 20 to 60 minutes watching a webinar
Webinars offer many benefits: they facilitate good content creation, position one’s brand/company as a resource, drive healthy engagement, generate high-quality leads and often expand one’s audience At the end of 2017, we conducted an in-depth survey into the state of video marketing in 2018. As part of our Webinars are increasingly being used for research, we also looked into the uptake and engagement rates lead generation, even more so amidst of webinars with marketers. Surprisingly, just 44% of marketers COVID-19 and a largely WFH said they had engaged in webinars. Of those, however, a environment; we expect virtual meetings whopping 87% said they found the webinar effective as part of and events will see increased interest an overall marketing strategy. For those who have been willing and continued utilization after COVID-19 to take the plunge, the potential of webinars is clear. dissipates provided high convenience, Encouragingly, our survey also revealed that 49% of marketers broader reach, lower costs and greater plan to host or participate in a webinar in 2018. So, clearly, there data capture is interest in the platform out there.”
______Sources for information on this page: Webcast Market report, Demand Gen Content Preferences study. Page 66 PRE-SALES MARKETING / SUPPORT
For B2C companies, high quality and seamless customer engagement and experience through omni-channel pre-sale service options is becoming critical to converting prospective customers. For B2B customers, presales provides a specific set of activities that lead to qualifying, bidding on, winning, and renewing a deal
Key Market Trends
Solutions are often a mix of technology and human interaction, but automation and AI-driven engagement is increasingly capturing share of more simplistic Q&A and customer requests The most simplistic form of pre-sales is online chat; more sophisticated approaches include omni-channel customer communication and more tools for finding answers and self-service education For more complex sales, utilizing recorded or live demonstrations, providing samples or allowing for trials, are key contributors to converting prospective customers Increasingly, pre-sales technology is connected to other key sales and marketing platforms, including online and mobile applications and a company’s CRM; capturing data on pre-sales activity is critical to monitoring prospective customers and assisting them in their purchase journey through follow up via alternative channels According to McKinsey, proper pre-sales functions can have a meaningfully positive impact on performance: can yield a five-point improvement in conversion rates, a 6–13% improvement in revenue, and a 10–20% improvement in the speed of moving prospects through the sales process
Global Market Sizing ($ in billions) Small Business $5 Enterprise Go-To-Market Opportunity $37 Mid-Market $8 $60B
______Sources for information on this page: Fortune Business Insights Customer Experience Management market report and McKinsey. Page 67 PRE-SALES MARKETING / SUPPORT (CONT.)
Key Market Trends (Cont.) Select Pre-Sales Marketing / Support Landscape Predominantly B2C Focused Providers In McKinsey’s work, they found that (For B2B, See the Webinar Technology Landscape) companies with strong presales capabilities consistently achieve win Traditional Customer Support / BPO Service Providers rates of 40–50% in new business and 80–90% in renewal business—well above average rates.
Further supporting omni-channel strategies and automated support: a study by Hubspot points out that 90% rate an immediate response as Multi-Channel Conversational Commerce Platforms important or very important when they have a customer service question. Immediate being defined as 10 minutes or less Chat / Call Platforms
Sales Enablement Solutions
______Sources for information on this page: HubSpot and McKinsey. Page 68 SOCIAL MEDIA MANAGEMENT
Enabling businesses to leverage the social media channel for marketing, customer care, intelligence gathering, public relations, product feedback and more
Key Market Trends
With over 70% of the U.S. population and over 3.5B people worldwide on social media, it is an important channel for businesses to reach their customers and prospects
However, this channel is still relatively underutilized as compared to more traditional mediums like voice and email. This sets the industry up for powerful secular growth as marketing and customer service budgets shift to this more modern channel, allowing businesses to reach their customers where they spend significant amounts of time
Highly fragmented and nascent market with many point solutions with significant opportunity to consolidate market share amongst the top vendors. Adoption can scale quickly as the market is largely greenfield with minimal replacement of legacy tools
According to a CMO survey in August of 2019, CMO's expected their social media spend to increase 90% over the next 5 years from their current levels
Global Market Sizing ($ in billions)
$18 CAGR 18A – 23E $9 14%
2018 2023
______Sources for information on this page: Statista, CMO and Markets & Markets Social Media Management market report. Page 69 SOCIAL MEDIA MANAGEMENT (CONT.)
Key Market Trends (Cont.) Select Social Media Management Landscape
Social media software vendors are highly dependent on integration and data sharing with their large social media partners to drive the value proposition of / their offerings creating both a competitive advantage for those that have both depth and breadth with the / platforms that matter, as well as large risk on partner dependency
/
Page 70 ACCOUNT-BASED MARKETING (ABM)
A B2B focused strategy that concentrates aligning sales and marketing resources on a clearly defined set of target accounts including their multiple stakeholders, and employs personalized campaigns designed to resonate with each account
Key Market Trends
ABM software is a market in the earlier stages of development – there are over 100 software vendors claiming to provide ABM functionality B2B buyers, overwhelmed by the deluge of digital marketing messaging are unsubscribing wherever possible and demanding their suppliers communications be relevant to their current business issues Given that dynamic, demand is high for ABM solutions with a survey of B2B marketers noting that nearly 60% plan to invest in an ABM software solution in the next 1-3 years Given the multitude of point solutions across ABM software, there has been convergence to a smaller number of platform providers supporting all, or most of the ABM specific functions
“Companies that have already implemented an ABM strategy now dedicated almost one third (29%) of their entire marketing budget to ABM. Almost three quarters (73%) of those same companies are planning to spend more on ABM in 2020, with an average increase of 21% to their ABM budgets.” – ABM Leadership Alliance Research
Global Market Sizing ($ in billions) $1.0
CAGR 17A – 23E $0.5 11%
2017 2023
______Sources for information on this page: Martech Today, Terminus, Superoffice.com, ABM Leadership Alliance Research and Markets & Markets Account-Based Marketing market report. Page 71 ACCOUNT- BASED MARKETING (ABM) (CONT.)
Key Market Trends (Cont.) Select Account-Based Marketing Landscape
Expect convergence between ABM and B2B marketing automation, as B2B marketing automation vendors such as Marketo and Eloqua enrich their products with ABM functions
There will be increasing alignment and potential consolidation with sales engagement software as the sales and marketing teams further align
Page 72 Customer Experience CUSTOMER EXPERIENCE MANAGEMENT
Customer Experience Management (also known as CXM or CEM) solutions help to collect, organize and track customer feedback to drive business, retain and grow customers
Key Market Trends
As global brands gain a more direct relationship with customers, they carry the burden of managing that CX
As CX moves from a “nice to have” to table stakes, it’s essential that every organization has CX as part of its DNA
Established tech platforms looking to capture broad market share from various beachheads are all vying for wallet share: CRM (Salesforce, Netsuite) , Contact Center (NICE InContact, Cisco), Customer Service (Zendesk, Pega), Customer Engagement (Medallia, Qualtrics) and Customer Success Analytics (Qualtrics, Medallia, Inmoment, Clarabridge)
Analytics-driven solutions (+AI / ML) is seen as the tip of the spear for driving step-change in CX: the Acquisition of Qualtrics by SAP was a game-changer for the industry
Large add-on acquisition activity and opportunity for further consolidation as leaders work to move pendulum from “best-of-breed” to “platform” approach
Global Market Sizing (1) ($ in billions)
$86 CAGR 18A – 23E $55 9%
2018 2023
______(1) Market sizing per IDC. Page 73 CUSTOMER EXPERIENCE MANAGEMENT (CONT.)
Key Market Trends (Cont.) Select Broad CXM / CEM Landscape
Verticalization of CXM increasingly important as broad sector agnostic platforms increasingly seen as “not enough” to meet the demands of complex, modern industries
Next-generation solutions – low / no- code development (Shopify, Salesforce), API management (Twilio, Mulesoft) and RPA (Pegasystems, UIPath) – are differentiators in crowded markets which increasingly demand hyper-personalized experiences
Page 74 COMMUNITY
Community management technology fosters the development of a community among customers, employees, and partners through various types of interactions. It consists of establishing a network in which key constituents can connect around a brand and / or product / service, share their experiences, and further advance a brand’s mission
Key Market Trends
Community management allows your business to: – Obtain feedback and gather ideas from your customers and audience members through real conversations – Provide support for audience members, fans, and customers when they need it – Increase brand and product awareness among your target audience – Learn what customers want, expect, and need in terms of content, products, services, and support – Build one-on-one and one-to-many relationships between audience members and your brand – Boost customer interactions, conversions, and sales – Provide value to your customers beyond a product or service
Most common community management tactics: – S: Customer Support / Success – forum, FAQ document, community website – P: Product Ideation, Innovation, and Feedback – e.g., user testing – A: Acquisition and Advocacy – e.g., brand ambassador – C: Content and Programming – e.g., marketplaces, user groups, user-generated content – E: External Engagement – Facebook or Instagram pages, events, etc.
Global Market Sizing ($ in billions)
$1.2 CAGR 14A – 19A $0.4 25%
2014 2019
______Sources for information on this page: HubSpot Ultimate Guide to Community Management article, IDC Worldwide Online Communities market report. Page 75 COMMUNITY (CONT.)
Key Market Trends (Cont.) Select Community Landscape
Tangible Benefits: Community Technology Providers – Reduced customer support costs – 49% of businesses with online communities report cost savings of 10% to 25% annually – Boosted brand exposure and credibility, making it easier to sell without selling – 67% of businesses use their communities for insights on new Brands with Community Forums products or services and features – Heightened engagement and better customer retention – A channel through which to present products and services before the official launch
______Sources for information on this page: Superoffice.com, Marketing Insider Group, HubSpot. Page 76 RATINGS & REVIEWS
Software and services for marketers to capture, manage, display and distribute ratings and reviews from consumers
Key Market Trends
Managing consumer reviews, both negative and positive is incredibly important for businesses in any vertical — 95% of consumers will not make a purchase without reviews, and there is a direct correlation between an increase in reviews and purchase behavior
Over 70% of shoppers start their searches on Google or Amazon making advanced ratings and review capability important for brands as customer reviews are often the first content consumers engage with on these platforms
Reviews not only help marketers build awareness, acquire new customers and increase sales but also drive loyalty and uncover potential customer service issues
There are a handful of players focused specifically on retail / ecommerce (Bazaarvoice, PowerReviews, Yotpo) while others focus on a broader set of verticals and provide customer service features (Birdeye, Podium, ConsumerAffairs, Trustpilot)
Global Market Sizing ($ in billions)
$24 CAGR 19A – 26E
$6 21%
2019 2026
______Sources for information on this page: Spiegel Research Center, PowerReviews, Business Insider, eMarketer, Fortune Business Insights Customer Experience Management market report. Page 77 RATINGS & REVIEWS (CONT.)
Key Market Trends (Cont.) 92% of consumers read online reviews (1) We see convergence between the reviews space and broader customer experience management as marketers desire a more comprehensive platform to determine the appropriate response to 85% an interaction with a consumer of consumers trust online reviews as much as personal recommendations (1)
Select Ratings & Reviews Landscape
______(1) BirdEye How online reviews impact your business and what you can do about it blog post. Page 78 LOYALTY
Programs that target conversion of new and existing customers into highly loyal customers who exhibit high repeat or recurring purchasing activity and also advocate for one’s brands, products, and services in the marketplace
Key Market Trends
Many surveys support the importance of loyalty / programs targeting loyalty: – 82% of U.S. adults say they're loyal to brands – In the U.S., 40% of online shopping revenue comes from repeat customers, who make up only 8% of site visitors – It costs a business about 5-25x more to acquire a new customer than it does to sell to an existing one – Existing customers spend 67% more than new customers – 69% of consumers say choice of retailer is influenced by where they can earn customer loyalty / rewards program points – 50% of consumers changed their behavior to reach a higher tier of loyalty
An overall staleness in loyalty programs is driving increased scrutiny of the true cost of programs and their ROI
We expect there to be higher turnover of older programs to new programs / providers that utilize technology to implement loyalty programs across all channels – Expect newer programs to be tailored/personalized to the individual consumer – Expect more give to get, with brands giving more goods / services / benefits to their most prominent customers, who in turn will spend even more with those brands
Global Market Sizing ($ in billions) Loyalty Management Market $11.0 CAGR 19A – 24E $6.0 12%
2019 2024
______Sources for information on this page: ICSC, Business Wire, Adobe, Outbound Engine, Forbes, Allied Market Research Loyalty Management Market Outlook report. Page 79 LOYALTY (CONT.)
Key Market Trends (Cont.) Select Loyalty Landscape
Increased integration amongst pure play loyalty providers and other marketing tech platforms will be required to maximize the power of loyalty solutions – Expect increased strategic M&A activity (e.g., Oracle acquiring CrowdTwist) as larger platforms look to add differentiated solutions to their suite to address what is a key value driver for customers in loyalty
Anticipate B2C trends / expectations to carry over to B2B customers and newer businesses will emerge to provide B2B oriented loyalty solutions
Page 80 REVERSE LOGISTICS
Services and / or technology used to manage the returns process, including returning or exchanging purchases, providing refunds and / or credit and capturing / acting on customer feedback
Key Market Trends
While normally one would not consider reverse logistics as part of marketing technology and services, we see the returns process as an increasingly critical aspect of the customer experience and capturing future sales / loyalty
Increasing prevalence of online, mobile and in-store ordering for at-home delivery is driving a meaningful increase in returns activity – At least 30% of all products ordered online are returned as compared to 8.9% in brick-and-mortar stores – In the U.S. alone, Statista estimates return deliveries will cost $550 billion by 2020, 75.2% more than four years prior
An efficient and fair returns process is critical to the customer experience and achieving customer satisfaction and maintaining loyalty – 60% of consumers age 18 – 25 will not shop with a retailer upon a poor returns experience
Global Market Sizing ($ in billions) Annual U.S. Merchandise Returns $604 CAGR 17A – 25E $3.9T $415 NRF retail industry sales 5% $369B 2017 2025 Amount of merchandise returned ______Sources for information on this page: Invesp, Statista, Pitney Bowes Online Shopping Study, Fortune Business Insights Customer Experience Management market report. Page 81 REVERSE LOGISTICS (CONT.)
Key Market Trends (Cont.) Select Reverse Logistics Landscape
Returns management also has a meaningful impact on profitability – Once the returned goods are back in the hands of a retailer, less than half are resold at full-price, according to Gartner Research
Many companies are not taking action to mitigate increased returns: While returns are a big problem for retail, only about 30 percent of the country’s largest retailers quantify its full cost and only 23 percent use some kind of technology or software to better manage it, according to Optoro
We expect to see more companies emerge with solutions, either outsourced services, technology or both, to help retailers / DTC brands improve the returns experience and optimize returns performance “Shoppers return 5 to 10 percent of what they purchase in store but 15 to 40 percent of what they buy online” - David Sobie, Co-Founder and CEO of Happy Returns
______Sources for information on this page: Gartner, Forbes, Optoro, Happy Returns. Page 82 Data & Insights MARKETING ANALYTICS
Marketing analytics is the practice of measuring, managing and analyzing marketing performance to maximize its effectiveness and optimize return on investment (ROI). Understanding marketing analytics allows marketers to be more efficient at their jobs and minimize wasted marketing dollars
Key Market Trends
With the global trend towards digitization, real-time, actionable analytics provide marketers with the ability to create a richer dialogue and relationship with customers
There has been an expanding number of analytics tools in the marketing space, with confusion about which tools are best. A “best of breed” vs “platform” approach debate has emerged
The proliferation of new channels and modern requirements of a personalized, omni-channel experience have added complexity in cross-device tracking
Enhanced integration capabilities across a broad variety of tools (CDPs, customer journey, CRM, BI tools, data warehouses, etc.) creates richer, customer-centric datasets
Adoption of AI and ML have created advanced analytic solutions that can discover segments of customers through patterns or anomalies that lead to conversion failure or success – Automation will optimize multichannel marketing – Autonomous marketing systems will issue more than 50% of multichannel marketing messages by 2023 – Data visualization and graph analytics tools help marketers visualize what data are saying, allowing for easier predictions and prescriptions – Analysis of semi-structured and unstructured data allows marketers to use data to perform advanced micro- targeting / micro-segmentation strategies
The rise of mobile as the preferred customer portal creates need for mobile analytics solutions – Consumers spend 70 percent of screen time on mobile devices and most of that time in mobile apps (6.5m total apps in major app stores) – Companies without mobile analytics are flying blind and must rely on intuition or domain expertise – Mobile advertising now accounts for ~70% of all digital advertising ($135B)
______Sources for information on this page: Gartner Predicts 2019: In Search of Balance in Marketing report, eMarketer Time Spent with Mobile report, Marketing Charts. Page 83 MARKETING ANALYTICS (CONT.)
Key Market Trends (Cont.) Select Marketing Analytics Landscape
Growing importance of data ethics, access, and security (GDPR and CCPA) require more scrutiny for how “data machines” procure data
/ /
Page 84 CUSTOMER DATA PLATFORMS
Customer Data Platforms (CDPs) are used to collect and integrate customer data into one consolidated database. These tools offer marketing teams relevant insights needed to run campaigns and improve CX by personalizing the communication between brands and customers
Key Market Trends
The ultimate desire to provide a simplified, personalized customer experience requires both the mapping of the customer journey as well centralizing customer data (through a CDP)
Optimized for modern market needs of connected profiles, personalization, intent-based, prescriptive analytics and a seamless CX
CDPs evolving to connect data and intelligence with insight to make better decisions and help boost customer loyalty, increase business agility and streamline marketing efforts
The average software company today uses 80 tools, each with its own data silo. Integration of disparate data siloes has moved from a “nice to have” to a “have to have”
Nascent industry with significant greenfield opportunities: <10% of companies have adopted CDPs
A true CDP leader offers at-scale, real-time centralized customer data access across siloes, external integrations, identity resolution with customer profiles and the ability to connect / integrate insights into actionable intelligence in a data compliant manner
Global Market Sizing ($ in billions)
$10 CAGR 20E – 25E
$2 34%
2020 2025
______Sources for information on this page: IDC, Segment, Baird investment banking knowledge, Markets and Market Customer Data Platforms market report. Page 85 CUSTOMER DATA PLATFORMS (CONT.)
Key Market Trends (Cont.) Select Customer Data Platforms Landscape
Tension between the requirement of hyper-personalized solutions and data privacy is creating opportunities for security, compliance and privacy-minded vendors
“Tool Sprawl”: CDPs with analysis and campaign functions are taking share, while systems limited to data access have declined, as buyers desire to meet their needs with fewer system touchpoints
Strong M&A outcomes from usual suspects (Salesforce / Evergage, Informatica / Allsight) as well as non- martech players (ARM / Treasure Data, Mastercard / SessionM, D&B / Lattice Engines) coupled with a fertile fundraising environment (Segment, Amperity, mParticle, Tealium) prove broad market interest in category with continued consolidation expected
“Companies manage 3x more data than they did 5 years ago.” – Zendesk
______Sources for information on this page: Zendesk, 451 Research, Capital IQ. Page 86 AUDIENCE & MARKETING DATA
Information used to identify consumer and B2B audience members and technology and services that support data-driven advertising and marketing
Key Market Trends
In the continued shift to digital ad spend is the emergence and maturation of digital data sources, which have spurred the development of a vast technology‐centered ecosystem of solutions engineered to enable more efficient placement of media and effective targeting of content to desired audiences – Data represents 10%+ of every dollar of digital advertising, an increase of 2x over the last 5 years
Spend on digital data sources and analytics have grown significantly faster than offline data over the last several years
The need to establish a persistent understanding of who individual customers and prospects are as they traverse multiple touchpoints has created demand for a new class of marketing technology and underlying data assets that focus on the resolution of audience identities and enable a richer understanding of individuals and their interactions
Emergent media channels such as connected TV, IoT, automotive and out of home platforms are beginning to generate audience data in volumes and granularity that make them fully actionable in advertising and marketing use-cases
Global Market Sizing ($ in billions)
$22.0 $23.0 CAGR 19A – 20E 6%
2019 2020
______Sources for information on this page: HubSpot, Baird investment banking knowledge, Winterberry Group The Outlook for Data Driven Advertising & Marketing 2020 report. Page 87 AUDIENCE & MARKETING DATA (CONT.)
Key Market Trends (Cont.) Select Audience & Marketing Data Landscape
First-party data is a major source of power in the digital ecosystems, with the large Internet platforms such as Google, Facebook and Amazon creating significant competitive advantages given massive cache´s of user data and the widest views of the consumer marketplace
Privacy regulation has had a limited direct impact on data investments, the increased scrutiny on consumer data has driven a wave of demand and investment in technology and infrastructure to provide data security, governance and transparent utilization
______Sources for information on this page: HubSpot, Baird investment banking knowledge. Page 88 MARKET RESEARCH
Market research is continually evolving by utilizing big data generated from multiple media and communications platforms to gain insights on consumer habits on shorter timelines
Key Market Trends
Market research includes the practice of collecting data on habits, opinions and behaviors within a particular group
The definition has changed over time as new media outlets have created new categories and methods of commerce and advertising – Expansion of new media provides new ways to study consumer opinions – Demand in social media research and broader media measurement continues to drive the total value of the research market higher – The multi-platform consumer, ubiquity of video, availability of big data, and the rise of automated advertising will continue to transform the possibilities of measurement and analytics
The landscape is highly fragmented with over 40,000+ companies participating in the market, but the top ten hold ~80% market share
AI, automation, big data and behavioral science / economics continue to be a topic of focus and largest opportunity areas for industry participants
Global Market Sizing ($ in billions) $47
$33 CAGR 19A – 24E 4%
2019 2024
______Sources for information on this page: IBIS World . Page 89 MARKET RESEARCH (CONT.)
Key Market Trends (Cont.) Select Market Research Landscape
Market research spend is correlated to research and development spend as companies test markets before new products are launched – Increasingly competitive marketplaces among all industries have created demand for shorter- cycle market research, and providers are turning to automated solutions and analytical tools to provide higher quality insights on shorter timelines – Full-service research providers have developed these skillsets, and newer point solution companies have arisen to meet this demand that provide collection and analysis of unstructured data, brand strategy consulting, analytical tools, strategic insights, qualitative and quantitative tools, and panel access recruitment
Page 90 APPENDIX Baird Overview BAIRD – A LEADING GLOBAL MIDDLE-MARKET INVESTMENT BANK
Employee-owned independent advisory firm with 4,600 employees
“Culture of integrity, Five businesses quality and teamwork” including private wealth management No. 1 overall “important small- and equity capital markets with / mid-cap research advisory firm” $2bn of revenue
“How we succeed is Subsector expertise as important as within investment banking if we succeed” and equity research
“We deliver great outcomes by putting Global investment banking team operating on one P&L clients first”
200+ transactions in 2019 – advisory and financing
200+ 700+ 375+ offices equity research stocks
Industrial Technology & Services
Consumer Healthcare investment bankers
______Greenwich Associates North American Equity Investors – U.S. Small- / Mid-Cap Funds and U.S. Equities Sales, Corporate Access & Research, May 2019. Surveys conducted with 100 small-cap and mid-cap fund managers and 169 fund managers and 269 traders, respectively. Rankings for qualitative metrics based on leading research firms in surveys. From FORTUNE Magazine, March 2019 ©2019 Fortune Media IP Limited. Used under license. FORTUNE and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of Baird. Page 91 BAIRD’S BEST-IN-CLASS M&A ADVISORY PLATFORM
We are significantly outperforming the broader M&A market
Unparalleled COVID Experience (1) 36 36 Deals signed or closed since March 2020 Deals currently in market 62 ~10x Deals preparing to go to market Median EBITDA multiple ~14x Median Technology & Services COVID deal multiple
Record Levels of Activity Comprehensive Platform (2018 – 2019) (2018 – 2019) 16% 29%
251 BUYER GEOGRAPHY Total M&A Transactions MIX MIX
71% 84% 217 U.S. International Sellside Buyside Sponsor-Owned Sellside M&A Transactions 32%
BUYER 37% MIX Transactions Pre-empted At or Before Update Bids 68%
Private Equity Strategic ______(1) Includes Baird M&A deals completed since March 1, 2020. Page 92 INDUSTRY LEADING CONFERENCES AND EVENTS
Baird sponsored conferences are widely viewed as best-in-class by management teams and institutional investors alike
Private Company Technology and Services Conference Selected Recent Conference Participants
Annual conference in February held at the Mandarin Oriental, New York, NY 2019 highlights: – 55 Presenting Companies – 720 Total Attendees – 1,287 One-on-one Meetings
Global Consumer, Technology & Services Conference
Annual conference in June held at the Intercontinental, New York, NY 2020 highlights: – 250 Presenting Companies – 2,053 Total Attendees – 4,994 One-on-one Meetings
Page 93 SELECT RELEVANT TOMBSTONES
Page 94 DIFFERENT- IATED GLOBAL FINANCIAL SPONSOR Direct access to and deep knowledge of private COVERAGE equity players globally
Team Member: John Moriarty Vinay Ghai Les Cheek Scot Berg Chris Coetzee Oliver Meyer
Experience: 26 years 22 years 27 years 18 Years 28 years 22 years
Palo Alto / Location: London Boston New York Chicago Frankfurt Denver
Team Member: Tom Lacy Jeff Seaman Lydia Xu Maria Watts Doug Henry Sarah Gaul
Experience: 26 years 26 years 18 years 15 years 13 years 9 Years
Location: Milwaukee Chicago Shanghai Chicago Chicago Chicago
Direct Global Access Globally coordinated access to sponsors in Americas, Europe and Asia
Full spectrum of private equity funds, family offices, government pension plans and sovereign wealth funds Deep Sponsor Knowledge
Comprehensive understanding of sponsors’ investment interests, current fund status and behavior in processes
Proprietary database of over 1,850 sponsors which includes detailed data on sponsor “process behavior” for the last 7+ years
Current Sponsor Appetite Significant Baird deal volume provides insights into sponsor appetite and valuation – 917 IOIs submitted by sponsors on Baird sellsides in 2018
89% of Baird’s processes include financial sponsor participation since 2018 ______Note: Selected private equity relationships shown. Page 95 Valuation Perspectives PRECEDENT M&A TRANSACTIONS
Advertising ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA Jul-20 Modernize, Inc. QuinStreet $68 N/A Mar-20 Tubi, Inc. Fox Corporation 490 N/A Feb-20 Credit Karma, Inc. Intuit Inc. 7,100 N/A Dec-19 Smartly.io Providence Equity Partners 223 N/A Dec-19 Finanzcheck AutoScout24 300 N/A Nov-19 Honey Science Corporation PayPal Holdings, Inc. 4,000 N/A Jul-19 Vungle Blackstone 750 10.7x Feb-19 RhythmOne Taptica 157 11.2 Dec-18 You Technology (Kroger) Inmar 450 9.0 Dec-18 MightyHive S4 Capital 153 13.5 Nov-18 Periscope, Inc. Quad/Graphics, Inc. 121 N/A Oct-18 Triton Digital, Inc. The E.W. Scripps Company 150 16.7 Sep-18 XO Group Inc. WeddingWire, Inc. 790 37.7 Aug-18 AppLovin KKR 2,000 13.3 Jun-18 AppNexus Inc. AT&T Inc. 1,600 N/A Jun-18 Slickdeals Inc. Goldman Sachs / Hearst 520 N/A Jun-18 Screenvision Cinema Network, LLC ABRY Partners, LLC 380 N/A Jun-18 Integral Ad Science Vista Equity Partners 800 N/A May-18 CafeMedia Zelnick 250 11.9 May-18 All Assets of Videology, Inc. Amobee, Inc. 101 N/A May-18 WordStream Gannett 150 9.4 Sep-17 System1 CourtSquare 550 N/A Sep-17 YuMe, Inc. RhythmOne plc 113 10.1 Aug-17 SpotX, Inc. RTL Group SA 389 N/A Aug-17 DoubleVerify Providence Equity Partners 305 N/A Jul-17 Rocket Fuel Sizmek 147 N/A May-17 Angie's List Inc. HomeAdvisor Inc. 522 52.0 Apr-17 Inmar OMERS Private Equity 1,500 12.5 Apr-17 Moat Oracle 780 N/A Mar-17 Teads S.A. Altice N.V. 308 N/A Feb-17 Turn Inc. Amobee, Inc. 310 N/A Mean $822 17.3x Median 380 12.2
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 96 PRECEDENT M&A TRANSACTIONS (CONT.)
Digital Experiences ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA Sep-19 Acquia Vista Equity $1,000 N/A Mar-19 Dynamic Yield Ltd. McDonald's Corp. 325 N/A Feb-19 Certona Corporation Kibo Software, Inc 60 N/A Sep-18 Episerver Insight 1,160 29.0x Jul-17 Acrolinx GmbH GENUI GmbH 60 N/A Mean $521 29.0x Median 325 29.0
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 97 PRECEDENT M&A TRANSACTIONS (CONT.)
Customer Journey Management ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA Feb-20 Vlocity, Inc. salesforce.com, inc. $1,330 N/A Feb-20 Infor Koch 13,000 N/A Feb-20 Localytics Upland 68 7.6x Jan-20 Emailage LexisNexis 480 N/A Nov-19 Percolate Industries Inc. Seismic Software Inc. 50 N/A Oct-19 Mailjet SAS Mailgun Technologies, Inc. 56 N/A Aug-19 iPipeline Inc. Roper Technologies Inc. 1,625 N/A Jul-19 Wavecell Pte. Ltd. 8x8 Inc. 125 N/A Apr-19 Acoustic (IBM Marketing) Centerbridge 500 33.3 Jan-19 Sailthru Campaign Monitor (Insight) 100 N/A Dec-18 Adestra Ltd. Upland Software Inc. 60 N/A Oct-18 Manage.Com Group Inc. Criteo SA 60 3.0 Oct-18 Sendgrid Twilio 1,834 N/A Sep-18 Marketo Adobe 4,750 N/M Aug-18 SugarCRM Accel-KKR 190 38.0 Sep-17 Newgistics Inc. Pitney Bowes Inc. 475 N/A Aug-17 Velocify Inc. Ellie Mae Inc. 128 N/A Apr-17 Connextions Inc. TeleTech Holdings Inc. 80 N/A Apr-17 Cheetah Digital Co., Ltd. Vector Capital 300 N/A Feb-17 SinnerSchrader AG Accenture plc 67 N/A Jan-17 Fishbowl Inc. STG Partners LLC 70 N/A Mean $1,207 20.5x Median 128 20.5x
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 98 PRECEDENT M&A TRANSACTIONS (CONT.)
Social & Relationships ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA Jan-19 Falcon.io ApS Cision Ltd. 126 4.7 Oct-18 Synthesio Inc. Ipsos SA 50 N/A Oct-18 Social Tables Inc. Cvent Inc. 110 N/A Sep-18 Questex MidOcean Partners 180 N/A Aug-18 24-7 Intouch, Inc. Ontario Teachers' Pension Plan Board 735 13.1 Jun-18 PSAV Blackstone 1,700 N/A Jan-18 UBM Informa 6,057 14.8 Dec-17 SMG Holdings Inc Onex 1,000 12.5 May-17 etouches Inc. HGGC LLC 150 N/A May-17 Lithium Technologies Vista Equity 330 N/A May-17 Jive Software Aurea Inc. 462 N/A Mean $991 11.3x Median 330 12.8
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 99 PRECEDENT M&A TRANSACTIONS (CONT.)
Customer Experience ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA May-20 Voci Technologies Medallia $59 N/A Oct-19 CrowdTwist Inc. Oracle Corporation 130 N/A Oct-19 SessionM Mastercard 215 N/A Aug-19 Matchbook Labs Inc. [dba GetFeed] SurveyMonkey 68 N/A Aug-19 KONY Temenos 580 N/A May-19 Smooch Technologies ULC Zendesk Inc. 72 N/A Mar-19 Usabilla B.V. SurveyMonkey 80 N/A Dec-18 Avoka Technologies Pty Ltd. Temenos AG 245 N/A Nov-18 Qualtrics SAP 8,000 N/A Jun-18 Convergys Corporation SYNNEX Corporation 2,519 9.0x Apr-18 PennWell Clarion Events 300 N/A Jan-18 Callidus SAP 2,426 N/A Nov-17 Bazaarvoice, Inc. Marlin Equity Partners, LLC 456 N/A Jul-17 The Experience Engine [dba TE2] accesso Technology Group plc 80 N/A Jan-17 Avention Dun & Bradstreet 150 N/A Mean $1,025 9.0x Median 215 9.0
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 100 PRECEDENT M&A TRANSACTIONS (CONT.)
Data & Insights ($ in millions)
Date Target Name Acquirer Name EV EV / EBITDA Jul-20 4C Insights Inc. Mediaocean $150 N/A Feb-20 Char Software Inc. Upland Software Inc. $68 N/A Oct-19 Lender Performance Group LLC Q2 Holdings Inc. 510 N/A Sep-19 Crossix Solutions Inc. Veeva Systems Inc. 430 N/A Aug-19 Pitney Bowes Inc. (software business) Syncsort Inc. 700 N/A Jun-19 Data Plus Math Corporation LiveRamp Holdings, Inc. 150 N/A Jun-19 Lattice Engines, Inc. The Dun & Bradstreet Corporation 135 N/A Jun-19 adjust GmbH Eurazeo 400 8.0x Jun-19 Tableau Salesforce 16,323 N/A Apr-19 Epsilon Data Management Publicis 4,400 9.3 Feb-19 Zoom Info DiscoverOrg (TA Associates) 748 N/A Jul-18 Acxiom The Interpublic Group of Companies 2,300 N/A Jun-18 Datorama Salesforce 744 N/A Apr-18 Mattersight Corp. NICE Ltd. 103 N/A Apr-17 Guavus Inc. Thales Group SA 109 N/A Feb-17 infoGroup Inc Court Square Capital Partners 600 8.6 Mean $1,742 8.6x Median 470 8.6
______Source: Capital IQ, 451 Research and Baird investment banking knowledge. Page 101 SELECT FINANCING ACTIVITY
Date Announced Target Lead Investor Deal Size ($ in M) Aug-20 Yotpo Bessemer, Access Industries, Vertex Ventures, Hanaco $75 Jul-20 Ceros Inc. Sumeru Equity Partners 100 Jun-20 Contentful Sapphire Ventures 80 Jun-20 Outreach Sands Capital 50 Jun-20 Hopin Salesforce Ventures; Accel; Northzone; Seedcamp; Slack Fund 40 Jun-20 Neeva Greylock, Sequoia 38 Jun-20 CreatorIQ Kayne Anderson Capital Advisors 24 May-20 Aircall DTCP 65 May-20 Bluecore Georgian Partners; FirstMark; Norwest 50 May-20 Amplitude GIC 50 May-20 ContentSquare Blackrock 190 May-20 Slice KKR 43 May-20 Morning Consult AVP, Lupa Systems 31 May-20 Symend Inovia Capital 52 May-20 Sensor Tower Riverwood Capital 45 Apr-20 Attentive Mobile, Inc. Coatue, Sequoia 110 Apr-20 Catalyst SPARK 25 Mar-20 Brooklinen Inc. Summit Partnes 50 Feb-20 Roblox Corporation Andreessen Horowitz LLC 150 Feb-20 SPORTORITY UK Ltd Dawn 40 Feb-20 OneTrust, LLC Insight Venture Management; Coatue Management 210 Feb-20 mParticle Arrowfoot Capital Management 45 Feb-20 GumGum, Inc. Upfront Ventures; Morgan Stanley; NewView Capital Managemen 22 Feb-20 SoundCloud Limited Sirius XM 75 Feb-20 MoEngage, Inc. Eight Roads Ventures 25 Feb-20 Snowflake Computing Inc. Dragoneer Investment Group; Salesforce Ventures 479 Feb-20 Habu, Inc. Superset; Ridge Ventures 15 Feb-20 Sender, Inc. Oak HC/FT Partners LLC 40 Jan-20 Moda Operandi, Inc. Apax Partners LLP; New Enterprise Associates 100 Jan-20 SuperAwesome Limited M12 17 Jan-20 Appsflyer Ltd. General Atlantic 210 Jan-20 Attentive Mobile, Inc. Institutional Venture Partners; Sequoia Capital Operations 110
______Source: LUMA Q1 and Q2 2020 Market reports and Baird investment banking knowledge. Page 102 SELECT FINANCING ACTIVITY (CONT.)
Date Announced Target Lead Investor Deal Size ($ in M) Jan-20 The Athletic Media Company Bedrock Capital 50 Jan-20 Funnel Operation Eight Roads Ventures 47 Jan-20 6Sense Insights Inc. Insight Partners 40 Jan-20 ActiveCampaign, LLC Susquehanna Growth Equity 100 Jan-20 Sisense Inc. Insight Venture Management, LLC 100 Jan-20 Performance Horizon Group Accel-KKR 45 Jan-20 BlueConic, Inc. Spring Lake Equity Partners LLC 13 Dec-19 Odoo Summit Partners 90 Dec-19 Iterable Viking Global Investors LP 60 Dec-19 ActionIQ, Inc. March Capital Partners 32 Nov-19 Kustomer Coatue Management 60 Nov-19 Highspot, Inc. ICONIQ Capital, LLC 75 Nov-19 Impartner Software Vector Capital 20 Nov-19 Freshworks Inc. Accel Partners and CapitalG Management Company 15 Nov-19 Verified Reviews Providence Strategic Growth Capital Partners 35 Oct-19 WizRocket Tiger Global Management LLC, Sequoia Capital India 35 Sep-19 RedPoint Global Inc Camden Partners Holdings 14 Aug-19 TapClicks, Inc. Boathouse Capital 10 Aug-19 Simon Data, Inc. Polaris Partners 30 Aug-19 Invoca, Inc. H.I.G. Growth Partners, LLC 56 Aug-19 Placer Labs, Inc. JBV Capital 12 Jul-19 NewsCred, Inc. InterWest Partners LLC 20 Jun-19 BigID, Inc. Tiger Global Management 50 Jun-19 Showpad Dawn Capital LLP and Insight Venture Partners 70 Apr-19 SalesLoft, Inc. Insight Venture Partners LLC 76 Apr-19 WizRocket Sequoia Capital India 26 Apr-19 Klaviyo Summit Partners 150 Apr-19 Mavenlink Carrick Capital Management Company and Goldman Sachs Grou 48 Apr-19 Segment.io Accel and GV 175 Jul-18 Quibi Holdings, LLC Undisclosed 400 Nov-17 Leanplum, Inc. Norwest Venture Partners 79 Mean $74 Median 50
______Source: LUMA Q1 and Q2 2020 Market reports and Baird investment banking knowledge. Page 103 PUBLIC COMPANY TRADING COMPARABLES – ADVERTISING
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Alphabet Inc. $934,725 55.1% 4.9% 20.3% 19.3% 24.5% 5.5x 4.6x 16.3x 13.1x Amazon.com, Inc. 1,525,137 40.6% 24.0% 17.7% 23.4% 39.4% 4.4 3.7 34.1 24.5 Cardlytics, Inc. 2,021 37.1% (10.6%) 45.3% 13.2% (180.3%) 10.7 7.4 N/A N/A CarGurus, Inc. 2,624 93.4% (12.2%) 25.7% 68.0% 48.1% 5.1 4.0 37.1 25.0 Clear Channel Outdoor Holdings 7,131 45.1% (28.1%) 12.5% (62.6%) 90.8% 3.7 3.3 33.6 17.6 Cognizant 32,119 36.1% (3.9%) 4.2% (14.8%) 14.3% 2.0 1.9 11.5 10.0 Criteo S.A. 521 35.9% (64.3%) (4.7%) (19.7%) (1.3%) 0.6 0.7 2.6 2.7 Dentsu Group Inc. 10,679 89.4% (5.9%) 8.4% (4.1%) 20.7% 1.2 1.1 7.6 6.3 eHealth, Inc. 2,526 99.3% 26.0% 24.8% 24.7% 31.4% 4.0 3.2 18.3 13.9 EverQuote, Inc. 1,542 93.7% 31.3% 22.1% N/M 45.6% 4.7 3.9 N/A N/A Facebook, Inc. 637,497 81.7% 9.7% 24.8% 25.7% 28.1% 8.2 6.6 17.1 13.3 Fluent, Inc. 202 29.9% 3.0% 7.0% 33.9% 23.2% 0.7 0.6 6.8 5.5 IBM 167,824 47.5% (4.7%) 2.5% 3.0% 9.9% 2.3 2.2 9.7 8.8 LendingTree, Inc. 4,528 94.2% (18.3%) 17.7% 5.3% 26.4% 5.0 4.3 31.2 24.7 Magnite, Inc. 629 64.9% 18.7% 29.7% (31.9%) N/M 3.4 2.6 N/A 15.6 Nielsen Holdings plc 14,313 56.1% (4.7%) 2.7% 47.4% 2.7% 2.3 2.3 8.0 7.8 Omnicom Group Inc. 16,373 18.0% (12.4%) 5.7% (20.3%) 12.5% 1.3 1.2 8.9 7.9 Outfront Media Inc. 6,028 46.2% (23.1%) 21.1% (38.2%) 58.9% 4.4 3.6 21.5 13.5 Publicis Groupe S.A. 13,643 45.8% (10.9%) 6.7% 6.1% 14.8% 1.2 1.2 6.0 5.2 QuinStreet, Inc. 488 11.1% 0.8% 4.0% 68.9% 29.4% 1.0 1.0 12.8 9.9 S4 Capital plc 2,097 79.6% 55.4% 33.3% 100.9% 43.3% 4.7 3.6 30.0 21.0 SAP SE 195,310 70.0% 4.7% 7.5% 51.9% 11.9% 6.0 5.6 17.1 15.3 TechTarget, Inc. 915 75.6% 0.4% 10.3% 48.7% 19.5% 6.8 6.2 22.2 18.6 Interpublic Group of Companies 11,602 20.8% (8.7%) 5.6% (16.0%) 11.7% 1.5 1.4 9.9 8.9 The Trade Desk, Inc. 19,688 76.8% 3.5% 36.0% 37.0% 58.2% 28.8 21.2 N/A N/A Verizon Communications Inc. 365,892 58.9% (3.0%) 3.4% (3.1%) 2.5% 2.9 2.8 7.8 7.6 WPP plc 14,815 18.2% (31.3%) 5.9% (13.7%) 21.2% 1.2 1.2 8.1 6.7 Mean 56.3% (2.2%) 14.8% 13.6% 19.5% 4.6x 3.7x 16.4x 12.6x Median 55.1% (3.9%) 10.3% 9.7% 22.2% 3.7x 3.2x 12.8x 11.5x
______Source: Capital IQ as of July 17, 2020. Page 104 PUBLIC COMPANY TRADING COMPARABLES – DIGITAL EXPERIENCE
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Adobe Inc. $204,822 85.6% 14.0% 15.5% 57.3% 18.1% 16.1x 13.9x 34.0x 28.8x Alphabet Inc. 934,725 55.1% 4.9% 20.3% 19.3% 24.5% 5.5 4.6 16.3 13.1 Open Text Corporation 14,544 73.9% 11.3% 3.3% 22.7% 11.7% 4.5 4.3 12.9 11.6 Oracle Corporation 202,592 79.7% (1.5%) 1.3% 17.8% 0.5% 5.2 5.1 10.6 10.6 Progress Software Corporation 1,735 87.8% 6.8% (0.2%) 38.6% 0.5% 3.9 3.9 9.7 9.7 salesforce.com, inc. 163,555 74.9% 17.4% 17.8% 162.4% 18.4% 8.1 6.9 27.4 23.1 Shopify Inc. 108,936 54.5% 37.6% 35.4% N/M 75.8% 50.1 37.0 N/A N/A Square, Inc. 52,365 39.7% 11.1% 25.4% 114.6% 195.5% 10.0 8.0 N/A N/A Mean 68.9% 12.7% 14.9% 61.8% 43.1% 12.9x 10.5x 18.5x 16.1x Median 74.4% 11.2% 16.7% 38.6% 18.3% 6.8x 6.0x 14.6x 12.3x
______Source: Capital IQ as of July 17, 2020. Page 105 PUBLIC COMPANY TRADING COMPARABLES – CUSTOMER JOURNEY MANAGEMENT
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Adobe Inc. $204,822 85.6% 14.0% 15.5% 57.3% 18.1% 16.1x 13.9x 34.0x 28.8x dotdigital Group Plc 381 90.1% 0.7% 8.7% 22.4% 10.3% 6.3 5.8 16.5 14.9 HubSpot, Inc. 9,022 80.8% 19.5% 20.7% N/M 49.4% 11.2 9.3 N/A N/A Microsoft Corporation 1,492,798 68.2% 10.4% 11.6% 9.9% 12.7% 10.1 9.0 22.2 19.7 Oracle Corporation 202,592 79.7% (1.5%) 1.3% 17.8% 0.5% 5.2 5.1 10.6 10.6 Pegasystems Inc. 7,892 67.3% 16.9% 18.7% N/M 99.4% 7.4 6.2 N/A N/A salesforce.com, inc. 163,555 74.9% 17.4% 17.8% 162.4% 18.4% 8.1 6.9 27.4 23.1 SAP SE 195,310 70.0% 4.7% 7.5% 51.9% 11.9% 6.0 5.6 17.1 15.3 Twilio Inc. 29,950 53.4% 34.2% 24.8% N/M 64.0% 19.7 15.8 N/A N/A Upland Software, Inc. 1,308 68.4% 18.7% 3.8% 81.2% 7.6% 5.0 4.8 14.4 13.4 Mean 73.8% 13.5% 13.1% 57.6% 29.2% 9.5x 8.2x 20.3x 18.0x Median 72.5% 15.4% 13.6% 51.9% 15.4% 7.8x 6.6x 17.1x 15.3x
______Source: Capital IQ as of July 17, 2020. Page 106 PUBLIC COMPANY TRADING COMPARABLES – SOCIAL & RELATIONSHIPS
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Adobe Inc. $204,822 85.6% 14.0% 15.5% 57.3% 18.1% 16.1x 13.9x 34.0x 28.8x Ascential plc 1,813 63.5% (25.8%) 29.2% (44.7%) 107.0% 4.4 3.4 24.5 11.8 Axel Springer SE 9,422 41.2% 6.6% 3.8% N/A N/A 2.5 2.4 N/A N/A Emerald Holding, Inc. 748 63.9% (36.7%) 28.0% (22.1%) 9.0% 3.3 2.6 8.7 7.9 Forrester Research, Inc. 736 58.3% (9.7%) 14.0% (22.8%) 91.2% 1.8 1.5 28.1 14.7 Gartner, Inc. 14,077 64.0% (9.5%) 13.5% 10.6% 11.2% 3.7 3.2 22.3 20.1 HubSpot, Inc. 9,022 80.8% 19.5% 20.7% N/M 49.4% 11.2 9.3 N/A N/A Hyve Group Plc 549 38.3% (39.3%) 56.0% (59.1%) (389.1%) 3.2 2.0 N/A 9.0 IHS Markit Ltd. 36,323 61.7% (2.8%) 7.4% 18.1% 9.8% 8.5 7.9 19.8 18.1 Informa plc 11,859 42.0% (35.8%) 26.7% (43.2%) 53.5% 4.8 3.8 16.8 11.0 LogMeIn, Inc. 4,295 74.1% 4.9% 5.9% 27.6% 9.2% 3.2 3.1 10.6 9.7 Oracle Corporation 202,592 79.7% (1.5%) 1.3% 17.8% 0.5% 5.2 5.1 10.6 10.6 Publicis Groupe S.A. 13,643 45.8% (10.9%) 6.7% 6.1% 14.8% 1.2 1.2 6.0 5.2 RELX PLC 51,598 65.0% (6.2%) 6.5% 7.1% 10.4% 5.3 5.0 15.2 13.7 salesforce.com, inc. 163,555 74.9% 17.4% 17.8% 162.4% 18.4% 8.1 6.9 27.4 23.1 Sprout Social, Inc. 1,253 72.2% 24.7% 28.0% (47.3%) (38.7%) 9.8 7.6 N/A N/A Sykes Enterprises, Incorporated 1,254 38.3% (0.2%) 5.0% (1.1%) 14.9% 0.8 0.7 7.9 6.8 TechTarget, Inc. 915 75.6% 0.4% 10.3% 48.7% 19.5% 6.8 6.2 22.2 18.6 Teleperformance SE 18,669 32.7% 2.9% 8.7% 21.3% 13.4% 3.0 2.8 15.3 13.5 TELUS Corporation 36,059 38.3% (0.9%) 5.9% 13.8% 6.4% 3.2 3.1 8.4 7.9 Thomson Reuters Corporation 37,741 30.5% 1.2% 4.1% 70.8% 7.3% 6.3 6.1 20.2 18.8 TTEC Holdings, Inc. 2,583 27.6% 2.8% 4.9% 11.5% 7.6% 1.5 1.5 11.6 10.8 Twilio Inc. 29,950 53.4% 34.2% 24.8% N/M 64.0% 19.7 15.8 N/A N/A Viad Corp 833 6.6% (42.3%) 65.0% (85.3%) 684.7% 1.1 0.6 46.3 5.9 Zendesk, Inc. 10,108 72.7% 23.6% 24.9% N/M 51.9% 10.0 8.0 N/A N/A Zoom Video Communications, Inc. 69,080 76.5% 189.8% 25.4% N/M 26.0% 38.3 30.5 N/A N/A Mean 56.3% 4.6% 17.7% 7.0% 34.8% 7.0x 5.9x 18.7x 13.3x Median 62.6% 0.1% 13.7% 10.6% 14.8% 4.6x 3.6x 16.8x 11.4x
______Source: Capital IQ as of July 17, 2020. Page 107 PUBLIC COMPANY TRADING COMPARABLES – CUSTOMER EXPERIENCE
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Adobe Inc. $204,822 85.6% 14.0% 15.5% 57.3% 18.1% 16.1x 13.9x 34.0x 28.8x Aimia Inc. 64 45.0% (69.2%) N/M N/M N/M 2.0x 19.3x N/A 12.4x Alliance Data Systems Corporation 18,777 18.3% (12.7%) (1.5%) (14.8%) 18.2% 3.9x 3.9x 18.4x 15.6x Cisco Systems, Inc. 181,796 64.4% (6.2%) 4.7% 8.2% 1.1% 3.8x 3.6x 10.4x 10.3x Medallia, Inc. 3,469 63.9% 14.8% 18.8% N/M 56.6% 7.5x 6.3x N/A N/A NICE Ltd. 12,369 66.4% 5.1% 8.1% 27.8% 9.9% 7.5x 6.9x 23.5x 21.3x Oracle Corporation 202,592 79.7% (1.5%) 1.3% 17.8% 0.5% 5.2x 5.1x 10.6x 10.6x Pegasystems Inc. 7,892 67.3% 16.9% 18.7% N/M 99.4% 7.4x 6.2x N/A N/A Rakuten, Inc. 14,265 (2.0%) 17.7% 14.3% (4.6%) 83.2% 1.0x 0.9x 15.6x 8.5x salesforce.com, inc. 163,555 74.9% 17.4% 17.8% 162.4% 18.4% 8.1x 6.9x 27.4x 23.1x SAP SE 195,310 70.0% 4.7% 7.5% 51.9% 11.9% 6.0x 5.6x 17.1x 15.3x SVMK Inc. 3,251 75.9% 21.4% 20.5% N/M 46.3% 8.7x 7.2x N/A N/A Verint Systems Inc. 3,298 66.3% (3.9%) 8.4% 96.8% 13.2% 2.6x 2.4x 10.5x 9.3x Zendesk, Inc. 10,108 72.7% 23.6% 24.9% N/M 51.9% 10.0x 8.0x N/A N/A Mean 60.6% 3.0% 12.2% N/A 33.0% 6.4x 6.9x 18.6x 15.5x Median 66.8% 9.5% 14.3% N/A 18.2% 6.7x 6.3x 17.1x 13.8x
______Source: Capital IQ as of July 17, 2020. Page 108 PUBLIC COMPANY TRADING COMPARABLES – DATA & INSIGHTS
($ in millions)
Operating Statictics Valuation Multiples LTM Revenue EBITDA EV / Revenue EV / EBITDA Enterprise Gross 2020P 2021P 2020P 2021P Value Margin Growth Growth Growth Growth 2020P 2021P 2020P 2021P Adobe Inc. $204,822 85.6% 14.0% 15.5% 57.3% 18.1% 16.1x 13.9x 34.0x 28.8x comScore, Inc. 470 49.9% (4.7%) 12.0% N/M 36.4% 1.3x 1.1x 14.2x 10.4x Forrester Research, Inc. 736 58.3% (9.7%) 14.0% (22.8%) 91.2% 1.8x 1.5x 28.1x 14.7x HubSpot, Inc. 9,022 80.8% 19.5% 20.7% N/M 49.4% 11.2x 9.3x N/A N/A ICF International, Inc. 1,853 35.3% (0.0%) 8.0% 1.2% 14.5% 1.3x 1.2x 14.0x 12.3x Ipsos SA 2,061 64.3% (5.4%) 6.9% (10.9%) 26.3% 1.0x 0.9x 9.1x 7.2x IQVIA Holdings Inc. 40,536 33.9% (3.2%) 11.0% 18.6% 14.3% 3.8x 3.4x 18.2x 15.9x LiveRamp Holdings, Inc. 2,267 59.9% 15.7% 19.7% (85.7%) N/M 5.5x 4.6x N/A N/A Microsoft Corporation 1,492,798 68.2% 10.4% 11.6% 9.9% 12.7% 10.1x 9.0x 22.2x 19.7x Nielsen Holdings plc 14,313 56.1% (4.7%) 2.7% 47.4% 2.7% 2.3x 2.3x 8.0x 7.8x Oracle Corporation 202,592 79.7% (1.5%) 1.3% 17.8% 0.5% 5.2x 5.1x 10.6x 10.6x salesforce.com, inc. 163,555 74.9% 17.4% 17.8% 162.4% 18.4% 8.1x 6.9x 27.4x 23.1x SAP SE 195,310 70.0% 4.7% 7.5% 51.9% 11.9% 6.0x 5.6x 17.1x 15.3x Verint Systems Inc. 3,298 66.3% (3.9%) 8.4% 96.8% 13.2% 2.6x 2.4x 10.5x 9.3x Mean 63.1% 3.5% 11.2% 28.6% 23.8% 5.4x 4.8x 17.8x 14.6x Median 65.3% (0.8%) 11.3% 18.2% 14.5% 4.5x 4.0x 15.6x 13.5x
______Source: Capital IQ as of July 17, 2020. Page 109 This has been obtained from sources we consider to be reliable, but we cannot guarantee the accuracy.
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