Digital Advertising Landscape Summer 2011

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Online Advertising Landscape

Summer 2011
Table of Contents
Section I Section II Section III Sections IV Industry Overview Emerging Trends Industry Breakdown Transactions and Comps
Summer 2011 Online Advertising Landscape
INDUSTRY OVERVIEW
Online Advertising Industry Overview

The online advertising industry is consolidating as large players in the space are looking to buy vs. build in this quickly evolving landscape New advertising technologies like ad exchanges, DSPs, SSPs, DMPs, real-time bidding and targeting platforms are optimizing online advertising, making it more effective and efficient
Taking advantage of rich customer data is improving returns for advertisers Data exchange rise is leveling the playing field As online ads become more effective and efficient, publishers can demand higher premiums for ad inventory and advertisers will allocate a greater portion of their spend towards online campaigns
Mobile platforms are creating opportunities for advertisers to reach customers as they make purchasing decisions in real-time
With mobile internet, customers are never really offline Enabling online advertising to have a greater impact on purchases made in-store
Social networks provide an enormous wealth of valuable data on consumer habits

Improving ROI of online campaigns through targeted ads to highly relevant potential customers Navigating privacy concerns will be a key obstacle
U.S. online ad revenue grew 14.6% to $26.0bn in 2010 over 2009, and is expected to grow at a 13.7% CAGR to reach $49.5bn by 2015
Mobile, video and social advertising are new mediums that are driving industry growth
Opportunity In All Online Marketing Sectors

Ad Networks: With a seemingly endless supply of ad networks in the market, who are the leaders and who will be acquired? Web Analytics and Data Insights: One of the most in-demand capabilities in 2009 and 2010. Social Media Marketing: Even Grandma is tweeting marketers need to figure this one out. Lead Generation: While public companies are struggling, the vertically-focused private companies are running strong. Interactive Agencies: Independent agencies were hard hit by the downturn, but their capabilities are still in demand. Search Engine Marketing & Optimization: With search still the foundation and Google the architect, this is the core of next generation advertising. Which companies will effectively leverage this opportunity? E-mail Marketing: Consider a world where your neighborhood mailman comes only once a weeknow consider who would benefit most from a world of less direct mail.
Global Advertising Revenues

Global search, display and classified revenue grew 17.8%, 18.9% and 8.3% in 2010, respectively
$50,000 $46,606 $45,000 $40,436 $40,000 $35,000 $31,126 $35,086 $34,400 $29,530 $25,275 $21,799 $20,000 $15,000 $10,000 $5,000 $0 2009A
Source: Zenith Optimedia Research
(in millions of $USD)
$30,000 $26,431 $25,000 $18,329
$9,940
$10,765
$11,815
$12,852
$13,961
2010A Classified Ad Revenue
2011E Display Ad Revenue
2012E Search Ad Revenue
2013E
U.S. Online Ad Revenue Growth

Online advertising revenue in the United States totaled $7.3bn in Q1 2011, an increase of 23.0% from Q1 2010
$8,000 CY 2002 $6,010 CY 2003 $7,267 CY 2004 $9,626 CY 2005 $12,542 CY 2006 $16,879 CY 2007 $21,206 CY 2008 $23,448 CY 2009 $22,661 CY 2010 $25,974 Q1 2011 $7,300
Quarterly U.S. Online Advertising Revenue (in millions of $USD)
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
Source: IAB Internet Advertising Revenue Report Full Year 2010 Results, Q1 11 Internet Advertising Revenue Results press release
U.S. Online Advertising Spending by Format

The most rapid revenue growth is expected to occur in areas other than the well-established search and banner ad formats
$60.0
$50.0
$49.5 CAGR 13.7% $41.2 $45.5 $4.7 $5.6 $4.0 $4.3 $4.9 $7.1
Online Ad Revenue (in billions of $USD)
$40.0 $31.3 $30.0 $26.0 $3.8 $1.4 $2.6 $6.2 $10.0 $12.0 $0.0 2010a 2011e Search Banner Ads $14.4 $4.1 $2.2 $3.0 $7.6
$36.8 $4.4 $3.1 $3.4
$4.5 $4.2 $3.7 $9.9
$11.0
$11.7
$20.0
$8.9
$17.0
$18.9
$20.2
$21.5
2012e
2013e Video Other
2014e
2015e
Source: eMarketer (July 2011)
Classifieds and Directories
Time Spent Consuming Media vs. Ad Spending

Online advertising spending has yet to catch up to evolving consumer habits
45% 40% 35% 31% 30% 26% 25% 20% 16% 15% 10% 5% 0% Print
Source: Charles Stanley research report Digital Media: The Future is Now (2011)
There is an opportunity to draw ad spend away from shrinking mediums like broadcast TV and print media
39%
28%
12% 9%
3%
Radio Time Spent Advertising Spend
TV
Online
Trends in Advertising Spending

A survey of media buyers indicates that mobile, social and video advertising are poised for the greatest revenue growth in 2011
100% 13% 90% 30% 80% 70% 60% 50% 42% 40% 30% 20% 10% 0% 4% 4% Social Media 25% 7% 19% 6% 3% 20% 13% 15% 13% 13% 4% Video Ad Networks Portals 6% Premium Publisher Inventory 13% 13% 5% 8% SEM/SEO 23% 24% 47% 45% 36% Not planning to spend 54% 20% 52% 38% 25% 11% 21% 35% N/A Spending will increase Spending will stay the same Spending will decrease 13% 10% 17% 22% 15% 15%
Demand Side Mobile Platforms ("DSP"s) Source: ValueClick Media 2011 Advertiser Survey
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Evolution: Web 1.0 (Past) to Web 3.0 (Future)

HTTP HTML JAVA XML SOAP FLASH JAVASCRIPT P2P RDF RSS AJAX ATOM OWL OpenID SPARQL SWRL
Web 1.0
1990-2000
Websites Keyword Search Directory Portals Lightweight Collaboration SaaS
Web 2.0
2004-2007
Weblogs Office 2.0 Social Media Sharing
Web 2.5
2007-2010
Social Mobile Widgets Networking Applications Semantic Search Semantic Databases
Web 3.0
2010 - ?
Distributed Search Intelligent Personal Agents
Publishing First basic version of the web featuring static HTML only websites Email Text only email
MMS (Multimedia Messaging Service) Allows users to send multimedia content to and from mobile phones Collaboration Shift from flat push publishing web to creativity, secure information sharing and collaboration (social networks, blogs, wikis, etc.) Content Ownership Users own the information SaaS (Software-as-a-Service) Broadband penetration allows for software programs run entirely online but with minimal crosssoftware integration Open-source Software A production and development philosophy promoting open access and review of the final product
Personalization Connection of siloed information to create more personal environments Mobile Applications Digital distribution of rich media and gaming applications Rich Mobile Platforms Widespread adoption of smartphones capable of accessing rich media content on mobile devices Social Media Sharing Robust network of users sharing media across the globe PaaS (Platforms as a Service) AJAX, lower bandwidth and server costs drive emergence of integrated web software suites (GoogleApps, Amazon, salesforce, Microsoft)
Intelligent Web Recommendations automatically develop based upon a users web habits Ubiquitous Connectivity Increased connectivity through widespread broadband adoption, mobile Internet access and mobile devices Open Identity Ability to seamlessly use one screen name to access the entire web Semantic Web Ability of the internet to understand and respond with relevant response Ubiquitous Collaboration Widespread and highly viral creative content collaboration virtuous circle between brands, celebrities and consumers
E-Commerce The start of online shopping Flat Content Early digitization and online availability of news, books, music and other media Siloed Services Early webenabled services such as search agents/shopping agents SMS (Short Message Service) Exchange of short text messages between mobile devices, although it is limited to 160 characters Smartphone Launched in 1993
11
Display Advertising Landscape
Source: LUMAscape
12
Search Advertising Landscape
Source: LUMAscape
13
Video Advertising Landscape
Source: LUMAscape
14
Mobile Advertising Landscape
Source: LUMAscape
15
Social Advertising Landscape
Source: LUMAscape
16
Commerce Advertising Landscape
Source: LUMAscape
17
Mobile Display Advertising Landscape
Source: LUMAscape
18
Consolidation in the Display Advertising Ecosystem

Large companies are becoming more innovative with their corporate strategy
Unique strategic acquisitions are made to grow and diversify product/service offerings to clients Better to buy vs. build in this quickly evolving environment
Sector
Performance Advertising Large Display Ad Networks Major Agencies Vertical Networks Web Delivery Targeting Platforms Consumer Data Marketing Analytics
Companies

Growth Opportunities
Apply ROI discipline Differentiate with tool and analytics providers Build baseline functionality Continue aggregation of large likeminded audiences Use advertising as an application Leverage increasingly sophisticated technology to better target customers Expand from customer data to customer acquisition Apply rich user data
19
Horizontal vs. Vertical Ad Networks

Horizontal ad networks are comprised of high traffic publishers of diverse types of content Vertical ad networks are made up of closely related content focused on a specific subject
Horizontal Ad Network Vertical Ad Network
Horizontal ad networks reach broad audiences, which can be appropriate for branding campaigns
47.0% of advertisers report reach as one of the most important factors when choosing a media partner
Vertical ad networks have a narrower audience

67.0% of advertisers report audience targeting as one of the most important factors when choosing a media partner
Horizontal networks leverage audience data to provide basic targeting across a broad array of properties
IDG Tech Network specializes in publishers that target business readers in the technology community
Information Technology Small Business Prosumers
Source: ValueClick Media 2011 Advertiser Survey
20
Differentiating Ad Networks
Audience data is now considered more valuable than inventory quality in online media buying decision making Targeting methods that leverage audience data have grown in importance while contextual targeting is declining Advertisers and agencies need greater audience insights, analytics and optimization services
What Metric do You Use to Evaluate Ad Network Performance?
CTR CPC CPA Ability to Drive Brand Awareness Interaction Rate Ability to Drive Brand Favorability 25% 35% 33% 48% 64% 61%
What Are the Most Important Factors When Choosing a Media Partner?
Performance/ROI Audience Targeting Price Transparency Optimization Reach Products Proprietary Data Sets Unique Content 20% 19% 17% 47% 55% 55% 67% 67% 84%
Source: Collective 2010 Display Advertising Study, ValueClick Media 2011 Advertiser Survey
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EMERGING TRENDS
Online Advertising Industry Developments

Ad exchanges and demand side platforms (DSPs) are revolutionizing the display ad market by making it more transparent and efficient for advertisers, while giving publishers better control of supply and pricing A fundamental shift in the digital advertising space continues to unfold as display advertisers continue to turn their focus from site-specific to audience targeting The market shift to selling audiences rather than sites is expected to drive strong growth
Sites Sold on site-specific, channel or Run-of-Networks (RON) basis Audience Individuals targeted by behavior, context, geography and demographics
As this shift in market focus continues to materialize, two distinct sets of companies will continue to grow in importance to both agencies and publishers
Ad Exchanges/DSPs Distributors of valuable information for enhanced advertising Data Source Companies Aggregators of information and consumer feedback
23
U.S. Online Video Ad Spending

Online video ad spending will nearly triple as a share of total online ad spending by 2015
$9,000 14.4% $8,000 12.4% $7,000 $7,110 12.0% 10.2% 14.0% 16.0%
$6,000
$5,640
10.0%
$5,000 6.9% 5.5% $3,000 $2,160 $2,000 $1,420 $1,000
8.4% $4,200 8.0%
$4,000
$3,090
6.0%
4.0%
2.0%
$0 2010a 2011e 2012e Annual Amount ($mm) 2013e % of Total U.S. Online Ad Spending 2014e 2015e
0.0%
Source: eMarketer (July 2011)
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(percentage of total U.S. online ad spending)
Growth of Online Video Advertising

70.0% of advertisers say they will increase video ad spend in the next 12 months
Only 41.0% of advertisers plan to increase display ad spending in the same period
European and U.S. online video marketing spending is expected to reach approximately $3.0bn each by 2012, representing a CAGR of 78.0% and 50.0%, respectively Online video ads decisively outperform television ads across key verticals and on-critical metrics, such as general recall, brand recall, message recall and likeability
Global Online Video Advertising Spend
$3,500 $3,000 $3,300 $2,800 $3,000
Online Video Ads Outperform TV Ads on All Key Brand Impact Metrics
70.0% 60.0% 50.0% 40.0% 30.0%
$590
65.0% 50.0% 39.0% 28.0% 21.0% 26.0% 14.0%
$2,500 $2,000 $1,500 $1,000 $500 $Asia 2008a Europe 2012e U.S. $300 $280
46.0%
20.0% 10.0% 0.0% General Recall Brand Recall Online Video Message Recall TV
Likeability
Source: eMarketer, ComScore Video Metrix and Nielsen IAG Cited in ARF 2010 speech Variations in Video Advertising Impact March 2010, Break Media 2011 Video Advertising Study
25
Evolution of Online Advertising: Ad Exchanges

An annual display advertising study of 420 advertisers and agencies provided some valuable insight on the display advertising ecosystem, including:
Only 30.0% of those responding had ever used an ad exchange or demand-side platform
55.0% of respondents indicated that they would use an ad exchange and/or DSP in 2010 (63.0% are large spenders)
What Are the Most Important Factors to Consider When Using an Ad Exchange?
55.0% 52.0% 46.0% 44.0% 41.0%
Will Exchanges Eventually Replace Ad Networks?
28.0%
72.0%
Targeting
Price
Optimization
Analytics
Reach
No Yes
Source: Collective 2010 Display Advertising Study
26
Evolution of Online Advertising: Real-Time Bidding

Real-time bidding (RTB) allows advertisers to bid on ad impressions in milliseconds at the moment they are created
RTB takes the uncertainty out of ad buying, creating greater returns for advertisers and allowing publishers to demand higher yields U.S. RTB spending will grow 133.0% in 2011
RTB introduces a new participant into the advertising value chain, the demand-side platform
DSPs instantaneously place bids on impressions to maximize ROI 2011 Expected U.S. Display Media Spending ($mm)
5.7%
Ad Exchange Spending ($mm)

$1,600 $1,400
$1,200 $1,000 $800 $600 $400 $200 $0 2010a non-RTB RTB

$353.0 $380.0
$592.0
7.9%
86.4%
$823.0
2011e
Non-RTB Exchange Traded
RTB
Other
Source: A commissioned study by Forrester Consulting on behalf of Admeld, Q4 2010, as cited by a February 2011 study published by WARC
27
Evolution of Online Advertising: Mobile Advertising

Total shipments of tablets and smartphones are expected to exceed PC shipments for the first time in 2011 There are 726.0 mm mobile 3G subscribers worldwide
3G subscribers users grew 35.0% YoY from 2009-2010
75.0% of respondents in a 2011 IAB survey reported that buying and selling ads in social media and mobile platforms is important Advanced smartphones with sophisticated graphics enable rich media advertising on mobile platforms Mobile video is emerging as an important element of mobile Internet use
In addition to YouTube, applications for ESPN, Netflix, Hulu and HBO are now available on Android and iOS devices Mobile video use is forecasted to grow at a 131.0% CAGR from 2009 to 2014 Mobile video will reach 66.0% of mobile Internet traffic by 2015
Advertising revenues follow audiences, and Internet users are increasingly migrating to mobile platforms
By 2014, half of U.S. web browsing will be done on mobile devices
Source: Cisco Research (2010) and 2011 IAB Interactive Ad IQ Survey
28
Evolution of Online Advertising: Social Advertising

Confluence of local, mobile and social platforms bring social advertising to a critical mass Social network traffic is huge, but social network ad spend has yet to catch up Social networks contain rich user information that enables more effective ad targeting
Navigating privacy concerns will be the essential challenge to social advertising in the foreseeable future
Social ad spending will grow in response to the rise of social shopping

Social Network Ad Spend
3.5 3 2.5 2 1.5 1 0.5 0 2009a 2013e
Social Network Users
800
$3.1bn
750
700
(in billions of $USD)
(in millions of users)
600 500 400 300 200 100 0 7.5 Foursquare 39 Yelp LinkedIn Twitter Facebook 100 200
$1.3bn
Source: IDC U.S. Consumer Online Behavior Survey results, Yelp Weblog, BBC News Twitter co-founder Jack Dorsey re-joins company, Business Insider Foursquare users doubled and www.linkedin.com
29
Evolution of Online Advertising: Social Gaming

Social gamers are heavily engaged with content Brands can provide in-game rewards in exchange for real world interaction
In one case, 7-Eleven provided gamers with in-game rewards in exchange for in-store purchases which resulted in the redemption of 3.0mm offers in six weeks
Social game advertising reaches the enormous Facebook audience of more than 700.0mm
The average American spends more time on Facebook than Google, Amazon, Yahoo and YouTube combined Social Gaming vs. Primetime TV: Weekly Audience (7/17/11-7/23/11)
(Millions of Weekly Viewers/Active Users)
U.S. Social Gamers

90.0 35.0% 27.0% 24.0% 61.9 53.0 29.0% 68.7 30.0% 80.0 70.0
45 40 35 30 25 20 15 10 5 0
38.1
18.3 17.7
14.1 8.9 8.7 8.2 8.1 7.5 7.4 7.3 6.8 6.6 6.5
(Millions of Users)
60.0 50.0 40.0 30.0 20.0 10.0 0.0 2010a
20.0% 15.0% 10.0% 5.0% 0.0%
2011e
2012e % of Internet Users
Social Gaming
Primetime TV
Social Gamers (mm)
Source: TV by the Numbers, All Facebook, Mashable, eMarketer
30
(% of Internet Users)
25.0%
Venture Capital Advertising Investment Trends

Mobile Video Social Infrastructure Display
VC Investment Targets by Internet Advertising Sub-Sector Location-targeted advertising solutions Technologies that exploit the mobile-social connection Rich media advertising for mobile devices Monetization technologies that go beyond the preroll ad Video ad networks with access to premium content Video yield management technology Interactive video advertising Social media customer targeting Platforms optimized to exploit rich audience information from social networks Social application monetization Social listening market research Real-time bidding platforms Ad exchanges that enable access to broader audiences Demand-side platforms that optimize return on investment for advertisers Data management to enable targeted advertising Targeted ad networks that provide audience data Ad networks that reach the rapidly growing Chinese market Geographically-targeted ad networks
Source: Proprietary discussions involving S&A and select venture capitalists
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INDUSTRY BREAKDOWN
Online Advertising Sub-Sectors

Media Buyers
Media Buying Platforms
Demand Side Platforms (DSPs)

Creative Optimization Data Optimization Analytics
Data Management Platforms (DMPs)

Data Suppliers Data Aggregators
Ad Exchanges Supply Side Platforms

Ad Networks Yield Optimization Publisher Tools
Infrastructure
Social Tools Ad Ops/Other Infrastructure Ad Servers Content Delivery Networks
33
Advertising Value Chain Overview

Buy Side
Infrastructure and Delivery
Sell Side
Demand Side Platform
Ad Exchange
Publisher
Media Agency
Ad Network
Supply Side Platform
34
Buy Side Details

The actual purchase of ad space is handled by a media buying platform, which may be an internal aspect of the media agency or an external firm The media buyer then utilizes a demand side platform to purchase ad space through an ad exchange or from a network directly The DSP may use several outside firms to provide and analyze data for targeted advertising
Media Agency
Demand Side Platform
To Ad Exchange(s) or Ad Network(s)
Media Buying Platform Data Supply Creative Optimization Data Optimization
35
Infrastructure and Delivery Details

DSPs make purchase requests from ad exchanges that include numerous ad networks and publishers Once an advertiser is paired with an appropriate ad impression, the advertisers content is delivered through an independent ad server and content delivery network
Ad Network(s)
From DSP(s) To Supply Side Platform(s)
Ad Exchange(s)
Ad Network(s) Ad Network(s)
Analytics Ad Server(s) Verification
Other Infrastructure
Content Delivery Network
36
Sell Side Details

The SSP interacts with DSPs through ad exchanges to maximize revenue per impression Once an impression is sold, the publisher delivers the advertising space to the ad server and the CDN delivers the ad in that space
To/From Ad Network/Exchange
Supply Side Platform
Publisher(s)
37
Evolution of Display Ad Buying

Advertiser Direct (Inefficient) Advertiser Advertiser Ad Network1 $1.00 $0.80 Ad Network2 Ad Network3 $0.64 $0.51 Ad Network4 Publisher Publisher Publisher Ad Network5 $0.41 $0.33 Ad Network6
Ad Networks (Inefficient)
Advertiser
Publisher
Ad Exchanges (Efficient)
Advertiser Advertiser Advertiser
Ad Network1 Ad Network4
Ad Network2 Exchange Ad Network5
Ad Network3 Ad Network6
Publisher Publisher Publisher
Demand-Side Platforms (More Efficient)
Advertiser Advertiser Advertiser DSP
Exchange1 Exchange2 Exchange3 Yield Optimizer
Publisher Publisher Publisher
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TRANSACTIONS AND PUBLIC COMPS
Selected Online Advertising Private Placements

Date Announced
08/01/2011 07/28/2011 07/26/2011 07/19/2011 07/11/2011 07/01/2011 07/01/2011 06/23/2011 06/16/2011 05/25/2011 05/25/2011 05/17/2011 05/16/2011 05/10/2011 05/09/2011 04/31/2011 04/26/2011 04/14/2011 04/07/2011 04/05/2011 03/29/2011 03/23/2011 03/22/2011
1 Does
Amount Raised in Target

Duomeng Zhisheng Network Yext ThinkNear SupersonicAds Image Space Media Tapjoy Mojiva Vpon OwnerIQ BuzzLogic Kompan.pl BlackArrow Groupe Concoursmania Clearspring Adconion TidalTV MakeMeReach FriendsList Individual Digital PlaceIQ Flank Marketing MediaShare Phorm
Total Funding Raised ($mm)

$10.0 35.0 1.6 6.2 4.8 70.7 35.3 7.0 20.8 30.2 2.1 66.0 17.8 45.5 114.0 61.0 4.4 0.0 2.5 2.0 2.0 10.0 121.3
(1)
Business Description
Ad Network Lead Generation Mobile Ad Targeting Social Ad Solutions Ad Network Social Gaming Advertising Mobile Ad Platform Mobile Ad Network Vertical Ad Network Social Advertising Search Advertising Video Advertising Marketing Agency Social Advertising Ad Network Video Advertising Social Advertising Classifieds Demand Side Platform Mobile Ad Network Marketing Agency Video Ad Network Targeted Advertising
Round ($mm)
$10.0 10.0 1.6 4.2 0.6 30.0 25.0 7.0 7.0 7.8 2.1 27.0 15.1 20.0 34.0 30.0 4.4 0.0 1.5 1.0 2.0 10.0 16.4
(1)
not include some undisclosed funding
Source: Industry estimates, Capital IQ and S&A proprietary research
40
Selected Online Advertising Private Placements (contd.)

Date Announced
03/18/2011 03/10/2011 03/10/2011 03/02/2011 02/28/2011 02/15/2011 02/02/2011 01/12/2011 01/11/2011 01/05/2011 01/04/2011 12/23/2010 12/17/2010 12/17/2010 12/15/2010 12/12/2010 12/09/2010 12/02/2010 11/30/2010 11/30/2010 11/23/2010 11/16/2010 11/12/2010
1 Does
Target
JumpTap RadiumOne AdTriad Mediazest Simplifi Holdings YoYi Media (Beijing) Interactive Advertising GraphEffect Adknowledge Strike New Media Millenial Media The Worldwide Exchange Digital Advertising Consortium Beijing Phorm Image Space Media SpotXchange Integrate Media6Degrees mInfo JumpTap Turn plista YuMe Avito.ru
Mobile Advertising Social Ad Network Ad Network Marketing Agency Demand Side Platform Targeted Ad Network Social Advertising Performance Ad Network Online Advertising Mobile Ad Network Classifieds Marketing Agency Targeted Ad Network Ad Network Video Ad Network Lead Generation Social Advertising Search Advertising Mobile Advertising Data Management Platform Video Ad Network Video Ad Network Classifieds
Amount Raised in Round ($mm)

$25.0 21.0 1.0 0.7 3.4 20.0 2.0 200.0 0.8 27.5 3.0 3.0 9.4 1.0 12.0 4.3 19.9 0.8 20.1 3.3 5.0 26.2

$90.0 33.5 1.0 1.6 3.9 32.0 2.0 248.0 0.8 65.0 8.0 3.0 104.9 4.2 12.0 4.3 31.7 4.1 65.0 58.6 3.3 55.0 26.2
(1)
(1)
(1)
(1)
41
Selected Online Advertising Private Placements (contd.)

Date Announced
11/01/2010 10/28/2010 10/22/2010 10/02/2010 09/27/2010 09/27/2010 09/20/2010 09/14/2010 09/08/2010 09/01/2010 08/26/2010 08/19/2010 08/18/2010 08/17/2010 08/06/2010 08/04/2010 07/19/2010 07/12/2010 07/07/2010 04/28/2010 01/12/2010 09/11/2009 06/09/2008 04/15/2008
1 Does
Target
Rubicon Project Individual Digital PlaceIQ AdChina Netshelter Technology Media Adstruc Tro Media OPMS Polygone International Rent Marketer Adsit Media Oggifinogi Beijing Herun Detang Media and Advertising Netsertive Adstruc Outdoor Advertising Storage & Integrated Systems eXelate Media AdChina Phorm Tremor Media TechMediaNetwork Giant Realm Technorati Federated Media Publishing, Inc.
Supply Side Platform Demand Side Platform Mobile Advertising Ad Network Vertical Ad Network Classifieds Ad Exchange Demand Side Platform Marketing Agency Classifieds Video Ad Network Video Ad Network Vertical Ad Network Demand Side Platform Classifieds Ad Network Data Management Platform Ad Network Targeted Advertising Video Ad Network Ad-Supported Content Ad Server Ad Exchange Media Agency
Mean Median
Amount Raised in Round ($mm)

$18.0 1.0 1.0 40.0 15.0 1.1 0.6 2.7 20.0 0.6 2.0 8.8 4.1 0.0 0.6 20.0 30.0 3.0 40.0 1.5 2.5 9.5 50.0
$13.9 $6.0

$51.0 2.5 2.0 80.0 24.0 1.1 0.6 5.2 7.5 0.6 5.0 4.3 11.8 4.1 1.1 0.8 24.0 40.0 95.5 79.4 12.8 32.1 56.7
$30.0 $10.0
(1)
(1)
(1)
42
Selected Online Advertising Acquisitions

Date Announced 8/30/2011 8/8/2011 8/1/2011 6/16/2011 6/9/2011 5/13/2011 5/11/2011 4/22/2011 4/11/2011 4/8/2011 3/30/2011 3/18/2011 3/2/2011 2/8/2011 11/11/2010 11/8/2010 10/18/2010 10/18/2010 9/24/2010 9/15/2010 9/1/2010 8/6/2010 Target EyeWonder Dotomi IndieClick Media Group Media Mind AdMeld CMG Worldwide 5:1 Holding Greystripe Tatto Burst Media The Andina Group Adenyo Juno Internet Buy Owner Delete Digital Marketing ScanScout Nikko Broadband Enterprises Deal Group Media ZIGExN Potrero Media Corporation BV! Media Acquirer DGFastChannel ValueClick Demand Media DG Google Next Fifteen Communications Group Yahoo ValueClick Ozura World Blinkx Foster Jennings Motricity Axel Springer Private Buyer Fuse 8 Tremor Video GMO AD Partners Specific Media Digital Performance Group Private Buyer InsWeb Rogers Media Target Business Description Horizontal Ad Network Demand Side Platform Vertical Ad Network Demand Side Platform Supply Side Platform Media Agency Demand Side Platform Mobile Ad Network Targeted Ad Network Vertical Ad Network Media Agency Mobile Ad Network Mobile Ad Network Online Classifieds Media Agency Vertical Ad Network Media Agency Video Ad Netwwork Search Engine Marketing Blind Ad Network Vertical Ad Network Targeted Ad Network Implied Enterprise Value ($mm) $66.0 295.0 14.0 414.0 400.0 4.0 26.4 70.0 60.0 30.5 0.5 142.5 53.4 1.0 0.6 65.0 $5.5 55.0 7.4 2.4 12.0 24.7 EV/LTM Revenue EBITDA 1.7x 4.9x 13.3x 1.0x 33.8 2.8x 0.8x 7.3x 7.1x 2.6x 0.2x 2.8x 0.9x 1.0x 1.8x 28.0x 3.3x 4.9x 13.0x
43
Selected Online Advertising Acquisitions (contd.)

Date Announced 6/9/2010 6/2/2010 5/4/2010 3/8/2010 2/22/2010 1/5/2010 12/31/2009 12/21/2009 11/9/2009 10/1/2009 9/11/2009 7/31/2009 7/5/2009 5/21/2009 4/15/2009 2/26/2009 10/20/2008 10/15/2008 10/1/2008 5/28/2008 5/7/2008 4/28/2008 Target Adisn iCrossing Ad Juice infoGROUP Adrime Quattro Wireless TIG Global Eyewonder AdMob Dark Blue Sea ReachLocalAustralia Autoreflex.com Adlink Media Cyber Communications Dedicated Media Zi Corporation Acerno Ad Egnage Networld Media M:Metrics Enliven Marketing Technologies Adify Acquirer CrowdGather Hearst Corporation Beyond Commerce CCMP Capital Advisors Weborama Apple MICROS Systems Limelight Networks Google Photon Group Limited ReachLocal Odysse Ventures Hi-Media Dentsu Media Initiatives Group Nuance Communications Akamai Technorati Branche Vous! comScore DG FastChannel Cox Communications Target Business Description Digital Ad Agency Digital Marketing Action Ad Network Online Marketing Services Online Rich Media Platform Mobile Advertising Vertical Ad Network Interactive Digital Ad Services Mobile Advertising Horizontal Ad Network Advertising Agency Ad Portal Horizontal Ad Network Horizontal Ad Network Horizontal Ad Network Mobile Ad Solutions Behavioral Ad Network Online Ad Network Horizontal Ad Network Mobile Ad Solutions Online Marketing Services General Ad Network Mean Median Implied Enterprise Value ($mm) $7.8 425.0 3.1 626.6 4.4 275.0 29.9 110.0 750.0 18.0 27.7 13.6 41.3 246.7 20.0 31.4 95.0 10.0 3.1 43.7 73.8 300.0 $111.5 $31.0 EV/LTM Revenue EBITDA 8.8x 4.3x 3.4x 1.3x 2.5x 6.9x 1.1x 3.3x 12.5x 0.9x 2.5x 1.1x 1.0x 0.3x 1.0x 2.4x 2.3x 2.5x 0.7x 4.4x 3.4x 42.9x 4.9x 2.5x 13.4x 24.3x 9.2x 13.7x 13.0x
44
Public Online Advertising Valuation Comps as of 8/30/2011

(figures in millions of $USD, except per share)
Online Advertising 1000mercis ad pepper media International N.V. Blinkx plc DG FastChannel, Inc. Hi-Media S.A. interCLICK, Inc. Local.com Corp. Marchex, Inc. ReachLocal, Inc. Sedo Holding AG TradeDoubler AB ValueClick, Inc. Velti Plc Weborama
Ticker ALMIL APM BLNX DGIT HIM ICLK LOCM MCHX RLOC LKI TRAD VCLK VELT ALWEB
Share Price $52.49 1.95 1.85 22.18 5.17 5.74 2.68 10.05 14.93 4.04 4.26 15.45 9.72 21.11 Mean Median
Market Cap $163.2 41.4 653.4 608.7 228.6 141.9 59.0 370.9 436.5 123.1 182.0 1,222.8 598.3 72.1
Enterprise Value (EV) $132.8 28.1 599.8 549.5 279.0 135.2 45.5 342.6 342.8 92.5 148.3 1,080.3 460.9 68.9 $307.6 $213.6
EV / FYE Revenue EBITDA 2.7x 0.4x 8.9x 2.2x 0.9x 1.3x 0.5x 3.5x 1.2x 0.6x 0.3x 2.5x 4.0x 2.9x 2.3x 1.8x 7.0x 18.4x 69.2x 4.9x 10.4x 14.7x 4.5x NM NM 8.0x 9.0x 9.0x 24.1x 15.8x 16.2x 9.7x
EV / LTM Revenue EBITDA 2.7x 0.4x 8.9x 2.0x 0.9x 1.1x 0.6x 2.9x 1.0x 0.5x 0.3x 2.3x 3.2x 2.9x 2.1x 1.6x 7.0x NM 69.2x 4.6x 10.4x 12.5x 63.3x 171.1x NM 8.0x 7.2x 7.9x 64.6x 15.8x 36.8x 11.4x
EV / NFY Revenue EBITDA NA NA NA 1.7x NA 1.0x 0.6x 2.3x 0.9x NA NA 2.0x 2.6x NA 1.6x 1.7x NA NA NA 3.9x NA 7.2x 3.8x 14.7x 25.6x NA NA 6.7x 8.5x NA 10.1x 7.2x
LTM Annual Revenue Growth NM 8.9% 96.4% 24.1% 28.9% 64.0% 2.4% 31.9% 35.8% 2.6% 3.8% 16.1% 24.5% 41.5% 29.3% 24.5%
Direct Marketing/Lead Gen Harte-Hanks Inc. InsWeb Corp. (1) LoopNet, Inc. Market Leader, Inc. Moneysupermarket.com Group PLC Move, Inc. QuinStreet, Inc. Rainmaker Systems Inc. Tree.Com, Inc. XO Group Inc. zipRealty Inc.
Ticker Symbol HHS INSW LOOP LEDR MONY MOVE QNST RMKR TREE XOXO ZIPR
Share Price $8.10 6.21 17.49 2.25 1.77 1.75 12.36 1.05 5.31 8.82 2.15 Mean Median
Market Cap $508.6 35.6 713.9 56.9 902.9 280.3 587.8 26.1 58.6 267.5 44.1
Enterprise Value (EV) $626.2 29.5 605.8 20.0 850.5 239.0 526.7 18.8 24.3 172.8 20.1 $284.9 $172.8
EV / FYE Revenue EBITDA 0.7x 0.7x 7.8x 0.8x 3.5x 1.2x 1.3x 0.4x 0.1x 1.5x 0.2x 1.7x 0.8x 5.5x 11.7x 27.4x NM 12.9x 19.2x 6.9x NM 3.3x 15.0x NM 12.7x 12.3x
EV / LTM Revenue EBITDA 0.7x 0.6x 7.4x 0.7x 3.1x 1.2x 1.3x 0.5x 0.1x 1.5x 0.2x 1.6x 0.7x 5.8x 12.0x 29.7x NM 10.7x 17.6x 6.9x NM NM 13.2x NM 13.7x 12.0x
EV / NFY Revenue EBITDA 0.7x NM 7.0x 0.6x NA 1.2x 1.1x 0.5x NM 1.4x 0.2x 1.6x 0.9x 6.2x NM 22.2x 0.0x NA 9.6x 5.6x NM NM 11.4x NM 9.2x 7.9x
LTM Annual Revenue Growth 3.8% 37.7% 9.1% 23.0% 20.8% -1.8% 20.4% -24.1% 31.8% 5.2% -25.6% 9.1% 9.1%
(1) LoopNet is being acquired by CoStar Group, but the deal has yet to close Source: Industry estimates, Capital IQ and S&A proprietary research
45
Public Online Advertising Valuation Comps as of 8/30/2011 (contd)

Internet Media/Marketing AOL, Inc. Baidu, Inc. Demand Media, Inc. Google Inc. IAC/InterActiveCorp. Microsoft Corporation Naspers Ltd. NetEase.com, Inc. Sina Corp. Sohu.com Inc. Tencent Holdings Ltd. Tomorrow Focus AG WebMD Health Corp. Yahoo Japan Corporation Yahoo! Inc.
Ticker AOL BIDU DMD GOOG IACI MSFT NPN NTES SINA SOHU 700 TFA WBMD 4689 YHOO
Share Price $15.31 148.35 8.89 540.70 39.29 26.23 50.11 49.04 105.34 81.55 23.31 5.14 35.29 320.67 13.84 Mean Median
Market Cap $1,637.7 51,765.1 746.1 174,585.4 3,338.2 219,761.9 18,813.4 6,402.8 6,938.4 3,123.9 42,479.3 272.4 2,070.6 18,598.2 17,474.6
Enterprise Value (EV) $1,298.9 50,218.0 642.5 141,604.4 2,578.7 181,528.9 20,130.0 4,659.8 6,116.4 2,584.1 40,506.2 287.8 1,722.0 16,195.6 15,001.0 $32,338.3 $6,116.4
EV / FYE Revenue EBITDA 0.5x 41.8x 2.5x 4.8x 1.6x 2.6x 4.3x 5.6x 15.2x 4.2x 13.6x 1.5x 3.2x 4.2x 2.4x 7.2x 4.2x 1.8x 75.6x 12.6x 12.0x 18.0x 6.0x 13.6x 11.1x 48.6x 10.1x 25.6x 16.1x 13.1x 7.3x 8.3x 18.7x 12.6x
EV / LTM Revenue EBITDA 0.6x 30.8x 2.2x 4.2x 1.4x 2.6x 4.3x 4.8x 14.0x 3.6x 11.0x 1.4x 3.0x 4.2x 2.7x 6.1x 3.6x 2.8x 54.3x 10.5x 11.1x 12.2x 6.0x 13.6x 9.7x 64.3x 8.8x 21.8x 13.9x 11.4x 7.3x 8.2x 17.1x 11.1x
EV / NFY Revenue EBITDA 0.6x 23.3x 2.0x 3.8x 1.3x 2.4x NA 4.3x 12.9x 3.1x NA NA 2.9x NA 3.4x 5.5x 3.1x 3.8x 40.3x 7.6x 9.0x 7.3x 5.6x NA 8.7x 102.1x 8.2x NA NA 8.6x NA 10.5x 19.2x 8.6x
LTM Annual Revenue Growth -21.1% 83.7% 34.7% 27.1% 25.1% 11.9% 18.2% 36.5% 15.4% 29.6% 49.4% 22.8% 20.1% 3.9% -14.4% 22.9% 22.8%
46
Online Advertising Sub-Sector Performance as of 8/30/11

3-month 6-month 1-year
70.0%
Online Advertising Index -13.0% -4.8% 39.0%
Subsector Relative Performance as of 8/30/2011 Direct Marketing/ Internet Media/ S&P 500 Dow Jones NASDAQ Composite Lead Gen Index Marketing Index Index Industrial Average Index -5.7% 0.2% -9.8% -8.0% -9.1% -12.9% -5.4% -8.6% -5.5% -7.4% 19.7% 19.0% 15.6% 15.5% 21.5%
60.0%
50.0%
% Relative Performance
40.0%
30.0%
20.0%
10.0%
0.0% Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Online Advertising Index
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
S&P 500 Index
Dow Jones Industrial Average
NASDAQ Composite Index
Direct Marketing/Lead Gen Index
Internet Media/Marketing Index
Source: Capital IQ
47
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Digital Advertising Landscape Summer 2011

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Online Advertising Landscape

Summer 2011 Online Advertising Landscape

Online Advertising Industry Overview

Social networks provide an enormous wealth of valuable data on consumer habits

Opportunity In All Online Marketing Sectors

Summer 2011 Online Advertising Landscape

Global Advertising Revenues

(in millions of $USD)

$30,000 $26,431 $25,000 $18,329

2010A Classified Ad Revenue

2011E Display Ad Revenue

2012E Search Ad Revenue

Summer 2011 Online Advertising Landscape

U.S. Online Ad Revenue Growth

Quarterly U.S. Online Advertising Revenue (in millions of $USD)

Summer 2011 Online Advertising Landscape

U.S. Online Advertising Spending by Format

Online Ad Revenue (in billions of $USD)

$36.8 $4.4 $3.1 $3.4

$4.5 $4.2 $3.7 $9.9

2013e Video Other

Source: eMarketer (July 2011)

Classifieds and Directories

Summer 2011 Online Advertising Landscape

Time Spent Consuming Media vs. Ad Spending

Radio Time Spent Advertising Spend

Summer 2011 Online Advertising Landscape

Trends in Advertising Spending

Summer 2011 Online Advertising Landscape

Evolution: Web 1.0 (Past) to Web 3.0 (Future)

Summer 2011 Online Advertising Landscape

Display Advertising Landscape

Summer 2011 Online Advertising Landscape

Search Advertising Landscape

Summer 2011 Online Advertising Landscape

Video Advertising Landscape

Summer 2011 Online Advertising Landscape

Mobile Advertising Landscape

Summer 2011 Online Advertising Landscape

Social Advertising Landscape

Summer 2011 Online Advertising Landscape

Commerce Advertising Landscape

Summer 2011 Online Advertising Landscape

Mobile Display Advertising Landscape

Summer 2011 Online Advertising Landscape

Consolidation in the Display Advertising Ecosystem

Summer 2011 Online Advertising Landscape

Horizontal vs. Vertical Ad Networks

Vertical ad networks have a narrower audience

Source: ValueClick Media 2011 Advertiser Survey

Summer 2011 Online Advertising Landscape

Summer 2011 Online Advertising Landscape

Online Advertising Industry Developments

Summer 2011 Online Advertising Landscape

U.S. Online Video Ad Spending

$5,000 6.9% 5.5% $3,000 $2,160 $2,000 $1,420 $1,000

8.4% $4,200 8.0%

Source: eMarketer (July 2011)

Summer 2011 Online Advertising Landscape

(percentage of total U.S. online ad spending)

(in millions of $USD)

Growth of Online Video Advertising