2014 annual report - the mobile majority
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Annual Review
2014
CEO Remarks 2014 was a transformative year for our young company. It was the year we moved from Early Stage Startup to Fast Growth Company. The transition, was challenging for our team both professionally and personally, but incredibly rewarding. As you will see in the following pages we have an engineered a strong product, on top of a powerful strategy that will provide long term competitive differentiation in a very crowded but extremely lucrative market. We are taking on, and winning business over iconic technology companies like Google and Facebook. We have quickly established ourselves as the leader of a new and skyrocketing market for comprehensive mobile marketing software. As I reflect on the past year, I think about the culture and values we have built in our company. I think about the meaning and purpose that our people get by coming in every day and tackling truly difficult problems. The investments that we have made in selecting only the very best people, and maintaining the highest expectations of ourselves, have become the vaccine that shields us from the inevitably stressful and difficult path we have chosen.
As we continue our fast growth, I have encouraged all of our people to reflect daily on the Stockdale Paradox: ‘We must retain faith that we will prevail in the end, regardless of the difficulties. AND at the same time… We must confront the most brutal facts of our current reality, whatever they might be.’ If we keep this maxim as our north star, we can continue to expect amazing things we never thought possible in 2015. Onward!
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Rob Emrich Founder & CEO
Table of Contents
Overview Technology Revenue Opera4ons Crea4ve + Case Studies Company growth Market growth Financials Strategy
The Mobile Majority Annual Review 2014
3
Recognized in 2014
4
Financial Milestones
5
$360K
$131M
Annualized Run Rate
$4M
$48M
Biggest Single Day Revenue Biggest 30 Day Period Revenue
Annualized Run Rate
100 Concurrent Campaigns
Industry Leading Selection Standards Rigorous Selection Process
Applications Hires
3,244 32 Hiring Rate 1%
Rigorous 4-‐5 session, multi test, in person white-‐boarding sessions
similar to Google 100% meritocracy
6
Harvard Goldman Sacks Y-‐Combinator Secret Service The Mobile Majority Google
5.8% 4.4% 4%
1% 0.4% 1%
LESS SELECTIVE MORE SELECTIVE
I joined The Mobile Majority over well known tech companies because I believed they had a massive
opportunity to provide the market with solutions and with a pace and attitude that every Product person dreams of
– Marcos Escalante / Head of Product
Technology
7
Technology Leadership
Background in astro-‐physics and CEO of high frequency software
development firm “Elastic” in Brazil
Chief Technology Officer
Ad Tech veteran with Mobile focus known for leading Product and Technology teams to deliver
massive value to customers
Marcos Escalante Head of Product
Industry veteran responsible for building and architec4ng big data solu4ons for CBS, FullScreen, MySpace, and Raytheon.
Cheolho Minale VP of Technology
Data scien4st and engineer who helps to solve problems from
conceptualiza4on to soNware realiza4on, with considerable experience in online display
adver4sing, machine learning, big data technologies
Yongjia Wang Head of Data Science
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Marcelo Wiermann
Technology
In more than one way 2014 was a critical year for us. It was the year we pivoted into the programmatic buying arena and almost instantly increased n-‐fold our ability to scale. It was the year we got into rich, terabyte-‐scale Big Data. It was the year we grew our engineering team from a scrappy single cell squad to a world class Agile team with skill sets and experience levels spread across the board. It was the year we committed to delivering a bold and industry-‐changing vision. In more than one way 2014 was the year we became a true contender in a market that has at its core the antithesis between large scale spend and a feeling of ‘business as usual’ towards levels of fraud and sub-‐optimal performance that would probably make more mature industries flinch. This was the year we set off in a course to revolutionize how business is done in our industry and we proved we can do it. And we are just getting started.
Reflections on 2014 Thoughts on 2015 If there is one thing I could say for 2015, it would is that I am very excited about 2015. We have the team, the technological basis, the know-‐how and the guts to deliver on our bold vision of reaching the top tier of our industry. The fact is that we have a lot of room to grow and a lot of ground to cover. We have got the basics of our strategy and products right. We have a good team of engaged people that we can use to further grow and expand while maintaining the awesome culture that defines us. 2015 will be all about expanding on the foundation that we laid in the previous year. It will be about delivering more polished and performant versions of our current products, increasing our base of customer / advocates and using more and more the humongous amount of rich, contextual data we have access to. This will be an year where we will give a lot of people a run for their money and show that we can do better, faster and with more reliability than most of our competitors.
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Marcelo Wiermann
Review of the Past + Predictions for the Future
CTO
Huge Growth
2 ENGINEERS
19 ENGINEERS
January 2014 January 2015
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January 2013 January 2012
2 ENGINEERS 1 ENGINEER
As a technology company engineers give us our competitive advantage. The are also extremely difficult to recruit because there is a massive shortage of computer science talent. We have shown we can successfully recruit engineering talent. Bringing talent from top tier companies like Quantcast, Atlas, and Datalogix.
Technology: Hiring
Rapid Technology Development
AdCast 3,944
Bidder 1,158
AdTags 711
Bider Core 664
Demeter 264 AdKit 50
New Tags Storage 45 Sensor 25
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6,861
Total Git Commits
2014
• Rewards Dashboard
• PaeDae In App
• Rewards iOS SDK
• AdSynergy Fully Integrated
Mobile Ad Platform
• AdCast Mobile DSP
• AdKit Universal Ad Delivery
• AdScore Pre-‐Bid Fraud
Detection
• AudienceArchitect Custom
Targeting / Audience Builder • Working with 6 Exchanges
& 31 Ad Networks
• Proprietary CRM Product
January 2014 January 2015
High quality code, rapid product development
Offline-‐to-‐Online CRM Targeting " Build mobile audiences using customer data from any customer relationship management system." Build on the Relationships You Already Have. Effective marketing isn’t (just) about exposing your brand to new, untapped audiences. It’s about turning strangers into friends, and friends into customers. Rather than starting from scratch, use what you know about prospects and customers to maintain exposure in an ongoing and relevant way.
• Real-‐Time, Real User Matching • Build an Audience with Confidence • Different Relationships, Different Uses
RealMatch™ Connecting the power of mobile advertising with offline CRM data
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AudienceArchitect™
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Pinpointing target audiences with advanced data management
AudienceArchitect™ bolsters external data sources with a proprietary database full of billions of customer interaction records. We leverage a combination of 1st-‐party (SDK-‐level), 2nd-‐party (RTB-‐level), and 3rd-‐party (data provider-‐level) sources, in addition to our own, to optimize a campaign’s target audience in real time.
Through an ongoing process of data verification, prediction, and machine learning, our platform is able to achieve significantly higher match rates and accuracy rates than other providers.
Break free from the constraints of legacy platforms and restrictive SDK environments. AdKit™ speeds up the development process plus delivers and tracks your rich-‐media ad flawlessly across any environment or mobile device type.
Using AdKit™, developers can quickly build mobile web ads with rich media content without the need of forced UI components. Save time with reusable templates, automated device determination/orientation changes, and pre-‐built content such as landing or error pages.
Construct and deliver the most engaging rich-‐media mobile ads anywhere
AdKit™
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Choose from the Best Cherry pick the best apps and sites so your ads are only shown on safe and effec4ve sources. Premium Inventory Select from a variety of premium sources to enable up to full-‐page display of your rich media and video ads. Buy Ads in Real-‐Time Our technology makes it easier than ever to buy real-‐4me mobile phone and tablet ad impressions. Integrate with Ease With full use of all The Mobile Majority’s products, AdCast™ helps target, op4mize, track data, protect against fraud, and more.
AdCast™ Delivering ads to the world’s best mobile exchanges, channels, and networks
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Our proprietary ad scoring index guarantees value by evaluating publisher reliability and CPM pricing so you have access to consistently viewable impressions at the best prices available. • Ensure quality with trusted and scored
inventory • Boost performance • Protect your brand • Gain transparency with post-‐campaign site
reports • Get the inventory you want that works best
for your brand and campaign
AdScore™ Turning fear into confidence with pre-‐bid placement verification
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In my 20 years in digital, 13 in mobile I haven’t been this excited about an opportunity to help evolve an industry. Our technology is years ahead of the competition, yet a couple years overdue based on our customers needs. The
traction we are getting is faster than any of my 5 previous sales teams – Evan Krauss / CRO
Revenue
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Revenue Leadership
Digital media veteran with a proven record of championing and developing successful businesses in important emerging market sectors.
With over 15 years in digital media, Amy is known for
building high performing teams and leadership in dynamic
marketplaces
Amy Solomon VP Sales East
Experienced marketer with a propensity to help brands tell
stories. He led marke4ng for Rob Emrich’s previous company before it was acquired, and he has joined
forces to do it again.
Matt Russo Head of Marketing
Former CEO & co-‐founder of mobile city travel companion Spotsi and alumni of Wieden + Kennedy technology incubator
Lauren Wolff Creative Director
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Evan Krauss CRO
Revenue
On the revenue front, the first half 2014 was about tes4ng our technology with live customers, proving market fit and honing our messaging to a^ract the right customers. ANer successful campaigns with a number of fortune 100 brands such as Unilever, Bayer, Paramount, Hershey’s, Hasbro, Amazon, Chase and 7’11, we spent the 2nd half of the year building out our revenue organiza4on. Our team at the end of the year consisted of 5 sellers, 2 sales support, 2 sales opera4ons, and a crea4ve team of 3. All but 1 are new employees hired during the 2nd half 2014. We are very excited about the team we have in place and feel strongly they are the right team to help us hit our revenue targets and beyond. It took a bit longer to put together than we expected but it is one of the best I have put together in my 20 years. The team has been trained and in market selling for about 4 months now. The pa^ern of driving awareness, interest, intent, and test buys is following the exact pa^ern I would expect at this stage of our business.
Reflections on 2014 Thoughts on 2015 With over 200 sales meetings under our belt and an ever-‐growing pipeline we feel strongly that our solutions are resonating in the market. We have met with and are seeing traction with 60 of the top 100 digital spenders today. Many of which have already led to RFP’s and closed deals. With the continued increase in PR attention and sales momentum we are seeing good traction with candidates on the hiring front and we will continue to hire A+ talent throughout the year. We expect to double the number of sellers and grow our support team by roughly 50% this year.
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Evan Krauss
Review of the Past + Predictions for the Future
CRO
HIRING GROWTH TEAM OF 14
January 2014 January 2015 January 2013 January 2012
TEAM OF 3
SELLER SUPPORT
TEAM OF 3 TEAM OF 2
Direct Sales Growth
REVENUE GROWTH
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Revenue Growth
21
01 / 2014 01 / 2015 01 / 2013 01 / 2012 01 / 2014 01 / 2013 01 / 2012
Modeled Revenue Plan Actual & Forecast Revenue Reseller Revenue
01 / 2015
DIRECT SALES RESELLERS
We take a very disciplined approach to our growth focusing on our culture, communication and alignment. We take great pains to develop a team of the
highest caliber who embody our core values and are dedicated to the ambitious mission we have set for ourselves. Furthermore, we developed the processes
to align our company objectives with department goals and individual employee tasks. That way, we are all striving for the same goal.
– Sam Kim / COO
Operations
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Operations Leadership
Sam worked in the IP and Business space at Simpson Thacher and Bartlett LLP before
becoming a partner at SGGS. He then went on to lead Business Development efforts at
Sensible Medical Solutions before founding The Mobile Majority with Rob.
Sam Goldberg Founder & Counsel,
Business Development
Sam has extensive experience in B2B, technology and finance through his work at the World Bank, Credit Suisse
and Kalchas. Prior to joining The Mobile Majority, Sam built and sold a
commodities trading platform.
Sam Kim Founder & COO
Mobile adver4sing veteran with over 6 years of industry experience managing
interna4onal teams of 18 Ad Opera4ons people and execu4ng
performance and brands campaigns at Smaato and Mdotm.
Sam Tam Head of Ad Operations
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Operations
Sam Kim Chief Operating Officer
I think of 2014 as the year we built a high throughput factory capable of manufacturing everything from a Ford Escort to the state-‐of-‐the-‐art Tesla Model S. While it takes most companies years to build a flexible production line like ours, we did it in record time with very limited resources. For that, I am incredibly proud of our team. We have the industry’s best engineers who built a revolutionary product utilizing the latest open source technologies. It is fast, reliable and flexible. We can produce and traffic very simple static image based campaigns all the way to bespoke rich-‐media ads that utilize mobile-‐specific features such as a phone’s accelerometer. It is truly the first the first of its kind. Our award-‐winning creative team developed highly engaging ads that lapped the industry averages on interaction and engagement metrics.
Reflections on 2014
24
Our ad operations team proved they can traffic $4 million in a single month and as much as $350,000 in a single day. This from a small, nimble team of three doing what other companies need 10 or more people.
Thoughts on 2015 While 2014 was a monumental year for the team, we achieved our success with very little focus on sales and marketing. We generated strong revenues for a company with one seller and a product that was in various stages of completion. That’s why 2015 will be the year of marketing and sales. We have proven out the market demand for our product and services. Now, we must let the world know who we are and why they should do business with us. We will tackle this challenge with the same tenacity we built our factory last year. And I expect nothing to stand in the way of our marketing, sales, and business development teams."
Review of the Past + Predictions for the Future
Creative + Case Studies
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Creative Sizzle Reel
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Link to watch video: https://vimeo.com/118657755
The Big Screen Goes Mobile
Impactful creative gets better results
Utilizing inline video, “Add to Calendar” functionality, and a Fandango ticket reservation integration, we were able to create awareness for this major film release and drive viewers to the box office for Paramount.
Paramount – T4
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• 16% clicked to play video • Nearly 90% video completion rate
• 11% of those who completed video entered sweepstakes
• 7% of entrants added release date to calendar
Link to watch video: https://vimeo.com/103820322
KEY INSIGHTS
This “wipe to win” rich-‐media campaign drove top-‐to-‐bottom funnel results for Bayer’s OTC cold and sinus product.
• 6.2% ad engagement rate
(vs. 1% industry norm) • 25 second average length of
engagement • 13% coupon redemption rate
Bayer – Aleve-‐D
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Interactive Rewards Win Big
KEY INSIGHTS
Mobile engagement moves the needle — from awareness to purchase
Link to watch video: https://vimeo.com/87112310
Driving Awareness Through Advanced Targeting
• Campaign Duration: 10 days
• Impressions: 378,577
• Video Completes: 7,074
• Video Completes 1.87%
• Campaign Duration: 1 day
• Impressions: 220,823
• Video Completes: 11,868
• Video Completes 5.73%
NBC – Constantine
Audience Targe>ng Outperforms Site-‐List Targe>ng 29
Targeting the right audience proved useful for NBC, as we served 220,823 impressions in ~1 day for their newest series Constantine. Alternatively, site targeting resulted in just over 378,500 impressions over ~10 day span.
KEY INSIGHTS
Link to watch video: https://vimeo.com/114074399
Deliver the Experience on Mobile
• Click to play: 6.59%
• CTR % (win): 48.91%
• CTR% (fail): 72.73%
• AV. Time Spent (Seconds): 41.82
Hasbro – Simon Swipe
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Rather than telling consumers what it’s like to play Hasbro’s newest game (Simon Swipe), we elected to show them instead by replicating game play through this interactive rich-‐media ad.
Users who lose the game may engage more with post-‐game features
Link to watch video: https://vimeo.com/106410545
KEY INSIGHTS
Catching Z’s. Literally.
• Engagement rate: 1.36%
• Email Opt-‐in Post-‐Game: 17.38%
• Coupon Redemption: 24.97%
• Press from Various Publications:
Mashable / Mobile Marketer / Creativity Mag
Neuro – SLEEP Water
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Game play proves again that consumers prefer to engage with interactive ads, ad are more likely to opt in once the branded experience is over.
Increased coupon redemptions after game interaction
Link to watch video: https://vimeo.com/87624475
KEY INSIGHTS
Get Out the Vote, 2014 Political Primary BEFORE
Speaker Boehner fav/unfav was: 52-‐40 = net + 12
Boehner for Congress
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WHAT WE DID
• $20,000 Budget, 2 Weeks
• 72% effective list coverage
RESULTS
Speaker Boehner’s favorable/unfavorable ratings were 71-‐22 = Net +29, a 408% Increase
The right message to the right media proves to be influential on mobile KEY INSIGHTS
Increased revenue is the obvious metric by which high-‐growth companies are measured. But what is perhaps more exciting from a business standpoint is the velocity of our technology’s
development and the opportunity it creates to dictate the landscape of the industry moving forward.
Company Growth
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26,698% 3 Year Revenue Growth
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Would be 5th Fastest Growth Company according to the inc500 Formula
2012 Revenue
267 X 2012
15 X 2012
2013 Revenue
2014 Revenue
Geographic Growth In 2014, The Mobile Majority became a truly global company. With presences already established on both coasts of the United States, we expanded our skill set and offerings by attracting some of the most talented developers, sales people, marketers, and ad operators in the world. Our expansion to four new cities across two continents is also a metaphor for industry we serve. Through technology, we are able to bridge the vision of our founders with the people necessary to take advantage of the seismic shift taking place around the globe. No longer does geography define the limits of our capabilities.
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1 8
22
1
1
USA
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BRAZIL
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Santa Monica
New York
Sao Paulo
San Francisco
Chicago Detroit
Columbus
First Corporate Acquisition: Elastic
Why Brazil? The U.S. market suffers heavily from a skewed demand vs. the supply of available developers. Brazil has a large pool of highly qualified engineering workforce mainly employed in conventional, large scale enterprise operations and a growing (but small) startup scene. Many of the brightest and more entrepreneurial software engineers have difficulties finding opportunities to work at the forefront of technology like The Mobile Majority does. As a result, it is easier to procure talent in a short amount of time to fuel the company's growth.
For example, our Sao Paulo-‐based team is comprised of highly skilled and talented software engineers, some of which possess PhDs and Master's degrees through some of the most prestigious institutions in Brazil. The team brings talent to all areas of product development including UI, backend, highspeed API integration, operations, and machine learning.
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< Valuation Comp
37
< Valuation Comp
38
POST MONEY VALUATION
INVESTMENT
RETURN
$15.9M
RETURN
$4.4M
RETURN
$16.6M
INVESTMENT
INVESTMENT
INVESTMENT
2012 2013 2014
SEED JAN 2012
A1 DEC 2012
A2 DEC 2013
B1 MAY 2014
RETURN
1,155%
RETURN
857% RETURN
282%
2015
CURRENT IMPLIED
VALUATION
RETURN
150%
Request specific numbers by emailing invest@majority.co
In 2014, some $50 billion of U.S. advertising dollars was allocated to digital channels. While
mobile received just over one-‐third of that spend, it will account for more than 70% of the
growing digital market by 2018.
Market Growth
40
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Mobile becomes a greater part of everyday live
41
Mobile is Exploding
Print Radio TV Internet Mobile
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Mobile Opportunity
Dollars vs. Time Spent in USTime Spent Ad Spend
5%
19%12% 10%
38%45%
25% 22%20%
4%
Internet Ad =
$43BMobile Ad =
$7.1B
15
5%
12%
38%
25% 20% 19%
10%
45%
22%
4% 0%
10%
20%
30%
40%
50%
Print Radio TV Internet Mobile
% of
Total
Med
ia Co
nsum
ption
Time
or
Adv
ertis
ing S
pend
ing
Time Spent Ad Spend
% of Time Spent in Media vs. % of Advertising Spending, USA 2013
~$30B+ Opportunity
in USA
Internet Ad = $43B
Mobile Ad = $7.1B
Remain Optimistic About Mobile Ad Spend Growth... Print Remains Way Over-Indexed
Source: Advertising spend based on IAB data for full year 2013. Print includes newspaper and magazine. $30B+ opportunity calculated assuming Internet and Mobile ad spend share equal their respective time spent share. Time spent share data based on eMarketer 7/13 (adjusted to exclude outdoors / classified media spend). Arrows denote Y/Y shift in percent share.
Mobile is Exploding Greatest Advertising Opportunity is in Mobile…
42
Global Mobile Ad Spend ($BN)
CAGR: 52%
2012 2013 2014 2015 2016 2017 2018
$8.8$17.8
$32.7
$49.7
$69.1
$88.6
$108.9
Source: Global Mobile App revenue per Strategy Analytics; comprises virtual goods, in-‐app advertising, subscription, & download revenue. Global Mobile 16 Advertising revenue per PWC; comprises browser, search & classified advertising revenue.
Mobile is Exploding …And Spend Continues to Increase
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Financials (Investors Only)
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“Whenever you see a successful business, someone once made a courageous decision.”
―Peter F. Drucker
Request materials by emailing invest@majority.co
Two billion people are expected to own a smart phone by the end of 2015, with over 83% of all Internet usage happening on
those devices. As advertisers and agencies decide where to spend their budgets to accommodate this influx of demand, The
Mobile Majority’s integrated approach creates a competitive advantage in a highly fragmented marketplace and delivers
superior results to our clients.
Strategy (Investors Only)
45
Request materials by emailing invest@majority.co
The Last Word In 2013, we were a rewards ad network. By the nature of the industry, ad networks have some limited upside and growth for most has stagnated or declined. We digested these observations and leveraged our core mobile technologies to burst onto the seen in 2014 as the premier rich media technology on mobile. In the words of the Supremes: "Reflections of the way life used to be..." 2014 was a year of evolution and growth for us to emerge as a cutting edge technology company at the forefront of a multi-‐billion dollar industry. We may not win every time, but we tenaciously fight for every inch. Those inches have grown into yards…and the yards will grow into miles. In the words of the Supremes: "Reflections of the way life used to be..." 2014 was a year of evolution and growth for us to emerge as a cutting edge technology company at the forefront of a multi-‐billion dollar industry. 2015 is our time to shine. Our technology innovation will continue forward, and we will expand our customer base by offering a self-‐serve mobile media buying platform. Having established our technology as a market leader in 2014, we are now investing in our marketing and sales
efforts to increase exposure and share the story with those that need it most: advertisers. Too long have advertisers been frustrated by paying for mobile ads that fail technologically or are so small that they cannot be read by consumers. Many in the industry are talking about the problem -‐ we are delivering the solution.
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Sam Goldberg Founder, Corporate Development & Counsel
To a prosperous 2015
Many Thanks
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