1

Introduction

1 1

What’s hot in marcoms today?

Q3 2014

2

What’s hot in marcoms?

2

As specialist advisers to the marketing communications and technologies industry, we are uniquely positioned to ensure that we are continually on top of key trends in

this rapidly evolving landscape. One of our key tools is our global deal tracker, which gathers the details of all completed deals in this sector, subcategorised and cross referenced by our team of analysts. This, along with the hundreds of conversations we have each month with both buyers and sellers, enables us to continuously identify emerging M&A trends. With the ever blurring boundaries between “marcoms” and “martech”, it is maybe unsurprising to see that the most talked about subsectors sit at their convergence points, namely : 1. Content marketing 2. Data & analytics,

3. eCommerce 4. Digital marketing; and 5. Mobile marketing This paper examines each subsector, the key trends and deal activity in 2014 YTD using both proprietary and third party data, which is referenced on page 55.

Introduction

eCommerce

Sector Overview

Market Overview

4

eCommerce Market Overview

Back-end

• Platform providers that offer the

fundamental eCommerce

technology platform

• Product: re-usable software

that can be implemented by a

third party or in-house

developers

Integration

• Systems integrators and front-

end agencies with systems

integration capabilities by own

middleware or partnership

• Service: bespoke eCommerce

platforms to businesses’ specific

enterprise systems

Front-end

• Digital design agencies with

systems integration capabilities

and pure front-end digital

design agencies

• Service: design the customer

facing website – the front-end

of an integrated eCommerce

platform

Full solution providers Use either third party or proprietary software as

a starting point in delivering a fully functional

online store

Technology Marcoms services

eCommerce value chain

5

eCommerce Market Overview

Ma

ge

nto

H

yb

ris

De

ma

nd

wa

re

Oth

er

Back-end Front-end Integration

Market landscape: Illustrative

6

eCommerce Market Overview

35%

32%

23%

4% 4% 2%

APAC

North America

Western Europe

Central & Eastern Europe

Latin America

Middle East & Africa

Regional share of Global eCommerce sales 2014

Global eCommerce sales forecast 2012 - 2017

• Largest eCommerce market in the EU

• Very mature: 39m people out of the

UK’s 63.3m strong population already

buy online

• Online retail accounts for 13% of the

UK economy

UK

• Total eCommerce sales in the USA are

expected to grow 15.5% to $304b by

the end of 2014

• Online retail is expected to account

for 6.8% of all retail in 2014 and 9% by

2017

USA

• In 2014 consumers in APAC will spend

more online than those in North

America

• It is estimated that China will account

for six in every ten dollars of the total

APAC spend

APAC

0

200

400

600

800

1000

1200

2012 2013 2014 2015 2016 2017

APAC

North America

Western Europe

Rest of the

World

Key trends & global statistics (10)

7

eCommerce Market Overview

1,058

1,251

1,505

1,771

2,053

2,357

22.3% 18.2% 20.3%

17.7% 15.9% 14.8%

2012 2013 2014 2015 2016 2017

Sales ($bn)

YoY growth

Global eCommerce customers

Global eCommerce B2C sales forecast

• Twice as much spent on mobile

devices in Dec-2013 compared to

Dec-2012

• Increases in services that utilise

multiple channels driving growth

• Such services include click/reserve

and collect which accounted for 25%

of multichannel retail sales

2013

• Expanding online and mobile user

bases in emerging markets

• Increasing mCommerce sales

• Developing payment and shipping

options

• Pushing into new international markets

Driving growth in

2014

• International B2C eCommerce sales

are expected to reach $1.5tn in 2014

and $2.4tn in 2017

• Growth driven by an increasing

internet ‘usership’ as emerging

markets come online and an

increasing proportion shop digitally

Looking forward

Key trends & global statistics cont’d. (11)

904

1,016

1,124

1,229

1,321

39.2% 41.3% 42.7% 44.3% 45.4%

2012 2013 2014 2015 2016

Number of global

customers (millions)

Digital buyer

penetration

8

eCommerce Market Overview

Key trends (12)

Trends

• Tablet first design Default for responsive websites is still desktop – with tablets overtaking PCs in 2016 it is likely that responsive websites will be designed for tablet first

• Cross-channel purchase journeys Currently cross-channel purchase journeys are being enabled by location and identification tools/solutions, i.e. iBeacons, and wearables such as Galaxy gear and the Apple Watch

• Mobile payments won’t take off until 2015 Consumers still need a convincing reason to use mwallets and until then retailers are unlikely to invest in this technology. A large number of different mwallet technologies have come to market recently – still not known which of these will make the biggest impact

• Consumers learning value of data and privacy

Consumers are becoming more savvy about their digital presence and the value of their data to advertisers. Needs to be a clearer value exchange – so consumers are incentivised to provide eTailers with data about themselves and are aware of where that data is going

• Mobile and tablet purchase points One in five store checkouts will take place on a mobile/tablet by 2015

• Reduce high return rates eTailers currently face high return rates. On average return rates are 25% but some eTailers face return rates of >50%. Solutions such as virtual changing rooms are attempting to combat this

eCommerce

Sector Overview

M&A Market

10

eCommerce M&A Market

Q3

Q1-Q3 2014 eCommerce deals (13)

Deal Volume Target Region

Major Buyers Deal Types

Quarterly Split

2

1

UK

APAC Africa

Western Europe

7

North America 4

3

4

Cross Border

PE Backed

6

2 11

5

3

1

3

1

Publicis WPP Dentsu

Q2

Q1

19

Total Deals

1

11

eCommerce M&A Market

Date Buyer Target Target Location Target Description

Sep-14 UK Multichannel eCommerce integrator

specialising in Hybris

Sep-14 USA Multichannel eCommerce integrator

specialising Oracle and Demandware

Sep-14 South Africa eCommerce integrator and application

developer

July-14 USA Web/enterprise content management and

systems integration agency

Jun-14 Japan eCommerce website design and build

agency

May-14 USA

IBM Smarter Commerce division of Trifecta acquired; IBM WebSphere Commerce

solutions consultancy

May-14 UK Multiservice digital agency with eCommerce

website design and build specialty

Apr-14 France

Sage France SA, eCommerce business

acquired; France-based eCommerce business

solutions provider

Mar-14 USA Provider of mobile and multichannel

commerce solutions and websites

Jan-14 UK Retail and eCommerce systems integrator

Q1-Q3 2014 selected transactions

Contents

01 Content Marketing 4

02 Data & Analytics 15

03 eCommerce 22

04 Digital Marketing 32

05 Mobile Marketing 42

06 References 54

07 About Results 56

13

Mobile Marketing M&A Market

References

1) Results Intelligence

2) Advantage Business Media’s digital road map, AdAge

3) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK

4) Nativeadvertising.com

5) Content Marketing in the UK: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA UK

6) Content Marketing in the UK, Content Marketing in North America: 2014 Benchmarks, Budgets and Trends: Content Marketing Institute/DMA

7) CapIQ, 451, OneSource, Results Intelligence

8) ExactTarget Marketing Cloud 2014 State of Marketing Survey, Deloitte Analytics Trends 2014, IBM, TechRepublic

9) CapIQ, 451, MergerMarket, Results Intelligence

10) eConsultancy (January 2014), eMarketer (January & April 2014), International Business Times (October 2013), eCommerce Week (January 2014),

bpost International (January 2014)

11) eConsultancy (January 2014), IMRG (January 2014), eCommerce Week (January 2014), bpost International (January 2014), Statista (2014)

12) The Drum (February 2014), Talk Business Magazine (December 2013)

13) CapIQ, 451, MergerMarket, Results Intelligence

14) eMarketer (March 2014)

15) IAB Digital Adspend 2013

16) eMarketer (June 2014)

17) IAB/PWC Adspend 2013

18) IAB Digital Adspend 2013

19) CapIQ, 451, MergerMarket, Results Intelligence

20) Cisco VNI Mobile (2014), NPD DisplaySearch (February 2014), IDC Worldwide Quarterly Tablet Tracker (2014)

21) IAB Native Advertising Playbook (2013), BIA/Kelsey

22) eMarketer (July 2014), Gartner (2013)

23) Google & Nielsen (March 2013), Cisco VNI Mobile (2014), relevant press, company websites

24) Gartner (September 2014), relevant press, company websites, Results Intelligence

25) eMarketer (August 2013), Kenshoo (December 2013)

26) CapIQ, Companies House documents, Press, company websites, Results intelligence

14

About Results

Corporate Finance Advisors to the Marketing Services & Marketing Technology sectors

Selected clients and transaction counterparties

An established team of sector experts…

• Results International is a market-leading M&A advisory

firm founded in 1991

• Entrepreneurial and owner-managed

• 40 person global team with over 250 completed

transactions

• Senior level attention on all transactions

• Winner of Cross-Border Deal of the Year 2014 (sale of We

Are Social to Blue Focus)

Software

Marketing Services

Marketing Technology

Digital Media

Sector specialism

…with global reach

15

About Results

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Unrivalled expertise in the Marcoms sector

16

About Results

Mark Williams Director

• Joined Results in 2010, with over 15 years of M&A experience

• Prior to joining Results Jim led

European M&A activity for the

marketing services division of

Omnicom (DAS)

• Clients include We are Social,

Blue Rubicon, Virgo Health,

Crayon and Iris

• Joined Results in 2005 - Previously Head of M&A at Ernst & Young

• 20+ years experience in corporate

finance, including M&A,

fundraising, IPOs, JVs, MBOs and

MBIs

• Clients include The Group, Figtree,

Monitor Media, Spannerworks, Flip

Media, Transactis, Punktilio,

Flamingo, Brand X, and AIA

• Joined Results in 2012. He started

his career at KPMG working in

Financial Services M&A and

moved to Ingenious Corporate

Finance in 2010

• Clients include Staffcare, Moonpig, St Ives, and Inflexion

Julia Crawley-Boevey Director

• Joined Results in 2010 having spent

over four years at BDO where she

worked in both Audit and

Corporate Finance

• Clients include The Group, Blue

Rubicon, Virgo Health, Incite, and Crayon

• Joined Results in 2012 to lead the

tech and digital media practice

• 15 years M&A experience at

Broadview then Jefferies, advising

tech and digital media companies

on M&A and fundraising

• Advised on transactions with

Oracle, Microsoft, Experian,

Moody’s, IAC, Axel Springer, DMGT,

and BT

• Joined Results in 2014, with over

15 years M&A experience

• Prior to joining Results, Chris led

the Technology M&A practice at

KPMG. He previously spent 11

years advising tech companies

at Arma Partners and JPMorgan

• Recent clients include Zinc

Ahead, Pushbutton and Irdeto

James Kesner Manager

• Joined Results in 2013 from Kingston

Smith

• ACA qualified, previously worked

as a Finance Director for a London

based brand consultancy

• Clients include ID magazine, Not to

Scale, Writtle, Adam and Eve

Richard Latner Manager

• Joined Results in 2014 after having

spent 9 years at KPMG across

audit, TS & M&A functions

• Clients include: WRG, Irdeto and

neoworks

Selected Team Members

Jim Houghton Partner

Keith Hunt Managing Partner

Julie Langley Partner

Chris Lewis Managing Director

17

About Results

Selected Team Members – International

• Long career in marketing sector

(Ogilvy & Mather, The Ball

Partnership)

• Managed the acquisition of SMART

by McCann Worldgroup, CCG by Publicis Group to establish Digitas

China, CIC by Kantar Media and

The Upper Storey by Isobar

Andrew Kefford Managing Partner –

Asia Pacific & MENA

Chris Beaumont Managing Partner –

North Asia

• 16 years of experience

consulting in Asia

• For 10 years Chris was with

McCann-Erickson in Asia; he was

both Vice-Chairman of its operations in Tokyo and Chief

Strategy Officer for WorldGroup

across Asia

• Has closed over 35

transactions totaling $0.75

billion

• Experience includes advising

Hunt Mobile Advertising on its

transaction with Opera Mediaworks

• Maurice has previously

worked at the Zanett Group,

Morgan Stanley and IBM

Maurice Watkins Partner

• 27 years experience in the

advertising sector, including

as COO of JWT's Middle East

Network

• Joined Results International in

2008 and has since been

engaged in a number of buy

and sell mandates

Imad Kublawi Regional Partner –

MENA

• Spent 24 years at Hindustan Thompson (part of JWT), the

largest ad agency in India

• Other roles include COO at

RK Swamy/BBDO and as

advisor to companies in India,

Pakistan & Dubai

Sunil Gupta Area Liaison –

South Asia

USA

Asia

Pierre-Georges Roy Partner

• Closed $4.0 billion in cross-

border transactions

• Experience includes advising Hunt Mobile Advertising on its

transaction with Opera

Mediaworks and Telesystem

International Wireless (NASDAQ:

TIWI) on its sale to Vodafone

For more information contact:

Jim Houghton Partner

+44 (0) 20 7514 8234

jhoughton@resultsig.com

Julia Crawley-Boevey Director

+44 (0) 20 7514 8239

jcrawley-boevey@resultsig.com

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