13th AnnualJEGI Media & Technology Conference:

Transformational Growth through Innovation + ChangeTime Warner Center, January 12, 2017

Amir Akhavan, Managing DirectorDavid Clark, Managing Director

3

Ad B

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g, O

ptim

izatio

n, Se

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So 2012…..

4

$25 bn $50 bn ~$75 bnDeal Value:

2010

-201

320

14-2

016

Digital Marketing, Commerce and Content Platforms

5

BUILD

FEED

FEED

6

Marketing Tech & Ad Tech

Tech-Enabled Marketing Services

7

Consulting

New Market Entrants New Market Entrants

Tech Services Alt. Agency In House PE Platforms

8

2nd largest digital network worldwide

- Advertising Age

Accenture Interactive named the world’s biggest and fastest growing digital agency network

- Advertising Age

Recent Digital Transactions:

ResourceExc.io

Aperto

Recent Digital Transactions:A Cunning Plan

AcquityAD.Dialeto

Allen InternationalAvventa

BrightStepChaotic Moon

dgroup

FjordIMJ

Karmarama Kurt Salmon

MobGen New Energy Group

PacificLinkReactive Media

9

“Digital” is redefining brand interactions and customer experience, everywhere

MediaMarketing

AdvertisingConsumer Service

Employee Engagement

Marketplaces / B2B

DeviceChannel

ApplicationPOS

Field / IoTCEM / Care /

Support

e/mCommerceMobile-first

“API”-ingPersonalization

LocalizationOn-demand

Digital Domains Digital Touchpoints Digital “Must Haves”

“Fast, infallible and cost effective”

“Knows me and gets me where I need to

go on demand”

“Looks good and works great, right out

of the box“

Expectations around customer experience and digital performance are high and unforgiving

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Digital Domains Digital Touchpoints Digital “Must Haves”

Integrated strategy, technical and creative skills required to develop and deploy enterprise-scale “digital experience” platforms

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Strategy / Consulting Design / Technical Creative / Data+ +

Digital Domains Digital Touchpoints Digital “Must Haves”

= Pain Points for Brands= Sizeable Market Opportunity

Global Commerce at $2 Trillion $4 Trillion by 2020

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P&G’s Tide SKU Family

Execution Production Work Flow Integration

Massive scale, localized, brand compliant, and global

Tide.comDigital

Channels PLA

Digital Assets

Images Mobile Video Specs/Reviews UGC

Tide Wants to Start Telling Live, Branded Stories in a UGC Environment

13Massive scale, localized, brand compliant, and global

was live

= Big Content for Big Commerce Problem

= Sizeable Market Opportunity

IBM Quietly Builds Its Video Cloud

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Massive Demand

Race is On

• Visual merchandising / guided selling• Content driven engagement…

video, video, video

• No leader in consulting, agency or tech• Rare DNA to combine creative and

enterprise workflow/tech

• Opportunity validated by enterprise player solutions

• Specialist firms and point solutions

Open Market

Global Commerce at $2 Trillion $4 Trillion by 2020

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Project Management

Strategy

Core Creative & Content

Data

Systems

Applications

Ente

rpris

e Ser

vices

Agency Consultancy

Enterprise Technology

Software & Tech Services

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Solutions

Deeper integration and broader offering

Blurring lines between service and tech enabled solutions

M&A responding to massive market opportunity

Acquisitions

End-to-End OfferingSoftware

Enterprise

Jeff Becker, Managing Director & Co-Head of Technology Banking

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HCM is a sizable market – $131 billion total market in 2015,projected to grow to $182 billion in 2019

$131.0$142.1

$154.2$167.3

$181.5

2015 2016 2017 2018 2019

Sources: IDG, Forrester, The Starr Conspiracy

The HCM Market Comprises Software, Services and Consulting to Help Organizations Better Acquire, Manage and Optimize People

This has created a focus on hot new areas of HCM:

Culture/Engagement Management:

Recognition/Rewards:

Benefits Admin/Employee Portals/Other:

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Key Factors Affecting HiringUnemploymentTime to HireCost to Hire Millennials in Workforce

Employers need tofind better ways to

recruit, onboard and retain employees

Each group stayed well within its own boundaries

Software companies were religious about not diluting margins and valuations with services

Services companies didn’t have the technology DNA to build or support software solutions

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Historically, HCM Has Been Separated into Two Distinct Camps: Software Vendors and Service/Consulting Providers

Consulting SoftwareTech-Enabled Services

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CEB Was Focused on Consulting, Research and Advisory

1. Analytics finds a way into all areas of HCM

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2. More acquisitions of engagement/culture management companies

3. Next generation of leadership development companies emerge combining tech and services

Sam Barthelme, Managing Director

$2.4

$4.5

$5.4

$4.0

2016 2025 2016 2025

SPENDING POWER (TRILLIONS)

24Sources: Iconoculture; US Census Bureau

69.876.1

54.6

73.2

34.9

Gen We(0-16)

Millennials(17-34)

Gen Exers(35-47)

Boomers(47-66)

Mature(67+)

US POPULATION BY AGE (MILLIONS)

Prefer experiences to buying things

Sharing economy replacing owner economy

Bombarded with ads and demand relevant and custom communications from brands

Mobile, mobile, mobile

Younger generations consume differently and have higher expectations for advertisers:

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ConsumersProduct Price

Place Promotion

Brands

$67

$60

$54

$40

DigitalAdvertising

ShopperMarketing

LoyaltyPrograms

SponsorshipActivation

TOTAL

(US budgets, $ billions)Budgets “In Play”

U.S.: $220 bnWW: $500+bn

Growth Rate

20%

10%

5%

15%

Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

ConsumersProduct Price

Place Promotion

Brands

Agencies Retail Svcs Audience

26Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

ConsumersBrands

Agencies Retail Svcs Audience

27Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

ConsumersBrands

Agencies Retail Svcs Audience

28Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

ConsumersBrands

Agencies Retail Svcs Audience

29

ConsumersBrands

Sources: AdAge, Cadent Consulting Group, eMarketer, GMA Booz, IEG, Raymond James, Snipp

Agencies Retail Svcs Audience

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AGENCIES: Storytellers & UX

RETAIL: Data & Location

AUDIENCE: Experiential

SOFTWARE: New Apps

SOFTWARE: Event Platforms

Scott Peters, Co-President

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1-3% of a corporation’s total revenue is spent on meetings and events

Sources: Aberdeen Group, Forrester Research, Markets and Markets

1

2

3

4 Event Management Software is a $5 billion market, expected to grow at a 10% CAGR through 2019

Events are the largest portion of the $60 billion B2B marketing budget, accounting for 24% of spend ($14 billion)

Event spending is growing 6% per year, and after a company’s website, is the most effective B2B marketing channel

34Source: Frost & Sullivan

$27B Manual Processes +

Software for Event Mgmt

$103B Meeting Spend on Hotels

$5B Event Mgmt

Software

$4B Hotel

Marketing

Venue Sourcing

Event Marketing

Event Management

Event Engagement

End-to-End Event Management Software

$9 Billion Total Addressable Market

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Marketing Tech

Event TechHospitalityTech

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Full Service Event Tech Duopoly Emerging

APPROVED!

CENTER

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Why Is This Sector Getting Interesting?

Onsite event data will be added to the CMOs analytics engine

Marketing CRM

Content Digital Events Websites Social

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CMO and Sales Teams Are Provided Superior Insights to Customer Status in the Purchase Funnel

Before Event Data Overlay After Event Data OverlayRegistered user to a website

Downloaded a white paper

Subscribed to a newsletter

Opened an email promotion

Visited a website

Tweeted about a product or service

Registered and attended a conference

Filled in a survey of their interests

Attended 9 sessions on CRM topics

Visited 10 booths with CRM services

Tweeted about CRM capabilities/sessions

Shared session information on LinkedIn

Requested more info from 4 CRM providers

Example of a Salesforce Conference

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CMO and Sales Teams Are Provided Superior Insights to Customer Status in the Purchase Funnel

Example: Roll up all event data by company and job title

GE Summary:Company Engagement Score: 93%Top Influencer Score: 94%

Most Engaged Companies in CRM Topics

GE Ford AT&T Verizon

GE: Most Engaged Job Titles

Director Architect Engineer

Increased Future Event Spend

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CMO and Sales Collaborating to Increase Productivity

Sales Rep

Marketing ROI Greatly Improved

Leads are: Prequalified Grateful for the call Contextually relevant Motivated purchasers Highly closable

Sales Nirvana

Many others…

Battle of the Event Data & Analytics Point Solutions

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Event Tech Duopoly Point Solutions CRM/Marketing

Automation

Why?

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CMO: Will demand event ROI frameworks to compare with other media channels

Event Agencies: Will need to deliver holistic data across all event activities

Event Companies: Will need to provide better data and analytics to exhibitors

Attendees: Will demand a more seamless, productive and relevant event experience

Impl

icatio

ns

Event ROI becoming a major focus for CMOs

…and… the events industry will post higher growth rates than many other forms of media and marketing in coming years

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More F2F Transactions Than Any Other Investment Bank

Innovative F2F Business Models

Event Technology Leaders

Tolman Geffs, Co-President

The business model of the future? Centralized hosting vs. on-premise Single-instance vs. custom software Subscription vs. large up-front license Minimal services

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CRM

Contacts

HR

Project Management

Service Management

Software Support

Massive Disruption

$108 billion valuation7.9x 2016 revenue

Unprofitable

CRM

Contacts

HR

Project Management

Service Management

Software Support

Equity PrecipitationMassive Disruption

Best-in-class search mgmt software $100mm revenue No profits – ever EV < 0.7x revenue 46

Difficult and very expensive path! UI is most expensive part of development Sales cycles long and costly Plus integration, training & support staff Steep losses until renewals catch up

The business model of the future? Centralized hosting vs. on-premise Single-instance vs. custom software Subscription vs. large up-front license Minimal services, massively scalable

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“Software as a Service as a Freakin’ Awesome Service”

SassafraS DNA Enterprise-grade software platform

(NOT just tools to enable services) Managed service delivery Avoid UI development, training, support Key check: Gross margins and revenue

retention comparable to SaaS Capital efficient + faster profit ramp

Software to administer large scale programs – McDonald’s Monopoly, Samsung offers, etc.

Operated by in-house service teams No contracts, highly re-occurring

Promotions Management

Software to deliver data management + media buying like Turn, MediaMath, AppNexus ($500mm+ invested)

Operated by in-house service teams AOR, high client retention

Digital Media Buying

Software comparable to Marin, et al Operated by in-house service teams Annual contracts, very high renewal

Search Management

SaaS vs. SassafraS Median MetricsSaaS Benchmark

$30-50 mm Companies“SassafraS” Benchmark3 Examples

Revenue Growth Rate 34% 39%Gross Margin 63% 66%Revenue Renewal 90-100%+ 112%Sales & Marketing / Revenue 45% 13%EBITDA Margin (5%) 19%Invested Capital / Revenue 131% O%

Source: Companies, River Cities Capital

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Appeal of SassafraS acquisitions

Strategic buyers value rapid entry into new markets and business flexibility

PE sponsors value growth, capital efficiency and leverage

Buyers get comfortable with “re-occurring” vs. contractual revenue

Trade on strong EBITDA multiples – not SaaS revenue multiples – less scalable

Option to productize and market software (but buyer beware, very different skills)

Expect more M&A for SassafraS models49