q3 2011 siemer online advertising report

Embedded Specialized Accomplished

Q3 2011

Siemer Online Advertising Report

2 Q3 2011Siemer Online Advertising Report

Table of ContentsSection I Industry Overview

Section II Emerging Trends

Section III Industry Breakdown

Sections IV Transactions and Comps

INDUSTRY OVERVIEW


Online Advertising Industry OverviewThe 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 SectorsAd 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 week…now consider who would benefit most from a world of less direct mail.


$9,940 $10,765$11,815 $12,852

$13,961

$18,329

$21,799

$25,275

$29,530

$34,400

$26,431

$31,126

$35,086

$40,436

$46,606

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

2009A 2010A 2011E 2012E 2013E

(in m

illion

s of

$USD

)

Classified Ad Revenue Display Ad Revenue Search Ad Revenue

Global Advertising RevenuesGlobal search, display and classified revenue grew 17.8%, 18.9% and 8.3% in 2010, respectively

Source: Zenith Optimedia Research


U.S. Online Ad Revenue Growth

Source: IAB Internet Advertising Revenue Report – First Half of 2011 Results

Online advertising revenue in the United States totaled $7.88bn in Q3 2011


$12.0 $14.4 $17.0 $18.9 $20.2 $21.5

$6.2$7.6

$8.9$9.9

$11.0$11.7

$2.6

$3.0

$3.4$3.7

$4.0$4.3

$1.4

$2.2

$3.1

$4.2$5.6

$7.1

$3.8

$4.1

$4.4

$4.5

$4.7

$4.9

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

2010a 2011e 2012e 2013e 2014e 2015e

Onlin

e Ad

Reve

nue (

in b

illion

s of $

USD)

Search Banner Ads Classifieds and Directories Video Other

$31.3

$36.8

$41.2

$45.5

$49.5

$26.0

CAGR 13.7%

U.S. Online Advertising Spending by Format

Source: eMarketer (July 2011)

The most rapid revenue growth is expected to occur in areas other than the well-established search and banner ad formats


12%

16%

31%

28%26%

9%

39%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Print Radio TV Online

Time Spent Advertising Spend

Time Spent Consuming Media vs. Ad Spending

Source: Charles Stanley research report “Digital Media: The Future is Now” (2011)

Online advertising spending has yet to catch up to evolving consumer habits− There is an opportunity to draw ad spend away from shrinking mediums like broadcast TV and print media


Trends in Advertising SpendingA survey of media buyers indicates that mobile, social and video advertising are poised for the greatest revenue growth in 2011

4%

20%13% 15%

4%13%

6% 8%4%

7%

3%6%

13%

13%

13% 5%

25%

23%

19%

24%

47%

42%45%

36%

54% 20% 52%38%

25%11% 21%

35%

13%

30%

13% 17%10%

22%15% 15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Social Media Demand SidePlatforms("DSP"s)

Mobile Video Ad Networks Portals PremiumPublisherInventory

SEM/SEO

N/A

Spending will increase

Spending will stay thesame

Spending will decrease

Not planning to spend

Source: ValueClick Media 2011 Advertiser Survey


Web 1.01990-2000

Web 2.02004-2007

Web 2.52007-2010

Web 3.02010 - ?

HTTP HTML JAVA XML SOAP FLASH JAVASCRIPT P2P RDF RSS OpenIDATOMAJAX OWL SPARQL SWRL

Websites KeywordSearch

Directory Portals LightweightCollaboration

SaaS SocialNetworking

Weblogs Social MediaSharing

Office 2.0 MobileApplications

Widgets Semantic Search

SemanticDatabases

Distributed Search

Intelligent Personal Agents

Publishing – First basic version ofthe web featuring static HTML onlywebsites

Email – Text only email

E-Commerce – The start of onlineshopping

Flat Content – Early digitizationand online availability of news,books, music and other media

Siloed Services – Early web-enabled services such as searchagents/shopping agents

SMS (Short Message Service) –Exchange of short text messagesbetween mobile devices, althoughit is limited to 160 characters

Smartphone – Launched in 1993

“Intelligent Web” –Recommendations automaticallydevelop based upon a user’s webhabits

Ubiquitous Connectivity –Increased connectivity throughwidespread broadband adoption,mobile Internet access and mobiledevices

Open Identity – Ability toseamlessly use one “screenname” to access the entire web

Semantic Web – Ability of theInternet to “understand” andrespond with relevant response

Ubiquitous Collaboration –Widespread and highly viralcreative content collaborationvirtuous circle between brands,celebrities and consumers

MMS (Multimedia MessagingService) – Allows users to sendmultimedia content to and frommobile phones

Collaboration – Shift from flat“push publishing” web to creativity,secure information sharing andcollaboration (social networks,blogs, wikis, etc.)

Content Ownership – Users “own”the information

SaaS (Software-as-a-Service) -Broadband penetration allows forsoftware programs run entirelyonline but with minimal cross-software integration

Open-source Software – Aproduction and developmentphilosophy promoting open accessand review of the final product

Personalization – Connection ofsiloed information to create morepersonal environments

Mobile Applications – Digitaldistribution of rich media andgaming applications

Rich Mobile Platforms –Widespread adoption ofsmartphones capable of accessingrich media content on mobiledevices

Social Media Sharing – Robustnetwork of users sharing mediaacross the globe

PaaS (Platforms as a Service) –AJAX, lower bandwidth and servercosts drive emergence ofintegrated web software suites(GoogleApps, Amazon,salesforce, Microsoft)

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


Display Advertising Landscape

Source: LUMAscape


Search Advertising Landscape

Source: LUMAscape


Video Advertising Landscape

Source: LUMAscape


Mobile Advertising Landscape

Source: LUMAscape


Social Advertising Landscape

Source: LUMAscape


Commerce Advertising Landscape

Source: LUMAscape


Mobile Display Advertising Landscape

Source: LUMAscape


Consolidation in the Display Advertising EcosystemLarge 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 Companies Growth Opportunities

Performance Advertising Apply ROI discipline

Large Display Ad Networks Differentiate with tool and analytics providers

Major Agencies Build baseline functionality

Vertical Networks Continue aggregation of large like-minded audiences

Web Delivery Use advertising as an application

Targeting Platforms Leverage increasingly sophisticated technology to better target customers

Consumer Data Expand from customer data to customer acquisition

Marketing Analytics Apply rich user data


Horizontal vs. Vertical Ad NetworksHorizontal ad networks are comprised of high traffic publishers of diverse types of contentVertical ad networks are made up of closely related content focused on a specific subject

Vertical Ad NetworkHorizontal 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

Horizontal networks leverage audience data to provide basic targeting across a broad array of properties

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

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


Differentiating Ad Networks

What Are the Most Important Factors When Choosing a Media Partner?

What Metric do You Use to Evaluate Ad Network Performance?

Audience data is now considered more valuable than inventory quality in online media buying decision makingTargeting methods that leverage audience data have grown in importance while contextual targeting is decliningAdvertisers and agencies need greater audience insights, analytics and optimization services

Source: Collective 2010 Display Advertising Study, ValueClick Media 2011 Advertiser Survey

25%

33%

35%

48%

61%

64%

Ability to DriveBrand Favorability

Interaction Rate

Ability to DriveBrand Awareness

CPA

CPC

CTR 84%

67%

67%

55%

55%

47%

20%

19%

17%

Performance/ROI

Audience Targeting

Price

Transparency

Optimization

Reach

Products

Proprietary Data Sets

Unique Content

EMERGING TRENDS


Online Advertising Industry DevelopmentsAd exchanges and demand side platforms (“DSP”s) are revolutionizing the display ad marketby making it more transparent and efficient for advertisers, while giving publishers bettercontrol of supply and pricingA fundamental shift in the digital advertising space continues to unfold as display advertiserscontinue to turn their focus from site-specific to audience targetingThe 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 willcontinue 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


U.S. Online Video Ad Spending

Source: eMarketer (July 2011)

Online video ad spending will nearly triple as a share of total online ad spending by 2015

$1,420

$2,160

$3,090

$4,200

$5,640

$7,110

5.5%

6.9%

8.4%

10.2%

12.4%

14.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2010a 2011e 2012e 2013e 2014e 2015e

(per

cent

age o

f tot

al U.

S. o

nlin

e ad

spen

ding

)

(in m

illion

s of $

USD)

Annual Amount ($mm) % of Total U.S. Online Ad Spending


$300 $280 $590

$3,300

$2,800 $3,000

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Asia Europe U.S.

(in m

illion

s of $

USD)

2008a 2012e

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%, respectivelyOnline video ads decisively outperform television ads across key verticals and on critical metrics, such as general recall, brand recall, message recall and likeability

Growth of Online Video Advertising

Global Online VideoAdvertising Spend

Online Video Ads Outperform TV Ads on All Key Brand Impact Metrics

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

65.0%

50.0%

39.0%

26.0%

46.0%

28.0%21.0%

14.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

General Recall Brand Recall Message Recall Likeability

Online Video TV


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)

Source: Collective 2010 Display Advertising Study

What Are the Most Important Factors to Consider When Using an Ad Exchange?

Will Exchanges Eventually Replace Ad Networks?

55.0% 52.0%46.0% 44.0%

41.0%

Targeting Price Optimization Analytics Reach

72.0%

28.0%

No Yes


$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2010a 2011e

(in m

illion

s of $

USD)

non-RTB RTB

Evolution of Online Advertising: Real-Time BiddingReal-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

$380.0

$353.0

$592.0

$823.0

Source: A commissioned study by Forrester Consulting on behalf of Admeld, Q4 2010, as cited by a February 2011 study published by WARC

Ad Exchange Spending ($mm) 2011 Expected U.S. Display Media Spending ($mm)

5.7%7.9%

86.4%

Non-RTB Exchange Traded RTB Other


Evolution of Online Advertising: Mobile AdvertisingTotal shipments of tablets and smartphones are expected to exceed PC shipments for the first time in 2011There 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 importantAdvanced smartphones with sophisticated graphics enable “rich media” advertising on mobile platformsMobile 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


0

0.5

1

1.5

2

2.5

3

3.5

2009a 2013e

(in b

illion

s of $

USD)

Evolution of Online Advertising: Social AdvertisingConfluence of local, mobile and social platforms bring social advertising to a critical massSocial network traffic is huge, but social network ad spend has yet to catch upSocial 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

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

$1.3bn

$3.1bn

Social Network Ad Spend Social Network Users

7.5 39100

200

750

0

100

200

300

400

500

600

700

800

Foursquare Yelp LinkedIn Twitter Facebook

(in m

illion

s of u

sers

)


Evolution of Online Advertising: Social Gaming

Source: TV by the Numbers, All Facebook, Mashable, eMarketer

Social Gaming vs. Primetime TV: Weekly Audience (7/17/11-7/23/11) U.S. Social Gamers

53.0

61.968.7

24.0%27.0%

29.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2010a 2011e 2012e

(% o

f Int

erne

t Use

rs)

(Milli

ons o

f Use

rs)

Social Gamers (mm) % of Internet Users

Social gamers are heavily engaged with contentBrands 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

38.1

18.3 17.7

8.2 6.8

14.18.9 8.7 8.1 7.5 7.4 7.3 6.6 6.5

05

1015202530354045

(Milli

ons o

f Wee

kly V

iewer

s/Act

ive U

sers

)

Social Gaming Primetime TV


Venture Capital Advertising Investment Trends

Source: Proprietary discussions involving S&A and select venture capitalists

VC Investment Targets by Internet Advertising Sub-Sector

Location-targeted advertising solutionsTechnologies that exploit the mobile-social connectionRich media advertising for mobile devices

Mobile Video

Monetization technologies that go beyond the pre-roll adVideo ad networks with access to premium contentVideo yield management technologyInteractive video advertising

Social

Social media customer targetingPlatforms optimized to exploit rich audience information from social networksSocial application monetizationSocial listening market research

Infrastructure

Real-time bidding platformsAd exchanges that enable access to broader audiencesDemand-side platforms that optimize return on investment for advertisersData management to enable targeted advertising

Display

Targeted ad networks that provide audience dataAd networks that reach the rapidly growing Chinese marketGeographically-targeted ad networks

INDUSTRY BREAKDOWN


Online Advertising Sub-SectorsMedia Buyers− Media Buying Platforms

Demand Side Platforms (“DSP”s)− Creative Optimization− Data Optimization− Analytics

Data Management Platforms (“DMP”s)− Data Suppliers− Data Aggregators

Ad ExchangesSupply Side Platforms− Ad Networks− Yield Optimization− Publisher Tools

Infrastructure− Social Tools− Ad Ops/Other Infrastructure− Ad Servers− Content Delivery Networks


Advertising Value Chain Overview

Buy Side Infrastructure and Delivery Sell Side

Media Agency

Demand Side Platform Ad Exchange

Ad Network Supply Side Platform

Publisher


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 firmThe media buyer then utilizes a demand side platform to purchase ad space through an ad exchange or from a network directlyThe DSP may use several outside firms to provide and analyze data for targeted advertising

Buy Side Details

Media Agency

Media Buying Platform

Demand Side Platform

Data Supply

Creative Optimization

Data Optimization

To Ad Exchange(s) or Ad Network(s)


Infrastructure and Delivery Details

Ad Exchange(s)

Content Delivery Network

From DSP(s)

Ad Server(s)

To Supply Side Platform(s)Ad Network(s)

Ad Network(s)

Ad Network(s)

Verification

Other Infrastructure

Analytics

DSPs make purchase requests from ad exchanges that include numerous ad networks and publishersOnce an advertiser is paired with an appropriate ad impression, the advertiser’s content is delivered through an independent ad server and content delivery network


Sell Side Details

Supply Side Platform Publisher(s)

The SSP interacts with DSPs through ad exchanges to maximize revenue per impressionOnce 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


Evolution of Display Ad BuyingAdvertiser

Advertiser

Advertiser Publisher

Publisher

Publisher


Ad Network1

Ad Network6Ad Network2

Ad Network3

Ad Network4

Ad Network5

$1.00

$0.80

$0.64

$0.51

$0.41

$0.33

Advertiser

Advertiser


Publisher

PublisherAd Network1

Ad Network6

Ad Network2 Ad Network3

Ad Network4 Ad Network5

Exchange

Advertiser

Advertiser


Publisher

Publisher

DSP YieldOptimizer

Exchange1

Exchange2

Exchange3

Direct(Inefficient)

Ad Networks(Inefficient)

Ad Exchanges(Efficient)

Demand-Side Platforms(More Efficient)

TRANSACTIONS AND PUBLIC COMPS


Selected Online Advertising Private Placements

Source: Industry estimates, Capital IQ and S&A proprietary research

1 Does not include some undisclosed fundingSource: Industry estimates, Capital IQ and S&A proprietary research

1 Does not include some undisclosed funding

Date Announced Target Business DescriptionAmount Raised in Round ($mm) Total Funding Raised ($mm)

10/10/2011 madvertise Mobile Advertising Mobile Advertising $10.0 $10.0 09/26/2011 TechMediaNetwork Vertical Ad Network 33.0 40.509/26/2011 Banyan Branch Social Advertising 2.1 2.109/15/2011 InMobi Mobile Advertising 200.0 215.609/15/2011 Steel House Targeted Ad Network 3.8 3.809/14/2011 Spotzer Media Group Video Ad Network 0.7 15.409/07/2011 agencyQ Marketing Agency 1.6 1.608/19/2011 Elevation Supply Side Platform 1.5 1.508/01/2011 Duomeng Zhisheng Network Ad Network 10.0 10.007/28/2011 Yext Lead Generation 10.0 35.007/26/2011 ThinkNear Mobile Ad Targeting 1.6 1.607/19/2011 SupersonicAds Social Ad Solutions 4.2 6.207/11/2011 Image Space Media Ad Network 0.6 4.807/01/2011 Tapjoy Social Gaming Advertising 30.0 70.707/01/2011 Mojiva Mobile Ad Platform 25.0 35.306/23/2011 Vpon Mobile Ad Network 7.0 7.0 06/16/2011 OwnerIQ Vertical Ad Network 7.0 20.8 05/25/2011 BuzzLogic Social Advertising 7.8 30.2 05/25/2011 Kompan.pl Search Advertising 2.1 2.1 05/17/2011 BlackArrow Video Advertising 27.0 66.0 05/16/2011 Groupe Concoursmania Marketing Agency 15.1 17.8 05/10/2011 Clearspring Social Advertising 20.0 45.5


Selected Online Advertising Private Placements (cont’d.)




05/09/2011 Adconion Ad Network $34.0 $114.0 04/31/2011 TidalTV Video Advertising 30.0 61.0 04/26/2011 MakeMeReach Social Advertising 4.4 4.4 04/07/2011 Individual Digital Demand Side Platform 1.5 2.5 04/05/2011 PlaceIQ Mobile Ad Network 1.0 2.0 03/29/2011 Flank Marketing Marketing Agency 2.0 2.0 03/23/2011 MediaShare Video Ad Network 10.0 10.0 03/22/2011 Phorm Targeted Advertising 16.4 25.8 03/18/2011 JumpTap Mobile Advertising 25.0 90.003/10/2011 RadiumOne Social Ad Network 21.0 33.5 03/10/2011 AdTriad Ad Network 1.0 1.0 03/02/2011 Mediazest Marketing Agency 0.7 1.6 02/28/2011 Simplifi Holdings Demand Side Platform 3.4 3.902/15/2011 YoYi Media (Beijing) Interactive Advertising Targeted Ad Network 20.0 32.002/02/2011 GraphEffect Social Advertising 2.0 2.001/12/2011 Adknowledge Performance Ad Network 200.0 248.001/11/2011 Strike New Media Online Advertising 0.8 0.801/05/2011 Millenial Media Mobile Ad Network 27.5 65.001/04/2011 The Worldwide Exchange Classifieds 3.0 8.012/23/2010 Digital Advertising Consortium Beijing Marketing Agency 3.0 3.012/17/2010 Phorm Targeted Ad Network 9.4 9.4






12/17/2010 Image Space Media Ad Network $1.0 $4.212/15/2010 SpotXchange Video Ad Network 12.0 12.012/12/2010 Integrate Lead Generation 4.3 4.312/09/2010 Media6Degrees Social Advertising 19.9 31.712/02/2010 mInfo Search Advertising 0.8 4.111/30/2010 JumpTap Mobile Advertising - 65.011/30/2010 Turn Data Management Platform 20.1 58.611/23/2010 plista Video Ad Network 3.3 3.311/16/2010 YuMe Video Ad Network 5.0 55.011/12/2010 Avito.ru Classifieds 26.2 26.211/01/2010 Rubicon Project Supply Side Platform 18.0 51.010/28/2010 Individual Digital Demand Side Platform 1.0 2.510/22/2010 PlaceIQ Mobile Advertising 1.0 2.010/02/2010 AdChina Ad Network 40.0 80.009/27/2010 Netshelter Technology Media Vertical Ad Network 15.0 24.009/27/2010 Adstruc Classifieds 1.1 1.1 09/20/2010 Tro Media Ad Exchange 0.6 0.6 09/14/2010 OPMS Demand Side Platform 2.7 5.2 09/08/2010 Polygone International Marketing Agency 20.0 7.5 09/01/2010 Rent Marketer Classifieds 0.6 0.6 08/19/2010 Oggifinogi Video Ad Network 2.0 4.3






08/18/2010 Beijing Herun Detang Media and Advertising Vertical Ad Network $8.8 $11.808/17/2010 Netsertive Demand Side Platform 4.1 4.1 08/06/2010 Adstruc Classifieds 0.0 1.1 08/04/2010 Outdoor Advertising Storage & Integrated Systems Ad Network 0.6 0.8 07/19/2010 eXelate Media Data Management Platform 20.0 24.0 07/12/2010 AdChina Ad Network 30.0 40.0 04/28/2010 Tremor Media Video Ad Network 40.0 79.4 01/12/2010 TechMediaNetwork Ad-Supported Content 1.5 40.5 09/11/2009 Giant Realm Ad Server 2.5 12.8 06/09/2008 Technorati Ad Exchange 9.5 32.1 04/15/2008 Federated Media Publishing Media Agency 50.0 56.7

Mean $16.2 $28.1Median $6.0 $10.0


Selected Online Advertising Acquisitions


Date Target Business Implied Enterprise EV/LTMAnnounced Target Acquirer Description Value ($mm) Revenue EBITDA

11/8/2011 Smartclip AG Adconion Media Group Limited Video Ad Network - - -11/1/2011 InterCLICK Yahoo! Online Advertising $250.9 2.0x 23.6x

10/13/2011 UpSNAP Services Call Genie Mobile Ad Network 0.6 - -9/20/2011 Sometrics Serve Virtual Enterprises Ad Analytics 30.0 - -9/14/2011 Response One St. Ives Ad Services 29.7 1.0x 9.9x

9/5/2011 Cybird GMO NIKKO Mobile Ad Network 0.9 0.1x -8/18/2011 CC Media APN News & Media Horizontal Ad Network 12.2 - -

8/8/2011 IndieClick Media Group Demand Media Online Ad Network 14.0 - -8/3/2011 AdXpose comScore Ad Analytics 19.3 - -8/3/2011 HipCricket Augme Technologies Mobile Ad Services 57.9 6.5x -8/3/2011 Digispace Solutions Bitzio Ad Services 0.8 0.2x -

8/30/2011 EyeWonder DGFastChannel Horizontal Ad Network 66.0 1.7x -8/8/2011 Dotomi ValueClick Demand Side Platform 295.0 - -8/1/2011 IndieClick Media Group Demand Media Vertical Ad Network 14.0 - -

6/16/2011 Media Mind DG Demand Side Platform 414.0 4.9x 28.0x6/9/2011 AdMeld Google Supply Side Platform 400.0 13.3x -

5/13/2011 CMG Worldwide Next Fifteen Communications Group Media Agency 4.0 1.0x -5/11/2011 5:1 Holding Yahoo! Demand Side Platform 26.4 33.8 -4/22/2011 Greystripe ValueClick Mobile Ad Network 70.0 2.8x 3.3x4/11/2011 Tatto Ozura World Targeted Ad Network 60.0 - -

4/8/2011 Burst Media Blinkx Vertical Ad Network 30.5 0.8x -3/30/2011 The Andina Group Foster Jennings Media Agency 0.5 7.3x -3/18/2011 Adenyo Motricity Mobile Ad Network 142.5 7.1x -

3/2/2011 Juno Internet Axel Springer Mobile Ad Network 53.4 - -2/8/2011 Buy Owner Private Buyer Online Classifieds 1.0 - -

11/11/2010 Delete Digital Marketing Fuse 8 Media Agency 0.6 - -11/8/2010 ScanScout Tremor Video Vertical Ad Network 65.0 2.6x -

10/18/2010 Nikko GMO AD Partners Media Agency 5.5 0.2x -10/18/2010 Broadband Enterprises Specific Media Video Ad Network 55.0 2.8x -


Selected Online Advertising Acquisitions (cont’d.)


Date Target Business Implied Enterprise EV/LTMAnnounced Target Acquirer Description Value ($mm) Revenue EBITDA

9/24/2010 Deal Group Media Digital Performance Group Search Engine Marketing $7.4 - 4.9x9/15/2010 ZIGExN Private Buyer Blind Ad Network 2.4 .9x -

9/1/2010 Potrero Media Corporation InsWeb Vertical Ad Network 12.0 1.x -8/6/2010 BV! Media Rogers Media Targeted Ad Network 24.7 1.8x 13.x6/9/2010 Adisn CrowdGather Digital Ad Agency 7.8 8.8x -6/2/2010 iCrossing Hearst Corporation Digital Marketing 425.0 4.3x -5/4/2010 Ad Juice Beyond Commerce Action Ad Network 3.1 3.4x -3/8/2010 infoGROUP CCMP Capital Advisors Online Marketing Services 626.6 1.3x -

2/22/2010 Adrime Weborama Online Rich Media Platform 4.4 2.5x -1/5/2010 Quattro Wireless Apple Mobile Advertising 275.0 6.9x -

12/31/2009 TIG Global MICROS Systems Vertical Ad Network 29.9 1.1x -12/21/2009 Eyewonder Limelight Networks Interactive Digital Ad Services 110.0 3.3x -

11/9/2009 AdMob Google Mobile Advertising 750.0 12.5x -10/1/2009 Dark Blue Sea Photon Group Limited Horizontal Ad Network 18.0 0.9x 13.4x9/11/2009 ReachLocalAustralia ReachLocal Advertising Agency 27.7 2.5x -7/31/2009 Autoreflex.com Odyssée Ventures Ad Portal 13.6 1.1x -

7/5/2009 Adlink Media Hi-Media Horizontal Ad Network 41.3 1.0x -5/21/2009 Cyber Communications Dentsu Horizontal Ad Network 246.7 0.3x 24.3x4/15/2009 Dedicated Media Media Initiatives Group Horizontal Ad Network 20.0 1.0x -2/26/2009 Zi Corporation Nuance Communications Mobile Ad Solutions 31.4 2.4x -

10/20/2008 Acerno Akamai Behavioral Ad Network 95.0 2.3x -10/15/2008 Ad Egnage Technorati Online Ad Network 10.0 2.5x -

10/1/2008 Networld Media Branche Vous! Horizontal Ad Network 3.1 0.7x 9.2x5/28/2008 M:Metrics comScore Mobile Ad Solutions 43.7 4.4x -

5/7/2008 Enliven Marketing Technologies DG FastChannel Online Marketing Services 73.8 3.4x -4/28/2008 Adify Cox Communications General Ad Network 300.0 42.9x -

Mean $98.6 4.5x 14.4xMedian $29.8 2.3x 13.x


Public Online Advertising Valuation Comps as of 11/14/2011

(1) LoopNet is being acquired by CoStar Group, but the deal has yet to closeSource: Industry estimates, Capital IQ and S&A proprietary research

(figures in millions of $USD, except per share) Share Market Enterprise EV / FYE EV / LTM EV / NFY LTM AnnualOnline Advertising Ticker Price Cap Value (EV) Revenue EBITDA Revenue EBITDA Revenue EBITDA Revenue Growth

1000mercis ALMIL $55.21 $176.1 $140.7 3.0x 7.9x 2.9x 7.4x NA NA NMad pepper media International N.V. APM 1.64 37.0 22.2 0.3x 15.4x 0.3x NM NA NA 9.5%Blinkx plc BLNX 1.66 855.5 546.1 8.3x 64.5x 6.4x 47.9x NA NA 73.8%DG FastChannel, Inc. DGIT 15.70 536.3 843.6 3.4x 7.5x 2.8x 6.6x 2.5x 6.3x 33.0%Hi-Media S.A. HIM 2.94 167.3 163.9 0.5x 6.5x 0.5x 6.2x NA NA 11.7%interCLICK, Inc. (being acquired) ICLK 8.98 182.4 219.8 2.2x 23.9x 1.7x 20.6x 1.5x 11.7x 52.1%Local.com Corp. LOCM 2.44 64.0 51.8 0.6x 5.1x 0.7x NM 0.7x 0.0x -8.9%Marchex, Inc. MCHX 6.38 328.5 202.3 2.1x NM 1.5x 35.4x 1.5x 9.9x 45.8%ReachLocal, Inc. RLOC 8.98 276.8 169.7 0.6x NM 0.5x NM 0.5x 12.8x 31.4%Sedo Holding AG LKI 2.73 103.7 59.9 0.4x 5.5x 0.4x 5.5x NA NA 2.6%TradeDoubler AB TRAD 4.21 193.9 140.8 0.3x 9.0x 0.3x 7.0x NA NA 5.7%ValueClick, Inc. VCLK 15.80 1,328.8 1,351.1 3.1x 11.3x 2.7x 9.4x 2.4x 7.9x 22.8%Velti Plc VELT 8.80 515.2 404.3 3.5x 21.1x 2.8x 65.5x 2.2x 7.5x 24.5%Weborama ALWEB 22.37 77.4 71.1 3.2x 17.3x 2.7x 14.1x NA NA 46.4%

Mean $313.4 2.3x 16.2x 1.9x 20.5x 1.6x 8.0x 27.0%Median $166.8 2.1x 10.1x 1.6x 9.4x 1.5x 7.9x 24.5%

(figures in millions of $USD, except per share) Ticker Share Market Enterprise EV / FYE EV / LTM EV / NFY LTM AnnualDirect Marketing/Lead Gen Symbol Price Cap Value (EV) Revenue EBITDA Revenue EBITDA Revenue EBITDA Revenue Growth

Harte-Hanks Inc. HHS $9.05 $568.5 $681.7 0.8x 6.0x 0.8x 6.7x 0.8x 7.0x 2.4%InsWeb Corp. INSW 8.10 46.4 37.6 0.9x 14.9x 0.7x 12.8x NM NM 37.9%LoopNet, Inc. (being acquired) LOOP 17.77 731.2 614.6 7.9x 27.8x 7.3x 34.6x 7.2x 23.5x 10.8%Market Leader, Inc. LEDR 2.74 69.5 44.6 1.8x NM 1.6x NM 1.3x 0.0x 35.1%Moneysupermarket.com Group PLC MONY 1.74 884.8 833.6 3.5x 13.0x 3.1x 10.7x NA NA 20.8%Move, Inc. MOVE 1.73 267.0 234.2 1.2x 18.8x 1.2x 17.6x 1.3x 10.0x -2.5%QuinStreet, Inc. QNST 8.73 415.9 374.4 0.9x 5.0x 0.9x 5.3x 0.9x 4.5x 11.3%Rainmaker Systems Inc. RMKR 0.92 22.9 15.6 0.4x NM 0.4x NM 0.4x NM -17.3%Tree.Com, Inc. TREE 5.10 56.3 46.0 0.2x 6.2x 0.3x 6.9x NM NM 33.2%XO Group Inc. XOXO 7.83 224.3 140.9 1.2x 12.2x 1.2x 10.4x 1.1x 8.2x 9.4%zipRealty Inc. ZIPR 1.70 34.9 10.6 NM NM NM NM NM NM -25.5%

Mean $275.8 1.9x 13.0x 1.7x 13.1x 1.9x 8.9x 10.5%Median $140.9 1.1x 12.6x 1.1x 10.5x 1.1x 7.6x 10.8%


Public Online Advertising Valuation Comps as of 11/14/2011 (cont’d)


(figures in millions of $USD, except per share) Share Market Enterprise EV / FYE EV / LTM EV / NFY LTM AnnualInternet Media/Marketing Ticker Price Cap Value (EV) Revenue EBITDA Revenue EBITDA Revenue EBITDA Revenue Growth

AOL, Inc. AOL $15.01 $1,533.9 $1,129.8 0.5x 1.6x 0.5x 3.0x 0.5x 3.2x -16.4%Baidu, Inc. BIDU 138.88 45,641.2 47,215.5 39.3x 71.0x 24.2x 43.7x 21.3x 35.4x 85.5%Demand Media, Inc. DMD 6.99 499.4 507.5 2.0x 10.0x 1.6x 9.2x 1.6x 5.9x 33.7%Google Inc. GOOG 613.00 189,312.3 163,241.0 5.6x 13.9x 4.6x 12.1x 4.2x 10.1x 29.8%IAC/InterActiveCorp. IACI 41.26 3,454.6 2,729.0 1.7x 19.0x 1.4x 12.6x 1.4x 7.8x 25.6%Microsoft Corporation MSFT 26.76 223,679.9 182,268.0 2.6x 6.1x 2.6x 6.0x 2.4x 5.7x 8.2%Naspers Ltd. NPN 46.25 18,882.8 18,563.2 4.5x 14.2x 4.5x 14.2x NA NA 18.2%NetEase.com, Inc. NTES 44.32 6,238.3 4,043.5 4.8x 9.6x 4.2x 8.4x 3.7x 7.6x 36.5%Sina Corp. SINA 78.89 5,577.6 4,460.8 11.1x 35.5x 9.7x 60.6x 9.4x 86.5x 17.5%Sohu.com Inc. SOHU 57.90 2,261.2 1,682.0 2.7x 6.5x 2.2x 5.2x 2.0x 5.4x 35.4%Tencent Holdings Ltd. 700 20.56 43,354.4 35,553.5 11.9x 22.4x 8.7x 18.1x NA NA 46.5%Tomorrow Focus AG TFA 4.95 290.0 276.8 1.6x 16.4x 1.5x 14.2x NA NA 22.8%WebMD Health Corp. WBMD 33.01 2,088.1 1,577.0 3.0x 12.0x 2.7x 10.6x 2.9x 8.8x 14.4%Yahoo Japan Corporation 4689 308.46 19,054.9 15,152.6 4.0x 6.9x 3.9x 6.7x NA NA 3.7%Yahoo! Inc. YHOO 16.00 20,580.6 17,814.0 2.8x 9.9x 3.4x 9.6x 4.0x 12.4x -20.6%

Mean $33,080.9 6.5x 17.0x 5.0x 15.6x 4.9x 17.2x 22.7%Median $4,460.8 3.0x 12.0x 3.4x 10.6x 2.9x 7.8x 22.8%


Online Advertising Sub-Sector Performance as of 11/14/2011

Source: Capital IQ

-15.0%

-5.0%

5.0%

15.0%

25.0%

35.0%

S&P 500 Index Dow Jones Industrial Average NASDAQ Composite Index

Online Advertising Index Direct Marketing/Lead Gen Index Internet Media/Marketing Index

Subsector Relative Performance as of 11/14/2011

Online Advertising Index Direct Marketing/ Lead Gen Index Internet Media/ Marketing Index S&P 500 Index Dow Jones Industrial Average NASDAQ Composite Index3-Months -1.1% -1.2% -0.2% 0.0% 0.1% -0.4%6-Months -20.1% -10.7% 5.3% -4.9% -3.2% -3.7%1-Year -7.8% -8.6% 1.7% 5.5% 8.5% 6.7%

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q3 2011 siemer online advertising report

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