The document discusses consolidation trends in the ad tech industry. It notes that VC investment in ad tech has declined as many companies have proven unprofitable. M&A activity is increasing as investors lose patience, with the number of ad tech deals doubling in the first half of 2013 compared to the same period in 2012. The document examines recent ad tech acquisitions and argues that too many small "point solutions" have been funded, leading to unnecessary competition and high costs. It suggests further consolidation is needed among data management platforms and other players.

1. Embedded Specialized Accomplished
OMMA DDM Conference
July 24, 2013
The Imminent Ad Tech Shakeout:
Is Consolidation in the Horizon?

2. 2
VC Investment in Ad Tech Declining
Source: Headwaters MB
$645.3
$786.9
$1,242.0
$543.1
$431.0
$945.9
$573.3
$257.8 $253.3
$324.5
109
98
90
99 96
75
63
57
48
56
$7.3 $8.8
$17.7
$6.8 $5.3
$14.6
$11.5
$5.5 $6.2 $7.1
0.0
20.0
40.0
60.0
80.0
100.0
120.0
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
NumberofDeals
Value(in$mm)
Aggregate Deal Value Number of Deals Avg. Deal Size
Ad tech businesses have largely proven to be unprofitable and challenging businesses to exit successfully

3. 3
M&A Activity Increasing as Investors Lose Patience
Ad tech transactions for the first half of 2013 doubled YoY from the beginning of 2012
― Investors in the ad tech space are losing patience with slow returns, pushing their companies to
either find buyers or show a clear path to profitability
17
34
$163
$1,246
$0.0
$400.0
$800.0
$1,200.0
$1,600.0
H1 2012 H1 2013
0.0
10.0
20.0
30.0
40.0
Value(in$mm)
NumberofDeals
Number of Deals Deal Size

4. 4
Recent M&A Activity
Date Target Buyer / Investor Comments
Jul 2013 IgnitionOne
(spinout from Dentsu
led by management)
ABS Capital,
Persimmon Capital
• Buyside marketing tech platform
• Single stack solution for multi-
channel media buying in search,
display, mobile, and social
• Competes with Turn, MediaMath,
Adobe, Marin Software, Kenshoo,
Criteo and Rocketfuel.
• $100M revenue
Apr 2013 Dedicated Media LIN TV • Multichannel ad buying platform
Jan 2013 Akamai’s Advertising
Decision Solutions
Unit
MediaMath • Akamai’s data co-op and
management platform
• Pixel-free tracking technology
Jan 2013 MediaWhiz - $10M Matomy • Multichannel performance marketing
platform
Jan 2013 TapIt! Media - $23M Phunware • Mobile display ad mediation

5. 5
What’s Driving This?
Investors have realized that Ad Tech Businesses are generally profit-challenged
Too many “point solutions” funded – Too much overlap and competition
Not enough revenue / profit in the market – unnecessary duplicative costs
― Every dollar of agency spend nets a publisher $0.45 on average
― Remainder gets cut up among trading desks, DSPs, exchanges, networks, data suppliers,
data aggregators, ad verification, tag management, retargeters, optimization, SSPs, etc.
Agencies used to be able to manage multiple vendors – now they all want to
consolidate their vendor relationships
Only a handful of players are achieving size, scale, profitability (AppNexus)
― Often play the role of consolidator(s) in the space and stepping in where large media
strategics have bowed out; can attract growth capital
Most players are running out of funding and not in a position to receive more
Many driven by impatient investors to exit – oftentimes at unattractive valuations
Too large ? … go IPO Too small or undifferentiated? … wind down (AdBrite)

6. 6
Ad Tech IPOs
Tremor Video’s recent IPO suggests previous unsuccessful attempts at securing buyers as
those with interest in the space – strategic or financial – become scarce
― Tremor raised only $75.0mm of the $90.0mm it was seeking; unprofitable - $16.0mm loss in 2012
YuMe has recently filed S-1 and others are expecting to follow suit
Recent IPOs Indicative of “Last Resort” Options for Ad Tech Companies
Tremor Video Stock Price Performance since IPO
$6.50
$7.00
$7.50
$8.00
$8.50
$9.00
$9.50
28-Jun-13
29-Jun-13
30-Jun-13
1-Jul-13
2-Jul-13
3-Jul-13
4-Jul-13
5-Jul-13
6-Jul-13
7-Jul-13
8-Jul-13
9-Jul-13
10-Jul-13
11-Jul-13
12-Jul-13
13-Jul-13
14-Jul-13
15-Jul-13
16-Jul-13
17-Jul-13
18-Jul-13
19-Jul-13
20-Jul-13
21-Jul-13
22-Jul-13
ClosingPrice
Performance
- 16% from
IPO open of
$10.00

7. 7
Ad Tech Public Companies
Few ad tech companies are publicly traded; few that are public are performing well
― Millennial Media currently at $9.00 vs IPO open $13.00, close $23.50 (down 60%) – unprofitable
― Velti currently at $1.00 vs Mar 2012 price of $13.55 (down 92%)
― ValueClick is the rare exception – its stock has risen over 30% since Mar 2012 price of $19.74
Publicly traded pure play ad tech companies are few and rare; not many are performing well
Stock Price Performance
Performance
ValueClick
+30%
Millennial
Media
- 60%
Velti
- 95%$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
ClosingPrice
Millennial Media Velti ValueClick

8. 8
Market Still Controlled by Small Number of Top Vendors
Advertising agencies agree there is too much overlap amongst companies that only provide simple
point solutions over sustainable services
― For every one successful company, there are 35-40 unprofitable companies offering redundant products,
splitting a revenue pie that is too small to sustain the entire ecosystem
Few end up achieving the size and scale needed to become attractive acquisition targets or to be
consolidators in the space
90.0%
82.0%
73.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2008A 2009A 2010A 2011A 2012A
IndustryRevenue%
Top 50
Top 25
Top 10
Top 10 Ad Companies Command 73.0% of Industry Revenues

9. 9
Display Ad Landscape – Unsustainable Number of Players
Source: LUMAscape

10. 10
Search Ad Landscape – Same Here
Source: LUMAscape

11. 11
Video Ad Landscape – … and Here
Source: LUMAscape

12. 12
Mobile Ad Landscape – and it’s becoming an issue Here
Source: LUMAscape

13. 13
Social Advertising Landscape – as well as Here
Source: LUMAscape

14. 14
Agencies / Advertisers Want to Deal with Fewer Vendors
and More Single Stack, Multichannel Solutions
Source: LUMAscape
DYNAMIC AD
INTELLIGENCE
PLATFORM
CENTRALIZED
AD-SERVING
OPTIMIZATION
RE-TARGETING
DATA MGMT
REPORTING
ACCESS INVENTORY TO
REACH AUDIENCE
ACROSS PREMIUM
PUBLISHERS AND
AD NETWORKS:
VERTICALS
BEHAVORIAL
CONTEXTUAL
VIDEOS
MOBILE
SOCIAL

15. 15
So What’s Happening? Consolidation of Point Solutions
toward Broader Platform Offering
Source: LUMAscape

16. 16
Potential Consolidators?
Company Capital Raised Investors Comments
AppNexus $75.0M (Jan 2013) TCV, Venrock, Tribeca • DSP
Videology $68.3M (May 2013) NEA, Comcast, Valhalla, Pinnacle,
Catalyst
• Video advertising
• DSP
RocketFuel $50.0M (Jun 2012) Mohr Davidow, Summit, Northgate,
Nokia
• Multichannel DSP
PubMatic $45.0M (Jun 2012) August, DFJ, Nexus, Helion • SSP
OpenX $27.5M (Dec 2012) Accel, SAP, Index, Samsung, Mitsui • Ad Exchange and
DSP
JumpTap $27.5M (Jun 2012) Summerhill, Redpoint, Valhalla,
General Catalyst
• Mobile RTB
Flurry $25.3M (Nov 2012) DFJ, InterWest, Menlo, CrossLink,
Union Square
• Mobile analytics and
advertising
DataLogix $25.0M (April 2013) IVP, Sequel, General Catalyst • DSP
Collective Media $20.0M (May 2013) Accel, Samsung, Cox • Ad exchange
Nexage $15.0M (May 2012) Hearst, GrandBanks Capital, Relay,
SingTel
• Ad exchange,
mediation and DSP

17. 17
Spring 2013
Online Advertising Report
Strategic Buyer Interests
Low Interest / Valuation High
Mobile /
Video
Social
Online
StrategicInterest/Priority
RTB
Auction
Exchanges
DSPs
Self-Serve
Platforms
Local /
SMB
Search
Agency
SMS /
MMS
Marketing
In-App
Display
FB
Game
Ads
Ad Networks
Affiliate Networks
Display
User
Acquisition
Marketing
In-
App
Video
Ad tech companies with strong technology and high potential for scalability in the areas of mobile, video and / or
social attract highest interest

18. 18
DMP Trends
DMPs have become fragmented as well – need for a DMP for DMPs / DSPs to emerge
― Validate and “cleanse” data from multiple DMPs / DSPs
― Provide mediation across various DMPs / DSPs in order to maximize targeting accuracy, reach
― Provide integrated DCO, tag management, ad verification capabilities as part of solution
Key trend is the separation of the data layer from the execution layer in the marketing
stack
― Brands want to leverage learnings of their audience profiles and customer data and apply that to
all marketing and consumer touch-points – online and offline
Biggest opportunity for growth lies in ability to use accurate data profiles across all
consumer marketing channels
― Huge opportunity in using data to inform offline media buying
― Important areas of focus also include social, video and mobile
Current implementation efforts are focused on the core purpose of targeted media
buying
Long-term potential for DMPs to be integrated into core business software systems to
facilitate data-driven decision making on sales, product dev, fin mgmt

19. 19
DMP Trends
59.0%
69.0%
73.0%
76.0%
83.0%
84.0%
84.0%
86.0%
90.0%
93.0%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Advertising Yield Optimization
Site Content Optimization
Creative Content Optimization
CRM Program Optimization
Channel Optimization
Emerging Channel Deployment
Multichannel Integration & Optimization
Campaign Channel Attribution
Targeted Media Buying
Customer Insight Development
Priority Applications for Future DMPsGenerally Supported Applications by Existing DMPs
23.0%
32.0%
32.0%
36.0%
37.0%
40.0%
44.0%
45.0%
78.0%
82.0%
0% 20% 40% 60% 80%
Emerging Channel
Deployment
Creative Content
Optimization
Site Content Optimization
CRM Program Optimization
Advertising Yield
Optimization
Multichannel Integration &
Optimization
Campaign Channel
Attribution
Channel Optimization
Customer Insight
Development
Targeted Media Buying
Survey conducted by IAP & Winterberry Group