1

Q1 2016 Market Report

Digital Brief 007

2

Mobile

LUMA’s Singular Focus on Digital Media

Technology

Media

Marketing MarTech

DigitalContent

AdTech

Ø LUMA’sexpertiseisattheintersectionofMedia,MarketingandTechnology

Ø Atthisintersectionexists:§ DigitalContent: contentsites,MCNs,gamepublishers,aggregators

§ AdTech: display,search,video,mobile,social,contentmarketing/native,connectedTV

§ MarTech: data,analytics,salesandmarketingautomation,email,predictivetools,commercetechnology,shoppermarketing,payments

Ø Mobile proliferationhasamajorimpactonthesemarketsandLUMAisdeeplyknowledgeableonmobile

3

Overall Commentary on Consolidation

Ø Inourlastend-of-yearMarketReport,wereported262acquisitions2015indigitalmediaandmarketing

Ø Thedealswetrackinthisreportfallintooneoffourcategories:§ Large(over$500mm)§ Medium($100– $500mm)§ Small($20– $100mm)§ Sub$20mmexitsareconsideredtechandteamdeals,

capitulations,orundisclosed

44

U.S. Digital Media M&A Activity by Sector

Source: LUMA Partners

#ofTransactions

Ø DigitalmediaandmarketingM&Aactivityisofftoanotherfaststartthisquarter,outpacinglevelsfromQ12015.

Ø DespitethemarketvolatilityearlyinthequarterandoveralllowerM&Aactivityglobally,strategicandfinancialbuyerscontinuetobeveryactiveinthedigitalspace.

19 20 18 1019

17 21 2622

15

2228

32

2734

01020304050607080

Q12015 Q22015 Q32015 Q42015 Q12016

AdTech MarTech DigitalContent

55

MARKETINGTECH

CRMSOFTWARE

INTERNETORIGINALS TELCO

MARKETING

MEDIA

DATA

CONSUMERINTERNET

TECHSERVICES

COMMERCE

Right Time Decisioning of

Consumer Data

(Ad Tech and MarTech)

A Growing Robust Pool of Strategic Buyers

Ø Softwaresolutionsthatenabledecisioningofconsumerdataisacapabilitythatattractsdeeppocketedstrategicsfromawidevarietyofindustries

Ø ManycompaniesfromAdTechandMarTechhavedevelopedthesecapabilities

66

10%

17%

7%

34%

3%

3%

10%

10%

3%3% ConsumerInternetCommerceTelcoMediaMarketingTechTechServicesInternetOriginalsCRMSoftwareMarketingData

Digital Media M&A Activity by Strategic Buyers

Source: LUMA Partners

Q12016StrategicBuyersTransactions

Ø Inthefirstquarteroftheyear,wesawstrongactivityfromstrategicbuyersinMediaandCommerce

Ø StrategicbuyersfromMediaandTelcoincludingRTLGroup,TimeInc.,AOL(Verizon)andTelenorGroupcontinuetoacquirecompaniesfocusinginAdTechastheybuildoutmoreadvancedmonetizationandtargetingcapabilities

7

2 25

1 2

17 18 13

9

17

0

5

10

15

20

25

Q12015 Q22015 Q32015 Q42015 Q12016

Over$100M Under$100M

Ad Tech M&A Activity

Ø Observations§ AdTechM&Aactivitybeganthe

newyearonpacewithQ12015with19transactions

§ 10ofthe19AdTechdealsfocusedonmobilemonetizationandcross-devicetargeting

Ø MovingForward– NativeAdvertising§ Theevolutionofprogrammatic

technologyisenablingnewformsofnativeadvertisingfromapp-installadstolong-formcontentadsthatblendinwithdifferentenvironmentsatscale

#ofTransactions

Source: LUMA Partners

8

Ad Tech – Notable DealsAcquirer Capital

RaisedEnterprise

Value Comments

Source: Crunchbase

OL $1.4B AconsortiumofChineseinvestorsacquiredOperaSoftwareforitsfastgrowingmobileadvertisingbusinessOperaMediaworks

N/A $56M WiththeacquisitionofSmartclip,RTLGroupenhancesitsvideoadvertisingofferingsbyaddingSmartclip’s digitalvideoandconnectedTVtools

$34M $360M NorwegiantelecomoperatorTelenoracquiredcross-deviceadvertisingcompany Tapad tobolsteritsdigitalmarketingcapabilities

N/A N/A ByacquiringViant,TimeInc. combinesViant’s AdvertisingCloud withitspremiumcontenttocreatea“people-based”marketingplatform

GoldenBrickSilkRoadFundManagement

9

MarTech M&A Activity#ofTransactions

Ø Observations§ SMBmarketingandcontent

marketingwerekeytargetareastobegintheyear

§ FinancialbuyeractivitywasstrongthisquarterwithHGGC,MarlinEquityPartners,andVistaEquityPartnersmakingmoves

Ø MovingForward– ABMMarketing§ Webelievestronglythataccount-

basedmarketingwilltakeoffthisyearasmoreB2Bmarketersrecognizethevalueofdeliveringtherightmessageattherighttimetotherightaccount

Source: LUMA Partners

2 5 5 4 3

1516

2118

12

0

5

10

15

20

25

30

Q12015 Q22015 Q32015 Q42015 Q12016

Over$100M Under$100M

10

MarTech – Notable DealsAcquirer Capital

RaisedEnterprise

Value Comments

Source: Crunchbase

$73M $200M WithAddThis,Oraclebringsthecompany’sdataandinsightsfrom15millionwebsitestoOracle’sDataCloudandIDGraph

FormerlypartofIntuit N/A AftersellingtoIntuit for$424millionin2012,marketingautomationfirmDemandforce

wasacquiredbyInternetBrandstogrowitshealth-relatedmarket

$39M $135M NICESystemsacquiredcustomeranalyticscompanyNexidia toexpanditsanalyticsofferingtoincludeadvancedbusinessintelligence,compliancesolutionsandmore

$60M $130M ByacquiringUStreamanditsvideolivestreaming technology,IBMisquicklyformingacloudservicesunitaftercompletingseveralacquisitionsinthisspace

$40M $342M Web.com,aproviderdigitalmarketingsolutionsacquiredYodle,aprovideroflocalbusinessmarketingtoolswhichgenerated$200millioninrevenuelastyear

11

91

7 4 7

13 26

2523

27

0

5

10

15

20

25

30

35

40

Q12015 Q22015 Q32015 Q42015 Q12016

Over$100M Under$100M

Digital Content M&A Activity

Ø Observations§ WarnerBros’acquisitionof

DramaFever andFilmOn’sacquisitionofCinemaNowhighlighttheM&AactivityintheSVOD/OTTspacethisquarter

Ø MovingForward– MessagingPlatforms§ Popularmessagingappslike

FacebookMessengerandKik arebuildingplatformsthatenableuserstodonewthingsoutsideofmessaginglikerequestingcarservicetotalkingtobusinesses

§ Messagingplatformsarebecomingnewdistributionchannelsforcontent,apps,andservices

#ofTransactions

Source: LUMA Partners

12

Digital Content – Notable DealsAcquirer Capital

RaisedEnterprise

Value Comments

Source: Crunchbase

$11M $100M Snapchat acquiredBistrips,themakeroftheemoji-creator Bitmoji app,as itcontinuestoinvestincreatingmoreinteractiveexperiencesforitsusers

$271M $250M Hudson’sBayCompanyacquiredonlineretailerGiltGroupe,whichpioneered theflashsalese-commercemodel,tocomplementHBC’sSaksOffFifthbusinessanditsstores

N/A $155M ChinesegamingcompanyBeijingKunlunTechCo.acquiredamajoritystakeinGrindr,thepopulargaydatingappwithover10millionusersworldwide

N/A N/A Mediagiant,Univision, acquiredacontrollingstakeofTheOnion,thesatiricaldigitalmediacompany,toreachandengagemoreofmillennialaudiences

$46M N/A Afterinvestingin ridesharingcompanyLyft,GeneralMotorsacquiredSidecarforitstechnologythatwillenabletheautomakertodevelopitsownridesharingservice

$22M $250M MicrosoftacquiredSwiftKey,themakerofpopularmobilekeyboards, foritsadvancedAIandmachinelearningtechnology

13

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1/4/16 1/18/16 2/1/16 2/15/16 2/29/16 3/14/16 3/28/16

TUBE RUBI TRMR MXPT YUME FUEL CRTO MRIN NASDAQ

Q1 2016 Stocks Performance – Ad Tech

Ø AdTechWeatherstheStorm§ AdTechstocksweatheredthe

marketstorm,finishingabove1%attheendofQ1

§ AdTechstocksaccomplishedararefeat,outperformingbothMarTechstocksandtheNASDAQ

Ø Highlights§ RUBIsoared15%afterbeating

earningsexpectationsfromQ42015andhittingover$1Binmanagedrevenuefortheyear

§ Afterfalling82%lastyear,MXPTendedQ1up9%thankstoQ4earningsandFY16guidancethatsurpassedanalystestimates

Market Data as of 3/31/16

14

-50%

-40%

-30%

-20%

-10%

0%

10%

1/4/16 1/18/16 2/1/16 2/15/16 2/29/16 3/14/16 3/28/16

CRM MKTO HUBS BCOV BV DWRE JIVE NASDAQ

Q1 2016 Stocks Performance – MarTech

Ø MarTechOfftoaRockyStart§ MarTechstockscrashedby15%

thisquarterafterfallingover4%lastyear

§ Bymid-February,MarTechstocksfelltoitslowestpointinthequarter,downover33%

Ø Highlights§ SaaS leaderswerehithardas

MKTO,HUBS,andDWREcollectivelyshed25%oftheirmarketcapbytheendofQ1

§ BCOVwastheonlyMarTechstockwetrackthatoutperformedtheNASDAQafterturninginasecondstraightprofitablequarter

Market Data as of 3/31/16

15

Q1 Key Startup Financings to WatchLead Investor Capital Raised Valuation Comments

Source: Crunchbase

N/A $56M N/A Bloomreach,ane-commercepersonalizationplatform,workswithmorethan175customersandcollectsdatafrom21%ofallU.S.e-commerce

N/A $100M $400M OnlineretailerBoxedhasraisedatotalof$132millionoffundingtocompetehead-to-headwithwholesaleclubslikeCostcoandSam’sClub

$48M N/A BusinessintelligencecompanyLookerhasgrown itscustomerbase,whichincludeeBayandKohler,to450 since lastyear

$794M $4.5B Augmentedreality (AR)startupMagicLeap’slatestSeries Croundoffundingwillenablethesecretivecompanytobringitsfirstproducttomarketsoon

$50M N/A Moat, amarketinganalyticsandintelligenceplatform,ismovingpublishersandmarketerstowardusingattentionasthenewdigitalmarketingcurrency

$60M N/A TheTradeDesk,anindependentadvertisingtradingdesk,raisedanotherroundoffundingforitssharebuybackandlong-termgrowthstrategies

$430M $16B WeWork,thepopularco-workingspacestartupthathas50,000membersin21cities,raisedfundingtoentertheAsianmarketasitcontinuestogrow

1616

LUMA’s Recent Content

TheFutureofTVPresentedatUpfrontSummit

Ø AttheUpfrontSummit,wepresentedtheFutureofTV,whereweexplainedtheconvergenceofTVanddigitalvideoandwheretheindustryisheadednext

StateofDigitalMarketingPresentedatDMSWest15

Ø AtourinauguralDigitalMarketingSummit,wepresentedtheStateofDigitalMarketing,whichprovidesourviewsonthemarketandsignificanttrendsinthedigitalmarketingecosystem

DigitalBrief004BacktoMadMen

Ø InourfourthDigitalBriefweexplainedwhatthefutureholdsforadagenciesandfivestrategiestheymaketakeinacompetitivemarketplace

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December 2011 February 2016

has been acquired by

The undersigned acted as co-advisor to Tapad, Inc.

LUMA’s Recent Deals

December 2011 March 2016

has been acquired by

The undersigned acted as co-advisor to Smartclip’s shareholders

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acquiredby

February2016

Tapad to be Acquired by TelenorLUMA Partners acted as Co-Advisor to Tapad, Inc.Announced February 1, 2016

StrategicRationaleØ ThroughtheacquisitionofTapad,Telenorwilladdadvanceddigitalcapabilitiestoitscore

telecombusinessandsecureafootholdinthegrowingadvertisingandmarketingtechnologyindustry.

Ø Themobileadvertisingmarketisgrowingrapidlyasmarketingspendcontinuestoshiftwiththechangeinconsumerbehavior.Thegrowingnumberofdevicesandtimespentacrossthemismakingidentityandcross-devicecapabilitiesanecessityindigitalmarketing,drivingthedevelopmentofbettertoolsthataddressdevicefragmentation.

Ø Tapad hasbecometheleaderinthisspacewithitsDeviceGraphtechnologythatconnectsuserbehavioracrossscreensandenablesmeasurementandmonetizationfromtheseaudiences.

Ø WithTelenor’s200millionmobilesubscriberbaseacross13markets,thecombinationofTelenorandTapad’s innovativetechnologyopensuplargeopportunitiesacrossestablishedandemergingmarketsaroundtheworld.

Ø Tapad,aNewYork-basedstartup,wasestablishedin2010byNorwegianentrepreneurAreTraasdahl,thecompany’sChiefExecutiveOfficer.Thecompanydeliversunifiedcross-devicemarketingtechnologysolutionsthatgivepublishers,marketersandtechnologyprovidersaholisticviewofconsumersacrossdevicesandscreens,includingsmartphones,tablets,homecomputersandsmartTVs.

Ø TelenorGroupASA(OB:TEL)engagesintheprovisionoftelecommunications,data,andmediaservices.Itoperatesthroughthefollowingsegments:MobileCommunication,FixedLineCommunication,Television-BasedActivities(Broadcast),andOtherOperations.Thecompanywasfoundedin1855andisheadquarteredinFornebu,Norway.

$ OverviewØ On2/1/2016,TelenorGroupannounced

thatitwouldacquireTapad for$360millionincash

Ø Tapad co-foundersAreTraasdahl andDagLiodden haveretaineda5%stakeinthecompany

Ø Dealterms:Ø Enterprisevalue:$360millionØ EV/LTMRevenue:6.3xØ EV/2015Revenue:6.3xØ EV/2016ERevenue:4.0x

Cross-ScreenMarketing

Algorithmic match

Probabilis)c Matching

Device Matching

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acquiredby

March2016

Smartclip to be Acquired by RTL GroupLUMA Partners acted as Co-Advisor to Smartclip’s ShareholdersAnnounced March 21, 2016

StrategicRationaleØ WiththeacquisitionofSmartclip,RTLGroupbroadensitsdigitaladvertisingcapabilitiesby

addingSmartclip’s digitalvideoandconnectedTVsolutions.

Ø TheconvergenceofTVanddigitalvideoisquicklybecomingareality.Thegrowingnumberofscreensusedforvideoviewinghassparkedtheneedforcompletesolutionproviders.

Ø Smartclip offersdigitalvideoadvertisinginventoryfromover700publishersandadservingcapabilitiestoInternet-connecteddevices.

Ø Smartclip willstrengthenRTLGroup’svideomonetizationstrategybycomplementingSpotX,aprogrammaticdigitalvideocompany.

Ø ThecombinationofSmartclip andRTLGroupgivesthemediacompanythetoolstogainmarketshareinthefastgrowingvideoadvertisingmarket.

Ø Smartclip deploysproprietary,custom-developedtechnologytodistributevideoadvertisingacrossallplatformsanddevices,controlledbyadservers.Whetheronlineusersconsumevideoontheweb,onmobiledeviceslikesmartphonesandtablets,oronconnectedTVplayersadvertisersandtheirmediaagenciescanreachtheexacttargetaudiencestheyseekfortheirbrandmessage.

Ø RTLGroupistheleadingEuropeanentertainmentnetwork,withinterestsin57televisionchannelsand 31radiostationsandcontentproductionthroughouttheworld.RTLGroup’sfamiliesofTVchannelsareeitherthenumberoneornumbertwoineightEuropeancountries. Withcurrently5.3billionmonthlyvideoviews,RTLGroupistheleadingEuropeanmediacompanyinonlinevideo.

$ OverviewØ On3/21/2016,RTLGroupannouncedthatit

wouldacquireSmartclip forabout$52.6millionincash

Ø RTLGroupwillacquirea93.75%stakeinSmartclip

Ø Dealterms:Ø Enterprisevalue:~$56million

ConvergentTV&Video

Partnerships “Netflix + Disney”

2020

LUMA’s Differentiated Value Proposition

1. UnparalleledIndustryKnowledge

2. StrategicApproach

3. ExecutionExcellence

2121

acquired by

March 2015

merged with

May 2015

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September 2015

a division of

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March 2016 February 2016

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November 2012

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LUMA’s Content-Driven, Expert-Based Approach

ConferenceKeynotes

Publications(over2millionviews)

CorporateTeach-ins

LUMAscapes(over5millionviewsfrom211countries)

DISPLAY MOBILE VIDEO SOCIAL NATIVE SEARCH MARTECH COMMERCE GAMING STRATEGICBUYERS

CompletedDeals

DigitalBriefs

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