The Changing Business

Landscape: M&A Review

Gus Tai – General Partner, Trinity Ventures
Lots of Activity
Audience/Advertising Relationship
Old School – Circa 2005

Audience

Audience engagement
concentrated on a few websites
 Audience/Advertising Relationship
Current Day

tablet
Audience

UGC Social
Engagement
Buzz Computer

Audience now engaged with advertising

in more ways, for more hours a day, in more places
 Advertising Value Chain
With audiences visiting only the top 10
consumer websites, it was easy to work
directly with the consumers

Display/banner ads

Advertisers
Advertisers Agency Publisher
(DSP)
 Advertising Value Chain
Ad networks began
aggregating audiences
across the web

Publisher
Advertisers Agency Ad Networks Publisher
(DSP)
 Advertising Value Chain
Technology based start-ups
saw value in creating a
marketplace

Advertisers Agency Ad Networks Ad Exchanges Publisher

(DSP) (SSP)
 Advertising Value Chain
Need for new rich
media ad serving
platforms

Publisher
Advertisers Agency Ad Networks Ad Exchanges Ad Serving Publisher
(DSP) (SSP) Platform
 Advertising Value Chain
With increased focus on measurable effectiveness,
data service providers emerge to improve ROI

Data Service Providers

Advertisers Agency Ad Networks Ad Exchanges Ad Serving Publisher

(DSP) (SSP) Platform
 Advertising Value Chain
Wow! That’s complicated!

Data Service Providers

Advertisers Agency Ad Networks Ad Exchanges Ad Serving Publisher

(DSP) (SSP) Platform
 ILLUSTRATIVE

Advertising Value Chain – Current

Strong consolidation as
$5.00 CPM
networks benefit from
economies of scale
($0.75 CPM) (Apple, Google,
Microsoft)

Value proposition switches

($2.00 CPM)
to “efficiency” of buying
($0.75 CPM) $1.00 CPM
Strong focus on media by specific customer ($0.25 CPM)
segments ($0.25 CPM)
understanding
“how to”
Advertisers
segment Agency Ad Network Data Ad Ad Serving Publisher
customers; (DSP) Provider Exchange Platform
pressure to spend (SSP)
Publishers work to
more online Big innovation around maintain/build captive
Early innings of
analyzing social, audiences
innovation as new
behavioral, purchasing
media grows
and geographic data
Source: JEGI estimates/2010 IAB report
Let’s look at the Headlines Again…
 Apple’s Role in the Value Chain

Data Providers

Advertisers Agency Ad Networks Ad Exchanges Ad Serving

Publisher
(DSP) (SSP) Platform
Let’s look at the Headlines Again…
Let’s look at the Headlines Again…
 Trends I See
DATA:
It’s about analyzing the data – not gathering the data.
Data analysis will become proprietary and valuable.

MEDIA:
It’s about content innovation – not repurposing traditional ads online.
Think about ‘sight, sound, motion and social’ across advertising formats.

LOCATION:
It’s about the ‘feet’ – not just the eyeballs.
Online advertising will measurably/massively drive offline purchases.
gus@trinityventures.com