DoubleClick May 2004 Investor Presentation - … · DCLK SOLUTION Abacus found prospects in...
Transcript of DoubleClick May 2004 Investor Presentation - … · DCLK SOLUTION Abacus found prospects in...
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DoubleClick
May 2004 Investor Presentation
We Make Marketing Work Better
plan
execute
analyze
© 2003 DoubleClick Inc. All Rights Reserved. May 18, 2004
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Forward Looking StatementsThis presentation contains forward-looking statements including earnings and revenue projections and future plans. The results or events predicted in these statements may vary materially from actual results. Factors that could cause actual events or results to differ from expectations include: lack of growth or decline in online advertising and marketing, intense competition in our industry, integration failures, changes in government regulation, operational failures and other risks that are contained in our SEC filings; including our most recent report on Form 10-Q.
Forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we may choose not to do so even if our estimates change. We will also refer to certain non-GAAP financial measures in this presentation. The non-GAAP financial information is provided as a compliment to results provided in accordance with GAAP and management uses this information in analyzing the progress of the business.
Please see the DCLK earnings press release dated April 15, 2004, for a reconciliation of EBITDA* to GAAP net income. Please see the Form 8-K filed on April 15, 2004 by the Company with the SEC for a discussion of why the Company believes EBITDA is a useful financial measure to investors and how management uses it.
*As presented herein.
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Agenda
• DoubleClick Overview• Data Overview• Tech Overview - Marketing Automation• Tech Overview - Ad Management• Q104 Financial Highlights• Performics Overview• Takeaways• Q&A
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DoubleClick Mission
Mission: • We make marketing work better
What does that mean?:
• We help our customers acquire new customers cost effectivelythrough innovative data and technology tools
• We add value by helping to increase our clients productivityand return on investment for their marketing dollars
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DoubleClick’s Marketing Solutions
ASP and software Tools for ad management (web publisher & agency)
Online media planning tool for agencies
Rich media tools
Email delivery tools
Enterprise Marketing Solutions• Campaign Management• Marketing Resource
Management
Web analytics tool
Catalog customer modeling
Customer Data Management Solutions and Services
Online Advertising Marketing Automation Data Solutions
TECHSOLUTIONS DATA
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Data Solutions
Abacus Alliances (US B2C, US B2B, International)
Data Management
Data Management
Solutions
Database Marketing
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Database Marketing
EmailMarketing
DatabaseMarketing
Online Advertising
Marketing Analytics
Marketing AutomationAbacus US B2C, US B2B, International, ChannelView
Abacus Alliance Revenue: $20.4 MM 1Q 2004 (reported in Data Segment)
Data Segment Gross Margin: 59.7% 1Q 2004
Primary Competitors: Experian, Info USA, D&BList Brokers
History: 14 year old businessAcquisition in 1999
Data Segment Revenue: $22.8 MM 1Q 2004
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How Does an Abacus Alliance Work?
Abacus B-to-CAlliance
Database
Member ‘A’Transactions
Member ‘B’Transactions
Member ‘C’Transactions
Abacus Proprietary
Modeling
Better New Prospects
More Info on Existing
Customers
Best Names off of 3rd Party
Lists
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Case Study: Abacus
OBJECTIVE Maximize revenue potential from existing customer lists (housefile)
CLIENT National Geographic Catalog
DCLK SOLUTION Abacus found prospects in under-used parts of list; among NG magazine subscribers w/ purchases similar to the NG Catalog; found names w/ purchase activity from similar offers
CUSTOMER From 2001 to 2002, housefile response RESULTS rates increased 225 bps; profitable
housefile circulation rose 136%; housefile performance increased by 58%
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Data Management
EmailMarketing
DatabaseMarketing
Online Advertising
Marketing Analytics
Marketing AutomationData Management Solutions
Data Management: $2.4 MM 1Q 2004 (reported in Data Segment)
Data Segment Gross Margin: 59.7% 1Q 2004
Primary Competitors: Experian & Various Smaller Players
History: 20+ year old business Acquisition in 2003
Data Segment Revenue: $22.8 MM 1Q 2004
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What is Data Management?The design, development, and management of a
client’s customer marketing database (i.e. house file)
The suite of tools to plan, execute, and measure multi-channel marketing campaigns
The production services to update databases and execute marketing campaigns
The analytics/modeling and strategic advice to help refine future marketing campaigns
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Enables Bundled Tech and Data Product Suite – Data Management links email, enterprise marketing, and website analysis with Abacus data to form a comprehensive, full-service, bundled solution
Solidifies Abacus Alliance Position – we can improve the accuracy of the Alliance data and may increase our sales by delivering larger prospect universes in a more timely manner
Client Retention – Managing the customer marketing database helps lock in strategic relationships & residual revenue streams
Clients Demand It –We believe that clients are actively seeking new service providers due to migration to multi-channel marketing
Synergies via Data Management
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Maturity
Ship It
Prove ItAbacus Japan
Abacus UK
US B-to-C
US B-to-B
Data Segment Revenue Growth Through a Balanced Product/Market Portfolio
ChannelView
5-10% growth
25-100% growth
Early StageAbacus Deutschland
Data Management
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Marketing Automation ProductsWebsite
Analytics
SiteAdvanceDARTMail
Campaign Management
Ensemble
Email Marketing
Marketing Resource
Management
SmartPath
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Marketing Automation
EmailMarketing
DatabaseMarketing
Online Advertising
Marketing Analytics
Strategic Services
Marketing AutomationDART Mail, SmartPath, Ensemble and SiteAdvance
Revenue: $12.0 MM 1Q 2004(Reported with the Tech Segment)
History: 2002 Launch or Acquisition
Primary Competitors: E.piphany, Digital Impact, Experian,& other single point players
Tech Segment Gross Margin: 70.4% 1Q 2004
Tech Segment Revenue: $45.3 MM 1Q 2004
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Crate & Barrel used DARTmail to promote a retail sales event to drive furniture store traffic and sales.
• Used DARTmail to geo-target customers in their database.
• Used DARTmail to measure the response of the campaign.
Results• Store sales increased by more than 50% over
the previous week during the email promotion.
• DART mail campaign successfully drove store traffic and gave customers the opportunity to browse online before visiting stores.
Case Study: DART Mail
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DoubleClick Enterprise Marketing Solutions
• Project Management
• Workflow
• Content Management / DAM
• Budget and financial management
• Predictive Analytics
• Descriptive Analytics
• Response Management
• Campaign Reporting
• Optimization ~
• DCLK will automate strategic planning, asset and collateral production, customer segmentation, and analysis across channels*:
* This list describes planned Ensemble and SmartPath integrated solution, expected before 2H2004.
~ Optimization features are planned for a later version.
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Case Study: SiteAdvance
Flax Art & Design needed to increase sales on website, decrease drop-off rate site, & simplify purchases.
• SiteAdvance team analyzed entry points, online search and checkout –usually main areas driving rate of abandonment and lost sales.
Results
• Exit rate dropped from 71% to 40 %
• New visitor drop-off decreased 31.5%, which along with improved search words, led to 4.8% increase in annual revenue.
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Ad ManagementOnline Publisher Advertiser/Agency
• DART for Advertisers
• MediaVisor
• DART Motif
• Site Directory
• DART for Publishers
• DART Enterprise
• DART Motif
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Ad Management
EmailMarketing
DatabaseMarketing
Online Advertising
Marketing Analytics
Strategic Services
Marketing Automation
Tech Segment Gross Margin: 70.4% 1Q 2004
Ad Management Revenue: $33.3 MM 1Q 2004 (reported within Tech Segment)
History: 6 year old business
Tech Segment Revenue: $45.3 MM 1Q 2004
DART Online Ad Management Solutions
Primary Competitors: aQuantive, 24/7, ValueClick, various smaller companies
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DoubleClick Ad Management Solutions
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Centralized campaign planning, execution, reporting,
analysis , & creative
optimization
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Case Study: DFA Unilever needed:• A solution that could support management and execution of
campaigns across each brand’s online advertising agency • A partner with robust wireless, research, and strategic ad
planning solutions • A partner with strong global presence
DFA is the solution:• 95% of brands use DFA and Spotlight tags to measure site
and creative ROI with help of assigned Project Manager• Developed test to validate Internet as effective vehicle for
brand and program awareness
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DART Motif Makes Rich Media Work Better
• Easy, simple, integrated workflow for creation, trafficking, and reporting
• Fast, streamlined process -- automated from start to finish
• Supports all major rich media ad types• Quality assurance through live preview testing • Reduces errors • Centralized reporting provides accuracy and
consistency in comparing rich media and non-rich media ad effectiveness
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Across the Board Year-over-Year Growth in Q1 04• Revenue increases in every product group
• Record operating profit in TechSolutions
• All-time best TechSolutions gross and operating margins
• Ad management revenues up 7%
• Marketing automation revenues up 15%
•Data up 23%, or 10% excluding Data Management
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Q1 04 Profitability Highlights
• Five consecutive GAAP profitable quarters Q1
• All time best quarterly overall gross margins
• Operating profit improved from ($ 539 K) to $2.6 MM year-over-year
• Highest-ever Q1 EBITDA* in 2004
* See statement on non-GAAP measures, such as EBITDA, on the disclaimer page of this presentation.
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Other Financial Highlights• Repurchased 1.9 million shares in Q1with an aggregate purchase price of $20.4 million
• Expect to have double-digit revenue and GAAP Net Income, growth, be EBITDA and CFFO positive in 2004
• DCLK will update guidance on July earnings call, which will include anticipated effects of Performics acquisition.
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• Only industry-leading provider of both search engine marketing and affiliate marketing technologies
• Performance-based Marketing• Based in Chicago• 120 employees• 200 + customers• Experienced management team• Profitable, EBITDA positive, & expected to have 50%
year-over-year revenue growth in 2004.
Performics Overview
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Solutions for Cataloguers, Marketers, Agencies, and Publishers
Search Engine Marketing• Provides the technology and support to clients to automate paid
placement, paid inclusion and comparison shopping listings across multiple search providers
Affiliate Marketing• Drives incremental sales/actions for marketers by managing, tracking
and reporting on marketer’s offers across multiple affiliate sites.
• Helps publishers monetize inventory through sponsored links
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Deal Overview• All-cash deal totaling $58 million, plus an earn-out of up to $7 million (for a
potential total of $65 million).
• Expected to close by mid-June.
• Will expand DCLK’s Search Marketing business & establish Affiliate marketing program.
• Performics will continue to be based in Chicago and DoubleClick expects to increase that workforce.
• Search Engine Marketing tool will be offered as a stand alone product & later integrated with DFA.
• Should be immediately accretive to EBITDA and should add at least $10 MM in revenues in 2H04.
• DCLK will update post-acquisition guidance on July earnings call.
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DoubleClick’s Marketing Solutions: 2H04*
DATA
ASP and software Tools for ad management (web publisher & agency)
Online media planning tool for agencies
Rich media tools
Email delivery tools
Enterprise Marketing Solutions• Campaign
Management• Marketing
ResourceManagement
Web analytics tool
Online Advertising
Marketing Automation
Performance Based
Marketing
TECHSOLUTIONS
Data Solutions
Catalog customer modeling
Customer Data Management Solutions and Services
Multi-Channel Marketing Analytics
Search Engine Marketing Management
Affiliate Marketing
DATA
* Upon assumed completion of Performics acquisition.
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Strategic Rationale• Performance-based marketing is a fast growing and attractive market.
• Significant customer overlap.
• Performics will benefit from DoubleClick’s global presence and gain access to DoubleClick’s suite of products.
• DCLK customers will leverage wider range of marketing solutions and enjoy centralized reporting for entire online spend.
• Cataloguers, advertisers, marketers, and publishers will have single solution partner & unified reporting for planning, executing, and analyzing campaigns.
• DCLK is acquiring fast growing company.
• DCLK will solidify its position as the single-source marketing platform.
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Takeaways• DoubleClick already offers the most comprehensive suite of Technology and Data solutions for Advertisers, Cataloguers, Marketers, and Web Publishers
• Performics deal will enhance the offerings available to both DoubleClick and Performics customers
• Further details on Performics deal will be given on July earnings call