GLOBAL AD TECH COMPANY FOR BRANDS & PUBLISHERS · 2018-03-21 · GLOBAL AD TECH COMPANY FOR BRANDS...
Transcript of GLOBAL AD TECH COMPANY FOR BRANDS & PUBLISHERS · 2018-03-21 · GLOBAL AD TECH COMPANY FOR BRANDS...
GLOBAL AD TECH COMPANYFOR BRANDS & PUBLISHERS
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This presentation contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995with respect to the business, financial condition and results of operations of Perion. The words “will”, “believe,” “expect,” “intend,” “plan,” “should” and similarexpressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion withrespect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to bematerially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financialinformation, including, among others, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future,risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactionswill divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potentiallitigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets inwhich the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures, marketacceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whetherreferenced or not referenced in this presentation . Various other risks and uncertainties may affect Perion and its results of operations, as described in reportsfiled by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December31, 2016 filed with the SEC on March 7, 2017. Perion does not assume any obligation to update these forward-looking statements.
FORWARD LOOKING STATEMENTS
Non-GAAP financial measures, including adjusted EBITDA, consist of GAAP financial measures adjusted to exclude acquisition related expenses, other non-recurring expenses, share-based compensation expenses, accretion and gain from the reversal of acquisition related contingent consideration, impairment ofgoodwill, amortization and impairment of acquired intangible assets and the related taxes thereon, as well as certain accounting entries under the businesscombination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on itsfair value at the date of acquisition. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other itemsthat are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management usesin planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate ourbusiness and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performanceof our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, andshould be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financialmeasures may differ materially from the non-GAAP financial measures used by other companies.
NON-GAAP MEASURES
Proprietary| NASDAQ: PERI
Perion Facts
• Founded in 1999
• Publicly listed 2006 (NASDAQ), 2007 (TASE)
• Reversed merger with Conduit (2014)
• Acquired Undertone in 2015
• ~500 employees with main offices in Tel Aviv and New York
Proprietary| NASDAQ: PERI
Investment Highlights
$274.0M
EBITDA
$28.9M
Complete Solutions For Advertisers & Publishers
Cash Flow
$36.0M
Revenue
150+ Fortune 500 companies
Extended agreementthrough 2020
• Profitable for 10+ years
• Market leader in digital advertising and search distribution
• Strong partnerships with
2017
Q4/17 $77.3M $11.9M $7.2M
Guidance 2018 $28-32M
Proprietary| NASDAQ: PERI
“Perion reported Q417 results above expectations”
2017
Actual Needham
Revenue ($M) $274 $272
Adj EBITDA ($M) $29 $26% of Revenue 11% 9%
Non GAAP EPS $0.24 $0.25
Actual vs Estimates:Revenue ($M) 101%Adj EBITDA ($M) 113%Non GAAP EPS 96%
Source: https://needham.bluematrix.com
Proprietary| NASDAQ: PERI
Search & Social Advertising
Brand Advertising
Awareness
Consideration
Intent
Purchase
High Impact | Data-driven | CreativeProgrammatic | Video | Retargeting
Leading in Search distribution| Innovative Technology | Leading
Social Partners
We deliver data-driven online advertising and search solutions to brands and publishers
Who we are?
Proprietary| NASDAQ: PERI
Key Priorities & Activities
Powering growth by focusing all the efforts
on the following key priorities
• Optimized cost structure
• Focused on profitability
• Media Buying
Organic Growth:
Sales First Approach
• Search
• Advertising
Differentiated Technology
• Campaign Intelligence
• Engineering
• Partnerships
Operational Efficiency
Perion Advertising
Confidential
Perion Addressable Market Accelerated Growth
US Digital Ad Spending, by Format (USD, B)
10
18
13
22
18
27
37
56
2017
2021
Rich Media Video Standard Display Search Other
Global Digital Ad Spend 2017:
$229B
Global Digital Ad Spend 2021:
$376B
Source: eMarketer, October 2017
83
129
CAGR 15% 14% 11% 11% 12%
Confidential
Perion Mastering Reserved Programmatic
33 39
46
78%
82%
84%
-
10
20
30
40
50
2017 2018 2019
74%
76%
78%
80%
82%
84%
86%
US Programmatic Digital Ad Spending (USD, B),% Of Total Digital Display Ad Spending
56%
Reserved high quality Inventory
Unreserved
2017 Programmatic Split
Source: eMarketer, September 2017
2
3
4
5
1 Proprietary
High-Impact Formats
High Viewability
High Tier publishers
Multi devices & platforms
Quality Traffic
Why Undertone ?
Consumers
Proprietary Technology
Multiple formats, channels and devices
Brands
Award Winning Creative
NASDAQ: PERI
Proprietary| NASDAQ: PERI
PHARMACEUTICAL TECH/TELECOMFIN SERVICES RETAILCPGAUTO
Serving The World’s Best Brands Across All Verticals
Proprietary| NASDAQ: PERI
P&G's Marc Pritchard On Avoiding The 'Crap Trap' In Advertising
“We emphasized the importance of consistency in brand building.
Focusing less on volume of advertising [and] more on quality [to] make sure
it’s consistently seen as your brand across the wide variety of mediums to
get people to turn toward it.”
(Procter & Gamble's Chief Brand Officer, Marc Pritchard, Forbes)
Source: https://www.forbes.com/sites/avidan/2016/10/23/pgs-marc-pritchard-on-avoiding-the-crap-trap-in-advertising/#7a86e8c776f7
Proprietary| NASDAQ: PERI
Undertone Offering Perfectly Meets Market Trends
Our Offering Market Trends
Proprietary Ad
builder system
• Higher scale & pace of targeted audiences• Innovative creative formats
Dynamic tags
White-listed pubs
• Brand safety across quality sites• Contextual relevancy
ML based campaign m
anagement system
• ROI of media spent• Optimization based on clients’ KPIs
Holistic end-to-end
solution
• Fewer but better partners• Cross platforms & screens
Across all
touchpoints
• High Impact ads in all platforms• Platforms are synced to generate optimization
Proprietary| NASDAQ: PERI
We approach Creative as both the Art & Science that connects
brands to consumers.
We design with the user experience in mind:
• Innovation lab consumer tests
• In-house full-service creative studio with deep brand and design expertise
• Data driven best practices
Creating High Quality Ads
Proprietary| NASDAQ: PERI
Screen Shift ExpandableAdhesion
Page Grabber See Through
A Glimpse Into Our Advertising Solutions
NASDAQ: PERI
Engaging Video Storytelling Drives Purchase Intent for Puffs
10%Lift in Purchase Intent
CTR 36X Industry Rich Media Benchmark1
Sexy, But Simple Car Imagery Sells 11,000+ Cars for BMW
11,310 Vehicles Purchased
21 seconds Interaction Time
Fun, Unexpected Creative Drives Site Visits for Garmin
635% Lift in Unique Site Visitors
389% Lift in Number of Site Visits
173%Lift in Store Visits
178% Lift in Site Visits
Appealing Image Gallery Drives Consumers to Raymour & Flanigan
Sources: Sizmek1
Delivering Strong Business Outcomes …
Proprietary| NASDAQ: PERI
60%
30%
0%
90%
45%
0%
3%
1.5%
0%
50%
25%
0%
38%
58% 85%
30%
*MOAT benchmark; *the ratio of those that converted from hovering to interacting
Sources: IPSOS; Sizmek 2015 Databook; Undertone 2016 Benchmarks
2.97%
0.22%
34%
0.98%
IPSOS Recall/Standard vs. Undertone HI
MOAT/Standard vs Undertone HI
Sizmek/RM vs Undertone HI
Sizmek/RM vs Undertone HI
EngagementAwareness Attention* CTR
Industry Undertone Industry Undertone Industry Undertone Industry Undertone
… Through High Performing Campaigns
Proprietary| NASDAQ: PERISource: Undertone Data, Google Insights, IAS, MOAT; UDMS 2016 Benchmarks;Based on Undertone Page Grabber and Standard 300 x 250
86%Lower Cost Per Click
50% Lower Cost Per Engagement
$1.00
$7.14
$10
$5
0
$.20
$.10
0
$0.10
$0.20
Industry Undertone Industry Undertone
… With Attractive Return On Investment
NASDAQ: PERI
Undertone Growth Strategy
Short-term Long-term
Artificial Intelligence to better optimize campaigns performance, by delivering to targeted audience, coherent brand message across all
media platforms & screens
Innovative technology, enabling advertisers to manage their brand awareness campaigns with holistic,
scalable & profitable solution
Perion Search
Confidential
Leading Search Syndication Player
An extended agreement through 2020, bolstering the relationship with Bing and expanding Perion’s reach within the search ecosystem
Attractive stable monetization for
publishers
Fully compliant with market regulations
Generating strong
cash flowCoverage in top
performing leading countries
Proprietary| NASDAQ: PERI
While Mobile Usage Is On The Rise, Desktop Usage Has Remained Consistent
Source: Mary Meeker “Internet Trends 2017”
Confidential
Search Market
34%Bing Ads Search Share
in US (PC)
136MBing Unique Searches
5.4BBing Monthly Searches
Source: eMarketer, September 2017Source: Microsoft, August 2017
Confidential
Search Future Plans
Expand product offerings through Bing
Diversify the
publishers pool
Develop internal
offerings (O&O, D2S)
Long term renewal with Bing in progress featuring expansion into adjacent products
ConfidentialProprietary| NASDAQ: PERI
Leader In Premium High Impact Advertising
Leader In Search Distribution
Long Standing Partnerships With Key
Industry Players
Data Driven Innovative Technology
Massive & Fast Growing Addressable Market
Attractive Financials
An Attractive Investment Opportunity In A Fast Growing Market
Thank You