Marin Software Investor Overview

Report
Investor Overview
March 2014
Safe Harbor
This presentation contains forward-looking statements including, among other things, statements regarding our business,
momentum, growth and future plans. These forward-looking statements are subject to the safe harbor provisions created by the
Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors,
including but not limited to (i) adverse changes in general economic or market conditions; (ii) delays, reductions or slower
growth in the amount spent on online and mobile advertising and the development of the market for cloud-based software; (iii)
competitive factors, including but not limited to pricing pressures, entry of new competitors and new applications; (iv) adverse
changes in our relationships with and access to publishers and advertising agencies; (v) level of usage and advertising spend
managed on our platform; (vi) our ability to expand sales of our solutions in channels other than search advertising; (vii) our
ability to expand our sales and marketing capabilities and manage our growth effectively; (viii) the development of the market for
digital advertising or revenue acquisition management; (ix) acceptance and continued usage of our platform and services by
customers and our ability to provide high-quality technical support to our customers; (x) material defects in our platform, service
interruptions at our data center or breaches in our security measures; (xi) our ability to develop enhancements to our platform;
(xii) our ability to protect our intellectual property; (xiii) our ability to manage risks associated with international operations; and
(xiv) our ability to retain and attract qualified management and technical personnel.
These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition,
significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission,
including in the section entitled “Risk Factors” in our quarterly report on Form 10-K for the year ended December 31, 2013, and
our other filings with the SEC, which are available free of charge at the Investor Center section of our website at
http://investor.marinsoftware.com/, all of which could cause actual results to differ materially from expectations set forth in the
forward-looking statements. All forward-looking statements in this presentation reflect Marin’s expectations as of February 11,
2014. Marin assumes no obligation to, and expressly disclaims any obligation to update any such forward-looking statements
after the date of this presentation.
1
SaaS Platform for Digital Ad Management
Measure
Manage
Optimize
Better Decisions
Time Savings
Financial Lift
2
Revenue Acquisition Management Leader
 673 active advertisers
 6.3 billion ad units managed
 Campaigns in 160 countries
 $6.0BN of annualized ad spend in Q4 2013
Annual Revenue ($MM)
$77.3
$59.6
$36.1
$19.0
$7.5
2009
2010
2011
2012
2013
3
Investment Highlights
Serving Large and Fast Growing Digital Ads Market
Search
Display
Leader in Revenue Acquisition Management
Comprehensive Analytical and Transactional Platform
High Growth SaaS Model with Participatory Economics
Social
Mobile
Proven Results for Blue-Chip Customers
4
Large, Fast-Growing Digital Advertising Market
Source: Magna Global, Digital Media Forecasts, December 2013. $ in billions *CAGR 2013-2018
5
Increasing Digital Marketing Challenges
Complexity
Fragmentation
Scale
6
Day in the Life of a Digital Marketer
Operational Tasks
Optimizations
Strategic Opportunities
 Format tracking codes
 Refine keywords and targeting
 Allocate budgets
 Stitch cost and revenue data
 Test creative and landing pages
 Launch new products and offers
 Pivot and trend data in excel
 Geo and device targeting
 Test new channels and publishers
 Build reports for management
 Adjust and optimize bids
 Forecast volume, profit and cost
 Format bulk sheets for upload
 Day-part campaigns
 Adjust to budget variances
7
Revenue Acquisition Management Platform
Publisher Data
Revenue & Conversion Data
Ad
Servers
Search
Display
Social
Optimization
Campaign
Management
Analytics
Marin
Tracker
Reporting
& Analytics
Offline
Data
Mobile
Measure
Manage
Optimize
8
RAM Platform: Powerful & Easy To Use
Analytics to Action Interface
9
Applied Big Data & Customer-Focused Innovation
6.3 Billion
Ad units under management
3 Million
Queries per month
80 Million
Campaign changes per day
250+ Terabytes
Stored across 50DB
1 Code Base
Multi-tenant architecture
11 Major Releases Annually
Iterative development
10
Key Online Ad Trends Favor a Platform
Move from keywords to audiences
Proliferation of channels, devices,
publishers, and ad units
Multi-channel bidding and attribution
Focus on customers (and lifetime value) not
transactions via CRM data
Integrate and leverage disparate data
sources
11
Marin’s Product Vision
Advertisers will want a platform that connects with all their disparate
data sources to ensure decisions are made using all their data.
The future is targeting audiences with added
insights driven by search intent and attribution.
Single platform and user interface for all marketing channels and devices
Open platform with access to any number of marketing
applications in an integrated manner (App Store)
12
Independent, Open Platform for Cross-Channel Revenue Acquisition
13
Audience Connect: Using Data to Drive Performance
Blue Kai / Exelate / Lotame / Etc.
■ Audience Analytics
■ Look-Alike Modeling for Audience
Expansion
■ Intent-based Remarketing
■ Audience-based Bidding for
Search Optimization
14
Audience Connect: Distribution and Optimization
15
Revenue Connect: Optimize Using Your Own Data





True Revenue Valuation
Offline Conversion Tracking
Forecasting Lifetime Value
Flexible Revenue Capture
Certified Revenue Partner
Ecosystem
16
Report and Optimize Across Your Portfolio of Channels




Cross Channel Management
Integrated Reporting and Analytics
Flexible Revenue Tracking
Automated Bid Calculations For Any
Publisher, Any Goal
 Attribution Across Publishers
17
Channel Connect: More Options for RAM
 Publisher data for reporting and optimization
 Twitter and Yandex debut by end of Q2 2014
18
Context Connect: Action Via External Data Sources





Connect any contextual data source
Smarter decisions with greater insight
Dynamically adjust campaign objects
More intelligent bid optimization
Customizable through Marin Labs
19
Optimize Using Data That Impacts Your Business
DYNAMIC ACTIONS
CONTEXT CONNECTIONS
Schedule automated actions based on
performance, attributes, and settings:
 Adjust bids based on Dimension values
 Pause objects based on conversion rate
 Increase budgets based on ROI
 Update landing pages based on CTR
A flexible onramp for integrating and
reporting on contextual data sources:
 Weather
 Stocks
 Sport scores
 Nielsen Rating
Build complex actions to address marketing
sophistication
View external data sources alongside
marketing performance
Drive smarter optimization strategies
20
Open: BoostCTR Integration
21
Independent, Open, Extensible RAM Platform
22
Industry Leaders Grow Facebook Programs With Marin
23

Rapidly scale programs

Acquire high LTV customers

Drive mobile ROI

Raise CTR’s and extend campaign life

Meet any financial or social objective

Global service and support
“Marin has dramatically changed the
way we advertise on Facebook and
has made it one of our most effective
performance marketing channels”
- Chase Wells, Director of Marketing at Webtrends
23
Competitive Landscape
Competition
Publisher Tools
Marin
 Independent, trusted 3rd party
 Cross publisher workflow and reporting
 Advanced bidding and optimization tools
Technology Providers
 Ability to manage complexity and scale
 Open, extensible platform; enterprise-class data
import and export capabilities
 Expert service teams with global reach
Internal Build
 Leading combination of power and ease of use
 Support for new publisher innovation
 Software as a service pricing model
24
Large, Underpenetrated Market
2017
$174BN
Digital Advertising Market
2012
$98BN
Digital Advertising
Market
Source: Magna Global, Marin Internal
2017
8,500+ Enterprise
Opportunities
>$100K / Month
2012
5,500+ Enterprise
Opportunities
>$100K / Month
25
Multiple Growth Drivers
Expand Internationally
Add Platform Modules
Support New Publishers
Acquire New Customers
Grow Existing Ad Spend
26
Experienced Management Team
Customer-Centric, Team-Oriented Culture
27
Finance Overview
Key Financial Highlights
 Strong Track Record of Growth
 100% SaaS Subscription Model
 Increasing Ad Spend and Consistent Advertiser Growth
 Growth Through New and Existing Advertisers
 Highly Diversified Revenue Mix
 Significant Long-Term Operating Leverage
29
Strong Track Record of Growth
Annual Revenue ($MM)
$77.3
$59.6
$36.1
$19.0
$7.5
2009
2010
2011
2012
2013
Quarterly Revenue ($MM)
$21.8
$20.1
$17.1 $17.2
$13.0
$14.0
$18.2
$15.5
$11.4
$9.5
$1.0
$1.4
Q1
Q2
$2.3
$2.9
$3.4
Q3
Q4
Q1
2009
$4.6
$5.0
Q2
Q3
2010
$6.0
Q4
$7.1
Q1
$8.1
Q2
Q3
2011
Q4
Q1
Q2
Q3
2012
Q4
Q1
Q2
Q3
Q4
2013
30
100% SaaS Subscription Model
Example Customer
Jan
Feb
Mar
$0
$240,000
$500,000
3.50%
3.50%
3.00%
Fee - % of Spend
-
$8,400
$15,000
Monthly Minimum
$7,500
$7,500
$7,500
Marin Revenue
$7,500
$8,400
$15,000
 100% SaaS-Based Subscription Model
Ad Spend
 Revenue Based on % of Monthly Ad Spend
Rate
 Shared Customer Success – Virtuous Cycle
Agency
Direct
 Channel Leverage
 Generally 12 month terms
 1-2 year fixed-rate contracts
 Minimum Fees – 50-70% of projected
monthly revenues
31
Increasing Advertisers and Ad Spend
Total Active Advertisers
673
487
502
Q2
Q3
531
542
Q4
Q1
584
610
436
390
337
50
79
Q1
Q2
134
151
100
116
Q3
Q4
Q1
Q2
2009
195
Q3
2010
223
240
Q4
Q1
280
Q2
Q3
Q4
2011
Q1
2012
Q2
Q3
Q4
2013
Annualized Advertising Spend Under Management ($BN)
$6.0
$4.7
$3.2
$1.7
$0.6
2009
2010
2011
2012
Note: Annualized spend based on last month of the period. Active Advertisers based on Advertisers with $2,000 in revenue in at least one month of the quarter
2013
32
Highly Diversified Revenue Mix
Diversified Advertiser Base
Global Presence
% Revenue
Retail
21%
Travel
17%
Technology
14%
Finance
13%
B2B
10%
Education
Other
7%
U.S.
69%
International
31%
Balanced Revenue Mix
Agency
48%
Direct
52%
18%
Note: All metrics based on FY 2013; Other includes Automotive, Healthcare, Real Estate, Industrial / Manufacturing and Government.
33
Q4 Highlights & 2014 Guidance
 Strong Q4 performance, beating our guidance
 Improved gross margins
 Total cash on balance sheet as of December 2013: $104.4 million
Guidance
Revenue
Non-GAAP Operating Loss
Non-GAAP Net Loss per Share
 Q1: $21.4 to $21.8 million
 Q1: ($8.9) to ($8.5) million
 Q1: ($0.28) to ($0.26)
 2014: $95.0 to $96.6 million
 2014: ($30.5) to ($28.9) million
 2014: ($0.94) to ($0.90)
Note: Guidance as of February 11, 2014. See Q4-13 Earnings Release dated February 11, 2014 for Non-GAAP definition and reconciliation to GAAP metrics.
34
Investment Highlights
Serving Large and Fast Growing Digital Ads Market
Search
Display
Leader in Revenue Acquisition Management
Comprehensive Analytical and Transactional Platform
High Growth SaaS Model with Participatory Economics
Social
Mobile
Proven Results for Blue-Chip Customers
35
Appendix
GAAP to Non-GAAP Reconciliation
Year Ended December 31
FY2012
FY2013
Q4’12
Q4’13
(in millions)
Gross Profit (GAAP)
Plus Stock-based Compensation
Plus Amortization of Cap'd R&D
Less Capitalized R&D costs
$ 34.8
0.4
0.5
(0.0)
$46.2
0.9
1.2
-
$10.0
0.1
0.2
(0.0)
$13.7
0.2
0.4
-
Gross Profit (Non-GAAP)
$35.7
$48.2
$10.3
$14.3
Operating loss (GAAP)
Plus Stock-based Compensation
Plus Amortization of Cap'd R&D
Plus Noncash expense related to warrants
Less Capitalized R&D costs
($25.3)
4.9
0.5
0.1
(1.7)
($34.3)
5.2
1.2
(3.2)
($6.8)
0.7
0.2
(0.5)
($7.9)
1.3
0.4
(0.7)
Operating loss (Non-GAAP)
($21.5)
($31.2)
($6.4)
($6.9)
Net Loss (GAAP)
Plus Stock-based Compensation
Plus Amortization of Cap'd R&D
Plus Noncash expense related to warrants
Less Capitalized R&D costs
($26.5)
4.9
0.5
0.6
(1.7)
($35.9)
5.2
1.2
0.5
(3.2)
($7.3)
0.7
0.2
0.2
(0.5)
($8.1)
1.3
0.4
0.1
(0.7)
Net Loss (Non-GAAP)
($22.2)
($32.2)
($6.6)
($7.0)
37

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