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7/29/2019 Bluefin Writeup
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Pivotal Research Group 853 Broadway, Suite 1406 New York, NY 10003
Important Disclosures Are Located In The Appendix
PIVOTALPivotal Research Group
U.S. Equity ResearchInternet / Advertising
Madison & WallConversations About Twitter And Nielsen
Feb. 8, 2013
Conversations About Twitter And Nielsen
Earlier in the week, the agency and media world was more than a little interested tolearn that Twitter purchased a small company called Bluefin Labs. We think thetransaction is notable given recent announcements from Twitter and Nielsen for what itmeans around Nielsens endeavors in social media analytics in the near term, but alsofor what it means around Twitters ability to capture a growing share of marketers digitalbudgets.
Media Agencies: Structure As Strategy
Over the past week, IPGs Mediabrands announced a significant overhaul of its seniormanagement team and its organizational structure. The change can be viewed asfavorable for the division and its parent company not only because of the newindividuals coming aboard (whom we regard very highly), but also because the newstructure appears to better mirror the manner in which marketers make their budgetingdecisions at a country or regional level, rather than at a global one. Investors andother observers may not pay much mind to such news beyond the personalitiesinvolved, but corporate structure can make a significant difference in businessoutcomes, driving as it does the potential for market share, growth in revenues andprofits.
Pivotals US Advertising Forecast And Comparables
We include updated trading data of our coverage universe in this report as well as ourforecasts for advertising in the United States.
Brian Wieser, [email protected]
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Media Agencies: Structure As Strategy
Over the past week, IPGs Mediabrands announced a significant overhaul of its seniormanagement team and its organizational structure. The change can be viewed as favorable for thedivision and its parent company not only because of the new individuals coming aboard (whomwe regard very highly), but also because the new structure appears to better mirror the manner inwhich marketers make their budgeting decisions at a country or regional level, rather than at aglobal one. Investors and other observers may not pay much mind to such news beyond thepersonalities involved, but corporate structure can make a significant difference in businessoutcomes, driving as it does the potential for market share, growth in revenues and profits.
When the news broke that a couple of key executives were leaving as heads of domestic oprations atMediabrands UM and Initiative, that their global heads were shifting to client-centric, regionally orientedroles and that two other individuals were shifting internally to become new global CEOs of the agencies,our first reaction was that something must be going wrong to have merited such a change. Whomakes such a management shake-up when things are going well? we thought. Mediabrands accountsfor around 20% of IPG revenues and we believe its profit margins are typical for media agency groups, orin the 20% range. This means that Mediabrands by itself probably generates around 40% of IPGsoperating profit, and so concerns at Mediabrands would be concerns for IPG at this point in time.
But our initial reaction was quickly corrected. What got us positive on the change was when we readthe following in the UKs Campaignmagazine: (new Initiative CEO Jim) Elms and (new UM CEO Daryl)
Lee will focus on product, proposition and process development within their agency networks, while(former Initiative CEO and now Mediabrands G14 Markets head Jim) Hytner and (former UM CEO, nowMediabrands North America head Jacki) Kelley will have profit-and-loss accountability for all agenciesand propositions in their geographical area.
Advertising agency-related businesses are notoriously difficult to manage. Because so manyindividuals have so many relationships at so many levels with the primary client decision-makers,because of matrixed reporting structures and because the product being sold is a person or group ofpeople applying a process rather than a thing, conventional command and control to drive acompany towards corporate objectives is hard to employ. However, a CEOs ability to providestaff with resources (whether personal or professional) makes a big difference. Thus, profit and lossownership and incentive structures that flow from P&L control make a substantial difference in focusingmanagers around profitability. The question is always where to put that P&L ownership, and historically
agencies have placed that ownership with the global CEOs of the companys operating brands. However,Mediabrands made its change in part because of the companys success in markets where Mediabrandshad regional CEOs owning the P&L covering an array of agency services.
For example, in Australia the local head of Mediabrands oversees operations for each of three mediaagencies and business brands which are present around the world. In addition, the unit operates a low-cost creative agency (Airborne) and has bought a mobile marketing firm (MNet). Our understanding isthat this unit has performed very well as a result of the structure. Where a clients marketing and agencyservices budget is managed at the country level such a media agency will be better-positioned to capturea growing share of wallet from the marketer. This goes back to a bigger point weve been arguingaround agency organic growth: new account wins are but one way to drive top-line organic growth.Improving existing client revenues or profitability is often more important.
This structure should work particularly well for IPG given that Mediabrands agencies presently servesfew clients on a global basis, and has sometimes struggled to add new ones in recent years. Moreimportantly (or perhaps as a cause of this), data we have studied in the past suggests that globalmarketers have shifted away from single country agencies and towards those operating at a global level,yet make assignments on a country or regional basis. Towards those ends, both units should benefit asworld-class teams and world-class tools will continue to ensure that Mediabrands teams will be includedin those pitches. And to the extent that the new structure allows the company to better marshall resourcesat the level at which agency contracts are awarded willl make Mediabrands all the better for it.
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Conversations About Twitter And Nielsen
Earlier in the week, the agency and media world was more than a little interested to learn thatTwitter purchased a small company called Bluefin Labs. We think the transaction is notable givenrecent announcements from Twitter and Nielsen for what it means around Nielsens endeavors insocial media analytics in the near term, but also for what it means around Twitters ability tocapture a growing share of marketers digital budgets.
Over the course of the past few years, Bluefin established itself as one of the dominant companiesin the fledgling social TV analytics space, increasingly relied upon for its tools used to informprogramming decisions and advertiser budgeting decisions. The product facilitated monitoring ofconsumer conversations around advertisement and program airings. Outputs could serve as a tie-breaker for TV planning choices for some brands, informing a buyer why they would prefer to include oneprogram vs. another in a schedule to advertisements, and offered feedback about consumer engagementto networks and program producers.
During much of the same time, Twitter was continuing to make progress penetrating agencies andadvertisers. While the companys set of large brand-centric advertisers has grown, we believe it hasremained relatively narrow, with clients at each agency who use Twitter perhaps spending tens ofthousands of dollars per year (although certainly a smaller number across the industry spendinghundreds of thousands of dollars per year) for what we imagine is a relatively modest base of revenue.Despite this, Twitter was increasingly becoming a key performance indicator of choice for many
advertisers, even if budgets on Twitter itself were small. Our understanding is that much of the agencyworld might not have connected social activity to brand goals, but instead considered it a simple proxy forsuccess. Nonetheless, the sheer size of Twitters user base and its importance in driving dialog aroundbrands (and, no less, social movements) was sustaining expectations for eventual scale as an advertisingvehicle among many observers.
Meanwhile, over at Nielsen, in November of last year that companys jointly (with McKinsey) owned NM
Incite purchased a competitor of Bluefins called Social Guide in order to allow Nielsen and NM
Incite to better quantify the relationship between social media and TV in order to establish new
research metrics on consumer behavior and marketing outcomes. Much of the data that NM Incite was
aiming to monitor and analyze originated with Twitter. Perhaps unsurprisingly, Nielsen and Twitter
subsequently made an announcement themselves, that the two companies would establish a
syndicated metric called Nielsen Twitter TV Ratings, measuring the reach of the TV conversation onTwitter, with commercial availability scheduled for the start of the 2013-14 TV season. This initiative was
intended to complement existing TV ratings and build on top of the audience engagement platform that
Social Guide developed inside off NM Incite.
Given all of this, we, and evidently others in the industry were perhaps somewhat confused by
Twitters purchase and subsequent announcement to cease selling to new customers of
Bluefin. What exactly did this mean for Twitters relationship with Nielsen? What did it mean about
Twitters intentions around advertising in general? In their words, Twitter stated that Bluefins data
science capabilities and social TV expertise will help us create innovative new ad products and consumer
experiences in the exciting intersection of Twitter and TV and that it would plan to collaborate closely
with Nielsen and SocialGuide on product development and research to help brands, agencies, and
networks fully understand the combined value of Twitter and TV. Much of the industry (or perhaps the
industrys research professionals) are by nature and necessity highly skeptical of the claims their vendors
make. This leads to much speculation and gossip in the industry, and thus many of the researchers we
interact were unlikely to take statements made by Nielsen or Twitter at face value.
Where we are certain is as follows: we have come to appreciate that Twitter is, of course working, on
efforts and developing tools that allow them to capture a greater share of advertiser budgets, and
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this initiative should be viewed in that light. Further, we believe that the more that Twitter pushes
into TV-related activities and maintains Nielsen as a partner, the more that Nelsen remains at the
forefront of measuring activity associated with TV (i.e. including consumer chatter, which is poorly
measured on the street and inside of homes, but better measured on the web through sites including
Twitter and Facebook). Nielsen may even make more money as Social Guides competitive position
improved with the removal of a big competitor from the market. Twitter will also continue to better facilitate
trusted third party measurement of social media in general.
But further into the future is where the speculation will lie. Will Twitter try to sell data to agenciesonce again at some point in the future (much to Nielsens chagrin)? Will it aggressively (and fruitlessly)
chase large brands for their television budgets, in competition with the networks who drive so much
traffic, and possibly will buy advertising from Twitter? This is all possible, but also entirely speculative.
The chances that TV budgets will flow to Twitter as advertisers become better acquainted with the
intersection of social media and television are low, as digital budgets and TV budgets will remain discrete.
However, we see the chances of creating a competing data product (possibly a free one, much as Google
provides a range of planning tools) in the future as somewhat higher.
But the efforts the two companies will make in this space in the near future provides us with much more
certainty that Twitter will increase its relevance to large brands and help it get on media plans one
way or another. Thus the most important outcome from Twitters actions is that they will help the
company maintain relevance to large advertisers, and increasingly important part of advertisers budget-
setting conversations just as they continue to expand the very consumer conversations they will now be
better able to monitor and analyze today.
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Pivotals Advertising Comparables: Trading Multiples and Targets
Trading Multiples
Nielsen Inter pub lic Omnic om Publ icis WPP CBS V iacom D iscovery Goog le Face book Yahoo
Target EV/EBITDA
2012 12.0x 7.1x 8.4x 10.3x 8.1x 9.6x 11.3x 15.4x 48.4x 69.1x 1.1x
2013 10.9x 6.5x 7.8x 9.0x 7.6x 9.6x 10.4x 13.3x 39.2x 29.5x 4.3x
Current EV/EBITDA
2012 12.0x 5.4x 7.6x 10.3x 8.9x 8.1x 9.1x 15.0x 45.1x 53.1x 0.7x
2013 10.8x 5.0x 7.0x 9.0x 8.3x 8.1x 8.4x 13.0x 36.6x 22.6x 2.5x
Target EV/FCF
2012 42.5x -48.7x 18.5x 19.5x 40.6x 17.0x 13.1x 4 6.9x 78.0x -362.7x 1.7x
2013 30.1x 17.6x 16.2x 49.6x 16.1x 16.2x 18.8x 29.5x 19.0x 45.3x 11.4x
Current EV/FCF
2012 42.4x -37.0x 16.8x 19.4x 44.5x 14.4x 10.6x 4 5.7x 72.8x -278.8x 1.0x2013 29.9x 13.4x 14.6x 49.5x 17.7x 13.8x 15.2x 28.8x 17.7x 34.8x 6.5x
Target P/E
2012 36.2x 20.2x 16.9x 15.5x 15.4x 20.5x 18.1x 27.7x 25.3x 1362.6x 7.0x
2013 26.7x 18.7x 14.6x 13.8x 13.9x 17.5x 16.0x 22.0x 24.3x 93.6x 19.8x
Current P/E
2012 35.9x 16.3x 15.0x 15.6x 17.1x 17.1x 13.8x 26.8x 23.9x 1084.4x 6.2x2013 26.5x 15.1x 13.0x 13.9x 15.4x 14.6x 12.2x 21.3x 23.0x 74.5x 17.4x
FCF = Net Income + D&A + Stock-Based Comp + Excess Tax Benefits + Pension Contributions - CapEx/M&A - Change in W/C + Other Recurring Cash Changes
Target Price And Related Metrics
Nielsen Inter pub lic Omnic om Publ icis WPP CBS V iacom D iscovery Goog le Face book Yahoo
Near-Term 2012-2017 Growth Rate 4.8% 4.9% 4.9% 7.1% 5.8% 1.8% 6.3% 10.5% 15.8% 26.2% -0.4%Long-Term Perpetual Growth Rate 4.0% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5% 5.5% 6.0% 7.0% 2.0%Near-Term 2012-2017 Discount Rate 7.0% 9.3% 7.6% 8.0% 8.1% 9.5% 7.6% 6.4% 7.8% 7.2% 7.3%
Cost of Equity 9.0% 11.3% 9.0% 8.5% 9.6% 10.9% 9.0% 7.3% 7.9% 7.3% 7.3%
Beta Equivalent 1.20 1.60 1.20 1.30 1.50 1.20 0.90 1.00 0.90 0.90Long-Term Perpetual Discount Rate 10.5% 13.8% 11.6% 12.0% 11.6% 13.0% 11.6% 10.4% 11.3% 11.2% 11.8%Long-Term Perpetual Discount Rate Spread Vs. N 3.5% 4.5% 4.0% 4.0% 3.5% 3.5% 4.0% 4.0% 3.5% 4.0% 4.5%
Enterprise Value (PV of Cashflows + TV) $17,703.7 $6,265.2 $17,478.7 10,502.3 13,651.0 $33,658.5 $44,123.7 $31,185.2 $214,374.7 $81,979.1 $6,718.8
2013E Cash + Market able Secur ities 1,074. 2 2, 057.1 2, 484. 9 1,253. 4 2,200.2 1, 436.9 ( 2.7) 688.7 59, 364.7 11, 435.3 3,895.3Other Asset Values 0.0 0.0 0.0 272.0 300.0 5,000.0 500.0 890.0 8,000.0 0.0 13,766.5Value of Cashflows, Cash, Other Assets 18,777.9 8,322.3 19,963.6 12,027.6 16,151.1 40,095.4 44,621.0 32,763.9 281,739.5 93,414.4 24,380.5
Debt (6,397.0) (1,600.5) (4,462.0) (1,043.0) (3,964.1) (8,619.0) (8,871.0) (6,989.0) (5,537.0) (1,500.0) 0.0Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Ta rget P rice Equ ity Va lue 12 ,3 80.9 6,721 .8 15,50 1.6 10 ,98 4.6 12 ,1 87 .0 3 1,476 .4 35 ,75 0.0 25 ,7 74.9 276,202 .5 91,91 4.4 24 ,3 80.5
2013E Shares 376.4 432.3 255.5 226.6 1,347.4 619.0 465.1 354.0 338.4 2,546.0 1,058.3
Target Stock Price 33.00 15.00 61.00 48.00 900.0 51.00 77.00 73.00 820.00 36.00 23.00 Target Vs. Current Price 1% 24% 12% -1% -10% 20% 31% 3% 6% 26% 13%
Rating HOLD BUY BUY HOLD HOLD BUY BUY HOLD HOLD BUY BUY
Current Stock Price 32.71 12.08 54.25 48.36 1,001.0 42.50 58.89 70.62 773.95 28.65 20.32
Current Stock Price Implied Equity Value 12,312.4 5 ,222.2 13,860.9 10,958.3 13,487.5 26,307.5 27,389.7 24,999.5 261,876.0 72,942.9 21,505.4Current Stock Price Implied Enterprise Value 17,635.2 4,765.6 15,838.0 10,475.9 14,951.4 28,489.6 35,763.4 30,409.8 200,048.3 63,007.6 3,843.6
Source: Pivotal Research
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Pivotals Advertising Comparables: Operating Metrics
Operating Metrics
Nielsen Interpublic Omnicom Publicis WPP CBS Viacom Discovery Google Facebook Yahoo
REVENUE
2012 $5,594.3 $6,928.1 $14,203.3 6,587.3 9,570.0 $14,673.5 $13,249.0 $4,533.6 $46,040.0 $5,089.0 $4,986.8
2013 5,721.7 7,117.0 14,747.7 7,238.5 9,940.7 13,594.1 13,925.7 5,383.6 55,483.7 6,850.9 4,955.4 2013 Growth 2.3% 2.7% 3.8% 9.9% 3.9% -7.4% 5.1% 18.7% 20.5% 34.6% -0.6%
2017 7,079.2 8,797.9 18,001.5 9,269.6 12,695.4 16,013.8 17,957.3 7,465.7 95,868.4 16,303.4 4,876.5 4-Year CAGR 5.5% 5.4% 5.1% 6.4% 6.3% 4.2% 6.6% 8.5% 14.7% 24.2% -0.4%
EBIT
2012 950.5 687.6 1,802.3 1,164.7 1,292.0 2,975.9 3,682.0 1,915.0 13,835.0 538.0 5,214.4
2013 1,097.7 747.2 1,960.2 1,316.5 1,401.6 3,189.5 4,018.0 2,213.0 14,643.5 1,633.0 901.4 2013 Growth 15.5% 8.7% 8.8% 13.0% 8.5% 7.2% 9.1% 15.6% 5.8% 203.5% -82.7%2017 1,628.0 1,275.5 2,790.2 1,871.3 2,094.7 4,564.2 5,177.6 3,440.5 15,832.5 4,813.6 936.2 4-Year CAGR 10.4% 14.3% 9.2% 9.2% 10.6% 9.4% 6.5% 11.7% 2.0% 31.0% 1.0%
EBIT MARGINS
2012 17% 10% 13% 18% 14% 20% 28% 42% 30% 11% 105%
2013 19% 10% 13% 18% 14% 23% 29% 41% 26% 24% 18%2017 23% 14% 16% 20% 17% 29% 29% 46% 17% 30% 19%
EBITDA
2012 1,472.5 885.6 2,082.9 1,014.7 1,683.0 3,500.9 3,913.0 2,025.5 4,433.5 1,187.0 5,869.02013 1,626.7 961.2 2,250.2 1,161.5 1,803.6 3,509.5 4,251.0 2,338.0 5,472.9 2,783.0 1,561.4 2013 Growth 10.5% 8.5% 8.0% 14.5% 7.2% 0.2% 8.6% 15.4% 23.4% 134.5% -73.4%
2017 2,093.0 1,460.5 3,140.2 1,696.3 2,540.7 4,804.2 5,404.6 3,568.5 11,301.1 6,513.6 1,636.2 4-Year CAGR 6.5% 11.0% 8.7% 9.9% 8.9% 8.2% 6.2% 11.2% 19.9% 23.7% 1.2%
EBITDA MARGINS
2012 26% 13% 15% 15% 18% 24% 30% 45% 10% 23% 118%
2013 28% 14% 15% 16% 18% 26% 31% 43% 10% 41% 32%2017 30% 17% 17% 18% 20% 30% 30% 48% 12% 40% 34%
FREE CASHFLOW (ex "Other" Changes)
2012 416.4 (128.7) 943.6 539.1 336.3 1,985.2 3,378.0 665.3 2,749.3 (226.0) 4,020.5
2013 588.8 355.2 1,081.6 211.7 846.2 2,071.8 2,347.7 1,057.4 11,276.7 1,809.3 590.0 2013 Growth 41.4% -376.0% 14.6% -60.7% 151.6% 4.4% -30.5% 58.9% 310.2% -900.6% -85.3%
2017 957.5 703.4 1,411.9 1,009.1 1,134.5 2,555.6 3,023.2 1,915.8 14,051.1 5,336.9 665.9 4-Year CAGR 12.9% 18.6% 6.9% 47.8% 7.6% 5.4% 6.5% 16.0% 5.7% 31.1% 3.1%
FREE CASHFLOW MARGINS
2012 7% -2% 7% 8% 4% 14% 25% 15% 6% -4% 81%
2013 10% 5% 7% 3% 9% 15% 17% 20% 20% 26% 12%2017 14% 8% 8% 11% 9% 16% 17% 26% 15% 33% 14%
NET INCOME
2012 333.4 345.7 965.5 703.6 867.1 1,638.2 2,239.0 1,001.8 10,758.0 53.0 3,943.52013 463.8 349.6 1,061.6 785.7 956.6 1,841.8 2,324.7 1,172.4 11,358.9 931.8 1,265.2
2017 837.5 733.8 1,561.9 1,167.1 1,362.9 2,725.6 3,111.2 2,007.8 13,321.5 3,637.5 1,600.7
NET INCOME MARGINS
2012 6% 5% 7% 11% 9% 11% 17% 22% 23% 1% 79%
2013 8% 5% 7% 11% 10% 14% 17% 22% 20% 14% 26%
2017 12% 8% 9% 13% 11% 17% 17% 27% 14% 22% 33%
FCF = Net Income + D&A + Stock-Based Comp + Excess Tax Benefits + Pension Contributions - CapEx/M&A - Change in W/C + Other Recurring Cash Changes
Source: Pivotal Research
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Pivotals Advertising Comparables: Profit and Cash Generation
Profit and Cash Generating Metrics
Nielsen Inter pub lic Omnicom Publ icis WPP CBS V iacom Discovery Google Facebook YahooEPS
2012 $0.91 $0.74 $3.62 3.11 58p $2.49 $4.26 $2.64 $32.38 $0.03 $3.29
2013 1.24 0.80 4.19 3.47 65 2.92 4.83 3.31 33.72 0.38 1.16 2013 Growth 35.6% 7.8% 15.8% 11.7% 11.0% 17.3% 13.3% 25.5% 4.1% 1356.3% -64.7%
DIVIDEND/SHARE
2012 0.00 0.24 1.20 0 .70 27 0.44 1 .05 0.00 0.00 0.00 0.00
2013 0.00 0.24 1.40 1 .17 31 0.48 1 .10 0.00 0.00 0.00 0.00
DIVIDEND/SHARE/CURRENT EQUITY PRICE2012 0.0% 2.0% 2.2% 1.4% 2.7% 1.0% 1.8% 0.0% 0.0% 0.0% 0.0%
2013 0.0% 2.0% 2.6% 2.4% 3.1% 1.1% 1.9% 0.0% 0.0% 0.0% 0.0%
FCF/SHARE
2012 FCF/2012 SHARES 1.11 (0.30) 3.69 2.38 25 3.21 7.26 1.88 8.13 (0.09) 3.802013 FCF/2012 SHARES 1.56 0.82 4.23 0.93 63 3.35 5.05 2.99 33.33 0.71 0.56
FCF/SHARE/CURRENT EQUITY PRICE
2012 3.4% -2.5% 6.8% 4.9% 2.5% 7.5% 12.3% 2.7% 1.0% -0.3% 18.7%
2013 4.8% 6.8% 7.8% 1.9% 6.3% 7.9% 8.6% 4.2% 4.3% 2.5% 2.7%
FCF = Net Income + D&A + Stock-Based Comp + Excess Tax Benefits + Pension Contributions - CapEx/M&A - Change in W/C + Other Recurring Cash Changes Source: Pivotal Research
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Pivotal Advertising Forecast: Direct Media
Contact: Brian Wieser
(e) [email protected] (t) 212 514 4682 (m) 917 734 1980
2010A 2011A 1Q12A 2Q12A 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E
DIRECT MEDIA ADVERTISING REVENUES
Direct Online
Total Paid Search (Incl. Mobile) 11,999.5 15,843.7 4,445.5 4,963.6 4,395.9 5,293.7 19,098.7 5,237.9 5,849.0 5,234.0 6,279.4 22,600.4 Annual Growth / Decline 11.1% 32.0% 21.7% 22.3% 20.9% 17.8% 20.5% 17.8% 17.8% 19.1% 18.6% 18.3% % of Direct Online 79.8% 82.6% 84.2% 85.4% 84.7% 86.0% 85.1% 85.7% 86.9% 86.2% 87.5% 86.6%
Other Direct Onlinee
3,045.5 3 ,343.2 832.5 849.8 792.7 858.7 3,333.7 872.0 883.1 836.4 893.5 3,485.1 Annual Growth / Decline -1.5% 9.8% -1.4% -0.4% 0.0% 0.6% -0.3% 4.8% 3.9% 5.5% 4.1% 4.5% % of Direct Online 20.2% 17.4% 15.8% 14.6% 15.3% 14.0% 14.9% 14.3% 13.1% 13.8% 12.5% 13.4%
Total Direct Online $15,045.0 $ 19,186.9 $5,277.9 $5,813.4 $5,188.6 $6,152.4 $22 ,432.3 $6,110.0 $6,732.1 $6,070 .4 $7,173.0 $26,085.5 Annual Growth / Decline 9.1% 27.5% 17.3% 18.4% 17.1% 15.0% 16.9% 15.8% 15.8% 17.0% 16.6% 16.3% % of Total Direct Advertising 35.4% 42.6% 47.4% 50.5% 47.1% 50.3% 48.9% 52.9% 55.7% 52.4% 55.3% 54.1%
Total Direct Mail 20, 59 9. 1 20,403. 1 4,729. 8 4, 616. 5 4,813.3 5,103.6 19,263.2 4,559.4 4,479.6 4,718.9 5,022.5 18,780.5 Annual Growth / Decline 3.8% -1.0% -4.5% -5.6% -6.0% -6.2% -5.6% -3.6% -3.0% -2.0% -1.6% -2.5% % of Total Direct Advertising 48.5% 45.3% 42.5% 40.1% 43.7% 41.7% 42.0% 39.5% 37.1% 40.7% 38.7% 39.0%
Total Directoriesa
6,852.2 5,494.0 1,130.6 1,092.1 1,011.5 983.5 4,217.6 883.9 873.5 803.9 782.6 3,343.9 Annual Growth / Decline -23.5% -19.8% -22.7% -22.5% -22.0% -25.8% -23.2% -21.8% -20.0% -20.5% -20.4% -20.7% % of Total Direct Advertising 16.1% 12.2% 10.2% 9.5% 9.2% 8.0% 9.2% 7.7% 7.2% 6.9% 6.0% 6.9%
TOTAL DIRECT $42,496.2 $ 45,084.0 $11,138.3 $ 11,521.9 $ 11,013.5 $12,239.4 $45,913.1 $11,553.3 $12,085.2 $11,593.2 $12,978.0 $48,209.8 Annual Growth / Decline -0.8% 4.4% 2.1% 2.8% 1.5% 1.0% 1.8% 3.7% 4.9% 5.3% 6.0% 5.0% % of Normalized Advertising 25.5% 26.3% 26.8% 26.0% 27.0% 26.7% 26.6% 27.8% 27.0% 28.0% 27.7% 27.6%
Source: Pivotal Research
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Appendix: Important Disclosures
Analyst Certification
I, Brian W. Wieser, hereby certify that the views expressed in this research report accurately reflect mypersonal views about the subject company and their securities. I further certify that I have not receivedand will not receive direct or indirect compensation related to specific recommendations or viewscontained in this research report.
Legal Disclaimers
Pivotal Research Group LLC is an independent equity research company and is neither a broker dealernor offers investment banking services. Pivotal Research Group LLC is not a market maker for anysecurities, does not hold any securities positions, and does not seek compensation for investmentbanking services. The analyst preparing this report does not own any securities of the subject companyand does not receive any compensation directly or indirectly from investment banking services.
Stock Ratings
Pivotal Research Group LLC assigns one of three ratings based on an expectation of absolute total return(price change plus dividends) over a twelve month time frame. The ratings are based on the followingcriteria:
BUY: The security is expected to have an absolute return in excess of 15%.
HOLD: The security is expected to have an absolute return of between plus and minus 15%.
SELL: The security is expected to have an absolute return less than minus 15%.
Ratings Distribution
Pivotal Research LLC currently provides research coverage of 33 companies, of which 64% are ratedBUY, 36% are rated HOLD and 0% are rated SELL. Our company does not offer investment bankingservices. This data is accurate as-of February 8, 2013.
Price Chart and Target Price History
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Other Disclaimers
Information contained in this report has been prepared from sources that are believed to be reliable andaccurate but are not guaranteed by us and do not represent a complete summary or statement of allavailable data. Additional information is available upon request. Furthermore, information and opinionsexpressed are subject to change without notice and we are under no obligation to inform you of suchchange.
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