Confidential0Q3 2019Sector Update Digital ServicesImportant disclosures appear at the back of this reportGP Bullhound LLP is authorised and regulated by the Financial Conduct Authority GP Bullhound Inc is a member of FINRAConfidential1Digital services perspectivesOliverACQUIRED BYYou & Mr JonesGP Bulhound is a leading technolgy advisory and investment firm, providing transaction advice and capital to category leaders§We publish this quarterly digital services market report to provide insights into public and private market valuations acrosthe transaction spectrum and qualitative insights into broader market trends§We also feature many of the leading digital services companies and CEOs§Based in our London and New York ofices respectively, Simon Nicholls and Greg Smith head up our digital services practice with over 50+ years of experience and have completed over 10 transactions for digital services copanies globally§We have completed 21 digital services deals in the last 24 months, including:CroudINVESTMENT FROMLDCInsitumACQUIRED BYAccenture InteractiveGoKart LabsACQUIRED BYWest MonroeMindcurvINVESTMENT FROMGenui& PrimepulseJelyfishINVESTMENT FROMFimalcConfidential2Key sector takeawaysCEO commentaryRecent transaction trendsPublic market analysesAppendix A: GP Bulhound digital services indexAppendix B: Public comparablesby category13456Contents2Appendix C: GP Bulhound credentials and team7Confidential3Sector 1Key sector takeawaysConfidential4GP Bulhounds views on curent trends in digitalservicesEarly crest of the wave for AI capability consolidation1234The world is going programaticInfluencer marketing growing in influenceDigital transformation trend is stil strong with M&A focus shifting to new skils and new geographiesConfidential5Curent trendsAI CONSOLIDATIONSource:Capital IQ, Pitchbok, The Drum1§AI is becoming increasingly important to marketing and digital services providers. As the availability of data increases exponentialy, AI is becoming esential to analyse, rationaliseand ultimately take insights from this data to ultimately drive improved custoer interactions§We are starting to se the early consolidation of capabilities that enable digital services providers with the capabilities to help their customers in different ways§The ways that AI is being delivered range from enabling beter personalisationof customer experiences or targeting (Omnicoms acquisition of Smart Digital in Germany), to help customers beter deploy AI to autoate, analyseor digitally transform themselves using data (Acentures acquisition of PragsisBidoopin Spain, or Hakuhodoand Softbanks JV launch in Japan)Early crest of the wave for AI capability consolidationDEAL DATE: SEP-19EV: N/AEV/ REV: N/ADEAL DATE: SEP-19EV: N/AEV/REV: N/A DEAL DATE: APR-19EV: N/AEV/ REV: N/AJV FOR DATADEAL DATE: SEP-19EV: N/AEV/ REV: N/AConfidential6Curent trendsSource: eMarketer: US Digital Ad Spending Wil Surpas Traditional in 2019, Capital IQ, Pitchbook2§The second wave of programatic is upon us all TV and media is becoming adresable. TV advertising is becoming adresable with the rapid adoption curve of smart TVs. Out of hoe will also become enabled for programatic now that the instaled base of digital signage is of meaningful scale. Programatic TV ad spend is expected to increase to $5bn in the US in 2020, representing a 2.6x increase vs 2018. Importantly, there is stil a lot of rom to grow -this $5bn will only represent 7% of the US TV ad spend in 2020§The advent of next generation technolgies, such as voice/visual search and AI/ML wil further enable programatic advertising technologies§We wil continue to se the acquistionof programmatic specialists (such as S4 Capital/Mightyhivesacquisition of ProgMedia), including programatic technolgy and data players, over the coming monthsDEAL DATE: OCT-19EV: $150.0MEV/ REV: N/ADEAL DATE: APR-19EV: $6.5MEV/ REV: N/A DEAL DATE: OCT-19EV: N/AEV/ REV: N/ADEAL DATE: APR-19EV: N/AEV/ REV: N/The world is going programaticPROGRAMMATICConfidential7Curent trendsINFLUENCER MARKETINGSource:Influencer Marketing Hub: The State of Influencer Marketing 2019 -Benchmark Report, Convince & Convert: Why Influencer Marketing is Creating Huge Returns for Busineses, Traackr: Influencer Marketing, WSJ: Online Influencers Tel You What to Buy, Advertisers Wonder Whos Listening, Capital IQ, Pitchbok3§Influencer marketing is becoming an integral part of social media marketing strategies. Influencer marketing agencies are increasingly valuable to help brands beter understand, identify, engage and suport the influencers who can create these high-impact conversations with customers§Social media marketing has traditionaly ben an area where busineses have strugled to measure impact. Influencer marketing is providing marketers with a strong ROI chanel that uses highly trusted word-of-mouth advertising to reach engaged customers. On average busineses generate $6.50 of revenue for every $1 invested in influencer marketing§63% of busineses influencer marketing budgets are expected to increase over the coming year, expecting to reach $6.5bn+ by the end of 2019. Marketers are keen to take advantage of major social media growth chanels such as Instagram which has sen 10x growth in just the past 5 yearsDEAL DATE: AUG-19EV: $11.2MEV/ REV: N/ADEAL DATE: JUN-18EV: $50.0MEV/ REV: N/ADEAL DATE: AUG-19EV: N/AEV/REV: N/A DEAL DATE: JUN-18EV: N/AEV/ REV: N/A Influencer marketing growing in influenceConfidential8Curent trendsDIGITAL TRANSFORMATIONSource:WestMonroe: West Monroe Partners Acquires Digital Services Company GoKartLabs, BusinesWire: Busineses Wil Spend Nearly $1.2 Trilion on Digital Transformation This Year, Capital IQ, PitchbokNote: = GP Bulhound deal4§Digital transformation has ben a fundamental trend for many of the digital services consolidators over the past few years, but is stil seing strong growth. Annual spending on digital transformation is expected to reach $1.2tr this year, with digital transformation consulting services reaching $3bn in 2018§As they sek to provide busineses with the necesary consulting capabilities to help them through a digital transformation exercise, the type of skills and aproaches to this transformation have continued to evolve§We have sen Acenture acquire Insitum, a firm focused on helping customers with digital transformation through strategic inovation consulting but importantly expanding Accenture Interactives reach to key parts of Latin America§Similarly GoKart Labs was acquired by West Monroe Partners to provide a blend of inovation, design and build of digital experiences through both consulting services and a product studioDEAL DATE: OCT-19EV: N/AEV/ REV: N/ADEAL DATE: OCT-19EV: N/AEV/ REV: N/ADEAL DATE: OCT-19EV: N/AEV/REV: N/A DEAL DATE: AUG-19EV: N/AEV/ REV: N/ADigital transformation trend is stil strong with M&A focus shifting to new skils and new geographiesConfidential9Section 2CEO comentary