Gian Fulgoni, Chairman of comScore and our closing keynote speaker, raised the notion, however, that online advertising is leaving branding dollars behind. In 2008, 63% of all media spending was on branding, but online accounted for only 5% ($6 billion) of the branding dollars. According to Mr. Fulgoni, “…the consumer is often motivated by emotion, causing a shift away from click rate metrics to a growing recognition of the impact of branding.”

We were delighted to hear Norman Pearlstine, Chief Content Officer of Bloomberg provide his insider’s perspective on why Bloomberg, a cutting-edge global news and information company, invested in BusinessWeek, a very traditional media company that still publishes its print edition every week. Among the key investment merits were BusinessWeek’s access to global leaders, which will enhance Bloomberg’s news coverage, and BusinessWeek’s web site, which is roughly the size of Bloomberg’s.

We would like to thank our sponsors for supporting this year’s event: Boston Consulting Group; GE Commercial Finance; Howard-Sloan-Koller Group; Intralinks; and Seward & Kissel. And, a complete summary of the Conference content can be found in this edition of the Client Briefing.

On the M&A front, 2009 was a classic case of split personality – the M&A market saw $5.3 billion in transaction value in 1H, and then $26.5 billion in value in 2H. Nine of the 10 largest deals of 2009 occurred in the second half, including the year’s largest – the announced $5.2 billion acquisition of IMS Health by TPG Capital and CPP Investment Board. At JEGI’s Conference, Fred Mather, EVP, Global Sales for Intralinks, said, “Intralinks is optimistic about 2010, as M&A activity increased in January, dominated by the middle market.” JEGI has seen a recent uptick in M&A activity as well, already completing six transactions in 2010 and 12 in the past four months, including The Economist Group’s sale of CFO to Seguin Partners; the sale of IT research firm Burton Group to Gartner; the $12 million investment in Edgar Online by Bain Capital Ventures; and Reed Business Information-US’s sale of four media properties to Canon Communications.

The good news is that new debt issue volume increased significantly in Q4 2009 to $26 billion from $17 billion in Q3, according to Matthew Lyness, Senior Managing Director, GE Capital Markets, speaking at JEGI’s Conference. The Federal Reserve announced that it was raising the discount rate by 0.25% to 0.75% on February 19, but this increase only affects $15-$30 billion of the Fed’s $2 trillion balance sheet and is not expected to lead to tighter financial conditions. Corporate results continue to be the bright spot, as nearly 80% of S&P 500 companies are beating earnings forecasts, and investors are now urging companies to use cash flow for capital spending over debt repayment. Historically, this has been a good sign of corporate growth and is likely to spur an increase in M&A activity as well, and perhaps it will help offset the sharp drop in February’s consumer confidence levels. Speaking of M&A activity, Tolman Geffs, JEGI’s Co-President, gave a very well received presentation at the IAB Annual Conference on February 22 in CA on brand advertising online and the next wave of M&A for interactive media. The presentation can be found on our home page: www.jegi.com.

Another JEGI senior executive, Managing Director David Clark, wrote an insightful article for this Client Briefing titled “A New Class of Marketing Services”, which discusses how new marketing disciplines have emerged that are web-based and data-driven. In particular, Customer Experience Management (CEM) focuses on assessing every interaction that a consumer can have with a brand and provides insights into how those interactions impact the overall buyer/user experience.

On other fronts, JEGI, in partnership with min and PaidContent, is proud to announce the release of the annual State of Digital Media Report. The Report provides an in-depth look at online business models that are working and why; the latest Interactive M&A trends; and much more. Click here to learn more and order a copy of the Report: http://bit.ly/9BZYgs.

Finally, we would like to extend our sincerest condolences to the family of Don Welsh, following his death on February 6. Don will be sorely missed by the many people he touched across a four-decade career in media. JEGI is deeply saddened by this loss of a two-time former client and dear friend of the firm’s.

We are optimistic about the year ahead, in spite of ongoing challenges facing the economy, including high unemployment levels and large government deficits. Please enjoy this edition of the Client Briefing and feel free to contact us to discuss the marketplace and your company’s M&A and strategic advisory needs.