Presented by: InternetQ. Capital Markets Day. July 2013

Transcription

1 Presented by: InternetQ Capital Markets Day

2 Global footprint Delivering innovative solutions across the globe 150+ MNO CONNECTIVITY AGREEMENTS CAMPAIGNS EVERY YEAR 50+ COUNTRIES 45% Brazil UK Greece Poland Cyprus Turkey Russia Vietnam Singapore Philippines Indonesia ORGANIC REVENUE GROWTH (2012) Operations Locations

3 Strong partnerships Working together for exceptional results

4 Cutting-edge platforms - Natural Evolution CRM - Personalised Interactivity Dovetails with Integrated Marketing ethos Advanced mobile marketing and mobile entertainment solutions

5 Handset Landscape - Where our platforms fit? Across the Board Across all Levels Smart Phone Sales*: Current Developed Markets (Europe) Markets: = 70+%: 125m units Developing Markets (APAC): = % 609m Units Feature Phone Presented by: Growth Opportunity: As consumers transition from Feature to cheaper Smart Phones Internetq platforms move with them MobiDialog Basic Phones: MobiDialog Services still relevant For existing and developing Markets MobiDialog Source: E Marketer

6 Handset Landscape - Where our platforms fit? Across the Board Across all Levels Smart Phone Sales: Current Developed Markets (Europe) Markets: = 70+%: 125m units Developing Markets (APAC): = % 609m Units Feature Phone Presented by: Growth Opportunity: As consumers transition from Feature to cheaper Smart Phones Internetq platforms move with them MobiDialog Basic Phones: MobiDialog Services still relevant For existing and developing Markets MobiDialog Source: E Marketer

7 Handset Landscape - Where our platforms fit? Across the Board Across all Levels Smart Phone Sales: 2017 Developed Markets (Europe) Markets: = 277m units Presented by: Developing Markets (APAC): = 1.26 Billion = c.50% of the 2.5b Smart Phone sales Globally Basic Phones: MobiDialog Services still relevant For existing and developing Markets Source: E Marketer MobiDialog

8 Internetq s Relevance UK alone, in the past year, penetration of Smart Phones Grown from 58% to 78% Smartphones = The Ultimate Personalised Marketing Tool: Presented by: Consumers are expecting convenience, simplicity and security in exchange for their loyalty. It is only by embracing mobile s full potential with the right strategy that a consumer facing business can compete in a mobile-centric world. - Deloitte Internetq provides, Internetq, Developers and Brands the tools and platforms to execute the strategy interact with the Consumers Here s how

9 MobiDialog Mobile Marketing Minimob Smart Ads

10 The mobile marketing ecosystem Clients & Partners Platform Users Network Operators Executive Media Organizations Project Manager Brands & Products Campaign Operator Traffic Aggregators MobiDialog Call-Center Agent SMS TV Print Downloads Coupons IVR Radio On-Pack Loyalty Alerts Campaign Types

11 Rewards mechanism User Points Participation Offers & Promotions Incentives to entice user participation 50 points for downloading a new app Answer correctly the next 3 questions in the trivia appand earn 100 points Profiling Points for purchases of selected products 100 points for every top-up over $20 Subscribe for a monthly data plan and earn 1000 points Rewards for users who respond to profiling questions Earn 100 additional points by sending your Name, Age and Gender to 00000

12 Segmentation & profiling Loyalty & Tenure New Users Active / Inactive Users Top Users User Preferences Morning Users Weekend Users Today Users Demographic Age Gender Language Country Channel Prepaid / Postpaid Users SMS / USSD / WAP Users IVR Users Top-up Behavior Top-up Frequency Preferred Day/Time Top-up Value Special Cases Failed Charge Free Users Subscribers

13 Loyalty program - Objectives Improve ARPU by increasing the frequency and value of user top-ups Reduce churn by rewarding loyal prepaid subscribers with valuable prizes Promoteother products and services offered by the operator through the established communication channel

14 Loyalty program Service mechanics Account Top-up Users top-up their account Special code included in the confirmation message for valid transactions Everyone Wins All participants who submit a campaign code within 7 days win instant prizes and loyalty points Code Submission Users submit the code through all possible channels: -SMS, IVR, web, mobile apps Prizes Larger prizes can be given with draws on weekly and monthly basis Better prizes for higher top-up values

15 Case study: Orange, Poland Participation - Account top-up - Renew/activate contract - SIM card activation - Purchases of promoted telecommunication services Duration - 1 year (May 2011 May 2012) Prizes - Match tickets for Euro 2012 games - Technology gadgets - Football merchandise

16 Tangible results 12% 16 35% 20% of targeted users participate in mobile marketing campaigns on average billing events per user per campaign on average average increase on non-voice ARPU among promotion participants average decrease in churn rate during mobile marketing promotions User Engagement Financial Benefits

17 Business development process Lead Evaluation Cross sell to current customers Partner Leads Current Customers New customers Internal Internal Leads Leads Current Customers Trade Shows shows Initial Lead evaluation Analysis of potential customer, local market conditions and competition Replicate succesful cases to other operators of the same group Internal process to evaluate leads Partner leads evaluated from partner but also internally Ability to go faster in final negotiations as customers trust partners for specific services Proposal Development Proposal including commercial offer (pricing, revenue share) developed for qualifying leads Customer Presentation Meeting with the customer, presentation of the proposal, demo and initial negotiations Final Negotiations Finalize product offer and commercial model Win / Loss

18 Transactional revenue model Objectives Incentives Revenue Allocation Operator partners with InternetQ to run mobile marketing campaigns seeking customer feedback or promoting selected products and services Service packages Mobile devices Distribute branded app Customer satisfaction survey Operator customers are notified of the promo and offered incentives to participate. A premium fee might be required for participation Premium content Telecom products Loyalty points Tickets to concerts and other music events InternetQ and Operator share campaign revenue based on agreed terms Revenue Share Model 50/50 split of revenues from premium fee Profit Share Model 80/20 split of revenues from premium fee InternetQ assumes campaign costs

19 Product integration Utilize mobile marketing expertise to organize campaigns promoting Akazoo Akazoo mobile apps create additional ad inventory that InternetQ partners can use for targeted campaigns Incorporate Akazoo music packages to bolster attractiveness of mobile marketing campaigns

20 MobiDialog Mobile Marketing Minimob Smart Ads

21 Smart ads Serving ads through the notifications system of the OS Push the boundaries of mobile advertising Text adsdisplayed in the notification area of modern smartphones Users who click on the ads are shown a landing page with more information Newer Android versions support actionable and customizable notifications with rich content

22 Ad formats Supported ad formats Push the boundaries of mobile advertising Push Notifications Promotional messages that show up on the notifications tray of the device Disappear once clicked Icons Shortcuts displayed as images on device desktop Stay on desktop until deleted by user

23 How it works Overview of the smart ads mechanism Push the boundaries of mobile advertising App publishers (developers, brands, operators) embed SDK in their app code Register with MiniMob and make their app smart ads enabled Smartphone users agree to Terms & Conditions and install app Must opt-in to receive smart ads Users receive out-of-app ads SDK data used for user profiling and targeted offers Support for various types of ads

24 Types of action Actions triggered by user clicks on ads Push the boundaries of mobile advertising Click 2 Market Directs to Google Play page of the targeted app Ideal for app cross-promotion Click 2 Web Opens URL on device browser Easy to track campaign results Click 2 Call Loads the default dialer app Needs explicit user permission before placing call Click 2 SMS SMS body pre-populated User approval required before sending the SMS

25 Why smart ads Major advantages of smart ads Push the boundaries of mobile advertising Smart ads can be sent even when app not in use Much higher conversion rates Ideal for ads requiring user action (click-to-web, download app, etc) Targeting higher-arpu smartphone users Not associated with SMS campaigns

26 Customize user experience Total control over advertising strategy Push the boundaries of mobile advertising Contact Policy - Set maximum number of ads each user can receive - Select hours of the day when notifications are blocked - Spare inactive users from receiving notifications Targeting - Target users by location or carrier - Limit campaign reach to users of specific devices - Associate campaigns to selected apps Copywriting - Test multiple message concepts - Upload unique icons for every campaign

27 Push the boundaries of mobile advertising User profiling Collecting data to build accurate user profiles User Device & Network Location Communication frequency Country Device manufacturer Local time Impressions Locale Phone model Status Clicks Operator OS version Installed apps Creatives used Network type Mobile browser version App usage Inactivity period Wi-Fi / GSM IMEI (encrypted)

28 Platform advantage Key benefits for app developers Push the boundaries of mobile advertising Completely free, no limits on campaign traffic App developers have full control of their ad inventory Transparency at every step means developers know how ads are distributed

29 Evolution of business model Enhancing platform to support advanced monetization options Push the boundaries of mobile advertising Ad Exchange Introduction of real-time bidding on ad inventory Enable advertisers run CPC, CPM and CPA campaigns and reward developers Paid Ads Developers promote their apps through the platform free of charge Free Platform Use

30 Usage statistics Growing presence in key markets Push the boundaries of mobile advertising Increasing traffic 18m unique SDK installs 1000 active developers Unique SDK installs per country United States 1,500,000 Brazil 1,000,000 Turkey 850,000 Germany 850,000 Over 1.5 million new SDK installs every week Thailand 800,000 Saudi Arabia 800,000 Mexico 650,000 Italy 550,000 Russian Federation 500,000 India 500,000 Indonesia 450,000 Spain 400,000

31 Akazoo Music Service Promoting Akazoo through push notifications Push the boundaries of mobile advertising Campaign Overview Targeted Countries Advertised Service Paid subscriptions to Akazoo Activity Period July 2012 September 2012 Total Impressions Over 40 million Improved Performance Average click-through-rate when advertising Akazoosubscriptions through push notifications, SMS messages and web landing pages 17% 1% 3% Push Web SMS Click-Through-Rate Russia Malaysia Singapore Thailand Indonesia 15% 17% 14% 18% 21%

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37 What is Akazoo? Unlimited music, made social On-demand streaming music service 100% Legal Major/Indie label Music Extensive repertoire of 15+ million tracks Unlimited Subscriptions& a la carte Social Fully integrated with Facebook Music Cloud Storage Converged service Unique Mobile Monetization Zero advertising

38 What is Akazoo? Multi-Channel Music Streaming Web Mobile Tablet Smart TV

39 Akazoo in Context Market Drivers & Needs Market: Converged Entertainment Services-$15 Billion Market 2015 Operator/ISP: Falling margins of traditional Voice & Data services. Users: Access vs. Ownership Users: Relevant Content means localized and trending content Monetization: Ease of premium billing in non-western markets Monetization: Local pricing

40 Akazoo Catalog Label Relationships Universal/EMI Music Sony Entertainment Warner/Parlaphone The Orchard Merlin Believe Ingrooves Local Music Labels 20 million tracks FUGA CI 08/13

41 Akazoo Plans Standard, Premium and Mobile Subscription Plans

42 Akazoo-Web Music streaming and playlist management

43 Akazoo music player Music streaming and playlist management Browser-embedded media player ( kbps) Music stored in personal cloud library and streamed by state-of-the-art music player User does not have to download software or store tracks locally Interactive player acts as on-site dynamic queue & playlist Non-interruptive streaming mode support

44 Akazoo social features Viral social CRM for automatic marketing Friends Share on Facebook

45 AkazooMobile Android and ios apps On-demand streaming 3G/Wifi Real-time social music activity feed Offlinemodefor tracks, playlists, albums Auto-sync of cloud based music library Search, autosuggest, voice search Mobile/MSISDN in-app billing Social invite, Mobile music profile

46 Tablet Experience Customized and Optimized Tablet optimized application 10.1 & 7 screens Includes all mobile app features Completely integrated with all cloud services

47 Akazoo remote control app Easy to access your music from anywhere Control your PC music using your mobile No need to connect mobile with PC Use your PC as an entertainment system App available for Android, ios& tablets

48 Strong Performance Improving ARPU Headline KPIs Monthly Revenue ( 000 ) B2C B2O/B2B Total Reg. Users 3,200,000 Total Subscribers 547,000 Avg Conversion Rate 18% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average Revenue per Subscriber Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

49 Expanding Customer Base Diversified territory footprint Revenue Comparison ( million) Users by Territory Poland 26 % Thailand 15 % Malaysia 13 % Greece 12 % Russia 10 % Brazil 6 % Paying Subscribers ( 000) Unadjusted Adjusted Turkey Singapore Spain 6 % 5 % 2% Indonesia South Africa Serbia 1 % 1 % 1 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Other 2 %

50 Commercial strategy & Geographic focus Develop new markets through key partnerships Commercial Strategy & Focus Focus on Operator and ISP partnerships & bundles in key territories Offer greater flexibility than our competition Secondary focus on device manufacturers and brands Geographic Footprint& Expansion Strategy First become regional leadersin two main global areas: Southeastern/Central Europe& Southeast Asia Use Partnerships and Operator deals for territory expansion Target Territories: Poland, Turkey, Greece, Italy, Bulgaria, Hungary, Czech Republic, Slovakia, Serbia, Russia, Romania, Singapore, Indonesia, Malaysia, Vietnam, South Africa

51 Akazoo Revenue Streams & Bundling options Bundling offers that meet partner needs Standalone Soft bundle Hard bundle Co-promo Akazoo offered direct to consumermarketing performed directly by Internetq. Akazoo offered as a add-on service to a partner s subscriber base. Akazoo offered as part of an overall tariff with one price or bundled and pre-installed into a device. Akazoo subscriptions are offered as an incentive for the brand s customers.

52 B2B vs. B2C Pros and cons of the B2B2C and B2C business models B2B (reaching consumers through a MNO) Leverage existing customer trust and loyalty to operator/media brand B2C (selling directly to consumer) Faster product iterations and user feedback + Lower marketing costs Availability of operator s internal media Commercial and marketing flexibility Shorter sale cycles Greater lifetime value of customers Full ownership Longer sale cycles Systems integration Higher Marketing Costs Price sensitivity

53 Case study: Samsung Akazoo on-pack promotion with Samsung Promotion Concept Special coupon with every purchase of select Samsung smartphones and tablets Akazoo music app pre-installed on devices New Registrations Users Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Conversion from free to paying MiniMob campaign Users who submit the code enjoy 3 months of free music streaming from Akazoo Ability to upgrade to Akazoo premium package for a monthly fee Free Users Service Usage (daily average) 36 minutes streaming Paying Users 1.2 track downloads

54 Case Study: Akazoo Globul Music Bulgaria T-mobile subsidiary Soft-Bundle Add-on service Hard-Bundle Music Tariff with 12 and 24 month subscriber commitment. Co-branded and customized for Globul subscribers Integrated Billing: Direct to mobile bill Heavy Use of Operator internal media

55 Akazoo Globul Music TVC Depeche Mode TV Promotion

56 Product Integration Synergies between mobile marketing tools and akazoo Utilize mobile marketing expertise to design campaigns promoting Akazoo Offer to run mobile marketing campaigns free of charge for operators who launch Akazoobundles Akazoo mobile apps create additional ad inventory that InternetQ partners can use for targeted campaigns Incorporate Akazoo music packages to enhance mobile marketing campaigns

57 Social Campaign Marketing Promo Description 2 winners that become facebook fans, opt-in or subscribe to Akazoo service get a chance to win tickets and travel to Rihanna s concert in London (all expenses paid). Channels Facebook, Web, Mobile Opt-in with MSISDN entry. Results ~15K Opt-ins, 14K Facebook Fans, 6K new subs Budget level Low Brand Cooperation Universal

58 Akazoo project/partnership pipeline Project pipeline for Q1-Q CONFIRMED PROJECTS Samsung, Greece (smartphones, tablets) Major MNO (Eastern Europe) Major ISP (Eastern Europe) Co-promo with global Smart TV manufacturer (Greece) Major MNO (Greece) Regional co-promo with global Android device manufacturer (South East Asia) Major Mobile Telco Group (Central & Eastern Europe) 1Major ISP (Poland) Major MNO (Poland) 2 Major MNO (Indonesia) Major MNO (Malaysia) GlobolOEM Android device manufacturer (Asia) 16 Mobile Operators, 2 ISPs, 2 device manufacturers and 1 Smart TV manufacturer in 16 different Territories

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60 InternetQ Acquisition of Atlas Interactive

61 Growth Strategy Continued growth to achieve scale and leverage Product Expansion Geographic Expansion Customer Diversification Leverage carrier relationships particularly with direct billing to expand mobile marketing portfolio Example: Mobile commerce Traffic networks Mobile apps Digital content management and distribution Accelerate customer acquisition, partner development, and local content agreements / music rights for Akazoo Example: Latin America MENA Western Europe USA Diversify customer base and acquire relationships in non-carrier segments Example: Global brands Large enterprise On device positioning

62 Acquisition Rationale Strategic and financial rationale for acquiring Atlas Interactive Expand reach of InternetQ services in new geographies where Atlas Interactive already active Increase mobile marketing campaign potential with MNOs where Atlas Interactive has direct commercial agreements Accelerate growth and create accretive value for investors, with higher EPS

63 Assessing acquisition potential Ranking potential acquisition of Atlas Interactive Business Access to new markets Complementary product portfolio Business objectives Organizational Organizational structure Corporate culture Commitment by key people Financial Working capital requirements Tax complications Debt and liabilities Technical Platform interconnection Software compatibility Infrastructure requirements Product MobiDialog Minimob Akazoo x x x x x x x 8 9 x x x x x x x 10 x Presence in many geographies and complementary mobile marketing capabilities Simple organizational structure with 22 people in two locations in Germany High forecasted growth without much working capital needs Technical compliance and standardized connectivity process Atlas Interactive partnerships with social game companies provide opportunities for MobiDialog and Minimob

64 Atlas Interactive Business highlights Key Atlas Interactive business factors Access, billing and content for distribution of digital assets in more than 120 countries Connected with more than 300 Mobile Network Operators worldwide High growth through expansion to India, China and LATAM Strong leverage on Telco side through direct connectivity agreements Important partnerships with mobile marketing agencies and social gaming brands A database of 3+ million opt-in users for mobile marketing campaigns Processing more than 1 million transactions per month

65 Atlas Interactive Financial highlights Geographical revenue distibution and strong European focus Revenue Distribution (FY 2012) Biggest Markets (FY 2012) 6% 5% 0.3% Germany 18% Western Europe Poland 17% Central & Eastern Europe 39% 50% The Americas Middle East & North Africa Other France Hungary 9% 7% Czech Republic 6%

66 Thank you! For more information, visit