2015 RedTroops Inc. - All rights reserved Investor Memo Page 1 INVESTOR MEMO

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1 Page 1 INVESTOR MEMO

2 EXECUTIVE SUMMARY In-app advertising as it exists today is a true black-box that lacks transparency and control for both advertisers and app developers. To be more precise, advertisers really have no way of telling how their money is actually being spent or where exactly their ads are being displayed. While developers usually just add an SDK, and start getting all these random formats of Ads thrown into their apps, without being able to control if these Ads actually fit their target users, or even how much exactly are they going to be paid for showing these advertisements. These are the main reasons that make the entire in-app advertisement ecosystem unusable for quite a lot of people. RedTroops is a marketplace that directly connects advertisers to app developers, by simply removing the Ad network layer and allowing them to communicate and deal directly. We do so by one of the following approaches: 1. An open marketplace where advertisers can browse all available apps on the network and engage in an auction-based/direct-buy campaigns to win Ad space within that app. 2. A solution-based approach, which will enable us to target medium/large publishers who are clearly shifting to direct Ad sales rather than using traditional Ad network models. By tackling both scenarios, we manage to cover a larger percentage of the market, gaining access to a larger variety of publishers, some of which would have been out of our reach otherwise. The direct marketplace approach is highly suitable for small/medium publishers and advertisers, as it offers an easier approach to creating an Ad, as well as enabling them to show Ads using smaller budgets. On the other hand, the self-serve Ad platform, solution approach, will target larger publishers, with premium traffic, who would otherwise turn to direct Ad sales. Though we will have in-direct access, we will still be able to offer advertisers, access to these developers as well. Thus insuring our fast growth and massive reach. Page 2

3 MARKET OPPORTUNITY IT S AN APP WORLD TV is losing ground to digital media and especially to mobile (smartphones & tablets); people are already spending more time using their smartphones. In fact, a recent study by flurry.com, shows that 86% of time spent on mobile is actually spent within an app. This clearly shows that apps are currently the controlling digital medium, and thus the best way to reach consumers, is to obviously target them within an app. TV Mobile Minutes/Day U.S. U.K. China South Korea IN-APP ADVERTISING IS BOOMING Mobile advertising is a new and emerging market, of which in-app advertising is currently the fastest growing segment. In 2013 the overall mobile advertising market sat at about $13.5Billion in 2013, with in-app advertising taking a solid 25% of that at $3.5Billion. However that percentage is expected to grow to 43% by 2018, making in-app advertising a huge $17Billion market. This clearly shows that the opportunity is now, to enter a young market and confirm our presence as a major player through both direct (our own marketplace) & indirect approaches (a solution based approach, to provide publishers with their very own self-serve Ad platform) Page 3

4 In-App advertising Mobile Advertising $0B $10B $20B $30B $40B DIRECT AD SALES Direct Ad sales are a huge part of every premium publisher s advertising sales, usually bringing in more than 50% of total advertising revenue. However direct ad sales are extremely time consuming, as they require great amounts of manual efforts for back and forth communication which includes agreeing on the deal details, as well as the required artwork and other details. Thus, making the whole process inefficient and immensely time-consuming. This eventually leads many publishers to even drop the whole thing, and that is exactly why automating this process can truly safe time and increase revenues significantly. RedTroops does exactly that, with a packaged solution that serves as a publisher s self-serve Ad platform and handles every aspect of the process from a-z. Page 4

5 PROBLEM AD NETWORK ADVERTISERS APP DEVELOPERS SMALL PUBLISHERS/ADVERTISERS Current ad network models are designed to function as an absolute black box, where neither advertisers or publishers control any aspect of the whole process. Advertisers throw money on these ad networks without knowing where their ads are being displayed or how their money is actually being spent, they just trust that the networks will do their magic, spending their money in the best place to get the best results in return. From a publisher/app developer s point of view, they add all these SDKs and start getting all these ads of different formats thrown into their apps, without being able to control which specific ads are being shown within their apps or how much they re actually going to be paid to show these ads. Which actually leads to in-app advertising becoming quite unusable for people who don t have a very strong experience in mobile marketing. This problem is also complemented by the fact that most advertising networks and even real-time bidding platforms clearly resort to media buying to significantly increase traffic and insure the expenditure of the entire set budget. Thus there is truly no guarantee that an advertiser s ads are actually being shown through a premium publisher s apps, or even to a specific unique set of users. On the contrary, this leads to an extensively overlapping audience, which greatly reduced the efficiency and reach of an Ad. On another note, rich-media Ads are in-accessible for people with budgets lower than $10,000 and are currently exclusively created by the ad network itself, for a fee of course, which is then shown within a specific app. RedTroops drag&drop, richmedia Ad creator makes it super simple for anyone, with no experience what-soever, to create an interactive Ad, with videos, images, etc within minutes. To simply sum it up, in-app Ads are ridiculously expensive and extremely inefficient as they exist today, where a trial to fix the system is inexistent as both advertisers Page 5

6 and app developers control very little of the entire process. RedTroops eases the process beginning with the creation of a rich-media Ads, which is then followed by buying an Ad space directly from developers, within an app of an advertiser s choosing. Guaranteeing maximum transparency and control. MEDIUM/LARGE PUBLISHERS As a developer s user-base grows they become a premium publisher who have access to a specific set of users, which in turn makes them quite attractive for advertisers, who seek them out directly for the placement of targeted Ads. This process is currently carried out through a sales team, which communicates with interested advertisers mainly through . It s very time-consuming, where the terms and price are discussed, as well as the required artwork in a specific set of size. So an Ad will generally take weeks to setup and schedule, not to mention the fact that none of these publishers allow their advertisers to display rich-media Ads, as those a dedicated technical team to create and thus are usually skipped. This is exactly where RedTroops comes in, with a solution based approach to act as a publisher s own selfserve Ad platform, which offers a super simple rich-media Ad creation tool, through which advertisers create the Ad itself and then set the dates and budgets accordingly, to be approved by the developer directly, after which it will be automatically displayed within the app, along with full analytics and payment solutions for both sides. Page 6

7 PRODUCT RedTroops is an end-end solution that is structured around 4 main parts: SDK (Software Development Kit) This is a chunk of a code that would be easily implemented within a developer s app, which would enable it to communicate with the RedTroops server to send/receive information. By doing this we are able to: i. Keep track of how many downloads/active users an app has ii. Detect user device data (hardware/software/device language/carrier) iii. Show any Ad built using our Ad creation tool, directly within those apps without the need to do any other steps iv. Tracking the performance of any specific Ad, in terms of impressions, clicks, and even views for videos. This in turn, allows us to maintain & guarantee transparency of all agreed upon conditions of placing an Ad. v. Offer all these analytical/marketing services for free, through our web interface for all participating developers. Web interface A user-friendly interface to allow developers and advertisers to mainly track the performance of an app/ad. This also features the push notification and Ad creation tool within it and offers a seamless process to manage the entire set of RedTroops tools. Ad creation tool A drag&drop rich-media Ad creation tool, that s so simple, your grandmother can use it. This allows anyone around the world, with no expertise whatsoever, to go to our website and create a highly interactive Ad within minutes. We re talking about videos, images, buttons, tabs, text, etc to build traditional Ads, surveys, forms, and any sort of advertisement to drive specific interaction from users. Marketplace An entire network of apps, featured through an interactive marketplace, where advertisers can easily browse all the apps, and pick the ones that suit them best, to engage directly through auction-based campaigns and win Ad space within those specific apps. For a more targeted approach and better results, we allow advertisers to search for apps according to category, number of downloads, weekly active users, countries in which these apps have the most downloads and even the budget set for those apps. Page 7

8 STRATEGY RedTroops aims to tackle the market quickly and efficiently, using two approaches, to guarantee the largest percentage of the market in the shortest amount of time. The two approaches are as follows: 1. Direct Marketplace: This will cater for small developers and advertisers with limited budgets, where all services will be offered and hosted directly by RedTroops. Advertisers will simply come to our website, create their Ad using our tools and then head to the marketplace, where they will engage directly with specific apps/developers, through auction-based campaigns to buy Ad space within that app. Developers on the other hand will need to implement our free SDK, gaining access to all the same advertising tools, as well as push notifications and Analytics. All of which they can use to promote/cross-promote for free over their own apps. 2. Self-Serve Ad Platform Service (A solution based approach) By offering our services as a solution to other developers/publishers, we will cater to an un-served segment in the market, which is direct-ad sales, thus allowing us to go after medium/large sized publishers. Page 8

9 The solution will simply automate the direct-ad sales process and simplify the entire procedure, saving developers time and money. The advertiser simply accesses the publisher s specific portal, creates the rich-media Ad itself and then gains detailed insight about the app/s traffic and available advertising slots to eventually buy an Ad spot. No part of this entire process requires any manual action, except the actual approval to display that Ad. Following both approaches from day one, insures a strong presence in the in-app advertising eco-system, by exponentially growing our small, medium and larger publisher base, we will gain access to a greater number of users, and will be able to attract a larger number of both small/large advertisers in a short period of time. BUSINESS MODEL It s so simple, we didn't even want to waste a page on it. Our current business model is based upon: 1. Commission on every marketplace transaction (RedTroops Marketplace) This percentage is currently set at 10% of the total value of any specific advertising campaign, which sets RedTroops at a better percentage than all other existing Ad networks, who currently set the share at (70-30). 2. Freemium Licensing Model (Self Serve Ad Platform: Solution-based Approach) We will start with a free solution + commission, along with a set of paid premium features that the publisher can add unto the default arrangement if they wish. As a publisher grows, our commission will diminish, and eventually get replaced by an annual licensing fee that will be calculated accordingly. Page 9

10 GO-TO MARKET STRATEGIC PARTNERS To kickstart our growth, RedTroops will seek strategic partnerships with companies who already have access to a larger number of apps/developers, where 1 partner ensure access to thousands of users. We will initially start with mobile operators, Especially those who have their own app stores/platforms and already have access to advertisers through transitional mobile media (SMS/MMS/etc ). Our solution will easily enable them to monetise directly by connecting the advertiser/developer side directly. This will eventually grow to other Ad agencies who are involved in traditional advertising media and are interested in accessing the mobile medium strongly to convert existing advertisers and increase revenues. GOING AFTER DEVELOPERS DIRECTLY Our strategy is mainly summarised by thought-leadership, and the offering of free tools that developers can use within their own apps and we will reach them as follows: 1. Direct s to app developers who fit a specific criteria (we have harvested the entire database of all developer s from both the app store/ Google Play). 2. Developer forums/websites, to engage directly and offer them an instant FREE solution that will allow them to instantly monetise within their apps. 3. By becoming an active part in Quora/Linkedin discussions that are directly related to the problem we re tackling, and encouraging developers to check out our solution 4. Collected data through the SDK, will also be used to formulate a large number of highly interesting, beneficial reports and infographics, which will be launched over major tech website, such as TechCrunch, as a teaser marketing strategy. 6. Articles and blog posts over well-known technology media publishers and bloggers. 7. Targeted social/professional media Ads, as well ad traditional web advertisement. Page 10

11 COMPETITIVE LANDSCAPE RedTroops embarks the existing mobile advertising landscape, creating a new medium/market which is a mix of different markets that caters to specific, unserved segments of publishers/advertisers. By starting with the creation of a rich-media Ad, and ending with a straight-forward process of buying an Ad space within in- app, we aim to open up the world of in-app advertising to anyone around the world, with no technical/marketing expertise whatsoever. We re going to do that by focusing on the two following segments: 1. The long tail: App developers with minor downloads as well advertisers whose budget is less than $10,000. although the money spent on each campaign might be of a smaller Page 11

12 2. Premium Publishers: App developers with a hugely successful app or a recognised business, attract direct attention from advertisers. As mentioned previously, this is currently a very manual, time-consuming process. None of competitors focus directly on the above segments, which clearly indicates a need in the market, and thus an opportunity for RedTroops to lead & grasp. We stand out & excel, through the following: 1. We re the world s first in-app advertising space marketplace. Offering 100% transparency and control for all participating parties, to allow everyone from app developers to restaurant owners to advertise on any app they choose. 2. Enabling anyone, with no expertise what so ever, to create a rich-media Ad within minutes, using our super simple, drag and drop, Ad creation tool. 3. We re an app developer s/publisher s very own self-serve Ad platform, which can be used directly through RedTroops.com, our implemented on their servers as a white-label solution, to give their advertisers access to Ad creation tools, which in turn enables automated Ad sales. 4. All of our tools are offered absolutely free for developers who implement our SDK. Giving them access to analytics, to better understand their audiences. As well as the necessary tools to allow them cross promote their existing apps, and even to reach out to other developers 5. RedTroops is the best paying monetisation platform out there, where developers/publishers make 90% of the revenue (instead of a maximum of 70% across all other competing Ad networks). Page 12

13 REFERENCES & SOURCES: Page 13