brand a where biz case - december final

8/14/2019 Brand a Where Biz Case - December FINAL

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BusinessCase

112/04/08

December 2008


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Company Purpose

Brandawhere will give brick and mortarstores increased control over therepresentation of their brand, andbusinesses, across an everexpanding universe of onlinemapping and mobile location aware

environments.

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B u r g e r K i n g


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What Is It?Phase 1 (first 12-24 months). A hands on

consulting service provided to brick andmortar retailers to help them better

market their businesses on mobile locationaware devicesPhase 2. (24 months +) The consulting

service will grow into a technologicalsystem and exchange for the purchase,placement and measurement of businesslistings on mobile location aware devicessimilar to the ad networks currently inexistence for the tethered web.12/04/08


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Why This Business isNeeded

Consumers are increasinglydiscovering businesses to patronthrough the use of mobile devicesand online mapping

There are thousands of popularmobile and online map findingservices, and many new ones beingintroduced each day.

Retailers would need to spend

significant time and resources in12/04/08


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Traditional Media

Online Media

Disposition & Propensity for Action

Reach/Awareness

Different Ads, Different Goals

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Be found with BrandAwhere.

Be sure they can find you the first time, all the time, and when themoment is right.

Tell them aboutyourself, create animage

Give them more detailsand sell virtually

Help people find the

nearby store and brandsthey know and trust


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Why NowSome unprecedented events quickly moving

mobile location awareness intomainstream

GPS chipset prices plummeting to $1-5versus $10-15 just 18 months ago,location awareness finding its way intomore and more devices

PND sales growing 100% year over year 10 million iPhones sold, all with location

awareness capabilities front and center. Rapid adoption of Android platform to

further support build out of cross device12/04/08


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How big is this opportunity?

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72 million users, or 44% of the online populationuse online maps (May 2008) 17 million users or 7.5% of all mobile phonesubscribers accessed maps via a mobile device(May 2008) In 2008 there will be more new personalnavigation devices sold than new cars in the

United States (est PND sales 20 million vs autosales of 13.8 million). Sales of personal navigation device in the U.S.grew ~100% 2007 vs 2006 New phones equipped with GPS expected togrow from 240 million in 2008 to 550 million12/04/08


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12/04/08


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Where is Location Awareness Now?

Category Leading Players Latest Stats Navigation or TrackingReady

Garmin 7.6M* sold in U.S. in 2007 100%

TomTom 9.5M* sold in U.S. in 2007 100%

VehicleManufacturers

~7-10% new car take rateAvailable in ~70% of vehicles sold*In ~3% of all U.S. cars

100%

ATT (GSM) 70 Million (subs) Small butgrowing fast,300% CAGR*T Mobile (GSM) 28.7 Million (subs)

Verizon (CDMA) 65.7 Million (subs) Nearly all withGPS, but not allapp enabledSprint (CDMA) 53.8 Million (subs)

*Sources: ABI Research, Navteq, Garmin, TomTom SEC filings 1012/04/08


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Fast Growing New AdVehicle

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Medium Millions

U.S. Mobile PhoneSubscribersU.S. Internet UsersMagazineU.S. TV HourseholdsMonthly Online MapsUsersCable TV Households

Newspaper Readers2008 PND Sales EstimateActive U.S. In-Dash NavSystems

2252201841127264.85317-24

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ABI: 900million GPSunits WWby 2012,with 560million in

phonehandsets

That doesnt yet know its a prime advertising vehicle


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Current Problem The business listings in many of the existing

online and mobile map applications areoften inaccurate, incomplete and missing

highly relevant marketing messages of value to the consumer.As a result: Retailers miss sales opportunities. Consumers cant easily find what theyre

looking for a critical time, when theyreready to buy.

Brands are not well positioned or12/04/08


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How The Issue is Addressed Today

Today retail businesses are largely at themercy of others to get their businesslistings right, and are not being pro active

about managing their presence.But when they dont get it right there is a lotto lose as customers may:

Postpone or forgo the purchase Go to a competitor which is more readily

findable Travel to less convenient locations, often

hurting chances for repeat business12/04/08


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BrandAwhere Solution

12/04/08

Process for collecting andupdating retail location and

store specific marketingelements

Storage and managed delivery of datato entire ecosystem of both online and

offline providers of location awareservices

Database

Web Server

Provide no cost added valueservice to ecosystem of service

providers


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Hypothetical Scenario

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Total Stores in Operation:3,456

New Store Openings:

2006: 175 stores2005: 173 stores

Correct Listing

Missing Listing

Incorrect Listing


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Many Missed SalesOpportunities

Source Accurate Inaccurate Missing TotalIncorrector MissingGoogle 3,120 286 50 336

Microsoft 2,897 483 76 559

Yahoo 2,991 385 80 465

Navteq 2,650 569 237 806

Teleatlas 2,602 544 310 854

Nokia Maps 2,941 380 135 515

Top 10Mobile MapApps

28,591 5,012 957 5,969

Total 45,792 7,659 1,845 9,504

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Base Case Cost/Benefit

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Even if just one person finds and has one new location visit for each previouslymissing listing, Sonic still comes out ahead.

Cost/Benefit

Revenue

Gross number of missed listings 1,845

Number of missed store visits (1per listing)

1,845

Typical Revenue per Store Visit $10

Directly recouped revenue $18,450

Expense

Total Stores Represented 3,456BrandAwhere Annual Fee Per Store $5

Total Sonic Expense ($17,280)

Net Benefit to Sonic +$1,170


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Significant Benefits ForAdvertisers

Assumptions

Scenario#1

Scenario#2

Scenario#3

Missed SalesPer MissingListing

1,845missinglistings

1 missedsale perlisting

2 missed 3 missed

InaccurateListingsMissed Sales %

7,659 10% missedsale perlisting

15% 20%

IncrementalRev

$10 persale

$26,109 $48,388 $70,668

Cost ($17,280) ($17,280) ($17,280)

Benefit $8,829 $31,108 $53,388

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As usage of mobile location aware devices increases, so does the value.

Reflects Direct Sales Benefit Only: Doesnt include benefits related to repeatbusiness, referrals, word of mouth, happy customers


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Avg. Sales TicketAverage Revenue Per Sale

Visa Average In Store Transaction $70

Starbucks


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How It Will Make Money:Part 1

Retailers are charged an annual fee perretail store in operation . Example Burger King has 7,458 U.S. stores in

operation (11.3k including Intl).

Cost to Burger King for services are at a rate of $5 or $10 per store

Annual Burger King Revenue to BrandAwhere:@$5: 7,458 x $5 = $37,290 per year

@$10: 7,458 x $10 = $74,580 per year Fee will vary on customer value There are approx 14 million brick and

mortar retailers in the U.S.12/04/08


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How It Will Make Money:Part 2

Phase # of Stores

# of visitsperstore/yr

Rate AnnualRevenue

Part 1 FixedFee

7,458 12(1/mo)

$10/store/yr

$74,580

Part 2 Cost PerVisit

7,458 365 (1per day)

$5/visit $678,000

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Widespread adoption of mobile location awareness and connected deviceswill growth curve seen on the web and provide the scale needed to supporta pay per transaction model.

Revenue potential for next generation is nearly 10x that of fixed fee modelBurger King exampleBurger King has 11.4 million customers dailyDrive 1 new visit per store per day = just .06% of customer volumeBurger King pays $5 per lead

TiN F t


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Fixed Fee$10/store/yr Cost Per Lead/Visit

$5 - $50 per lead

TimeNow Future

Post ClickStore Visit


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Mobile ApplicationEcosystem

The mobile location aware applicationmarketplace needs a revenue model.

Like the web, its unlikely that consumers willdirectly pay subscription fees for these services,so an ad supported model may be needed

All finding services including mainstreampersonal navigation device manufacturers wouldbenefit from the creation of this business and the

revenue share it could create not dissimilar tomany small vertical web businesses supportthemselves via Google AdSense

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Current System: Brick and mortar storeinformation is one of many pieces of geo information gathered by mapmakers.

New System: Brick and mortar storeinformation is marketing controlledand paid for by those that benefitmost from being found businesses.

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Summary

brand a where biz case - december final

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