stratfor and ecnext 2003 recap and 2004 opportunities

Copyright 2003 ECNext

Stratfor and ECNext 2003 Recapand

2004 Opportunities

Mike PerkinsChief Technology Officer

Pam SpringerVice President, Sales

Rob ReachSenior Account ExecutiveECNext, Inc.(614) 408-0067

January16, 2004


Agenda-ECNext and Stratfor 10:00-12:00 January 16, 2004

• Introductions 10:00-10:10

• 2003 Recap and Metrics 10:10-10:30– Financial

– Timeline

• 2004 Look Ahead 10:30-11:00– 2004 Stratfor Goals & Expectations

– 2004 Econtent Market

– 2004 ECNext Solutions

• 2004 Stratfor/ECNext Opportunities 11:00-11:30

• Platform 11:30-11:40

• Next Steps 11:40-12:00


Who We Are

• Founded in 1996 in Columbus, Ohio

• VC funded– Athenian Venture Partners

– River Cities Capital Funds

• Founded as a content aggregator – Built sophisticated platform & tracking capabilities

– Worked with over 500 publishers to market content

• Leveraged aggregator model to evolve to build customer branded e-commerce solutions

• ECNext provides services and technology enabling our customers to sell their valuable business information on the Web

• We market to companies who create and sell high-value business research, reports, news, analysis, and data


Benefits we provide for our Customers

• Generate new revenue by reaching net new Web buyers– Successfully exploit Web as new direct sales channel

• Broaden market reach– Tailor & size offerings to meet range of customer needs

• Cross-sell new buyers to other offerings– Keep your message in front of them

– Bundles, promotions, incentives

• Increase repeat buyers– Discontinue access in a pre-defined timeframe

– Increase subscription by automating renewal promotion

• Decrease production & distribution costs





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


Current Terms

• Contract:– 18 month term

– $2,500/mo license, customer support and hosting fee

– $2,500/mo for hosting former Plug-n-Pay customer database

– $3.00/year for new subscriber ($.25/mo)

• Recent Add on (10/03 – 3/04):– $4,000/mo for 40 hours/month custom development; (5 month

retainer)


2003 Highlights

• 2003 Sales of $1.6 Million

• Sales Increased 400% Q3 over Q2 $372,626

• Sales Increased 260% Q4 over Q3 to $972,059

• October Sales were $388,997


Financial Results

Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-04 YTD Totals

Stratfor Gross Sales 51,154 166,137 56,119 22,268 15,827 38,871 182,828 150,927 388,997 320,062 263,000 $1,656,190 $1,656,190

ECNext Fixed Income Mo Maint Fee - Non Legacy customers2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 $22,500 Mo Maint Fee - Legacy Customers 1,250 2,500 2,500 2,500 2,500 2,500 $8,750 Mo Develop & Prod Sves Retainer 4,000 4,000 $0

2,500 2,500 2,500 2,500 2,500 3,750 5,000 5,000 5,000 9,000 9,000 $31,250ECNext Variable Income Subscription Fees 1,796 4,985 1,101 376 324 502 3,203 448 453 660 $13,849 Monthly Retainer Overage 763

1,796 4,985 1,101 376 324 502 3,203 448 453 1,423SUBTOTAL ECNext Income4,296 7,485 3,601 2,876 2,824 4,252 8,203 5,448 5,453 10,423 9,000 45,099 $45,099

Chargebacks 50 184 354 474 120 (476) 3,101 5,728 20,974 25,879 19,716 $76,104


Financial Results

Stratfor/ECN Monthly Sales 2003

0

100,000

200,000

300,000

400,000

500,000

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec


Financial Results

0%

20%

40%

60%

80%

100%

Feb Apr Jun Aug Oct Dec

Relative Revenues vs. Costs

Stratfor Net Sales

ECN Costs


Financial Results

Chargeback Threshold

$(5,000)

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2% of Sales

Actual Chargebacks





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


Timeline Monthly Support Calls

Support Calls

0

50

100

150

200

250

300

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Support Calls

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total50 99 139 129 154 138 54 255 111 99 55 1,283


Timeline

Q1 Q2 Q3 Q4Iraq war site built End of qtr changes in contacts Plug & Pay DB Cutover Retainer establishedEstablished Customer feed to Developed and delivered Sales Admin Tool Modified Landing pages for Basic

Take transactions while Created custom transaction reports Modified Landing pages for PremiumStratfor provided access delivered daily and set up to go self serve Modified auto renewal

Set up a content site Training on the Pub Tool for Marla's team Trial Corporate Account set upDual sites running content Validating Customer lists with DB's Changes to Sales and Account ModuleProvided Stratfor with the Pub tool Email campaigns

Reconciliation Audit-extensive no cost to StratforRadio silence





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


2004 Stratfor Goals and Expectations

• Revenue

• Organization

• New Products

• Email Campaigns





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


eContent Market OverviewIncreasing Use of the Web

“Our research on the information habits of users in various functional roles and industries shows that 79 percent of users turn first to the open Web for work-related information.”– Outsell

• Search engines are starting point for business searches– 79% of searches start here

– 70% of info delivered online


Market OverviewMarket Size

• $11B in individual business information purchases over previous 12 months– 22% of buyers spent $10,000 or more

– Median of $1,500

• Additional $35.5B in purchases out of the departmental budget

*Source: Outsell, Super I-AIM


Market OverviewBusiness Drivers

• Fewer $ for corporate-wide information purchases– Slowing economy

– Budget cuts for corporate librarians, research dept’s

• Fewer corporate-wide buyers– Consolidation of tier 1 companies (e.g., pharmaceutical, chemical,

automotive)

• New markets are harder to reach– Many small, new companies

• Need for information not going away

• Individual transaction buying increasing


Market OverviewShifting Buyer Behavior

• Decentralization of Information Purchases – 68% of business end-users prefer to find their own information

– Only 3% will call the corporate librarian

– Only 25% will visit the corporate library

• 51% of content purchases driven by end-user decision– Purchased information typically satisfies tactical, project-oriented need

– Decisions requiring approval are typically made by a functional Director or VP

• Purchase Size– 34% have purchase authority for $5,000 or more

– Median purchase authority is $1,000

*Source: Outsell, Super I-AIM


How internet users find web sites

77%

42%

30%

22%

3%

SearchEngines

Links

Off-lineAdvertising

Email

Banners Source: Dick Morris survey for iProspect


1.70%

2.00%

2.40%

4.00%

4.40%

4.50%

4.80%

9.90%

18.40%

27.60%

28.90%

29.50%

Look Smart

Earthlink.com

Lycos

AltaVista

Netscape

Infospace

Overture

Ask Jeeves*

AOL*

MSN**

Yahoo*

Google

Search engine audience reach

Source: Nielsen NetRatings for SearchEngineWatch.com

* powered by Google ** powered by Inktomi


The search engine opportunity…

• A potential customer on a mission to find critical business information opens a search engine and enters key words…

• Your site is listed first in the results. He doesn’t know about your business, but assumes that since you are highly ranked he should learn more…

• He clicks the link to your site and opens directly to one of your articles– the description is on target – he clicks to buy.

40% or more of your online content sales can be driven directly from search engines.





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


ECNext SolutionsBeyond SEO – Content Illumination

Definition of Content Illumination: SEO techniques applied to web site on a page-by-page basis (e.g. product pages)

Objectives:

Bring potential content buyers from search engine directly to point-of-sale– Direct potential content buyers to a relevant product page

– Eliminate the need for the buyer to search site to find information

– Minimize the number of clicks-to-purchase


Standard ECN Customer Metrics

• Search Engine Related Revenue

• 1.5% overall site conversion rate

• 3 x search engine site conversion rate (4.5%)

• Over 400% increase site traffic after 4 months (with SEO & Content Illumination programs)

• 50% Average Year over Year revenue growth for ECN customer

• Due to ECNext integrating at the Stratfor site subscription sign up page, these metrics and programs are not applicable. Hosting Stratfor content would make these available.


ECNext Solutions Summary

• Search engines are the key tool for business users to find information on the Web

• SEO and Content (Article) Illumination are very cost-effective tools for bringing traffic to business e-content sites

• Targeted Content (Article) Illumination programs help drive traffic and increase conversion rates by:– Bringing potential content buyers directly to the point-of-sale

– Minimizing the number of clicks-to-purchase

• Adding this functionality into the Stratfor solution will drive additional sales


InfrastructureHosting, Security, Maintenance, Redundancy

Business IntelligenceTest, Measure, Analyze, Report & Refine

DemandGeneration

Search Engine Optimization- Site optimization- Content Illumination

Email Campaigns

Affiliate Programs

Industry Links

Print Campaign Tracking

Trials

Content Management

Publishing Tool

Automated Source Data Feeds

Data Formatting- Segment- Index

Outbound XML (Web Services)

Aggregator Feeds

eCommerce Transactions

License Options - Pay-per-view- Subscription

Payment Options- Credit card- Pre-paid- Bill me

Promo Options- Bundling- Discounts- Cross-sell related items

Tracking and Reporting

Activity Tracking- Visits / Transactions- Revenue- Cart abandons

Customer Database

Lead Database

Subscription Management

Usability Studies

Operations & SupportEnd-user Help Desk, Credit Card Billing and Reconciliation

Making eContent Work for You

Additional Modules Available: Telesales Corporate Acct. Mgt.

Multicurrency Personalization Conference Sales Ad Server

Stratfor Solution (currently utilized)





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00


Demand Generation & Site Optimization

• Search Engine Visibility• Website Usability Testing & Improvement• New Features• Direct Marketing


1. Top-level SEO• Website-level visibility for relevant, frequently-

used keywords phrases

2. Current event SEO• Visibility to highly relevant, topical landing pages

3. Article page illumination• Visibility to individual articles

Search Engine Visibility Initiatives


Search Engine Visibility: Top-level SEOHomepage

About us

Current Keywords (daily searches):• Strategic forecasting (2)• Predictive intelligence (0)• Global intelligence (10)• Strategic intelligence (20)• Geopolitical analysis (3)• Geopolitical forecasts (0)• Intelligence services (19)• Geopolitical intelligence (2)• Business intelligence (351)• Issues intelligence (0)• Intelligence briefs (0)

Other Valuable Keywords:• International business

risk (33)• International business

news (171)

Red = Stratfor currently ranks high

Current searches: 53

Potential additional searches: 558

Note: “international” searched more heavily than “global”


Search Engine Visibility: Top-level SEO

• Keyword analysis is necessary, but not sufficient for search engine visibility

• Also requires:• Appropriate placement of keyword phrases• Ensuring page structure is search engine “crawlable”• Keeping abreast of changes to each search engine’s

ranking methodology


Search Engine Visibility: Current event SEO

• Landing pages quickly developed & live for breaking events

- Template- “Cocked and ready”- Tailored to drive subscriptions- Pay-per-click keywords purchased to drive

immediate, highly-relevant traffic


Search Engine Visibility: Article page illumination

• Unseen, intermediate landing pages for each article- SEO friendly- Keyword rich- Redirect to the Stratfor article page

• Experience shows this increases traffic by 4x.• Article page must be optimized to convert searches

into subscriptions


Website Usability Testing & Improvement• User Testing

- Obtain detailed, qualitative feedback about how to improve site

• Surveys- Pop-up survey to visitors when certain events occur (e.g.,

subscription is not completed)• A/B Testing

- Implement site changes, often based upon User Testing & Surveys, and quantitatively assess the impact on shopping & purchasing behavior

- Live, side-by-side comparison- “let the customer decide”- E-commerce best practice


Website Usability Testing & Improvement: AB Testing

Subscribe Now!

E.g., Article Landing Page:

• User test feedback: shopper’s unclear how to subscribe• Proposed change: Large “subscribe now!” button on article page• AB test: Randomly 50% of visitors receive version A & 50% receive version B• Metrics analyzed: average subscriptions started & completed per visitor


Website Features• “My Stratfor”

- Allow existing subscribers to customize their view of the Stratfor site

- Organize sections based on personal relevance- E.g., Yahoo vs. My Yahoo


Email & Direct MarketingTypes of Programs

• Subscriber renewal programs– Email renewal promo is built into ECNext solution

• Automated based on renewal date

• Configurable Number & timing

• Registration / promotion programs– Capture registrations on site

– Promote subscriptions

• Subscriber acquisition programs– Email & DM to purchased lists

– ECNext provides tracking and execution support


Email Marketing

End-to-end Tracking

Analysis & Reports

Track program metrics

- Email opens

- Site traffic

- New subscribers

- Subscriber retention

- Revenue

Test programs

- List performance

- Promo offers

- Creative & message

Execution

Set tracking codes

Stage creative

Manage customer list

Manage mailing list

- In-house list

- Rented lists

Send emails

Process opt-outs & bounce backs

Program Planning

Plan program

- Target audience

- Define offers

- Creative

Develop creative

- Message

- Design

Acquire lists

- Research

- Negotiate

Project management

ECNext’s subscriber acquisition program support

Stratfor’s marketing activities


Opportunities

• SEO & Article Illumination

• eMail Campaigns

• Ad Servers

• XML Feeds

• Personalization by end user

• Tracking, Reporting & Monitoring





– Timeline





• Platform 11:30-11:40

• Next Steps 11:40-12:00

stratfor and ecnext 2003 recap and 2004 opportunities

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