Adi Bar-Dagan

Meyrav Elad

Emanuel Hachamov

Achinoam Levy

Nocham Ohana

Maxim Vainstein

Kfir Yadgar

Roy Zuckerman

The NeedThe Need

• Low TRP / GRP - $30 Billion Waste

• Unspecific target audience

• Greater competition in Multi-Channel TV

• Studies indicate a need for targeted advertising

from the consumer’s point of view

• Advertising routing system based on one to

one broadcasting

• Personalized user profiling

•Advertisements presented to specific viewer

in accordance with personal profile.

• Response server allowing user-advertiser interaction

The ProductThe Product

Data collection and aggregation:

• Interactive questionnaires – demographic data and preliminary viewers preferences.

• User Interaction – Enhancement and tweaking of personalized profile.

• Continuous Analysis of viewing habits.

The ProductThe Product

• STB with substantial storage capacity

• Client-Server connection

• Software installed remotely on viewer’s

digital set top box

• Constant update of set-top Ad database

Technology OverviewTechnology Overview

• Data analysis through learning algorithm

• Response Aggregation through Return

Channel• Compatible with the leading middle-ware

operating systems

Technology OverviewTechnology Overview

The MarketThe Market US Advanced STB ForecastUS Advanced STB Forecast

Forecast: US Digital Cable and Satellite Penetration

* Source : Forrester Research

0

10

20

30

40

50

60

2001 2002 2003 E 2004 E 2005 E 2006 E

Nu

mb

er

of

US

Ho

us

eh

old

s

( in m

illio

ns

)

Satellite

Analog cable

Basic digital cable STBs

Advanced cable STB*

Total advanced digitalSTBs

• By 2006 there will be over 45 millions households (u.s) using interactive TV.

• TV Advertising revenues (2001, in Billions):- Broadcasting Networks – $16.8

- Cable Networks – $10.1

- Infrastructure Companies – $2.7

* source: Forrester research, Jupiter Communications

The MarketThe Market

* Source: People Meter

The MarketThe Market

25%

10%

4%11%

50%

Best TRP/GRP Second Best TRP/GRPThird Best TRP/GRP Fourth Best TRP/GRPOther

NDS

Wink

NAVIC

AD-EXACT

ACTV

AdQ

CompanyCompany Personal Personal ProfileProfile

Response Response ServerServer

Profile Profile UpdatingUpdating

AdAdRoutingRouting

ReturnReturnChannelChannel

ActiveActiveClientsClients

Competitor AnalysisCompetitor Analysis

Two revenue streams:Two revenue streams:

• Licensing fee from content providers*

• Advertisers fees from “more info” requests

* Profit Sharing with infrastructure companies

Business ModelBusiness Model

* Source: People Meter

Business ModelBusiness Model

25%

10%

4%11%

50%

Best TRP/GRP Second Best TRP/GRPThird Best TRP/GRP Fourth Best TRP/GRPOther

• Expected TRP/GRP – 70% (40% growth)

• 30% expected increase in revenues (Full Deployment)

• Revenue split 10% to each party (Content, Infrastructure, AdQ).

• One–Two year license at predetermined price.

Business Model Business Model assumptionsassumptions

• System initial installment by AdQ

• System maintenance and operation by infrastructure companies

• Long term contracts with infrastructure companies

Business Model AssumptionsBusiness Model Assumptions

Revenues Revenues (in millions US $)(in millions US $)

200620052004

AdQ Market Share

Digital STB Deployment

Total TV Ad Revenues*

Total Added Value by AdQ

45% 55% 65%

5%

$36,300

$245

10% 15%

$43,100 $52,400

$711 $1,533

AdQ Revenues $82 $237 $511

* Source: Financial Times

• Stand Alone Applications – 8/2002

• Prototype – 8/2002

• Beta Version – 2/2003

• Version 1.0 – 8/2003

• Final Release – 10/2003

Development PlanDevelopment Plan

• Direct Sales – US Market first

- Infrastructure companies

- Cable and DBS content companies

- Broadcast Networks

• Area by Area roll-out

Marketing PlanMarketing Plan

Income StatementIncome Statement (in thousands US $)(in thousands US $)

200620052004

R&D

Revenues

Operations Cost

Total Cost

$82,000 $237,000 $511,000

$13,050

$20,525

$33,575

$28,650 $45,500

$43,277 $52,420

$71,927 $97,920

EBITDA $48,425 $165,073 $413,080

Required Funding for 2002-2004: 10 Million DollarsRequired Funding for 2002-2004: 10 Million Dollars

• Consumer behavior – “couch potato” and “lay-z-boy” phenomena

• Growing variety of content channels• Middleware manufacturers embedding

software features• New technologies (PVR etc.)• Insufficient financial resources

RisksRisks