The Yield Team• Eric (Contractor) – Analytics – Eric identifies areas on which the revenue team should focus and

provides feedback and guidance on what is/isn’t working in our iterative improvements. Without an Analytics capability, everything we do would be flying blind.

• Matt (Full Time 6/1/09) – Sales – Matt’s primary responsibility is making sure that our Free List and Paid List email campaigns are executed flawlessly. Each “single” campaign is actually a couple dozen emails/landing pages with specific technical requirements. Matt is evaluated not by the revenues of the campaign but by a zero-defect metric. He also does research and other legwork to support the entire team.

• Megan (Full Time 6/15/09) – Sales – Megan’s primary responsibility is driving direct and indirect revenue goals via partnerships. This runs the gamut from identifying new partners to managing existing relationships. This role, which includes responsibility for execution as well as negotiating a relationship, is new. Megan is also cross-trained with Matt to insure that campaigns go out each week without fail.

• Tim (Contractor) – Sales – Tim’s sole responsibility is to increase yield in our conversion processes. He designs new pages, deploys the necessary testing infrastructure, works with Eric to measure results, and iterates. He is measured according to the increase in percentage yield that he’s able to generate for any given volume level.

#1: The Activities that your team is engaged in

Eric & MattEric

June

• With IT, finish revisions to our customer database to track from first visit to purchase via FL campaign

• Develop reconciliation reports to verify WPromote advertising commissions

• Continue improvements to daily online analysis report (see attached)

• Managing WPromote mechanics (on-going)

Q3

• Develop reporting for iPhone app and widget impact

• Guide revisions to Word-of-Mouth design changes to our free features

• Continued guidance on pools of opportunity in existing conversion processes

Q4

• Analytics for 3rd party distribution platforms like ThomsonReuters

• Analytics for Refer-a-Friend program

• Analytics for advertising sales

MattJune

• Research Refer-a-Friend program providers

• Continue campaign mechanics (on-going)

• Help with text and graphics for campaigns (on-going)

• Redesign layout of Free Weeklies

Q3

• Develop better email campaign reporting tools

• Research Word-of-Mouth strategies

• Support iPhone app and widget roll-out

Q4

• Help with selling advertising roll-out

• Coordinate Holiday Gift campaign

Megan & TimMegan

June

• Assess existing partnerships

• Support email campaigns (on-going)

• Develop partnership profiles & approach strategy

• Create partnership package (marcomms, landing pages, etc.)

Q3

• Develop target list

• Begin approaching partners

Q4

• Continue approaching partners

• Iteratively improve

TimJune

• Continue working with IT to get testing infrastructure in place on existing conversion pages

• Develop new page designs to test

• With IT re-architect sign-up page process (continues in Q3)

• Supporting WPromote conversion activity

Q3

• Roll-out next wave of tests for existing conversion pages

• Revise presentation of free features to drive Word-of-Mouth efforts (see example attached)

• Support Seth in site design from a conversion standpoint

Q4

• Continue iterative improvement of conversion funnels

• Deploy conversion pages for new events, i.e. Get our iPhone app; Get our widget; etc.

#2: The amount that we can expect from those activities

Baseline - Average Mar-May 2009

• Walk-up– Eligible (Unpaid) Site Visitors – 206,540 people– Revenues - $46,667– Per Capita Value – 22.6 cents/visitor

• Free List– Free List Sales

• Total Free List Revenues - $136,333

• Front-Month Cohort Revenues - $57,565

• Front-Month Cohort Yield – $3.24/person

– Free List Growth• Eligible (Anonymous) Site Visitors – 204,533 people

• New Cohort Addition – 17,767 people

• New Cohort Yield – 8.6%

Walk-Up Scenarios

• Optimization increases in Per Capita Value are MORE LIKELY and occur FASTER at higher walk-up conversion levels

• 60%+ of Walk-up Sales occur via the Become a Member tab on the homepage. Homepage changes to reflect Dossier will have a major impact on the top of this conversion funnel. I recommend involving SiteTuners in the homepage conversion design process.

Free List Signups Scenarios

• Increases in Free List Signup Yield will come about through a combination of better design and new reasons to give us your email address. Our Free Weekly emails need to be explicitly redesigned to encourage signing up for your own copy (better design). A STRATFOR widget will “trade” an email address for a widget to post on your site (new reason).

• Each cell above becomes the following month’s Front Month Cohort.

Front-Month Free List Sales Scenarios

• With a cohort the size of May’s (14K names), we can do one 75/25 split test per month. If the cohort size increases as anticipated, we can do additional testing and thus increase Per Capita Value faster.

• My existing team is focused exclusively on improving the landing pages for our emails. A MarComms person to be hired should help as well, in crafting better emails.

• This is the Front-Month cohort ONLY, as per the “Volume Strategy.” Older cohorts will also contribute to total Free List sales.

Partners

• Partner Types– WAC (91 regional chapters)

– Synapse Frequent Flyer Mile Program

– Book-Related

• Security Book – ASIS, PoliceOne

• Israel Book – to be determined

– Military

– Academic

– Security

– Financial

– World News

• Goals– Direct Co-Sales (Mauldin)

– Direct Free List registrations

– Affiliate model, using our widget to increase FL registrations in exchange for a follow-on revenue split

– STRATFOR Membership as partner member benefit (WAC and CIC proposals)

– Traffic driver, sending potential FL registrants our way in exchange for having a content draw on their site

Partner Scenarios

Minimum Accomplishments– 1 Included Membership Deal (WAC, CIC, etc.) for $50K+– 11,000 Free List additions (results in $44K FL revenues)– 100,000 Site Visitors (results in $27K advertising revenues)

#3: The rationale of why #1 will yield #2

Walk-Up Rationales

• Continue testing/design improvements on the join page itself to increase yield of people on /join page completing a transaction which is currently trending in the right direction

• Begin testing/design improvements on homepage to increase yield to /join page from homepage which is currently trending in the wrong direction

WIWUSFI00001XX111599Unpaid Visitors to J oin Page

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5/8/

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ge

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2

Stage 1 > 2

7 per. Mov. Avg.(Stage 1 > 2)

WIWUSFI00001XX111599J oin Page to Purchase

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Stage 2 > 3

7 per. Mov. Avg.(Stage 2 > 3)

Walkup Rationales - Continued

• Implementation of a “Sampling Strategy” – a site tour, a fuller range of free articles, etc.

• Implementation of the consolidated landing page (see Playboy example) to take advantage of more conversion events, faster

• WPromote iterative improvement• Testing/improvement of Free Trial process• Homepage design improvements associated with Dossier roll-out,

especially involving SiteTuners for conversion expertise• Add PayPal/E-check payment capability• Fixed About Us page that doesn’t describe a consultancy• Availability of new books from George and STRATFOR as

premiums

Free List Sign-Up Rationales• Facilitate word of mouth• Deploy tested, iteratively-improved designs• Offer new reasons to sign up for the Free List• Increase traffic that’s looking for specific STRATFOR information

EXAMPLES• Redesign of the Weeklies, to emphasize getting your own copy• Redesign of the 3-strikes redirect page to offer Anonymous visitors a FL signup• WPromote iterative improvement• Facilitating sharing of free features (see STRATFOR versus JibJab.com pages)• Homepage button (for Anonymous visitors) offering Free List signup• Widget registration process and increased barrier-page views from Widget-initiated

traffic• Dossier availability/Better homepage• Fixed About Us page that doesn’t describe a consultancy• Availability of electronic editions of new books from STRATFOR

Free List Rationales - Continued

The number of barrier page views (i.e. opportunity to join the Free List) is trending down. Homepage revisions should improve this trendline.

WIWUSFIBP107172Barrier Page Pageviews

Stage 2

0

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/mem

bers

hip

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evie

ws

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7 per. Mov. Avg.(/memberships/Pageviews)

STRATFOR Podcast Page

JibJab.com Video Page

Free List Sales Rationales

• A Consolidated landing page (see Playboy example) increases the number of conversion data points to speed testing.

• Extensive multivariate testing of landing page designs, akin to SiteTuners improvement to Free List barrier page design

• Iterative testing of 4-week Intro Series for front month cohort provides steady improvement as opposed to ad hoc campaigns that didn’t provide lessons for following weeks

• Day of week/Time of day testing for mailing

• Better writing/design from MarComms professional

• Add PayPal/E-check payment capability

• Fixed About Us page that doesn’t describe a consultancy

• Availability of new books from George and STRATFOR

Empirical FL Cohort Behavior

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Wk 1

Wk 3

Wk 5

Wk 7

Wk 9

Wk 1

1

Wk 1

3

Wk 1

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Wk 1

7

Wk 1

9

Wk 2

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Wk 2

3

Wk 2

5

Wk 2

7

Wk 2

9

Wk 3

1

Wk 3

3

Wk 3

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Wk 3

7

Wk 3

9

Wk 4

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Wk 4

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Wk 4

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Wk 4

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Weeks of Campaigning

% o

f C

oh

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Sig

ned

Up

Feb Mar Apr MayJun Jul Aug SepOct Nov Dec JanJan99 Feb 79 Feb 99 Feb 149Feb 199 Mar 99 Apr 99 May 25May 75

• The big cash comes in the first 4 weeks of campaigning (the front month). The goal is to make our nut with that component and campaign much less frequently (QSM) to cohorts. See “Volume Strategy.”

Testing ONE Page for Different Purposes

Partner RationalesOne Included-with-

membership deal for $50K+11,000 FL Signups generating

$44K in FL revenues100,000 Site Visitors worth $27K in advertising revenues

•Canadian International Council has told us that they want to include STRATFOR as an included membership benefit.

•Several WAC chapters include “free” subscriptions to magazines paid for with a dues allocation.

•Widget distribution driving traffic to our site•Changing partner emphasis from immediate purchase to FL sign ups first•A partner package/samples that make it easier for partners to work with us•A person to follow up on underutilized relationships like Kiplinger and Olasky

•Widget distribution driving traffic to our site•Changing partner emphasis from immediate purchase to FL sign ups first•A partner package/samples that make it easier for partners to work with us•CPM - $30•Impressions/Page – 3•Pageviews/Visit – 6•Sell-through % - 50%

#4: What your next steps are going to be after you monetize

the current investment.

Facilitating Word of Mouth Using Our Free Features

• Elements of a Strategy– Measurable Goal(s)

– Allocated Resources: people, time, money

– Timeline to achieve goals

– Success/failure criteria

– Expansion/contraction plan

• Our Free Features– Geopolitical Weekly

– Security Weekly

– Audio Podcasts/iTunes Presence

– Video Podcasts/YouTube Presence

– Red Alerts

– Sample Articles/Site Tour (to come)

• 09Q3 – Develop the strategy, get all the pieces in place• 09Q4 - Execute

Complementary Revenues & New Initiatives

• iPhone application – 09Q3– Subscription revenue– Advertising revenue

• Selling advertising (seen by non-Paid traffic only) – 09Q4– On website– In emails– In multimedia features

• Kindle version of STRATFOR – 09Q4

• Hybrid Paid/Free (Advertising Model) – 10Q1

• Versions of Homepage for Logged in Members Different from Non-Logged in Members – 10Q1

• Buying Advertising Ourselves – 10Q1

Available Free Advertising

Clickability to Share Paid Content

Comments

• This is a 6-month plan, starting from IT delivery of necessary infrastructure

• Improvements will be stair-step function upwards, NOT entirely back-loaded.

• The most important step in conversion funnels is the top. Homepage changes can have a dramatic impact on these forecasts.

• Testing occurs faster and yields higher conversions the more conversion events we have to analyze, not necessarily more site traffic.

• WPromote is a (costless) wildcard which could significantly influence reported yields based on the qualification of traffic they send to us.

I also want you to address the renewal issue in the face of the $99 issue. What are your plans

on handling it..

October 08 $99 Renewal Plan• 40% - To Renew at $99 (400 people)• 60% - To Renew at Higher Rates (600 people)

– 1/3 – $104.83 (200 people)– 1/3 – $109.62 (200 people)– 1/3 – $114.71 (200 people)

• Decline/Save Process– 1st – offer 3 additional months free– 2nd – offer 3 additional months free + Israel book free

• Segmentation– Decisions about segmentation above will be made on zip code basis, upsell people in wealthier zip codes

This is the “Volume Strategy” renewal process. Each year, individual Members’ renewal rates go up by a small amount. In personal terms, the increase is hardly discernible, and certainly no reason for canceling. From STRATFOR’s perspective, however, the aggregate of these small increases is a very meaningful increase in cash.

A 50,000 Member census with a $10 renewal increase generates a $500,000 increment.

The “Volume Strategy”