The document discusses mobile advertising opportunities using Frog2Frog's interactive advertising platform. It proposes ad-supported mobile services that provide free SMS and voice calls in exchange for viewing brief, inline ads. This benefits operators by boosting revenues, advertisers through improved reach and interactivity, and users through reduced costs. Initial service ideas and a business model demonstrating revenue increases are provided. Implementation is described as requiring simple integration with existing SMS and data gateways.

7. Vodafone CZ has launched ad-supported SMS Launched to the press and public on Sept 18 th , 2007, the Vodafone CZ service uses the Frog2Frog Java handset client and back-end server platform (customized to match VF requirements) to provide the service*. Customers can send up to 300 SMS per day for free. It´s a media property with user-generated-content…it´s mobile Web 2.0… See http://www.milujteje.cz/ * - Many areas of information are client confidential. Sub numbers and usage were published by Vodafone in March 2008. With 60 thousand users by March 08, in a population of only 10 million, it’s proportionally 4-5 times more successful than Blyk!!

8. Why advertise around SMS and voice? Interactive mobile ads presented while people are already using the services they actually use can create a mobile advertising platform with real scale. Market Growth This is the overall market potential of mobile advertising Frog2Frog’s interactive ads appear while users compose SMS and as they dial for a voice call Most effort is going here..............? Source: Chetansharma.com ( http://www.chetansharma.com/sellphones.htm )

9. SMS for free (while you see interactive ads – J2ME) ‏ The user sees ads only while sending an SMS, so intrusion is minimal. In-line interactivity is designed for mobile, so no waiting or spinning globes. * - Voice app also available Easy, intuitive process, with T9 spelling, phonebook integration, etc. Main menu – 1 st ad SMS entry. T9 & phonebook all work Ad, including image, text,.. … including in-line interactivity SMS is sent Return to main menu. New ad. BMW – The Driving Machine

13. For advertising effectiveness, converting ad to transaction* is vital A key issue is having an interactivity model that is quick, that does NOT force users to look at blank screens or spinning globes. Users want instant response. * - Or information Have users opt in to receiving more information Allow users select which product they prefer Send vouchers to users only on request

14. For advertising effectiveness, good end-user experience is vital Click-to-hyperlink , in particular, is the wrong model for most in application advertising – especially for common mobile activities like sending an SMS. recommended Supported* * - depending on specification implemented Easiest, most flexible. Callback, SMSback, text input, vouchers, etc.,etc.,etc Transaction on a controlled platform Immediate feedback, no delay. No problems! “ In-line” interactivity Need to have people to answer the phone. Transaction “disappears” Who pays for the call??? Will I end up on hold? Click to call OK Transaction “disappears” Pretty good model. Click to SMS Low CTR, expense of maintaining destination Transaction “disappears” Spinning globe Wait A PITA Click to hyperlink For advertiser For operator For user

19. Aspects of existing and some possible services NP = not published Please Call Me (Vodacom) Blyk Vodafone SMS Gratis Please Call Me SMS Gratis Operator Zahlt Advertising Criteria Reach ✔✔✔ ✔ ✔✔ ✔✔✔ ✔✔ ✔✔ Price per Ad ✔ ✔ ✔ ✔ NP ✔ ✔ ✔✔ ✔ ✔✔ ✔ Interactivity ✔ ✔ ✔ ✔ ✔✔ ✔✔✔ ✔✔✔ ✔✔✔ Targeting ✔ ✔✔✔ ✔✔✔ ✔ ✔ ✔✔✔ ✔✔✔ Operator Criteria Revenue boost per user ✔✔ ✔ NP ✔ ✔✔✔ ✔✔ Acquisition N/A ✔✔✔ NP N/A ✔✔✔ ✔✔ Churn Reduction ✔✔ N/A NP ✔ ✔✔ ✔ Revenue Protection N/A N/A NP ✔ ✔✔ N/A

20. Channel Ad Capacity (normalized to DE population, Ads/month) Population Reach /%) ‏ Vodafone CZ SMSGratis Blyk UK (April 08) „ XXXZahlt“ XXX Total XXX PleaseCallMe XXX FreeSMS Note, Vodafone CZ is the smallest operator in CZ

21. Frequency (Ads /day) ‏ Reach Daily limit Sender population Receiver population 10 6 8 2 4 “ Please Call me” has great reach, with many potential receivers. Reach can be increased on “SMS Gratis” by injecting ads into the free space left in the messages, if desirable. Reach – senders and receivers

23. 1 F2F user impact – stimulation (50% discount case) F2F users generate higher revenue AND higher income on ad-supported SMS than on regular offers. 100% free offers are most frequently considered “ Normal” SMS user revenue F2F user revenue 100 SMS x 7c per SMS NET monthly revenue € 7 * - illustrative prices, 7 cents per sms, 3.5c per sms on F2F service, ad price = 20 CPM, 75% booking ratio Outbound SMS plus Ad revenue 3.5c*100+(20CPM*2,3*100*0.75) ‏ Increased SMS Interconnect Net revenue € 10-11 Stimulated Inbound SMS Substitution of Outbound voice Stimulated Inbound voice Stimulation of outbound SMS 3.5c*50 +20CPM*2,3*50*0.75

25. 3 SMS Price decline SMS prices are falling in many markets, with operators throwing revenues away. Why not get paid for Free SMS instead AND slow or stop overall declines? Base in Belgium Base offers unlimited SMS with their new “Mania” pre-paid offer, as long as the user recharges more than €15 per month. This is on-top of voice credit purchased with the €15 payment. Halebopp in Sweden Offers up to 3000 SMS per month for free with their new offer as long as the card is recharged. SMS are ~5cents after the 3000 SMS. Offer comes on top of call credit.

26. 3 SMS Price & Revenue sustained by ad financed SMS 20c 10c Interconnect 2004 2005 2006 2007 2008 2009 2010 2011 Price/SMS The bulk of SMS traffic and revenue continues on the red line, the SMS “Classic” Product. Presence of the green, discounted ad-supported service allows better ability to maintain prices on “Classic” products. By reversing or stopping price decline and introducing a revenue stimulating ad-supported offer, operators can see a double benefit. Ad income can increase over time as LB-ads, local ads, increased targeting, etc., impact impression prices. Most expensive offer Average billed /SMS Cheapest offer Average ad income

27. 3 Advertising financed SMS saves SMS revenues The impact of revenue protection from a dual “ad supported” and “classic” strategy could be €1-€2 per month across the whole relevant base. ~9c Starting SMS Price (2008) ‏ 100% SMS price discount on F2F offer 20 Ad price (CPM) ‏ 200,00% F2F stimulation (traffic increase) ‏ 7,0% SMS price decrease per year in ad-supported/classic scenario 12,0% SMS usage increase /yr, both classic and F2F 13,0% Price decrease SMS /yr, base case Inputs