ADSLOT LTD. — Investor Presentation 2011

Sep 14, 2011

Webfirm Group Limited Investor Update 15 September 2011

Presentation Agenda

1. Company Overview

2. Webfirm division

3. Adslot division

a. Overview

b. Market Opportunity

c. Customers and Products d. Current Operational Focus e. Financials

1. Summary

Webfirm Group Limited (ASX:WFM)

Board of Directors

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Executive Acting CEO Executive Non-Exec Non-Exec
Chairman Director Director Director
Adrian Giles Andrew Barlow Anthony Chris Morris Tiffany Fuller
Co Founder - Co Founder - Du Preez Founder &
Funds
Hitwise Hitwise Chairman
Co Founder - Management
Co Founder - Adslot Major
Shareholder
Groups:
Computershare Venture Capital
Adslot
ASX
Lis(ng
Code:

WFM
Andrew Barlow related entities 8.4%
Current
Share
Price:
$0.072
Chris Morris related entities 8.4%
52
Week
Low:
$0.057
Overachieve Pty Ltd 4.1%
52
Week
High:
$0.265
Adrian Giles related entities 2.7%
Cash
at
Bank
(30
June
2011)
$18.4M
J&M Barlow Pension Fund 2.0%
Shares
on
Issue:

681,698,900
Anthony Du Preez related entities 1.9%
Market
Capitalisa(on:
$49.1M
27.5%
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Company Overview

Webfirm Group Limited (ASX:WFM) Currently has two operating divisions

Online marketing solutions for small to medium businesses

Changing the way that advertising is bought and sold

The primary focus for the company is the growth of the Adslot division

Division

Webfirm division currently subject to strategic review

• Developing websites for small and medium size businesses (SME’s) is highly competitive and Webfirm Division losses to date have been driven by its inability to profitably compete in this market

• Our focus therefore has been on providing search engine optimisation services , search engine marketing (paid search advertising), hosting and social media marketing as a profitable business in a growth market

• We are conducting a strategic review of the Webfirm business over the coming months to determine our future strategy and focus on this business

• As part of this review, we have also taken the conservative position to write down the value of the Webfirm goodwill to $0

Automate. Control. Optimise.

Adslot Overview

• Adslot sells automated ad sales platforms to major online classifieds portals world-wide

• Adslot is currently focused on becoming the world’s number one provider of automated ad sales solutions to online classifieds publishers globally

• Adslot has signed four of the world’s leading online classified publishers in three countries (Australia, New Zealand and France) so far

• Adslot’s solutions help classifieds portals drive growth of their display ad revenue using patented auction technology , while also reducing cost of sales

• Adslot has enhanced it’s product offering over the last 18 months through the acquisition and successful integration of three leading ad automation technologies

• Adslot: ad sales booking system and yield optimisation platform

• QDC: display ad builder

• Adimise: ad server

Adslot sells the display advertising surrounding the listings on classifieds portals

Example: “Suburb Sponsorship” product for real estate portals

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Trade Advertisers
~ 10,000 Agents
SMB Advertisers
mortgage brokers, insurance brokers,
landscapers, builders, renovation
specialists, plumbers, electricians,
interior decorators, buyers advocates,
homewares retailers, lenders, etc.
100,000+ SMBs
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Three key factors drive Adslot’s business

1. Natural growth in display advertising for online classifieds publishers

2. Revenue transacted through Adslot’s Platform

• Slots - total number of ad slots available to sell

• STR - percentage sell through rate

• Price - average cost of each slot

3. Adslot’s Share of Revenue on Platform Rate card commercial terms include a combination of:

• Setup Fee (based on cost recovery model) – fixed cost for scoping, product customisation and deployment

• Licence Fee – % of all revenue on platform , underwritten by minimum monthly fee

• Performance Fee - % of revenue uplift created, based on Publisher’s internal targets

Where we are today

• We know from our initial implementations that our products work , and work well

• We are very sticky – although it has taken some time to build and implement our initial products, we have become deeply embedded within our cornerstone customers’ businesses (strong annuity stream and long-term viability of model)

• As our customers’ display ad revenue grows, so do we

• We currently have a strong pipeline of prospective customers in AsiaPac and Europe, with initial discussions also underway with US classifieds publishers

• We have successfully secured and grown a talented technical team with outstanding innovation and development capabilities

• All our core technology acquired during FY11 has been integrated seamlessly into an end-toend platform

• We have secured a strong capital base to fund the growth of the business

• We have identified and are successfully capturing the large growth opportunity that has emerged in classifieds display advertising

Classifieds market opportunity is big

Online Classifieds publisher revenue is growing globally

Display advertising currently makes up approx. 1/5th of classifieds portal revenue

Source: RBS Morgans, research report released 14 June 2011: “Media – Online Classifieds in Focus”

Our customers display ad revenue is growing

Display ad revenue is the fastest growing source of revenue for online classifieds publishers in Australia, as listings revenue reaches maturity

Customer growth in display advertising

Carsales

• Carsales display ad revenue growth in FY2011 was 51% on pcp

• That compared to only 22% YOY growth for all other revenue

Realestate.com.au

• REA’s display ad revenue growth in FY2011 was 26% on pcp

• That compared to 23% YOY growth for total revenue

• That makes REA 4[th] largest display ad publisher in Australia by revenue

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60
50
40
FY2010
30
FY2011
20
10
0
Carsales Realestate.com.au
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• Both Carsales and REA were well above the overall 22% annual display ad growth rate for all publishers

• Both Carsales and REA are using Adslot’s technologies to help accelerate growth in display ad revenue

Adslot products are attractive to classifieds portals

Adslot’s Unique Selling Proposition ( increase revenue from display advertising while reducing costs ) is attractive to classifieds publishers because:

1. They are technology-smart companies who already understand the economic value of selling classifieds listings via a self-serve advertising platform. (ie. they immediately understand the positive impact that Adslot’s self-serve sales channel for display ads can have on revenue growth and profit margins)

2. They realise that their listings business is maturing and growth is slowing as they reach saturation. In order for them to maintain revenue growth, they are looking to display advertising and value-add products around the listings to sustain rapid revenue growth

3. They have a highly valuable and dedicated “in-market” audience who are actively looking for houses, cars, or jobs, which enables Adslot to drive higher yield due to the highly-contested nature of the classifieds publishers’ display ad inventory

Key take-out: Adslot is in the sweet spot of classifieds publishers strategic goals regarding value-add products and growth in display advertising

Adslot’s technologies give classifieds portals the ability to maximise revenue growth in display advertising

Customer Overview – Carsales.com.au

• Adslot’s first platform for carsales.com.au went live in November 2010

• The platform is an internal ad sales tool used by Carsales’ ad sales team to optimise the forward sale of premium display ad inventory to large car manufacturer advertisers

• Once a year, forward market

• Adslot has further refined this tool for use by Carsales again in November 2011 and beyond

Example Only

Customer Overview – Realestate.com.au

• Adslot’s first platform for realestate.com.au went live April 2011 (Victoria only)

• The platform was rolled out Nationally in August 2011

• The current platform enables Real Estate agents to purchase Suburb Sponsorship via the Adslot patented auction system

• Take up by Real Estate Agents and Revenue on Platform is continuing to grow at a strong rate

Example Only

Customer Overview – Realestate.co.nz

• realestate.co.nz chose Adslot to automate the sale of premium listings . The platform went live in April 2011

• Stage two of the platform rollout will allow the real estate agents to design and customise their premium listings using Adslot’s Ad Builder technology

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Example Only

• The premium listing product has been added to the Adslot platform as a core product available to other customers

Customer Overview – SeLoger.com

• France’s largest real estate portal, and the fifth largest in the world in terms of revenue

• SeLoger is Adslot’s first customer to utilise all of Adslot’s proprietary technologies acquired in the past 18 months, providing a fully-automated, end-to-end, self-serve product

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Step 1 Step 2 Step 3
Build a campaign Create an ad and pay Serve and measure ad
Customer Inventory Booking Payment Creative Ad Serving Reporting/
Management Management Management Management Management Management Analytics
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Automated, end-to-end, self-serve ad sales platform Automated, end-to-end, self-serve ad sales platform

SeLoger.com End-to-end Platform

End-to-end Platform Live Demo (English)

SeLoger launch is a key milestone in the company’s product evolution

• Adslot has successfully integrated all the various technologies acquired over the past 18 months into one seamless end-to-end platform

• Adslot now has a standardised product that it can sell to all other publishers world-wide (not just classifieds publishers)

• Adslot has significantly reduced product implementation timeline months vs 6 months for other deployments)

• Implementation times will be further reduced with successive customer deployments, allowing even quicker on-boarding of revenue

• SeLoger is Adslot’s first second-language (non-English) platform proves we have a genuine, world-wide customer-offering

• Full end-to-end automation allows Adslot to negotiate a higher share of revenue on platform

Adslot grows its client revenue on platform over time

Multiple products for each customer

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Third Product
Launched again
For a real estate
increasing the
clients engagement portal, product
Second with Adslot rollout may
Product develop as
Launched
follows:
1. Suburb
First Product Sponsorship
Launches 2. Premium
following 2-4
Listings
month
3. Direct to
implementation
small
advertisers
automation
Time
6 Months 12 Months
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Future market and product opportunities

In addition to its current focus on solutions for major classifieds portals, Adslot intends to expand its customer base by selling its new end-to-end, self-serve platform to other major online publishers outside of classifieds

In addition, Adslot is also developing two new product areas:

1. Adslot Direct for small-to-medium-sized content publishers

• Allows small-to-medium content publishers to sell inventory directly from their websites

• Product-in-a-box

• Build it once, sell to many

• Hosted in the cloud

• Self-serve set-up and installation for publishers

• Chasing the long-tail of ad revenue captured by niche publishers

2. Stand-alone Ad Builder for Advertisers

• Initially targeted at SMB advertisers, looking to build display ads quickly and cheaply

More on these exciting products in the coming months

Current Operational Focus – revenue growth

Pivoting from being a highly-customised software services provider to a product-driven sales organisation

1. Focus on bringing revenue onto our current platforms quicker by:

• Reducing sales lead times to online classifieds publishers

• Simplifying and standardising our products and pricing structure

• Improving sales processes

• Increasing products sold to our customer base and standardising the commercial terms upon which they are sold

2. Expanding our customer base to include other large publishers outside of classifieds by:

• Leveraging existing automated, end-to-end ad sales platform (ie. SeLoger)

3. Further expanding customer base to include small-to-medium content publishers by:

• Further focus on product innovation and development utilising technologies already built

• Build-it-once, sell-to-many “product in a box” for small-to-medium content publishers

Essentially, a focus on People, Products, Processes and Performance (revenue)

Adslot Financials

• In FY 2012 we will continue to add new advertising inventory from our existing clients as well as adding new clients

• We expect our costs to increase and continued losses in FY2012 as we continue our rapid roll-out in to other geographic and vertical markets, but anticipate steadily growing revenues during the same period

• We expect to deliver strong revenues and profitability on a clientby-client basis from the second year following initial implementation

• This will ultimately deliver strong profitability , but will take time to build

• New products and market opportunities will supplement existing revenue channels

Group Financial Summary

• We have sufficient cash to see us through to profitability, and we do not intend on raising any more money to execute on our current strategy

• Operating within our current strategy sees us with a solid prudential cash buffer , which we will use to develop new products, enter new markets or for value accretive acquisitions

• *As at market close, 14 September 2011

Contacts

Media

Andrew Barlow Acting CEO andrew.barlow@webfirmgroup.com

Webfirm Group Limited Level 2, 85 Coventry Street South Melbourne, Vic 3205 Ph: 03 8695 9100

Investor Relations

Brendan Maher CFO & Company Secretary brendan.maher@webfirmgroup.com

www.webfirmgroup.com www.adslot.com www.webfirm.com

Disclaimer

The information contained in this presentation is given in good faith and has been prepared from information believed to be accurate and reliable. The information presented does not take into account your individual financial circumstances and it is not designed to be a substitute for specific financial or investment advice or recommendations and should be relied upon as such. You should consider talking to your financial adviser before making an investment decision. So far as the law allows, Webfirm Group Limited excludes all liability for any loss or damage whether direct, indirect or consequential.

This presentation includes forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Webfirm Group Limited, and which may cause actual results to differ materially from those expressed in this presentation.