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2009 New Business Plans

2009 New Business Plans. Executive Summary. 2009 will see New Business continue to drive a bigger share of overall revenue for eBay Australia and a significant proportion of it’s growth

eden-richardson
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2009 New Business Plans

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  1. 2009 New Business Plans

  2. Executive Summary • 2009 will see New Business continue to drive a bigger share of overall revenue for eBay Australia and a significant proportion of it’s growth • With the right investment and focus, New Business could deliver $44.5m revenue in 2009; an increase of 47% YoY • Motors will continue to deliver solid results, whilst most growth will come from Advertising • Whether we get there also depends largely on eBay’s willingness as a business to think long term and to make bold moves around advertising including establishing an in-house sales force and increasing ad units available on site

  3. Agenda • New Business Lookback • 2009 Strategy • Revenue and expenses • Plans • Advertising • Verticals • Motors • Headcount Requirements

  4. Accelerated advertising revenues 290% YoY Display, 660% YoY Text, 228% YoY eBay now #8 publisher in Australia! Motors business healthy Motors revenue 30% YoY Cars GMV growth 30% YoY Live listings doubled in last 12 mths due to Drive partnership Entered previously non-addressable segments through partnerships Lotsofhotels.com.au – Travel Jobs – CareerOne, $960k max revenue pa Real Estate – Domain, $140k test, 4 mths Active discussions with Services & DDG Huge learnings from new innovations that can be applied to 2009 initiatives eg Motors microprojects; technical issues, traffic drivers, technology partner selection Integration with marketing processes New Business - 2008 Review Challenges Successes • Advertising: • Lack of on site inventory to sell • Need to maximise monetisation on display and premium content • Build more integrated & flexible solutions for advertisers with more technical product resource • Cross functional marcoms process unsustainable for ad sales due to tight lead times • Motors • Driving demand to match supply • Stepped improvement in UE • How to most effectively enter non-addressable segments & nurture their performance? • Rapidly applying learnings from 2008 to 2009 initiatives and scale, scale, scale!

  5. 2 1 3 Accelerate advertising revenue stream Build & nurture verticals Broaden appeal of Motors Revised New Business Strategy: 2009 New Business Strategy: Leverage eBay asset portfolio to tap into the broader eFees market Support AU marketplaces strategy by leveraging NB expertise New Business to consult to marketplaces to develop & execute on core strategy Position eBay as major publisher through display, SP, text advertising & Ad Centre Build Motors as mainstream place to buy cars by optimizing the UE & driving demand Build tightly integrated new verticals in traditionally non-addressable markets NB to add value by providing expertise across product, analytics, Business development eBay to be #8 publisher and be top of mind for major AU advertisers Verticals like Jobs, RE, & DDG appear on site as a seamless eBay experiences, powered by blue ribbon partners Build top of mind consideration whilst matching right type of buyers to right type of cars

  6. 2 1 3 Accelerate advertising revenue stream Build & nurture verticals Broaden appeal of Motors Revised New Business Strategy: 2009 New Business Strategy: Leverage eBay asset portfolio to tap into the broader eFees market Support AU marketplaces strategy by leveraging NB expertise New Business to consult to marketplaces to develop & execute on core strategy Position eBay as major publisher through display, SP, text advertising & Ad Centre Build Motors as mainstream place to buy cars by optimizing the UE & driving demand Build tightly integrated new verticals in traditionally non-addressable markets Finding Selection Selection Loyalty

  7. New Business aspiration of $44.5m in 2009, 47% YoY growth 2006 $8.7m 2007 $14.9m 2008 $30.2m 2009 $44.5m

  8. New Business revenue growth primarily driven by a 67% YoY increase in Advertising revenues 2008 $30.20m 2009 $44.5m Advertising $29.1m Motors $15.3m

  9. 2009 New Business Expense Request of $4m Contractor expenses included in case our request for new HC is not fulfiled

  10. 2009 Projected Expenses of $4m - assumes we get our full HC ask

  11. ROI Summary *Other includes: shipping, operations, research, T&T

  12. 2 1 3 Accelerate advertising revenue stream Build & nurture verticals Broaden appeal of Motors Revised New Business Strategy: 2009 New Business Strategy: Leverage eBay asset portfolio to tap into the broader eFees market Support AU marketplaces strategy by leveraging NB expertise New Business to consult to marketplaces to develop & execute on core strategy Position eBay as major publisher through display, SP, text advertising & Ad Centre Build Motors as mainstream place to buy cars by optimizing the UE & driving demand Build tightly integrated new verticals in traditionally non-addressable markets NB to add value by providing expertise across product, analytics, Business development eBay to be #8 publisher and be top of mind for major AU advertisers Verticals like Jobs, RE, DDG etc should appear on site as a seamless eBay experience, powered by blue ribbon partners Build top of mind consideration whilst matching right type of buyers to right type of cars

  13. Advertising YoY Growth + 186% + 96% + 61% + 55% + 43% Globally, eBay Advertising has been asked to build plans to deliver US$1B revenue in 2011 Advertising net revenue (USD mio.) 1,000 700 450 280 143 50 Key events • Launch US Text Ads • Launch Int‘l Text Ads • Turnaround Y! relationship • Text Targeting (Kairos) • Intl display • AdCommerce Beta • ePN • Design to advertise • New ad placements • Sales org • PubCommerce launch • AdCommerce display • PubCommerce ramp up • Bring sales force in-house • M&A • Network effects in adnetwork kick in • Leading sales network • M&A

  14. General online advertising in Australia is forecast to grow at 23% YoY in 2009 Advertising Australian General Ad Revenue Growth* Key Industry Trends* • Growth dominated by performance and next generation brand marketing eg integrated content, video, eDM • Most major publishers losing share to vertical and niche players (incl eBay) • 51% Online advertising spend driven by Banking, Finance, Insurance, Auto, Communications • Digital media advertising well placed to capture more spend as the economy slows and marketers seek more cost effective campaigns 14 *Source: Frost & Sullivan, Online General Advertising Market. Period: 2007/8. Country: Australia. Excludes text advertising

  15. eBay’s goal is to maintain or better it’s # 8 ranking as the market grows Advertising 2008 Publisher Share of AU Online Advertising market* (display + text) $AU millions 2009 Goal: $29m 15 *Source: Frost & Sullivan, Online General Advertising Market. Period: 2007/8. Country: Australia. Excludes text advertising

  16. Advertising AU advertising strategy is to maximise revenue by offering products for different segments of Advertisers along the yield curve Advertising Yield Curve Premium Display Ads in-house Partners powering eBay Verticals Strategic partnerships Ad Centre eCPM Remnant display ads Text Ads (Google + SDC) Site Volume

  17. Advertising Let’s look at where the growth in Advertising is coming from… Breakdown of Advertising Revenues: 2008 vs 2009 $29.1m $2.1m $3.6m $-0.9m $1.6m $2.3m $0.2m $2.6m $17.4m Sales Force

  18. Advertising Let’s look at where the growth in Advertising is coming from… Breakdown of Advertising Revenues: 2008 vs 2009 $29.1m $2.1m $3.6m $-0.9m $1.6m $2.3m $0.2m $2.6m $17.4m FD selling display until 30/6/09 Use in house sales team from 1 July to sell premium display Outsource lower value display to at least 2 remnant agencies Most 08 SP revenue now appears in “Verticals”. In 2009 will include ads from finance, telcos, mobile, FMGC, etc Full launch in Feb. Will replace Featured Plus when Dynamo launches Includes Jobs, DDG, Travel (LOH), Real Estate, Services Sales Force

  19. Advertising Investing in Advertising in 2009 has the potential to grow Display Ad Revenues to $10.1m, 108% YoY growth Display Advertising Revenues (Sales force + remnant + SP + verticals) $6,000,000 20 2009 $10.1m 2010 $18.3m 18 $5,000,000 16 Invest in sales team, infrastructure & industry marketing 14 $4,000,000 12 Revenue ROI $3,000,000 10 8 $2,000,000 6 4 $1,000,000 2 $0 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 YoY Growth - eBay 127% 80% YoY Growth - industry 23% 23% * Verticals includes travel. 2010 assume sales force ramping, STR and CPM improve YoY. High level, top down forecast

  20. Advertising We could deliver $1.1 to $1.9m incremental revenue in 2009 with an in house sales force vs continuing with Fairfax Digital Graphical Revenue Comparison: stay with Fairfax vs in house sales/remnant strategy $25 Incremental revenue potential of $7.8m-$10.54m in 2010 as the sales force scales and we improve monetisation $20.36 $20 $17.56 Revenue $m $15 $10.58 $9.82 $9.78 $10 $8.68 $5 $0 2009 2010 Stay with FD In house sales force + remnant: low case In house sales force + remnant: medium case Assumptions: FD over deliver on rev gtd by 10% and grow 15% YoY in 2010; eBay revenue equals premium display + remnant + SP + verticals less travel (LOH). Travel excluded as it would not be impacted by whether sales force is in house or with Fairfax

  21. Advertising Accelerating Display Advertising Revenues – Assumptions • Get commitment for 4 new HC (excluding Glen – currently being converted to FTE) ie 2 x sales managers, 1 sales support, 1 trafficker • Commence recruitment for new HC early Q1 09 with a view to starting new team in early Q2 09 • New business allocated less aggressive SP/verticals revenue targets in Q1/Q2 09 in order to devote time to set up in house sales operation • Assume no over performance from Fairfax in Q1/Q2 09 as they will know our “in house” plan from 31 March 09 • Major variables in the revenue model: • % inventory we sell in house vs outsource to remnant agencies • CPM rate applied to premium and remnant inventory • Sell through rate • eBay globally support advertising through the creation of new placements including integrated content, streaming videos and behavioural targeting

  22. Advertising In House Sales Force – Direct Costs

  23. Advertising To Summarise the Display Ad Opportunity…. Invest $191k + 4 FTEs to generate incremental revenue of $1.1-$1.9m, with 1 year ROI of 10X

  24. Advertising Ad Centre is a simple & effective solution to replace Featured Plus for sellers Utilise existing Featured Plus! checkbox option in SYI/listing tools and Billing, displaying such listings randomly in the same Ad Widget at the top of Search Results Pages Buyer’s View Seller’s View

  25. Advertising Ad Centre forecast to deliver $3.6m revenue in 2009 Key Assumption Convert 50% of FP users onto Ad Centre when it launches with category specific pricing in Q1 09 Ad Centre Revenue Forecast Launch Ad Centre with category specific pricing to maximise adoption

  26. Advertising Advertising Text Revenue will deliver $15.3m in 2009, 22% YoY growth Advertising text revenue forecast: Google + SDC • Global opportunities to increase text revenue • User segment targeting ie show fewer google ads to active buyers • Behavioural targeting Google text ads • Google text ads on VIPs • Outsource mgmt of text ads to Global Centre of Excellence ( at the earliest, 2H09) 2007 $3.8m 2008 $12.6m 2009 $15.3m • Challenges • Page views will decrease if Finding 2.0 implemented • Ensure that cannibilisation kept to a minimum (currently 1.2-1.8%) by keeping core eBay UE top of mind • Top down direction on accepting ad placements that may increase cannibilisation

  27. 2 1 3 Accelerate advertising revenue stream Build & nurture verticals Broaden appeal of Motors Let’s look at each part of our strategy in more detail New Business Strategy: Leverage eBay asset portfolio to tap into the broader eFees market Support AU marketplaces strategy by leveraging NB expertise New Business to consult to marketplaces to develop & execute on core strategy Build tightly integrated new verticals in traditionally non-addressable markets Position eBay as major publisher through display, SP, text advertising & Ad Centre Build Motors as mainstream place to buy cars by optimizing the UE & driving demand Verticals like Jobs, RE, DDG etc should appear on site as a seamless eBay experience, powered by blue ribbon partners NB to add value by providing expertise across product, analytics, Business development eBay to be #7 publisher and be top of mind for major AU advertisers Build top of mind consideration whilst matching right type of buyers to right type of cars

  28. Verticals Our Vision is to create integrated verticals that enhance the core marketplace From this….. To this….. As per TradeMe example: Integrated RE listings that will look like eBay site, but are powered by RE partner

  29. Verticals Largest opportunities are non-transactional, fastest-growing in non-addressable segments Most require industry expertise + supply from partner • *Classifieds and ecommerce • **Source: Frost & Sullivan, Forrester

  30. Verticals will contribute $2.47m revenue in 2009Note: Verticals roll up as part of “Display Advertising” Verticals revenue forecast 2009 Revenue Summary Real Estate $460k DDG $335k Jobs $820k Travel $338k Services $520k

  31. Companies advertising products & services of interest to our community ST in nature Campaign driven, tactical focus Relatively quick & easy to implement Have complimentary offer to marketplaces Examples: Finance/Insurance Telcos/Broadband/Mobile FMCG Shipping Promotional partners/seasonally driven All start as Strategic Partners (on trial basis), however they also meet other criteria: Need tailored shopping experiences to flourish (just like motors) Add value to our core marketplace experience Considered as a new eBay category Mostly fall into the traditional ‘non-addressable’ ecommerce segment for eBay Can be deeply integrated into eBay where it increases overall loyalty to eBay brand Often powered by a 3rd party Offer special content or deals to eBay community Minimum 12 month commitment Examples: Travel (LOH), Jobs, DDG, Real Estate, services, dating, tickets, groceries What is the difference between Strategic Partners & Verticals? eBay Vertical eBay Strategic Partner

  32. 2 1 3 Accelerate advertising revenue stream Build & nurture verticals Broaden appeal of Motors Let’s look at each part of our strategy in more detail New Business Strategy: Leverage eBay asset portfolio to tap into the broader eFees market Support AU marketplaces strategy by leveraging NB expertise New Business to consult to marketplaces to develop & execute on core strategy Position eBay as major publisher through display, SP, text advertising & Ad Centre Build Motors as mainstream place to buy cars by optimizing the UE & driving demand Build tightly integrated new verticals in traditionally non-addressable markets NB to add value by providing expertise across product, analytics, Business development eBay to be #7 publisher and be top of mind for major AU advertisers Verticals like Jobs, RE, DDG etc should appear on site as a seamless eBay experience, powered by blue ribbon partners Build top of mind consideration whilst matching right type of buyers to right type of cars

  33. Motors forecast to deliver $15.3m revenue, 22% YoY growth 2009 Motors Revenue Forecast • Assumptions • Core auction business remains healthy with vehicles revenue 18% increase YoY; GMV increase 24% YoY • Cars/OV price increase drives $695k incremental • Silverstone price increase of 10% • Hybrid a helps position eBay as more mainstream but is not a significant revenue driver

  34. Motors Motors – Implications for 2009 Become Australia’s favourite place to buy & sell a vehicle 1 2 Build mainstream demand Grow new revenue streams Innovate Product • Improve the mix of offerings to buyers (and monetize) • Higher end supply (Hybrid and Silverstone) • Parts fitment project • Finance & Insurance integration • Integrating catalogues into the selling and buying flows. • Adapting global finding changes to the microsite. • Understand and market intelligently to mainstream buyers. • Reposition eBay Motors brand.

  35. 2009 New Business Plans Q1 Q2 Q3 Q4 Focus Advertising Ad Centre Full Launch Fairfax Digital manage Display Recruit & train in house sales team Premium display managed in house Negotiate Remnant deal Remnant out sourced to agency Set up in house sales systems Industry PR campaign Optimise text advertising on site Verticals Travel (LOH) - light Travel (LOH) - deep Real Estate - light Real Estate - deep Services - deep Jobs - light Jobs - deep DDG - deep DDG - light

  36. 2009 New Business Plans Q1 Q2 Q3 Q4 Focus Motors Demand marketing UE testing UE testing SYI enhancements - catalogues VPP Dealer Sales Force - Classifieds Support marketplaces Integrate shipping carriers into eBay tools eg SYI, calculator

  37. Job / Contractor Role:Full-time sales staff to sell eBay display ads and close deals with advertisers. Role is commission based correlated with performance to target. Level:25 Business Justification:Critical head count required in order to bring Display sales in-house to hit 2009 Display ad revenue ($7MM-10MM) Timing / term Q2 09 2009 New Business HC Request Ad Sales Manager X 2

  38. Job / Contractor Role:Full-time executive to co-ordinate Ad Sales projects and support sales staff Assist with preparation of sales materials and proposals Level:24 Business Justification:Critical support required in order to bring Display sales in-house to hit 2009 Display ad revenue, as well as achieve total Ad Sales team revenue. Timing / term April 2009 onwards (currently 6-month contractor via Tequila commencing Oct 08) 2009 New Business HC Request Ad Sales Executive

  39. Job / Contractor Role:Full-time operational role to execute trafficking, optimising and reporting requirements for display ad campaigns Level:22 Business Justification:Critical ops support required in order to successfully execute Display ad campaigns closed by sales staff Critical to ensure Advertiser’s campaigns are successful, in order to drive repeat business and a future revenue stream Timing / term Q2 09 2009 New Business HC Request Ad Sales Trafficker

  40. Job / Contractor Role:Full-time operational role to manager Dealer Classifieds business, execute marketing plans, input to overall strategy and execute user experience enhancements Level:24 Business Justification:Motors forecast to drive $13.5m revenue in 2009. Currently we only have 1 HC which is not sufficient for the long term health and mgmt of the category in expanding it beyond a niche site Motors manager role is currently being performed via a contactor, which we are out sourcing via Dealer Ads for 6 months. Timing / term Late Q1 09 2009 New Business HC Request Motors Manager

  41. In summary, 2009 is shaping up to be a great year for new business! • New Business could potentially grow revenue 47% YoY, up to $44.5m in 2009 with a healthy ROI of 10X • Revenue increase relies on a commitment to $4m budget including: • Bold moves and sustained commitment to growing eBay as a Publisher • Establishment of in house sales force • Time to plan and execute a first class sales strategy & marketing blitz • Continued support to grow Motors – especially driving demand and improving the user experience • Heavy cross functional support from marketing, finance, HR and legal

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