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To: ztect who wrote (90)	2/1/2000 8:28:00 AM
From: Bill Fortune III	Read Replies (1) \| Respond to of 177

Good math Z. And with the best yet to come. Regards, Bill

To: ztect who wrote (90)	2/1/2000 11:30:00 AM
From: ztect	Read Replies (1) \| Respond to of 177

(q+a) Promo Card Math VS Cause Driven Marketing By: AlanC Reply To: 42633 by ztect Monday, 31 Jan 2000 at 9:14 PM EST Post # of 42724 Thanks Z. I think that's a pretty realiztic analysis. Since you're on a roll now how about backing into the UCP projections to determine the gross revenues TSIG might expect if UCP were successful in reaching their fundraising goal through this medium. LOL -------------------- AlanC. No clue about UCP. If Miller or another company does a promo, each promo may generate similar % returns. Revenue numbers will be contigent upon distribution amount and to whom. A targeted group more likely to activate will result in a higher percent of activation, buy through and reload. As for "cause" driven, that's harder to model because card sales aren't finite, plus all past projections for other deals were based on participation that didn't materialize as hoped. I think the corporate deals are better. Upfront money for cards, no commitment or hard sell for promo card recepient, and exposure from corps more experienced at advertising. P. Henry in my conversation with him said, if I'm not mistaken, that the corporate deals will be the ones more agressively pursued. Now think about a four city NCAA road to the final four Coke promotion w. 200,000 cards in each region for each regional final. And another 200,000 for the final four game targeted to 17 through 22 years old another large cd buying internet savy demographic with disposable income. Multiply the prior math by (5) five and that's over two million revenue before additional cd sales based on 40% activation and 10% reloads with NO advertising costs. What's tsig's burn rate again? The one promo exceeds it. The second promo if done as per my hypothetical design could actually lead to positve cash flow. Let's hope Coca Cola think the deal is great for them too. z

To: ztect who wrote (90)	2/1/2000 11:59:00 AM
From: ztect	Read Replies (1) \| Respond to of 177

(fa) Super Bowl Coca Cola Promo Card MATH: Model 2 -------------------------- 200,000 cards distributed ---------------------------------- ---------------------------------- Model based on Certain Assumptions (listed below) ---------------------- ---------------------------- assume 25% activated 50,000 --------------------------------- -------------------------------- 80% buy through of 3 cd's= 40,0003 120,000 cd's, 40,000 shipments $1.00 margin cd sales, $1.00 margin shipping (25%) $120,000 cd sales + $40,000 shipping sales $160,000 sub-total ----------------- ----------------- 10% buy through of 2 cd's= 5,0002 10,000 cd's, 5,000 shipments $1.00 margin cd sales, $0.75margin shipping $10,000 cd sales + $3,500 shipping sales ----------------- $13,500 sub-total ---------------- ---------------- 10% buy through of 1 cd= 5,000 * 1 5,000 cd's, 5,000 shipments $1.00 margin cd sales, $0.50 margin shipping $5,000 cd sales + $2,500 shipping sales ------------------- $7,500 sub-total ------------------------------------------- ------------------------------------- 50% of the 80% of 3 buy throughs reload 25,000 reloads = $250,000 card sales 12.5% of reloads from total distribution $125,000 coke $112,500 tsig $12,500 National Music Foundation -------------------------- Sub-totals cd sales/shipping $181,000 Sales from card reloads $112,500 ------------------- ------------------- Total tsig $293,500 ------------------- ----------------- Revenues from advertising (hypothetical numbers) Cost of card= $0.25 Price of card to coke = $0.50 margin = $0,25 income = 0.25 * 200,000 = $50,000 ---------------------- ---------------------- Grand Total= $293,500 + $50,000 = $343,500.00 Cost of advertising = $0.00 ----------------- ------------------ No additional sales from the reloads factored into this model ------------------ --------------------- Model also doesn't account for any "viral impact" ie. promo card recepients telling other non-recepients about the site and its value. ----------------------- ----------------------- Assumptions only 25% card activation only 12.5% card reload $1.00 margin cd's 20% margin shipping Card Production cost = 0.25 Card Mark- up 1 time Card margins = 0.25 Conservative assumptions? Conservative numbers? Alternative numbers and assumptions? =========================