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TSX.V: VID
Corporate Presentation- Winter 2015 -
TSX.V: VID 2
The Presentation has been prepared by SoMedia Networks Inc., using its best efforts to realistically and factually present the information
contained. However, subjective opinion, dependence upon factors outside SoMedia Networks Inc.’s control and outside information sources
unavoidably dictate that SoMedia Networks Inc. cannot warrant the information contained to be exhaustive, complete or sufficient. In addition,
many factors can affect us which could significantly alter the results intended by SoMedia Networks Inc., rendering the information/projections in
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This Presentation does not constitute a prospectus or public offering for financing, and no guarantees are made or implied with regard to the
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whichever is earlier.
SOMEDIA NETWORKS INC. DISCLAIMER
TSX.V: VID 3
BUSINESS DEMAND FOR VIDEO INCREASING
VIDEO DELIVERS RESULTS
The Relevancy Group, “The ROI of Video in Email Marketing”
BUDGETS & VOLUME OF PRODUCTION INCREASING
2014 Online Video Production Trends Report - May 2014
• Video is the best performing marketing tool available to marketers and budgets are increasing rapidly
• Mobile is driving massive growth in the use of video
• Video ads receive 3X the clicks that other ads do. Video ad views are growing 100% year over year
• Cisco projects that 84% of web traffic will be video by 2018
• YouTube is the #2 search engine
Growth in the Use of Online
Video by Business
ABOUT SOMEDIA
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INVESTMENT HIGHLIGHTS
• SoMedia is positioned at the nexus of several powerful growth trends
• Online Video Marketing
• Cloud Based Marketing & Analytics
• The Evolution of Crowd Sourcing
• Targeting a very large addressable market that has been unable to embrace the clear benefits
of video marketing due to issues of cost, complexity and lack of scale
• SoMedia’s video production solutions remove these barriers through the use of an innovative
cloud based front end and advanced crowdsourced workforce management platform
• The video production space is extremely fragmented, without scale and with no market leader
able to serve customers nationally
• Q3/Q4 ‘14 integrations with 20 cloud based marketing platforms (Salesforce, Marketo, Eloqua,
Act-On, Sharepoint etc) a key catalyst for near-term growth
• Google partnership offers significant 2015 upside potential.
• Shares remain well under the radar and do not reflect near term momentum or opportunity
for sector ownership
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WHAT WE DO
Cloud Based Video Production & Marketing - VaaS
• Scalable B2B and News video production : Available on demand, anywhere, in unlimited volume, at 50%> savings
• Video as a Service (VaaS). Cloud based production platform is integrated with project management, video players and advanced analytics systems
• VaaS production platforms control a unique Crowdsourced Workforce Management system that harnesses a specialized workforce of 3500+
• Turnkey reseller & corporate solutions : 4000+ internet marketing resellers signed to date
• VaaS production and marketing solutions for cloud based marketing platforms: Salesforce/Exact Target, Google, Oracle/Eloqua, Marketo, Microsoft
Scale: manage an unlimited number of simultaneous projects
Reach: order professional video in any location in North America
Volume: order any number of videos anywhere, on demand
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• Video production companies are typically low
tech small businesses managed by creatives
• Expensive
• Producing video content in volume or in
numerous locations is extremely difficult
• Outcomes are variable and dependant on the
skills of individuals
• Quality control is a key problem
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THE PROBLEM WITH VIDEO
2014 Online Video Production Trends Report - Web Video Marketing Council
BIGGEST VIDEO PRODUCTION CHALLENGES
ABILITY TO EXECUTE IS A PROBLEM
Analyzing the ROI of Video Marketing - the Aberdeen Group
COST & DIFFICULTY
2013 Video Marketing Survey and Business Trends Report – Web Video Marketing Council
THE TWO BIGGEST FACTORS HOLDING
BACK MORE VIDEO MARKETING
The Pain Points of Video
Production
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VaaS = Crowdsourcing + Process Control
RE-ENGINEERING VIDEO PRODUCTION
Crowdsourcing leverages both the explosion in trained video production talent and the dramatic
decline in the cost of video production equipment
Front end VaaS (Video as a Service) platform manages creative development, task planning and
production management
Network of 3,500+ video production specialists throughout North America managed by cloud based
process and QC platform
Turnkey solutions offer scalability, reach and volume
Result is significant reduction
in cost (40-50%) and turnaround
time (14 days)
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RESELLER SOLUTIONS
Integrated Reseller Platform: Turnkey Custom Video
Production Anywhere in North America
Sell and deliver video - no video expertise required RESELLER SIGNUPS
Fast, 14-Day Guarantee
On-Demand
Lowest Cost
50 to 100% Markup
Consistent Quality
Standardized Formats
Anywhere in North America
Free Players + Analytics
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THE RESELLER CHANNEL
7,000+ONLINE MARKETING
COMPANIES IN CANADA
76,000+ONLINE MARKETING COMPANIES
IN THE UNITED STATES
27 million SMBs
2 million SMBs
4000+ Resellers signed to date
• Web Design & Development Services
• SEO & SEM Specialists
• Digital Agencies
• Advertising Agencies
• Marketing Consultants
A large fragmented market providing:
internet marketing services to:
27 MILLION SMBS 2 MILLION SMBS
Q3 Reseller Growth:
• Sales to resellers increased 112 %
• 162% increase in sales to existing customers
• 43% growth in sales to new customers
• Production backlog increased to $843,107
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HIGHER VALUE RESELLER CASE STUDY
Largest private healthcare practice
marketing agency in US.
Marketing agency serving financial advisors
and financial planning firms.
WHY THEY CHOSE
SOMEDIA
Needed a solution to replace their in-house
video offering.
Had been unsuccessful in offering a reliable
video product to their customer base. Required a
turnkey out sourced solution to enable scale up
of the new service to their client base.
COMPANY 50 employees 15 employees
CLIENTS 15,000+ independent healthcare practitioners Hundreds of independent advisors
+ TD Ameritrade as a corporate partner
TOTAL VIDEOS
PRODUCED TO-DATE10 30
AVERAGE VIDEO
PURCHASE PRICE
$1000
(Sold to end clients with 80-100% markup)
$675
(Sold to end clients with 80-100% markup)
EXPECTED 2015 REVENUE $40-80k $25-50k
WHY THEY CHOSE
SOMEDIA
Looking for a solution to replace
their in-house video offering.
Required turnkey outsourced solution
to enable scale up of new services to
their client base.
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REPEAT RESELLERS & SALES BACKLOG
Higher Value Reseller Projections
Annual Sales Value
Current Partner
Current Pipeline
Total Current
2015 New Acquisition
TotalResellers
2015
$50k + 6 5 11 11 22
$25-50k 12 10 12 55 67
$10-25k 29 31 60 53 113
$5-10k 110 27 137 22 159
• Inside sales higher value client close ratios have been 55% since Q3
• Qualification and targeting processes have been focused on high value partners since Q2
Orders received from resellers but not yet produced or Sales Backlog reached $1+ million by the end of Q4.
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Ability to provide turnkey, high quality, affordable video
ad content filmed anywhere in North America
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GOOGLE PARTNERSHIP
SMBs who advertise on Google do not use video ads on YouTube due to cost
Goal to convert text and banner advertisers to grow video ad revenue
Require a trusted video production solution to serve the 5,000+ certified agency
partners who manage advertising program for Google clients
Challenge / Opportunity
Why Google Chose SoMedia
Success to Date
Google Promotion of Scalable Video to all 5000+ agency partners (Q1 2015), then directly to SMB’s
Proposed International Expansion of SoMedia’s services with Google as lead partner
What’s Next:
Become official go-to provider of affordable video ads for YouTube. Work with Google agency
partners who become high value repeat resellers for SoMedia. Build out Video Ad production
solutions with Google as lead partner - expand video ad production services to other partners.
Opportunity for SoMedia:
In August 2014, Google launched test promotion with a select
handful of agency partners. SoMedia completed production of video
ads, received referrals, repeat orders and recommendations from
agency partners
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CORPORATE & ENTERPRISE PLATFORM
Scalable Video Production for Corporations & Agencies
Volume and National Reach are Corporate
Marketing Pain Points
Solutions for multi location corporations
in large volume.
On Demand Video Production Department
Corporate Platform includes project, team and
campaign management, tracking, reporting,
players & advanced integrated analytics
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CORPORATE CASE STUDY
Global enterprise software company National auto care franchise with 800+ locations
WHY THEY CHOSE
SOMEDIA
communications. They were previously
accustomed to paying $20-25k per video and
AAMCO wants to create custom video content
for each of their 800+ franchise locations and
SoMedia is the only company able to provide the
geographic reach and scale to deliver.
COMPANY 68,000 employees 201-500 employees
CLIENTS 263,000 in 130 countries 800+ locations
AVERAGE VIDEO
PURCHASE PRICE$2500 $550
EXPECTED 2015 REVENUE $25-50k $150-$250k
WHY THEY CHOSE
SOMEDIA
SoMedia produced a series of client
videos for internal and external
communications at a fraction of the cost
of their previous provider - a savings of
more than 80% .
SoMedia is the only company able to
provide the geographic reach and scale to
deliver custom video content for each of
their 800+ franchise locations.
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MARKETING PLATFORMS
Scalable Video Production Integrations
for Platforms
Current and In Progress Integrations, Tests and App Developments
Apps and direct integrations of scalable, on demand video production services with video players and advanced analytics
SoMedia is the first mover. Only video production solution able to deliver required scale & reach
Introduction of content marketing and demand generation programs will broaden overall market awareness and reduce cost of client acquisition
Rapid rollout started Q3: 20 integrations so far
TSX.V: VID 16
DIRECT INTEGRATIONS & APPS
Adobe Marketing Cloud MAP
Alfresco CMS
Bigcommerce App Marketplace
CallidusCloud MAP
Constant Contact Email Mtkg
CrownPeak CMS
Ektron CMS
GetApp App Marketplace
Hootsuite SMM
Hubspot MAP
InfusionSoft CRM
Ion Interactive Landing Pages
Kapost Content Marketing
Leadpages Landing Pages
Limelight Content Syndication
MailChimp Email Mktg
Microsoft Dynamics CRM
Newscred Content Syndication
OneSpot CMS
OpenText CMS
Salesforce CRM
Salesfusion MAP
Silverpop MAP
Sitecore CMS
SnapApp Content Marketing
Wix.com Website Creator
IN PROGRESS, PLANNED & POTENTIAL
COMPLETED
Act-On MAP
AppDirect App Marketplace
Campaign Monitor Email Mktg
Captera App Marketplace
Eloqua MAP
ExactTarget MAP/Email
Google Chrome Marketplace App Marketplace
Marketo MAP
Microsoft Sharepoint CMS
Moz CMS
Serchen App Marketplace
Unbounce Landing Pages
Web.com Website Creator
WordPress Website Creator
Yahoo! App Marketplace
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Scalable Video is the only video production solution capable of providing the
North American wide reach, volume and scale required to service the Marketo
platform.
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PLATFORM PARTNER STUDY
Marketo ecosystem enables clients to access everything needed to run
successful marketing campaigns, but had no video production solution
Challenge
Why They Chose SoMedia
Success to Date
Content marketing, events, promotional programs. Marketo is very excited about the potential for
increased use of video; SoMedia to attend and present at the Marketing Nation Summit in 2015.
What’s Next:
Work with Marketo customers (Fortune 1000) to roll out video campaigns that require scale
and volume production.
Opportunity for SoMedia:
Strong early traffic to SoMedia Launchpoint page
Leads and enquiries being generated
Based on initial success, Marketo invited SoMedia to become expert content contributor for their corporate marketing blog
Marketing Automation Platform
3000+ customers
Market Cap: $1.1 billion
TSX.V: VID 18
SALES MODEL EVOLUTION & COST OF AQUISITION
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THE COMPETITION
Opportunity for Category Ownership in a Global Market
Vid
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PROGRESSIVE LEADERSHIP
Rick Schultz CGA - CFO
George Fleming - Founder & Co-CEO
15 years experience as an Internet business founder or co-founder. CEO & founder of One Person Health
(HealthPricer.com), Co-founder of eCharge Corp. Prior to that at Canaccord Capital.
12 years accounting management experience; involved in the preparation of two IPOs.
Tactical Corporation, Taleo Corporation, Pivotal Corporation.
Amir Mirhosseini - CTO & Co-Founder
Highly innovative technology architect & programmer. Graduated with a BSc and Masters
(incomplete) in Computer Science from UBC.
Colin Osing - Vice President, Marketing
Former head of marketing at Canpages Inc. (IYP) with 15 years experience selling digital
marketing solutions to SMBs and agencies.
Ben Pickering - President & Co-CEO
15 years experience in the online media and software industries. CEO of Strutta, senior roles at Yahoo. Named a
Top 40 Digital Strategist by the Online Marketing Institute. MBA from Stanford University.
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TSX.V: VID 21
VALUATION & MARKET CAP
Current Nominal Valuation Leaves Room
for Upside Based on Comparables
• Company founded in 2006
• $20+ million raised to date
• 22 employees
• Net burn rate is ≈ $125,000/month
• Current market cap of $6.1M compares to C$20+M invested in the company
• Competitor Studio Now raised $5 million in venture financing in 2014, start up competitor Vidyard raised $6M in venture financing in 2013
• Comps across the online advertising, video production, and web advertising sectors suggest robust valuation metrics are achievable
Stock Price (1/6/15) $0.145
52 Week Low - High $0.09 - $0.90
Avg. Daily Vol. (3 mo) 114,374
Shares Outstanding 41.5M
Insider* Holdings (est.) ~28%
Market Cap $6.1M
Enterprise Value (mrq) $9.1M
TSX.V: VID 22
KEY TAKEAWAYS
Suite of Technologies are Built and Proven$20M+ already spent on development. Company is now focused on sales and marketing.
Disruption Story + Opportunity for Category Ownership Only video production solution focused on scale, reach and volume. Only video production
reseller solution in the market. Only turnkey video production solution available to large
SaaS platforms like Salesforce, Marketo, etc.
TimingBuilt a base of over 4,000 resellers, sold over 2,500 videos to date. Completed 20
platform integrations. Sales began ramping in 2014 and poised for rapid growth in 2015.
Focus on ExecutionTargeted inside sales effort, strategic business development, and implementation of
demand generation marketing programs to support sales development
Five Key Areas of Focus are:
1. Increase repeat sales from existing pool of resellers and add more
2. Continue platform integrations
3. Leverage scale, reach and volume advantages to close corporate and agency accounts
4. Launch content marketing and demand generation programs
5. Expand VaaS platform capabilities and add self serve reseller signup
TSX.V: VID 23
George Fleming - Founder & Co-CEO
Tel: 604.683.5510
Email: [email protected]
CONTACT US
SoMedia Networks, Inc.
221 E 10th Ave, Suite 201
Vancouver, BC Canada V5T 4V1
US Investor Relations Contact
Michael Koehler
Liolios Group, Inc.
Tel: 949.574.3860
Email: [email protected]
SoMedia Investor Relations Contact
Tel: 604.683.5510 x 570
Email: [email protected]
TSX.V: VID 24
Appendix
TSX.V: VID 25
NEWS & BRANDED CONTENT PRODUCTION
SaaS based crowdsourced news production platform offers on demand
or manage yourself “marketplace” option.
Unique front end Saas platform includes creative development processes,
marketplaces, task planning and production management – controls
crowdsourced workforce
Leverages network of 3,500+ video production specialists throughout
North America
Targeting a very large addressable online media and corporate market
underserved by traditional news production services
Launching Jan 2015
PRODUCED
CONTENT FOR:
• Video Players, Hosting and Analytics
included
• Anywhere in North America
• SaaS & Services Revenue Model
TSX.V: VID 26
SCALABLE VIDEO PRICING & MARGINS
$599 – 1499+
Mostly standard Custom or
premium Custom videos
Mostly standardized 30 & 60 second Ad,
Testimonial and Profile formats
Typical partner markup is 50% to 100%
Mostly standardized 30 & 60 second Ad,
Testimonial and Profile formats plus Custom
Margins: 41% – 70%
Wholesale from
$699 – 1499+Margins: 48% – 70%
Direct Sale from
$899Margins: 40% – 70%
Custom Video from
Reseller Model
Agency and Content Model
SaaS Platform Direct & Corporate Model
TSX.V: VID
Set a player’s color to
match your brand
(and add your logo).
Add a map to
your location.
Enable sharing to
Facebook, Twitter and
other social networks.
Leads sent directly to your
email.
Promote offers or
services, and drive traffic
back to your website.
Promote coupons, giving
viewers the ability to print
out and redeem.
Integrate videos into any
website or blog.
Auto-generated video
sitemaps and meta data
for enhanced SEO.
Target videos based on
location, device, or time of day
CUSTOM VIDEO PLAYERS
BRANDING
GOOGLE MAPS
SOCIAL MEDIA
LEAD CAPTURE
CALLS TO ACTION
COUPONS
EMBED CODE
VIDEO SEO
CONTENT TARGETING
Customizable video player with enhanced campaign and targeting features.
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Viewer EngagementHow many viewers watch the entire video?
At what point do they drop off ?
Understanding engagement data will help
improve your next video.
Conversion RatesHow many viewers are clicking on your
calls-to-action? How many leads are you
generating? The only way to optimize is
by tracking your CTRs.
.
Viewer GeographyTrack the geographic location of all your
viewers - filtered by country, region,
or city.
.
Social EngagementMonitor how many times your video is
shared and which social networks are
most popular with viewers.
.
Performance by Embed LocationFilter your data by embed location and
compare how each is performing.
Video’s Impact on Your
Website or Blog
We’ve integrated with Google Analytics
to understand how your video is
impacting your website.
.
Track performance with integrated real-time analytics
ADVANCED VIDEO ANALYTICS
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“Video is booming in the hotel space. Partnering with
SoMedia gives us the ability to seamlessly integrate
video offerings into our service mix. We’re now able
to offer hotel clients like Marriott, Hilton and others
high quality video content, on-demand, at any
location across North America.”
John McAuliffe - President, Leonardo
Scalable Video gives Leonardo the ability to sell and
deliver high quality video content to their clients,
on-demand, anywhere in North America, at any volume.
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RESELLER TESTIMONIAL
Leonardo provides solutions to
e-marketers at 6,000+ hotels, 150+ hotel chains
and over 120 travel websites.
Leonardo was looking for a single video production solution
to provide video content for their national hotel chain clients
in multiple locations in multiple states.
Challenge
Solution
Testimonial
TSX.V: VID 30
OPERATIONAL RESULTS
SALES & BACKLOG
GROWTH
Q3 Results
$306,653 in sales which was a 22%
increase in sales over the previous
quarter or 136% growth over the
same period last year
$843,107 in Sales Backlog which was
an increase of 38% over the previous
quarter
Growth in New Partner Sales of 150%
over the prior quarter
Reseller sales of $251,834 increased
20% over the previous quarter
Corporate Sales increased 30% over
the prior quarter
VALUE OF SALES
MONTHLY YTD
NEW SALES VS EXISTING