Welcome

• Understanding the choice, not to persuade you, but we are recommending both markets.

• Please save questions until the end.

Characteristics of Projection

-Non-nuclear

Two trains/Two tracks

Site agnostic=may or may not happen within the confines of the site. Discrete=quantized. Continual= range.

Site-specific can be estimated accurately, site-agnostic cannot. It seems like a lot of our discussion has been in site-specific and none in site-agnostic.

Limits of site-specific

• Historical data, not specific to Fenorris. If you used a projection like this for Google or Facebook, it would predict 0 revenue. If you used it for Windows Smartphone, it would be too high.

Limits of Site-Specific

• Takes average, ignores total price (Fenoriss’ items are very high price.

So that means the site-agnostic data is very important.

Why can’t site-agnostic be estimated accurately?

• Because it is predicated by traffic, e-herd, like stocks

And you can never guess what people will actually do until they do it, since there are too many z variables, also known as “static.” Predicting in a non-linear dynamic system is like predicting stocks or the weather, we don’t do it in revenue projections. But there are other signs a stock is hot even if cannot be predicted. Even genius stock pickers are wrong around 60% of the time but when they’re right, they’re really right, when they’re wrong they’re only somewhat wrong. This is due to causal portrait modeling.

So why should I care about site-agnostic aspects of the campaign if I

cant quantify the benefit?• There are qualifiable not quantifiable benefits:

reach, network effect, valuation, community, % chance sales, competitive adv, our authority

Targeted vs non targeted, the projection never accounted for non-

targeted

Reach, targeted cpm

If corp climb was a city

• Targeted

Non targeted

Network effect

• Info cascade, Private vs. social signals, tipping point, contagion model

“Social signals outweigh private since the % chance I am right is lower than all those peopleBeing wrong”

Valuation

• Due to MOOC and crowdsourced features

Community

• Evangelical

• Research

• Partnerships

% chance/sales

competition

Our authority, Tour Italy, 5.4 mil profit. 3 yr.

Eagle One DS, 0.5 Mil profit

Lip Gloss Culture, 85k profit

Site-specific: We can lower the cash reqs but we can’t change this trend

This is typical for longer term investments such as real estate, if you don’t like this chart, you should not do internet marketing.

Risk and MAPE, wrong way to think about it

Healthy signs of risk reduction

Other healthy signs are engagement, social signals, feedback from people.

What is MAPE?

• The chance that this number will be wrong, it can be wrong by $0.01 and still have 10% MAPE. It is not the chance that the projection is wrong. This is because 1) There is a pos/neg skew. 2) This distribution is Gaussian. 3) There is a higher limit MAPE distortion.

MAPE

5% MAPE = 2.5% positive skew, 2.5% negative skew

Stdev MAPE

• When stdev occurs this is the probability distribution. It is not all or nothing.

MAPE= Gaussian distribution because it deals with random events

MAPE negative distortion

• The 5% correlates to the 10% but the 10% distorts the 5%

Distortion

Projection does not account for this

RVR

• The RVR is incredibly high which show very limited risk.

• RVR of Apple Stock in Sep 2009: 1.4

• RVR of campaign: 4

• Caveat: RVRs oversimplify risk (does not capture skewness or kurtosis)

Marketing campaigns

• Don’t fail or succeed in the blink of an eye. If they are failing it becomes pretty clear from the outset. We will poor social signals, traffic numbers, feedback etc. That being said, never invest in marketing unless you can handle losing all of your money.

Testing

• Opinions are wrong, testing is right. If 500 people all get onto a site and say it’s a good idea, then it is. If not, then it isn’t. This should be done for US and India.

Real risks• What are some of the real risks?

• Traffic is high, sales are low. This would mean a longer period of time for recoup of principal.

• SEO is not a good traffic source, for w/e reason. This would mean higher-cost advertising.

• Electric is not reliable. This projection was not specific to us however.

False risks

• I can spend 50K and see nothing.

• I am revenue negative for too long: If you can’t be revenue negative for a year, internet marketing is not for you. There is always the chance that you won’t be but it cannot be qualified.

India and US should both be done

• Projections were done with cross-transferring utility assumption, which is why India looked so good.

• Both markets are self-supporting.

• Jumping into the other market is easy.

• Testing will show where we can focus more of our energy. Also, I already mentioned the India projection is not even valid.

Computational Simulations

• Ran but am not happy with them yet, I had a colleague look at them and he said they were not good enough.

• Without live data, the simulations are just for our own amusement, however. We should go ahead and fund the tests now.