Scoutmob mobile advertising

Michael ForoobarFebruary 5, 2013 (Google)

Agenda for today

» Background on Scoutmob– Unofficial history– Differentiation

» Local ad sales–Merchant math– Common objections (attribution)

» Experiments and mobile trends

Scoutmob actually started out as a wi-fi business

Local businesses receive a custom landing page

Tool for SMBs to build customer relationships

Quickly pivoted when a better business model came along

“COST PER DOOR SWING”Our pitch: use mobile to drive offline sales

SMB niche small but 12% CAGR w/ online capturing growth

Offline still accounts for bulk of local advertising spend (deals are small)

Needed to differentiate brand from competitors

Needed to differentiate brand from competitors using mobile

Needed to differentiate brand from competitors using price

ROI math works for local businesses (even w/ high costs)

Redemptions 1,000Average ticket: $55  Average party size 2.4 based on survey dataCost of entrée $15 one per personCost of app/dessert $5 "Cost of drink $3 "

Avg Scoutmob ticket: $35  Percent discount 50%Max discount $20 capped downside

Variable costs: $28  Cost of sales 50% food and bev costs (35% standard)Scoutmob fee $4 per redemption

Gross profit $3,600 Total revenue $35,200Cost of sales -$27,600Scoutmob costs -$4,000

ROI 90%

Marketing not always day-to-day top priority for SMBs

Redemptions 1,000Average ticket: $55  Average party size 2.4 based on survey dataCost of entrée $15 one per personCost of app/dessert $5 "Cost of drink $3 "

Avg Scoutmob ticket: $35  Percent discount 50%Max discount $20 capped downside

Variable costs: $28  Cost of sales 50% food and bev costs (35% standard)Scoutmob fee $4 per redemption

Gross profit $3,600 Total revenue $35,200Cost of sales -$27,600Scoutmob costs -$4,000

ROI 90%

Common objection: I am giving discounts to my “regulars”

» Anecdotes hard to overcome

» What does “regular” mean?

» Average user dines out ~5 times per week– Primarily lunch and dinner– 5% dine out more than half their meals

Solution: survey customers to baseline for incremental value

No, I was

alrea

dy a re

gular

custo

mer

No, I was

a custo

mer but o

nly infre

quently

Yes, b

ut I had

heard

about m

erchan

t prev

iously

Yes, I

learn

ed ab

out the m

erchan

t thro

ugh Sc

outmob

0%

5%

10%

15%

20%

25%

30%

35%

40%

11%

33%

27% 28%

Was this your first visit?

Solution: survey customers to baseline for incremental value

No, I was

alrea

dy a re

gular

custo

mer

No, I was

a custo

mer but o

nly infre

quently

Yes, b

ut I had

heard

about m

erchan

t prev

iously

Yes, I

learn

ed ab

out the m

erchan

t thro

ugh Sc

outmob

0%

5%

10%

15%

20%

25%

30%

35%

40%

11%

33%

27% 28%

55% new and 11% self-described regulars

Common objection: Scoutmob is sending me bad customers» More anecdotes– Repeat use (“friend’s phone”)– Bad tippers– Low-margin

» Data locked in POS– Also, lack of analytics expertise

Solution: study POS data to understand spending (w/ Copilot)

Solution: study POS data to understand spending (w/ Copilot)

Scoutmob customers actually spend more, up to max discount

Source: Pizza Nostra (San Francisco)

Transactional data: ad platforms, banks, card companies, etc.

MOBILE COMMERCE AND ATTRIBUTION THOUGHTS

Things we are seeing and planning

Running experiments is a great way to understand contribution» Short-term online offline– Urgency and expiration work well– Small incentive, e.g. free hot dog

» Tests in retention and acquisitions – Email vs. push vs. email + push– Offline branded search, location

searches

Accuracy more realistic than precision in multi-channel

Mobile commerce big this year for us, what we are seeing…» Mobile desktop conversion» Mobile web is low hanging fruit– Tablets look like desktop– Challenge: product browsing– Drive traffic w/ email

» Logged-in users help– Shopping cart across devices–Mobile only promotions