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telligentbloke

02/08/12 7:40 PM

#243278 RE: Poptech #243264

Ask Marriott exactly how much money Neomedia has generated during the time of her tenure from paid ad campaigns, using Neomedia's platform. Forget all the hardware and IP licensing. Just the revenue from brands and their agencies running QR ad campaigns.

No doubt, some individual at the brand or agency level coordinates any utilization of QR code integration. And yes, QR is just one part of a total effort.

Putting aside for the moment your assertion that using a free service would not even be considered, let's look at just how much someone would pay. All media is sold and bought in a demand and supply environment. The more demand the higher the price as well as the converse of that.

The point is, how much pricing leverage does Marriott have in a world of free or dirt cheap services. Supply is very high and demand may be increasing base upon press reports. Assume the demand is high but so is the supply.

If you were a brand, how much would you be willing to pay to create five or six codes along along with tracking the number of scans and placements for each code for a typical one month campaign? Those brand people would consider these factors:

Should they be willing to pay $100K, $50K, $10K or $1K? Assuming your brand has an attractive offer or incentive at the end connection of the QR code, how much is that QR connection worth? Let's say you got very lucky and generated around 1M scans in a month. Extremely lucky and most probably not even close to reality. Suspend reality for the moment.

At a cost of $100K that equates to a $100 CPM (Cost-per-thousand, the basic metric for determining the pricing of most media) .

Mobile display ads sell for between $1.00 and $10.00 CPM's. So on that basis, a reasonable QR campaign CPM range at 1M scans would be between a $1.00 CPM and a campaign cost of $1000 or $10.00 CPM at a price of $10K. If you can get your display CPM to average $5.00, how would you justify a $10.00 CPM for the QR portion? Keep in mind, once someone clicks on a display ad, you as a brand can track every additional click all the way through a purchase or transaction of some sort. QR metrics stop once the you are connected to the mobile website. What will you be willing to pay more for? QR or display?

How many ad campaigns would Neomedia need to be running every month at the $10K per campaign, just to cover the $400K a month from YA? That's right: 40. If the reality is closer to $1K, that would equal 400 campaigns.

Annualized, that comes out to between 480 and 4800 campaigns annually. Now count the number of listed advertisers on Neomedia's website. And how many sales people do they have?

The next question for Marriott should be how many paid advertiser campaigns were run with Neomedia in 2010 and 2011. No reason for that number to be a state secret, minus the names of the advertisers. Or how many advertisers do you have and what was the average number of campaigns run annually for each advertiser? 10, 20, 30?

Do the math. Marriott and YA certainly are not when it comes to reporting to the shareholders.