Transactional Brand

Building Opportunity: An Integrated Advertising Campaign

to Increase the Number of Spotify Premium Subscribers

July 29, 2016

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Executive summary

R2C Group hopes to attain Spotify as a client and execute their media dollars in a strategic way. The following document describes our agency and explains how we plan to utilize our media, analytic, and creative tools to maximize success for Spotify. We began building our strategy by conducting primary and secondary research to better understand the target audience. In order to reach the “Modern Mixtapers” and “Plugged-Ins”, we recommend three channels: TV, Digital (display and search), and Out of Home (OOH) digital billboards. For our media strategy, we utilized MRI data and looked at the best performing media channels for our current internal clients. For our creative direction, we chose the tagline “share the moment” to inspire people to create, find, and share playlists with friends and other listeners. We believe there is a music genre or playlist made for every person. Whether he/she can’t sleep, is having a party, or going on a road trip, there is a playlist for every moment. R2C Group hopes to help Spotify convey that message.

Agency Overview

Capabilities: R2C Group is the most data-driven creative and media agency you will ever meet. We’re all about performance. We link brand strategy, creative, and production to dynamic media buying and advanced analytics, achieving unbeatable success for our clients. We have proven that it is possible to deliver on both sales and branding without making sacrifices. We call it transactional brand building. Locations:

Portland, Oregon

San Francisco, California

Philadelphia, Pennsylvania

Providence, Rhode Island Number of full-time employees:

200 skilled employees

18 years in business

Profit of $425 million a year In-house services offered: Our Portland office offers pre-production, production, and post production services. We hire freelance directors who specialize in our client’s brand needs. The San Francisco office specializes in digital strategy and analytics, allowing us to provide our clients with up-to-date dashboards and reliable success measurements. Our Providence branch, called MMSI, focuses on a pay-per-inquiry strategy. Media Channels: Our aggressive media buying approach and optimization team are fueled by advanced technology and deep relationships. We have an upper funnel, mid-funnel, and lower funnel strategy when buying media. Upper funnel serves for high reach, strong programming context, and a longer tail response. The mid-funnel approach is a good combination of reach and frequency and provides response volume at scale. Lastly, the lower funnel approach provides lower reach, good frequency, captures demand, and pays out. There is also limit to scalability.

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Meet the Team

Madi Budge Madi Budge works on the Account Management team in the Client Services Department. At R2C Group, Budge is involved in the effort to develop brand strategies and optimize sales for five R2C Group clients: 23andMe, Wargaming, Peloton, SoFi and SimpliSafe. Budge is trusted with the creation of audience profiles, conducting advanced analytics and organizing meeting times. In addition, Budge has knowledge in disruptor brands, having analyzed the media habits of the top disruptor brands the past three years, in which Spotify is included. On the Spotify account, Budge

and the rest of the client service team is the main point of contact. They are here to answer any questions, concerns or comments and relay the information to others on the campaign. She and her team strive to ensure the satisfaction of the client while simultaneously increasing brand awareness and sales. Mika Chesnutt

Mika Chesnutt is an Account Manager in the Client Services Department at R2C Group. She works on the accounts of some of R2C’s longest clients, BISSELL and Consumer Cellular. She helps the larger team consistently deliver excellence and increase sales for these clients while developing their brands, which ultimately keeps these clients coming back to R2C Group. Chesnutt consistently checks in with the various departments to ensure deliverables are met in a timely manner. She schedules both internal and client meetings, performs analysis on current shows, and

constantly engages in conversations on how to optimize performance and build brand awareness for her clients. On the Spotify account, the client services team is your day to day contact, here to keep you informed throughout the process and answer any questions that may arise. Brina Woolhiser

Brina Woolhiser works with the Creative Department in Portland as a graphic designer, story boarder, and sometimes illustrator. She specializes in illustrative motion graphics. Woolhiser has recently been working on style frames for R2C clients: SimpliSafe, and SoFi. She also is greatly involved in the visual research that goes into a creative brief that determines the creative style. On the Spotify account, Woolhiser executed the storyboards, mood boards, print ads, motion graphics editing, music editing, and creative direction.

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Pearson Kunz

Pearson Kunz works as both a Senior and Post Producer in the Production Department. For the Spotify campaign, he organized the logistics of the shoot while also coordinating the post-production process. This includes an involved role in the creation of edits as well as the supervision of the music mixing and graphic pop-ups. Also, for this particular shoot, he acted as the Director. Pearson ensures that all strategic messages originally requested by the client are delivered in each spot both visually and aurally – all within the specific time and aspect requirements of broadcasting. In the past, he has worked Consumer Cellular and SoFi.

Zachary Cardinal

Zachary Cardinal works with production and is our Executive Producer/ Director of Photography for this spot. He works closely with our production and post production team to bring our spots to life. He has worked with clients such as Bissell, Humana, SoFi, Tax Act and Google. He has budgeted for the spot but also works on set to put everything together. On set he works with the Director and the production manager to ensure a smooth production process and is your main contact on set for related questions or inquiries.

Hosana Medhanie

Hosana Medhanie is a planner in the Media Planning Department in Portland. At R2C Group, she often aids the other media planners with analyzing data from different markets and media, creating weekly client status reports, updating data for client daily files, and studying media usage using Tracker and MRI. The clients she works with to determine the types of media to implement include Humana, Wargaming, Lendio, Premier Care, and Redfin. On the Spotify account, Medhanie did preliminary research on Spotify and its competitors, as well as running Kantar reports to compare competitor spending.

Deanna Nanni

Deanna Nanni is a planner in the Media Planning Department and an Account Manager in the Client Services Department at R2C Group in the Philadelphia office. Nanni works on a few clients including Adore Me, Rebagg, Namely, and Total Gym. She is in charge of note taking per client call she attends. She is in charge of sending out internal status reports, setting up NCA’s, conducting research, and analyzing MRI data. On this project she created a media plan using MRI data and utilized Tracker to create a Response Index. Nanni allocated the 5 million dollar budget

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between TV, digital, OOH, and production. Lastly, she projected budget and optimizations for Phase two planning. Nanni can answer any questions regarding the media plan and budgets. Kayla Gonzales

Kayla Gonzales works with the Digital Department in San Francisco to supply digital strategies and analytics insights to clients like Humana, Consumer Cellular, and 23andMe. She specializes in creating and updating dashboards that display campaign performance metrics. Recently, she has worked with clients like Total Gym and Perfect Fitness to monitor search and display campaigns. Gonzales also works with the search and display teams to strategize optimal media partners and budgeting. On the Spotify account, she created a digital strategy for search and display campaigns. She also created a preliminary dashboard

that can be added to as the campaign begins. Gonzales will be happy to answer any questions regarding digital strategy or performance measurement. Allegra Reich

Allegra Reich is currently working in the Media Department at MMSI. At MMSI, she often works with the media team to track daily client leads on various media outlets as well as researching new media to contact. Reich has been working with the newly acquired client Leesa. She has created a specific case study regarding this client and the projected improvement Leesa will face after collaborating with R2C Group. Because Leesa targets a similar target to Spotify as well as satisfying specific consumer needs, these results can be translated to Spotify’s performance when collaborating with R2C Group.

Process

Strategic: R2C Group specializes in transactional brand building, a unique advertising approach proven to substantially grow our clients’ businesses and achieve their brand goals. With an accountable mandate of tying every single transaction back to the dollars invested in driving it, we guarantee that our clients’ budgets will be used efficiently. Rooted in the advanced analytics of direct marketing, the essence of the formula is proven: instant-action messaging, extremely aggressive media, and daily decision-making insights. The result is lower cost brand growth.

Analytics: We provide leading edge analytics that deliver actionable performance insights daily. We use state of the art proprietary analytics platforms such as Signal Link, Wavecast, and Brand Pulse. All clients are provided with a personalized dashboard that reports key metrics and insights into what media and strategy is working best for the campaign. With a dashboard that is customized to each client’s needs, full transparency is guaranteed.

Media: R2C Group employs over fifty media buyers across all channels. R2C Tracker, our proprietary media database, has $8 billion of sales data for thousands of campaigns covering

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every category and audience, allowing us to more effectively target. We also work throughout the entire marketplace: General, DR, Digital, Upfront, Scatter, Performance, Programmatic, Fixed, and ROS. Our buyers aggressively manage media daily – our teams and technology make sure we can react to the fluctuations instantly. They are constantly navigating the marketplace to gather insights, and the R2C Group compensation model incentivizes everyone when they produce creative and plan/buy media that works.

Creative: Our creative model looks like a triangle. We start with “The Hook”. We want to engage the audience with a strong emotional or rational idea. Then we ask “Why Buy?” Here, we supply consumers with reasons to believe the message and explain how we can solve their problems or meet their needs. Next, “Prove You Are Telling the Truth”: we provide the audience with demonstrations, reviews, and testimonials to instill trust and a sense of value. We then “Prove Your Brand is Trustworthy” with guarantees, endorsements, and justifications for the deal. Lastly, we “Make Them Respond” by creating urgency with a limited offer or a bonus, resulting in an interaction with the brand that provides both awareness and a potential sale.

Research Tools

In the discovery phase of our transactional brand building process, we use primary and secondary research to develop a situation analysis of the brand. The competitive analysis includes media spending, media types, messaging/offer review, spend by week/month/year, and commercial lengths. The target audience profile includes demographics, media consumption, psychographics, customer satisfaction, and customer segmentation. The primary research includes brand momentum and image studies, attitude and usage studies, focus groups, and ethnographies. Our proprietary online research tool, MindReader, allows us to use customer attitudinal data to help make decisions at all stages of campaign development. MindReader’s Attitudes and Usage gives current profile of customers by identifying attitudes, perceptions, preferences and usage/substitutions, informing the brand situation analysis and creative development. Concept and Copy identifies the most appealing ad elements that best deliver brand communication goals while driving purchase intent. Brand Pulse, the brand momentum and image study, gives a 360 degree view of advertising communications performance against the competition, guiding brand positioning.

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Creative and Production

Research tools and process that will inform creative:

The process for designing integrated creative messaging that achieve response goals on a CPA basis:

CPA Goal: $50-$70 The overall goal is to acquire between 70,000 and 100,000 new members. We recommend using three different media channels in order to reach Spotify’s audience

at various touchpoints. Digital advertising offers an opportunity to effectively retarget potential consumers and find “look-alike” audiences, expanding the reach of the brand and increasing conversion volume. A well-developed TV strategy reaches a broad audience, and will help drive digital performance and increase awareness of the brand. Finally, out of home digital billboards will offer a dynamic point of interaction – we can promote different songs/playlists for different holidays, driving mass amounts of consumers to the application and website.

Creative length recommendation:

Television o Budget: $2,540,000 o We recommend one sixty second commercial. Sixty seconds is needed to fully

immerse the viewer in the message and music. Shorter commercial lengths do not

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allow for as many songs to be prominently featured, which could possibly engage the viewer or listener less.

Digital o Budget: $1,100,000 o We recommend running a display and search campaign throughout the entirety

of phase one and strongly recommend continuing a digital presence for phase two. We will have a flighting approach with heavy up on the holidays to follow our TV schedule. When we are not in our heavy up stages, we will have a minimum spend of $30,000 spent on digital. Pausing digital campaigns completely could result in a loss of data, so we strongly recommend a continuous campaign to maintain accuracy.

OOH- Digital Billboards o Budget: $262,500 o Digital billboards are a cheaper and more time efficient way of broadcasting our

message across major target markets. The major markets we want to hit are Los Angeles and New York City. The first flight will take place during quarter four. The first city we will target is Los Angeles for the weeks of October 24th and October 31st for Halloween. Then we will flight again in Los Angeles for the weeks of November 21st and November 28th for Thanksgiving. Next, we will flight again in quarter one in New York City. The first flight will occur during the Christmas holiday season. The two week flight will be the week of December 19th and December 26th. The next flight will be February 6th and February 13th for Valentine’s Day. During all four flight periods, we will have 10 units displayed. A digital billboard in the New York City market has the potential to reach 313,662 impressions. A digital billboard in the Los Angeles market has the potential to reach 399,616 impressions. Since we will be flighting during the holiday season we have the potential to reach these impressions.

Timeline for executing new creative:

TV commercial launch date: October 17th o Editing and final cuts take about four weeks. A review with Spotify would be

scheduled to see if there are any changes they would like made. Overall process can take up to six weeks.

Digital launch date: September 26th o The assets needed for digital can take around three weeks to produce.

Digital Billboard launch date: October 17th o This can take up to three weeks after filling out contracts with vendors and placing

the digital billboard ads.

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Case Studies

The Brand: Adore Me is a disruptive e-commerce startup that sells women’s intimates online. To Adore Me, the 3rd fastest-growing company in NYC on the Inc. 500 list, TV is more than a branding tool; it’s a direct response channel through which the lingerie brand acquires new customers, from petite to plus.

The campaign: Recently, startups have been driven into the arms of offline advertising by the ever-increasing costs of online advertising. Adore Me launched its first TV campaign in January 2015. TV has since proven to be an efficient direct response channel for the brand that’s targeting millennials. Adore Me turned to R2C Group to manage its new TV campaign because both companies revolve around the same values: data-driven, fast-paced and focused on optimization. Compared to traditional TV advertising, R2C Group has an innovative way of managing TV campaigns by providing very detailed performance KPIs down to the channel, program, day and time – on a daily basis. Adore Me found this to be a great fit as it wanted to be able to get real-time analysis of its ad performances in order to optimize and reduce its cost per acquisition.

The results: By going to R2C Group to manage and optimize its TV campaign, Adore Me was able to noticeably increase its customer base, with the side benefit of growing brand recognition.

What R2C Group did for Adore Me: R2C group doubled Adore Me’s membership base and tripled website traffic.

Why it is relevant to Spotify: Adore me and Spotify have a few things in common with one another. First, they are both subscription based companies. Both drive membership/subscription sales. Spotify strives to have new premium users and Adore me strives to have new VIP users. Next, they both target millennials. Spotify has a slightly larger audience and also targets men, but overall, they have very similar demographics.

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The Brand: Leesa was founded in 2015 with the mission to deliver comfortable bedding directly to the consumer’s doorstep. The Leesa mattress adapts to all body shapes and sizes as well as sleeping styles. One in every ten of their mattresses sold is given to the homeless.

The campaign: Leesa launched its first TV campaign in April 2015 with R2C Group. The campaign features 30 and 60 second TV advertisements geared to target first time home owners in their late 20s. The ads focus on technology, ease of order, and the impact of social media. The results: R2C Group increased brand recognition for Leesa through their direct response TV campaign, creating a passageway from the consumer to the company.

What R2C Group did for Leesa: Based on past sales projections combined with the new ad campaign, there is an expected increase in sales for Presidents Day of 300% as well as 150% for Memorial Day.

Why it is relevant to Spotify: Leesa and Spotify target a similar demographic and serve specific needs. While Spotify targets the younger millennial generation, it also targets those in their thirties and forties, giving them a large variety of music they can choose from. Similarly, Leesa targets this same demographic and looks to satisfy the needs of the specific consumer through a large variety of mattress and bedding choices based upon personal preference.

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The Brand: Spark Networks was not afraid to claim a spot in an already established online dating market, practically invented by eHarmony.com and Match.com. Spark’s flagship relationship site, Christian Mingle, is now the largest resource in the Christian dating community.

The campaign: In the early stages of Christian Mingle’s existence, the focus was on growing the member pool. This was accomplished with direct response messaging tactics, including real-life success story testimonials and frequent registered member count updates.

The results: Christian Mingle was at two million members when TV launched in 2011. That community has grown to 14 million.

What R2C group did for Christian Mingle: R2C Group was able to increase membership by 7x. The awareness increased by 3x.

Why it is relevant to Spotify: Christian Mingle is an online dating service that can only be used if a user signs up for a membership. The target market is similar (25-49 years old). R2C Group serviced a fully integrated approach for Christian Mingle using digital and TV and it was very successful. We hope to see similar results using digital and TV for Spotify.

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Media Analytics

Phase one: We recommend a flighting approach for the media plan. In our allocation of the budget,

we placed a heavy emphasis on TV, with digital efforts being slightly secondary. Time and again, we have seen TV drive digital performance, and our budget follows that plan. The flighting plan spends $0 on TV for the first three weeks, then ramps up to $200,000 leading up to the holiday, with an increase to $300,000 for the week of the holiday. Digital will continue to run throughout the entire campaign. Out of home digital billboards will run during the holidays. The first billboard will be for Halloween in Los Angeles airing for two weeks. Secondly we will post another digital billboard ad for Thanksgiving for two weeks in the Los Angeles market. For quarter one we will post digital billboards for Christmas and Valentine’s Day in the New York market. Both holidays will run for a two week flight. We recommend testing two different markets because both are high traffic areas that will provide us with high impressions. The purpose of phase one is to test holidays. Halloween is a holiday known for parties, and we want Spotify to be the music service that provides the perfect playlist for every party. The TV strategy will remind viewers about the services Spotify Premium offers, and our digital billboards will encourage consumers to explore holiday related playlists and share them with their friends. Holidays like Thanksgiving and Christmas are known for family gatherings and traveling. Because Spotify Premium offers users the ability to listen to playlists offline, we would want to stress this pain point in our messaging. Often when traveling, consumers don’t want to waste cellular data or risk having a poor internet connection that interrupts the streaming experience. Our audience profile shows that the target audience has a busy lifestyle, and when holidays are added to the mix, the busyness intensifies. Educating them on Spotify’s offline capabilities would convert more consumers and allow them to get through the holidays with the perfect playlists.

Utilizing tools like MRI, we were able to pull data from different audience demographics. Then we pulled data based on television stations that these specific demographics watch. The three different audiences we pulled are:

o Male/Female Age 18-49 o Male/Female Age 25-34 o ( Adults - Gender and 18-49 - Age - Respondent and Listened to Internet-only radio

or other online music or audio services - Activities done on the Internet in the past 30 days or Listened to radio on the Internet - Activities done on the Internet in the past 30 days or iTunes.com - Entertainment: Websites visited in last 30 days or iTunes Radio - Entertainment: Websites visited in last 30 days or Pandora.com - Entertainment: Websites visited in last 30 days or Spotify.com - Entertainment: Websites visited in last 30 days).

After pulling the MRI data, we determined that the best performing stations are: MTV 2, MTV, Comedy Central, E!, FX, Adult Swim, Discovery Family, Spike TV, and Bravo. MRI showed excellent results with reach and household size.

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Next, we pulled a response index from Tracker to see where our internal clients spend their media dollars. We pulled data from Christian Mingle, because they have a similar target market and are also membership based. We saw that Comedy Central performed well for them with a media spend of $4,782,780 and an index of 177. We also pulled a response index for Adore Me. They have spent their advertising dollars on, E!, MTV, MTV 2, Adult Swim, and Bravo. All of these stations performed well for the brand. Lastly, since the media plan consists of mostly larger networks, it is important to add lower funnel media. Looking at our competitors, it was clear that VH1 Classic and MTV Live were strong performers for these brands.

Overall, the TV media plan consists of MTV 2, MTV, Comedy central, E!, FX, Adult Swim, Discovery family, Spike TV, and Bravo. We do not recommend adding upper funnel media at this time. We want to focus on adding mid-funnel media because it has a good combination of reach and frequency. Stations considered mid-funnel are response drivers and have a solid audience and efficient rates. The mid-funnel stations are MTV 2, MTV, Comedy central, E!, FX, Adult Swim, Spike TV, and Bravo. We would shoot to have prime local spots in these stations since prime is expensive and locals tend to be inexpensive. For our mid-funnel media, we would buy a mix of locals and nationals. We also want to add in our lower funnel stations, Discovery Family, MTV Live and VH1 classic. Adding in the lower funnel channels will make our plan more diverse and reach an extended audience. We would buy Adult Swim, Discovery Family and E! locals, because we could buy more expensive dayparts to increase frequency. We would buy all other dayparts as nationals and focus on locals where the local cover up is low. In our initial testing stages, we want to hold off on adding any upper funnel media. After the initial testing, we would slowly add in more upper funnel stations. We want to have as much of a mixed approach as possible, then eventually find our core stations and dayparts that work best.

For the Digital display and search strategy, we recommend taking a mid-funnel approach in order to capture a decent balance of reach and targeting. Quantcast, Rocketfuel, and Taboola have all delivered successful campaigns for past and present clients. We recommend running both banner and box advertisements for display. We also recommend utilizing Facebook, because the target market uses the site daily and it is a cost efficient way to reach a significant amount of people. For search, we recommend utilizing the three major engines: Google, Yahoo, and Bing. Google typically drives the most conversions, but Yahoo and Bing have the potential to drive a lower cost per conversion.

Phase two: This is an expansion of phase 1 that will take place in 2017 for Quarters 2, 3, and 4. We

hope to scale Spotify as a brand and have people convert from free users to premium users.

We recommend more out-of-home opportunities for Spotify, like sponsorships and pop-up events. In quarter three, we believe Spotify could benefit from a pop-up interaction event in New York City. Spotify will be celebrating their eleven year anniversary on July 14, 2017. This could be a day to celebrate Spotify’s anniversary, but it could also be a way

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to interact with and celebrate its users. This past year, Spotify’s event at the SXSW conference in Austin, TX featured a house with a mosaic wall of playlists that people could interact with to play music. The event also had music trivia and audio booths where attendees could collaborate and listen to different playlists. For quarter three, we would like to expand upon the “Spotify House” idea for an event in New York City where people on the street can come together, collaborate, and listen to music. The purpose of this event is for Spotify to “share the moment” with its users and fans. We also want to incorporate the music trivia game - if a player gets a certain amount right they could be entered into a drawing to win a free, year-long premium membership. Audio booths could be available for groups of friends to create and listen to playlists. To increase the level of interaction, attendees could also be provided with chalk to create images or write about the music they feel inspired by. Lastly, we hope to pair up with sponsors, like Starbucks, in order to further scale the event. Starbucks could offer promotional drinks related to the event and have booths where attendees purchase refreshments.

o Hosting a large event like this has the potential to build awareness and convert new customers. Many people, especially the older consumers within the target audience, are not aware of how Spotify works, so this event could educate consumers on the all of the benefits and offerings of the service. This a way to engage the audience and gain new members in a fun and creative way. We could also use the event as a means of gathering future promotional material. Creating commercials or other advertisements about the experience offered by Spotify could encourage others to convert to the service.

There is also an opportunity to promote Spotify through ESPN College Football during game breaks to encourage fan engagement. Fans could tweet at Spotify their favorite song with the hashtag #Iwantatouchdown, which would instantly be added to the “Touchdown Playlist”. During game breaks, Spotify could play a song that was recently added. This will encourage fans to download Spotify so they can access the playlist they helped create.

o The goal of this promotion is to build awareness, encourage users to interact with the service, and drive conversions to the Premium service. People who attend a college football game are likely tailgating beforehand, so the playlist could also be listened to as attendees prepare for the game.

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Competitive Research

Using Kantar, we were able to analyze Spotify’s main competitors, which included: Apple Music, Google Play Music, Pandora Radio, SoundCloud, Tidal, and Youtube Red. Where others are spending on TV:

TV Mix (000) 12 months ending 5/16/16

Networks Apple Music Pandora

Radio Spotify

YouTube Red

Grand Total

% of Total

FOX $12,717 $0 $0 $0 $12,717 22% ABC $6,528 $696 $338 $0 $7,562 13% CBS $1,940 $3,084 $0 $0 $5,024 9% NBC $4,256 $0 $0 $66 $4,322 8% TNT $2,608 $1,047 $0 $53 $3,708 7% MTV $1,481 $1,331 $0 $0 $2,811 5% WARNER BROS. DOMESTIC TV $2,036 $0 $0 $0 $2,036 4% COM $749 $779 $0 $18 $1,545 3% CW $1,428 $0 $0 $0 $1,428 3% ESPN $539 $563 $0 $0 $1,102 2% TBS $488 $607 $0 $0 $1,095 2% BET $545 $544 $0 $0 $1,088 2% VH-1 $214 $846 $0 $0 $1,060 2% E! $0 $759 $0 $0 $759 1% AMC $9 $711 $0 $3 $723 1% MTV2 $123 $394 $0 $0 $516 1% FRFM $149 $320 $0 $0 $469 1% USA $132 $332 $0 $0 $464 1% ESP2 $0 $396 $0 $0 $396 1% ADSM $150 $194 $0 $0 $343 1%

All Others $2,270 $1,668 $3,580 $14 $7,532 13% Grand Total $38,359 $14,269 $3,919 $154 $56,700

% of Total 68% 25% 7% 0%

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Where others are spending their Media Budget: Media Mix (000)

12 months ending 5/16/16

Media Type Apple Music

Google Play

Music

Pandora Radio

SoundCloud Spotify Tidal YouTube

Red Grand Total

% of Total

Network TV $26,869 $2,707 $3,780 $338 $66 $33,759 34% Spot TV $1,772 $174 $15 $3,580 $14 $5,555 6% Cable TV $7,658 $629 $10,475 $74 $18,836 19% Syndication $2,060 $2,060 2% Magazines $5,379 $5,379 5% National Spot Radio $6 $3 $8 0% Local Radio $22 $5 $27 0% Internet-Display $1,341 $1,787 $566 $21 $340 $900 $78 $5,033 5% Internet-Search $4,062 $222 $20,815 $99 $25,199 25% Outdoor $41 $779 $25 $185 $1,993 $3,024 3%

Grand Total $39,768 $11,455 $18,922 $243 $25,266 $2,993 $232 $98,880

Media Type Apple Music

Google Play

Music

Pandora Radio

SoundCloud Spotify Tidal YouTube

Red Grand Total

% of Total

TV $38,359 $3,510 $14,269 $0 $3,919 $0 $154 $60,210 61% Online $1,341 $1,787 $4,628 $243 $21,155 $1,000 $78 $30,232 31% Print $0 $5,379 $0 $0 $0 $0 $0 $5,379 5% Radio $27 $0 $0 $0 $7 $0 $0 $35 0% Outdoor $41 $779 $25 $185 $1,993 $0 $3,024 3%

Grand Total $39,768 $11,455 $18,922 $243 $25,266 $2,993 $232 $98,880

% of Total 40% 12% 19% 0% 26% 3% 0%

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Reporting

Dashboard: Your secure, online portal to access campaign performance is updated daily by one of our analysts. Widgets can be customized to report the results you want to see by product, creative, medium, and offer. Date ranges can be specified to show daily, weekly, monthly, quarterly, and yearly results. Reports can be downloaded in Excel or PDF format. Nielsen and MRI feeds, as well as call center data, can be imported.

SignalLink: Detects spikes in immediate upper funnel consumer actions as they correspond to media airings. Lift Analysis: Internal week-over-week analysis of business trends from media investment to revenue. Given proper data feeds, R2C Group will perform similar analysis for sharing learnings.

Success

Explanation of the media team’s approach to buying media and your creative optimization process for TV:

Client goals are a very important part of R2C Group’s core values. Goals are managed by building long term relationships and participating in a weekly dialogue. Through weekly meetings, results per media station are calculated and reviewed, and can be altered to fit the client's needs. The media team utilizes the pre-logs to as well as MRI, and Kantar to increase frequency for the client. There is also a 50/50 creative rotation - the creative that generates the most leads for the client is the one that R2C Group will utilize further. The media team is structured in a way to plan, strategize, and optimize specific client goals. It is a hands-on process from the start to finish. The team is managed to specific performance goals through the KPI’s and follow client requests to increase or decrease frequency.

Existing examples of analytical reports you use to identify the right target audience and optimize campaigns over time. Explain how you model initially and adjust media mix on as close to a real-time basis as possible. If relevant, highlight how you manage multiple channels and achieve a more focused and effective voice.

R2C Group utilizes MRI to determine the appropriate target audience. MRI data gives us insights that allow us to better target audiences through online radio or TV. When pulling a report, we are able to select audience demographics and certain categories. Kantar is a tool to show where our competitors are placing media. This lets us determine what media mix we should use.

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The example above is pulled from a Zulily audience sizing report from MRI. The gray box is a visual display of 238 million U.S adults. Inside the blue box this represents 166 million of the U.S adults who online shop. Next, the three boxes represent three different demographics, grandmothers, millennial moms, and moms. To the left we specifically state who is the core target and our secondary target.

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The image listed above explains the television mix month by month for Zulily. The orange represents cable TV, the blue represents syndication, the dark green represents network TV, and light green represents spot TV. As October 2015 approached we saw a significant increase in TV spend. Most of Zulily’s TV dollars were spent on cable and syndication.

This image represents Zulily’s competitors and where they are spending their television media dollars. For instance Amazon spends an equal amount on TV and online. Whereas Zulilly is spending close to 80% on online media compared to about 20% on TV. This chart lets Zulily see that they should spend their media dollars in other media locations such as print and radio.

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Highlight media tools used in our process. Clearly express those that are complementary with agency relationship versus those that require additional fees whether in the form of new third-party services/relationships or additional agency service fees. Also state what expectations Spotify should have from an implementation standpoint in providing the necessary access or wiring to our databases or technology layers to provide media buying and optimization.

Providing accurate and frequent feedback from our creative work is important to our agency to keep our clients up to date and aware of the performance. We provide these tools to our clients as they need it no matter where they are in the process. During the measurement plan stage in our preparation for launch, we work with our client to establish relevant KPIs, define channel diagnostic measures, define baseline and projections, and develop a media plan. The client dashboard is a complementary tool sent out every day. Dashboard displays relevant information including current media spend, agency spend, direct MER, and total conversions broken out in various ways. It is customized based on our client for reviewing campaign metrics. This information will be reviewed on a weekly status call as well as used in a presentation at campaign conclusion.

WaveCast is a proprietary media planning and buying tool which is relatively new. We currently are not billing extra for this service. This tool reveals the impact of TV investment and buyer driven optimization insights. These insights can include how consumers are responding to the TV investment made, what the best performing channel tactics are, and the impact and opportunity to scale.

In order to best analyze our successes, we may request access to data from our clients. The data needed changes based on the type of analyses. Pre-campaign launch, metrics are needed for baseline establishments which include previous media spend by channel. During the media optimization stages of the campaign, daily data may be requested from client.

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Lastly, we do use third party tools as listed above in the research and digital analytics section. There is no additional charge for the use of these third party tools. R2C Group strives to bring accurate and complete results to our clients.