Sample Business Plan eye return

Business Plan for eyeReturn From Eye-Ons Corporation This document specified project. has not been publicly released. Viewing is only permitted non-disclosure agreement, by the individual specific to this in a mutually signed EyeOns Corporation We would be pleased organizations to arrange for its release to other parties within your respective or outside, please contact us at tstoute@eyereturn.com. Version: 000C17-515 TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................ 2 EXECUTIVE SUMMARY ....................................................................................................... 4 VISION ............................................................................................................................ 7 EYERETURN PRODUCTS AND SERVICES ............................................................................... 8 BUSINESS TO CONSUMER - THE ADVERTISING/PROMOTIONAL BUSINESS TO BUSINESS - THE ADVERTISING/PROMOTION MECHANISM ............................................... 8 9 9 ENGINE ........................................................ BUSINESS TO BUSINESS -THE EYERETURN EXCHANGE ........................................................................ VALUE PROPOSITION - AN OVERVIEW .......................................................................................... WEB SITE OWNERS (WSO) .................................................................................................... ADVERTISERS AND CAMPAIGN SPONSORS (CS) .............................................................................. WEB SURFERS - MEDIA CONSUMERS .......................................................................................... EYERE1-URNVALUE ... SUMMED UP ............................................................................................. 11 12 13 13 14 BUSINESS MODEL ............................................................................................................ 15 REVENUE MODEL .................................................................................................................. 15 THE MARKET ................................................................................................................... 17 SIZE OF MARKET .................................................................................................................. COMPETITORS ..................................................................................................................... 17 18 ROLLOUT STRATEGY ........................................................................................................ 21 SCOPE OF INITIAL RELEASE...................................................................................................... SCOPE OF FUTURE RELEASES .................................................................................................... 23 25 STRATEGIC PARTNERS ..................................................................................................... 26 SOFTWARE PATENT .......................................................................................................... 26 FINANCIAL STRUCTURE OVERVIEW .................................................................................... 26 Page 2 24101101 REVENUE GENERATIONMETHOD................................................................................................ 26 FINANCIALSTATEMENTS COREBUSINESS................................................................................... 27 FINANCIALSTATEMENTS - AGGRESSIVE GROWTH ...................................................................... 27 OWNERSHIPANDFINANCING.................................................................................................... 28 CAPITALREQUIREMENTS ......................................................................................................... 28 EXIT/PAYBACKSTRATEGY....................................................................................................... 28 MANAGEMENT TEAM ......................................................................................................... 29 THE NRG FACTORY ........................................................ ERROR! BOOKMARK NOT DEFINED. EYERETURN GLOSSARY .................................................................................................... 32 APPENDIX A - PRO-FORMAS .............................................................................................. 34 Page 3 24/01/01 EXECUTIVE SUMMARY "In the year 2001, 10% of Web of some format or technique conceived of yet...it will siphon from banners and interstitials" eMarketer (www.emarketer.com), Ad Importance, April19, 1999 ad dollars will consist that has not been Web dollars primarily Banners to Decline in Vision: eyeReturn will become the industry standard software provider advertising, and promotion in the new media channels. for interactive media, Overview: eyeReturn is the only BRANDABLE Interactive Online Rewards program in the world. Rewarding online customers for their loyalty, eyeReturn delivers targeted traffic to specific websites in the same way that frequent flyer points drive repeat customers to specific airlines. Using a two stage process, eyeReturn gets websurfer attention and keeps it, creating customer acquisition and retention. The cornerstone of the patent-pending eyeReturn system is the clickable virtual token (VokenTM), which delivers rich-media response rates without the need for high bandwidth. Floating across the pages of any site in the world, Vokens can look like any branded image, from a cola can to King Kong. More compelling than any static, boxy ad or button, Vokens consistently inspire real world click-through rates in and above the 10% range. Once a websurfer clicks on a Voken, they enter the second stage of the eyeReturn system: a suite of online loyalty points programs, collect and win games and real-time newsflashes. Seamlessly, the eyeReturn engine can integrate with any existing points system, or deliver new and exciting contests, promotions and content. By collecting points or gamepieces that are hidden over multiple pages of multiple sites, the websurfer is exposed to content he/she may never have seen otherwise. The campaign sponsor can target the movement of the websurfer by placing the vokens on any page of any site that they choose. The eyeReturn system is a completely turn-key 3rd party solution, dynamically generated by eyeReturn servers. This translates into extremely rapid campaign deployment and negligible technical investment on the client side. Log on to www.eyereturn.com/demos to see eyereturn in action. 24/01/01 Page4 Return Business Model and Value Proposition: two of the most prevalent issues on the internet: 1. 2. eyeReturn is designed as a solution to Elusive goal of attracting and keeping Web site traffic - creating increasing customer retention. Lack of effective online advertising and promotion mechanisms. site stickiness and The Internet and WWW have created a new channel for advertising and promotion and a new arena for business competition, eyeReturn uses a unique, 2 level approach to capturing websurfer attention, and then keeps that attention by delivering a range of captivating options. The eyeReturn business model is founded on creating value for Web Site Owners, Advertisers, and Web surfers. Specifically, the eyeReturn system: Business to Consumer - Offers Web Surfers: • the opportunity to receive "something for nothing" • the opportunity to participate in an on-line reward system and interactive games • interactive real time event driven alerts service and navigation tools Business to Business - Offers Web Site Owners: • Increased site stickiness • A program that enables Web Site owners to acquire new customers, increase advertising sales, and build customer loyalty • A new form of advertising revenue • An event driven "alert" service and navigational tool • An open, secure, automated on-line exchange, where site owners and advertisers meet, negotiate, implement campaigns and check campaign stats in real time Business to Business: Offers Advertisers: • A unique, transactional and powerful form of advertising and promotion for the Web and email. • A customizable tool that allows advertisers to reach their target demographic effectively, and control their online advertising and promotion campaigns • A tool that allows advertisers to manage, track and measure the effectiveness of on-line campaigns • An event driven Web based "alert" service and navigational tool • A pay for performance advertising and promotion engine solution Market Analysis: The rapid adoption of the Internet has created a new arena for advertising and promotion. Despite recent fluctuations in the market, long term forecasts project steady growth in advertising and promotion on the Internet - moving from USD4 billion in 1999 to over USD17 billion in 2002. The eyeReturn system is designed to capitalize on this growing market by offering a unique new advertising and promotion option that easily outperforms existing solutions. Traditional banner ads and sponsorships have declined in effectiveness, and while "rich media" promotions can provide increased performance, they are dependent on high bandwidth connections, which have yet to establish significant market penetration. The eyeReturn system delivers an elegant solution to these problems by providing the response rates of rich media without the requirement for high-speed access. Scalability-" The eyeReturn infrastructure is highly extensible, completely scalable, proprietary, and patent pending. There are no software or hardware barriers for advertiser or Web site owners, making the eyeReturn Vokens completely viral and self-propagating. The eyeReturn system itself is designed for infinite expansion, to accommodate company growth and development of future interactive applications. 241o11oi Page 5 Return Competitive • • Advantage: eyeReturn will succeed because: • • • • • It is first to market with a powerful new form of Web based advertising and promotion eyeReturn provides a synthesis of the most important factors for successful advertising campaigns: Branding, Interactivity, Loyalty/Reward programs and Transactional implementation. It is an automated business-to-business system that allows advertisers and website owners to customize and administrate (manage, track and review) interactive advertising campaigns. It is a truly viral advertising/promotion system - a positive feedback loop of campaign creation, increased consumer and industry awareness, consumer demand for the current campaigns and new campaigns, lead to the creation and proliferation of new campaigns. It is a completely integrated, turnkey solution, with no technical investment necessary on the client side - very important in this era of overburdened technology departments It employs patent pending technology, and operates from a secure platform Strategic relationships currently exist: Microsoft has extended an invitation to eyeReturn to become a member of the Microsoft Independent Software Vendors Network; furthermore Microsoft has agreed to express a strategic partnership agreement with eyeReturn, and to offer technical and business support to the eyeReturn corporate initiatives. PSINet and eyeReturn have a formalized agreement to have PSI host of all eyeReturn's servicing and support needs. As an international corporation PSINet brings eyeReturn the capability of expanding into every geographical market in the world along with leveraging its vast network of internal and external partners and clients. Premier Sponsors currently exist: MuchMusic/Bravo/City TV/Space (All CHUM Specialty Channels): ChumCity International has hosted numerous eyeReturn campaigns on their popular family of sites over the summer of 2000. Over 2 million eyeReturn Vokens have been served, and clickthrough rates are in the range of 6% to 12%. HMV / SaturdayNight.Ca / BMG Canada: a 5 week cross promotion on all three sites of a 500 CD giveaway for their "Five Divas" campaign. A classic "collect and win" promotion, this campaign generated average click-through rates of 18%, and a conversion rate of 30%. eyeReturn is a NRG Factory Company: With the NRG Factory's support, the eyeReturn team is quickly able to get the strategic partnerships, funding, IT infrastructure, and other components required continue the evolution of the eyeReturn system. • • • • • Management Team-" Tim Stoute (P. Eng) is the CEO of eyeReturn, and brings with him over 6 years of project management and application development experience (with such companies as Bratch Innovation, Bell Mobility). In addition to Tim's expertise, eyeReturn has assembled an impressive team of application and interface development talent, along with a senior sales and marketing team with years of experience in traditional and interactive media. The board of directors of eyeReturn includes Geoffrey Dawe; Executive Vice President National Post Magazines, Matt Saunders CEO - The NRG Group, Anthony Messina - CFO The NRG Group. Exit/Payback • • • • Strategy: Sale to Portal Sale to Media / Content Provider Initial Public Offering Sale to on-line Advertiser 24/01/01 Page 6 Return • b VISION Return eyeReturn will become the industry standard software provider for interactive and promotion in the new media channels. media, advertising, The advent of the Internet and World Wide Web (WWW) has created a new medium of entertainment, communication, and business transactions. The World Wide Web constitutes millions of entities, each having their own messages, offerings, and business objectives. The Internet and WWW have created a new channel for advertisers and new arena for business competition, eyeReturn offers advertisers and content providers a unique, interactive and transactional advertising and promotional tool created for new media channels. eyeReturn will revolutionize the way advertisers and Web site owners communicate. 24/ol/ol Page 7 Return J £ EYERETURN PRODUCTS AND SERVICES Business to Consumer - The Advertising/Promotional Mechanism eyeReturn is a completely new and unique advertising and promotional tool that compels Web surfers to stay longer on sites, and visit more frequently. By increasing traffic, the eyeReturn mechanism creates site ' stickiness' by encouraging Web users to surf repeatedly and deeply and allows advertisers to convey their message in a unique and engaging manner with Vokens ("Virtual Tokens") Vokens: An eyeReturn token / virtual token: Vokens are best described as interactive media elements that are "Whatever, Wherever, and Whenever a website owner or campaign sponsor wants". Vokens can be used: 1. 2. 3. for 'virtual' collect and win games as part of a "loyalty reward" program as an interactive navigational tool Vokens offer the following: These multi-purposed Unlimited Brandinq The eyeReturn mechanism offers advertisers limitless branding; Vokens can appear in any form, any time on any part of a Web site. Vokens are: • Fully customizable - Vokens can be anything, from a company logo, popular caricature, icon, game piece...anything. This allows advertisers to create customizable campaigns that feature their specific brand or campaign message. Free flowing - Vokens have no boundaries or constraints, they can remain fixed in time and space, or they can bounce, swim, or float across any Web site on any given page, at any time. Easily Administered - Vokens can appear wherever and whenever an advertiser requests. Their appearance can be based on time, number of impressions or specific locations. For example, a Voken can appear (on average) every 10 minutes of a Web users session, or for 1 in 10 visitors, or at a predetermined location and time on a Web site. • • Interactive Reward Delivery, Alerts and Messaqinq allowing surfers to click Vokens don't just appear on Web sites; they are a compelling interactive, and receive a reward, message or direction • Reward - Clicking on a voken delivers the websurfer into any number of unique, loyalty building eyeReturn reward delivery systems. These can be collect and win contests, point accumulation programmes (like air miles), scratch and win gamecards. The eyeReturn system is designed to deliver virtually any type of contest or promotion in existence. Message - Vokens can dynamically deliver information to a websurfer. For example, Vokens can offer instant real time news flashes on a portal site, interesting trivia on an entertainment site, or introduce a product relevant to a particular Web site. Direction - A Voken can encourage Web users to 'surf deeper' to information and/or direct users to specific locations on a Web site, advertiser's site. find out more or a 3rd party • • 24/01101 Page 8 Return Business to Business - The Advertising/Promotion Engine In addition to providing an exciting new medium for advertising, the eyeReturn system is a fully automated advertising engine that allows businesses to implement, manage, plan, track and review their eyeReturn campaigns/promotions: Fully Automated Advertisers and Web site owners are able to utilize the eyeReturn system to meet on the Internet, negotiate advertising agreements, plan, activate and deactivate campaigns. Easily Manageable Advertisers and Web site owners can oversee promotions, manage overall success and progress. Trackable implement campaign phases, and Advertisers and Web site owners can track the progress of current campaigns, find the hot spots, generate reach reports broken down by demographics and monitor overall success. Pro-Active Advertisers and Web site owners can review all of: the information generated from a specific campaign, and easily make changes to increase performance of the campaign while it is still in progress. Business to Business -The eyeReturn Exchange eyeReturn utilizes an innovative system called the 'eyeReturn Exchange" that allows Campaign Sponsors (or their agents) and Web Site Owners to meet and negotiate campaign terms privately online. The Exchange also allows campaigns to be implemented and activated on Web sites, once the Campaign Sponsors and the Web Site Owners have agreed to participate with each other. The following points describe the basic functionality of the eyeReturn Exchange. • • Web Site Owners (WSOs) and Campaign Sponsors (CSs) are listed in the online eyeReturn Exchange directory if they so choose. eyeReturn has created a Web based, free market economy (The eyeReturn Exchange), in which advertisers (CSs) and advertising space owners (WSOs) can meet via the Exchange, and negotiate a deal which satisfies their individual requirements. Listed WSOs and CSs may be contacted by prospective complimentary reciprocals CSs and WSOs that are interested in either having a campaign appear on a listed site or having a Web site host a particular campaign. Listed parties that negotiate a deal with complimentary listed parties each must indicate participation with the other on the eyeReturn Exchange Web site (The eyeReturn Agreement). Once each party has indicated participation with the other, the eyeReturn campaign from the CS will become active on the WSO site. The terms of the eyeReturn Agreement between the WSO and CS are confidential to these parties exclusively. eyeReturn impressions are tracked and archived online in real time so that WSOs and CSs can monitor impressions, traffic, and clickthroughs. • • • • 24/Ol/O_ Page 9 Return • Campaign Sponsors will be charged a performance based blended fee combining the number of Voken impressions their campaign receives with the number of clickthroughs their campaign achieves. 24/o/ol Page10 Return Value Proposition - an overview The customers and benefactors of eyeReturn products and services are Web site owners, advertisers, and Nedia consumers (Web surfers): • Web Site Owners (WSO): any company or organization that owns or controls a Web server connected to the World Wide Web via the Internet. • Advertisers and Campaign Sponsors (CS): Campaign Sponsors is the term referring to any party that underwrites and eyeReturn campaign. A campaign sponsor is any entity that has a message to convey to a segment of the population, and has chosen eyeReturn as a vehicle for their message. They may also be Web Site Owners. Mobile Tech. User M Web Suders TV W_ewers Owned by Web site owners Sega,Globe and Mall, CNET,Disney, AOL WebSitel ...... Web Site 2 Web Site 3 Web Site 4 Generates revenue by E_liFl_turn each EyeRetum token issued charging campatn sponsors eRet urn (----) Secure,robust production enviroment with high speed Intemet acces_ corporate advertising campains In mediaw_d_Agenck_ to obtain target demographic and reach Media Agency 1 _._ Media Agency 2 Media Agency n EyeOns campalns. Pay money to advertise May include; Sega, Globe and Mail, • CNE-Ir, isney,AOL D Coq:)oratlon 1 Corporation 2 Corporation 3 Corporation n Page11 24/01/01 ¢reReturn Web Site Owners (WSO) This demographic section consists of national and international corporations that are eager to attract consumers to their Web sites, and generate revenue by hosting advertising or selling products and services on their sites. Presently, the typical corporate entity of this description has spent in excess of $1,000,000 in constructing and maintaining a Web site, with the sole purpose of furthering the public's awareness of its product or service, or selling products or services online. The eveReturn product addresses these exact needs by offerinq increased traffic to their sites thereby creatinq potential additional revenue. WSO Needs • • • • • • • Traffic - Web sites are primarily valued based on the numbers of visitors they attract they need traffic. Differentiators - Web site owners require innovative differentiators site - to incent visitors to stay longer, and return more frequently. to add value to their Effective Navigation- Website owners require new ways to highlight and direct traffic to different areas of the site Alert messaging - the ability to announce news, new developments, within a short time period. I st time visits - Web sites are challenged to attract first time visitors. Repeat visits - Web sites are challenged to attract second time visitors, and to keep them coming back - keep them loyal Revenue - Web sites need to generate revenue. Web site owners currently generate revenue by selling advertising on their site in the form of banner ads, and selling their products and services. or product launches eyeReturn • • • • Value to Web Site Owners: EyeReturn is compatible with all prevalent Web browsers and all Web Sites. Web site owners campaigns will generate advertising revenue by hosting 3 rd party eyeReturn Web site owners will attract more first time and repeat visitors; their site will become 'sticky' such that visitors will stay longer, surf deeply, and come back more frequently. Web sites using the eyeReturn system will be differentiated from their competitors and Web surfers will choose participating eyeReturn sites over those that do not offer eyeReturn Provides an interactive of all existing methods and eye-catching navigation device that eclipses the performance and alert consumers in a timely and - no • • • • • Alert Service: ability to stream engaging manner new information Simple implementation of sophisticated technical investment required by WSO contests and loyalty reward programmes EyeReturn offers logging and reporting of eyeReturn campaign metrics A transparent, scalable, extensible, and customizable to client needs tool that can be individually tailored 24101101 Page 12 Return Advertisers and Campaign Sponsors (CS) of new and unique ways to convey their advertising and Web has opened up a new arena for advertising and the reach of advertising and promoting to the incredible the Internet. Brand owners are in constant search messages. The advent of the Internet promotions. No corporation can ignore and growing number of people that use Advertisers understand that key factors for successful advertising campaigns are branding, customization, interactivity and loyalty programs, eyeReturn leverages each of these key success factors in the new advertising arena of the Internet. CS Needs • • New Tools - Advertisers are looking for new, engaging, advertise on the Internet. interactive, innovative ways to A change from bannerAds - Banner ads are contained within pre-defined, fixed spaces on Web pages, which severely limits creativity. With clickthrough rates of far less than 1%, banner ads do not represent a trackable return on investment for advertisers. eyeReturn Value to Advertisers and Campaign Sponsors advertising engine that may be customized The eyeReturn system provides a dynamic interactive to meet advertisers marketing and branding needs. • • • • • • • • • • Offers the unique capability to execute sophisticated online promotions brand awareness, customer loyalty, and Web site traffic. Compatible with all prevalent Web browsers and all Web Sites Completely Brandable: Vokens can be "anything" Complete administrative that increase - from a cola can to King Kong control of eyeReturn campaigns navigational tool collect and win games; i.e., An event driven "Alert Service" and interactive Ability to independently control every aspect of eyeReturn sets, prizes, points, campaigns Customization - look and feel and behavior of Vokens Control Voken appearance: timing, behavior, frequency, Secure distribution and redemption of Vokens locations eyeReturn Exchange site that allows Web Site Owners and Campaign Sponsors to meet 'online', negotiate a hosting / campaign sponsoring agreement, and 'turn-on' the campaign Enables logging and reporting of eyeReturn campaign metrics Scalable, extensible, and customizable Compatible with all major DoubleClick, Engage, 24/7) online tool advertising network delivery mechanisms (ie: • • • Web Surfers - Media Consumers EyeReturn offers Web Surfers: • • The ability to participate in entertaining, games An event driven Web based alert service interactive, collect and win promotions and 24/01/01 Page 13 Return J • • A new way to navigate the Web eyeReturn Value ... Summed Up partners, each of whom benefits every time The model is complete/y viral, self-reinforcing eyeReturn creates a network of interdependent another user is added to the eyeReturn network. and scalable. Stickiness Web site owners will attract more first time and repeat visitors; their site will become 'sticky' in that visitors will stay longer, surf more deeply, and come back more frequently. Web sites will be differentiated from their competitors and Web surfers will choose participating eyeReturn sites over those that do not offer eyeReturn. Increased Revenues Web site owners will generate revenue by hosting the eyeReturn campaigns on their sites. Powerful Tool Web site advertisers and interactive agencies will have a powerful new advertising and promotion tool at their disposal. The tool offers the ability to create interactive, dynamic advertising campaigns and promotions that will effectively communicate advertisers messages and brands. No Hardware or Software Barriers There are virtually no hardware or software limitations or restrictions applied to the use of eyeReturn system by Web site owners, advertisers and surfers. Sophisticated online games and loyalty reward programmes can be implemented with no client-side technical involvement. 24/01/01 Page 14 Return m BUSINESS MODEL The eyeReturn proprietary software system creates a business model, which serves both the 'business to consumer' and 'business to business' markets, eyeReturn has developed a unique advertising, promotional and loyalty rewards engine delivered in a unique and compelling new way that provides: Business to consumer advantages: • A customizable tool that allows advertisers to reach their target demographic effectively, and control their online advertising and promotion campaigns • A program that enables Web Site owners to acquire new customers, increase sales, and build customer loyalty • A unique and proprietary advertising system that compels Web surfers to stay longer on sites, and visit more frequently Business to business advantages: • The eyeReturn Exchange - an open exchange where advertisers and Web Site owners can meet on-line to exchange services • A tool that allows advertisers to manage, track and measure the effectiveness of online campaigns • Real time management and reporting • A loyalty reward program that is completely customizable and easily administered by campaign sponsors and advertisers • The option of working with or without advertising agencies Future releases will leverage the eyeReturn software platform to deliver: • expansion into new markets such as Web TV and Wireless devices • Personalized targeting by websurfer • geotracking • expansion into new geographical markets • personalized eyeReturn campaigns • artificial intelligence • personal agents • further multimedia depth and interactivity • "News Flash" functionality • gaming interface Revenue Model eyeReturn will generate revenue in three ways: 1) based on impressions of the eyeReturn Vokens - this is the "traditional" means of charging for Web based advertising - i.e. banner ads 2) and based on Voken click-throughs - which provides a performance based revenue stream 3) consulting services surrounding the strategy and implementation of eyeReturn campaigns Adoption of the tandem revenue model addresses the core needs of each of the participants: 1) 2) having a base line cost of predictable revenue for campaign corporation, and a performance based revenue stream hosts and the eyeReturn 24/01/01 Page 15 Return This model, according to the Internet Advertising Bureau, was the most popular form of Web ad buying in 1998 - "a hybrid of impressions and performance metrics", z l Morgan Stanley Dean Witter - E-Marketing Report, May 2000 24101101 Page 16 Return THE MARKET Size of Market According to the Morgan Stanley Dean Witter Report: "The e-Marketing Report, May 2000": for $2 "e-advertising will be big...we expect e-advertising will continue to swell. Our 2002 estimates e-advertising indicate that the U.S may exceed $17 Billion...and Europe may reach Billion...worldwide e-advertising may reach $21 Billion in 2002." eyeReturn is designed to leverage the growing on-line advertising market Outdoor 1% Radio 10% Newspapers 32% • Outdoor 1% Newspapers 26% * • Radio 8% * Broadcast TV 28% • Direct Mail Broadcast TV 23% Direct Mail 23% 1999 Advertising (June 99, Spending IAB) • 2004 Advertising (June 99, Spending IAB) • "ad banners won't disappear altogether, but they will take a less important role...savvy Web advertisers will deeply integrate themselves with the content and services offered to targeted customers...increasingly, companies are breaking out of the banner box" (eMarketer, Ad Banners to Decline in Importance, April 19, 1999) • "In the year 2001, 10% of Web ad dollars will consist of some format or technique that has not been conceived of yet...it will siphon Web dollars primarily from banners and interstitials" (eMarketer, Ad Banners to Decline in Importance, April 19, 1999) 24101101 Page 17 Return Competitors Since eyeReturn is a synthesis of Internet advertising mechanisms and engines, there is currently no directly comparable company or service. However the competitive space can be broken down into two generalized categories: 1. 2. Web based loyalty reward programs Web Advertising representation firms Loyalty Programs 1. Web Site Currently there are no Web site loyalty reward systems that create advertising opportunities, so in this space there are no direct competitors to eyeReturn. Four companies that identify similar corporate objectives (although not similar strategies or technology) to those of eyeReturn are AirMiles ®2, Beenz ®3, NetCentives 4, and mypoints.com. Each of these companies offers Web based user incentive and reward programs: • • • Loyalty and reward programs that offer Web surfers "something for nothing" Web sites They encourage users to discover and become loyal users of the participating They compete for the exploding Web loyalty and reward market Advantage Loyalty Programs - The eyeReturn While other, more basic loyalty programs strive to achieve similar goals, eyeReturn is unique in key ways: 1. eyeReturn is fully customizable: Vokens can be branded and marketed on a campaign by campaign basis,and on a siteby sitebasis - so users are not just collecting arbitrary points, they are findingdynamic, interactive tokens (Vokens) that have intrinsic value and which may be used in an infinite number of ways. In contrast to eyeReturn,these competitors only providesimple,static images in predefined (nonrandom) locations, forrewards atthe pointof purchase,or inemails. or 2. With eyeReturn, the Vokens that appear on a Web surfer's page can represent corporateobjectives; through logos,caricatures and branded games. Surfersare surprisedto see Vokens on Web sites and obtain instantaneousrewards for interacting (clicking)n them. Vokens can be deliveredin multimedia "Flash" o segments including interactive games, treasurehunts, news flashes, and in viral email campaigns. 3. To the Web user, Vokens may be randomly distributed randomly appearing- but and Web site owners or advertisers control: can • • • • • • Precise timing and location that Vokens appear Elapsed time before the Voken appears on page Types of Vokens which appear on specific Web sites Probability of finding a Voken on any given page Value or meaning of the Voken (coupon, reward, news, awareness, etc ..) Branding of the Vokens (campaign) 2http://www.airmiles.c a/ 3 http://www.beenz.com 4 htlp://www.netcentives.com 24/01101 Page 18 Return • Number of Voken appearances per user session 2. Web Advertising Representation firms These firms represent advertisers in their negotiations with Web publishers, and offer a suite of technology to their customers allowing the management and tracking of Web based advertising campaigns. These firms primarily serve the banner ads of their clients to Web sites that participate in their (often extensive) network of sites. Representative companies that fall into this category are: • • • DoubleClick (DCLK) Engage (ENGA) 24/7 Media (TFSM) Discussions with the above mentioned companies have confirmed that it is possible to serve eyeReturn campaigns through their extensive networks, eyeReturn enabled test campaigns are currently being planned for delivery through these networks, the success of which would significantly extend the reach of the eyeReturn system worldwide. Current firms: Branding/Advertising Mechanisms used by Web Advertising representation Currently, Web site advertisers are limited to a few on-line advertising Q Banner Ads: options, they are: The first form of Internet advertising, banner ads act much like outdoor billboards, communicating an advertisers message in a fixed space. Banner ads and sponsorships currently represent 87% of all advertising spending on the Web. Some of their limitations are as follows: • • • • Fixed in dimension - only available within the boundaries placed by Web site owners Fixed location - only available in predisposed areas on Web pages Limited interactivity - allow click-throughs only Very low click-through rates; currently averaging under 0.5% E] Transitional Advertisements: Web site ads that appear in the empty space while a requested page downloads. Representing under 1% of all advertisements on the Internet, transitional advertisements limitations are as follows: • • • • • Q Function constrained Time constrained - only appear when another page is downloading - disappear after requested page fully downloads Limited interactivity Require specialized client side software Mini-Web page advertisements (Pop up Windows: Interstitials): Interstitials Advertisements that are delivered as mini-browser e-mail attachments, downloads or pop-up windows. Representing approximately 4% of all advertisements on the Internet, mini-Web page advertisements limitations are as follows: • Intrusive - cover a large portion of a Web site, obscuring navigation 24/01/01 Page 19 Return • • • Long download Limited time over standard dial-up connections interactivity extremely intrusive (ie: annoying) by many websurfers considered 24/01/01 Page 20 Return , i Web Advertising Representation firms - the eyeReturn advantage Current Advertising Mechanisms - The eyeReturn Advantage Unlike the traditional Web branding / advertising mechanisms described above, eyeReturn targets consumers whenever, however and wherever an advertiser wants by being completely: • • • • Dynamic and Interactive Completely customizable and administratable Free flowing and Seamless Relevant and Rewardable Currently there are no other advertisingpromotional features as an integrated system: • • • • • • • • Ad server engines that offer all of the following On-line meeting area for Web site owners and campaign sponsors Fully automated Managing Tracking Reviewing Ability to change campaigns in progress Use of interactive, customizable, free flowing and administratable Vokens that not only offer seamless advertising to campaign sponsors, but encourage site stickiness and deep surfing to Web site owners. monitoring of campaigns that includes: ROLLOUT STRATEGY eyeReturn is a software development company that has created a suite of online tools that enable interactive, dynamic advertising and promotional campaigns for the new media channels, such as the Web. In addition to offering the unique eyeReturn software solution, eyeReturn will offer the services associated with the planning, creation, and management of eyeReturn campaigns. eyeReturn recognizes the key role media agencies play in the creation of advertising campaigns and promotions on behalf of their clients, and as such we plan to offer the eyeReturn software as a free tool to these organizations. eyeReturn will be employing its global launch and roll out in three successive stages: 1. The first 3 months of "live" production launch will consist of its soft-launch Canadian premier sponsors: MuchMusic, Bravo, Space, City TV, Charity.ca, Canada and Saturday Night Magazine. and millions with major BMG Music This stage is now over - with 8 successful campaigns completed impressions delivered, eyeReturn /s past "proof of concept _" 2. of Voken The second stage (3 to 6 months) of the eyeReturn roll out strategy will focus on engaging the top 5 to 10 websites, portals, and advertising firms in Canada. 24/01/01 Page21 Return eyeReturn is currently in the negotiation process with tt_e two largest online advertising representative companies, the top 8 international interactive agencies in Canada, and approximately 50 other potential clients, from portal to car manufacturer, eyeReturn has received tacit confirmation of engagement from several of these companies, with campaign launch dates scheduled for Q4. 3. The third stage (6 months an beyond) is the US launch. This will include a clear targeting of the market segments to include: 3 of the top 10 websites, portals, and advertisers, 7 of the top 25, and 12 of the top 50 241o z Page 1/o 22 Return Scope of Initial Release The launch strategy for eyeReturn is divided into 3 stages: Table 3.1: Launch Stages 1-3 months: soft launch Obtain market exposure in Canada by launching eyeReturn with premier sponsors (launch partners that are not paying for services). Conduct customized eyeReturn implementations to customers: Campaign Sponsors, Web Site Owners, and Advertising Agencies. Current Premier Sponsors Include: National Post Online, Bravo, MuchMusic, BMG Canada, Saturday Night Magazine. Leverage market exposure and aggressive sales campaign to sign up additional customers. Market share and acceptance is gained via premier sponsors. Revenue generation by charging Campaign sponsors / Voken impression and clickthroughs. Additional fees charged for customized eyeReturn implementations. II 3-6 Canadian Launch eyeReturn business model is fully engaged, eyeReturn Exchange is operational. eyeReturn sales team is selling fully customized versions of eyeReturn campaigns: Targeting the top advertisers, websites, and portals in Canada. eyeReturn services group is creating custom campaigns. Web Site Owners and Campaign Sponsors are meeting and engaging each other via the eyeReturn Exchange. EyeReturn will be in a position to fully enter into its U.S. Launch: EyeReturn's US strategy: targeting 3 of the top 10 websites (portals) in the U.S. 7 of the top 25 websites or portals 12 of the top 50 websites or portals eyeReturn Exchange revenue model is engaged Revenue is generated by charging Campaign sponsors / Voken impression and click through. Fees charged for fully customized implementations eyeReturn. of III 6 months on U.S. Launch eyeReturn Exchange revenue model is engaged Revenue is generated by charging Campaign sponsors / Voken impression and click through. Fees charged for fully customized implementations eyeReturn. of 24/01/01 Page 23 Return Stage I eyeReturn will make the biggest 'foot print' possible, in the shortest amount of time possible to: • • • Create a market buzz about this new advertising Infiltrate the Internet with eyeReturn campaigns mechanism and engine Make duplicating the eyeReturn product less attainable and attractive Stage I of the launch is designed to achieve the critical mass of market acceptance, awareness, and use that will ensure that competitors will not eclipse eyeReturn once they see the value of the eyeReturn system by creating a similar product, eyeReturn will specifically target large international interactive marketing and advertising firms, and make them aware of the eyeReturn mechanism and engine for their clients use. Stage I will: • • • • • Stage/Jr eyeReturn marketing will create eyeReturn will continue to sell and promote the eyeReturn tools and services to interactive firms and advertising agencies, Campaign Sponsors, and Web Site Owners. eyeReturn a full set of development tools that enable the rapid design and customization of campaigns. Create a market buzz about eyeReturn Offer the eyeReturn interactive marketing as tool for the creation of online advertising firms and advertising agencies. and promotion to Sign up campaign sponsors Inform Web site owners of this new form generating revenue for their site. Infiltrate the Internet with eyeReturn campaigns of advertising, therefore a new way of Full Canadian Launch: EyeReturn sales team will build on the successes of our "soft launch" clients, and seek to sign on the top 5 to 10 Canadian websites and interactive campaign sponsors. During this stage, eyeReturn will introduce the 'eyeReturn Exchange' that allows Campaign Sponsors (or their agents) and Web Site Owners to meet and negotiate campaign terms privately online. The Exchange will also allow campaigns to be activated on Web sites, once the Campaign Sponsors and the Web Site Owners have agreed to participate with each other. The following points describe the basic functionality of the eyeReturn Exchange. • • WSOs and CSs will be listed in the online eyeReturn Exchange directory eyeReturn will create a Web based, free market economy (The eyeReturn Exchange), in which advertisers (CSs) and advertising space owners (WSOs) can meet via the Exchange, and negotiate a deal which satisfies their individual requirements. Listed WSOs and CSs may be contacted by prospective complimentary reciprocals - CSs and WSOs that are interested in either having a campaign appear on a listed site or having a Web site host a particular campaign. Listed parties that participation with Agreement). Once campaign from the negotiate a deal with complimentary listed parties each must indicate the other on the eyeReturn Exchange Web site (The eyeReturn each party has indicated participation with the other, the eyeReturn CS will become active on the WSO site. Agreement between the WSO and CS are confidential - by eyeReturn to • • • • The terms of the eyeReturn these parties exclusively. CSs will be charged a transaction fee - per eyeReturn token impression 24/01/01 Page 24 Return • eyeReturn 'click throughs' will be tracked and archived based on the Campaign and Web Site - thereby establishing a measure of success for each entity. Stage IIII US Launch: eyeReturn will be launching an aggressive sales strategy in the North American market. eyeReturn will to continue to build on the success of its Canadian roll out by leveraging its relationships with such companies as PSI Net, Microsoft, Nortel, and others, eyeReturn will be adopting a comprehensive approach to target and engage: • • • Brand owners and online advertisers Interactive media agencies Portals and Web Publishers Scope of Future Releases Future releases of the eyeReturn system are best described in the features outlined below; these features may be introduced into subsequent versions of the eyeReturn software: • • • • • • • • • • • expansion into new markets such as Web TV and Wireless devices expansion into new geographical markets such as Asia and Europe Personalized eyeReturn systems, and eyeReturn Agents - Vokens that appear based on rules defined by the user. "Create your own Vokens" site where end users may create and locate their own personal eyeReturn campaigns, and define discrete, private audiences. Support for complex online games such as Bingo, Slot Machines, etc. Artificial intelligence of eyeReturn - ability of eyeReturn to exhibit complex behaviors or properties such as hiding, reproduction, fighting, communicating, etc. Interactive Integration games to gain rewards - i.e. Flash / Shockwave games of Vokens into Video games and other virtual worlds Online Campaign Sponsor credit application and approval Comprehensive search functionality Additional multimedia depth and interactivity 24101101 Page 25 Return i a STRATEGIC PARTN ERS To date, eyeReturn has established a number of partnerships • • with strong industry players. The NRG Group is partially owned by China.corn (NASDAQ: CHINA), which provides an opportunity for expansion into the Asian market. Microsoft has extended eyeReturn an Invitation to join their IVN (Independent Vendor Network) this will allow eyeReturn to join with companies like Delanotech and Cyberplex (also part of Microsoft's IVN) that services B2B and B2C clients with advanced services supported by Microsoft architecture. PSINet International and eyeReturn have a formalized agreement to have PSI host of all eyeReturn's servicing and support needs. As an international corporation PSI brings eyeReturn the capability of expanding into every geographical market in the world along with leveraging its vast network of internal and external partners and clients. eyeReturn is currently working with Minden Gross Grafstein & Greenstein, Barristers and Solicitors, for legal consultation and services surrounding incorporations, shareholders agreements, employee stock option plans, etc. eyeReturn is currently working Trademarks and Patents. with Bereskin & Parr for the creation and filing of • • • SOFTWARE PATENT During the week of April 16, 2000, eyeReturn (Eye-Ons Corporation) filed a patent application with the United Sates Patent office. The Patent application has been created by Bereskin & Parr, and is designed to protect the unique intellectual property of the eyeReturn system. Copies of the patent application are available upon request. FINANCIAL STRUCTURE OVERVIEW Revenue Generation Method eyeReturn will generate revenue in two ways: 1. 2. based on impressions of the eyeReturn Vokens - this is the "traditional" means of charging for Web based advertising - i.e. banner ads and based on Voken click-throughs - which provides a performance based revenue stream Adoption of this tandem revenue model addresses the core needs of each of the participants: 1. 2. having a base line cost of predictable corporation, and a performance based revenue stream revenue for campaign hosts and the eyeReturn This model, according to the Internet Advertising Bureau, was the most popular form of Web ad buying in 1998 - "a hybrid of impressions and performance metrics". 5 Additionally, eyeReturn will generate revenue by providing consulting services surrounding the planning, creation, support and management 5 Morgan Stanley Dean Witter - E-Marketing Report, May 2000 services to our clients of eyeReturn campaigns. 24101/01 Page 26 Return The revenue stream financial models. derived from these offered services has not been quantified in the current Financial Statements Please refer to Appendix - Core Business quarterly financial pro-formas. A for detailed TABLE: CORE BUSINESSPRO-FORMAS Year Quarter 2000 Q4 $18,290 2000 Q1 $555,693 2000 Q2 $1,299,690 2001 Q3 $1,803,372 2001 Q4 $2,644,856 2002 Q1 $3,227,773 2002 Q2 $3,702,573 2002 Q3 $3,725,664 REVENUE $640,717 COST -$622,427 PROFIT -$622,427 Inc. Profit -$1,479,430 -$1,782,315 -$1,718,318 -$1,066,837 $107,561 $1,692,759 $3,302,048 -$857,003 -$302,885 $63,997 $651,481 $1,174,398 $1,585,198 $1,609,289 $1,412,696 $1,602,575 $1,739,375 $1,993,375 $2,053,375 $2,117,375 $2,116,375 Assumptions • eyeReturn rates: o o • will charge campaign sponsors / publishers based on the following rate card $1 / 1000 $0.20 impressions (CPM), plus depending on campaign performance consistently running on: - $0.60 per click-through by the end of operational o o o year 1, eyeReturn will have campaigns 5 of the top 10 Canadian 10 of the top 25 Canadian Web sites / portals Web sites / portals 3 of the top 50 US Web sites / portals Unique users / month of the top 10 CDN sites: 1,285,000 of the top 25 CDN sites: of the top 50 US sites: / user session: 2 5% 733,000 14,900,000 • • • • • Average Average Average Number Unique users / month Unique users / month of Voken Impressions % of Voken Click-throughs: Financial • o o o o Statements Dominate Expand Expand Create -New Market Expansion growth planned to: market devices In order to achieve the aggressive the North American into new markets such as Web TV and Wireless markets increased into new geographical future versions with such as Asia and Europe functionality EyeReturn requires anticipates costs and revenues as described in the following table: 24/01/01 Page 27 Return l e TABLE:NEW MARKETGROWTH PRO-FORMAS Year Quarter 2000 Q4 2000 Q1 2000 Q2 2001 Q3 2001 Q4 2002 Q1 2002 Q2 2002 Q3 REVENUE COST PROFIT $18,290 $790,717 $555,693 $2,332,125 $5,410,116 $7,934,567 $9,683,318 $11,107,71 $11,176,99 9 1 $2,062,696 $2,627,575 $3,014,375 $3,268,375 $3,328,375 $3,392,375 $3,391,375 -$295,450 $2,395,741 $4,666,192 $6,354,943 $7,715,344 $7,785,616 -$772,427 -$1,507,003 Ownership and Financing Eye-Ons Corporation, operating as "eyeReturn" is a privately held, provincially incorporated company (Ontario, Canada). Eye-Ons is jointly owned by The NRG Group (35%) and 1375000 Ontario Inc. (65%), a holding company owned by Tim Stoute. Capital Requirements eyeReturn is seeking capital to continue rapid growth and to achieve short and long term goals. We require capital to: • • • • • • • • Accelerate growth Continue to employ the best people in the world Expand office space and resources Development of future versions of eyeReturn software Research and Development Legal Costs Application hosting Sales and marketing initiatives please refer to the detailed forecast cost analysis contained in For more detailed information, Appendix A. Exit/Payback • • • • Strategy Sale to Portal Sale to Media / Content Provider Initial Public Offering Sale to on-line Advertiser 24/01/01 Page 28 Return MANAGEMENT TEAM The eyeReturn management group blends business wisdom and experience, with youthful exuberance for a powerful and flexible team. Tim Stoute President and CEO tstoute@eyereturn.com As President and Chief Executive Officer of Eye-Ons Corporation, Tim directs the company's operations, software and services development, strategic alliances, and growth strategy. Tim has extensive knowledge of the dynamics of the Internet, and of how to meet the goals of companies wishing to leverage the medium in their marketing and sales objectives. Tim has over 3 years _'_ experience managing large municipal development projects with Schaeffers Consulting Engineers, | with 4 years of Internet and Web related development experience. Tim combines technical and project management experience with problem solving and communication skills, providing the\ strong leadership andv_L_on required to launch and manage the eyeReturn !nitiative. Tim| received an hono_lr-_legre_ in Applied Science (Civil Engineering) from Queen s University in j' Kingston, Ontar_('(1994), _lnd is currently registered member of the Professional Engineers Ontario. Geoff Dawe Board of Directors dawe@saturdaynight.ca As the Executive VP, Executive VP, National Post Magazines, Geoff is currently in charge of the re-launch of Canada's oldest magazine, Saturday Night in addition to forming strategic marketing campaigns for all National Post publications and Web sites. Previously, Geoff was the Vice President of Sales and Marketing at Canadian Home Publishing, and developed the marketing strategy and launch for www.canadianhouseandhome.com, an interactive, e-commerce Web site. In the advertising business for over 20 years, Geoff brings extensive experience, industry contacts, and knowledge to Eye-Ons Corporation as a Board Member. Matthew Saunders domain expertise Board of Directors matt@thenrggroup.com Matthew is the President and Co-Chief Executive Officer of The NRG Group. He directs the NRG Group's operations and evaluates opportunities, strategic alliances and business partnerships for the NRG Group. Matthew led the development of the NRG Factory and oversaw the initial five Factory investments. Matthew oversaw the operations and financial management of KidsNRG with over 50 multimedia projects for multi-media solutions for: IBM, Royal Bank, TD Bank, CIBC, Department of Canadian Heritage, the CRBronfman Foundation, McGraw-Hill Ryerson, Xerox Canada, Air Canada, Don Tapscott's book Growing Up Digital, Magna International (Olympic Advocates Together Honorably Web site), and Royal LePage. Matthew was a consultant with Coopers & Lybrand where he specialized in public sector financial management, including financial systems, testing, business process reengineering, and institutional evaluations. Matthew received his MBA from Northeastern University, Boston, Massachusetts, and is currently a member of the Certified Management Consultants of Canada. He was drafted by the Chicago Blackhawks of the National Hockey League in June 1989. 24/01/01 Page 29 Return f Anthony Messina Board of Directors Anthony@thenrggroup.com Anthony is the Chief Financial Officer of the NRG Group providing investee companies with financial direction and evaluating business opportunities that promote the growth of the Company. Anthony was most recently part of the investor relations team at the Bank of Montreal. He formulated the banks financial communication with institutional investors and was instrumental in building relationships with buy and sell side analysts in both Canada and the United States. From 1987 to 1999, Anthony held various positions at Coopers & Lybrand and in business advisory, business assurance and capital markets. Anthony's initial focus was on entrepreneurial businesses whose issues ranged from managing growth to succession planning. His client based evolved into larger private companies, multinationals doing business in Canada and Canadian public companies. Anthony advised on issues related to financing and divestiture strategies as well debt and equity offerings in Canada and the United States. Anthony received his Bachelor of Business Administration degree from York University and his Chartered Accountancy designation in 1991 and in 1998 he was awarded his Chartered Financial Analyst designation. Anthony is currently the Treasurer of the Canadian Children's Opera Chorus. Renee Hill Marketing and Sales Lead rhill@eyereturn.com A veteran of advertising sales and marketing, Renee has extensive experience on the agency side of the industry developing and executing media plans and assisting with international public relations campaigns. Renee acted as lead sales representative and spokesperson for the launch of the successful niche magazine Teen Tribute (Tribute Entertainment Media), and has extensive Web experience from managing the development and launch of Tribute's Web initiative. Renee has a proven advertising sales track record stemming from her experience introducing and implementing new and unique multi-media advertising promotions and campaigns. Eric Brandes Application Development Lead ebrandes@eyereturn.com Eric is the eyeReturn application development lead. Eric began programming in 1989, and has worked in the application development field since 1996, with a focus on databases and back end programming. Immediately prior to coming to eyeReturn, Eric was the leader of a team of programmers in designing, developing, and implementing an enterprise wide online order review system. Eric received a BSc. in the field of Pure Mathematics from the University of Toronto in 1996. Matt Fraser Interface Development Lead mfraser@eyereturn.com Matt is currently the interface development lead on the eyeReturn project. Matt is a graduate of Simon Fraser University with a degree in Computing Science, and has been programming computers and creating applications since 1985. Matt has specialized in the Web application and interface development field since 1996. Ian Hewetson Account Manager ihewetson@eyeretu rn.com In the course of producing television for Discovery, YTV, Teletoon, Bravo UK and AllianceAtlantis, 24/01/01 Page 30 Return Ian has gained a wealth of creative and project management experience. In an account management role at eyeReturn, Ian will build on his established track record of meeting tight deadlines, nurturing client relationships, and implementing sales and marketing strategies. Ian holds a BA (honours) in Communications from Queen's University. Dave Rivers New Business Development drivers@eyereturn.com Dave's primary responsibility at eyeReturn is the planning of all aspects of strategic marketing and sales initiatives. Prior to joining the company, Dave was Director of Sales & Marketing for Class Travel International Inc., a leading youth oriented travel company based in California, with a focus on the development of "click and mortar" strategies. Prior to joining Class Travel, Dave attended Ryerson University, and persued a career as a Canadian National Athlete with the World Cup Bobsleigh Team. Current Advisors: John Janzen Technical Lead / Project Management jjanzen@xcert.com John Janzen is a senior software architect and manager at Xcert International Incorporated - a company that provides digital certificate software products and services for corporate enterprises and government agencies that want to conduct trusted and secure business-to-business communications and commerce over the Internet. A graduate of Waterloo University, and possessing over 12 years of software architecture experience, John is an exceptionally valuable advisor to eyeReturn. John is located in Vancouver, and will therefore have limited direct involvement with eyeReturn, however is will be acting as a senior technical architect and advisor. NRG Factory www. nrgfactory.com With the NRG Factory's support, companies are able to get the strategic partnerships, funding, IT infrastructure, marketing/branding expertise, and all other components required to create a high performance team. These critical processes and infrastructure are iteratively redesigned by the core team, making each start-up more successful. Future Staffing Requirements eyeReturn recognizes the vital requirement of staffing and growth management, and as such has identified key roles in the company, and accounted for them in the pro-forma cost analysis. Generally speaking eyeReturn will endeavor to attract the best people in the world to join the eyeReturn team. We will do this by providing competitive salaries, employee stock option plans, a fantastic and passion filled worked environment, and very positive and progressive culture. eyeReturn will be hiring leaders in the following fields: • • • • • • • • Marketing & Advertising Sales Accounting Law Technology and Development Graphic Design Client Services Customer Relations 24/01/01 Page 31 Return EYERETURN GLOSSARY Administration Screens: A series of secure Web pages will be created to allow Web Site Owners and Campaign Sponsors to administer their respective elements of the eyeReturn system. Browser: The software [also referred to as a client] that allows a user of a personal computer or workstation to view pages of the World Wide Web [also called Web surfing]. To experience eyeReturn functionality, the user requires either an Internet Explorer 4.0 and higher Browser, or a Netscape 4.5 and higher Browser. Campaign: A campaign is a media communication that an advertiser launches to promote their product or service. Campaigns can run on many media platforms, television, radio, newspaper, or on one media platform. An eyeReturn campaign is when Vokens are inserted into specific websites for consumer interaction and impressions, eyeReturn campaigns can be created to coincide and compliment offline-advertising campaigns in other media such as print and television. Campaign Privacy Policy: A statement and will not be used. outlining how campaign registration information will, Campaign Site: The corporate branded site that personalized list of collected Vokens. allows web surfers to view their own Campaign Sponsor: Campaign sponsor refers to any party that underwrites and eyeReturn campaign. A campaign sponsor is any entity that has a message to convey to a segment of the population, and has chosen eyeReturn as a vehicle for their message. Client: The software [also referred to as a Browser] that allows a user of a personal computer or workstation to view pages of the World Wide Web [also called Web surfing]. To experience eyeReturn functionality, the user requires either a Internet Explorer 4.0 and higher Browser, or a Netscape 4.5 and higher Browser. Dynamic HTML (DHTML): Level 4 and greater Browsers use versions of DHTML to allow for the greater functionality and programmatic control of Web page presentation. Exchange: the 'eyeReturn Exchange' will allow Campaign Sponsors (or their agents) and Web Site Owners to meet and negotiate campaign terms privately online. The Exchange will also allow campaigns to be activated on Web sites, once the Campaign Sponsors and the Web Site Owners have agreed to participate with each other. Once activated, the exchange allows both campaign sponsors and Web Site Owners to manage track and review the progress of their campaigns. eyeReturn Privacy Policy: A statement outlining how eyeReturn registration and will not, be used. Java Applets: Applets. information will, eyeReturn does not rely on any compiled and downloaded software such as Java Java Script: A script language commonly used on the Web pages and supported by most prevalent Web Browsers. Allows for programmatic logic to be embedded in Web pages, and executed by the client Web browser. Offline: Not connected to the Internet. 24/oz/oz Page 32 Return Online: Being connected to the Internet. Used to denote applications the Internet or the World Wide Web for some specific functionality. or individuals that utilize Passport: Web surfers who participate in eyeReturn are required to register and create a user profile. This user profile information will be called the user's passport, and once created the passport will provide access to all eyeReturn campaigns - therefore, users will only have to register once. Participation in some campaigns may require users to provide additional information, however this information will remain the property of eyeReturn and the campaign sponsor only. Passport site: same as the eyeReturn corporate site (_www.eyeReturn.com) Plug-Ins: in order to experience some types of media on the Web, surfers require 3rd party software applications to be downloaded and installed on their browsers - these are referred to as Browser Plug - Ins. Examples of plug-in are the Shockwave Player and Real Player. EyeReturn requires no browser plug-ins. Points: Some sets of collected eyeReturn Vokens may be redeemed for points. There is no limitation to what the points can represent; they can represent any form of created currency. Prizes: Some sets of collected eyeReturn Vokens may be redeemed for rewards. delivered to the winning recipient. Prizes will be Reward: Material goods, currency, or points assigned to Web surfers who have participated in an eyeReturn campaign, and have met the criteria for winning. This typically occurs by collecting a set of eyeReturn Vokens. Set: For the initial release of the eyeReturn product, eyeReturn campaign Vokens can be collected to form groups or sets. A complete set of collected Vokens may be redeemed for points or prizes. Stamp: eyeReturn Vokens, when encountered and activated, may be redeemed for eyeReturn campaign stamps. These stamps are added to the user's profile, and may be collected to form sets. Surfer: an individual who is accessing pages of the World Wide Web using a computer and a Web Browser. Token: one half of an eyeReturn Voken - the branded, graphical elements that are found on Web pages. When found, Web surfers may click on the Voken in order to activate it, capture it, or redeem it for a campaign stamp User: the term used to identify the individual who uses the eyeReturn computer while accessing the World Wide Web with a Web Browser. on their personal Voken: An instance of an eyeReturn Token found on a Web Site Owners Web site: a virtual token - called a "Voken". eyeReturn tokens are randomly distributed, randomly appearing, customized and branded graphical elements that are found on Web pages. When found, Web surfers may click on the Voken in order to activate it, capture it, or redeem it for a campaign stamp. Voken Dispenser: The Voken Dispenser is proprietary eyeReturn eyeReturn Vokens to be distributed to participating Web sites. software that enables Web Server: Software that enables a computer to deliver requested Web pages to Browsers. Web Site Owner: Web site owners are the corporate or individual owners of Web sites that utilize eyeReturn to host eyeReturn campaigns on their site. Web Site Owners generate revenue by hosting campaigns, promoted by campaign sponsors. Web surfers encounter eyeReturn Vokens while surfing Web Site Owner's sites. 24/01/01 Page 33 Return , Jr APPENDIX A - PRO-FORMAS 24/oz/oz Page 34 Return