SNS Monetization KPI Examples

與創業者對話 ∣ A Series of Talks
Introduction to CyberAgent
Catherine Chang / CyberAgent Ventures, VP
4/25/13
CyberAgent Ventures, Inc. 1

Who we are…
CyberAgent Inc. is one of Japan’s leading
internet services conglomerates.
About us:
 1998, established in Tokyo, Japan.
 2000, IPO on Tokyo Stock Exchange (Mothers), 4751.
 Headquartered in Shibuya, Tokyo.
 2,600 full-time employees.
Products & Services:
 Internet advertising agency
 Internet media businesses
 Smartphone contents and services
 Investment

3
What we do…
Based on the concept of “start small, develop big,” CyberAgent has
established and developed a wide network of group businesses from the
ground up, without any strategic M&As.
Online Ad Mobile Ad
/ Media
Online Media
PC & Mobile Games
E-Commerce Finance and Investment
SEM operation management
Ad network and targeting ads
SEO
Buzz marketing
PR Ads
Celebrities’ promotion
Mobile Ad agency
Reward ads
Agency for national clients
Women’s media ads
Blog and virtual community
Price comparison media
“Groupon” service
Avatar community
Wedding information media
Online games
Mobile social apps
Smartphone apps
Smartphone apps Smartphone apps
Mobile social apps Smartphone apps and ads
Men’s apparel
Foreign currency exchange Venture capital

4
4
Highlights: Ameba
 Since launch in 2004 as a blogging service, Ameba has grown to become one of
the largest diversified social media platforms in Japan, offering avatars and games.
 20 million registered members, 30 billion monthly PV, more than 10,000 celebrity users.
Blog service
Avatar service 「Ameba Pigg」
Monthly PV Growth
Users communicate and socialize with their own avatars
in a virtual world.
Mobile PVs
PC PVs

5
ADVERTISEMENT CONTENTS MEDIA
CA旗下日本最大的手機廣告代理公司
CAMobile與全球最大的app ad network公
司tapjoy合作
CyberAgent與DeNA合資的專注于智能手機
廣告的子公司。
CA旗下專注于智能手機的子公司。佔據日本
智慧手機廣告市場70%的市場份額
PC與手機社交遊戲中Reward廣告代理公司
APPstore中用戶量最大的介紹APP的媒體
Free APP King
LBS應用外匯應用
Highlight: Smartphone Services

6
Highlight: Mobile Games
 CyberAgent Inc. and subsidiaries produce and operate 300+ unique mobile
titles, making us one of the largest mobile content providers in Japan.
 “Rage of Bahamut” leading
Japanese card battle game
developed by CyberAgent
subsidiary Cygames, Inc.,
ranked consistently on iOS top
grossing in numerous countries
 US$15 million revenue / month

7 7
2012 financial performance
Sales: JPY 141 billion (US$1.5 billion )
Operating profit : JPY 17 billion (US$183 million)
Sales Performance

Overview of Investment Activities

CyberAgent Ventures – regional offices
9
Network of 10 offices across 7 countries, Pan-Asia focus with US coverage

Alice has more than 15 years of VC experience in
Taiwan and China, focusing on electronic,
manufacturing, tech and IT, with a track record of 25+
investments and 8 successful IPOs. Alice received her
MBA in international business from University of Toledo.
Alice joined CyberAgent Ventures in 2010.
Catherine is a Bay Area native and UC Berkeley graduate
with a background in legal studies. She worked on several
private equity deals in Asia before joining CyberAgent
Ventures in 2011.
Alice Fang /
General Manager
Catherine Chang / VP
Light Lin / Adviser
Light is a serial entrepreneur and angel investor. While still
a student at Chiao Tong University, he co-founded
wretch.cc, which became the largest blogging service in
Taiwan and was later acquired by Yahoo in 2007. His latest
project is Flying V, a Taiwan-based crowd-funding platform.

Technology moves fast, so we don’t try
to do everything ourselves.
Invest in local talent, leverage our know-
how to grow leading internet businesses
in emerging markets.
Why we invest…

 Identify emerging markets with growth potential
in the tech sector;
 Narrow down untapped segments and services;
 Seek out teams with local expertise and
execution ability;
 Work together to deploy proven business models
in these markets.
How we invest…

Win me over as a user (first and foremost)!
How we evaluate…
Does your product…
 Fulfill a latent market demand?
 Show a clear competitive advantage?
Is your team…
 Able to adjust quickly to market feedback?
 Cohesive and responsive?

Japan’s largest recipe
sharing media
 1.2 million recipes
 15 million MAU
 4% premium users (as
% of MAU)
Business model:
 Banner ads
 Tie-up ads
 Premium users
Business model reference: Cookpad
Financials:
 US$40 million sales (FY2011)
 US$11 million net profit (FY2011)
 60% of revenue comes from premium users

16
Portfolio companies in Taiwan

What is “incubation?”
 Identify goals
 Set KPI to meet goals
 Repeat as necessary

Grow User acquisition
PV, DAU, MAU,
members
Traction Engagement
Retention rate,
time on site,
task completion
Monetize Business Model
Advertising,
premium fees,
ARPU
GOAL KPI

Examples of false positives:
User acquisition: MAU high vs. member/MAU ratio
Engagement: PV high, long time on site
Business Model: paid downloads vs. freemium

Example 1: content / info portal
2013 2014 2015
CPM 5 10 15
banner 5 7 10
ARPU (NT$) 300,000 350,000 400,000
campaign 3 5 7
2013 1Q 2013 2Q 2013 3Q 2013 4Q 2014 1Q 2014 2Q 2014 3Q 2014 4Q
MAU 3,000,000 3,150,000 3,307,500 3,472,875 3,828,845 4,020,287 4,221,301 4,432,366
PV/MAU 7.5 7.5 8 8 9 9 10 10
Monthly PV 22,500,000 23,625,000 26,460,000 27,783,000 34,459,602 36,182,582 42,213,013 44,323,663
banner 67,500 70,875 79,380 83,349 147,684 155,068 180,913 189,959
campaign 2,700,000 2,700,000 2,700,000 2,700,000 5,250,000 5,250,000 5,250,000 5,250,000
total ad sales 2,767,500 2,770,875 2,779,380 2,783,349 5,397,684 5,405,068 5,430,913 5,439,959
clicks clicks/mo. 22,500 23,625 26,460 27,783 34,460 36,183 42,213 44,324
conv. 10% 2,250 2,363 2,646 2,778 3,446 3,618 4,221 4,432
ARPU 300
item sales 2,025,000 2,126,250 2,381,400 2,500,470 3,101,364 3,256,432 3,799,171 3,989,130
Operation
Ads
Affiliate
Identify goals and KPI for relatively mature content / info portal, ready to
monetize.
 Goals: Monetize
 Business Model: Affiliate sales
 KPI: PV, click rate and conversion rate

False positives
• High PV, but not translating to high conversions
• Breakdown PV by channel and time of access, found that users were not
accessing the main channel with embedded affiliate links
• Adjust content placement across channels, gradually direct users to
affiliate channel
Increase Click Rate
• Change UI and placement of “buy” button on content with affiliate links
• 30% increase in referral clicks in 1-month period
Increase Conversion
• User behavior analysis – push content to match user’s search history and
needs

Takeaways:
 High PV is meaningless, because it was concentrated in the wrong
place. Unable to monetize this traffic.
 Could have executed ad-model, but overlooked more promising
affiliate model.
 Attention to user needs and behavior and simple redesign of
features and UI successfully drove PV to desired channel, and
increased click + conversion rates.

Example 2: SNS
2011 2012 2013
Register users 4,875,000 7,932,000 9,372,000
MAU 1,828,125 2,974,500 3,748,800
DAU 609,375 991,500 1,249,600
No. of employees 11 30 34
　　　developers 7 15 15
Total cost 491,800 2,289,610 2,533,035
Salary 232,800 1,453,380 2,002,035
Servers cost 0 355,230 0
bandwidths 114,000 370,000 400,000
Marketing 2,000 21,000 25,000
rental 15,000 60,000 66,000
Others/Financing cost 128,000 30,000 40,000
Sales 175,061 2,337,820 5,350,750
Revenue stream - 1 175,061 1,017,926 1,558,942
Revenue stream - 2 0 960,000 2,520,000
Revenue stream - 3 0 359,893 1,271,808
Profit -316,739 48,210 2,817,715
Cost+expenses
Sales
KPI

User Acquisition
New Register user Remark
Organic growth 1,350,000 X new users daily * X days * X months
New user from mobile 780,000 App services in iOS & Android to reach new users,
New user integrating from other sites 850,000 FB Fans; Cross acquisition of potential new user and convert them
into register users through integration with other SNS and medias.
New users contributing from new
features
1,020,000 Conversion rate from visitor to new user is at X% when new
features launching
Total 4,000,000
Example 2: SNS

Cost Structure
Example 2: SNS
Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
員工数 7 11 20 27 29 30 33 33 34 34
核心人員数 2 2 3 4 4 4 4 4 5 5
核心人員月工資 6,000 7,000 8,050 8,050 8,050 8,050 9,258 9,258 9,258 9,258
一般技術人員数 5 7 12 15 15 15 15 15 15 15
一般技術人員月工資 3,400 4,200 4,830 4,830 4,830 4,830 5,555 5,555 5,555 5,555
其他員工数 - 2 5 8 10 11 14 14 14 14
其他員工月工資 - 2,600 2,600 2,600 2,600 2,600 2,990 2,990 2,990 2,990
人力成本小計 87,000 145,800 285,330 376,350 391,950 399,750 486,623 486,623 514,395 514,395
需要服務器数 - - 15 15 10 5
購入服務器数 - 15 15 10 5
購入服務器單价 - 7,894 7,894 7,894 7,894
服務器成本小計 - - 118,410 118,410 78,940 39,470 -
帶寬成本 57,000 57,000 80,000 90,000 100,000 100,000 100,000 100,000 100,000 100,000
推廣成本 - 2,000 4,000 5,000 7,000 5,000 5,000 6,000 8,000 6,000
租金 7,500 7,500 15,000 15,000 15,000 15,000 16,500 16,500 16,500 16,500
其他管理費用/融資費用 3,000 125,000 6,000 8,000 8,000 8,000 10,000 10,000 10,000 10,000
其他成本小計 67,500 191,500 105,000 118,000 130,000 128,000 131,500 132,500 134,500 132,500
總成本 154,500 337,300 508,740 612,760 600,890 567,220 618,123 619,123 648,895 646,895

iPartment.com.tw (愛情公寓）
Investment date:
Oct. 2006, Nov. 2007
Model: Avatar SNS
(advertising+ subscription fee)

Back to the basics, identify the team’s strong points
Calmly, objectively analyze and pinpoint the user’s
motivation, figure out where the service’s value
proposition truly lies
Design features and business model based upon
this core value proposition
Establish mutual trust with management team
CAV’s value-add:

KPI:
UU
POI with review coverage
iPeen.com.tw （愛評網）

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Annual Portfolio Conference
 Bring together all portfolio companies across regions, create unique
opportunities for teams to establish business alliances.
 Share CyberAgent Group’s know-how in various areas. Discuss data
analysis techniques， HR and organizational structure, and other
management issues.
Incubation Events

Social Application Conference (Jan 2010, Beijing)
 Introduce the trend of “open-social” in Japan to Chinese developers
 CyberAgent, Mixi, and DeNA participated in the conference
Smartphone Applications Developers Conference (May 2011, Shenzhen)
 Introduce latest trends in smartphone apps in China, Japan and the US
 Sina/Tencent/Alibaba from China, and CyberAgent/DeNA from Japan
gave presentations with more than 400 Chinese developers in
attendance
Incubation Events

STARTUP BASE CAMP – CyberAgent Ventures’ Tokyo incubation center. 50+
person co-working space, est. in Feb. 2012, largest of its kind in Japan.
SBC provides access to mentor network of established IT/tech professionals in Japan,
on-site HR/legal/accounting advice and pitch events in front of active investors.

Incubation at CAV: Takeaways
 Not about hard “resources.”
 Tell it like it is. Identify problems and goals from an objective POV.
 Timing. Focus on one achievable crucial KPI given
financial restraints, and push to achieve within a short span of time.
 Work out growing pains. Leverage CA’s experience growing from
startup to 2500+ employees, help portfolio manage org. structure,
HR and other managerial issues.
 Trust is everything.
 KPI. Figure out what is most important at company’s current stage.

SNS Monetization KPI Examples

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