Go-To market plan for new Fitbit Premium Subscription

2. Agenda

3. Fitbit Smart Coach

4. Go To Market Objectives

5. Target Audience
● Owns a Fitbit wearable and a
smartphone
● Value conscious but has
expendable income
● Is comfortable with technology
but not necessarily an expert
● Uses social media frequently
● More comfortable buying from
well-known companies
● Lives in North America
● 30+
Persona:
Chris
● Has a desk job
● Earns 100K+ per year
● Willing to pay for a product that received
good reviews on improving health habits
● Uses a smartphone and often visits social
sites to post comments and images
● Wants to work out more regularly
● Is 34 and lives in the U.S.

6. “Get More With Fitbit” - Campaign Flow
Use both paid and owned channels to target current FitBit users w/o paid
subscription.
Display Ads (Retargeting)
Premium Subscription
Landing Page
30 Day Free Trial
Paid Subscription ($49
annual)
Paid
Push
Notification
Owned (Little or No Additional Cost)
Newsletter and
Announcements (email)
Display Ads
(FitBit.com)
Social
Channels
Device Box
Inserts

7. Direct Marketing Conversion
No commitment 30 day free trial will result in high conversion to trial.
Premium Subscription
Landing Page
30 Day Free Trial
Paid Subscription
($49 annual)
Paid
Click Thru Rate: 0.8%
Conversion: 30.0%
Conversion: 5.0%
No commitment
Opt in
● Impressions per paid: 8,333
● Impressions per trial: 417
● Using CPM rate of $5.00
o Cost per conversion: $41.67 (max is $56.49)
o Cost per trial: $2.08 (max is $2.82)
● Max = 50% of 3 year subscription
● We will monitor conversion to trial rates and
adjust CPM buys to stay below maximum.
Display Ads (Retargeting)

8. Model Details
● Optimizing spend with use of owned channels
● Using retargeting techniques to focus on device owners
o Retargeting spend tied to device sales
● Increase awareness with retail fixture and box inserts
● Seasonal adjustments
● Compounding effect of renewals

9. Projections
Q4 2014 2015 2016
Devices Sold (Million Units) 2.5 13 33
New Subscriptions (Owned Channels) 125,338 811,552 2,013,380
Total New Subscriptions 132,161 846,701 2,100,775
Subscription Revenue $6.61M $46.95M $138.35M
Marketing Cost $5.55M $7.79M $11.77M

10. ● Fitbit Smart Coach will increase revenue and
brand awareness
● Target market is current Fitbit users
● Overall Marketing ask: $25 million
o - First quarter marketing ask: $5 million
● Estimate revenue: $192 million
Summary

11. Appendix

12. Paid Marketing: Maximum Acquisition Cost
Allow higher acquisition costs since majority of new subs will be from owned
channels and subscription also benefit hardware sales
● Maximum acquisition cost is 50% of lifetime value = $56.49
o 50% of 3 years of subscription ($110.74)
o Y1 ($49.99) + Y2 ($34.99 - 70%) + Y3 ($27.99 - 80%) = $112.98
● Premium subscriptions brings additional value
o Differentiates Fitbit and Increases perceived value of band
o User with premium have higher loyalty (plus years of data)
● Risk of higher cancellation rate: Address with on-line pre-expiration
campaigns to increase engagement before renewal

13. Sensitivity Analysis: Cost per Trial
CPM
Impressions per Trial (IPT)
400 500 600 700 800 900 1000 1100 1200
$2.50 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00
$2.75 $1.10 $1.38 $1.65 $1.93 $2.20 $2.48 $2.75 $3.03 $3.30
$3.00 $1.20 $1.50 $1.80 $2.10 $2.40 $2.70 $3.00 $3.30 $3.60
$3.25 $1.30 $1.63 $1.95 $2.28 $2.60 $2.93 $3.25 $3.58 $3.90
$3.50 $1.40 $1.75 $2.10 $2.45 $2.80 $3.15 $3.50 $3.85 $4.20
$3.75 $1.50 $1.88 $2.25 $2.63 $3.00 $3.38 $3.75 $4.13 $4.50
$4.00 $1.60 $2.00 $2.40 $2.80 $3.20 $3.60 $4.00 $4.40 $4.80
$4.25 $1.70 $2.13 $2.55 $2.98 $3.40 $3.83 $4.25 $4.68 $5.10
$4.50 $1.80 $2.25 $2.70 $3.15 $3.60 $4.05 $4.50 $4.95 $5.40
$4.75 $1.90 $2.38 $2.85 $3.33 $3.80 $4.28 $4.75 $5.23 $5.70
$5.00 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $5.50 $6.00
$5.25 $2.10 $2.63 $3.15 $3.68 $4.20 $4.73 $5.25 $5.78 $6.30
$5.50 $2.20 $2.75 $3.30 $3.85 $4.40 $4.95 $5.50 $6.05 $6.60
$5.75 $2.30 $2.88 $3.45 $4.03 $4.60 $5.18 $5.75 $6.33 $6.90
$6.00 $2.40 $3.00 $3.60 $4.20 $4.80 $5.40 $6.00 $6.60 $7.20
$6.25 $2.50 $3.13 $3.75 $4.38 $5.00 $5.63 $6.25 $6.88 $7.50
$6.50 $2.60 $3.25 $3.90 $4.55 $5.20 $5.85 $6.50 $7.15 $7.80
$6.75 $2.70 $3.38 $4.05 $4.73 $5.40 $6.08 $6.75 $7.43 $8.10
$7.00 $2.80 $3.50 $4.20 $4.90 $5.60 $6.30 $7.00 $7.70 $8.40
$7.25 $2.90 $3.63 $4.35 $5.08 $5.80 $6.53 $7.25 $7.98 $8.70
Will adjust CPM based on IPT to keep costs per trial below $2.82 (expect $2.08)

14. Box Inserts - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
New Devices 2,500,000 3,375,000 1,875,000 1,875,000 6,250,000 8,437,500 4,687,500 4,687,500 15,625,000
Trials 750,000 1,012,500 562,500 562,500 1,875,000 2,531,250 1,406,250 1,406,250 4,687,500
Subscriptions 37,500 50,625 28,125 28,125 93,750 126,563 70,313 70,313 234,375
Revenue $1,874,625 $2,530,744 $1,405,969 $1,405,969 $4,686,563 $6,326,859 $3,514,922 $3,514,922 $11,716,406
Box Insert
Cost
$225,000 $303,750 $168,750 $168,750 $562,500 $759,375 $421,875 $421,875 $1,406,250
30% trial rate, 5% conversion rate

15. Email Newsletter - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Opens 2,711,059 2,888,681 2,051,732 2,172,912 6,638,951 7,125,761 5,063,271 5,375,226 16,490,654
Clicks 94,887 101,104 71,811 76,052 232,363 249,402 177,214 188,133 577,173
Trials 28,466 30,331 21,543 22,816 69,709 74,820 53,164 56,440 173,152
New Subscriptions 1,423 1,517 1,077 1,141 3,485 3,741 2,658 2,822 8,658
Revenue $71,151 $75,813 $53,847 $57,028 $174,238 $187,014 $132,884 $141,071 $432,793
Subscription Rate (Opt Out) 50% Trial Rate 30%
Open Rate 24% Trial Conversion Rate 5%
Click Rate 3.50%

16. Push Notifications - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Opened
Notifications
2.8M 4M 4.2M 4.5M 6.9M 9.9M 10.6M 11.2M 17.2M
Trials 847,206
1,203,617
1,282,333 1,358,070 2,074,672 2,969,067 3,164,544 3,359,516 5,153,329
New
Subscriptions
42,360 60,181 64,117 67,903 103,734 148,453 158,227 167,976 257,666
Revenue $2.1M $3.0M $3.2M $3.4M $5.2M $7.4M $7.9M $8.4M $12.9M
50% of customers open a notification, 30% trial rate once open, 5% trial conversion rate

17. Fitbit.com Display Ads - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Addressable Users 5.65M 8.02M 8.55M 9.05M 13.83M 19.79M 21.10M 22.40M 34.36M
Impressions 147M 209M 222m 235M 360M 515M 549M 582M 893M
Click Throughs 2.94M 4.17M 4.45M 4.71M 7.19M 10.29M 10.97M 11.65M 17.86M
Trials 881,094 1,251,762 1,333,626 1,412,393 2,157,659 3,087,830 3,291,126 3,493,897 5,359,462
New Subscriptions 44,055 62,588 66,681 70,620 107,883 154,391 164,556 174,695 267,973
Revenue $2.20M $3.13M $3.33M $3.53M $5.39M $7.72M $8.23M $8.73M $13.40M
Visits per week per device 2
CTR on Display Ads 2%
Display Ad Trial Rate 30%
Trial Conversion Rate 5%

18. Retargeting - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Imp.s/
Customer
10 10 5 3 10 10 5 3 10
Max
Spend
$284,296 $407,814 $218,340 $138,286 $700,113 $1,010,597 $542,091 $343,818 $1,744,968
New Subs 6,823 9,788 5,240 3,319 16,803 24,254 13,010 8,252 41,879
Revenue $341,087 $489,279 $261,955 $165,910 $839,967 $1,212,474 $650,380 $412,499 $2,093,543
CPM 5 Conversion Rate 5%
CTR 0.80% Cost Per Conversion $41.67
Trial rate 30%

19. Costs - Quarterly
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Retail Fixture Costs $5,020,000 $5,020,000 $5,020,000
Creative Costs $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Box Insert Cost $225,000 $303,750 $168,750 $168,750 $562,500 $759,375 $421,875 $421,875 $1,406,250
Retargeting $284,296 $407,814 $218,340 $138,286 $700,113 $1,010,597 $542,091 $343,818 $1,744,968
Total New Subscribers 132,161 184,698 165,240 171,108 325,655 457,403 408,764 424,057 810,551
Renewals - - - - 92,513 129,289 115,668 119,775 301,969
Total Subscriptions 132,161 184,698 165,240 171,108 418,168 586,691 524,433 543,832 1,112,520
Subscription Revenue
(Millions)
$6.61 $9.23 $8.26 $8.55 $20.90 $29.33 $26.22 $27.19 $55.61
Marketing Ask (Millions) $5.55 $0.74 $0.41 $0.33 $6.31 $1.79 $0.99 $0.79 $8.20