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AdGrove.com will position itself as the premier, discount, online advertising and advertising services hub for small businesses. Using leading-edge web technology, AdGrove.com will initially offer customized products and services exclusively in the radio advertising industry. As a new competitor in an attractive market AdGrove.com's primary marketing objective is securing exclusive radio station partnerships. The second marketing objective is revenue growth. The key drivers of revenue are the number of ad spaces listed, the number of visitors, the value of information, transaction value, and the conversion rate. Accordingly, AdGrove.com will focus on attracting visitors, providing high-quality service, and converting visitors to buyers. Our marketing objective is to attract 3 million visitors, 88,000 transactions with an average transaction size of $5,000, and capture 4% of the radio advertising market by year five.

5.3 Value Proposition

The value propositions that AdGrove.com will communicate to each of the customers within our target are outlined below. The goal is to attract first-time customers and provide them with enough value to convert them into repeat customers.

Radio Stations seek access to customers at a low-cost. AdGrove.com Delivers: An online radio brokerage service which enables stations to customize marketing efforts for each buyer, reach new customers, and package buying options, at a fraction of the cost of traditional methods.

Small Businesses seek easy, targeted, cost-effective advertising. AdGrove.com delivers: A fiee and friendly website to manage market research, campaign planning, ad space buying, creative services and ad monitoring all in one place, in a fraction of the time and cost. The convenient way to buy radio advertising.

5.4 Strategic Partnerships

Strategic partnerships are fundamental in the world of Internet commerce. AdGrove.com's strategic alliances will help increase brand equity, create barriers to entry, reduce marketing expenses, and reduce the time-to-market.

Radio Station Partnership Strategy
A key to AdGrove.com's success will be the strategic partnership forged with the Radio Advertising Bureau (RAB), the national association that represents 4,300 radio stations and 80% of US radio advertising revenues. An AdGrove.com partnership will provide RAB with a number of benefits, including: revenue sharing, an Advisory Board role, website design control, free national educational marketing campaign about the value of radio advertising, zero-cost investment in the technological advancement of the entire industry, free technical training to members, and an opportunity to open a third sales channel for RAB's radio station members. The RAB partnership will provide AdGrove.com with access to a majority of the radio advertising industry revenues, create instant credibility, reduce AdGrove.com's time-to-market, and create a competitive advantage. AdGrove.com will receive access to RAB's industry contacts, membership, cross-marketing opportunities, and editorial content.

Radio Stations Direct
AdGrove.com will also target non-RAB member stations that represent mom-and-pop operations in the most wired cities in the top 250 radio markets nationwide. RAB will develop custom partnership and exclusivity agreements with each participating radio station. In addition, RAB will train sales people and accounting personnel on the easy-to-use AdGrove.com system.

Market Research Firm
AdGrove.com will forge a strategic partnership with SRDS, a provider of media and marketing information for the media industry. SRDS' new online database represents information on 9,400 radio stations, including demographic profiles, market information, formats, and price. This database is updated in real-time and costs $467 per year, and $210 per additional user in the same facility. AdGrove.com will negotiate a partnership agreement including an up-front fee for use of the information with a cost per use beyond the fixed rate. SRDS current customers are advertising agencies and major corporate marketing departments. This partnership will enable SRDS to access new small business customers efficiently and grow their market, at no additional investment or marketing cost.

U.S. Chamber of Commerce
AdGrove.com will forge an alliance with the U.S. Chamber of Commerce, the world's largest business federation, representing nearly three million companies, 96% of which are small businesses, and 3,000 local and state chambers. U.S. Chamber of Commerce aggregates the power of small businesses to fight for their interests and provide necessary products and services. Similarly, AdGrove.com will enable the U.S. Chamber of Commerce to offer their members a discount for our services, while supporting a service which returns buying power to the small business. This partnership provides AdGrove.com cooperative marketing opportunities (direct mail, website, and trade shows); access to the US Chamber of Commerce membership list; and a competitive advantage.

5.5 Marketing & Sales Strategy

5.5.1 Promotion

AdGrove.com's strategy to attract and convert website visitors is supported by a strong promotions effort that combines advertising and public relations strategies. The promotional efforts will focus on building brand and "buzz" around the AdGrove.com name.
  1. Advertising: Creating Awareness & Use

    Radio: To secure discounted or free radio ad space, AdGrove.com will leverage its partnerships with radio stations, allocating $100,000 for the initial launch in Austin. The radio advertising campaign will target major radio markets and wired cities and focus on educating the small business customer about the value of radio, radio listener demographics, and the value of AdGrove.com.

    Internet: In addition, AdGrove.com will trade radio spots with Internet advertising agencies, such as AdKnowledge, to secure discounted Internet ad space on major small business and ad agency websites. AdGrove.com will allocate $50,000 for Internet ad purchases.

    Print: AdGrove.com will also advertise in national periodicals, which target small businesses, such as Inc. magazine. AdGrove.com will allocate $100,00 for the initial launch.

  2. Grassroots: Creating the Buzz

    AdGrove.com will use its e-mail access to its membership to send promotional e-mails about discount ads that meet the customer's needs. AdGrove.com will also encourage radio stations to offer discounts to targeted customers who have logged on with specific radio stations. This brokering service will create demand for airtime and a partnership between AdGrove.com and their buyers and sellers.

    AdGrove.com will also establish alliance partnerships or "hot links" on other small business websites, providing a stream of revenue for the host for every customer generated by that link.

    Mascot Tour: AdGrove.com will create a brand mascot called "Mango" who will tour the country, talking about the "juice" on AdGrove.com. Mango will visit partnering radio station morning talk shows, attend trade shows, and participate in parades. Mango will write editorial content on the website for his location, and provide a diary of his travels around the country. AdGrove.com's public relations strategy will focus on a "Mango Madness" national tour. Mango will visit highgrowth start-up companies around the country to articulate the benefit of radio.

    Trade Shows: AdGrove.com will attend national and regional small business tradeshows around the country to demonstrate the website and promote the AdGrove.com name and brand.

    Charity: AdGrove.com will donate pre-tax profits, time, and ad space to nonprofit charitable organizations addressing issues of electronic literacy, community development investment, and global climate change. Adgrove.com will launch a GIFTAD campaign, which provides one free ad space to a charity of their choice for every 100 visitors. Visitors will be able to select from a list of potential recipients. AdGrove.com will enable visitors to send an e-mail about this campaign to friends and family. Mango will also participate in charity events that reflect the recipient organization.

  3. Sales: Creating Conversion

    While also helping to attract visitors, the main thrust of AdGrove.com's promotion effort will be on converting visitors. After reviewing other e-commerce models, AdGrove.com will initially use a traditional sales staff to make sales calls directly on businesses and provide a free technical demonstration of AdGrove.com. These sales forces will be deployed regionally. Since the highly fragmented small business buyers are not early Internet adopters of technology, we believe this is the easiest way to build visitors, customers, and loyalty.

    AdGrove.com will use a pull strategy, by issuing a weekly e-mail newsletter for its members showcasing the buying discounts, and "fire sales" available that week. In addition, AdGrove.com will feature businesses that have saved through AdGrove.com, new advertising techniques, and radio wisdom.

    In addition to discounts, AdGrove.com will establish partnerships and links with other web sites. In addition AdGrove.com will list its web advertising for sale on AdKnowledge. This will be a source of revenues for AdGrove.com and an opportunity to advertise to its target market.

    To motivate visitor purchases, AdGrove.com will use 25%of the promotion budget on discounts, special price packs, and other tactics that will reduce the cost to the consumer and increase conversion rates. AdGrove.com has forecasted discounts to total 5% of sales.

5.5.2 Pricing

AdGrove.com's pricing strategy will be consistent with the overall objective to attract visitors. Products are priced to meet the perceived value of what they represent to the target customer. The two products for purchase on AdGrove.com are: 1.) Value-added market research data and 2.) Radio advertising space. Pricing of these products is reflected in membership fees, and transaction fees.

Membership Fees:
Buyers and sellers are required to join as Mango Members to gain access to AdGrove.com's basic market research information, planning tools, and buying tools. To drive traffic and encourage use, membership is free to both buyers and sellers. However, to execute a trade, buyers and sellers must "pre-qualify" by completing a brief financial membership and terms and conditions form.

Advertising Space Prices:
Using AdGrove.com's status as an ad agency, AdGrove.com will receive 15% discount on ad space. AdGrove.com will then list the premium-advertising space for a 10% discount. This price will only be available on AdGrove.com's site (not traditional suppliers), and will be competitive with listings on any other websites. AdGrove.com will also negotiate volume-buying discounts to automatically apply to a buyers' planning schedule.

AdGrove.com will also offer discounted advertising space through electronic "fire sales" of leftover ad space. This advertising space will be priced by the radio station and will reflect an 11 - 75% discount on regular ad space. This space will be competitive with other on-line providers and will be sold on a first-come, first-serve basis.

Information Transaction Fees:
Within the research division, buyers will have access to extra market research data for an additional fee, which reflects a percentage of the price of the market research to AdGrove.com. The information will be presented in a one-time transaction price of $29.99 per transaction and the information requested will be saved in the buyers' profile for future use.

Commission Fees:
AdGrove.com will collect a 5% commission from radio stations for the use of the AdGrove.com as a sales channel. This fee is transparent to the buyer and seller.

Table of ContentsAppendices
1. Executive Summary
2. Company Overview
3. Products and Services
4. Market Analysis
5. Marketing Plan
6. Operations Plan
7. Management
8. Financial Summary
Management Team Resumes
Small Business Internet Use
Revenue Model and Assumptions
Pro Forma Financial Statements
Strategic Alliance Proposal
Most Wired Cities in America
Market Research
Sample Questionnaire
All information herein is confidential and belongs to AdGrove.com, Inc.