Full  Year,  Fiscal  Year  Ending  March  2014
Consolidated  Financial  Results

UNITED,  Inc.
(TSE  Mothers,  Code:  2497)

May  7,  2014 　 　 　All  of  the  opinions,  predictions,  forecasts  and  the  like  presented  in  this  document  are  those  made  by  UNITED,  Inc.  based  on  information  available  at  the  time  of  preparation  of  the  document,  but  no  guarantee  is  made  as  to  the  accuracy  of  this  information.  Actual  results  may  diﬀer  greatly  from  these  forecasts  due  to  changes  in  various  factors.  Company  names  and  product  names  presented  in  this  document  are  trademarks  or  registered  trademarks  of  their  respective  owners.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

1	

Contents

1 　Consolidated  Financial  Results  for  the  Full  Fiscal  Year
2 　Consolidated  Financial  Results  for  This  Quarter
3 　Reference  Material

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

2	

1 　CONSOLIDATED  FINANCIAL  RESULTS  FOR  THE  FULL  FISCAL  YEAR

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

3	Our  Core  Operations

We  are  putting  eﬀort  into  the  smartphone  media  operations  and  RTB  advertising  operations  expected  to  see  market  growth  in  the  future,  actively  investing  in  these  operations  to  achieve  business  growth.

Media  segment

Smartphone  media  businessCore  Operations

Other  media  businesses(*1)

Advertising  segment

RTB  advertising  business(*2)

Investment  segment  (*3)

Venture  capital  business

Advertising  agency  business*1 Email  advertising,  internet  research,  sports  marketing*2 RTB  (real-‐‑‒time  bidding)  refers  to  a  mechanism  for  conducting  advertising  transactions  based  on  real-‐‑‒time  auction.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

4	Results  Highlights  for  FY  Ending  March  2014

Overall

Full-‐‑‒Year  Results• Both  revenue  and  proﬁt  increased  over  the  previous  ﬁscal  year.
 　  Sales 　 　                        6,156  million  yen  (+33%  YoY) 　  Operating  proﬁt 　      138  million  yen  (+5,535%  YoY)
• The  media  segment  and  advertisement  segment  including  the  core  businesses  have  turned  aroundCore  Businesses

Smartphone  Media  Business• Sales  increased  by  3.2  times  year-‐‑‒on-‐‑‒year  (*1)
• The  number  of  downloads  for  CocoPPa  reached  23  million  on  March  29,  2014  (6.07  million  downloads  as  at  end  March  2013).  
CocoPPa  developed  into  a  global  customization  community• Increased  revenue  from  “apps  for  the  career  market”  and  “aﬃliate  media  services”  RTB  Advertising  Business• Sales  increased  by  2.7  times  year-‐‑‒on-‐‑‒year  (*2)
• The  cumulative  number  of  advertisers  for  the  DSP  “Bypass”  reached  2,000  companies  (March  2014)• Monthly  advertising  inventory  for  the  SSP  “AdStir”  reached  20  billion  ad  impressions  (January  2014)  (*3)

*1  Sales  from  the  smartphone  media  business  for  the  ﬁscal  year  ending  March  2013  includes  sales  of  SPiRE,  Inc.  prior  to  the  merger.
*2  Sales  from  the  RTB  advertising  business  for  the  ﬁscal  year  ending  March  2013  does  not  include  sales  of  SPiRE,  Inc.  
prior  to  the  merger.
*3  The  number  of  monthly  ad  impressions  reached  25  billion  in  April  2014.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

5	Consolidated  P/L  Statement  for  the  Full  Year  (YoY)
The  media  segment  and  advertisement  segment  turned  around,  revamping  the  proﬁt  structure.  In  the  media  segment,  both  revenue  and  proﬁt  increased  due  to  scale  expansion  resulting  from  the  merger  and  business  growth  after  the  merger.  In  the  advertising  segment,  the  gross  proﬁt  margin  was  improved  due  to  expansion  of  the  in-‐‑‒house  RTB  advertising  platforms  (*).
(million  yen)
FY  Ending  March  2014

FY  Ending  March  2013

Sales

6,156

4,624

+33%

 　Media  segment

3,001

516

+481%

 　Advertising  segment

3,050

2,920

+4%

 　Investment  segment

162

1,186

△86%

 　Inter-‐‑‒segment  elimination

△58

-

-

1,697

1,569

+8%

 　Media  segment

962

180

+434%

 　Advertising  segment

625

446

+40%

 　Investment  segment

110

943

△88%

-

△1

-

1,558

1,566

△1%

138

2

+5,535%

Total  proﬁt  from  sales 　Inter-‐‑‒segment  elimination
Selling,  general  and  administrative  expenses
Operating  proﬁt

Year-‐‑‒on-‐‑‒Year  Change 　Media  segment

Proﬁtability  achieved

234

△56

-

 　Advertising  segment

Proﬁtability  achieved

29

△250

-

 　Investment  segment

80

595

△86%

 　Head  oﬃce  expenses

△205

△287

-

Recurring  proﬁt

153

30

+397%

101

△236

-

Yearly  net  proﬁt

Proﬁtability  achieved*  In-‐‑‒house  DSP  “Bypass”  and  in-‐‑‒house  SSP  “AdStir”

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

6	

Consolidated  Balance  Sheet  as  at  the  End  of  This  Fiscal  Year
Cash  on  hand  increased  by  1,843  million  yen  due  to  the  exercise  of  subscription  rights  to  shares  with  exercise  price  revision  terms  allotted  to  Merrill  Lynch  Japan  Securities  Co.,  Ltd.  in  December  2013  (fundraising  of  1,629  million  yen),  etc.  
Current  liabilities  and  ﬁxed  liabilities  decreased  by  166  million  yen  and  195  million  yen,  respectively  due  to  the  deconsolidation  of  SOCIALWIRE  CO.,LTD.  in  April  2013,  etc.  
(million  yen)End  of  This  Fiscal  Year
(Mar.  2014)End  of  Previous  Fiscal  Year
(Mar.  2013)

Increase/  Decrease

Current  assets

7,239	

5,949	

+1,291	(Cash  on  hand)(5,096)	

(3,252)	

(+1,843)	

Fixed  assets

960	

896	

+64	

Current  liabilities

1,040

1,206

△166

Fixed  liabilities

0

195

△195

7,159

5,443

+1,716Net  assets

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

7	

2 　CONSOLIDATED  FINANCIAL  RESULTS  FOR  THIS  QUARTER

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

8	

4Q  (January-‐‑‒March)  Results  Highlights

Overall

4Q  ResultsCore  Businesses

Smartphone  Media  Business

RTB  Advertising  Business• Both  revenue  and  proﬁt  increased  over  the  previous  quarter 　  Sales 1,817  million  yen  (+13%) 　  Operating  proﬁt  　132  million  yen  (+197%)• The  advertising  segment  saw  accelerated  growth  due  to  expansion  of  the  RTB  advertising  business  coupled  with  increased  sales  in  advertising  peak  periods.
• Sales  increased  by  25%  over  the  previous  quarter.
• CocoPPa  Play  (iOS  version),  the  ﬁrst  sister  app  of  the  CocoPPa,  was  released.
• We  started  to  provide  two  types  of  service,  “iQ  Quiz  Collection  for  Sugotoku”  and  “Brain  Training  Game  Pack  for  Sugotoku”  for  Sugotoku  Contents®  (*).  
• Sales  increased  by  67%  over  the  previous  quarter.
• The  4Q  (January-‐‑‒March)  sales  from  the  in-‐‑‒house  RTB  advertising  platform  grew  by  71%  over  the  previous  quarter.

*:  This  is  a  service  provided  by  NTT  DOCOMO  Inc.  where  a  select  basket  of  roughly  100  types  of  content          including  news,  weather,  games,  horoscopes,  etc.  can  be  used  unlimited  at  a  monthly  price  of  ¥380          (tax  not  included).  “Sugotoku  Contents®”  is  a  registered  trademark  of  NTT  DOCOMO  Inc.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

9	

4Q  (January-‐‑‒March)  Consolidated  P/L  Statement  (over  the  Previous  Quarter)
Although  revenue  decreased  and  proﬁt  increased  in  the  overall  media  segment,  both  revenue  and  proﬁt  increased  in  the  smartphone  media  business.  In  the  advertising  segment,  the  RTB  advertising  business  acted  as  a  driver  for  increased  revenue  and  proﬁt.
(million  yen)

4Q,  FY  ending  March  2014

3Q,  FY  ending  March  2014

Quarter-‐‑‒on-‐‑‒Quarter  Change  (%)

1,817

1,615

+13%

821

837

△2%

 　Advertising  segment

1,002

749

+34%

 　Investment  segment

17

40

△57%

 　Inter-‐‑‒segment  elimination

△24

△12

-

Total  proﬁt  from  sales

517

432

+20%

 　Media  segment

283

253

+12%

 　Advertising  segment

213

143

+49%

 　Investment  segment

20

35

△42%

-

-

-

Selling,  general  and  administrative  expenses

384

387

△1%

Operating  proﬁt

132

44

+197%

 　Media  segment

91

61

+49%

 　Advertising  segment

72

△2

-

 　Investment  segment

13

28

△53%

 　Head  oﬃce  expenses

△44

△41

-

Recurring  proﬁt

135

43

+208%

Quarterly  net  proﬁt

122

24

+396%

Sales
 　Media  segment 　Inter-‐‑‒segment  elimination

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

10	Media  Segment:  Trend  in  Sales  by  Quarter
Smartphone  media  business  sales  increased  by  25%  over  the  previous  quarter.  
This  was  due  to  the  provision  of  “apps  for  the  career  market”  for  Sugotoku  Contents®  and  the  eﬀects  of  programs  to  diversify  CocoPPa  revenue.
Sales  in  the  media  segment:  trend  by  quarter■Other  media  businesses  (*)
■Smartphone  media  business(million  yen)

1,000

837

821

391

474

369

380

363

2Q

3Q

771

500

501
343

0

571
414

157

156

4Q,  FY  ending
March  2013

1Q,  FY  ending
March  2014

452

4Q

*  Other  media  businesses:  email  advertising,  internet  research,  sports  marketing
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

11	

Advertising  Segment:  Trend  in  Sales  by  Quarter
RTB  advertising  business  sales  increased  by  67%  over  the  previous  quarter.
Sales  from  the  in-‐‑‒house  RTB  advertising  platform  grew  mainly  in  the  smartphone  segment,  resulting  in  a  71%  revenue  increase  over  the  previous  quarter.
Sales  in  the  advertising  segment:  trend  by  quarter■Advertising  agency  business■RTB  advertising  business(million  yen)

1,022

1,002

1,000

303
(※)

581
500

377

342
0

319
262

4Q,  FY  Ending 1Q,  FY  Ending
March  2013
March  2014

716

749

313

329

302

700
403

419

2Q

3Q

4Q

*  Sales  of  Fringe81  Inc.,  an  advertising  agency,  which  was  excluded  from  consolidation  in  March  2013
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

12	Full-‐‑‒Year  Results  for  FY  Ending  March  2014  Full-‐‑‒year  operating  proﬁt  for  the  ﬁscal  year  ending  March  2014  was  138  million  yen,  attaining  the  goal  of  turning  around  operating  proﬁtability  in  the  full  year,  which  was  set  at  the  beginning  of  the  ﬁscal  year.  

（The  goal  of  turning  around  operating  proﬁtability  in  the  full  year  was  achieved  covering  the  expenses  of  72  million  yen  for  prior  investment  in  a  new  business  in  the  smartphone  media  business  segment,  which  was  not  included  in  the  plan  prepared  at  the  beginning  of  the  ﬁscal  year.)

Companywide  sales  and  operating  proﬁt:  trend  by  quarter

Sales  (million  yen)

1,500

1,565	
  1,817	
  

1,615	
  Operating  proﬁt  (million  yen)300

1,159	
  

1,000



500







0

200
100

0





-‐‑‒100


1Q

2Q

3Q

4Q

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Sales
Quarterly  operating  proﬁtCumulative  operating  
proﬁt

13	

Concepts  on  Results  for  FY  Ending  March  2015•

For  the  ﬁscal  year  ending  March  2015  too,  we  aim  to  increase  both  revenue  and  operating  proﬁt  by  continuously  achieving  growth  mainly  in  the  smartphone  media  business  segment  and  the  RTB  advertising  business  segment.

•

The  smartphone  media  business  segment  and  the  RTB  advertising  business  segment  are  deemed  to  have  entered  in  a  period  of  reaping  proﬁts.

•

However,  we  do  not  present  our  performance  forecasts  because  there  is  the  possibility  of  taking  unplanned  actions,  such  as  investing  in  a  new  business  or  carrying  out  merger  and  acquisition  transactions,  in  order  to  seize  business  opportunities  to  achieve  mid-‐‑‒term  growth.

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

14	

Smartphone  Media  Business

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15	

Smartphone  Media  Business
The  smartphone  media  business  comprises  the  following  three  elements.

 　 　 　 　 　 　 　 　 　“CocoPPa”

 　 　 　 　 　 　 　 　 　 　 　The  Smartphone  Costomization  Community  App  reached  23  million  downloads  on  March  29,  2014.

“Apps  for  the  Career  Market”
・In-‐‑‒house  apps  provided  for  the  au  Smart  Pass
・2  types  of  content  provided  for  Sugotoku  Contents®

“Aﬃliate  Media”
In-‐‑‒house  operated  point  media

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

16	

“CocoPPa”  Downloads  and  Global  Expansion
Downloads  of  “CocoPPa”  reached  23  million  on  March  29,  2014.  33%  of  all  downloads  is  from  U.S.  and  it  has  grown  to  be  a  global  community  with  83%  of  all  users  outside  of  Japan.
CocoPPa  was  awarded  at  the  “Digital  Content  of  the  Year  2013/The  19th  AMD  Award(*)”  organized  by  the  Association  of  Media  in  Digital  on  February  24,  2014.  It  is  recognized  to  be  outstanding  app  from  Japan  that  has  become  a  worldwide  hit  and  was  selected  as  one  of  the  9  works  awarded  the  Annual  Content  Awards  for  Excellence.
Breakdown  of  cumulative  “CocoPPa”  downloads  by  country

Monthly  cumulative  downloads  of  “CocoPPa”(ten  thousand)23  million
iOS  (released  July  19,  2012)

Others  19%

Android  (released  May  29,  2013)

U.S.  33%

Thailand  2%
Mexico  2%
Canada  2%
Spain  2%China  2%France  3%
Italy  3%Brazil  4%

Japan  17%

United  Kingdom  4%
Germany  4%
Jul.                                    Oct.                              Jan.                                    Apr.                                  Jul.                                  Oct.                              Jan.                Mar.  29

Taiwan  5%

Data  as  of  March  29,  2014  when  23  million  downloads  were  reached*  AMD  Award  is  organized  by  the  Association  of  Media  in  Digital  and  sponsored  by  the  Ministry  of  Internal  Aﬀairs  and  Communications.  The  award  is  established  to  facilitate  the  development  of  digital  media  industry  and  with  the  aim  of  improving  the  quality  of  digital  media  products  and  cultivating  human  resources.  This  yearʼ’s  Grand  Prize  was  awarded  to  the  "Shingeki  no  Kyojin  Project"(Attack  on  Titan  Project).
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

17	

“CocoPPa”  4Q  Programs  (CocoPPa  Play)As  a  joint  business  with  G-‐‑‒Crest,  Inc.,  “CocoPPa  Play”  was  released  as  an  avatar  app  enjoyable  to  use  with  “CocoPPa”,  for  iOS(*)  on  March  14,  2014.  
*  CocoPPa  Play  for  Android  will  be  released  in  near  future

CocoPPa  PlayCocoPPa・Users  are  able  to  dress  up  their  avatars  with  cute  clothes  and  accessories,  and  show  them  oﬀ  in  fashion  shows.
・The  main  revenue  source  is  paid  items  such  as  clothes  for  dressing  avatars.

It  is  possible  to  set  the  avatars  created  in  “CocoPPa  Play”  to  be  used  in  “CocoPPa”  mypage.

Tie-‐‑‒ins  between  “CocoPPa  Play”  and  “CocoPPa” 　 　<Flow  of  purchase  of  items>
  1．Purchase  “C-‐‑‒Coins”  for  exclusive            use  in  CocoPPa  Play.
 　 　8  C-‐‑‒Coins→\100 　 　42  C-‐‑‒Coins→\500 　 　88  C-‐‑‒Coins→\1,000 　 　196  C-‐‑‒Coins→\2,000
  2．Purchase  items  with  C-‐‑‒Coins.
 　 　Prices  vary  depending  on  items            and  each  item  costs  1  to  20              coins.

Other  features  include:
・Customer  transfer  between  both  apps
・Clothes  designed  by  popular  “CocoPPa”  creators  are  oﬀered  as  paid  items
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

18	

“CocoPPa”  4Q  Programs  (Premium  Content)
By  the  end  of  4Q,  leads  to  the  premium  content  store  came  to  the  top  view  and  the  numbers  of  items  are  diversiﬁed  (50  types  as  at  end  December  2013  →93  types  as  at  end  March  2014).    
Screens  of  premium  content  store  (as  of  March  31,  2014)
Storeʼ’s  top  screen

Screen  for  selecting  content  to  be  purchased（C)1976,2014	
  SANRIO	
  CO.,LTD.	
  APPROVAL	  NO.E-­‐550430-­‐1	

©Pusheen	
  Corp.	

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

19	

“CocoPPa”  Revenue  Opportunity  Diversiﬁcation  Program
Downloads  grew  at  a  steady  pace,  reaching  23  million  and  we  aim  to  expand  our  proﬁtability  in  the  mid  term  by  mainly  utilizing  the  existing  means  of  revenue  opportunities  while  maintaining  and  expanding  our  customer  base.
Diversiﬁcation  of  “CocoPPa”  Revenue  Sources:  Time  LineFY  ending  March  2014
2Q  and  before
Banner  advertising

FY  ending  March  2015
3Q

4Q

1Q

(Advertising  places  were  reduced  to  enhance  usability  in  3Q  and  after)
Tie-‐‑‒up  advertising

Momentary  printing  stop  (Priority  is  given  to  other  measures)

Premium  content

CocoPPa  for  Sugotoku 　CocoPPa  Play

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

20	

“Apps  for  the  Career  Market”  4Q  programs
In  February  2014,  we  started  to  supply  2  types  of  new  content,  “Brain  Training  Game  Pack  for  Sugotoku”  and  “iQ  Quiz  Collection  for  Sugotoku”  for  Sugotoku  Contents®  provided  by  NTT  DOCOMO.  
(Further,  we  also  started  to  provide  “CocoPPa  for  Sugotoku”  in  December  2013.)
Apps  included  in  “Brain  Training  Game  Pack  for  Sugotoku”

TAP10

Indian  Magic  of  Mental  Calculation

Treasure  of  the  Pyramids-‐‑‒  Mystic  Mental  Maths  -‐‑‒PAIRS  LOCK

Match  Number

Apps  included  in  “iQ  Quiz  Collection  for  Sugotoku”

Wine  iQ

Sushi  iQ

Restaurant  iQ

Cheese  iQ

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Beer  iQ

21	History  of  Our  Smartphone  Media  Business  and  Future  Programs
In  the  ﬁscal  year  ending  March  2014,  each  of  “CocoPPa”,  “apps  for  the  career  market”  and  “aﬃliate  media  services”  achieved  growth  and  we  started  to  invest  in  a  new  business.

CocoPPaFY  ending  Mar.  2013

FY  ending  Mar.  2014

・6  million  downloads  mainly  from  United  States・23  million  downloads  from  around  the  world  reached・Revenue  sourced  only  from  banner  advertising・Diversiﬁcation  of  revenue  sources 　other  than  banner  advertising  (tie-‐‑‒up 　advertising,  premium  content,  Sugotoku 　Contents®,  CocoPPa  Play  (iOS))・Signiﬁcant  renovation

Apps  for  the  career  marketAﬃliate  
media
New  
business,  etc.

・In-‐‑‒house  apps  supplied  for  the  au  Smart  Pass

・Increased  revenue  from  the  au  Smart  Pass
・2  types  of  content  started  to  be  supplied  for  Sugotoku  Contents®

FY  ending  Mar.  2015
・We  aim  at  mid-‐‑‒term  revenue  expansion  by  mainly  utilizing  the  existing  revenue  opportunities
・To  maintain  and  expand  the  existing  revenue  sources・To  seek  for  new  revenue  opportunities

・“BEAT+”  oﬀered  as  a   　service  linked  to  the     　“Groovy”  music  player   　provided  by  DeNA  Co.,  Ltd.

・Revenue  gained  by  developing  in-‐‑‒house  media

・To  expand  revenue  by  developing  new  mediaー・Establishment  of  Fogg,  Inc.,  the  ﬁrst  company  formed  under  the  internal  system  “U-‐‑‒Start”.    
The  address  book  app  “iam”  started  to  be  supplied

・We  plan  to  launch  new  businesses

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

22	  Overview  of  Our  Smartphone  Media  Business  and  Future  Plans
It  is  aimed  to  scale  up  the  mid-‐‑‒long  term  proﬁts  by  producing  the  investment  cycles  from  the  short-‐‑‒term  monetization  apps  to  the  mid-‐‑‒long  term  monetization  apps.
  ▶︎  In  this  ﬁscal  year,  the  scale  of  this  business  was  expanded  so  that  proﬁts  could  be  gained  while  investing  in  new  businesses.
Mid-‐‑‒long  term  monetization  apps

Short-‐‑‒term  monetization  apps

To  scale  up  the  proﬁt  by  creating  the  huge  traﬃcs  with  the  services  closely  to  lifestyleiam  (Jan.  2014~∼)
Proﬁle  exchange  service  developed  by  subsidiary  Fogg

CocoPPa  (Jul.  2012~∼)Smartphone  customization  community  appTo  earn  the  stabilized  proﬁts  with  the  early  start-‐‑‒up  of  services  and  support  the  business  as  a  wholeApps  for  the  career  market
・Portfolio  in  the  au  Smart  Pass.  (Feb.  2012~∼)

・Portfolio  in  Sugotoku  Contents®  (Dec.  2013~∼)
CocoPPa  Play  (Mar.  2014~∼)
Avatar  app  linked  with  CocoPPa

Aﬃliate  media  (Mar.  2012~∼)
We  operate  several  in-‐‑‒house  developed  aﬃliate  media  services.
The  images  of  proﬁt  structure  in  Smartphone  businessproﬁt  size

Short-‐‑‒term  monetization  apps
Investment

terms
Mid-‐‑‒long  term  monetization  apps

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

23	

RTB  Advertising  Business

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

24	RTB  Advertising  Market  Size  and  Predicted  Share  of  Overall  Display  Advertising

The  U.S.  RTB  advertising  market  is  projected  to  expand  to  approximately  $10.1  billion  in  FY  2016,  while  the  Japanese  RTB  advertising  market  is  projected  to  expand  to  approximately  $9.2  billion  in  FY  2016.  This  is  projected  to  be  the  highest  growth  rate  within  the  display  advertising  market.
Forecast  of  U.S.  RTB  advertising  market  size

Forecast  of  Japanese  RTB  advertising  market  size

(million  US  dollars)(million  US  dollars)









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

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

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

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

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

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

Size  of  RTB  advertising  market

Size  of  RTB  advertising  market

RTB  advertising  share  of  overall  internet  ad  market

RTB  advertising  share  of  overall  internet  ad  market(Source:  IDC  October  2013  /  RTB  advertising  share  of  overall  market  calculated  by  United)
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

25	

Situation  of  the  In-‐‑‒House  RTB  Advertising  Platform
The  number  of  advertisers  for  the  DSP  “Bypass”  reached  2,000  companies  and  monthly  advertising  inventory  for  the  SSP  “AdStir”  reached  25  billion  ad  impressions.  Each  platform  continued  to  grow  in  its  scale.

In-‐‑‒House  DSP  ”Bypass”

In-‐‑‒House  SSP  ”AdStir”

・The  service  was  launched  as  a  smartphone-‐‑‒speciﬁc  DSP  in  April  2012
・Number  of  advertisers  reached  the  2,000  companies  in  March  2014.

・  The  service  was  launched  as  a  smartphone-‐‑‒speciﬁc  SSP  in  April  2012
・Monthly  advertising  inventory  reached  20  billion  ad  impressions  in  January  2014  and  25  billion  ad  impressions  in  April  2014
・Increasing  the  inventory  was  promoted  in  collaboration  with  ad  networks

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

26	

Japanese  RTB  Advertising  Market  and  Our  Growth  Rate
The  Japanese  RTB  advertising  market  size  is  estimated  to  grow  by  36%  in  the  period  from  2013  to  2014.
In-‐‑‒house  advertising  platform  sales  grew  by  112%  same  period  last  year.
Japanese  RTB  advertising  market  size  and  growth  rate

(million  US  dollars)

Growth  rate  of  in-‐‑‒house  advertising  platform  sales







+36%  



increase+112%  increase














(Source：IDC,  October  2013;  market  size  prediction  for  the  full  year)        (Actual  results  for  the  January-‐‑‒March  period)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

27	

Comparison  of  “Bypass”  with  the  other  Major  Smartphone  DSPs

In  the  smartphone  RTB  advertising  market,  there  are  several  unique  DSPs  from  other  companies  including  a  new  entrant  but  “Bypass”  has  unique  features  that  diﬀerentiate  it  from  other  major  DSPs.
Comparison  of  “Bypass”  with  the  other  Major  Smartphone  DSPs
Features  of  Supports  all  advertisers  who  focus  on  performance

Features  of  other  major  DSPsSpecialized  in  speciﬁc  business  categories  such  as  electronic  commerce

Focus  on  branding

Detailed  audience  targeting  utilizing  an  abundant  advertising
  inventory

Focus  on  distribution  method  such  as
  specializing  in  retargeting

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

28	

Future  Measures  for  Our  DSP  “Bypass”
We  will  achieve  continuous  growth  through  the  “improvement  of  advertising  performance”,  “expansion  into  a  new  segment”  and  “reﬁne  and  enhancement  of  our  strengths”.

MeasureI

1

2

3“Improvement  of  advertising  performance”

Adjust  to  advertisers  in  the  sectors  such  as  electronic  commerce,  human  resources,  ﬁnance  and  real  estate  who  focus  on  performance  and  are  expected  to  increase

Construct  the  recommendation  engine,  and  “Dynamic  retargeting”  Enhancement  of  retargeting  functions
  (Planned  to  start  in  May  2014)

Implementation  of  deep  link  functions

MeasureII

1

1

Improvement  of  bidding  and  CPA  optimization  logic

2

Advance  into  a  new  segment  where  growth  is  expected

Start  native  advertising(Planned  to  start  in  the  second  half  of  2014)

MeasureIII

Improvement  of  app  performance
  (Planned  to  start  in  May  2014)“Expansion  into  a  new  segment”“Reﬁne  and  enhancement  of  our  strengths”

Further  increase  the  supply  side  inventory,  which  is  already  largest  in  Japan,  by  connecting  with  new  SSPs
Operation  expertise  for  smartphone  RTB

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

29	

Our  SSP  “AdStir”  Monetization  Mechanism
Our  SSP  “AdStir”  achieved  one  of  the  largest  sales  among  the  Japanese  smartphone  SSPs(*1).
Process  of  ad  requests  generate  revenue  by  “AdStir”
Ⅰ.  A  user  visits  a  media  site 　  (Ad  request  generated)

Ⅱ.  The  ad  request  is  transmitted  via  AdStir  to  DSP    （Adding  information  of  screen   　  size,  ad  format,  etc）

Ⅲ.  If  a  bid  conditions  are  right,  the  bid  is  accepted  in  the  RTB  process.
DSP[A]
DSP[B]Ad

DSP[C]

Ⅳ.  If  a  bid  is  not  accepted  in  the  RTB  process,  an  ad  served  from  ad  networks  is  displayed.
“AdStir”  has  two  revenue  patterns  in  III  and  IV  above,  and  have  the  largest  revenue  scale  in  the  Japanese  smartphone  RTB  segment(*2).

Ad  network[A]Ad  network[B]Ad  network[C]*1,2  Based  on  our  survey
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

30	

Future  Measures  for  Our  SSP  “AdStir”
We  will  increase  the  amount  of  transaction  within  “AdStir”  by  further  expanding  the  scale  of  transactions  and  raising  the  transaction  unit  value,  and  thereby  enhance  our  advantage  over  other  SSPs.

MeasureⅠ“Expanding  the  scale  of  transactions”

Increase  both  advertising  inventory  and  the  number  of  advertiser  bids  and  increase  the  number  of  RTB  win  bids

1

New  media  recruiting

Further  expand  the  largest  inventory  (25  billion  ad  impressions  per  month)  in  the  Japanese  domestic  smartphone  RTB  advertising  market
2“Raising  the  transaction  unit  value”
MeasureII

1Raise  the  unit  value  by  supporting  various  advertising  formats  including  videos  and  automatically  optimizing  and  serving  advertisements  with  high  unit  value

Enhancement  of  automatic  revenue  maximization  function
An  ad  that  can  be  sold  for  the  highest  unit  value  is    automatically  served  by  supporting  new  advertising  formats

Connection  with  new  DSPs

Further  increase  the  number  of  smartphone-‐‑‒compatible  DSPs  (currently  9)  with  which  AdStir  is  connected,  although  that  number  is  already  largest  in  Japan

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

31	

History  of  Our  RTB  Advertising  Business  and  Future  Programs

Both  “Bypass”  and  “AdStir”  expanded  their  scales,  backed  by  the  growth  of  the  RTB  advertising  market  in  the  ﬁscal  year  ending  March  2014.  We  will  continue  to  achieve  growth  mainly  in  the  smartphone  RTB  segment,  taking  speciﬁc  measures.

DSP“Bypass”

SSP“AdStir”

FY  ending  Mar.  2013

FY  ending  Mar.  2014

・Number  of  advertisers  was  268  companies

・Number  of  advertisers  reached  2,000  companies

・Advertisers  were  limited  and  mainly  consisted  of  those  from  the  digital  book  sector

・General  advertisers  from  electronic  commerce,  human  resources  and  other  sectors  increased

・Number  of  registered  media  was  5,097

・Number  of  registered  media  was  13,600  (Monthly  inventory  reached  20  billion  ad  views)

・The  situation  required  that  prior  investment  (outright  purchase)  was  made  to  secure  inventory

・Prior  investment  to  secure  inventory  became  unnecessary

・Connection  was  made  with  5  DSPs・Connection  was  made  with  new  4  DSPs

FY  ending  Mar.  2015

・Improve  advertising  performance・Adjust  to  new  segments
・Reﬁne  and  enhance  strengths

・Expand  the  scale  of  transactions
・Raise  the  transaction  unit  value

・Various  formats  including  videos  were  supported

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

32	

Overall  Summary

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

33	

全体まとめOverall  Summary

Whole  company

Full-‐‑‒year  operating  proﬁt  for  the  ﬁscal  year  ending  March  2014  was  136  million  yenWe  achieved  the  goal  of  “turning  around  proﬁtability  in  the  full  year”  set  at  the  beginning  of  the  ﬁscal  year

Smartphone  media  businessWe  continued  the  cycles  of  investing  proﬁts  generated  from  the  short-‐‑‒term  monetization  apps  in  the  mid-‐‑‒long  term  monetization  apps
We  aim  to  scale  up  the  proﬁt  in  the  ﬁscal  year  ending  March  2015

RTB  advertising  business

Based  on  the  growth  of  the  RTB  advertising  market,  we  continued  to  achieve  growth  focusing  on  in-‐‑‒house  platforms  in  the  smartphone  segment
The  ﬁscal  year  ending  March  2015  is  deemed  to  be  a  period  of  reaping  proﬁts

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

34	

3 　Reference  Material

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

35	

4Q  (January-‐‑‒December)  Consolidated  P/L  Statement  (YoY)
In  the  media  segment,  the  smartphone  media  business  achieved  growth  and  in  the  advertising  segment,  although  revenue  decreased  due  to  the  sale  of  Fringe81  Inc.  in  March  2013,  both  revenue  and  proﬁt  increased  in  the  RTB  advertising  business.
(million  yen)

4Q  of  FY  ending  March  2014

4Q  of  FY  ending  March  2013

1,817

1,821

△0%

821

501

+64%

 　Advertising  segment

1,002

1,022

△2%

 　Investment  segment

17

296

△94%

 　Inter-‐‑‒segment  elimination

△24

-

-

Total  proﬁt  from  sales

517

611

△15%

 　Media  segment

283

169

+67%

 　Advertising  segment

213

191

+12%

 　Investment  segment

20

252

△92%

Selling,  general  and  administrative  expenses

384

557

△31%

Operating  proﬁt

132

54

+142%

 　Media  segment

91

10

+730%

 　Advertising  segment

72

△50

-

 　Investment  segment

13

158

△92%

 　Head  oﬃce  expenses

△44

△64

-

Recurring  proﬁt

135

70

+92%

Quarterly  net  proﬁt

122

△24

-

Sales
 　Media  segment

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

Year-‐‑‒on-‐‑‒Year  Change  (%)

36	Cash  Flow  Calculations  for  the  Full  FY  Ending  March  2014
The  “cash  ﬂow  from  investment  activities”  was  △1,022  million  yen  due  to  investment  in  Mercari,  Inc.,  etc.,  increase  in  time  deposits  and  other  factors.  The  “cash  ﬂow  from  ﬁnancial  activities”  was  +2,161  million  yen  due  to  factors  such  as  the  exercise  of  subscription  rights  to  shares  with  exercise  price  terms.
(April  2013  to  March  2014)(million  yen)

Consolidated  cumulative  full-‐‑‒year  period 　Cash  ﬂow  from  operating  activities△206	

 　Cash  ﬂow  from  investment  activities△1,022	 　Cash  ﬂow  from  ﬁnancial  activities

2,161	 　  Increase/decrease  in  cash  and  cash  equivalents936 　  Term-‐‑‒end  balance  of  cash  and  cash  equivalents

2,496	

・Time  deposits  that  have  more  than  three  months  until  maturity  are  not  included  in  the  “cash  and  cash  equivalents”.  (Applicable  deposit  balance  as  at  the  end  of  March  2014:  2,600  million  yen)

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

37	

「CocoPPa」のサービス概要
Icons,  wallpapers  and  home  screens  posted  by  users  are  downloaded  and  shared  in  the  community.  The  translation  featured  by  Google  within  “CocoPPa”  is  enjoyed  by  users  for  cross-‐‑‒border  communication.

≪”CocoPPa”  Usage  Images≫
User  posting  material  (creator)

Sample  page  of  creators  (comments)”This  icon  is  cute.”  or  “I  like  your  sense  of  style.”In  English,  Chinese,  Arabic,  German  and  many  other  languages

Icons  and  wallpaper  are  contributed  from  around  the  world  (free).546,000  icons,  125,000  wallpapers  by  the  end  of  December

Post

Exchanges  between  users  (motivation  for  creators  to  post)

Decorating  users

Smartphone  screen  decorated  using  posted  material  (free)

replies:“Thank  you  for  the  comments.”  “I  am  glad  to  contribute  it.”
The  translation  features  are  many  of  the  languages.
There  is  ample  communication  among  users  based  on  posted  materials,  etc.
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

38	

“CocoPPa”  Premium  Content
Sales  of  cartoon  character  home  screen  themes  (sets  of  icons  and  wallpaper)  as  premium  content
Samples  of  premium  content  and  home  screens
Hello  Kitty  version

Snoopy  version<Flow  of  purchase  > 　(As  of  March  31,  2014)

１

Purchase  the  points  for  CocoPPa
Points  can  be  purchased  from  100  point  increments  at  a  cost  of  100  points  =  ¥100
• In  the  Android  version,  there  are  also  monthly  subscription  plans  where  points  can  be  purchased  at  a  discount 　 　 　 　¥330  plan  →  330  points  +30  bonus  points 　 　 　 　¥500  plan  →  500  points  +60  bonus  points 　 　 　 　¥1,000  plan  →1,000  points  +150  bonus  points•

２ Points  to  be  used  to  download  home  screen  themes••（C)1976,2014  SANRIO  CO.,LTD.  
APPROVAL  NO.E-‐‑‒540128-‐‑‒1

8  icons  +  2  wallpapers  costs  200  points
16  icons  +  2  wallpapers  costs  300  points(excluding  the  sale  and  limited  items)(c)  2013  Peanuts  Worldwide  LLC

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

39	

Real-‐‑‒Time  Bidding  Setup
STEP  1

When  a  user  visits  a  site,  user  data  is  transmitted  to  a  DSP

SSPUser  Avisits  site

STEP  2

Data  on  User  A(advertising  frame  size,  Browser,  etc.)

User  A

Advertiser:  Beverage  manufacturer

DSP
B

Advertiser:  Car  Company

DSP
C

Advertiser:  Real  Estate  Agent

Advertisers  bid  from  a  DSP,  auction  held  at  SSP
▶Advertising  from  the  winning  advertiser  is  displayed.
Auctionis  served  a  real  estate  advertisement

DSP
A

SSP
Advertising  from  winning  advertiser  is  servedAdvertiser  bid  data

DSP
A
DSP
B
DSP
C

Bids

¥0.05
for  User  A

Beverage  mnufacturer
Bids

Car  Company
WIN

Real  Estate  Agent

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

¥0.07
for  User  A
Bids

¥0.09
for  User  A

40	Increase  in  New  Advertisers  for  DSP  ”Bypass”
The  number  of  advertisers  reached  1,000  companies  16  months  after  the  service  was  launched  and,  7  months  thereafter,  reached  2,000  companies,  accelerating  growth.  With  regard  to  new  advertisers  in  4Q,  there  was  an  increase  in  general  advertisers  from  electronic  commerce,  education,  human  resources  and  other  sectors  in  addition  to  the  conventional  web  content  sector.

Trend  in  number  of  advertisers  for  DSP  “Bypass”

2,000  companies  reached(Companies)

2,000

1,500

1,000  companies  reached

1,000

500

0

April  2012

16  months

August  2013

7  months

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

March  201441	Growth  in  Advertising  Inventory  of  SSP  “AdStir”
Through  continuous  media  recruiting,  the  number  of  registered  media  reached  13,000.  In  this  quarter,  the  current  advertising  inventory  increased  by  about  1.5  times  from  the  previous  quarter  to  61.5  billion  ad  views,  and  increased  by  about  5  times  on  a  year-‐‑‒on-‐‑‒year  basis.
Quarterly  advertising  inventory  of  “AdStir”(Ad  views:  units  of  100  million)

700$

615$

600$
500$

413$

400$

277$

300$
200$

124$

179$

100$
0$
2012$$4Q$

2013$$1Q$

2013$$2Q$

20133Q$

2013$4Q$

The  above  graph  shows  the  total  number  of  ad  views  on  media  with  “AdStir”  installed  and  does  not  show  sales.	
Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

42	

VisionBecome  the  leading  internet  ﬁrm  in  Japan

MissionCreate  new  value  through  continued  challenges  and  contribute  to  society

Copyright  ©  UNITED,  Inc.  All  Rights  Reserved.

43