1 PROPRIETARY AND CONFIDENTIAL

MerchantCircle “Merchant Confidence Index” Survey Results

December 8, 2011

MerchantCircle.com, a Reply!, Inc. property

800 W. El Camino Real

Mountain View, CA 94070

© 2011 Reply! Inc.

2 PROPRIETARY AND CONFIDENTIAL

Survey Methodology

Fielded online November 8th through November 28th, 2011

Invitation to participate sent via email to a random sample of 100,000 MerchantCircle members (out of a membership base of 1.6 million members)

Total responses: 2,555

– 78.0% of responses from merchants with 1-4 employees

– 12.4% of responses from merchants with 5-9 employees

– 8.0% of responses from merchants with 10-49 employees

– 1.7% of responses from merchants with 50+ employees

No incentive was offered to complete the survey

By virtue of the survey methodology (delivered via email and fielded online), responses are expected to come from relatively more “internet-savvy” members

Merchant Confidence Index tracks track four key questions designed to synopsize the prevailing trends among local business owners. The overall index score is based upon a standardized five-point Likert scale.

© 2011 Reply! Inc.

3 PROPRIETARY AND CONFIDENTIAL

State of the U.S. economy

How would you rate today’s economy compared to the past twelve months? (n=2,555)

© 2011 Reply! Inc.

4 PROPRIETARY AND CONFIDENTIAL

Expectations for future revenue

How do you expect your sales revenues to change over the next three months? (n=2,555)

© 2011 Reply! Inc.

5 PROPRIETARY AND CONFIDENTIAL

Expectations for holiday revenue

How do you expect your holiday sales revenues to compare to last years? (n=2,555)

© 2011 Reply! Inc.

6 PROPRIETARY AND CONFIDENTIAL

Marketing expenditures

How do you expect your marketing/advertising expenditures to change over the next three months? (n=2,096)

© 2011 Reply! Inc.

7 PROPRIETARY AND CONFIDENTIAL

Hiring expectations

How do you expect your company’s headcount to change over the next three months? (n=2,555)

© 2011 Reply! Inc.

8 PROPRIETARY AND CONFIDENTIAL

Merchant Confidence Index Calculation

Question Average

Response

Score (on 1-5

Likert scale)

Normalized

Score (on a

100-point

scale)

Change vs.

Q1 2011

Score

How would you rate today’s

economy compared to twelve

months ago?

2.56

12.8 -7.9%

How do you expect your sales

revenues to change over the

next three months?

3.30 16.5 +0.6%

How do you expect your

marketing/advertising

expenditures to change over

the next three months?

2.97 14.9 -0.2%

How do you expect your

company’s headcount to

change over the next three

months?

3.05 15.3 +0.3%

Merchant Confidence Index Score 59.4 -6.0%

© 2011 Reply! Inc.

9 PROPRIETARY AND CONFIDENTIAL

Marketing budget

What is your annual ad/marketing budget? (n=2,096)

© 2011 Reply! Inc.

10 PROPRIETARY AND CONFIDENTIAL

Adoption of specific online marketing services

Percent answering yes to the following question: “Are you promoting your business with the following websites/services?” (n=2,096)

© 2011 Reply! Inc.

11 PROPRIETARY AND CONFIDENTIAL

Marketing channel preference

If you had to put all your marketing time and budget into only one channel, what would it be? (n=2,096)

© 2011 Reply! Inc.

12 PROPRIETARY AND CONFIDENTIAL

Interest in purchasing leads in key business categories

Would you be willing to pay a per-lead fee for qualified customer prospect information? (n=488)

© 2011 Reply! Inc.

13 PROPRIETARY AND CONFIDENTIAL

Adoption and repeat usage of Facebook Ads

Have you used Facebook ads? (n=2,093)

Would you used Facebook ads again? (n=496)

© 2011 Reply! Inc.

14 PROPRIETARY AND CONFIDENTIAL

Perception of Facebook Ads amongst users

Why would you use Facebook ads again? (n=303)

Why wouldn’t you use Facebook ads again? (n=181)

© 2011 Reply! Inc.

15 PROPRIETARY AND CONFIDENTIAL

Adoption and repeat usage of daily deals sites

Have you offered a daily deal with a group buying site? (n=2,071)

Would you offer a daily deal with a group buying site again? (n=241)

© 2011 Reply! Inc.

16 PROPRIETARY AND CONFIDENTIAL

Perception of daily deals sites amongst users

Why would you offer a daily deal again? (n=181)

Why wouldn’t you offer a daily deal again? (n=59)

© 2011 Reply! Inc.

17 PROPRIETARY AND CONFIDENTIAL

Current and future group deals adoption

Which group deals services have you used in the past? (n=233)

Which group deals service do you plan to use in the future? (n=304)

© 2011 Reply! Inc.

18 PROPRIETARY AND CONFIDENTIAL

Group deals adoption criteria

What criteria matter most to you when choosing a group buying service? (n=314)

© 2011 Reply! Inc.

19 PROPRIETARY AND CONFIDENTIAL

Mobile marketing

Describe your mobile marketing efforts today. (n=1,854)

© 2011 Reply! Inc.

20 PROPRIETARY AND CONFIDENTIAL

Smartphone adoption amongst local business owners

Which of the following devices do you use for your business? (n=1,971)

© 2011 Reply! Inc.

21 PROPRIETARY AND CONFIDENTIAL

Tablet adoption

Do you use a tablet device for your business (e.g., iPad)? (n=1,988)

© 2011 Reply! Inc.

22 PROPRIETARY AND CONFIDENTIAL

Respondent Profiles

© 2011 Reply! Inc.

23 PROPRIETARY AND CONFIDENTIAL

Size of business

How many people does your business employ? (n=1,952)

© 2011 Reply! Inc.

24 PROPRIETARY AND CONFIDENTIAL

Business categories

Which single business category best describes your business? (n=1,952)

© 2011 Reply! Inc.