QUARTERLY BENCHMARK REPORT

Q3
CAPITAL MARKETS ENGAGEMENT IN CONTXT
Q3 - 2018
 A LETTER FROM OUR CEO
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

At Street Contxt, we spend a lot of time thinking about the future of distribution, client
coverage, and knowledge management in Capital Markets. We’re thinking about the
evolution of email, and what the future of the industry’s largest communication
network looks like. We’ve become a trusted advisor to Brokerages, Funds, and IRP’s
around the world (we have customers in 19 countries and counting). As such, we’re
seeing global challenges and structural strains emerge, and helping our clients
navigate them, and plan for the future.

This report dives deep into the emerging trends we’re seeing, but we wanted to provide
a brief overview of them here.

The Sell Side is publishing more content then ever.

Whether you’re a brokerage or IRP, you can assume that your competitors are
publishing more content than ever before. As firms start to appreciate the scalability of
email, they are leaning on the gas, which is having several consequences. It highlights
the importance of thinking deeply about your content strategy: what you’re sending,
when you’re sending it, and who you’re sending it to. We’re seeing this:

Preview rates are rising: clients are spending more time skimming, and less time
reading as they navigate a busier and busier inbox

Senders are squeezing more into one email: the average number of links per email
is steadily rising, and individuals try to squeeze more content into a single email
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with the hopes of hitting a relevant chord

The Buy Side is overwhelmed: it’s not unusual for us to hear from PM’s who receive
over 3,000 emails a day. They are desperately trying to better manage and tailor
what hits their inbox, and manage their subscriptions effectively. We’re actually
seeing a rise in PM’s using fax machines as a reliable, and non-flooded, channel.
 A LETTER FROM OUR CEO
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Prospecting is evolving.
Brokerages and IRP’s are getting much more targeted in how they prospect, by
enhancing their outbound process, and adopting new inbound processes.

Outbound prospecting should be more intelligent: don’t just blast emails into the
ether – you need to leverage data and engagement trends to drive actionable
conversations with new prospects. Don’t call them every single morning just
because you’re trying to build the relationship – wait until you put out something
relevant and interesting, then take advantage of the opportunity to start a
conversation. The days of downloading a mailing list and blasting out emails into
the ether is over.

Inbound prospecting is very new to the industry, but we’re excited to see (and
help) it flourish. Inbound differs from outbound in that with inbound prospecting,
qualified and verified leads are delivered to the firm on an ongoing basis based on
a set of criteria (vs. Outbound, which is traditional prospecting where the firm
reaches out to the potential client). We’re continually excited about how
Exchange, our latest product, is evolving into an inbound prospecting platform for
the sell side, and a global content trial/sample for the buy side. We’re delivering
leads to contributors all over the world, and already have 110 Brokerages and
IRP’s contributing.

Every firm – no matter how large or small – should be thinking deeply about what
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their ongoing prospecting (or business development) strategy is, how it’s success
will be measured, and what technology will support it.
 A LETTER FROM OUR CEO
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Old truths are being disproved.

We love to challenge age-old wisdom, and back up our arguments with data. One of
the recent areas we’ve been spending time on with our clients is the idea that you don’t
have to be out before the open. Our clients have been using data to understand when
the best time to distribute content is, and it’s very, very rarely between 7:00am –
9:30am local time. Everyone is trying to push out their content then, so while you may
want to have something light go out, don’t try to jam everything out the door just
because that’s the way you’ve been doing it for twenty plus years. Firms need to use
data to make smart decisions.

Client coverage, distribution, and knowledge management continue to evolve. Having a

global platform, we have a first-hand view at how these trends are evolving, and
continually work with our clients to plan and prepare for the future. We’re excited
about the future, and excited to work with our clients to build the structures,
applications, and approaches of the future.

We’re excited about the future, and excited to work with our clients to build the
structures, applications, and approaches to meet the needs of tomorrow.
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Blair Livingston
Founder & CEO, Street Contxt
 01 — INTRODUCTION
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Report Methodology

Each quarter, Street Contxt leverages anonymized pattern data from over
60,000,000 total email interactions to create this Quarterly Benchmark Report.

We hope that this quarterly report serves as a guide to understanding how your
firm should be adapting their strategy and structure to fit the always-changing
industry landscape.

This report aims to help you answer common questions like:

What does engagement look like over the summer and should I do
anything differently?

As a salesperson, when should I be engaging with my clients?

What is the best way to use email to engage with my clients?

How much time is spent reading my content?

How should I structure my morning note, or other content?

Should I use links to engage my audience?

How often should I send?

How quickly does my content reach my audience?

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What are some false positives that traditional engagement tools generate? How
do you account for them?

Not sure how to leverage technology in your client facing strategy?

Have questions about industry trends, tools, or best practices?
Reach out your Account Executive, or email us at sales@streetcontxt.com to learn more.
 01 — INTRODUCTION
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Street Contxt manages the distribution of over 16,000,000 emails through our flagship
Edge product every quarter. From those emails, we measure over 8,000,000 unique
interactions, including opens, clicks, and forwards.

We are trusted by firms all over the world to deliver content and collect insights. In Q3
of this year our system has delivered content to a total of just under 400,000 unique
contacts residing in 161 different countries.

Total interactions
60,000,000+ measured

Contacts, in 161 countries,

400,000+ receving content

Distinct firm domains

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58,000+ receiving content

 02 — ENGAGEMENT BENCHMARKS
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Understanding how your engagement

compares with global averages, and what the
evolving trends look like.

20.57% 7.76%
20.37%
5.92%

Q3 - 2017 Q3 - 2018 Q3 - 2017 Q3 - 2018

Open Rates Click Rates

We saw the expected seasonal lows in engagement for Q3 of this year. As vacations
and family time ramps up, the street can get a little bit quieter.

Seasonally, Q3 2018 came in just under last year in opens and clicks. Additionally, we
believe that as more people are travelling over the summer, they tend to read more
content on their mobile device. Our research shows that click rates on mobile devices
tend to be much lower, approaching 0%. It’s important to understand whether your
clients are reading via a mobile device, and if so, structure your content and
communications to be as easily accessible via mobile as possible (tip: short subjects,
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less links, less content).

In times of the year when engagement dips, tracking where your content is receiving
opens and clicks with Street Contxt Edge can help identify higher leverage
opportunities to follow-up with your clients.
 03 — CONTENT PREVIEWS
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

How deep into your content do clients go?

Q2 63% Q2 62%
Q3 58.24% Q3 58.59%

Reads on Desktop Reads on Mobile

In addition to the drop in clicks and opens in Q3, we also saw behavioural patterns
change, as people spent less time reading, and more time skimming content. Both
desktop and mobile reads dropped from Q2 of this year in favour of previews.

The overall preview percentage was considerably higher

than Q3 of 2017 as well, highlighting a year over year increase.
23.86%
Q3 - 2017
As a refresher, a “preview” as we define it means a reader Overall Preview
engaged with email content for less than 16 seconds. Percentage

With these changes, you need to think more about how to capture a reader’s attention
at the top of an email. There are lots of tactics to do this: top links, bullet summaries,
or other valuable content, but you need to test and find what works best for you. We
feel it is fundamentally getting harder to compete for attention, especially in a mobile
world, which means you need to catch the reader's attention in the first 16 seconds, or
risk losing them to the next email.
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As attention spans drop, it becomes even more important to understand engagement

and what content is getting attention in spite of the seasonal trends.
 04 — LINK CLICKS
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

How should I structure my content?

What is the impact of including links?
How many should I include?
We have seen an interesting trend as our clients have begun adding more links into
their emails in order to decipher content engagement, and leverage any and all client
opportunities to get in front of their clients.

Link clicks are a strong indicator of interest and usually tied to a specific topic, stock,
or piece of research. Appreciating which links are receiving attention allows you to
follow up with additional services, and really engage your clients.

Average Links per Email

13

12

11

10

9
Q3 - 2017 Q4 - 2017 Q1 - 2018 Q2 - 2018 Q3 - 2018

We see that subtly reflected in the small increase in the average number of links in
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each email over the last year. We’re also encouraging our users to include more
links, but also prioritize them (by doing things such as including “top links” or “most
read links”). The email ends up acting as more of a table of contents, making it
easier to navigate (no one wants to read an essay) but also serves as a jumping off
point for further reading.
 04 — LINK CLICKS
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

In the previous quarters, only a small number of links in our system have received the
majority of clients clicking on them. As shown in the chart below, we saw an increase
in the diversity of links receiving client attention.

Percentage of Links Driving Clicks Q1 Q2 Q3

100%

80%
% of clicks

60%

40%

20%
5% 10% 15% 20% 25%

% of total links

We believe this may be partly driven by more intelligent content structuring.

We’ve been working closely with our clients to help them optimize their content
for engagement, and refine their structure. We believe this is one of the fruits of
that early investment.

Because link clicks are such a great indicator of interest in a specific name or
topic for a client, we hope to see this trend continue in Q4.
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 05 — READERSHIP VELOCITY
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

How long does it take for clients to read

my commentary?

40 minutes
Q1
230 minutes
Time required to
reach audience 30 minutes
Q2
50% Readership 290 minutes
80% Readership

30 minutes
Q3
290 minutes

Readership velocity represents the time it takes for a certain percentage of the
eventual readers of your commentary to read it. As an example, if 100 of 1,000
subscribers will eventually read a piece of content (giving you a 10%) open rate,
how long does it take for the first 50 of those 100 to read your content?

We break this out into two buckets: how long it takes to reach 50% of that final
readership (50 of the 100, in the example above), and how long it takes to reach
80% of that final readership (80 of the 100 in the example above).
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This highlights, yet another trend we’ve seen continue into Q3, which is an
increasing gap between how little time it takes some readers to get to content, and
how long it takes others.

While we’ve seen a slight decrease in the number of minutes it takes the average
 05 — READERSHIP VELOCITY
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

email to reach 50% of its readers, the amount of time it takes to reach 80% of the
audience has been increasing.

What does this mean?

It means that if you miss your clients in the first pass (i.e. they don’t get to it in the first
30 minutes or so), then it will take them much longer to get back to it. This highlights
the importance of following up on important content, and realizing that getting out an
email isn’t enough - if it’s missed, it could take a long time for the reader to loop back
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 06 — HAVING RELIABLE DATA
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

How accurate are the analytics you rely on?

As the saying goes, garbage in, garbage out. We continue to make improvements to
the core analytics that power our platform, but have noticed ever increasing sources
of false positives. One of the biggest drivers of those false positives is anti-virus and
anti-spam systems being used in large email infrastructures.

These systems have the task of constantly looking for viruses - which means they
are constantly opening every email, clicking every link, and sometimes doing so
multiple times.

22,900 791,316
Domains using anti-virus False positive interactions
at least once in Q3 due to anti-virus in Q3

In Q3 we saw a consistent number of contacts still using anti-virus systems. Often

mandated by larger corporate environments, anti-virus software can really throw a
wrench in engagement tracking (and as we’ve highlighted, is a major issue for
consumption measurement systems like those used in MiFID II reporting).

Based on our research, we are the only platform in Capital Markets that actively
detects and removes false positives from engagement analytics. We have not met a
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single firm who has built a solution internally, or leveraged a system externally (other
than) us to solve this problem.

The majority of email tracking applications do not factor in anti-virus activity, sweeping
it under the rug by including these incorrect numbers in their engagement data - which
will only become an increasing problem over time.
 06 — HAVING RELIABLE DATA
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

How does Street Contxt Edge manage these false positives?

We have the largest distribution scope and scale in capital markets, allowing
us to flag false positives such as anti-virus activity and separate it from
authentic user interactions.

Authentic Events

Incoming events Anti-virus Events

Event Filter
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 07 — SUMMARY
Q3 - 2018 - QUARTERLY BENCHMARK REPORT

Key takeaways
Q3 saw a seasonal reduction in clicks and opens. How did your team do against
seasonal averages?

More individuals are previewing content instead of spending the time to

carefully read your content. Is your firm fighting or working with this trend?

Links are continuing to play an important role in engaging and segmenting your
audience. How does your firm track and manage link clicks?

The divide between those that open your email immediately and those that wait
is getting bigger. How much of your audience do you engage within the first
hour after sending?

False positives, such as anti-virus engagement, continues to threaten the

accuracy of your data. Street Contxt can leverage the largest anti-virus data
set to get better quality data. How are you managing false positives?
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If you’d like to learn more about how Street Contxt Edge can help you measure your
team’s engagement, get in touch with us at sales@streetcontxt.com
ABOUT THE FIRM

Street Contxt is reinventing client coverage in capital markets. Street Contxt

enables sell side brokerages and independent research firms to efficiently and
profitably cover clients from every value segment.

Street Contxt Edge is the number one global high touch coverage solution for
sales, trading, and investment banking, used by over 100 firms in more than 19
countries. Street Contxt Edge helps your team increase the number of high-value
and well-timed client conversations to drive scale, efficiency, client value and
ultimately, revenue.

Specifically focused on the long tail of funds, Street Contxt Exchange allows
providers to monetize their written content with a pool of new prospects. As a
result, contributors can drive short term revenue and nurture new inbound
relationship opportunities.