Airing Out Opportunities with the CEO
Report #2 Recap
In Sophic Capital’s Clearing the Aires report, we discussed how the technology of our client American Aires Inc. (CSE:WiFi, OTCQB:AAIRF), (“Aires” or the “Company”) protects against electromagnetic (EMF) radiation and optimizes human health. In this report, we highlight how CEO Josh Bruni, who brings 25 years of proven success in building international brands and supercharging revenue growth through predictable and scalable data-driven marketing and e-commerce models, has developed, and is successfully executing against a business model that leverages high-impact partnerships.
Growth Model
Key to American Aires’ growth model is CEO Josh Bruni bringing his 25 years of proven success in building international brands and methodically accelerating revenue. Mr. Bruni has built and led strategy for consumer brands across multi-billion-dollar categories, including fashion & apparel, footwear, health & wellness, food & beverage, and tech, including large brands such as Pacsun, NordicTrack, 7 For All Mankind, Reckitt Benckiser, Ancestry.com, and others. He lends his expertise for growing Aires Tech’s sales via a strategy that leverages partnerships, efficient data-driven marketing practices, and a strong operational framework.
Leveraging High-Impact Partnerships
Key to Mr. Bruni’s business model is leveraging high impact partnerships with athletes, celebrities, and leagues. While these types of partners have the benefit of built-in mass audiences and extensive reach, Mr. Bruni’s approach extends far beyond that through the combination of content + validation + conversation + amplification:
- The “content” factor involves creating and marketing co-branded content associated with the entities and individuals in question, building on the Company’s existing storylines of prioritizing health and high performance.
- The “validation” factor involves the instant trust and credibility the Aires brand receives from consumers as a result of being vetted and associated with well-known and loved partner brands.
- The “conversation” factor involves (a) the benefit of Aires having direct access to and engagement with top performers and world-class leagues, and (b) the resulting ability to share those engagements with fans and consumers to engage them in the ongoing Aires brand conversation.
- The “amplification” factor involves leveraging all of the above over the medium and long term to create advertising campaigns that are more effective and with greater reach, by building a recognizable brand and increasing consumer awareness very quickly and efficiently.
While the Company’s growth engine already regularly realizes $3 returned in sales for every $1 spent on advertising (3-to-1 Return on Ad Spend or $3-to-$1 ROAS), Mr. Bruni’s skillful use of these partnership-related factors is expected to result in significant advertising efficiency, where each incremental dollar spent on advertising would generate sales above the Company’s current $3-to-$1 ROAS metric as the Aires brand becomes more recognizable, more trusted, and more “household” like, driving more organic sales, rather than relying on heavy advertising expenses.
Examples of Leveraging High-Impact Partnerships
On May 30, 2024, the Company became an Official Partner of UFC®, the world’s premier mixed martial arts organization. Under the agreement, American Aires will receive prominent placement within all UFC monthly Pay Per Views broadcasts. This potentially provides the Company’s products with visibility before more than 700 million fans in 170 countries, as well as in an estimated 975 million households that receive UFC’s broadcasts. In addition to Pay Per View broadcasts, American Aires will also be integrated into the UFC Live Weigh-In Show, UFC’s studio show shot on location during the Official Weigh-Ins of Pay Per View events and live streamed on YouTube to a global audience of more than 18 million followers. The long term value for American Aires, in such partnerships, goes far beyond the initial sales lift. Being officially partnered with a world-class brand such as the UFC creates instant trust and validity through that association, which boosts consumers’ perception of the Aires Tech brand. These high engagement touchpoints also initially help create and enhance brand recall for American Aires in one segment – UFC viewers – which can then be further amplified via adjacent touchpoints, which enhances the brand’s footprint, potentially increasing the return from future partnerships and advertising campaigns.
Although the UFC’s audience and reach are extensive, the UFC’s main focus is getting that audience to watch its events. However, by creating co-branded content with the UFC and its high-profile athletes – such as Michael Chandler and Maycee Barber – and using their testimonials, American Aires can initiate marketing campaigns that make the Company itself and its products (rather than the UFC fights) the focus of the targeted audience attracted to the sport. Plus, the UFC has a Performance Institute where Aires Tech is already showcasing how its products improve athlete performance, recovery, and wellness. This validation from elite athletes, who have vast followings, and high trust amongst their followers, adds further credibility to Aires’ products and elevates the brand’s positioning in the health and technology space.
Similarly, American Aires announced a partnership with WWE®. The partnership aims to bolster the personal performance regimens of WWE Superstars and educate fans worldwide about safeguarding against potential health effects from EMF radiation. The agreement, effective as of June 11, 2024, and running through the end of 2025, will prominently feature across WWE properties, emphasizing extensive social media promotion. Fans can catch these integrations by following WWE’s platforms regularly, which broadcasts to more than 180 countries in 30 languages and can be seen in 1 billion television households worldwide each week.
American Aires also teamed with Canada Basketball to raise awareness of EMF radiation protection. The multi-year marketing partnership grants the Company exclusive logo usage, promotional rights, and activation opportunities, enabling the brand to co-promote products and amplify its presence and support across Canada’s basketball community.
Most recently, American Aires announced a racing first: a partnership with MBM Motorsports to protect a NASCAR Cup team from in-race EMF radiation. Driver Chad Finchum and the #66 Ford Mustang crew will showcase Aires Tech’s Lifetune products to protect them against the EMF emissions from their many complex in-race communication devices throughout the 267-lap race on October 27, 2024. Aires Tech will be featured in the car’s paint scheme, prominently displayed on the rear quarter panel. The brand will host a fan contest for a chance to win a VIP NASCAR experience that includes a meet-and-greet with driver Chad Finchum, a tour of his hauler and a seat atop the pit box to listen to team communications during the race.
Leveraging Partners’ Channels to Enhance Media Efficiency
American Aires invests in media every month to drive consumer sales. However, a critical part of their growth engine also involves the Company leveraging the far-reaching media channels of partners, such as the UFC and others. Access to these partner channels enables Aires Tech to scale their market exposure more efficiently, without proportionally increasing their advertising budget.
While each new partnership requires initial ramp-up time to devise an effective strategy, create content, build, test, and optimize advertising campaigns, before the full potential of the investment can be reached in terms of order volume and sales growth, the overall strategy is proven to enhance the Company’s media spend efficiency.
A Disciplined Organic Growth Model
American Aires operates with a disciplined growth framework, targeting Return on Ad Spend (ROAS) of $3 returned in sales for every $1 spent on advertising. This ROAS allows the Company to scale aggressively, and provides room for profitable growth once the platform achieves critical mass.
This uncapped growth potential is a cornerstone of the Company’s operational strategy, resulting in solid results since CEO Josh Bruni joined Aires in late 2021, boosting sales 128% YoY in 2022 and 79% in 2023 to over $10.4 million in order volume. Compounding this growth is Aires’ strategy of targeting repeat purchases (~20-25% of the Company’s current revenue is from repeat customers) and maximizing long-term value of each customer.
Execution and Agility
The Company has a bias towards action, allowing American Aires to adapt and adjust swiftly based on market conditions or internal feedback. For example, within hours of sealing its UFC partnership, American Aires started running co-branded advertisements during a UFC event, leading to traffic spiking on its website. Furthermore, about 80% of sales are US-based, giving Aires plenty of arbitrage opportunities to deploy ad budgets to other countries if cost/efficiencies are not available in a particular region. The Company has shipped to 93 countries, and many of the core markets today are English speaking. However, the UFC presents a large international opportunity since many of the UFC’s fastest growing regions are non-English.
Building a Loyal Customer Base
American Aires benefits from significant repeat purchases, even though its products are not consumable like a beverage. The vast majority of customers are satisfied and loyal (see 900+ customer testimonials here on Junip), often making subsequent purchases after their first orders. Part of this dynamic is the result of the Company being customer-centric, and working to optimize initial and subsequent purchases. This drives high lifetime customer value, with customers often buying low-cost introductory Lifetune One units and subsequently purchasing wearables such as Go and Flex, with eventual purchases of Zone and Zone Max units for office/living space protection. As additional products are introduced in 2025, this repeat customer purchasing behaviour pattern can potentially provide greater upside for Aires through their established connection and rapport with the Company’s large and loyal consumer base.
Tapping into External Factors
Cultural awareness of EMF radiation or new legislation can improve product sales. Media attention on American Aires’ technology often accelerates sales, which also reinforces the Company’s drive to find high-impact partnerships.
Community and Engagement
American Aires knows how to engage deeply with its customers and prospects. Its advertisements often generate thousands of comments and community interactions. This high level of engagement mirrors, for example, the UFC’s relationship with its fans and reinforces the Company’s focus on building a loyal and active customer base. While many of the Company’s partnerships are with athletes/leagues and are focused on peak performance, American Aires has also been actively diversifying to include mass-market opportunities targeting everyday people and regular households. Examples include CEO Josh Bruni’s Q2 2024 appearance on “Health Uncensored with Dr. Drew” that aired on FOX Business Network, and their upcoming Q1 2025 appearance on Military Makeover with Montel®, where the Aires team will incorporate Aires Tech products into the home of the episode’s featured family.
Coming Up…
In our next report, we’ll look at the revenue model for Sophic Capital client American Aires Inc. (CSE:WiFi, OTCQB:AAIRF).
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Disclosures
American Aires Inc. [CSE:WiFi, OTCQB:AAIRF] has contracted Sophic Capital for capital markets advisory and investor relations services.
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