2. Some Not So Secret Secrets of eMarketing The Power of eMarketing eMarketing Association September 5 th, 2002

3. Not So Secret Secrets: 1. The Internet Opportunity (Still) Remains Huge 2. Consumer Media Habits Are Changing (Duh!) 3. Broadband is Here… Now… Today 4. The Ultimate Marketing Machine 5. Great (Creative) Ideas Win

4. Not So Secret Secrets: -- In spite of the stock market -- In spite of the ad slump -- In spite of the economic slowdown -- In spite of Worldcom, Enron, Adelphi, etc. -- In spite of what the pundits have to say The Internet Opportunity Remains Huge

5. A Large and Growing Community…Worldwide Source: IDC, February 2002

6. Users Are Spending More Time Average Time Spent – Home/Work Users Source: Comscore Media Metrix 3 hours 5 mins

7. And Spending More Money Source: Mediamark Research Inc, Fall 2000 and 2001 studies

8. In More Places Top Category Choices January 2000 News/Info/Entertainment: 59M users Automotive: 5M users Travel: 22M users Shopping: 51M users Search Engine: 56M Top Category Choices February 2002 News/Info/Entertainment: 93M users Automotive: 29M users Travel: 49M users Shopping: 87M users Search Engine: 90M Source: Media Metrix, January 2000 & February 2002 – My Metrix

9. The Internet Has Become An Essential Part Of People’s Lives Source: Nielsen Netratings, IMS Services, February 2002

10. And It’s Only Just Begun…Globally Source: IDC, February 2002 (ICMM v8.1)

11. Not So Secret Secrets: 1.The Internet Opportunity (Still) Remains Huge 2. Consumers Media Habits are Changing.

12. Online Advertising’s Growth Follows History -50% 0% 50% 100% 150% 200% 250% Years since medium’s inception 123456789 2001: Dot-com demise coupled with overall advertising growth of -2% 1999: Peak of the dot-com bubble Internet Television Cable 240% 195% 122% 112% 94% 81% 141% 37% 56% 66% 34% 62% -19% 33% 35% 6% 28% 19% 13% 18% 13% 5% 24% 13% 8% 28% Internet Cable Television Source: Universal McCann, IAB, and Forrester Research, Inc. Annual percentage growth in advertising

13. More Time Online Than Magazines & Newspapers Combined % Weekly Media Minutes 12-64 Source: SRI, Media Mentor – Fall 2001 Usage Measured between 6:00AM and Midnight

14. Internet = 12% of Media Consumption and 3% of Ad Expenditures Media Vehicle Total # of U.S. Media Consumers (Fall 2001) % share of Media Minutes 2001 % Ad Expenditures By Media Television *TV Total with Cable* 195M49%50% Print (Magazines+ Newspapers) 188M8%42% Outdoor 199MNA2% Radio 169M31%3% Internet 122M12%3% Total U.S. Adults 18+ 203 Million 100% Source: U.S. Adults 18+; Mediamark Research Inc. Fall 2001; Internet – Comscore/MM Ad Spending Source: CMR – Ad Spender, 2000 * 2001; U.S. only

15. Today… More People Are Using Online Travel Than Their Daily Newspaper Spring 2002 Online Travel Spring 2002 Newspaper Travel Section Spring 2000 Online Travel Section Spring 2000 Newspaper Travel Section Source: Daily Newspaper Section Readership/Travel Section – MRI Spring 2000-2002, Adults 18+; Online – Comscore Media Metrix ~ 2000 & 2002 July data sets, U.S. online Users 2+

16. Same Is True for Classified Source: Daily Newspaper Classifieds Section Readership – MRI Spring 2000-2002 Adults 18+ Online – Comscore Media Metrix ~ 2000 & 2002 July data sets, Online Classifieds include: Classifieds, Careers, Personals, and Real Estate Categories Only – U.S. Online Audience 2+ Spring 2002 – Newspapers Classifieds Section Read Spring 2002 Online Classifieds Spring 2000 Online Classifieds Spring 2000 – Newspapers Classifieds Section Read

17. If Your Target Is Teens & Young Adults… The Internet Can’t Be Ignored Age GroupTotal Time Spent with Media InternetMagazinesNewspapers Age 12-64 (Total Audience) 60.9HRS7.2HRS1.9HRS2.87HRS Age 12-17 57.82HRS8.55HRS2.65HRS2.41HRS Age 12-24 60.13HRS8.37HRS2.31HRS2.16HRS Age 12-34 62.09HRS8.21HRS1.99HRS2.22HRS Source: SRI, Fall 2001, Average Hours Spent with Media within an average week U.S. 12+ audience average time spent per week

18. What’s Wrong With This Picture? -- Nike target audience reading magazines: 29MM -- Nike advertising in magazines (2001): $81 MM Source: CMR; Nielsen -- Nike target audience online: 23MM -- Nike Online ad budget: $4 MM

19. The Value of Adding the Internet to the Magazine Plan MAGAZINE only Media Plan Reach: 76.8% GRPs: 845 Total Cost (Magazine Only): $5.2M MAGAZINE+INTERNET Media Plan Reach: 83.1% GRPs: 936 Magazine Cost: $3.5M Internet Cost: $1.7M Demo: Age 12-24 Budget: $5.2M Budget per Week: $400K Time: 13 Weeks + Total: $5.2M

20. What About TV? Reach Light TV Viewers with the Internet TV Only Media Plan Reach of Target Audience: 51.2% Total 13 weeks GRP: 962 Weekly GRPs: 74 TV & Internet Media Plan Reach of Target Audience: 75.5% Total 13 weeks GRP: 1612 Weekly GRPs: 124 Demo : Age 18-49 & Light TV Viewers Cost : $300K per Week, Total: $3.9M Running Time : 13 weeks TV: $15 CPM; Internet: $8 CPM Source: SRI, Fall 2001 – Media Mentor

21. Here’s Something to Think About…

22. Workplace Daytime: The New Prime Time Source: Nielsen Netratings, IMS Services, February 2002

23. The Office Daypart: A Significant Opportunity TIMEMODEFAVORED MEDIA 6 am 7 8 9 10 11 12 pm 1 2 3 4 5 6 7 8 9 10 At Home AM Commute Workplace PM Commute At Home Newspaper, TV, Radio Radio, Outdoor Online Radio, Outdoor TV, Magazines Online

24. Not So Secret Secrets: 1. The Internet Opportunity (Still) Remains Huge 2. Consumer Media Habits Are Changing. (Duh!) 3. Broadband is Here… Now… Today

25. Setting “High”Speed Expectations - Broadband’s Boom Began In 2001 - 10 20 30 40 50 Cable DSL Fixed wireless Satellite Fiber 200520042003200220012000 Broadband households (millions) Cable DSL Fixed wireless Satellite Fiber Total (millions) 3.747.7611.4215.8119.4322.42 1.252.96 6.6110.0714.0617.75 0.020.250.661.252.224.20 0.00 0.190.551.111.87 0.00 0.010.060.190.47 5.0010.9718.8927.7337.0146.72 (numbers may not total due to rounding) 0 Source: Forrester Research, November 2001

26. The March To Broadband Source: Nielsen//NetRatings, May 2002, (@Home) - Over 20% of Active Users now on Broadband - 1 in 10 Households using Broadband - Half (!) of ALL time online is via Broadband

27. Broadband Cumulative Hours Outgrown Total Narrowband Hours Sep-00 Nov-00 Jan-01 Mar-01 May-01 Jul-01 Sep-01 Nov-01 Jan-02 0. 200. 400. 600. 800. 1,000. 1,200. Total Time (Million Hours) Month Cumulative Hours Online Broadband Narrowband US Home and Work users Source: Nielsen Netratings, Historical Data Points

28. Broadband Users Do More of Everything Online 39% 84% 68% 48% 45% 31% 27% 26% 23% 22% 19% 17% 16% 94% 69% 65% 52% 84% 42% 58% 50% 42% 35% 30% 31% 25% 35% 51% 33% 35% 27% 39% 33% Online user Broadband user Use online chat Request tech support Visit weather sites Read magazines Read newspapers Download MP3 Visit TV network sites View stock prices Other Use reference sites Make purchases Send SMS Use free email Download software Company/brand sites Research vacations Research products Randomly surf Use search engines Send/receive email 15%30%45%60%75%90%0 Broadband user Online user Source: Forrester Research, November 2001

29. Broadband Creates Stickiness, Loyalty and Media Consumption Growth Source: Nielsen//NetRatings, July 2002, US Home users

30. Not So Secret Secrets: 1. The Internet Opportunity (Still) Remains Huge 2. Consumer Media Habits Are Changing. (Duh!) 3. Broadband is Here… Now… Today 4. The Internet is The Ultimate Marketing Machine

31. Only The Internet Combines Direct Marketing Targeting With Mass Media Reach Direct Marketing Advertising Commerce Data, Research and Consumer Insights Promotions

32. The Power Of The Internet: Need Based Solutions Integrated with offline marketing, the Internet can uniquely fulfill the six most common, yet essential, marketing needs.

33. What Are Your Needs? Awareness? New product introduction? Event marketing? Re-positioning? Co-branding / partner association? Brand preference?

34. What Are Your Needs? Coupons? Sweepstakes? E-mail collection? Off-line?

35. What Are Your Needs? Buyer? Trial taker? Visitors? Registrants? Qualified leads? Conversions

36. What Are Your Needs? Increase spend? Referral? Reduce churn? Win back? Crisis management? High frequency personalization?

37. What Are Your Needs? Analyze & optimize media plans CRM infrastructure / applications Online fulfillment, replacement, and cost reduction Shorten “to market” cycle Creative and offer pre-testing

38. What Are Your Needs? - Customer profiling & insights - Find best prospects - Multiple media comparison - I.D./ maximize event triggers - Predict events

39. Some Mini Cases Ford Explorer Intro Ford Explorer Intro Sale in Biggest Sale in Internet History Pepsistuff.com

40. Branding: Ford Explorer Customer Identification: Potential SUV purchasers, generally families with children Business Drivers: “ Explosive” 24 hour front page event to reach maximum number of prospects, plus offline TV and outdoor billboards Measurement and Assessment Track activity on Ford Explorer site, identify potential prospects, measure brand awareness

42. Results: Ford Explorer -- 300K leads to Ford after 24 hour event -- Exceptionally strong PR in consumer and print vehicles -- Extraordinary response from dealer network

43. Sales Promotion: The Biggest Sale In Internet History Customer Identification: -- Users and potential users of Yahoo! who have either shopped online or are on the fence -- Yahoo! Shopping partners Business Drivers: Heavy online and offline promotion to drive sales during slow retail period Measurement & Assessment: Merchant participation and sales results

44. Retail, travel, and auction partners participated Logos free, based on editorial and brand. Paid Premium placements All Yahoo! Stores list their offers. What it Looked Like Online

45. Offline Marketing & PR Radio in 10 Markets High online buyer penetration Heavy-up in AM/PM drive Print - 4 color, full page ad - USA Today & SF Chronicle Buzz - telephone poles in key cities PR - 66 placements (broadcast & print) - More than 88mm impressions

46. Results: Over 1,000 partners 70% average lift in sales. oSome lifts as high as 1500%, with daily sales at holiday season levels.

47. Optimization: Pepsistuff Customer Identification: Younger (13 –34) soda drinkers Business Drivers: Totally integrated online and offline loyalty program using multiple ad units on Yahoo!, chat, auctions, e-mail, TV, in store and radio Measurement and Assessment: Store sales volume vs. prior year, Brand strength, registrations, ROI vs. offline, PR,

51. Banner Advertising on Yahoo!

52. POS Materials

53. Pepsistuff.com Results -- 5% increase in sales vs. year ago -- 3.5 million registrations -- 60% of registrants gave permission for future e- mail correspondence -- 80% more cost effective than offline promotion -- Significant increase in Pepsi monitored “Brand strength” survey -- New Pepsistuff.com coming

54. Not So Secret Secrets: 1. The Internet Opportunity (Still) Remains Huge 2. Consumer Media Habits Are Changing. (Duh!) 3. Broadband is Here… Now… Today 4. The Ultimate Marketing Machine 5. Great (Creative) Ideas Win

56. But…Be Careful What You Ask For… You Might Get It. Fake Windows, Deceptive

57. But…Be Careful What You Ask For… You Might Get It. Irritating, Too Much Blinking

58. OK… So What’s The Takeaway? Like offline, smart marketers will win Seize the opportunity as the Internet gets bigger and better Media plans can be more effective and efficient by integrating the Internet with offline The Internet is unsurpassed at identifying and solving customers needs Push the envelope creatively. It works