1. 1 Introduction to the Cross Media Optimization Study Robert Acquaotta Director, Advertiser Relations

2. 2 Landmark study methodology assesses “Cost Effectiveness” of each Medium Scientifically evaluates real world, in-market campaigns Marketers carefully considered methodology Largest Cross Media Study Ever Conducted

3. 3 Introducing the Participants IAB: IAB: The organizing Association Marketing Evolution/Rex Briggs: Marketing Evolution/Rex Briggs: Developed landmark study methodology and executed the studies Dynamic Logic: Dynamic Logic: Applied AdIndex ® product to collect consumer views and behavior ARF (Advertising Research Foundation): ARF (Advertising Research Foundation): Reviewed the study methodology Forrester Research: Forrester Research: Full analysis & review

4. 4 State of The Union : Interactive Medium

5. 5 Which trend matters to marketers? Percent of time spent Online by Users 16% 14% 12% 10% 8% 6% 4% 2%

6. 6 Online Delivers the Audience Source: Harris Interactive, April 2002 Fully Two Thirds of the Adult U.S. Population is Now Online 137 Million Consumers Online Source: Harris Interactive, April 2002

7. 7 …And their Usage Doubles Over Time Source: eMarketer; UCLA Center for Communications Policy, November, 2001

8. 8 In Fact, Essential to Consumer’s Lives When was the last time you: Source: Jupiter, eMarketer, Forrester, NetRatings 40% Not Decided 42% Travel Info/Mo. 21% Map Info 92% News At Work 30% “Competitive” Research 15% “Making New Friends” 26% Check Quotes

9. 9 The Media Landscape Has Changed Source: NAB (1965-1986); Nielsen (2000) Percent of adult evening viewers who can name a brand advertised watched Make bars in same colors

10. 10 Perhaps you have questions about the Effectiveness of Online advertising…

11. 11 1,000+ Ads Tested – Online Advertising Works! Mean Changes for Four Measures of Effectiveness Source: Dynamic Logic MarketNorms – Database of 400 campaigns *All measures statistically significant at 99%; n=campaigns; between 375 and 416 +3.7 +5.9 +2.0 +2.1

12. 12 The New Marketing Question Why No longer talking about Why Online How How to integrate Specifically, how to integrate to maximize: Brand Awareness Brand Image Purchase Intent & Sales

13. 13 Key Findings from XMOS The major findings of the Study to date

14. 14 The Key Finding of the Study Same budget Better results

15. 15 Why does Increasing Online produce better results within the same budget? Online advertising affects branding metrics Online advertising is typically more cost efficient at producing branding gains Online reaches those who would otherwise not get the advertising message CoverageEffectivenessValue

16. 16 Coverage Media potholes Coverage

17. 17 Coverage Heavier TV Not Reached By TV 25% 75%

18. 18 Frequency Does Not Fall Evenly HEAVIESTLIGHTEST Avg. Freq by Quintile Frequency considered wasteful Frequency considered not helpful 15%

19. 19 Coverage Heavier TV Not Reached By TV 25% QVQIVQIIIQIIQI Frequency1.02.44.37.616.4 60% 40%

20. 20 Coverage Media potholes!

21. 21 Effectiveness and Value

22. 22 Effectiveness and value *OTS = Opportunity to see advertisement based on GRP levels % Purchase intent 0 10 20 30 40 50 60 70 80 90 100 012345678910 Frequency: Number of OTS* ad exposures Diminishing returns

23. 23 Branding effect Marketing spend Television Internet Effectiveness and value

24. 24 CoverageEffectivenessValue Brand Awareness Brand Image Purchase preference

25. 25 Growing Brand Awareness The major findings of the Study to date

26. 26 Growing Brand Awareness Increasing Online is more cost effective way to build brand awareness

27. 27 Product Awareness Aided awareness: Grilled chicken flatbread sandwich *4 day moving average (for greater sample size stability) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 6/36/56/76/96/116/136/156/176/19 Broadcast Only

28. 28 Online builds brand awareness That’s a 3pt incremental branding gain for same budget 10.0% 20.0% 30.0% 40.0% 50.0%60.0%0.0% *Online advertising: 60% reach/2.0 frequency TV TRPs trimmed by approximately 20%13.6% Of budget Point of diminishing returns

29. 29 Optimizing for Brand Building Recommendation Internet Reach 60% or 6 Million More Consumers Aware of the Product! The Affect = Awareness

30. 30 CoverageEffectivenessValue

31. 31 Positioning the Brand Brand Image The major findings of the Study to date

32. 32 Building Brand Image For McDonald’s Flatbread Sandwich… “New”, “Different” and “Combination of great flavors” For Dove Nutrium Bar… “Nourishes your skin” and “is a for people like me” For Colgate “Long lasting protection” and “complete protection” For Kleenex soft pack “Convenient” and “innovative design”

33. 33 Cross-media synergy Creative reinforced the core message across media

34. 34 “Surround Sound Marketing” “Just as each speaker accomplishes the same goal by exploiting its unique position and strength, each element of the marketing mix must find its strength and leverage it to surround the consumer with a synergistic and consistent message.”

35. 35 What about the 40% of your target that are not reached by TV?

36. 36 The Kleenex® TV campaign

37. 37 Campaign over 8 weeks Heavier TV Lighter TV Not Reached By TV 40% 60% 25% Heavier Online Lighter Online Not Reached By Online

38. 38

39. 39 Summary of branding gains among lightly reached / not reached TV audience Positive Brand association (top box average) No Mag or Online Online (no mag) Magazine (no online) Magazine and Online

40. 40 CoverageEffectivenessValue

41. 41 Purchase Intent & Sales The major findings of the Study to date

42. 42 Results in a 14% increase in purchase intent Same Budget, Better Results Results in a 14% increase in purchase intent Same Budget, Better Results Optimizing Online

43. 43 Effectiveness and Value Purchase intent (top 2 box) 8.7% 11.5% 14.2% 0%5%10%15%20% Pre-campaign Offline Only Online + Offline ( freq & 3.1)

44. 44 Value Value Cost per person affected by advertising 0 100 020406080 Pre-campaign 100120 65 Offline Only Online + Offline

45. 45 All Media Demonstrate Diminishing Returns Number of advertising exposures Average of Branding Metrics (%) Magazine Online Television

46. 46 Optimizing the Dove Plan for Brand Building 2.0 impressions (down from 2.6) Print 5.5 impressions (down from 6.0) TV 3.1 Impressions (up from 1.7) Internet TV Print 85% 50% 10% 10% in Original Plan Reach Frequency Internet 60%

47. 47 Colgate Total Toothpaste

48. 48 Online ads increase purchase intent Effectiveness Index of Improvement in Purchase Intent

49. 49 Online is More Cost Effective than Other Media Effective TV and Print CPMs are compared and indexed to this number. OnlineTVMagazine (100) (123)(184) Purchase Intent Cost of Change by Other Media Indexed to Online

50. 50 Overall, Online is the most cost efficient media Cost per impact Media Combinations Online onlyMost cost efficient Magazine & Online All media combined Broadcast Only Magazine OnlyLeast cost efficient Point gain over baseline is calculated by measuring the post branding level and subtracting the pre- campaign level (linear regression used to measure underlying trend). Costs per person impacted indexed against online advertising only and rank ordered.

51. 51 Recap: Topline Brand Results Base % Online: Reco % Online: Results And more to come… 2%2% 15% +14% 1%1% 13% +8% 7%7% 11% +20% +34% 2%2% 10% +7% Purchase Intent Brand Image Awareness

52. 52 CoverageEffectivenessValue

53. 53 Key Takeaways Same budget Better results

54. 54 Thank You