1. Newspaper Creative Benchmark Report McCafe July 2011

2. It’s a component of the Newspaper Effectiveness Metric which is run by the newspaper industry marketing body, The Newspaper Works. A monthly study designed; To measure and identify the effectiveness of newspaper creative To help improve understanding of how to use newspapers effectively To improve the understanding of the roles newspaper advertising can play To improve the standard of newspaper creative To provide a consistent metric that is accepted as the industry standard McCafe was included in the July 2011 study

3. Pre/post effectiveness studies, measuring in-market effects and how newspaper work with Television Comparison of creative against category averages Comprehensive analysis of how newspapers can best be used to influence purchase behaviour The Newspaper Works’ effectiveness partner:

4. Recognised industry measures + Newspaper measures Proprietary newspaper measures The Newspaper Works’ effectiveness partner: Ad Recognition Brand Linkage Message Comprehension Brand Equity Impact Role Map Action Map Newspaper Creative Diagnostics

5. McCafe was one of nine ads tested in Sydney Sample: Australians 16+ Sample size: 111 Fieldwork: 20-26 th July 2011 Conducted online by Ipsos MediaCT Benchmarks used: All Newspaper Norm(see appendix for details)

6. Branded Newspaper Benchmarks

7. ‘Keeping Us Awake’ Market: Sydney Size: 28cm x 5 col Position: EGN Tested: July 2011 Ad benchmarked

8. Brand linkage and ad recognition can be affected by the timing of research and the weight of the campaign. While brand linkage was generally low, only one respondent named a competitive brand (Michel’s Patisserie) so misattribution is not the issue. Interest in the main messages of the ad was significantly high versus Newspaper Norms. +12 Newspaper Norm Significantly different to Newspaper Norm at 90% c.l. Caution: Brand Linkage respondents n=10

9. Newspaper Norm The Creative Diagnostics map has skewed more towards ‘negative’ responses however previous testing has proven that ads that are ‘cluttered’ and ‘have too much information’ can also be very successful if clear in their intention and the information is presented in a logical, organised manner. Significantly different to Newspaper Norm at 90% c.l.

10. What did the respondents say about the ad? It looks good and makes me think more positive about McDonalds and McCafe It seems to be more upmarket than previous ads and will attract more people It's long & tedious. I didn't finish reading it. The TV ad told me what it was all about It is plain, and does not look like a McDonalds ad - perhaps that is the point. Honest message Information heavy : both good and bad Left with positive feelings Good headline, interesting content but might have too much information, especially compared to other newspaper ads It's an honest and good ad. Usually a company would put an apology in the newspaper for causing a big offence or disaster but I guess some people do take their coffee very seriously! It is not really an ad but a public notice. If they are improving their coffee, that is great as there is a lot of competition out there.

11. Very high levels of message comprehension reflect a clear piece of communication. 66% were generally correct in their understanding of key messages with a further 21% mentioning coffee. The word cloud depicts the most commonly used words within verbatim comments

12. Despite the ad being seen as being information heavy and cluttered, it achieves significantly high scores against three key brand equity metrics, driving understanding, relevance and differentiation. Significantly different to Newspaper Norm at 90% c.l. +18+13+22 Newspaper Norm

13. This ad has achieved very good Role Map scores and performs significantly well at delivering Affinity, Information and very importantly for people who may be McCafe rejectors, Reappraisal Newspaper Norm Significantly different to Newspaper Norm at 90% c.l.

14. The most likely action taken by respondents off the back of exposure to this ad is to Buy/Try the product, demonstrating that the honest approach has worked very well for McCafe Newspaper Average Significantly different to Newspaper Average at 90% c.l.

15. Comparison with other advertisers

16. Market: Syd Size: Strip Position: EGN Tested: October 2009 Comparison with previous ads Market: Syd Size: DPS Position: EGN Tested: March 2010 Previously tested McDonalds adHigh performing repositioning campaign Appealing to consumers on credentials Market: Adelaide Size: FPC Position: Special Feature Tested: July 2009

17. Interesting to note that the McCafe ad has achieved generally better overall equity results than the Grand Angus ad, which was supported by a large print and TV presence +18+13+22 Newspaper Norm +18 Significantly different to Newspaper Norm at 90% c.l.

18. The Grand Angus ad achieved very high Role Map scores for 5 out of 6 Roles, delivering a very strong link back to the TV campaign. McCafe works effectively on its own as a newspaper ad. Comparison with a previous McDonald’s ad Newspaper Norm

19. The ‘Keeping Us Awake’ is comparable to the Kmart ‘Change’ ad in terms of delivering a significantly high overall performance versus Norms, with the McCafe ad also doing well on providing relevant Information. While the differences are small (4 % points), McCafe is now our #5 ad for delivering on Reappraisal (Kmart is #1) for all ads tested since 2008 Comparison with an overt repositioning campaign Newspaper Norm

20. Gloria Jeans highlighted their environmental credentials to successfully gain high levels of Affinity, Reappraisal and drive the Public Agenda. McCafe stacks up favourably, driving Reappraisal and Information (and this is validated via the recent Capstar Blue survey, placing McCafe as the #1 preferred coffee chain brand) Comparison with another approach to coffee retail Newspaper Norm

21. 6.2x Higher than norm 5x Higher than norm 2.1x Higher than norm 2.9x Higher than norm 7.8x Higher than norm 3.8x Higher than norm All newspaper norm. June 2011 (Updated monthly)

22. This ad from McCafe has performed very effectively against our key brand and action metrics While the creative does not have universal appeal, the ‘honest and genuine’ approach has been very successful at delivering a message to encourage a rethinking of the offering This ad is now in our Top 5 for significant performance against Reappraisal This ad is a great example of how using an atypical approach and reducing the marketing ‘spin’, can cut through, differentiate and gain good feelings about the brand It certainly looks as if the strategy to address quality perceptions for McCafe coffee is on target to be effetcive Report from Capstar Blue released 1/9/11 with respondents positioning McCafe as their #1 preferred coffee chain, shows this strategy has been highly successful

24. Established in 2006 by the major Australian newspaper publishers: – News Limited – Fairfax Media (including Rural Press) – APN News and Media – West Australian Newspapers Represents paid national, metropolitan, regional and community titles. Primary aims: – To promote newspapers as a powerful medium for advertisers – To ensure that newspapers are perceived as being contemporary and relevant in a transforming media landscape

25. Creation of All Newspaper norms Testing of randomly selected newspaper display ads 5,100 ad observations in total 40 test ads, 100+ observations per ad Population representative sample of the five mainland state capitals Conducted online by Ipsos Media CT, July-August 2008 Sample size 1,737

26. Newspapers are a powerful medium to utilise across a broad range of strategic roles. Six strategic advertising roles have been validated both qualitatively and quantitatively, resulting in the creation of Role Map, one of two proprietary newspaper metrics. Role Map demonstrates how consumers connect with newspaper advertising across the six roles, comparing the performance of creative against a footprint of all ads tested. Retail average Statements are tailored to be appropriate to the advertising category.

27. Newspapers are recognised as an effective medium for delivering a Call to Action. Action Map, the third proprietary newspaper metric, expands on this strategic role to provide an understanding of the types of action a newspaper ad inspires. Measured via forced exposure, people are asked about the actions they would consider taking (or have taken) as a result of seeing the ad. New measure introduced in March 2010, norm not yet available.

28. Another proprietary newspaper metric provides a set of creative diagnostics unique to the attributes of newspaper advertising. They’ve been developed to help identify areas for improvement where results across other brand and advertising measures may require further analysis and interrogation. Retail average Statements are tailored to be appropriate to the advertising category.