How Media Works: Advertising and the Purchase Funnel A Yankelovich Study for the Television Bureau of Advertising

The Impact of Television Advertising Prepared for: The Television Bureau of Advertising April 15, 2009 2

Study Objectives Yankelovich, part of The Futures Company, conducted a survey among US adults on behalf of the Television Bureau of Advertising to determine the role that TV plays as part of a multi-platform environment for advertising. More specifically, the goals of the research were to understand: The role of television advertising in driving consumer actions throughout the purchase decision process How television interacts with other media platforms, including new media such as the Internet How purchase decisions are made as a result of this interaction, including the role of different media platforms in the purchase cycle

Methodology This study was designed to measure responses to ads seen across 15 different consumer categories: Vehicles or auto dealers Financial services Restaurant Department or discount store Automobile or life insurance Schools, colleges, or trade/vocational schools Furniture, mattress, or carpeting / flooring stores Healthcare products or services Entertainment activities Services Telecommunications or electronic products Travel or travel website Food, convenience, or grocery stores / supermarkets Home improvement stores or services Commercial website

Methodology Respondents were first asked in which categories they have seen a television ad in the past two months that made an impression on them Each respondent then completed an ad survey for up to three of these categories. The survey measured the overall impression of each ad, actions taken after seeing the ad, and whether ads for the same product or service were encountered in other media, etc. The respondents were asked questions on which media most increased awareness and interest, or prompted action across the range of categories studied. Survey results were obtained via online interviews among 3,002 consumers who had seen a television ad in the past 2 months that made an impression on them, and include a total of 8,109 ad category surveys. Interviews took place January 29 to February 10, 2009

Methodology In addition to what we will review today, additional information from this study will be available for the following: Gender Age Urban Suburban Rural Income TV Viewing (hours) Internet Use (hours) Number of Media Ad Exposures Actions Taken After TV Exposure Relevance of Ads Media Combinations

The Geometry of the Yankelovich Study Product Category Media Platform Purchase Funnel

The Purchase Funnel Awareness Consideration Preference Purchase

Purchase Funnel: Awareness Auto Financial Restaurants Dept./Disc. Auto-Life Ins. Schools-Coll. Furniture Healthcare Entertainment Telecom-Elect. Services Com. Website Travel Food Store Home Imp. Category Media Platform TV Internet Newspapers Magazines Radio E-mail Billboards/Outdoor Other None Norm 43 14 8 4 2 20 44 (102) 45 (105) 32 (74) 47 (109) 37 (86) 50 (116) 48 (112) 19 (136) 13 (93) 9 (64) 12 (86) 20 (143) 6 (43) 11 (79) 6 (75) 4 (50) 19 (238) 3 (38) 11 (138) 6 (150) 5 (125) 1 (25) 2 (50) 3 (75) 7 (175) 4 (100) 0 (0) 8 (200) 4 (200) 2 (100) 1 (50) 5 (250) 3 (150) 19 (95) 22 (110) 24 (120) Percentages shown for the question: “What media most increased your awareness of the advertised product, service or offer.” Index to norm in parentheses.

Advertising Impact on Various Stages of the Consumer Purchase Funnel

Travel & Travel Websites Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Department/Discount Stores Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Food/Convenience/Grocery Stores and Supermarkets Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Furniture/Mattress/Flooring Stores Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Entertainment & Activities Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Restaurants Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

Automotive Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase

TV’s Overall Impact Through the Purchase Funnel “What Media Most Increased or Prompted…”

Television’s Contribution to Total Media Impacts

TV’s Share of Media Impact Remains Relatively Flat Through All Phases of Purchase Funnel

Travel & Travel Websites Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Department & Discount Stores Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Food/Grocery Stores and Supermarkets Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Furniture/Mattress/Flooring Stores Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Entertainment Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Restaurants Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Automotive Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.”

Key Take-Aways Media impacts 80% of the Awareness phase of the funnel and declines to 53% at the Transaction phase. There is no single pattern to the Purchase Funnel. Different consumer categories behave differently in terms of overall ad impact. Consumers perceive that different media provide different impacts, both by category and by Purchase Funnel phase. Two consistently strong contributors in most categories and Purchase Funnel phases are television and the internet. Other media experience a wider range of impact based on category and Purchase Funnel phase. Television is impactful at all stages of the consumer Purchase Funnel.

Why is this Important?

The playing field has gotten longer and wider The New Media Matrix Mass Awareness Activation Niche The playing field has gotten longer and wider

The playing field has gotten longer and wider The New Media Matrix Mass You Are Here Awareness Activation Niche The playing field has gotten longer and wider

The New Media Matrix Mass Niche

2008 Top 15 Media Categories Newspaper $38,441 19.5 $ in Millions % Newspaper $38,441 19.5 Local TV stations 25,686 13.0 Terrestrial radio 19,643 10.0 Broadcast networks 18,368 9.3 Cable networks 18,223 9.2 Consumer magazines 12,673 6.4 Yellow pages 12,346 6.3 Search advertising 10,691 5.4 Branded ent./product placement 8,948 4.5 Out of home 7,184 3.6 Local/regional cable 6,409 3.3 Online display ads 4,629 2.4 Broadcast syndication 3,193 1.6 Online classified 3,139 1.6 Online video/rich media 2,475 1.3 Total $192,000 Source: Jack Myers Business report 12/08: eMarketer 12/08

2008 Remaining Media Categories (less than 1% share) $ in Millions % Online lead generation $1,645 0.8 Video games 875 0.4 Cinema 819 0.4 Mobile 655 0.3 Online sponsorship 514 0.3 Email 488 0.3 Satellite radio 296 0.2 Source: Jack Myers Business report 12/08: eMarketer 12/08

The New Media Matrix Awareness Activation

The New Media Matrix • Direct Response • Call-to-Action • Awareness (Activation) • Call-to-Action • Awareness • Mood • Image • Branding • Features • Price-Item

The Purchase Funnel Drives the Media Matrix Awareness Consideration Preference Purchase Source: Wordpress.com

Popular Assumptions Traditional media – especially broadcast – is a top-of-the-funnel-choice Interactive media is a bottom-of-the-funnel choice … “The Last Click” Middle-of-the-funnel is open season for all media … interest, consideration and preference are variables

Yankelovich Report on 15 Consumer Categories Awareness Consideration Preference Purchase TV 43% Newspaper 8% Magazine 4% Internet 14% TV 40% Newspaper 8% Magazine 3% Internet 13% TV 35% Newspaper 8% Magazine 2% Internet 13% TV 26% Newspaper 7% Magazine 2% Internet 12%

Take Aways TV Still Rules The research has been consistent and reinforcing: Council for Research Excellence Video Consumer Mapping Study Nielsen Annual Report on Time Spent with Television Nielsen Quarterly Three-Screen Report TVB Media Comparison Study In today’s media environment, match marketing goals to the right media drivers.

Thank You