When Media Worlds Collide Mike Yardley Managing Partner 05/24/06

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Digital Evolution

What is Digital?  A medium. A channel. A marketing and efficiency tool enabled by technology.  Digital is more than web properties, online marketing, technology platforms, , relationship marketing, and advertising, it's become part of everything. It’s a way of life.

Digital Evolution OVERVIEW The Digital Age Has Transformed Information Flow and Facilitated Open Social Networks THE FIRST AGE Communication Network Infrastructure TCP/IP FTP THE SECOND AGE Content Hypertext Protocol Self-Organizing Repositories Real Time Broadband Adoption Transition to mainstream THE THIRD AGE Today Co-Creation P2P/Blogs/Wiki Reduced Reliance on MSM Proletarian Punditry “Death” of traditional media

Digital Media Collision

"The time has come for us to agree that mass-media marketing is over.” Larry Light, CMO McDonald's Almost half of marketers are decreasing spending in traditional advertising channels (network TV, magazines, direct mail, and newspapers) to fund an increase in online ad spending in Online ad spending is projected to grow at rate of nearly 25% in 2005 and will represent 8% of total advertising spending by 2010, rivaling ad spending on cable/satellite TV and radio.

“Traditional” advertising is becoming less effective.  More than half of consumers are consuming two media at a time *  More than 25 percent of U.S. households have a DVR today and it is projected by year 2010 over 40 percent will have DVRs **  More than half of DVR owners skip most or all TV commercials *** * Retail Advertising and Marketing Association (RAMA) and BIG research ** Forrester Research: The State of Consumers and Technology: Benchmark 2005 *** 11/2005 MAGNA Global USA and Forrester Research: Is TV Still a Viable Medium

Mass TV reach is declining.

New technologies are impacting the way marketers reach consumers as they allow access to content anytime, anywhere, through multiple channels.  Marketers moving from mass marketing to individualized marketing as consumers move to more individualized viewing  On-demand viewing  Viewer-generated content  Video search technology  Marketers pursuing multiple new approaches as consumers are consuming media in more and different ways and are fragmented in their behaviors  Marketers are embracing platform-agnostic content, fluid mobility of media experiences - - delivering brand experience no matter what medium the consumer is using 02/2006 IBM Institute Study

TV networks are moving to the internet. NBC Universal purchased iVillage for $600 million - Reuters 03/08 Disney CEO announced a new service, called MyABC, to offer video downloads of ABC shows online. - Variety 02/27 AOL to offer free WB produced shows & pay- per-download shows from established programmers - Reuters 03/06

Way Beyond The Banner – Consumer Package Goods

Taking Digital To The Consumer

Leveraging The Power Of Social Networks

Creating Digital Applications

Application Dissection Media Holder -Video mail -Comcast DigiTV -Etc. Dynamic Feds -Charts -Calculator -Etc. Flexible Feeds -Partners -Sponsors -Etc. Contextual Posts -Partners -Sponsors -Etc. Podcasting -Partners -Sponsors -Etc.