1. Findings on the effectiveness of Outdoor advertising from Econometric studies conducted by BrandScience - Retailers (and highlights from FMCG study) 21 September 2009

2. Background & Objectives Highlights from the FMCG study Results of the Retailer Meta analysis Agenda Overview of the BrandScience Results Vault Summary and Conclusions

3. Retailer Meta Analysis: Key questions to be answered Question answered How effective is Outdoor advertising for Retailers?  How does the efficiency of Outdoor compare with other media?  How does the efficiency of Outdoor advertising change at different levels of spend?  How does Outdoor advertising impact on the performance of other media channels?  Is Outdoor advertising becoming more or less efficient over time?  What are the implications for budget allocation by media? 

4. Background & Objectives Highlights from the FMCG study Results of the Retailer Meta analysis Agenda Overview of the BrandScience Results Vault Summary and Conclusions

5. BrandScience Results Vault The BrandScience Results Vault collates data from over 400 econometric studies conducted by BrandScience to provide a unique insight into how different media drive sales independently, and in combination with other media. The Results Vault contains: – 71 Retail studies –57 of the Retail studies have Outdoor advertising spend –34 of the Retail studies have a measured Outdoor effect The Results Vault allows for detailed examination of media performance by channel and sector and contains lots of findings on how Outdoor advertising works: ● Absolutely ● Relative to and in synergy with other media ● Over time Partly due to poor data quality, the impact of Outdoor could not be measured in 40% of studies. The comparable figure is 4% of studies for TV and 10% for Print

6. Retailer ATL Media Mix: Studies in the BrandScience Results Vault are fairly representative of the UK: Outdoor makes up 9% of ATL media spend for Retailers in the Results Vault compared to the UK Norm of 6% BrandScience Results Vault*: ALL Retail Studies Nielsen Media Research Top 100 UK Retailers *Sample Set: Retail Results Vault studies as at 15 th May 2009 The average UK retailer spends £6.4m pa on ATL advertising with this media split The average retailer in the BrandScience Results Vault spends £5m pa on ATL advertising with this media split

7. Retailer TOTAL Media Mix: Studies in the BrandScience Results Vault are fairly representative of the UK: Outdoor makes up 6% of total media spend for Retailers in the Results Vault compared to the UK Norm of 5% BrandScience Results Vault*: ALL Retail Studies Nielsen Media Research Top 100 UK Retailers *Sample Set: Retail Results Vault studies as at 15 th May 2009 The average UK retailer spends £7.5m pa on advertising with this media split The average retailer in the BrandScience Results Vault spends £7.1m pa on advertising with this media split

8. What types of Retail clients are we studying? 57 of the 71 retailers spend on outdoor The majority of the cases are UK firms with 80% being top 5 in their category

9. Background & Objectives Highlights from the FMCG study Results of the Retailer Meta analysis Agenda Overview of the BrandScience Results Vault Summary and Conclusions

10. Recap: How effective is Outdoor advertising for FMCG brands? Recap: How effective is Outdoor advertising for FMCG brands?

11. FMCG: TV is only 5% more efficient than Outdoor advertising Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

12. FMCG: If production costs are included, Outdoor becomes the most efficient medium Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

13. FMCG Results Vault How does ROI vary according to proportion of outdoor spend? FMCG Results Vault How does ROI vary according to proportion of outdoor spend?

14. FMCG: Outdoor ROI increases with proportion of spend Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

15. FMCG: Increasing share of spend on Outdoor boosts the ROI on other main media Sample Set: All Results Vault studies (2002 -2008) with measured Outdoor RROI

16. FMCG Results Vault Carryover rates – the medium term effect of media spend. By proportion of outdoor spend FMCG Results Vault Carryover rates – the medium term effect of media spend. By proportion of outdoor spend

17. Higher Outdoor spend drives higher carryover rates (lagged effect of advertising). 1) For Outdoor 2) for TV Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

18. FMCG Results Vault ROI trends over time by medium Our models categorised by year of evaluated campaign FMCG Results Vault ROI trends over time by medium Our models categorised by year of evaluated campaign

19. Outdoor is becoming more efficient, whereas TV is becoming less efficient Sample Set: All FMCG Results Vault studies (2002 -2008)

20. Given different ROIs by medium and changes in ROI over time, FMCG advertisers should increase their share of spend on outdoor

21. Outdoor optimal share of spend should be 16% We can apply ROI by medium by year figures to determine optimal media split for the average FMCG brand

22. Background & Objectives Highlights from the FMCG study Results of the Retailer Meta analysis Agenda Overview of the BrandScience Results Vault Summary and Conclusions

23. How effective is Outdoor advertising for Retailers?

24. Outdoor performs just as well as TV and both media are second only to Print Incremental Sales revenue generated for each £1 of media cost Sample Set: Retail Results Vault studies as at 15 th May 2009

25. RROI calculations are often based on media space costs and exclude production costs which can be a sizeable percentage of total ad spend TV production costs make up for a larger share of spend than any other medium Source: WARC ATL Media Production Costs as a percentage of media/production total TV 14.4% Print8.1% Outdoor7.8% Internet7.6% Radio7% Incorporating production costs into the RROI calculation changes the ranking of the media channels Incorporating production costs into the RROI calculation changes the ranking of the media channels

26. RROI calculations are based solely on media space costs and exclude production costs - which can be a sizeable percentage of total spend Incremental Sales revenue generated for each £1 of media and production cost Sample Set: Retail Results Vault studies as at 15 th May 2009

27. The Print, DM and Radio RROIs are far higher when Outdoor is used Sample Set: Retail Results Vault studies as at 15 th May 2009 +34% +61% +84%

28. How does the efficiency of Outdoor advertising change at different levels of spend?

29. Outdoor RROI increases slightly as spend increases, implying there is room for retailers to increase their share of spend on Outdoor Sample Set: Retail Results Vault studies as at 15 th May 2009 +22%

30. Outdoor Carryover rate increases significantly as spend increases, implying there is room for retailers to increase their share of spend on Outdoor Sample Set: Retail Results Vault studies as at 15 th May 2009 +145%

31. “Life”of campaign vs. Outdoor spend Based on time taken for advertising to have 95% of its “total” effect Sample Set: Retail Results Vault studies as at 15 th May 2009 +131%

32. How does Outdoor advertising impact on the efficiency of other media channels?

33. Increased spend on Outdoor boosts the RROI on TV and Print Sample Set: Retail Results Vault studies as at 15 th May 2009 +19% +28%

34. Higher spend on Outdoor is associated with a higher carryover rate on TV and Print Sample Set: Retail Results Vault studies as at 15 th May 2009 +18%+50%

35. Higher Outdoor spend elongates the life of TV and Print campaigns Based on time taken for advertising to have 95% of its “total” effect Sample Set: Retail Results Vault studies as at 15 th May 2009 +30% +62%

36. Is Outdoor advertising becoming more or less efficient over time?

37. Trends in RROI over time: 1) Major Media vs Outdoor *Two year moving average Sample Set: Retail Results Vault studies as at 15 th May 2009

38. Trends in RROI over time: 2) Support Media vs Outdoor *Two year moving average Sample Set: Retail Results Vault studies as at 15 th May 2009

39. What are the implications for budget allocation by media?

40. By calculating diminishing returns curves and projecting trends in ROI over time, we suggest that overall Outdoor investment should increase, and on average should be doubled. The Retailer category includes brands with very disparate media strategies. Television, radio and cinema should be reduced.

41. Background & Objectives Highlights from the FMCG study Summary and Conclusions Agenda Overview of the BrandScience Results Vault Results of the Retailer Meta Analysis

42. Summary of findings for Retailers and FMCG study Outdoor delivers High ROI for both FMCG brands and Retailers Above average Outdoor spend increases the medium term/brand effect of Outdoor AND TV Outdoor ROIs are increasing over time whereas TV is decreasing When production costs are taken into account, Outdoor outperforms TV by 3% for FMCG brands & by 8% for Retailers.