1. EIAA Marketers’ Internet Ad Barometer September 2005

2. Agenda nBackground nThe Research nWhat the Industry does well nBarriers to Advertising Online nOnline’s Role within Marketing Strategy nOnline Advertising Expenditure nKey Takeouts

3. European Online Advertising nJupiter predict that the European advertising market will be worth over €80bn by end 2005 nOnline adspend will be worth almost €3bn, almost 4% in share nThe EIAA predict that online will account for 7% by 2008

4. nObjective To understand the role online advertising plays and attitudes towards the internet amongst key advertisers across Europe nMethodology §Enders Analysis commissioned to run research §Telephone interviews with over 50 leading brand advertisers §Focus on FMCG, Entertainment, and Automotive sectors §Companies selected according to level of offline ad spend with top 20 advertisers by spend in each sector targeted §Mix of marketing decision-makers with national and European responsibilities The Research

5. Participating Advertisers

6. What the Industry does well

7. Shattering the myth…. 89% DISAGREE that brand advertising online is a waste of money 1. Brand advertising doesn’t work

8. Shattering the myth…. 81% think that online advertising is a vital component of their advertising strategy 2. Online advertising is an add-on to mainstream marketing strategy

9. Shattering the myth…. 88% of those questioned agreed that increasing broadband penetration is making the internet more attractive as a branding medium 3. The internet only has a niche audience

10. Shattering the myth…. Advertisers have similar broad marketing objectives when using online as with other media 4. Online advertising can’t do both branding and direct

11. Strengths Audience reach topped the list of unprompted strengths mentioned with 58% highlighting its benefit. Other unprompted strengths mentioned were accountability, the interactive nature of the medium and the ability to innovate

12. Strengths by Market & Country nFMCG nReach/targeting perceived most important strength nFollowed by interactivity & ability to innovate nEntertainment nReach/targeting perceived biggest strength nAccountability more of a strength for UK nAutomotive nAccountability biggest strength in UK nFollowed by ability to innovate and interactivity

13. Barriers to advertising online

14. Research & Measurement nUnsophisticated research tools mentioned in highest frequency nFMCG in UK also mentioned difficulty in comparing to other media in a large amount nOnly 3 out of 16 advertisers include internet in brand or media influence studies nMany advertisers struggle to link online advertising to key marketing and business metrics

15. Online Planning nInsufficient standardisation of formats nInsufficient dedicated staff and resources internally nLabour intensive nature of campaigns

16. Support nLack of enthusiasm from ad agencies cited as top barrier to using online nLack of internal senior management support one of top internal barriers nSenior marketers interviewed keen to build relationships “at the right level”

17. Role within Marketing Strategy

18. Branding Vs Direct Response FMCG

19. Entertainment Branding Vs Direct Response

20. FMCG EntertainmentAutomotive Branding Vs Direct Response

21. European Marketing Objectives nFMCG nInfluencing purchase decisions the strongest objective nFollowed by changing brand perceptions nEntertainment nInfluencing purchase decisions and generating sales nUK & Europe less focussed on delivering customer contacts nUK less focussed on increasing brand awareness nAutomotive nUK – Increase brand awareness, change brand perceptions & generate sales nEurope – Influence purchase decisions & generate sales

22. nPurchase decisions, branding, sales are most common objectives nYet brand awareness, purchase intent and sales are least used measures nClick-through & registration measured across the board nAlthough branding related objectives more prominent, measurement is still relates to DR Measuring Objectives

23. nMany advertisers already spending a significant proportion on search vs. display advertising nPan Euro FMCG advertisers invest very little in search nUK advertisers intend to increase search spend Search

24. Online Advertising Expenditure

25. FMCG: Share of Adspend

26. Entertainment: Share of Adspend

27. Automotive: Share of Adspend

28. Share of increase from other media AllTVPrintDM UK FMCG brand advertisers57%29%14%- Entertainment brand advertisers 33% --- Automotive brand advertisers81%-41%20% Pan- European FMCG brand advertisers83%33%- - Entertainment brand advertisers 50%-25% - Automotive brand advertisers50%-- - Reallocated media spend 2005 Majority of new spend coming out of traditional media budgets, particularly TV

29. European Online Adspend nFMCG predicting smallest share of spend in 2007, Automotive largest nPan European advertisers predicting biggest growth in share of budgets nException with automotive where UK advertisers predicting biggest growth in share nAdvertisers predicting budget reallocated from TV and print to increase online share nUK also intending to reallocate some DM budgets to online

30. Key Takeouts

31. Summary nPositive growth in spend predicted on all sectors nOnline already and integral part of the marketing mix with objectives following brand strategy and sales nBarriers derive from research/measurement, ease of use and enthusiasm

32. See you next at … For further information please contact Alison fennah afennah@eiaa.net or visit www.eiaa.net