1. Demographic Targeting and Business Intelligence Jed Nahum Director of Product Management, Microsoft adCenter SES San Jose August 7, 2006

2. Page 2 | August 9, 2015 Agenda How do we provide BI and demographic targeting? How accurate are the data? Do targeting and BI enable better returns? Microsoft adCenter Background Summer ’05 –Pilots in SG and FR October 18, 2005 US pilot –400 advertisers –25% traffic February NYC SES: 70% traffic May 4: adCenter US Launch Early August: New release

3. Page 3 | August 9, 2015 How Do We Provide BI and Targeting?

4. Page 4 | August 9, 2015 Two Uses of Data for adCenter Marketers Business Intelligence Targeting & Optimization

5. Page 5 | August 9, 2015 How Accurate are the Data? Internal assessment of accuracy using two separate databases, one of which was the registration data for adCenter (CAPRi), the other being MSFT consumer marketing database (CIQ). Marketing database integrates data from existing subscription services, consumer packaged goods registrations, direct purchase transactions, key on-line events and external sources of data including demographics. Compared US data only Identify cases in which the consumers overlap –Age: 2.2MM consumers –Gender: 1.9MM consumers

6. Page 6 | August 9, 2015 Gender Overall match rate: 88% Marketing FemaleMale adCenter Female89%13% Male11%87% Age Statistics 80% of ages match in the two DBs Younger consumers tend to have more consistent ages in the two DBs Users who are in their 20’s, 30’s and 60’s are slightly more likely to provide age information in Passport than users who are in their 40’s and 50’s

7. Page 7 | August 9, 2015 Audience Intelligence Informs Retail Industry Findings Reaffirm, Learn & DiscoverRefine Your Strategy KeywordAudience ProfileInterpretationActionable Item Reaffirm what you already know tag heuer46% Male 26-35Traditionally target Males Bid boost on male 26-35 pursesLargely Female audienceTraditionally target Females Bid boost on Female for "purses" Learn new facts about your audience kitchen appliances 50% Male/Female. BUT: "small kitchen appliances" - 65% Female "viking kitchen appliances" - 84% Male Gender gaps for different types of kitchen appliances Place gender based incremental bids on tail terms. Create gender targeted ads for tail terms Discover intelligence that changes your strategy hobo50% Male/Female Organic searches are for info about hobos and commercial searches are for retailers of Hobo purses. Leave out references to hobos Target ads to to women. Buy tail terms (hobo bags). diaper61% M; 48% M < 36 Explanation: Males searching for adult site www.dpf.com. Exclude adult references by including references to babies in ads. Bid boost for Females

8. Page 8 | August 9, 2015 Audience Intelligence Informs Entertainment Industry Findings Reaffirm, Learn & DiscoverRefine Your Strategy KeywordAudience ProfileInterpretationActionable Item Reaffirm what you already know soap opera70% Female ages 18 - 50Consistent with hypotheses Advertisers can create female targeted ads with this keyword Bid for Females 18 - 50 Learn new facts about your audience movie tickets, amusement parks 70% Female ages under 50 Large female audience for movie tickets Create female targeted ads Bid for Females 18 - 50 rap music [and related terms] 60% – 95% Female ages 18 – 35 Larger female audience for Rap Target creative to women Bid for Females 18 - 50 casinos [and related terms] 60% – 90% Male ages 26 to 35 Large male audience for casinos Target creative to men Bid for Males 26 - 35 Discover intelligence that changes your strategy elle girl48% Male Men searching for Elle McPherson Create Female targeted ads Negative match “mcpherson” or “model” Pursue related tail terms “elle girl magazine”

9. Page 9 | August 9, 2015 Audience Intelligence Informs Intelligence on Travel Reaffirm, Learn & DiscoverRefine Your Strategy KeywordAudience ProfileInterpretationActionable Item Reaffirm what you already know spa resortsOver 65% Female <36 Traditionally target this demographic Create Female targeted ads for spa related keywords Bid boost Female < 36 Learn new facts about your audience honeymoon / honeymoon packages honeymoon: 50% M/F; honeymoon packages: 73% Female Males research honeymoon spots; Females research honeymoon packages Create Female targeted ads for honeymoon packages Bid boost for Females hotel / hotel reservations hotel: 55% Female; hotel reservations: 75%+ Male 26-50 Large Male population for hotel reservations Create Male targeted ads Bid boost Males 26-50 wine tours80% Female 18-50Large Female audience Create Female targeted ads Bid boost for Females 18-50 Discover intelligence that changes your strategy safari / African safari vacation safari: 50% Male/Female; African safari vacation: 60%+ Female audience Male searches for "safari" were searching for Apple Computer's Safari RSS. Females more apt to search for safari vacations. Negative match RSS. Bid boost African safari related terms. Target creative to women Bid boost for Females

10. Page 10 | August 9, 2015 Reaffirm, Learn & DiscoverRefine Your Strategy KeywordAudience ProfileInterpretationActionable Item (s) Reaffirm what you already know Ferrari and related terms 70% Male <35 Traditionally target Male audience Create Male targeted ads and incrementally bid boost Males 18- 35 Learn new facts about your audience porsche boxster and related terms 70%+ Female <51 Searches for "porsche" were split 50% M/F; searches for "porsche boxster" were predomintaly F Create Female targeted ads and incrementally bid boost for Females under 51 pick up trucks 80% Female 18- 35 Large Female audience Create Female targeted ads and incrementally bid boost for Females 18-35 ford focus70%+ Female Large female audience for ford focus and related models Create Female targeted ads and incrementally bid boost for Females hybrid cars 60%+ Female; majority under 36 Large younger Female audience for hybrid cars Create Female targeted ads and incrementally bid boost for Females < 36 Discover intelligence that changes your strategy vans51% < 35 Paid search for vans, minivans etc; organic search for Vans sneakers Negative bid "footware" and "shoes." Incrementally bid for M/F over 35 Audience Intelligence Informs Intelligence on Automotive

11. Page 11 | August 9, 2015 Why adCenter Measurable Conversion + Powerful Audience Intelligence Demographic 50% Male/Female 65% Female Keyword"Cookware""Kitchenaid" Demographic75% Male80% Female Keyword"Clothing" "Isaac Mizrahi" Demographic70% Male80% Female Keyword"TVs""Sony TVs" Audience Targeting Conversion Rate Compete Inc. ranks MSN first in conversion rates in Retail, Consumer Electronics and Travel categories* Notes: *Compete defines Conversion as a session where the conversion funnel was completed (purchasing retail item, purchasing travel) MSN scored 3rd in Financial Services, the only other category studied

12. Page 12 | August 9, 2015 Why adCenter What’s Working for our Clients “The ROAS comparison for June for our biggest client, expressed as revenue per ad dollar spent, is $2.85 for AdWords, $5.53 for Yahoo, and $8.13 for Microsoft adCenter. Needless to say, we’re going to increase our investment in Microsoft adCenter right away.” — David Szetela, President & CEO, Clix Marketing, www.clixmarketing.com “The efficiency gained from Microsoft adCenter allowed Move.com to be more aggressive with its acquisition strategy, resulting in more conversions across the entire campaign.” — Frank Lee, VP, Account Management & Partner Relations, The Search Agency “The campaign has been an overwhelming success. We have seen conversion rates up to two times as high as other major search engines, including Google, all at lower bid prices. At this point, we want to spend as much money with Microsoft adCenter as we can because it simply works as well or better than anything else out there. — David Rodnitzky, Senior Director of Marketing Adteractive “MSN achieved an excellent rate of return on the amount we spent. Register.com looks forward to growing our paid search campaign with MSN as the engine expands.” —Craig Cooperman, Director, Advertising & Partner Marketing at Register.com.

13. Page 13 | August 9, 2015 Success Story: Home Décor Case Study Source: Market Forecast, Retail, 2005-2009, JupiterResearch. 2005. Campaign results on Microsoft adCenter earned significant ROI, exceeding acquisition cost goals and outperforming Yahoo! The addition of Microsoft adCenter to the advertising mix, and its ability to deliver strong ROI has contributed to an increase in HDPI's overall search marketing spend With Microsoft adCenter serving 100% of MSN Search traffic, HDPI anticipates gaining even more flexibility to reallocate its search budget to better performing search engines "Our goal is to maximize ROAS without cannibalizing revenue growth. The acquisition cost on Microsoft adCenter is so low that it allows us to increase our maximum CPA goals on other engines and still remain below our campaign cost threshold.“ - Christal Condon Director, Online Marketing "The net result is we are able to drive more volume and convert more visitors at a reduced cost. Microsoft adCenter has greatly enhanced our ROI." - Christal Condon Director, Online Marketing

14. Page 14 | August 9, 2015 Wrap Up Learn more: –Varnished: advertising.msn.com/adcenteradvertising.msn.com/adcenter –Unvarnished: www.webmasterworld.com and forums.searchenginewatch.comwww.webmasterworld.com forums.searchenginewatch.com –adCenter blog: blogs.msdn.com/adCenterblogs.msdn.com/adCenter –Funky, cool stuff: adlab.microsoft.comadlab.microsoft.com jed.nahum@microsoft.com