1. September 2008 The Evolving Media Economy

2. www.MagnaInsights.com 2 Once Upon a Time, Marketing = Media + Creative Traditional media was primary (sole?) venue for communications objectives

3. www.MagnaInsights.com 3 But Fragmentation Fractured That Proposition

4. www.MagnaInsights.com 4 Music Was The Canary In The Coal Mine Source: Magna, RIAA Digitization changed production, distribution and consumption

5. www.MagnaInsights.com 5 And DVRs Were To Be The Last Nail In The Coffin

6. www.MagnaInsights.com 6 With A Digital Revolution Blooming In The Aftermath

7. www.MagnaInsights.com 7 But Traditional Media Never Died “Television is the worst form of advertising, except all the others that have been tried”

8. www.MagnaInsights.com 8 But Traditional Media Never Died New advertisers rely on it for mass branding effects Source: Magna analysis of TNS-CMR data

9. www.MagnaInsights.com 9 But Traditional Media Never Died Large brand-based advertisers: focus on reach… Source: Initiative Analysis of Nielsen Data

10. www.MagnaInsights.com 10 Source: Magna, US Census, Veronis Suhler, OPA But Traditional Media Never Died …And frequency

11. www.MagnaInsights.com 11 Source: Magna, WARC, InternetWorldStats. Weekly reach figures for France and UK, daily for other countries. Reach definition for magazines = issue reach in France, Italy and Spain. Internet reach typically = % of population online monthly per Nielsen NetRatings, ITU and other sources as of June 30 2007 (except for US = March 31, 2007) But Traditional Media Never Died This is true in established markets…

12. www.MagnaInsights.com 12 But Traditional Media Never Died …And emerging ones Source: Magna, WARC, InternetWorldStats. Weekly figures for Brazil and Russia. Russia, China and India magazines are issue reach figures. Indian TV and radio = daily, newspapers = issue. Chinese TV = weekly and radio = daily. Internet typically = % of population online monthly per Nielsen NetRatings, ITU and other sources as of June 30 2007

13. www.MagnaInsights.com 13 But Traditional Media Never Died It also holds for young audiences… Source: Magna analysis of Nielsen Media Research data

14. www.MagnaInsights.com 14 But Traditional Media Never Died …In the US and around the world Source: WARC

15. www.MagnaInsights.com 15 Consequences of Reach and Frequency Paradigm 20 YEARS AGO Models that were well-designed…

16. www.MagnaInsights.com 16 Consequences of Reach and Frequency Paradigm 20 YEARS AGO …For an era of homogenous media platform access…

17. www.MagnaInsights.com 17 Consequences of Reach and Frequency Paradigm TODAY …May not be as well-suited for a world of Web 2.0%…

18. www.MagnaInsights.com 18 Consequences of Reach and Frequency Paradigm TODAY …Which will reach some audiences and miss others

19. www.MagnaInsights.com 19 Drivers of Online Spend = Endemics, New Businesses Largest advertisers drive TV, smaller advertisers drive online Source: Magna analysis of TNS-CMR data

20. www.MagnaInsights.com 20 Source: Magna, US Census, Veronis Suhler Drivers of Online Spend = Endemics, New Businesses Reflecting effectiveness for SMEs…

21. www.MagnaInsights.com 21 Drivers of Online Spend = Endemics, New Businesses …Who benefit from a Democratization of Advertising Source: Magna analylsis of IRS data

22. www.MagnaInsights.com 22 Beyond search, emerging media = small business today Emerging Media: Systemic Growth Requirements Source: Magna, IAB

23. www.MagnaInsights.com 23 Emerging Media: Systemic Growth Requirements Impacting “gut” decisions = ?

24. www.MagnaInsights.com 24 Emerging Media: Systemic Growth Requirements Establishing better infrastructure

25. www.MagnaInsights.com 25 Emerging Media: Systemic Growth Requirements Re-aligning organizational structure Operating Division Retail Distribution Product Development Branding CEO Other Corporate Functions COO PR / Corporate Communications Operating Division Product Development Branding Operating Division Product Development Branding CMO / Central Marketing CreativeOtherMedia Marketing, PR, Retail, Sales Source: Magna Direct / Online Sales

26. www.MagnaInsights.com 26 Emerging Media: Systemic Growth Requirements Focusing on people, not pages (or ratings)

27. www.MagnaInsights.com 27 Emerging Media: Systemic Growth Requirements Assessing value, not cost Top 10 DMAs $>$ National Network

28. www.MagnaInsights.com 28 Emerging Media: Systemic Growth Requirements Transforming data into actionable insights = + ?

29. Contact: Brian Wieser, CFA Tel: 646-865-2260 Email: brian.wieser@magnaglobal.com www.MagnaInsights.com

30. 30 Discussion Roger Keating SVP, Digital Media Hearst-Argyle Television Steve McGowan SVP, Insights and Client Research Initiatives The Nielsen Company

31. www.MagnaInsights.com 31 Issue #1 Consumers in Control Vs. Controlled Consumers? Source: Magna

32. www.MagnaInsights.com 32 Issue #2 Fragmentation: Friend or Foe? Source: Magna analysis of Nielsen data

33. www.MagnaInsights.com 33 Issue #3 Who Crosses Platforms? Source: Magna