1. 1 Search Engine Strategies SJ 2006 Presented By Anne Frisbie VP, Category Yahoo! Search Marketing Power of Search Reach and Engage the Empowered Consumer with Yahoo Search Marketing

2. 2 The New Consumer Paradigm 1 1 2 5 Agenda Value in Controlling the Conversation

3. 3 The New Consumer Paradigm The evolution of the shopping process through the use of technology

4. 63% First began researching 57% Narrowing down options 42% Deciding where to buy 51% Making final decision % Gathered Information Mean # Sources Used 2.8 2.7 2.8 2.5 Information Is Gathered Throughout The Purchase Process We’ve always imaged the purchase process as a funnel – but it’s not. New technology allows consumers to gather information at all stages of the purchase process. Half of all consumers are still gathering information from a variety of sources right up to their point of purchase. The Internet is the most utilized source of information at each stage in the purchase process. Source: Long & Winding Road It’s not a funnel!

5. 5 If searchers are looking for something you offer, start a conversation Consumers have also integrating search into their purchase process in a big way. Millions of people are researching their future purchase using search, even though the vast majority of purchases are still being made offline Search Usage Prior To Purchase (By Category) Search Is An Integral Resource Prior To Purchase Source: 1)Long & Winding Road 2) Reach & Engagement Studies

6. 6 Searchers Are Looking To Be Influenced # of Brands Considered Before Purchase (across product categories: Automotive, Finance, Technology, Retail) Pre-Purchase Searchers Consider More Brands Average # of brands considered prior to purchase Being more engaged and investigative shoppers, searchers are the shoppers most open to discovery. At the beginning of the purchase process, they consider more brands than non-searchers. Source: Long & Winding Road  Indicates a significant difference at a 90% confidence level

7. 7 The Mindset Of A Searcher I considered myself to be a serious bargain shopper It’s important to research new products in order to make informed decisions I enjoy shopping for and researching new products When shopping, don’t typically buy right away I discover new products or services that I buy later while researching other items They’re Knowledge Seekers, Not Bargain Hunters Well, they are bargain shoppers, but no more so than Non-Searchers. Searchers truly distinguish themselves as being more engaged and active shoppers across a variety of metrics Source: Long & Winding Road  Indicates a significant difference at a 90% confidence level

8. 8 Solidifying Purchase Decisions Searchers Make Up Their Minds Online & Are Less Likely to Change Them Offline Building their expertise prior to purchase, searchers were less likely to change their mind about the product they wanted while shopping offline Retail Fluency Report, Summer 2005 CMO Council, in partnership with ConsumerEdge Research Group Target: Offline Purchasers of Consumer Electronics (Digital Camera, Computer/Laptop, DVR/DVD player, Printer, TV purchasers)  Significant difference at a 95% confidence level Purchased The Item I Intended To I purchased the item I intended to when I purchased offline

9. 9 What’s the Value of Controlling the Conversation? With searchers more open to influence at the start of the shopping process but less likely to change their mind once they reach the stores, Yahoo wanted to work with marketers and measure the branding value of search.

10. Search Brand Studies: Yahoo Capabilities Measuring Branding Benefits of Sponsored Search: 1.Survey capability that enables near immediate responses from active in-market shoppers of your products (e.g. 700 responses) 2.Capability is coupled with a competitive click-stream analysis of all in-market shoppers (e.g. 10,000+ shoppers) – with test & control visibility 3.Capability can be extended to work for both search & display advertising simultaneously for the largest marketers 4.Resource intensive studies with limited pipeline; high level findings will be shared to benefit the industry

11. Search Brand Studies: Test vs. Control Groups 1.A user searches on a pre- categorized term 2.Depending on the time of the search, the user will either see the test client’s sponsored link in a premium position or not 3.The next time the user returns to Yahoo, within 48 hours of the search, Yahoo! will serve the user a 3rd party survey invitation 4.Survey respondents can be segmented between clickers & non-clickers to understand full brand impact Requirements: The study requires significant advertiser investment - where online transactions are not the sole success metric. The advertiser bids to a premium position for half of the test period. During the other half, the keywords will be offline*. * Listings are turned off and on every 24 hours to control for seasonality and any potential effect from offline activity

12. Initial Search Brand Study Results 1.Message internalization can occur from the simple text-only ads Statistically significant lifts in brand awareness & perceptions occurred in some studies from exposure alone 2.The real power lies in search’s ability to move brand perceptions when you get the searcher to click Very significant brand lift was seen from those that visit the brand’s website versus those that don’t Amazing branding power in the marketer’s landing page & website 3.Search advertising can change consumer behavior & increase the amount of time that they spend with your brand Consumers exposed to search advertising change their behavior – spending more time online with the brand including increased visitation to third party content sites about that marketer’s products

13. THANK YOU! Anne Frisbie afrisbie@yahoo-inc.com