1. Embrace the Facts

1. TW Medialab Study on Social Media & TV: 5 Main Insights Breakthrough Time Warner Media Lab study using advanced capabilities identifies second screen and social media principles.   Millennial respondents came to the Time Warner Media Lab to watch Conan O’Brien and TMZ under a number of critical second screen conditions.  Some used social media.  Some used synched apps, some watched together in pairs, some watched alone.  The Lab’s ability to capture biometric responses, track visual attention to each screen, and capture all social media transactions of participants, demonstrates what can be known with advanced research capabilities. 1. Embrace the Facts 3. Social viewing fills the gaps 2. Social viewing > solo viewing 4. Audio is critical 5. Synch apps provide an opportunity to increase engagement

2. Insight #1: Embrace the Facts Social media and second screen are here to stay. More than 9 in 10 young adults (18-34) have mobile phones and almost 2/3 of those are smart phones (Nielsen). They don’t turn off these electronic companions when they choose to watch TV. We have no choice but to understand and address it. Two-thirds of those who use social media while watching TV do so at least once a day. Nearly one-half (46%) of all 15-49 year olds in the U.S. who surf the net have engaged in a Social TV activity in the past 30 days. These behaviors include using social media sites such as Facebook, Twitter and Get Glue or the use of TV sync apps while watching television. • “Normally I watch TV with my roommates, we all have our laptops, our cell phones out, and we’ll just talk about what’s going on the TV, and then we’re Tweeting…we’re always on our electronics!” (Male)

3. Insight #2: Social Viewing More Engaging than Solo Viewing Biometrically monitored engagement during social viewing is higher than during solo viewing. Social viewing with another, in-person, delivers the highest levels of engagement. “Second screen” social viewing delivers the next highest amount of engagement, followed by solitary viewing. The viewer has more to keep them engaged when connected to another person than when they watch alone. This does not mean they are more visually engaged with what’s on the screen. 2nd Screen Social Viewing (using social media while watching TV) is 1.4Xs Higher in engagement peaks during content & ads for Conan and TMZ. The second screen adds additional dimensions to the content while keeping viewers at high engagement levels even during slower moments. > < Social viewing (pairs in same room w/o 2nd screen) is1.4Xs Higher in engagement peaks during content & ads for Conan and TMZ. This is a combined effect of hyper attention to the content and ads as each viewer checks the content for relevance and the impact of social discussion. Solo Viewing • “I would be less into a show if someone took away all my social media, because you wouldn’t have somebody else to share that with and get them involved into it. I like having other people involved, a crowd or a group, it just makes it more enjoyable.” (Female)

4. Insight #3: Social Viewing fills the gaps Inevitably, declines in engagement with the content will occur at times during the show or during ads. Social viewing fills these gaps, and maintains engagement. That should discourage tune out and channel changing. • The increased engagement of all groups relative to the Solo viewing controls is apparent. • The highest levels of emotional engagement occur in the “Friends” and “Social Media” groups. • During Conan and TMZ, the sync app helps maintain a high engagement level as well as minimizes engagement drops during ads. • The generic sync app used during TMZ still creates overall higher engagement; however, not as consistently as apps designed to work with the specific program. Social Media Group Sync App Group Engagement Friendship Pairs Solo Viewers % of Media Time by Platform Duringads 27% iPad TV Duringcontent 8% `

5. Insight #4: Audio is Critical Two screens may be present, but there is still only one audio track. The study found that those who engage in second screen behaviors while the TV is on still listen to the TV, and that audio “snaps them back” to the TV. Decades of research shows that these “orienting reflexes” are powerful drivers of visual attention, even for very young children. Commercials that feature attention grabbing audio, including audio with particular contextual relevance, will snap visual attention back to the TV screen. In this research, popular current songs seem to successfully accomplish this. Sync App Users - { Visually attend to 80% of the commercials with strong audio cues Hear some audio from all of the commercials Visually attend to 65% of the commercials Visually attend to 0.7% of the commercials at 16x and hear 0% - Video screen grab of respondent looking up at each ad during a relevant audio cue: All 2nd Screen Viewers Fast Forwarding Viewerswho don’t leave the roomor change channels (for example purposes - this population was not studied during this research) Sync App Users

6. Those who use these apps are engaged, and engaged viewers are receptive. Viewers say they appreciate apps that provide the opportunity to engage, on their own terms. For programmers, the data shows that if you are going to build it, resources have to be deployed to maintain a quality, meaningful experience. For advertisers, the data shows large lifts in standard brand metrics like brand favorability for advertisers who sponsor these experiences. Insight #5: Sync Apps Provide an Opportunity to Increase Engagement AT&T advertised their 4G LTE network during the program and on the Conan Sync app. This branding primed app users to pay more attention to the advertising and ultimately engaged them more effectively. Below is a screen grab from a video that shows the difference between the primed (Sync App users) and unprimed groups: Another example comes from the Microsoft Bing ad which had strong audio cues using popular music. As the audience maintained their engagement through a combination of TV and iPad use, they visually tuned into the Bing ad and reached high engagement levels. They maintained that level of engagement and watched the entire ad: Brand favorability of AT&T was lifted 33 points after exposure to the app and the AT&T sponsorship.* ‘Positive’ Opinion of AT&T 1 = extremely negative, 5 = extremely positive (Top 2 Box) “The AT&T ad was constant. On the Conan app, I know I was seeing that banner a lot, the blue one. I remember it. Even though I wasn’t paying attention, I remember it.” (Female) +33 pts. *Note: Based on N=31- directional findings presented.