EIAA Marketers’ Internet Ad Barometer September 2005

1. EIAA Marketers’ InternetAd Barometer September 2005

2. Agenda • Background • The Research • What the Industry does well • Barriers to Advertising Online • Online’s Role within Marketing Strategy • Online Advertising Expenditure • Key Takeouts

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

4. The Research • Objective To understand the role online advertising plays and attitudes towards the internet amongst key advertisers across Europe • Methodology • 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

5. Participating Advertisers

6. What the Industry does well

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

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

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

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

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 • FMCG • Reach/targeting perceived most important strength • Followed by interactivity & ability to innovate • Entertainment • Reach/targeting perceived biggest strength • Accountability more of a strength for UK • Automotive • Accountability biggest strength in UK • Followed by ability to innovate and interactivity

13. Barriers to advertising online

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

15. Online Planning • Insufficient standardisation of formats • Insufficient dedicated staff and resources internally • Labour intensive nature of campaigns

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

17. Role within Marketing Strategy

18. Branding Vs Direct Response FMCG

19. Branding Vs Direct Response Entertainment FMCG

20. Branding Vs Direct Response Entertainment Automotive FMCG

21. European Marketing Objectives • FMCG • Influencing purchase decisions the strongest objective • Followed by changing brand perceptions • Entertainment • Influencing purchase decisions and generating sales • UK & Europe less focussed on delivering customer contacts • UK less focussed on increasing brand awareness • Automotive • UK – Increase brand awareness, change brand perceptions & generate sales • Europe – Influence purchase decisions & generate sales

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

23. Search • Many advertisers already spending a significant proportion on search vs. display advertising • Pan Euro FMCG advertisers invest very little in search • UK advertisers intend to increase search spend

24. Online Advertising Expenditure

25. FMCG: Share of Adspend

26. Entertainment: Share of Adspend

27. Automotive: Share of Adspend

28. Reallocated media spend 2005 Majority of new spend coming out of traditional media budgets, particularly TV

29. European Online Adspend • FMCG predicting smallest share of spend in 2007, Automotive largest • Pan European advertisers predicting biggest growth in share of budgets • Exception with automotive where UK advertisers predicting biggest growth in share • Advertisers predicting budget reallocated from TV and print to increase online share • UK also intending to reallocate some DM budgets to online

30. Key Takeouts

31. Summary • Positive growth in spend predicted on all sectors • Online already and integral part of the marketing mix with objectives following brand strategy and sales • Barriers 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