AEDE - November 2010

1. How can Publishers re-establish a commanding position within the digital advertising market? The role of performance marketing and personalization - key lessons from the Danish market.  AEDE - November 2010

2. Sections • The Market • Relevance drives Value - and why search is the key to Performance Advertising and Personalization • The Publishers Challenges • Responding to Publisher requirements - The OAX Service • The Danish case

3. Section 1 The Market

4. The Market Global Ad Spending: Advertising Money follows EyeballsAd Revenue per User = $46 in 2009E vs $28 in 2005E* *Morgan Stanley

5. Ad Spending in Europe:“Search” is the largest and fastest growing segment The Market European online ad revenues ** In billion € (estimates) ** Source: Forrester research 2009

6. The Market Who will seize the opportunity?% of Time Spent in Media vs % of Advertising Spending*(2009 US) % 50 BUSD Global Opportunity *Morgan Stanley

7. The Market Search based ads already more than 50% of online ads of which 1/3 is contextual Preliminary Observations The Market Environment Publishers are desperately seaking new revenue streams Ad spending is rapidly shifting from paper to online Search based advertising will dominate - relevance is the key competitive factor All publishers will need to tap into search based advertising if they want to secure the digital revenue stream

8. Section 2 Relevance Drives Value - and Search is the Key

9. Search is Key What is Search?Explicit Search Car rental Explicit Search Ads: Ads being presented with results when using a search box

10. Search is Key What is Search?Implicit search • Ads being presented on regular sites based on automatic matching between: • article content and ads – contextual ads • user intents and ads – personalized ads Implicit search: contextual text ad Implicit search: contextual display ad Implicit search ads constitutes 1/3 of Google revenues

11. Contextual performance advertisingContent analysis to match text-based ads to news content Search is Key Contextual ads: Ads are being selected and displayed based on real time matching between ads available and content in article Performance advertising: Ads are only paid for when clicked on by user (PPC - Pay-per-click) Site owners and OAX are remunerated according to the number of clicks

12. Performance Marketing RevenuesRevenue is a function of response to ads Search is Key $ = PI x CTR x APC Click Through Rate Average Price per Click Page Impressions This is the revenue model established by Google and the basis for 1/3 of its revenues.

13. PersonalizationSearch will continuously drive relevance and ad targeting Search is Key Ad User Intent Content/ Context • Relevance is the key driver for value over time • For advertisers • For users • For publishers / site owners • Only search based technology enables targeting and continuous increase in relevance – real time weighting of multiple dimensions in the algorithms driving the ad extraction process: • Content • Localization • Personalization (profiling, behavior targeting) • External context • Device • Ad performance • Time and date

14. Section 3 The Publisher Challenges

15. The Challenges Publishers Preparing for Digital Business: 7 Key Considerations Search based & performance advertising will dominate the digital advertising market in the foreseeable future Relevance is the key driver creating value and revenues in search based & performance advertising No single Publisher can benefit from networking effects and establish and control a competitive performance advertising network The war to control key digital advertising assets has since long started – the main competition is not between Publishers but vs new tech players (eg. Google, Facebook, Apple) New competition within the traditional value chain – the role of Advertisers and Media Agencies is changing. A fight for repositioning is going on. Publishers must reconsider their organization, digital assets and products – concepts, user relations, user data and traffic becoming more important than content The learning curve is steep - the costs of getting on board will only get higher

16. When publishers consider their alternativesThe publishers dilemma The Challenges Users Advertiser Publishers Agency Google is a Black Box Currently only Google can help publishers tap into search based ad revenues, - but the price and strategic setting is unacceptable • No revenue control • No direct relationship with advertisers • No transparency or transfer of key knowledge • No control on role, strategy or level of engagement • Google is a B2C: Direct competition for users, traffic, user data, services and revenues Publishers locked in a subcontractor position with their main competitor

17. The Challenges Preparing for Digital Ad RevenuesThe Dramatic Explosion of Ad Features - How to explore, test and develop the right offerings? Relevant Ad Placement • Manual • Tagging • Search based matching – contextual • Search based matching – personalization Business Model Format • Display • Text • Video • Interactive • CPM • CPC • CPA Channel Price Model • Queries • Generic/News sites • Verticals/Classifieds • eCommerce • Gaming • Social Networks • Fixed price • Auction • Revenue share

18. Section 4 Responding to Publisher Requirements - The OAX Service

19. Executive SummaryOAX – the short story The OAX Service OAX = Google AdSense A Business Model made for Publishers + A search based Trusted Third Party ad network for Publishers A pure B2B – neutral – independent – transparent –

20. The OAX Service OAX value proposition for site owners Applying search technology to match ads, content and users • Benefits to publishers: • Strategiccontrol with key assets • Control with key businessrelations • Revenuecontrol with search based ad business • Highest revenueshare in the market • Transparency • Learning and Innovation • Network effects • High revenuepotential • Neutral 3rd party infrastructure – not dominated by any market player End Users Publishers empowered to enhance their position based on their existing assets and business strategies

21. Building Key Competitive Advantage The OAX Service Personalization • Yield Optimization • Relevance & Performance: • Real time yield optimization handling • all digital ad inventory for publishers • New Formats: • App ads • Reach & New Channels: • IPTV • Market position: • 1stAdexchange with • personalization and yield optimization • Personalization • Relevance & Performance: • Disruptive personalized targeting • based on multiple dimensions • Doubling of CTR • New Formats: • Image ads • Video ads • Reach & New Channels: • Tablets and Mobile • Position: • 1st publisher network with search • based and personalized targeting Yield Optimization Contextual • Contextual • Relevance & Performance: • Matching of ads with content • Performance = Google Adsense • Formats: • Textual ads only • Reach & Channels: • Web sites only • Position: • 1st national publisher network in • Europe with contextual advertising Time 2010 2012 Building a unique and sustainable business position for Publishers

22. Section 5 The Danish Case

23. First national contextual ad network for Publishers in EuropeBecoming market leader in the Danish market The Case • The OAX service was launched in DK in June 2009 • A strong foothold in core segment: 85% of premium Danish content sites are members • Gradual expansion into other Danish segment • 10 mill PI/day

24. The Case General Performance: OAX levels with Google Adsense re revenue generation for Publishers • Effective Revenues (eCPM): • OAX provides superior revenues in News Category* • OAX provides superior revenues in Entertainment Category* • OAX is still behind in Sports Category* * Based on directly comparable data of revenues generated by Google Adsense and OAX for leading Danish web site in June / July 2010

25. The Case General Performance: Danish OAX Key metrics improve

26. The Case Product developmentTesting New Ad Products Image ads Product ads

27. The Case Product developmentTesting New Ad Products Exclusive ads Intertext

28. The Case Publishers lessons in Denmark: ”New” Insights Search based & performance advertising will dominate the digital advertising market in the foreseeable future All Publishers have included search based and performance advertising as part of their offering Relevance is the key driver creating value and revenues in search based & performance advertising Leading Publishers have started digital ad product development No single Publisher can benefit from networking effects and establish and control a competitive performance advertising network The Publishers have started a much closer cooperation, using OAX as a common advertising infrastructure The war to control key digital advertising assets has since long started – the main competition is not between Publishers but vs new tech players (eg. Google, Facebook, Apple) Publishers have reduced/stopped short term gains (making business with Google), selected long term interests (staying in control of and building own assets) New competition within the traditional value chain – the role of Advertisers and Media Agencies is changing. A fight for repositioning is going on The Publishers have started explore new business models based on a common infrastructure where they are in control Publishers must reconsider their digital assets and products – concepts, user relations, user data and traffic being more important than content Publishers are reconsidering their internal organisation and incentive schemes The learning curve is steep - the costs of getting on board will only get higher The Publishers have started on a learning process - which is surprisingly hard

29. Thank You