September 4 th , 2011

1. “Much More In Store” CAMPAIGN By: David Schwartz September 4th, 2011

2. All human actions have one or more of these seven causes: Chance, nature, compulsions, habit, reason, passion, desire. ~Aristotle Today, you will experience how high quality display advertising is going to help transition shopping at a B&N location from a chance encounter to a desirable habit. It’s time for the world to see what’s in store at Barnes and Noble.

3. Campaign Outline Situation Analysis Target Audience Marketing Strategy Creative Strategic Media Plan Evaluation Plan

4. Strategic Planning Situation Analysis • Key Takeaways: • Customer Environment • Consumer preference is rapidly transitioning to e-books • Consumers value the lower cost and convenience associated with digital offerings • Consumers have easy access to alternative channels with lower cost offerings • External Environment • The cost of living is rising (negative impact to discretionary spending) • The jobless picture isn’t getting any better • Continued uncertainty in the markets and the economy • Internal Environment • Floor traffic is declining in B&N’s retail stores • B&N’s retail channel is struggling to stay relevant in the transition to digital • The sales of digital readers is increasing, which will ultimately cannibalize retail book purchases

5. Marketing Plan Objective Create a compelling display advertising focused marketing campaign in order to achieve the following objectives: (1) drive intention to shop at a physical location, (2) drive preference for B&N over Amazon or other digital convenience channels, (3) drive in-store sales consumption and repeats, (4) generate $3.06 B in sales. Strategy

6. PRIMARY TARGET MARKET Target Audience Examples Introducing Tyler and Erin • Erin (Female - Primary) • 18-49 years old • Single • Full-time employee; Income: > $85,000 • Web generalist & heavy mobile user / searcher • Researches new products & companies online • Spends time online shopping, reading news & gossip, downloading work related info, making travel arrangements, socializing, checks local entertainment, and listening to Internet radio. • Enjoys reading books / e-books • Tyler (Male - Secondary) • 18 -49 years old • Single • Works Full-time; Part-time graduate student • Income ~ $65K; on a budget • Heavy Internet user & advanced searcher • Researches new products & companies online • Spends time online socializing, downloading info & music, reading news & sports updates, and enjoying entertainment • Enjoys reading books / e-books

7. PRIMARY TARGET MARKET 50+ Baby Boomer … and Let’s Not Forget About Jenifer (age - secondary) • Jenifer • 50+ years old • Married • Working professional • Net worth over $850K • Web generalist • Listens to talk AM talk radio on his drive to and from work • Watches approximately 3 hours of cable TV per day • Spends a fair amount of her free time online • Jenifer likes to spend time on the web researching health care services and info, banking, making travel arrangements, purchasing gifts and supplies, reading the news, and sending e-mails to friends and family • Jenifer’s family convinced her to join Facebook in 2009 • Jenifer loves to read. She regularly in bookstores and she recently received a digital reader (NOOK) for a birthday gift.

8. Creative Objective & Strategy What do we want to accomplish? Display advertising will be used to drive preference, intent and consumption for B&N’s retail and college bookstore offerings. The ultimate target is to grow sales by $3.09 B. Whom are we talking to? We are speaking to affluent families, high consumption readers, students, and young adults who fit the ideal customer profile that was identified previously. What do they think now? A significant percentage of our target audience believes that they don’t have a compelling reason to go to a B&N retail or college bookstore. They can order their textbooks and supplies online at a discounted price or they can consume digital info via their digital reader. What do we want them to think? We want the target audience to know that B&N retail and college bookstores offer unique value that cannot be obtained online or via a digital reader. Instead of only thinking about the purchase price or distribution channel, we want the target audience to associate the overall benefit of the purchasing process / experience with the goal they are trying to accomplish.

9. Creative Strategy & The Selling Idea Why should they think this? The target audience will think this because the communications and the promotional offerings will be specifically designed to help shape their thinking. The display advertisements, supporting digital content, and promotional offers will be designed to generate the market demand needed to achieve the campaign’s objective. What is our message? B&N has increased the value of in-store purchasing and now offers a number of compelling reasons why consumers should acquire more of their books and supplies at an offline location. Advertising Tone and Appeal The advertising tone will be clever and engaging. In addition, it will be approachable, friendly, rewarding, authentic, and intriguing. Selling Idea Display advertising and the supporting campaign content and promotional offers will convince the target consumer that Barnes and Noble retail and college bookstores offer a unique opportunity to (1) increase their buying power, (2) obtain highly competitive pricing in a desirable offline setting, and (3) fulfill various lifestyle needs (e.g. social connection).

10. Campaign workflow • The workflow for the “Much More In Store” campaign is as follows: • The target market will be informed via display advertising, email marketing, digital public relations, college bookstore homepage’s and the company’s retail homepage that B&N is offering consumers that spend a predetermined amount inside B&N retail and college bookstores(1) free and greatly reduced priced NOOKs or (2) special offers over the campaign period on e-books, college books, and / or retail books. • In particular, display advertising will be used to attract the target audience to the offers, and to drive preference, purchase intent, and consumption. • Existing NOOK owners that opted-in for corporate communications will be emailed the offer. • Once the consumer reaches the predetermined in-store spending level, they will immediately be eligible to for lucrative “in-store” only specials such as buy two items get a third item of equal or lessor value free, free e-books or e-magazines and so forth. • E-book purchases of a predetermined amount will trigger special “in-store” only discounts. • Consumers can select to have the amount of their offer donated to largest children’s literacy nonprofit in the United States: RIF (Reading is Fundamental).

11. Campaign workflow 1. Display / Digital Advertising 2. In-Store Purchases 3. In-Store Sales Promos 4. Harvest Nook & e-Books Main Hook Free or Discounted NOOKs E-Book Promotions Achieve The Campaign Target Over the 8 Month Timeline Retail and College Books College Textbook Promotions Retail Textbook Promotions Supplies Achieve The Campaign Target Over the 8 Month Timeline Purchase a Predetermined Amount of Merchandise In-Store or e-books Online Receive High Value Promotions Such as Buy Two Get One Free, Volume Discounts, etc.

12. Sample (Display Ad) Pitch Video Video Title: “B&N helps send Sally to Hawaii” Concept: Sally and her friends want to plan a trip to Hawaii. Sally uses her go-to search engine to look for trip information but is unable to use the fragmented results to plan her trip. She decides that it is time to visit her local B&N to purchase a best selling travel guide on Hawaii. Sally remembered that B&N is running a special promotion that will boost her purchasing power, so she decides to purchase a diet book and a best selling novel as well. In the back of Sally’s mind, she knows that she was able to beat the system by getting online pricing at a desirable offline B&N location. Sally feels like she is one smart customer. Objective: Break through the clutter with the use of simple but fast-paced and clever imagery to help consumers understand that there is “much more in store” at B&N. Consumers will be reminded that fragmented search results have major limitations and sifting through tons of information is hardly a viable “solution”. The display ad video will drive intent and action by informing consumers that B&N is running high value in-store promotions on items they value and want to purchase.

13. Don’t give up. We’re here to help. Learn from Sally. Sally dreams of Hawaii. Text-only. No image. She wants to plan a trip with friends. With B&N’s new promo, Sally earned a free travel guide, and points toward a free NOOK or other store merchandise. B&N has about a bazillion easy to find books, digital readers, and supplies. And the decision was made. Aloha, Sally! There’s Much More In Store at your local Barnes and Noble So, now you know Sally’s story. Sally does a search. The results were very, very, blue. How will she decide? That’s when Sally thought of Barnes and Noble. Text-only. No image. Sample Display Ad Video Storyboard Soundtrack: Justin Raisen - “How About Now” http://www.nme.com/nme-video/youtube/id/7DCQd2isKOY/search/justin-raisen Promo code XYZABC Provided to Consumers

14. Strategic media Plan Objective • The main objective of the media plan is to support the achievement of our campaign goals by ensuring that B&N’s messages stand out in cluttered marketing environments. The specific media objectives are as follows: • Create a targeted level of awareness in preselected geographic areas (retail and college bookstores) in the top ten designated marketing areas (DMAs) throughout the USA. Once the program is tested and optimized, it will be expanded to B&N locations across the US. • During the introductory period (first 30 days), reach 50% of the primary target audience an average of 3 times. • Following the introductory period of 30 days, create sustained awareness by reaching 25% of the target audience each month for the remainder of the campaign. Initial Test DMAs Post Test Locations B&N Retail Bookstores Across the US (705) B&N College Bookstores Across the US (636) New York Los Angeles Chicago Dallas Philadelphia Houston Miami Atlanta Washington Boston

15. Strategic media Plan Strategies The following media strategies are recommended for B&N: Concentrate introductory weight in September, 2011 to energize the marketplace about the promotions. Seamlessly integrate and align the communications around the target audience’s media consumption profile Communicate B&N’s enhanced value proposition to college students to limit purchasing their books online. Promote more heavily during the Holidays (e.g. Labor Day in September), in September (back-to-school), and at the beginning of each new school semester / quarter. Use lifestyle-focused Internet properties with high affinity to help engage the target audience. Capitalize on purchases made at B&N college bookstores during the back-to-school shopping season to help drive additional promotional offerings. Jumpstart the campaign in the first month in order to help build momentum, and provide sustained support over the second half of the campaign in order to maintain purchasing activity throughout the campaign. Rationales: The media strategy was developed using the following rationales: The media mix closely aligns with the findings from secondary consumer research. The cost effectiveness, accountability, and category fit for leveraging interactive marketing. The lifestyle characteristics of the target audience.

16. Strategic media Plan Campaign Overview Target Audience

17. Strategic media Plan Campaign Overview: Property Evaluation

18. Strategic media Plan Campaign Review

19. Strategic media Plan Campaign Review: Books, Literature, and Magazine Properties

20. Strategic media Plan Campaign Review: Women’s Interests

21. Strategic media Plan Campaign Review: Entertainment

22. Strategic media Plan Reporting • Display Advertising Reporting • Impressions • Post-views • Post-clicks • Click through rate • eCPM • Page views per visitor • Clickstreams • Consumer Behavior (e.g. coupon code downloads) • Video views

23. Strategic media Plan Cont. Budget Allocation Budget Allocation By Publisher Percent of Media Spend by Category

24. Strategic media Plan Media Schedule

25. Evaluation Plan Evaluation Plan Overall Campaign Success Measurements The measureable campaign objectives (as listed previously) are as follows: KPIs: (1) In-store sales and (2) surveyed brand metrics (awareness, intent, and preference) Pre-Campaign Measures Third-party Research for Baseline Awareness, Intent, and Preference Levels Concept / Creative Testing Attitude Analysis

26. Evaluation Plan Evaluation Plan Cont… • Post-Campaign Success Metrics • Incremental Sales • Incremental Increase in Awareness, Purchase Intent and Brand Preference • Incremental Increases in Store Traffic • Incremental increases in Website traffic (B&N Website and B&N College Websites) • Click-Throughs for Display Advertisements, Video Views, and Coupon Code Utilization • Based on the above, the following brief list of success metrics has been selected for the campaign: • Brand awareness (recall & recognition), intent, and preference research from third party market research providers. • Audience response to calls to action. • Website traffic and buzz. • Actual purchase behavior. • Media spend within budget.

27. The End