Nielsen Trust and Advertising Global Report July09

July 2009 Nielsen Global Online Consumer Survey Trust, Value and Engagement in Advertising

Overview Nielsen recently surveyed over 25,000 consumers online across more than 50 markets from Europe, Asia Pacific, the Americas and the Middle East on their attitudes toward trust, value and engagement of advertising. Trust and Value Engagement Trust Us Across over 50 countries measured, a When engagement is measured by the Understanding consumer trust in majority of online consumers surveyed ability of advertising to convey humor, advertising is as important as ever. trust most forms of advertising and emotion and information, TV ads surpass agree that it delivers value by promoting online video ads. • Social media are expanding consumers’ competition and supporting a wide range positive and negative influences Of those same dimensions, consumers are regarding brands. Two-thirds of the of media. most receptive to the humorous qualities global Internet population visit member Trust in advertising is up: Consumers in TV and online video ads. communities online (Source: Global today are more trusting of every Faces and Networked Places: A Nielsen Asian and Middle Eastern consumers marketing channel tracked compared Report on Social Networking’s New are the most likely to find the intended to two years ago, save newspaper Global Footprint, March 2009). humor in a TV ad, while Latin American advertising, trust in which declined a consumers are the most likely to find • Economic pressure is driving greater marginal 3%. informative those TV ads that are attention to ROI, and advertisers have a Peer recommendation is the most intended so. vested interest in marketing investments, trusted channel, trusted “completely” or underscoring the importance of trust Latin American consumers are the most “somewhat” by 9 out of 10 respondents and engagement in advertising like never receptive to online video ads in terms of worldwide. before. all three dimensions: humor, emotion and Of the major paid advertising channels information. Beyond earning their trust, advertisers (online, outdoor, print, radio, TV and and media companies want consumers theatre), television and newspaper are the to understand the value of advertising— most trusted media. a less concrete sentiment that can broadly Text message ads on mobile phones are affect consumer receptivity to advertising the least trusted paid advertising channel, in all media. winning the confidence of just 24% of consumers globally. Online search, banner and video ads are trusted by fewer than half of respondents. Latin American consumers tend to be the most trusting of advertising, and European consumers the least trusting. Copyright © 2009 The Nielsen Company. 1

Trust, value and engagement in Figure 1: Global Consumer Trust in Advertising by Channel advertising should be measured in a variety of ways. For the purposes of this 0% 20% 40% 60% 80% 100% paper, Nielsen recently launched a global Recommendations from people I know 34 56 9 1 online consumer survey to measure Brand websites 13 57 26 5 Consumer opinions posted online 13 57 25 5 trust in advertising among consumers, Editorial content such as a newspaper article 10 59 27 4 partnering with the World Federation Brand sponsorships 9 54 31 6 of Advertisers (WFA) to also examine Ads on TV 8 53 33 6 the value of advertising. This approach Ads in newspapers 7 54 34 5 succeeds in gauging general consumer Ads in magazines 6 53 36 6 Ads in radio 6 49 38 7 perceptions of advertising, while Billboards and other outdoor advertising 5 49 39 6 services such as Nielsen IAG, Nielsen’s Emails I signed up for 7 48 37 8 advertising engagement measurement Ads before movies 5 47 41 7 and consultancy, can gauge similar Ads served in search engine results 4 37 48 11 Online video ads 3 34 51 11 perceptions and engagement on an Online banner ads 3 30 51 16 ad-by-ad, channel-by-channel basis. In Text ads on mobile phones 2 22 47 29 this paper, we discuss only the general and global perceptions measured by the Trust completely Trust somewhat Don’t trust much Don’t trust at all survey. What we found is, while trust and value Figure 2: Consumer Trust in Advertising by Channel (Trust Somewhat/Completely) perceptions can vary greatly by market 2007 vs. 2009 and media, global consumer trust in 90% advertising is on the rise and most 78% consumers acknowledge the value 70% 70% advertising offers. 60% 61% 63% 61% 63%61% 56% 59% 56% 54%55% 55% 52% In this report, we extrapolate the results 49% 49% 41% of our recent global survey to provide 38% 34% 33% insights into consumer trust in advertising, 26% 24% 18% the value consumers see in advertising and certain dimensions of engagement across TV and online video ads, in particular. Text ads on mobile phones Online banner ads Ads served in search engine results Ads before movies Emails I signed up for Ads in radio Ads in magazines Ads in newspapers Ads on TV Brand sponsorships Consumer opinions posted online Brand websites Recommendations from people I know Trust in Advertising Nielsen measured consumer trust in 16 different marketing channels by asking 2007 2009 consumers “To what extent do you trust the following?” Across all channels, an average 56% of respondents indicate that they trust NB: Editorial content, billboards/outdoor advertising and online video ads not covered in April 2007 survey. advertising “completely” or “somewhat.” Peer recommendations top the list, editorial content and brand sponsorships most trusted media: 61% of global trusted by 9 out of 10 consumers; while ahead of a broad list of paid advertising consumers say they trust TV advertising— text message based ads perform the channels. This importance of peer the same percentage that trust newspaper lowest, trusted by just 24%. recommendations and consumer opinions advertising. online justifies the attention marketers Across the 16 measured channels, Online and mobile advertising have continue to pay to the use of social and non-media channels are more trusted perhaps the steepest hill to climb for consumer-generated media. than paid media channels. After peer consumer trust: in addition to text recommendations, consumers trust brand Of the paid advertising channels of online, message advertisements, online search, websites, consumer opinions online, outdoor, newspaper, magazine, radio, TV banner and video ads are the only and theatrical, TV and newspaper are the channels trusted by fewer than half of Copyright © 2009 The Nielsen Company. 2

respondents globally. The good news Figure 3: Global Trust in TV Advertising for online is that consumer trust in that medium is growing. The percentage of 74% 67% global consumers trusting banner ads 62% 61% grew 27% between 2007 and 2009 49% 51% (from 26% to 33% of consumers). The percentage trusting ads in search engine 39% 38% 33% results grew 21% (from 34% to 41% 26% of consumers). Consumers today are more trusting of every marketing channel tracked when compared to two years ago, save newspaper advertising, trust in which LA APIMEA NA EU Global Average declined a marginal 3%. Theatrical advertising saw the greatest growth in Trust completely/somewhat Don’t trust much at all trust—increasing 37% since 2007, from 38% of consumers to 52%. Figure 4: Global Trust in Newspaper Advertising Trust Varies by Region 75% 66% 62% 61% Though TV and newspaper are the most trusted advertising channels overall, 50% 50% trust in ads across both media varies 38% 39% considerably by region. Trust in TV 34% 25% advertising is much higher than average in Latin America, where 74% of consumers trust it, and lower in Europe, where just half (49%) trust it. Similarly, trust in newspaper advertising, LA NA APIMEA EU Global Average which tied as the most trusted paid advertising vehicle globally, varies as Trust completely/somewhat Don’t trust much at all a trusted source by region. As with TV, Latin Americans are the most trusting of newspaper advertising (75%), while just Figure 5: Global Trust in Online Advertising * half of Europeans trust it. The higher-than-average trust that Latin 64% 58% 57% 59% American consumers exhibit for TV and 53% newspaper advertising is consistent 47% 43% 42% 41% across almost all measured channels. In 36% all but one channel—“E-mails I signed up for”—Latin American consumers are the most likely to trust advertising; North American consumers are the most likely to trust such e-mails. LA NA APIMEA EU Global Average Trust in online advertising is only evident among four-in-ten global consumers Trust completely/somewhat Don’t trust much at all (41%). But again, Latin American consumers exhibit the highest level of * Includes search engines, email subscriptions, online banner ads and online videos. trust (53%), whereas Europeans are the most hesitant (36%). Copyright © 2009 The Nielsen Company. 3

Figure 6: Most Trusted Paid Advertising Channel by Market—Top 16 14 14 The most trusted 5 2 1 medium varies Emails I signed Brand Ads in Ads on TV Ads in Ads on radio by market. up for sponsorships newspapers magazines Number of countries * Most trusted marketing channel by market, amongst online banner and video ads, ads served in The search engine results, outdoor, theatrical, brand sponsorships, magazine, radio, TV, newspaper and e-mail subscriptions following tables present a further breakdown of which countries’ consumers express the most trust in each of the paid advertising channels. Figure 7: Territories Showing the Most Trust by Paid Advertising Channel Theatrical Search Engine Emails Venezuela 74% Vietnam 62% Portugal 69% Philippines 70% Brazil 62% Brazil 67% Brazil 69% Indonesia 57% US 67% Colombia 69% Philippines 56% UAE 66% South Africa 67% Venezuela 56% India 65% Magazine TV Online Banner Ads Venezuela 82% Colombia 82% Vietnam 67% Colombia 79% Venezuela 80% Venezuela 62% Brazil 76% Pakistan 78% Turkey 57% Philippines 75% Philippines 77% Colombia 53% Vietnam 75% Mexico 52% Brazil 77% South Africa 75% Newspapers Outdoor Online Video Ads Venezuela 81% Venezuela 71% Vietnam 63% Pakistan 79% Philippines 69% Colombia 56% Philippines 78% South 69% Venezuela 56% UAE 78% Africa Brazil 54% India 77% Pakistan 69% Philippines 53% Brazil 77% Colombia 69% Radio Brand Sponsorships Mobile Text Ads South Africa 78% Colombia 80% India 43% Venezuela 78% Venezuela 80% Venezuela 43% Colombia 73% Brazil 79% Vietnam 42% Brazil 72% South Africa 78% Brazil 36% Mexico 72% Pakistan 78% Pakistan 35% Copyright © 2009 The Nielsen Company. 4

The Value of Advertising We asked if advertising: • Helps make a difference (through public service advertisements) In addition to wanting consumers to • Increases value for consumers (through competition) • Often gets my attention and trust advertising, advertisers and media is entertaining companies want them to understand • Promotes consumer choice (helping the value that advertising provides. consumers exercise their right to choose) Globally, most consumers agree that New this year to our study, we analyzed advertising delivers these types of value. international perceptions of the value of • Powers economic growth (by helping Across all eight, more consumers than not advertising. companies succeed) agree with the statements. In partnership with the WFA, we measured • Creates jobs (through economic growth Most prominently, consumers understand consumer perceptions on eight values for and as an industry in itself) that advertising helps to subsidize the advertising. • Is the lifeblood of media (funding a cost of sporting and cultural events: diverse, pluralistic media landscape) 81% of consumers agree with that value. Consumers are less convinced • Funds sports and culture (through of the value of advertising in providing sponsorship) useful information on issues such as safety and health through public service announcements, although even here, 63% Figure 8: Global Consumer Sentiment on Key Values of Advertising of consumers agree that it does so. While the perception of advertising value 0% 20% 40% 60% 80% 100% appears consistent across age and gender Advertising and sponsorship are important to fund 22 59 10 3 6 groups, there are considerable regional sporting events, art exhibitions and cultural events differences, as with trust in advertising. By helping companies succeed, advertising creates jobs in those companies and in the advertising industry 15 65 12 2 7 The most notable regional variation is on Advertising contributes to growth of the economy 13 58 17 3 8 the subject of advertising’s ability to help consumers make more informed choices, Advertising stimulates competition, which leads to better products and lower prices 16 52 22 5 6 by providing information. Globally, two- By providing me with information, advertising thirds of consumers agree that advertising 14 53 22 6 5 allows me to make better consumer choice provides value this way. In Latin America, Advertising funds low cost and free content on the Internet, TV, newspapers and other media 14 53 18 4 11 eight out of 10 consumers agree, but only half of European consumers do. Advertising often gets my attention and is entertaining 13 53 21 7 5 Advertising provides useful information on important issues in society, such as safety and health 13 50 23 7 7 Strongly agree Agree Disagree Strongly disagree I don’t have an opinion Figure 9: By Providing Information, Advertising Allows for Better Consumer Choices 82% 72% 72% 67% 50% 44% 27% 22% 21% 16% LA APIMEA NA EU Global Average Strongly agree/Agree Strongly disagree/Disagree Copyright © 2009 The Nielsen Company. 5

Engagement with Advertising To consider whether advertising is achieving its intended audience engagement, Nielsen measured general advertising engagement with a focus on TV ads and online video ads. Global respondents were asked to rate their levels of agreement with statements on three aspects of engagement: funny, emotionally touching, and informative. Overall, online consumers are most receptive to the comedic qualities in a TV or online video ad. About six in ten of them (59%) “strongly agree” or “agree” that they understand the humor in TV ads that are meant to be funny, while about half (49%) share the same understanding for online video ads. Figure 10: Global Engagement with TV Ads In our survey, TV ads surpass online 49% video ads in engagement along all three dimensions measured. The tide may be 42% shifting a bit, though. Recent research 36% 35% 36% by Nielsen IAG, Nielsen’s advertising 29% engagement consultancy, showed that teens are on average 146% more likely 15% 10% 9% 11% 8% 9% 5% 3% 3% Strongly agree Agree Neutral Disagree Strongly disagree Funny Emotionally touching Informative Figure 11: Global Engagement with Online Video Ads 43% 41% 41% 36% 32% 27% 20% 16% 8% 11% 6% 5% 6% 4% 4% Strongly agree Agree Neutral Disagree Strongly disagree Funny Emotionally touching Informative Copyright © 2009 The Nielsen Company. 6

to recall an advertised brand and key Figure 12: Global Comparison of Engagement (Strongly agree/Agree) message from an in-stream ad they have viewed during a full TV episode 59% watched online, compared to an ad from 50% 49% a commercial airing on linear TV (for the 44% same brand/product). Other age groups 37% show higher levels of recall to ads during 33% TV shows online, too, though to a lesser extent. The relationship and differences of online video and linear TV ads is currently being explored by Nielsen IAG. Looking at differences by region, with regard to TV ads, Asian and Middle Eastern online consumers most often resonate TV ads Online video ads with the intended humor (67%), while Latin Americans are the most likely to feel Funny Emotionally touching Informative informed (68%), both above the global average. All three dimensions—humorous, emotional and informative— resonate least with Europeans. Figure 13: Engagement with TV Ads by Region (Strongly agree/Agree) Online video ads are the most engaging among Latin American consumers across 67% 68% all three aspects of measurement, at 63% 63% 60% 59% levels solidly above the global average. 55% 52% 55% 50% 50% Once again, Europeans register the lowest 44% 44% in terms of the emotional qualities (22%). 42% 29% LA NA APIMEA EU Global Average Funny Emotionally touching Informative Figure 14: Engagement with Online Video Ads by Region (Strongly agree/Agree) 63% 55% 55% 45% 47% 46% 49% 40% 43% 34% 37% 32% 33% 27% 22% LA NA APIMEA EU Global Average Funny Emotionally touching Informative Copyright © 2009 The Nielsen Company. 7

Conclusion Though a rising segment of consumers, specifically teenagers, seems more The Nielsen Global Online Consumer engaged with online video ads than TV ads, Survey shows that consumer trust in overall consumers in our survey perceive advertising has risen since the previous television ads to be more effective than survey was conducted in 2007. Consumers online video ads at communicating continue to trust the opinions of other humorous, emotionally touching and consumers (either people they know or informative messages. consumer opinions posted online) more Variations in consumer trust across than paid advertising, including online, markets, demographics and media have outdoor, print, radio, TV and theatrical implications in the best way to engage channels. Branded websites are the most consumers in a fragmented media world. trusted advertiser-produced medium, tied What’s more, understanding the value with consumer opinions online, while two that consumers see in advertising—and traditional media—TV and newspaper the levels of engagement they feel—can —are the most trusted paid media. help marketers to best appeal to the In addition to trust, consumer marketing interests of their audience. This perceptions on the value of advertising paper outlines just some of the variations are generally positive. Approximately on consumer trust and perceptions in 80% of consumers globally acknowledge advertising, but additional Nielsen insights the value of advertising in funding art are available. exhibitions, cultural and sporting events and helping companies succeed and create jobs. A lower share of consumers (67%) recognizes the value of advertising in the basic media model of underwriting low cost and free content. Perceptions on the value delivered by advertising vary across regions, with Western European consumers the most skeptical and Latin American consumers viewing the value of advertising more favorably. Copyright © 2009 The Nielsen Company. 8

About the Nielsen Global Online About The Nielsen Company Consumer Survey The Nielsen Company is a global The most recent Nielsen Global Online information and media company with Consumer Survey was conducted by leading market positions in marketing Nielsen Consumer Research from March and consumer information, television 19 to April 2, 2009, among 25,420 and other media measurement, online Internet consumers over 50 markets intelligence, mobile measurement, across Europe, Asia Pacific, North and trade shows and business publications Latin America and the Middle East. The (Billboard, The Hollywood Reporter, largest half-yearly survey of its kind, the Adweek). The privately held company is Nielsen Global Online Consumer Survey active in more than 100 countries, with provides insight into the opinions and headquarters in New York, USA. preferences of Internet consumers across the world. For further detailed results by market or information on advertising engagement from Nielsen IAG, please contact Stephan.Goldsand@nielsen.com. For more information visit www.nielsen.com Copyright © 2009 The Nielsen Company. 9

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