Trends in Advertising by Augustine Fou Chief Digital Strategist

Trends inAdvertising Dr. Augustine Fou http://www.linkedin.com/in/augustinefou November 15, 2012.

UPDATE: April 16, 2013 Source: IAB 2012 Advertising ReportNovember 15, 2012. 2

Time Spent with Media

From Traditional to Digital Television is 42% Online is 38% Source: IAB and Business Insider Oct 2012November 15, 2012. 4

From CPM to Performance Source: IAB, PwC April 2011November 15, 2012 5

Facebook reach already larger Burberry 12.6M 8.4M Once Upon A Time Dior 7.8M 8.5M Desperate Housewives Gucci 7.6M 8.6M Rules of Engagement Louis Vuitton 7.3M 8.9M Touch Chanel 6.5M 9.5M CSI: NY Dolce & Gabbana 5.3M 9.7M Body Of Proof Ralph Lauren 4.9M 10.0M SURVIVOR: ONE WORLD Calvin Klein 4.0M 10.1M 60 Minutes Coach 3.3M 10.5M Unforgettable Armani 3.1M 10.7M Blue Bloods Prada 1.7M 12.0M The Voice Fendi 1.6M 14.0M Big Bang Theory Versace 0.8M 14.6M Person Of Interest Cartier 0.7M 18.0M Dancing with the Stars Hermes 0.6M 18.6M NCIS Source: Facebook, April 2012 Source: TVByTheNumbers, April 2012… than many top TV ShowsNovember 15, 2012 6

Facebook reach already larger Burberry 12.6M 1.0M Marie Claire Dior 7.8M 1.0M GQ Gucci 7.6M 1.1M Lucky Louis Vuitton 7.3M 1.1M Elle Chanel 6.5M 1.2M Vanity Fair Dolce & Gabbana 5.3M 1.3M Vogue Ralph Lauren 4.9M 1.5M Self Calvin Klein 4.0M 1.5M Fitness Coach 3.3M 1.6M Shape Armani 3.1M 1.7M InStyle Prada 1.7M 2.0M Real Simple Fendi 1.6M 2.0M Seventeen Versace 0.8M 2.4M Glamour Cartier 0.7M 3.0M Cosmopolitan Hermes 0.6M 3.6M People Source: Facebook, April 2012 Source: Wikipedia, 2H 2011 … than all top magazinesNovember 15, 2012 7

Future of Advertising “Soup and Soda” “Cars and Computers” branding performance2012 - $107B Television ($70B, 2012) Digital ($37B, 2012) 55% 45% 22% 46% 32% Broadcast Cable Display Search Other (Facebook) (Google) 2016E - $104B Television ($61B, 2016E) Digital ($43B, 2016E) 51% 49% 42% 49% 9% Broadcast Cable Branding Performance Other (Facebook) (Google)

Trend Commentary • Overall ad market will shrink because digital introduces new efficiencies into the system, so fewer dollars are need to achieve the same effect • Awareness ad dollars will always exist, but awareness spending will shift to digital channels – e.g. Facebook, because of its massive reach and better targeting (than TV, print, etc.) • The general trend is from impression based advertising towards performance; small-ticket, low consideration products (e.g. soda, cpg) will remain on the left side (awareness) while big-ticket, high consideration products will tend towards the right (performance)November 15, 2012. 9

So What? “Even awareness ad dollars will shift online to places like Facebook where performance can be better measured; the rest of digital will continue trend towards performance and pay per action – e.g. search.” - Dr. Augustine FouNovember 15, 2012 10

Dr. Augustine Fou – Chief Digital Strategist “I show clients how they need to evolve their advertising and marketing in the new digital world.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT 95) AT AGE 23 ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou Slideshares: http://www.slideshare.net/augustinefou LinkedIn: http://www.linkedin.com/in/augustinefouNovember 15, 2012 11 acfou@mktsci.com

APPENDIXNovember 15, 2012. 12

Percent of Budgets in Digital Source: eMarketer Feb 2012November 15, 2012. 13

Total Ad Spending by Share Source: eMarketer, Dec 2012

Top Spending by Industry Top U.S. Advertising Verticals Automotive Fast Food / QSR Restaurants Automotive Dealership Wireless / Telecommunications Retail Motion Picture / Movies Pharmaceuticals Source: Marketing Charts, Dec 2012

Global Ad Spend Growth bySector Source: Marketing Charts, Nov 2012

Marketers to DECREASE Source: http://www.marketingcharts.com/wp/television/marketer s-say-theyre-shifting-focus-away-from-traditional- media-26578/November 15, 2012 17

U.S. Online Exceeds PrintNovember 15, 2012 18

Omnicom (NYSE:OMC)November 15, 2012 19

MDC Partners (NASD:MDCA)November 15, 2012 20

WPP (NASD:WPPGY)November 15, 2012 21

Publicis (PINK:PUBGY)November 15, 2012 22

Interpublic (NYSE:IPG)November 15, 2012 23

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Trends in Advertising by Augustine Fou Chief Digital Strategist

by Dr Augustine Fou on Nov 15, 2012

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