The Digital Reality
Search
MDAS Singapore
Chris Schaumann, Country Sales Manager

Slide 2 | © Microsoft Corporation 2007

Future Shape of Advertising
Slide 5 | © Microsoft Corporation 2007

The Consumer is in Control
Slide 6 | © Microsoft Corporation 2007

The Consumer is in (Remote) Control
Slide 7 | © Microsoft Corporation 2007

The new TV Reality
Before DVRs, (TV Viewing) After DVRs
• 70% of television viewing • Up to 60% of viewing is time
happens during primetime shifted
hours
• Virtually all television • Reality, news and sports are
watched \"live\" the only genres that retain
much live audience
• 70% of commercials are
• Life fits into the network's
skipped
schedule
• Two-thirds of television
occurs outside of primetime
hours
Slide 9 | © Microsoft Corporation 2007

DVR – the next VCR (with a catch)
In recorded programming, what percentage of ads do you actually watch?
Source: Forrester’s consumer technographics 2004 DVR online study
Slide 10 | © Microsoft Corporation 2007

Digital Generation
Source: Nielsen//NetRatings consumer Survey 06/06
Slide 14 | © Microsoft Corporation 2007

No more Mass Media?
Slide 15 | © Microsoft Corporation 2007

TV Channel Proliferation
The End of Mass Media
7109
Number of TV Channels
1686
416
246
93
UK
Japan US France Germany
Source: Europe: Screen Digest 2005, Japan: Wikipedia May 2006, US: US Federal Comms Commission, 2004

The End of Mass Media
34%
24%
13%
9%
Source: NAB (1965 – 1986); Nielsen (2000)
Slide 17 | © Microsoft Corporation 2007

Multi-tasking
Source: MindShare, November 2005
Slide 18 | © Microsoft Corporation 2007

Always connected and informed
Access home & work Connected
Self expression Informed
Slide 20 | © Microsoft Corporation 2007

The Internet beats the TV
in the Battle for Attention
Slide 22 | © Microsoft Corporation 2007

Print Global Trends
1995 USD billions constant prices
140
135
130
125
120
115
110
105
100
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Slide 23 | © Microsoft Corporation 2007

Slide 24 | © Microsoft Corporation 2007

Print Humor
Slide 26 | © Microsoft Corporation 2007
26

The Rise of Windows Live Spaces
120 m
40 m
2m
Source: Microsoft Internal Data (audited by PWC)
Slide 27 | © Microsoft Corporation 2007

The Internet has reached Critical Mass
Slide 28 | © Microsoft Corporation 2007

Exploding Online Users in APAC
Source: www.internetworldstats.com, February 2007
Slide 29 | © Microsoft Corporation 2007

Exploding Online Users in APAC
Source: www.internetworldstats.com, February 2007
Slide 30 | © Microsoft Corporation 2007

Exploding Online Penetration in Asia
Source: www.internetworldstats.com, February 2007
Slide 31 | © Microsoft Corporation 2007

Who’s Online?
Source: PAX Q3,05-Q2,06 (10 markets ex Tokyo; among top Management Sample)
Slide 32 | © Microsoft Corporation 2007

Average Hours of
Media Exposure per Day
Source: Synovate Young Asians Nov 2005
Slide 35 | © Microsoft Corporation 2007

What is the Global Youth spending more Time on?
Slide 40 | © Microsoft Corporation 2007

But Consumers are still way ahead….
Slide 41 | © Microsoft Corporation 2007

The World is changing (fast!)
Growth rate: years to reach a quarter of the US population
Slide 43 | © Microsoft Corporation 2007

The World is changing (fast!)
Growth rate: years to reach a quarter of the US population

Digital Dominance
Games
Digital radio
Mobile
Outdoor
Digital TV
Cinema
Analogue radio
Analogue TV
Internet
Print
Growth rate: years to reach a quarter of the US population
Source: ISOBAR
Slide 45 | © Microsoft Corporation 2007

Internet is the most helpful Medium
for Product/Service Information
Source: Synovate Young Asians Nov 2006
Slide 47 | © Microsoft Corporation 2007

Internet for B-2-B?
Slide 48 | © Microsoft Corporation 2007

Internet is the most
helpful Medium for Consumer Electronics
Source: Consumer Electronics Association, Oct 2006
Slide 49 | © Microsoft Corporation 2007

Consumers research & buy Online
Source: EIAA Mediascope 2005

Share of Advertising Expenditure – U.S. 2005
Source: Media expenditures by medium from TNS Media Intelligence & Coen’s
Slide 52 | © Microsoft Corporation 2007

Share of Advertising Expenditure – U.S. 2005
COEN’S U.S.
ADVERTISING EXPENDITURES MEDIUM AS % OF TOTAL TOTALS*
MEDIA 2005 2004 % CHG 2005 2004 2005 2004 % CHG
Direct mail NA NA NA NA NA 55,218 52,191 5.8
Yellow Pages NA NA NA NA NA 14,229 14,002 1.6
Cable local spot NA NA NA NA NA 5,358 5,103 5
Network TV 26,706 26,218 1.9 9.9 9.9 16,128 16,713 -3.5
Local newspaper 25,537 25,164 1.5 9.4 9.5 39,870 38,985 2.3
Magazine 23,218 21,628 7.3 8.6 8.2 12,847 12,247 4.9
Spot TV 17,115 18,794 -8.9 6.3 7.1 24,300 25,877 -6.1
Cable TV network 16,453 14,818 11 6.1 5.6 18,296 16,424 11.4
Internet 8,323 7,343 13.3 3.1 2.8 7,764 6,853 13.3
Local radio 7,431 7,453 -0.3 2.7 2.8 15,357 15,205 1
Business publication 5,038 5,234 -3.7 1.9 2 4,170 4,072 2.4
Syndicated TV 4,222 3,931 7.4 1.6 1.5 3,865 3,674 5.2
Outdoor 3,529 3,213 9.8 1.3 1.2 6,232 5,770 8
National newspaper 3,467 3,303 4.9 1.3 1.3 7,465 7,629 -2.1
National spot radio 2,604 2,617 -0.5 1 1 3,469 3,540 -2
Sunday magazine 1,739 1,529 13.7 0.6 0.6 NA NA NA
FSI 1,442 1,392 3.6 0.5 0.5 NA NA NA
Network radio 1,010 1,028 -1.7 0.4 0.4 814 836 -2.6
Local magazine 451 360 25.2 0.2 0.1 NA NA NA
Total US 271,074 263,766 2.8 100 100 271,074 263,766 2.8
Source: Media expenditures by medium from TNS Media Intelligence & Coen’s
Slide 53 | © Microsoft Corporation 2007

Slide 54 | © Microsoft Corporation 2007

Regional Reach (vs. TV)
Source: Synovate Young Asians 2005, Hong Kong, Singapore, Korea & Taiwan
Slide 59 | © Microsoft Corporation 2007

Regional Reach (vs. Print)
Source: Synovate PAX 2005/06 (Q2 ’05-Q1 ’06)
% Av. Issue Readership,
Slide 60 | © Microsoft Corporation 2007

Reaching Consumers
throughout their Media Day
7.00am Journey
Morning Paper
Breakfast News Breakfast Show
To Work Check News/
Mail
9.00am
11.00am Search
1.00pm Paper/Mags Out for News, Sport,
Drive Time
Lunch Finance
3.00pm
5.00pm Search
7.00pm Leisure Mags
Drive Time Web Cast
Journey Home
9.00pm
News, Ent,
Sport
11.00pm
Slide 63 | © Microsoft Corporation 2007

Digital Convergence
+ WiFi
Slide 66 | © Microsoft Corporation 2007

The Captains of the Industry get it...
Digital is becoming the core marketing tool. ... it
is, and we should have no doubt about this, a
fundamental and irreversible evolution.
Publicis Groupe CEO Maurice Levy
Source: AdAge May 2007
Slide 68 | © Microsoft Corporation 2007

The Captains of Industry get it...
I believe today’s marketing model is broken. We’re applying antiquated thinking
to a new world of possibilities…
Jim Stengel, GMO: P&G
Slide 69 | © Microsoft Corporation 2007

The Captains of the Industry get it…
Source: Forrester December 2004 (What’s Next For TV Advertising)
Slide 70 | © Microsoft Corporation 2007

…and the Consumers?
- Internet tops TV as most popular pastime -
Surfing the Internet is now more popular than watching
television, according to new figures.
On average, adults in Britain spend more time online at their computers
- 41.5 days a year - than in front of the TV. Government figures from the
Office of National Statistics show that we spend just 37.5 days a year
watching television.
Source: Daily Mail, 8th March 2006
Slide 72 | © Microsoft Corporation 2007

…and the Clients?
– Jim Stengel, CMO P&G –
“What we really need is a mind-set
shift, a mind-set shift that will make
us relevant to today‟s consumers, a
mind-set shift from „telling and
selling‟ to building relationships.”
Source: Times UK Online, October 21, 2005
Slide 73 | © Microsoft Corporation 2007

…and the Clients?
– Heineken Halts All TV Advertising in UK –
Heineken has pulled its television ad budget after 30 years of broadcast
advertising campaigns. It will redirect its marketing dollars towards point-of-
sale promotions and event sponsorship.
Rob Marijnen, managing director of Heineken UK, said that a number of factors
had prompted it to put its money elsewhere...
“The enormously cluttered environment in TV ads makes it difficult to make
standout ads... It’s also very expensive and it’s questionable as to its
effectiveness.”
Source: Times UK Online, October 21, 2005
Slide 74 | © Microsoft Corporation 2007

…and the Clients?
-– McDonald’s doubles online spend
after global restructure –-
McDonald’s has restructured its global marketing team and doubled its online advertising
budget as it turns to interactive media to forge a more meaningful relationship with
consumers.
Consumer-generated content and social networks such as Windows Live Spaces are
believed to be important areas of focus for the company.
Detailed research conducted through Microsoft demonstrated that online was 44 per
cent more cost-efficient than other media when it came to driving purchase intent.
TV’s share of the marketing pot has reduced from 85% to 70%.
Source: Industry News, January 2007
Slide 75 | © Microsoft Corporation 2007

…and the Clients?
-- NESTLE favors Digital by an additional 8% --
NESTLE dropped a digital bombshell this week. The Swiss food giant is reducing
its TV advertising budget from 68 to 60 per cent of marketing expenditure
globally in recognition of the importance of digital media.
\"The advent of the digital age continues,\" announced Nestle Australia's Ian
Alwill. \"Nestle has legislated that we will spend more in the digital space.\"
Source: Fairfax, November 2006
Slide 76 | © Microsoft Corporation 2007

…and the Clients?
Suzuki to 3x Online Ad Spend
In a move to become a bigger player on the auto
landscape, American Suzuki Motor has more than tripled its
online ad spend this year and already has made its Internet
media buy for 2007, well ahead of the competition.
Up to 85% of Internet ad buys are now made upfront.
Source: Brandweek 6/9/06
Slide 77 | © Microsoft Corporation 2007

…and the Clients?
-- HP spends 30% Online --
HP has shifted its online media spend from 10% to
30%. They have also merged content and media in
various fresh and compelling ways.
Source: ANA Annual Conference October 20`06
Slide 78 | © Microsoft Corporation 2007

…and the Clients?
Source: ANA Annual Conference October 20`06
Slide 79 | © Microsoft Corporation 2007

…what about Microsoft?
Of the $500 million
Microsoft allocated to the
introduction of its Vista
operating system, 30% went
online.
Source: Times UK Online, October 21, 2005
Slide 80 | © Microsoft Corporation 2007

…and the Industry?
“78% of advertisers feel that over the last two years television
advertising has lost effectiveness, and — as a direct result —
marketers are exploring emerging technologies to help bolster
their television advertising spend.”
Source: Survey from the Association of National Advertisers (ANA) and Forrester Research, 30th March 2006
Slide 81 | © Microsoft Corporation 2007

…and the clients?
“The ANA predicts that
80% of advertisers will
spend more of their advertising budget on
Web advertising
and 68% of advertisers will look to search
engine marketing.”
Source: Survey from the Association of National Advertisers (ANA) and Forrester Research, 30th March 2006
Slide 82 | © Microsoft Corporation 2007

Some things never change
Slide 83 | © Microsoft Corporation 2007

Planning & Creativity
Slide 84 | © Microsoft Corporation 2007

The Future of Marketing
- From Monologue to Dialogue
“Media execution &
media buying
is becoming the new
creative in advertising”
Source: The Economist Intelligence Unit, September 2006
Slide 85 | © Microsoft Corporation 2007

The Future of Marketing
- From Monologue to Dialogue
“Every major advertiser today is
re-evaluating their entire
marketing investment”
Ed Erhardt, President of Marketing and Sales
Source: The Economist Intelligence Unit, September 2006
Slide 86 | © Microsoft Corporation 2007

Bring the Love back!
Join the conversation at
www.bringtheloveback.com
Slide 87 | © Microsoft Corporation 2007

Customer-2-Customer
Generation ‘C’ (for Content)
• Research shows that 86% of consumers
no longer believe what brands say about
themselves
• Whereas 78% of consumers believe
what other consumers
say about brands
Slide 88 | © Microsoft Cooperation
2006

Slide 89 | © Microsoft Corporation 2007

Make your communication
genuine
Slide 90 | © Microsoft Corporation 2007

Make your communication
relevant
Slide 91 | © Microsoft Corporation 2007

Target the right
message
At the right
time
To the right
person
Slide 92 | © Microsoft Corporation 2007

Break up the silos of
creative
+
planning
Slide 93 | © Microsoft Corporation 2007

Engage your audience with
interactivity
Slide 94 | © Microsoft Corporation 2007

Slide 103 | © Microsoft Corporation 2007

What does this mean for Microsoft -
a new era
Slide 104 | © Microsoft Corporation 2007

Software & Ad Market
2007 Online Ad Market = $34B
6% of total Ad Market
2009 Online Ad Market = $52B
8% of total Ad Market
Sources:
-Market Sizes: Microsoft & Universal McCann
- Online Market Sizes: Oppenheimer & Co. Inc., June 2007 (sources include Universal McCann, Interactive Advertising Bureau (IAB) and
PricewaterhouseCoopers )
Slide 105 | © Microsoft Corporation 2007

“Going back about 20 years I used to tell our
people Microsoft was about one thing:
Windows, Windows, Windows…
but not any more baby, it’s
Advertisers, Advertisers, Advertisers”
Steve Ballmer
Slide 107 | © Microsoft Corporation 2007
107

Slide 109 | © Microsoft Corporation 2007

Slide 113 | © Microsoft Corporation 2007

Slide 116 | © Microsoft Corporation 2007

Online for the Consumer in Control
Move from links to answers Biz
Network
Previous Relevant
Access all areas
Searches Info
Met Book
on-line
EntertainmentAnswer my Question Club
Family Friends
Designed to
My social Network
Com-
puter News
Files
mework together
Friends Family
Everything on Anything
Met Play
Anywhere access
on-line Group
Family Friends
Friends
Safety and security
Trip Local
Photos Search
Last
Other
job pals
Family
Local
shops
Slide 117 | © Microsoft Corporation 2007

Volume of Users
Content providers (major to self select)
Slide 120 | © Microsoft Corporation 2007

Vision
• Windows Live, a new set of personal Internet services and
software, is designed to bring together in one place all the
– Relationships
– Information
– Interests
• People care about most, with enhanced safety and security
features across their PC, devices and the Web.
• MSN and Windows Live will be offered alongside each other as
complementary services.
Slide 121 | © Microsoft Corporation 2007

Slide 126 | © Microsoft Corporation 2007

Slide 128 | © Microsoft Corporation 2007

A comprehensive Advertising Solution for You
• Reach your their target audiences across multiple digital lifestyle touch points
• Your message in the right place at the right time
• As consumers communicate, research, inform, entertain and work
• Dynamically engage your brands with your audience
• Context and content for 76 million Asian users on MSN, Windows Live, Microsoft Office
• High-impact advertising products and platforms such as Window Live Messenger
• Achieve advertising results through world-class partnership services
• Access to advertising innovation, knowledge sharing, planning and service excellence
• Benefit from case studies, industry research, custom ad accountability and more
Slide 129 | © Microsoft Corporation 2007

Advertising when the Audience is …
– Game Console
(over the Internet)
– IPTV
– Online Video
– Online Maps
– Instant Messaging
– Online Services
– Mobile Phone/PDA
Slide 138 | © Microsoft Corporation 2007

While playing Games
Slide 139 | © Microsoft Corporation 2007

While watching TV (over the Internet)
Slide 142 | © Microsoft Corporation 2007

While watching Video (Online)
Branded Experiences:
1. Watching MSN in Concerts (Music/Videos Online)
2. Watching Live Earth
Slide 143 | © Microsoft Corporation 2007

http://msninconcert.msn.com/music/archive/en-sg/archive.aspx
Slide 144 | © Microsoft Corporation 2007

07/07/07 – Live Earth
Page 145

07/07/07: The Media Event
From the producers of Live 8, a media event to focus global attention on climate crisis…
• 7 concerts…
at ecologically responsible & politically important venues
• 7 continents…
each with its own environmental concerns
• 150+ artists…
performing in support of a global call to action
• 60+ films…
& PSAs messaging critical environmental issues
• Live Earth’s “SOS” online community…
engaged by rich content & interactivity
• 2 million audience members…
inspired by the event experience
• 2 billion viewers…
mobilized to take action with corporate partners
Page 146

Global Concert Locations and Venues
Artist for All Venues to be confirmed
• US: Giants Stadium Confirmed
• UK: Wembley Stadium – London Confirmed
• Brazil: Copacabana Beach, Rio de Janeiro
• South Africa: The Cradle of Human
Kind, Maropeng near Johannesburg
• Japan: Tokyo Dome, Tokyo
• China: (location TBD), Shanghai
• Australia: Aussie Stadium, Moore Park, Sydney

Live Earth Confirmed Artists
Giant Stadium–New Jersey
• Kanye West • Melissa Etheridge
• AFI • Dave Matthews Band
• Kelly Clarkson • Rihanna
• Akon • Fall Out Boy
• KT Tunstall • Roger Waters
• Alicia Keys • Smashing Pumpkins
• Ludacris • John Mayer
• Bon Jovi • The Police
• Sheryl Crow
Page 148

Live Earth Confirmed Artists
Wembley Stadium–London
• Beastie Boy • James Blunt
• Black Eyed Peas • John Legend
• Bloc Party • Keane
• Corinne Bailey Rae • Madonna
• Damien Rice • Paolo Nutini
• Razorlight
• David Gray
• Duran Duran • Red Hot Chili Peppers
• Snow Patrol
• Foo Fighters
• Genesis
Page 149

Global Media Distribution & Reach
• A global campaign fueled by 24-hour multimedia reaching 2 billion viewers
The Exclusive Online Distributor
“One of the things that Microsoft and MSN really believe in is that the Internet is going to change the world, and
that we can play a very big role in this.” Joanne Bradford-Corporate Vice President and CMO,
MSN Live Earth Press Announcement, Los Angeles, 2/15/2007
U.S. Broadcast Global Broadcast Online Marketing & PR
SaveOurSelves.org
Guerrilla Marketing
User Generated
Content
PSAs
Page 150

http://liveearth.sg.msn.com
Slide 151 | © Microsoft Corporation 2007

Watching Live Earth on television, as opposed to online via MSN, is an
effect not unlike being a passenger in your grandmother's car:
\"Go faster, turn here, oh hell, forget it, I'll drive…Each concert feed
streamed via MSN without buffering or hiccups, meaning that each
was as mouse-clickably close as the next...The pageantry that sprung
from his devotion was, as seen through MSN's Live Earth webcast,
nearly perfect in its execution.
8 million people viewing 15
With a reported
million streams for the event breaking the record set two
years ago by Live 8, Live Earth is broadband's biggest event to
Steve Bryant, Hollywood Reporter
date!
Slide 152 | © Microsoft Corporation 2007

Finding Local Information
Slide 154 | © Microsoft Corporation 2007

Finding Local Information
Slide 155 | © Microsoft Corporation 2007

While Socializing
Slide 157 | © Microsoft Corporation 2007

J&J Acuvue Theme Pack
Slide 158 | © Microsoft Corporation 2007

J&J Acuvue Theme Pack
Slide 159 | © Microsoft Corporation 2007

While Working
Slide 161 | © Microsoft Corporation 2007

While Working
Slide 162 | © Microsoft Corporation 2007

On the Road
Slide 163 | © Microsoft Corporation 2007

Our Unmatched Audience Reach
Digital Lifestyle
Slide 165 | © Microsoft Corporation 2007

Slide 173 | © Microsoft Corporation 2007

Case Study: Nokia
Slide 227 | © Microsoft Corporation 2007

Nokia New Year’s Eve
Live Concerts - a truly Global Entertainment Experience
Challenge
• Help Nokia own the music category
on a global basis
MSN Solution
• Created a truly global entertainment
experience via live concerts in five
cities for one giant party during new
year’seve in
HongKong, Mumbai, Berlin, Rio and
New York
Result
• Nokia New Year’s Eve concerts were
the only branded communications to http://nokianewyearseve.msn.com
consumers at the time
Slide 228 | © Microsoft Corporation 2007

Nokia New Year’s Eve
Live Concerts - a truly Global Entertainment Experience
Impact
• Hundreds of thousands of
viewers tuned in during the 24
hour period to watch the live
streaming concerts in real time
• 1,000+ posted images/videos
of their experiences
http://nokianewyearseve.msn.com
Slide 230 | © Microsoft Corporation 2007

Case Study: Blogging / Volvo
Slide 242 | © Microsoft Corporation 2007

Volvo: “What’s Your Story?”
Connecting advertisers with digital storytelling
• Challenge: Engage adults 25 -54 in a way that
connects Volvo with real-life user stories
• MSN Solution: Associate Volvo with the
blogging experience and MDAS’ platform to
bring real-life consumer stories to life
• Result: Associates Volvo with the blogging
experience, rather than the content itself. As
result, Volvo “trustworthiness” showed lift
• Impact:
– Significant lift in key brand metrics
– Visitors are 3.5x more likely to search the
web for Volvo keywords
http://whatsyourstory.msn.com/
Slide 243 | © Microsoft Corporation 2007

Blogging in Asia
• Almost half of the online Asian community
have a blog (45%)*
• Why do Asians blog?*
– Keep in touch - 53 % blog to stay close with
friends and family
– Self Expression - 50% started their blogs to voice
strongly held opinions
• 48% of young Asians say reading blogs is their
favorite online activity **
*Blogging Asia: A Windows Live Report, 2006.
**Synovate Young Asian Survey, 2006.
Slide 244 | © Microsoft Corporation 2007

Customized Solutions - Recently launched
• Starwood Westin: Renewal http://renewal.msn.com
• Philips: Ambilight http://movies.msn.com/movies/movie-trailers/ambilight
• Nissan Infiniti: Open for Design http://openfordesign.msn.com
• Microsoft: Show Us Your Wow http://showusyourwow.msn.com
• Ford: Ideas from the Edge http://fordedge.msn.com
• Prilosec OTC: Bunco games http://bunco.msn.com
• LeBron James: LeBron on MSN http://lebron.msn.com

Contact Information
• Online Services Group - Southeast Asia
Microsoft Operations Pte Ltd
1 Marina Boulevard #22-00
Singapore 018989
• Chris Schaumann
Country Sales Manager, Singapore
+65 (6882) 8532
chris.schaumann@microsoft.com
www.msn.com.sg | www.live.com | spaces.live.com | mail.live.com
• Find out about the latest information and case studies at http://asia.advertising.msn.com/
• Sign up for the new MSN Newsletter at https://www.msn-advertising.com/msn_ad/
• Get new Windows Live Services: http://ideas.live.com/
Slide 262 | © Microsoft Corporation 2007

Slide 266 | © Microsoft Corporation 2007