WFA Annual Report 2016

1. Annual Report 2016

2. The only organisation representing and connecting global marketers. London, Brussels, Singapore

3. President’s Vision 2 Message from the CEO 3 Executive Committee 4 Marketing Groups 6 CMOforum IMCforum MEdIaforum 7 CdOforum SOurCInGforum InSIGhtforum 8 Worldwide meetings 2016 Marketing highlights 10 Staff 12 Public affairs Groups 14 responsible Advertising And Children Programme Policy Action Group 15 Digital Governance Exchange Alcohol marketing 2016 Public affairs highlights 16 WFa Events 18 Global marketer Week, Kuala Lumpur 21 regional meeting, Cartagena Finances 22 2016 In numbers 24

4. President’s Vision What a year we have left behind: much to reflect on, much to learn from and much to forget but, above all, much to look forward to. We’ve seen the digital revolution continue and its profound impact on the world of marketing. It has shaken the foundations of the business to the core, with many talking up a completely changed approach to communications and marketing. But here’s the danger: the basics are often ignored and shiny new solutions are reached for without pause for reflection. for 2017, in the age of post-truth politics and a renewed need to focus on the basics of marketing and communications, the lessons for brands are clear – re-earn trust through truth, focus on the fundamentals and combine the art and science of marketing to deliver for your customers. As the marketing and communications services sector adapts to these changing times, I hope the core skills of creativity and combining magic and logic to connect brands to their users will continue to be celebrated and valued. There is no algorithm for creativity, there is no rulebook on how to do it better than anyone else. But there are lots of great people who know how to make connections with people – that is what this sector has always been about and will always be about. At the World federation of Advertisers, we want to continue to champion best practice that has helped the sector thrive and challenge the lack of transparency that sometimes bedevils it. We try to build effective collaboration and intend to celebrate the fact that in 2017, despite the increasing focus on technology, automation and personalisation, marketing and communications will remain fundamentally a people business. The late, great Bill Bernbach said many years ago: “Human nature hasn’t changed for a million years. It won’t even change in the next million years. only the superficial things have changed. It is fashionable to talk about the changing man. A communicator must be concerned with the unchanging man, with his obsessive desire to survive, to be admired, to succeed, to love, to take care of his own.” Today, Bernbach would have said “the unchanging man and woman”, and he might have expanded the thought to include the multichannel world we live in. But I bet he would have maintained the core observation. So here’s to 2017, then: the year of the unchanging man and woman in an ever- changing world. I am looking forward to it and I’m proud to continue presiding over the WfA as it helps brands to put people first. David Wheldon, WfA President Cmo rBS Despite the increasing focus on technology, marketing remains fundamentally a people business. “ 2

5. Message from the CEO 2016 was not a year that will be forgotten in a hurry. Profound changes and landmark events were witnessed both inside and outside of our industry. Such changes inevitably bring great uncertainty and I am acutely aware of the impact that this has on our national association and corporate members alike. So I am more gratified than ever that amidst such unpredictability the organisation has been able to consolidate and strengthen. Total revenues reached an all-time high with a net growth rate of 12% in corporate membership. This has enabled us to re-invest significant resources into membership services. our online Global Knowledge Base has doubled in size and is now used by more than 80% of our members. A bespoke Crm tool is currently being rolled out, which will significantly increase our ability to proactively identify needs and deliver relevant insights. Putting these systems and processes in place will redouble our efforts to focus on what is critical to our members. In 2016, WfA held eighty meetings across four continents. Between meetings, over two hundred benchmarks and twenty surveys were conducted. All with the objective of helping members get substantial practical assistance with their day-to-day challenges. Digital transformation continues to be the #1 priority for our members. But 2016 saw ad fraud and transparency top marketers’ most serious concerns. All will force marketers into reviewing how they do business in 2017 and beyond. Brands face regulatory pressures across multiple sectors. New rules coming out of Europe for data collection will have global ramifications for brands. WfA will be a trusted and action-oriented partner capable of offering tangible solutions to these multiple challenges. As a lack of transparency threatens to divide the marketing ecosystem, we must be a source of collaboration and unity. As policy- makers seek to restrict our activity, we must showcase what is great about our industry. As people call marketing into question and block us out of their lives, we must champion customer-centric connections which offer real value. 2017 promises to be full of challenges. We look forward to addressing them with your support. Stephan Loerke, CEo WfA We must champion customer-centric connections which offer real value. “ 3

6. Executive Committee david Wheldon CMO RBS WFA President (As elected at the Annual General meeting on march 16, 2016) 1 5 11 6 12 7 13 8 14 9 15 10 16 2 3 4Matthias Berninger VP Public Affairs MARS WFA Deputy President Mike hughes Director General ISBA, UK WFA Treasurer Stephan Loerke WFA CEO Christian Flouch Global Head of Media, Consumer Connections Anheuser-Busch InBev Wouter Vermeulen Group Director, International Government Relations & Public Affairs The Coca-Cola Company Emmanuelle Wargon General Director, Corporate Affairs and Communications Danone alessandro Cagli EU Affairs Director Ferrero Mary Catherine toker VP Government Relations General Mills thomas holzapfel Global Category Leader and VP Marketing Procurement Deutsche Telekom WFa Corporate Member representatives WFa Officers 2 3 41 11 12 13 14 15 16 5 6 7 8 9 10 WFa regional Vice-Presidents Sergey Glushkov President RAA, Russia Regional VP C&E Europe Loïc armand Senior VP External Affairs L’Oréal Regional VP Western Europe Bob Liodice President & CEO ANA, USA Regional VP North America Javier Medrano Senior VP Marketing Grupo Bimbo Regional VP Latin America Sameer desai Head of Consumer Healthcare Asia, MEA and LATAM Mundipharma Regional VP Asia-Pacific achieng Butler CMO Africa Division Danone Regional VP Africa 4

7. nicki Kenyon VP Marketing APAC Visa Eleonore Ogrinz Head of International Advertising Red Bull david Oliver Global Director, Public & Government Affairs Mondelēz Joris Pollet Director, Government Relations & Public Policy, Europe, Middle East, Africa & Asia Procter & Gamble americo Campos Silva Global Head of Digital and Social Media Shell Julie Chan Global Consumer Engagement Lead Pfizer roel de Vries Corporate VP, Global Head of Marketing, Communications and Brand Strategy Nissan Motor Company Luis di Como Senior VP Global Media Unilever Pierre-Jean Bozo Director General UDA, France roger harlacher President ASA, Switzerland ritva hanski- Pitkakoski Managing Director ML, Finland ron Lund President & CEO ACA, Canada Sandra Martinelli Executive Vice President ABA, Brazil Jan Morten drange CEO ANFO, Norway Bharat Patel Executive Committee member ISA, India ahmet Pura Chairman RVD, Turkey david arome Okeme President ADVAN, Nigeria Chris Van roey CEO UBA, Belgium Joachim Schütz Managing Director OWM, Germany hou Yunchun President CANA, China WFa Corporate Member representatives WFa national association representatives 17 21 18 22 19 23 20 24 25 29 33 26 30 34 27 31 35 28 32 36 37 17 21 18 22 19 23 20 25 31 32 33 34 35 36 37 26 27 28 29 30 24 Mounir Jazouli President GAM, Morocco 5

8. 2016 proved to be the most dynamic year yet fortheCMOFOruM,anexclusive,invitation- only peer network that offers some of the most experienced marketing leaders with the opportunity to exchange experiences with a view to offering actionable insight into how to address common priorities. The group’s meeting at Cannes Lions brought together twenty-five Cmo-level marketers with sessions led by unilever’s Keith Weed, mastercard’s raja rajamannar and WfA President and rBS Cmo, David Wheldon. The spotlight also turned to Asia-Pacific as we expanded with the first meeting in Hong Kong, anchored by newly-appointed CMOforum Chair for APAC and APAC Cmo at mastercard, Sam Ahmed. The group’s focus inevitably mirrored WfA’s core priorities. Transformation topped the agenda, reflected through sessions around evolving capabilities. Cmos were, of course, central to much of this change, with many finding themselves with expanded roles often incorporating corporate communications. The digital marketing ecosystem was also top of mind, with the focus especially centred on brand owners the victim of ad fraud and consumers rejecting marketing communications through increased usage of adblocking. Linked to this was a heavy focus on customer- centricity, as reflected in WfA’s Project reconnect (project-reconnect.com) on which many of our Cmo members sit on the Advisory Board. Whilst many acknowledge our industry is still far from being truly ‘customer-centric’, others felt they had made real progress with one Cmo describing his role as “Chief of Customer obsession”. 2016 was an exciting year for IMCFOruM as the group significantly grew in size (+25%) and geographical footprint. Further to the launch of our first meeting in dubai and our workshop series in Singapore, the group now connects senior marketers in four regions. meetings featured case studies and discussions led by senior marketers from Coca-Cola, Brown-forman, Diageo, Jaguar Land rover, LEGo, SAP, mars, mondelēz and Nestlé. Guest speakers were also invited to challenge the status quo in their field of expertise. Isaac mizrahi (Alma) and mark Adams (VICE), who received the highest guest presentation rating this year, were two of them. Content marketing continued to dominate ourmembers’agendasandthegroupshared experience to get better at creating relevant content. This included initiatives such as setting up global digital partnerships. As one member put it, “marketers are living in blissful ignorance” when it comes to integrated marketing measurement. The group accordingly tackled how to evolve measurement frameworks, providing our members with insights to move from proxy metrics to meaningful business metrics. We concluded 2016 with a re-run of our integrated briefing research. The novelty was an agency-version of the survey that was sent to agency heads. This highlighted interesting opinion differences and the fact that work still needs to be done to establish mutual criteria for ‘integration nirvana’ in the eyes of clients and agency partners. 2016 was a challenging and fascinating year for the media industry, with transparency, ad fraud and programmatic all key concerns. Skilled global media expertise has never been in greater demand. But change doesn’t just come through new hires and we are seeing many companies successfully evolve for the data-driven era. This involves up-skilling, re-examining agency relationships and embedding technology and data to deliver ‘precision at scale’ – the media director’s mantra in 2016. Control and transparency are core requirements for programmatic to work with full effect, and we’ve seen a number of clients implementing ‘second generation’ models in 2016. Agency Trading Desks remain the most common way of conducting programmatic but the market is evolving rapidly, with in-house and ‘hybrid’ models on a considerable growth trajectory. WfA research in 2016 also found that clients are moving their programmatic investments towards Private market Places to limit their exposure to ad fraud. WfA’s Compendium of Ad fraud Knowledge for media Investors, published in 2016, calculated that ad fraud represents $50bn on a conservative estimate, but it’s not unrealistic to assume that the true number might be three times larger. our compendium focused on solutions to limit and reduce fraud and we’ve been developing these principles in meetings. But ad fraud is an intractable problem, perpetuated by the structure and systems in place in the digital media ecosystem. undoubtedly this will continue to be a focus for the MEdIaforum. CMOforum IMCforum MEdIaforum Marketing Groups 6

9. ‘digital transformation’ has remained a focus in 2016. Much of this is concerned with people, culture and organisations, and our content has concentrated on helping members to learn from one another. Brands have been increasingly courting ‘start-ups’ for their technology, their spirit of agility and innovation. WfA research focused on the effectiveness of these relationships. There are inherent difficulties with getting ‘a speedboat and an ocean liner to co-exist’, and 88% of clients agree that brands often aren’t sure what their start-up arrangement will look like. But our sessions have dug deeper and found that brands with clear objectives and goals have made a success of these relationships. Data and technology are also core to this group, but harnessing data and drawing meaningful insights remains a challenge. Data management Platforms may provide part of the solution but the complexity of implementing these should not be underestimated. A data strategy is a start- point, with details on how this will be used and whether those use cases are within legal compliance. Trust and privacy have become crucial for those in the CdOforum, described as “the future of brands” in a recent meeting. With the democratisation of information, competitive advantage can be obtained by those who are customer-obsessed. In 2016 and into 2017 the focus moves from digital ‘transformation’ to ‘maturity’. We hope that WfA’s new digital maturity diagnostic tool can help brands to benchmark their progress on this journey. Sourcing isn’t all about costs. It’s about managing suppliers so that you get the right services at the right price at the right time. Within the marketing industry, this often means that sourcing spends more time on incremental value improvement, rather than savings. many would agree that this is as it should be, and procurement’s influence undoubtedly continues to rise within global marketing organisations. So how can it best wield this influence? many marketing procurement members feel that the ways they contribute the most to a brand’s business success is not through savings, but through helping marketing run capability assessments, pitch management, scope of work and briefing alignment, remuneration model setting/planning and performance reviews. There’s much to do here and if marketing involves sourcing in these areas it can help to streamline a great variety of complex business processes, which of course frees up time for marketing to work on building great brands. Who ‘owns’ agency management has been a core question for the SOurCInGforum over the past 18 months. Approaches differ depending on business, legacy and internal culture, but the most mature marketing procurement teams are steadily leveraging more responsibility in these fields. As agency rosters get ever more complex, it will be interesting to see how many more global brands draw on their sourcing teams to help them take ownership of their diverse and interdependent marketing supply chains. the objective of InSIGhtFOruM is to improve how consumer insight specialists and marketers work together to generate actionable insights to inform unifying marketing ideas. This group now boasts 150 professionals from WfA’s membership and is the only global network for global client-side consumer insight leaders. In 2016 the group welcomed its first Chair, Elinor Bateman, Director of Brand Insight and Sponsorship at Barclays, who hosted the first meeting of the year and shared the value derived from creating an insights community within the organisation. The group met in London and, for the first time, in Singapore. Topics included critical areas for client-side market research specialists. New methodologies featured in every meeting, including demonstrations in leveraging artificial intelligence and behavioural analysis. The group also focused on improving the effectiveness of their function within large multinationals, including through tackling how to disseminate insights within global organisations. Building on these themes, the group also held its first workshop hosted by BrainJuicer. This interactive session focused on better understanding the value of the insights function; seeking to understand how the Consumer Insights departments measure their own contribution to profitable brand growth and how they may further improve in this area. Between events, the group ran benchmarks amongst members on several topics including copy testing and recommended innovative brand tracking suppliers. The group also continued to share the findings from our future of Insights Project with a webinar and remote meetings. CdOforum SOurCInGforum InSIGhtforum more at wfanet.org/ar2016 7

10. 3 10 12 CMOforum Singapore, 25 may Cannes, 23 June Hong Kong, 25 october Singapore, 27 october IMCforum Dubai, 18 february London, 21 April miami, 19 may London, 22 November MEdIaforum London, 4 february New Delhi, 16 february rome, 18 may Shanghai, 7 July New York, 27 october madrid, 17 November London, 22 November 1 amsterdam 2 Cannes 3 Cartagena 4 Cologne 5 dubai 6 hong Kong 7 Kuala Lumpur 8 London 9 Madrid 10 Miami 11 new delhi 12 new York 13 Paris 14 rome 15 Shanghai 16 Singapore Marketing Groups Worldwide meetings 8

11. 1 2 9 14 5 15 6 413 11 8 16 7 CdOforum Hong Kong, 20 January London, 3 march Singapore, 14 April Cologne, 13 September Amsterdam, 25 November Singapore, 30 November Hong Kong, 1 December SOurCInGforum Paris, 24 february London, 2 June Shanghai, 6 July Singapore, 29 September Paris, 24 November New York, 7 December InSIGhtforum London, 7 April Singapore, 28 September London, 10 November 9

12. the year in numbers aSEan marketers seek enhanced digital capabilities research conducted among regional and local marketers from brands that spend over uS$55b per annum globally highlights need to boost consumer insight, integrated activity planning, innovation, digital marketing and analytics to drive digital transformation. new online tools 2016 Marketing highlights member-led meetings, remote forums & webinars on four continents member representatives attended meetings global benchmarks100+ 700+ 40+ 6 3k+ marketers: peer-to-peer networks connecting • CMOforum • CdOforum • IMCforum • MEdIaforum • SOurCInGforum • InSIGhtforum Ground-breaking guide on combatting ad fraud The guidelines are meant to assist marketers in taking practical steps to reduce their exposure to ad fraud in four key areas: people and technology, education and communication, standards, and governance. The Agency Cost Index is WfA’s first agency remuneration tool SoNAr measures an organisation’s digital maturity 10

13. new marketing group chairs CMOforum (APAC) Sam ahmed CMO APAC Mastercard CdOforum antonia McCahon Global Digital Acceleration Director Pernod Ricard InSIGhtforum Elinor Bateman Director, Insight & Research Barclays 1st IMCforum in Hong Kong 1st InSIGhtforum in Singapore1st WFaforum in mENA/Dubai new reports Key reports on programmatic, working with start-ups, media agency remuneration and media procurement excellence were produced. Survey on programmatic & trading desks Working with start-ups Survey on Media Agency Remuneration 11

14. robert dreblow Global head of Marketing Services Will oversees WfA’s public affairs and communications work, including Project reconnect. A graduate of modern Languages from oxford university, he worked previously as a journalist in uK, france and Spain. Based in Singapore, ranji supports WfA corporate members in Asia by helping to build on the existing working groups and nurture fully- fledged regional Cmo and CDo groups. A Singaporean national, ranji previously worked in various digital marketing roles at Samsung. Stephan Loerke Chief Executive Officer Stephan manages the WfA secretariat, oversees all work carried out on behalf of its members and is the WfA’s main spokesperson. He sits on all WfA public affairs and marketing committees, as well as on the WfA Executive Committee. Prior to joining WfA, Stephan worked at the united Nations in New York and later in both marketing and management roles at L’oréal. Combining french and German nationalities, Stephan speaks french, German, English, Dutch and Spanish. Staff robert oversees WfA’s marketing services and groups, working from both London and Brussels. His focus includes championing member priorities and keeping members updated on key trends. He was previously an Associate Director at mediaCom in London and Toronto. Will Gilroy director of Public affairs and Communications ranji david aPaC director Marketing Services Claire is focused on delivering greater added value to WfA member organisations. A British national, she has over a decade of membership services and industry body experience. Claire works from both London and Brussels. Claire Mullen head of Membership matt is responsible for the delivery services to the WfA MEdIaforum and CdOforum and for setting the agenda, for discussion and approach, to core global media and digital issues. He is WfA’s subject matter expert on programmatic buying. Matt Green Global Lead Media & digital Marketing Steve leads the WfA’s SOurCInG- forum and InSIGhtforum. Prior to joining WfA, Steve completed a master of research in marketing at the university of Leeds. originally from the uK, he speaks french and English. Steve Lightfoot Senior Manager Global Marketing Procurement 12

15. rebecka works on food marketing to children and coordinates the responsible Advertising and Children Programme, which addresses policy issues around marketing to children. She holds a masters in Political Sciences from the Sorbonne university and worked in two leading consultancies in Brussels. rebecka allén Public affairs Manager Any leads the IMCforum and helps manage WfA’s flagship CMOforum and events, including Global marketer Week. A french national of Chinese origin, she worked on the agency side in Paris for five years before joining WfA. any ung Senior Manager Marketing Services Nataliaisfocusedondeliveringremote knowledge exchange to members and looks after WfA’s regional meetings in Latin America. Before WfA, she worked at millwardBrown and Henkel. A Colombian national, she holds an International marketing master’s Degree. natalia Echeverri Knowledge Manager Agnieszka leads the alcohol workstream and covers horizontal public affairs files, including the European Audiovisual media Services Directive. A graduate from Sciences Po Paris, she was previously at Pernod ricard and worked for the french Business Confederation. agnieszka Katner Senior Manager Public affairs Catherine leads the Digital Governance Exchange,WfA’sforumforseniorlegal and digital marketing governance specialists. A graduate from oxford and Sciences Po Paris, she joined the WfA from fleishmanHillard, where she worked on data protection, e-commerce and digital policy. Catherine armitage Senior Manager Public affairs Axel’s work primarily focuses on initiatives such as the Coalition for Better Ads and Value of Advertising. With Agnieszka, he also looks after Policy Action Group. He previously worked for the European Interactive Digital Advertising Alliance and has a masters in international relations. axel debry Public affairs Manager Camelia works on communications, coordinates media Smart World and manages the WfA network of national advertiser associations. She has previously worked on the consultancy side in Bucharest and Brussels and as communications adviser in the European Parliament. Camelia Cristache Communications Manager Laura supports the team in implementing WfA’s internal and external communications plan and manages WfA’s social media presence. Combining Belgian and Philippine nationality, she holds a master’s Degree in New media and speaks English, filipino and Dutch. Laura Baeyens Junior Communications Manager A Belgian national, Karine has been the first point of contact for WfA members for many years. She oversees the back office, the everyday running of the secretariat, personnel and finances and works in tandem with Theresa on administrative issues. Karine Lesuisse Office Manager Theresa is in charge of the logistics for WfA meetings and events, including Global marketer Week, and supports Karine in running the office. A German national, she speaks German, Dutch, English and french. theresa ruess Member relations & Event Coordinator Stéphane manages WfA’s database, critical for ensuring the delivery of quality services to members. He holds a degree in Visual Communication and was previously with a company specialised in the development and production of indoor and outdoor branding solutions. Stéphane arnhem database Manager 13

16. raC now brings together over 900 people globally who have a direct stake in the sensitive issue of marketing and children. the network is almost 400 strong in Europe, over 150 of whom came to our quarterly meetings in Brussels to address the issues of highest priority to brand owners. Top of the priorities in 2016 has been the ongoing revision of the Eu Audiovisual media Services Directive. rAC focused much of its work around understanding what is at stake for marketing and children and engaging the right policy-makers to ensure its voice was heard and heeded in the policy debates. In parallel, the group has taken the lead in promoting initiatives which seek to ensure that commercial communications reflect societal concerns about children, such as the Eu Pledge, which limits the impact on children of certain food marketing, and media Smart, which aims to equip children with the skills to be discerning when faced with brand communications. The group has also been sensitive to ensuring that members are respecting fast-changing societal expectations around privacy. on data collection, rAC engaged academics working on research commissioned by policy-makers and Insafe, a European network promoting safer and better usage of the internet. uNICEf has been prioritising the issue of marketing and how brands should seek to ensure that they protect and safeguard children’s rights. uNICEf’s focus is on food marketing, digital marketing and privacy issues and identifying what kind of brand presence would be legitimate in schools. rAC is in the process of facilitating an ongoing exchange with a view to driving consensus on best practice in these areas. rAC’s role is also to spot emerging issues in order to help brands future-proof their ability to communicate. The group heard from ebiquity to get insight into how kids are served ads online, realEyes on evolving market research techniques and the secretariat helped professionals understand the implications of marketing platforms such as Snapchat, EvanTube, Ar & Vr and connected toys. Certain sectors continue to face major threats to their ability to communicate with consumers, such as food, alcohol, energy drinks and toys. the industry at large faces horizontal challenges in relation to digital with privacy concerns being prioritised by policy-makers globally. the broader advertising ecosystem faces an existential threat in the form of adblocking. Indeed, the increase in adblocking continues apace. WfA has embraced this challenge as an opportunity to improve the online advertising experience. This is the goal of the Coalition for Better Ads, a global industry-wide initiative co-founded by WfA and launched in September. As part of the European Commission’s Digital Agenda, the Digital Single market Strategy looked to maximise the potential of the digital economy. The Commission seeks to optimise regulation and holds the keys to a potentially enhanced recognition for the role of self- and co-regulation in the digital environment. The General Data Protection regulation officially came into force in may and will have a substantial impact on how marketers collect and use data, not just in Europe but around the world. Brands now face a crucial 18-month implementation period. The process to revise the Audiovisual media Services Directive, the main Eu law governing advertising on TV and online video services, was the number one focus for brand owners in 2016. The European institutions are debating on how to keep the regulation relevant as media consumption patterns continue to evolve and new services are offered. The effectiveness of industry programmes to ensure responsible advertising practices, such as the Eu Pledge and responsible marketing Pact, will be key to warding off the more disproportionate calls for regulation proposed by an increasing number of activists and policy-makers. responsible advertising and Children Programme Policy action Group Public affairs Groups 14

17. In 2016 the concept of digital governance continued to grow in importance within many brands. Previously, good governance was perceived by many as the domain of the risk- averse ‘naysayers.’ now, it is being increasingly recognised as a key enabler of progress, allowing companies to embrace technologies more rapidly. This is of particular importance in light of the speed in which digital innovation is occurring and the increasing inability of traditional legislation to keep up. In this relatively unchartered environment, the ability for brands to exchange risk mitigation practices with peers across critical areas – from data management to IP challenges when crowdsourcing content – becomes very valuable. Some of the recurring themes in our 2016 meetings included: Consumer vs. compliance: the inability of policy to govern rapidly- evolving developments has resulted in situations where a brand can easily be legally compliant without being aligned with consumers’ expectations. Discussions around how brands can effectively secure sustainable data flows have repeatedly highlighted the need to look beyond compliance in order to strengthen relationships with consumers. Privacy & data protection: data protection has been high on the agenda following the adoption of new, stricter privacy rules in Europe. Discussions focused on what the new regime will mean for the relationships between brands and their consumers. Whilst many brands want to get closer to their consumers, the new rules will push marketers to be more creative in how they communicate complex privacy policies and terms and conditions in an understandable and transparent way. Control vs. creativity: the number of risks presented by the online ecosystem has led many brands to implement robust governance standards across their operations. However, these standards must have sufficient flexibility to allow marketers the freedom to remain creative and dynamic. Strategies relating to digital security and copy approval processes have demonstrated the need to balance risk and commercial considerations. there is increasing pressure on alcohol producers in light of marketing’s perceived role in encouraging underage consumption. The responsible marketing Pact (rmP) is the industry’s flagship response to this challenge and focuses on three core areas. firstly, it addresses advertising placement by using common controls to ensure that ads are only placed in media where the audience is composed of at least 70% adults over the legal drinking age. Secondly, it identifies a ‘standard alcohol profile’ on social networks to limit minors’ access to brand communications. finally, it ensures, through a blacklist of creative features, that ads don’t primarily appeal to minors. 2016 was the first year in which the independent monitoring exercise was carried out on the three pillars. The commitment on advertising content was assessed by the European Advertising Standards Alliance (EASA) and national self-regulatory organisations (Sros) who found 83% compliance. This is an encouraging start but more clearly needs to be done to ensure that alcohol advertising is not primarily appealing to minors. The two other rmP pillars – on placement and social media – are being monitored together with the corresponding commitments of the International Alliance for responsible Drinking (IArD) by ebiquity and EASA. The World Health organization and the wider health community are equally concerned about alcohol advertising in digital media. In order to respond to these growing concerns, WfA took part in “Protecting underage through responsible Alcohol marketing,” an event organised in the margins of the World Health Assembly by IArD. finally, the revision of the Eu Audiovisual media Services Directive harbours the possibility of strict Eu wide controls on alcohol marketing. The group is playing a lead role in representing the rmP as a meaningful and effective component of the policy mix in this context. more at wfanet.org/ar2016 digital Governance Exchange alcohol Marketing 15

18. responsible Marketing Pact 2016 was the first year during which the official, independent monitoring exercise was carried out on the three pillars of the programme. All results will be made public. audiovisual Media Services directive revised The Eu institutions are debating a proposal on how to keep the main law governing advertising on TV and online video services (AVmSD) relevant as media consumption patterns continue to change and new services are offered. for WfA, this is an opportunity to promote ad standards as a meaningful and effective component of the policy mix. Improving the online ad experience Leading international actors involved in online media join forces to improve consumers’ experience with online advertising. The Coalition for Better Ads will use consumer insights and cross-industry expertise to develop and implement new global standards for online advertising. member-led meetings. Engagement with WhO, OECd, unICEF, European institutions. WfA working groups connecting 1k+ legal, public affairs and privacy professionals. Local engagement in more than 30 markets to develop industry programmes in the face of potential statutory controls. 2016 Public affairs highlights 40+4 16

19. alcohol compliance monitoring Two global monitoring exercises launched in collaboration with the International Alliance for responsible Drinking (IArD) to assess compliance with the Digital Guiding Principles and the 70/30 rule on online media. Effective food marketing self- regulation WfA was instrumental in driving the adoption by IfBA members of a strengthened IfBA policy on marketing to children. The enhanced commitment forms the basis for local food marketing pledges, which the industry has now launched in 52 countries. Eu Pledge Eu Pledge launches implementation guidelines, announces more stringent criteria across some categories and a new mechanism to increase transparency and accountability. data Protection The Eu General Data Protection regulation officially came into force in may and will have a substantial impact on how marketers collect and use data, not just in Europe but around the world. advertising generates €7 in GdP for every €1 spent Value of Advertising, an independent study commissioned to Deloitte by WfA and industry partners, is the first-ever Eu-wide report to assess the economic and social contribution of advertising. The study found that advertising contributed nearly 6m jobs across the Eu and 4.6% of total GDP. more at www.valueofadvertising.org. Advertising funds Globally, advertising accounts for EACH EURO INVESTED BY BRANDS IN ADVERTISING ADVERTISING FUELS GDP 5.8MILLION JOBS IN EU 2.6%OF ALL EU EMPLOYMENT ADVERTISING createsjobS Internet services TELEVISION REVENUES Advertising provides high-quality jobs ...so that these can be enjoyed for free or at a reduced rate VALUE ADVERTISINGOF PERSONAL MAIL SEARCH AND SOCIAL MEDIA WEBSITES SOCIAL MEDIA PLATFORMS ARE ACCESSED BY ALL SEGMENTS OF THE POPULATION valueofadvertising.org #AdsMatter AS DEFINED BY OECDSUPPORTS COMPETITION BY drives innovation BY INCENTIVISING BUSINESSES TO OUTPERFORM COMPETITORS CREATING DIFFERENTIATED PRODUCTS AND SERVICES INCREASING CHOICE CAN GENERATE UP TO 7 EUROS OF GDP IN THE EU ECONOMY JOBS DIRECTLY INVOLVED IN THE PRODUCTION OF ADVERTISING JOBS ENABLED IN THE MEDIA AND ONLINE SERVICES due to advertising (e.g. journalists or content producers) JOBS CREATED IN THE WIDER ECONOMY due to the economic activity driven by advertising MEDIA & ADVERTISING SECTOR 34000 WHOLE EU ECONOMY 22 000 INFORMING CONSUMERS RADIO REVENUES 40% OF EU CITIZENS REGULARLY USE E-MAIL SERVICES Advertising media internetservices 75%75% Funded by: A research by: AVERAGE GROSS INCOME IN THE EU 17

20. The Global marketer Conference co-hosted by WfA and the malaysian Advertisers Association (mAA) was the centrepiece of the week, with some of the biggest names in marketing sharing insights into how they have built their brands in South-East Asia and globally. AirAsia CEo and malaysia’s most famous entrepreneur, Tony fernandes, gave the keynote speech and told the story of building a world-beating brand based on genuine consumer insight and human understanding. The highest-rated speaker from Global marketer Week in Sydney, BrainJuicer CEo John Kearon, then unveiled a unique global study on the future of the marketing insight function. WfA also held an ASEAN Accelerator panel to discuss the potential of marketing in South East Asia. Suresh Balaji, HSBC’s APAC Head of marketing, Smita Gupta, TATA Communications’ marketing Director in APAC, miguel de Andrés, Google’s Creative Head of Technology in APAC, ranga Somanathan, Starcom/mediaVest’s Coo in South East Asia and WfA’s marketing Director for Asia, ranji David, offered their perspectives. James Temple, SVP, managing Director, Executive Creative Director EmEA at r/GA, shared his experiences on how brands and agencies can accelerate innovation. mondelēz’s maria mujica shared the story of fly fearless, a culmination of many experiments of working with agencies around the globe. David Wheldon, rBS Cmo and WfA President, closed the conference with a State of the union address and a word of advice to brand owners. “Brands need to act and think like people,” he said. “In my experience, the people I’ve most admired have a number of traits in common. They are passionate and entertaining, they have a point of view, they show empathy, they are open and transparent in their dealings. “most importantly, you know you can trust them. The successful brands of the future will be those that most effectively embrace these characteristics. These attributes will govern not only how brands communicate and serve their customers. In an increasingly open and transparent world, they will also be the yardstick by which successful corporations will be judged.” The Global marketer Week also played host to internal meetings including the Executive Committee meeting, the Annual General meeting and the National Associations Council (NAC), which focused on membership growth strategies with insight-driven sessions led by heads of WfA’s national advertiser associations. Following on from Beijing, new York, Sydney and Marrakech, Kuala Lumpur played host in March to WFa’s global event for multinational marketers. Global Marketer Week was an unmissable four days of inspiration, discovery and learning, bringing together hundreds of the world’s top marketers and thought- leaders at WFa’s first-ever GMW in South-East asia. ASEAN Accelerator panel ASEAN Accelerator panel Global Marketer Week Kuala Lumpur, Malaysia 18

21. maria mujica John KearonTony fernandes James Temple David Wheldon 19

22. Project reconnect is WfA’s effort to develop a better understanding of what people want and expect from brands. This requires listening, dialogue and change. Building on previous research with We Are Social on what makes for great brand marketing in the digital world and after looking at the flipside of the coin – what turns people off ads – in 2016, we set out to show how great brand marketing puts people first and how delivering meaningful and valued brand experiences pays dividends. In march 2016 in Kuala Lumpur a session was led by Karmarama’s Executive Chairman Jon Wilkins alongside Will Sansom, Director of Content and Strategy at Contagious Insider. Entitled “People Inc.”, the session also brought together a panel of industry experts to share their own experiences and insight on how to foster the best possible conditions for great work to flourish and nurture talent; how to work with other functions internally and get the most out of working with agency partners; and how to innovate and look beyond the organisation for inspiration and talent. In 2016, we continued working with marketing Week in the uK and Campaign APAC to identify great brand stories that can inspire marketers. Some of the biggest names in the industry, including Cmos from unilever, Visa, Heineken, rBS and mastercard shared their views on why and how brands need to adapt to what increasingly aspirational and demanding consumers expect: to stand for something more, provide experiences and address the world’s problems. Their brand stories and more can be found at www.project-reconnect.com We have all found ads at some point to be annoying, even intrusive. Worse, advertising is often blamed forsomeofsociety’smostintractable problems. Some like to point the finger at marketers for online privacy issues, childhood obesity, alcohol misuse, financial debt and for promoting unsustainable behaviours. Jon Wilkins Project reconnect panel Will Sansom Project reconnect Kuala Lumpur, Malaysia “If a brand considers consumer-centricity disruptive, it deserves to be disrupted” Will Sansom, Contagious Insider 20

23. WFa held its 14th annual regional LataM meeting in Colombia, back to back with “Cartagena Inspira,” Latin america’s showpiece event for communication, creativity and innovation. Co-hosted with ANDA Colombia on 27-28 September, the event brought together in Cartagena regional marketers and public affairs professionals, as well as WfA’s advertiser associations in Colombia, Chile, Peru, Argentina, Bolivia, Guatemala, Paraguay and Spain. The meetings tackled some key topics for public affairs professionals, such as responsible food marketing, marketing to children and ad blocking, while the marketing sessions centred on ad fraud, internal capabilities and working with start- ups. A focus was also given to audience measurement, data privacy and the latest trends in advertising. The two-day event was chaired by WfA’s Vice-President for Latin America and Grupo Bimbo’s Senior Vice-President of marketing, Javier medrano. The 2017 meetings will be co-hosted with the National Advertiser Association of Paraguay (CAP) in Asunción, on 26-27 September. Latin american regional Meeting 2016 Cartagena 21

24. (All figures in euro) Budget 2016 realised 2016 Income 3,536,479,00 3,742,791.05 revenues from associations 410,000,00 434,324.60 revenues from corporate members 2,120,000.00 2,158,164.51 New members 150,000.00 200,194.89 revenues from rmP 246,479.00 246,480.00 revenues from IArD 190,000.00 230,000.00 revenues from IfBA 275,000.00 275,000.00 revenues Sponsorship Conference 40,000.00 45,600.00 Strategic Partners 85,000.00 135,000.00 other revenues 5,000.00 0.00 Discount (early payment) -5,000.00 0.00 financial profit 20,000.00 18,027.05 Expenses 3,535,210.00 3,741,538.93 Personnel & consultants 2,588,000.00 2,478,308.11 operating costs 962,000.00 1,103,834.01 Conference & General Assembly 120,000.00 144,154.93 rmP Costs 96,000.00 96,050.00 Strategic Projects 25,000.00 249,981.88 Provision for recruitment plan 75,000.00 0.00 reinstatement Provision Strategic Projects -320,000.00 -320,000.00 reinstatement Provision for rent Compensation -10,790.00 -10,790.00 total revenues 3,536,479.00 3,742,791.05 total expenses 3,535,210.00 3,741,538.93 Final result 1,269.00 1,252.12 Financial Statement 2016 22

25. registered auditor’s report for the year ended december 31, 2016 to the Board of directors of the World Federation of advertisers We report to you in the context of our appointment as the association’s registered auditor. This report includes our opinion on the financial statements, as well as the required additional statements. The financial statements include the balance sheet as at December 31, 2016 and the income statement for the year then ended. report on the financial statements – unqualified opinion We have audited the financial statements of the World federation of Advertisers for the year ended December 31, 2016, which show a balance sheet total of €4,806,803 and a profit for the year of €1,252. Responsibility of the Board of Directors for the preparation of the financial statements The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework applicable in Belgium, and for such internal control, as the Board of Directors determines, is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the registered auditor our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the International Standards on Auditing (ISAs). Those standards require that we comply with the ethical requirements and plan and perform the control to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the registered auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the registered auditor considers the association’s internal control relevant to the preparation of financial statements that give a true and fair view, in order to design control procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of valuation rules used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements. We have obtained from the Board of Directors and association officials the explanations and information necessary for our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Unqualified opinion In our opinion, the financial statements of the World federation of Advertisers give a true and fair view of the association’s equity and financial position as at December, 31, 2016, and of the results of its operations for the year then ended, in accordance with the financial reporting framework applicable in Belgium. auditor’s report Lasne, february 14, 2017 michel WEBEr, reviseur d’entreprises registered auditor 23

26. Marketing & Public affairs contacts engaged 6k+ attended by 450+ marketers in South East Asia the WFa team 10 nationalities, 15 languages spoken: Soo-uh Sdaai!Hello! Hallo! Hallå!Привет!Bună!¡Hola!Dag!Bonjour! Hujambo!Dzień dobry! Kamusta! Nín h o!Ciao!moi! Belgium france uk T he NetherlandsLuxembourgItalySpainGermanyS witzerlandromaniaSlovakiaTurkeyIndiauAESing aporemalaysiaHongKongChinaCambodiaColom bia Peru Brazil uSA Meetings in 30 countries 80+ WFa meetings average meeting attendance29 • WFaforum in Dubai • CMOforum in Hong Kong • InSIGhtforum in Singapore • CdOforum in Hong Kong First in corporate membership to 87 companies 12% growth Used by 82% of members marketing benchmarks 100+ WFa worked with 16 industry sectors 2016 in numbers 24

27. World Federation of Advertisers London, Brussels, Singapore wfanet.org info@wfanet.org +32 2 502 57 40 twitter @wfamarketers youtube.com/wfamarketers linkedin.com/company/wfa

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