The Consumer is control and ignores standard Advertising. He spends most of his time online and the online populations in Asia are exploding. Advertisers are trying to keep up and struggling with finding the right way to reach and engage them in a meaningful manner. Measuring this engagement is another challenge. The presentation will highlight key consumer trends, their online behavior and illustrate a way forward. Presented on 17.07.09 at the Asian Publishing Convention in Manila, Philippines

1. Digital Advertising - Trends - Chris Schaumann Global Advertising & Digital Lead Asia Pacific & Greater China Region CMG | Global Marketing Group

2. 1. Changing Landscape Did you know? Bring the Love back Digital Divide Future Shape of Advertising Agenda 2. Advertising v3.0 Trade Maps New Marketing Model Experiential Marketing Measuring Engagement 3. Media & Management Altered Media Universe Role of Media & Agencies Case Study from the Future 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 2

3. Did you know? 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 3

4. So what does it all mean? Change! “In 10 years, allmedia will be digital!”- Steve Ballmer, CEO Microsoft We’ll need to rethink 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 4 a few things media advertising marketing agencies ourselves

5. Bring the Love back! Join the conversation at www.bringtheloveback.com 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 5

6. Exploding Online Users in APAC Source: www.internetworldstats.com , July 2009 17 July 2009 © Microsoft Corporation 2009 | WW CMG 6 Almost 1.6 Billion Users Worldwide

7. Still huge Potential in APAC Source: www.internetworldstats.com , July 2009 17 July 2009 © Microsoft Corporation 2009 | WW CMG 7 Internet Penetration World Average: 24%

8. Average Time of Media Exposure per Day - Asia Source: Synovate PAX Digital Life, Nov 2008 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 8

9. 2009 Internet Ad Share Source: Zenith Media Pyramid Estimates, Dec 2008 17 July 2009 9 © Microsoft Corporation 2009 | WW CMG 13% APAC average

10. Global Ad Spend Share by Media 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 10 Source: Zenith Optimedia

11. Asia Pacific Net Advertising Growth 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 11 Source: MPA Research Estimates

12. The Digital Divide The Marketing Confidence Gap 17 July 2009 © Microsoft Corporation 2009 | WW CMG Slide 12 Source: Neo@Ogilvy

14. Online Market Sizes: Oppenheimer & Co. Inc., June 2007 (sources include Universal McCann, Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers )17 July 2009 © Microsoft Corporation 2009 | WW CMG 13

15. Global Media Consumption 17 July 2009 © Microsoft Corporation 2009 | WW CMG Slide 14

16. …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 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 15

17. Future Shape of Advertising 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 16

18. 1. Changing Landscape Did you know? Bring the Love back Digital Divide Future Shape of Advertising Agenda 2. Advertising v3.0 Trade Maps New Marketing Model Experiential Marketing Measuring Engagement 3. Media & Management Altered Media Universe Role of Media & Agencies Case Study from the Future 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 17

19. 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 18

20. The New Marketing Funnel “The traditional AIDA funnel has become a sea of complexity” Source: Forrester Research 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 19

21. Trade Maps: Then and Now 18th Century: Map of the Northwest Passage 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 20

22. Trade Maps: Then and Now 21st Century: Social Trade Map 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 21

23. 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 22 Source: http://www.caida.org/tools/visualization/walrus/gallery1/

25. Case Study: Unilever http://www.campaignforrealbeauty.com http://www.youtube.com/results?search_query=dove 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 24 Source: Youtube.com – 19,036,415 Views, October 2008

26. Campaign for real Beauty 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 25 Source: Youtube.com – 19,036,415 Views, October 2008

27. Campaign against real Life 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 26 Source: Youtube.com – 2,697,709 Views, October 2008

28. Talk to your Daughter before they do! 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 27 Source: Youtube.com – 2,697,709 Views, October 2008

29. Talk to your Daughter before Unilever does! 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 28 Source: Youtube.com – 164,946 Views, October 2008

30. Talk to Dove before it’s too late! 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 29 Source: Youtube.com – 557,368 Views, October 2008

32. The top Brands that will be those whose Consumers... ...tell the best Stories

33. Brands with themost Recommendation in theirCategory grow 4x faster than theCategory Average.Increasing recommendation by12% doubles sales growth. Source: London School of Economics Source: Bain Consulting

34. Exploding Referral Spectrum 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 33 Source: The Value Profit Chain, Heskett/Sasser, Jan 2003

35. Engaging Customers “The essential difference between reason (logic) and emotion is that reason leads to conclusions while emotion leads to actions.” - Neurologist Donald Calne 17 July 2009 34 © Microsoft Corporation 2009 | CMG | Global Marketing Group

36. Engaging Customers “95 percent of our purchase decision making takes place in the subconscious mind...” - Gerald Zaltman, Professor, Harvard Business School 17 July 2009 35 © Microsoft Corporation 2009 | CMG | Global Marketing Group

37. New Marketing Model Source: Mohan Sawhney, Kellogg School of Management 17 July 2009 Slide 36 © Microsoft Corporation 2009 | CMG | Global Marketing Group

38. Experiential Marketing Attract Engage 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 37 Excite

39. Engaging Consumers Immersive Interactive 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 38 Participatory

41. Rich Digital Experiences 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 40 Source: AvenueARazorfish :: Showreel e.g. http://www.audi.com/a4globaldrives

42. PUBLISHER TOOLS PROVIDER Microsoft Media Network 17 July 2009 © Microsoft Corporation 2009 | WW CMG Slide 41

43. Engagement Duration Challenge The new Marketing needs to not only to attract, but also engage & excite Reach & Frequency are not catering to measure the quality of Engagement & Excitement Solution This new metric is coined: Brand Exposure Duration - BXD BXD is the length of time an individual is exposed to a given advertisement BXD = Views × Percent of Segment Viewed × Segment Length BXD = Video Ad Views x %65 x 30 sec. 17 July 2009 42 © Microsoft Corporation 2009 | CMG | Global Marketing Group

44. Engagement Mapping 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 43 Engagement Mapping is a flexible attribution model that enable advertisers to include many factors In their Engagement ROI calculations Source: Atlas Engagement Mapping Paper, 2008

45. 1. Changing Landscape Did you know? Bring the Love back Digital Divide Future Shape of Advertising Agenda 2. Advertising v3.0 Trade Maps New Marketing Model Experiential Marketing Measuring Engagement 3. Media & Management Altered Media Universe Role of Media & Agencies Case Study from the Future 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 44

46. 17 July 2009 Slide 45 © Microsoft Corporation 2009 | CMG | Global Marketing Group

47. The End of Mass Media 7,109 Number of TV Channels ~3,000 1,686 416 246 93 UK Japan US France Germany Source: Europe: Screen Digest 2005, Japan: Wikipedia May 2006, US: US Federal Comms Commission, 2004 17 July 2009 46 © Microsoft Corporation 2009 | CMG | Global Marketing Group China

48. The KING still reins 17 July 2009 47 © Microsoft Corporation 2009 | CMG | Global Marketing Group

49. Breadth & Depth across APAC 17 July 2009 © Microsoft Corporation 2009 | WW CMG Slide 48 Total APAC reach : 288 million | 34.1% coverage of all APAC online 20.8musers in Japan 145m users in China 7.1m users in S Korea 5.7musers in Taiwan 2.4musers in Hong Kong 8.5m users in India 0.7musers in Philippines 4.2musers in Thailand 4.3m users in Malaysia 8.7musers in Australia 1.9musers in Singapore 1.5musers in New Zealand Source: ComScore & iResearch : Dec 08

50. YOU as the editor 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 49

51. Planning & Creativity 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 50

52. 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 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 51

53. Placement vs. Audience Digital Lifestyle 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 52

55. A fixed Cost to the Business

56. To a variable Cost of Production17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 53

57. A Vision of the Digital Future 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 54

58. 1. Changing Landscape Did you know? Bring the Love back Digital Divide Future Shape of Advertising Summary 2. Advertising v3.0 Trade Maps New Marketing Model Experiential Marketing Measuring Engagement 3. Media & Management Altered Media Universe Role of Media & Agencies Case Study from the Future 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 55

59. Advertising v3.0 Bloghttp://advertising3.spaces.live.com 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group Slide 56

60. 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 57

61. 17 July 2009 © Microsoft Corporation 2009 | CMG | Global Marketing Group 58