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MDAS Singapore
Chris Schaumann, Country Sales Manager

| © Microsoft Corporation 2007

Future Shape of Advertising

Slide 5 | © Microsoft Corporation 2007

The Consumer is in Control


The Consumer is in (Remote) Control


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 quot;livequot; 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

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


Digital Generation

Source: Nielsen//NetRatings consumer Survey 06/06


No more Mass Media?


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)


Multi-tasking

Source: MindShare, November 2005


Always connected and informed

Access home & work Connected

Self expression Informed


The Internet beats the TV
in the Battle for Attention


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


Print Humor

26

The Rise of Windows Live Spaces

120 m

40 m
2m

Source: Microsoft Internal Data (audited by PWC)


The Internet has reached Critical Mass


Exploding Online Users in APAC

Source: www.internetworldstats.com, February 2007


Exploding Online Users in APAC



Exploding Online Penetration in Asia



Who’s Online?

Source: PAX Q3,05-Q2,06 (10 markets ex Tokyo; among top Management Sample)


Average Hours of
Media Exposure per Day

Source: Synovate Young Asians Nov 2005


What is the Global Youth spending more Time on?


But Consumers are still way ahead….


The World is changing (fast!)

Growth rate: years to reach a quarter of the US population


The World is changing (fast!)


Digital Dominance

Games

Digital radio

Mobile
Outdoor

Digital TV
Cinema

Analogue radio
Analogue TV
Internet
Print

Source: ISOBAR


Internet is the most helpful Medium
for Product/Service Information

Source: Synovate Young Asians Nov 2006


Internet for B-2-B?


Internet is the most
helpful Medium for Consumer Electronics

Source: Consumer Electronics Association, Oct 2006


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


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


Regional Reach (vs. TV)

Source: Synovate Young Asians 2005, Hong Kong, Singapore, Korea & Taiwan


Regional Reach (vs. Print)

Source: Synovate PAX 2005/06 (Q2 ’05-Q1 ’06)
% Av. Issue Readership,

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


Digital Convergence

+ WiFi


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


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


The Captains of the Industry get it…

Source: Forrester December 2004 (What’s Next For TV Advertising)


…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


…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


…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.”



…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


…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.

quot;The advent of the digital age continues,quot; announced Nestle Australia's Ian
Alwill. quot;Nestle has legislated that we will spend more in the digital space.quot;

Source: Fairfax, November 2006


…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


…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


…and the Clients?

Source: ANA Annual Conference October 20`06


…what about Microsoft?

Of the $500 million
Microsoft allocated to the
introduction of its Vista
operating system, 30% went
online.



…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


…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


Some things never change


Planning & Creativity


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


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


Bring the Love back!

Join the conversation at
www.bringtheloveback.com


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

Make your communication

genuine


Make your communication

relevant


Target the right

message
At the right

time
To the right

person


Break up the silos of

creative
+

planning


Engage your audience with

interactivity


What does this mean for Microsoft -
a new era


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 )


“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

107

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


Volume of Users

Content providers (major to self select)

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.


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


Advertising when the Audience is …

– Game Console

(over the Internet)
– IPTV
– Online Video

– Online Maps

– Instant Messaging

– Online Services

– Mobile Phone/PDA


While playing Games


While watching TV (over the Internet)


While watching Video (Online)

Branded Experiences:

1. Watching MSN in Concerts (Music/Videos Online)

2. Watching Live Earth


http://msninconcert.msn.com/music/archive/en-sg/archive.aspx


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


Watching Live Earth on television, as opposed to online via MSN, is an
effect not unlike being a passenger in your grandmother's car:
quot;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!


Finding Local Information


While Socializing


J&J Acuvue Theme Pack


While Working


On the Road


Our Unmatched Audience Reach

Digital Lifestyle


Case Study: Nokia


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


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


Case Study: Blogging / Volvo


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/


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.


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/


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