Research shows that print is the most effective media for retail

1. For Retailers:
The Impact of Online Advertising
Based on a meta-analysis of econometric studies by BrandScience

2. 2
Online Currently Receives a Low Share of Media Spend
27% 27%
23%
10%
7%
6%
0%
0%
10%
20%
30%
TV Print DM Online Radio Outdoor Cinema
ShareofMediaMix
Current Media Mix Allocation for Retailers
TV Print DM Online Radio Outdoor Cinema
Source: Nielsen Media Research/BrandScience Estimates – UK Retailers who spend £1m+ on advertising p.a. Only includes retailers who spend online. Includes Search.

3. 3
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Facts about online advertising for retailers:
• More efficient than TV
• The most efficient medium for online retailers
• Return on investment is yet to peak
• The performance of other media can be improved by spending more online

4. 4
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“You only get out of
something what you
put into it.”

5. Sales
Market
Share
Customer
Acquisition
Brand
Perception
5
Econometric Modelling
Applying Maths to Marketing
• 26 UK retailers who spend online
• 24 of those in top 100 retailers ranked by media spend
Marketing
Activity
Pricing
Weather
Competitor
Activity
Drivers Performance

6. 6
Calculating Revenue Return on Investment
Revenue Gained Through Marketing Activity
Cost of Marketing Activity
= RROI

7. 7
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Online is More Efficient than TV for Retailers
£1.85
£5.01
£3.44
£2.15
£1.62
£1.11
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Radio Print Online TV Outdoor DM
RROI
Total Retail*
% Media
Mix
2% 41% 19% 16% 7% 14%
* Includes all 26 studies that were included as part of this analysis
Based on a meta-analysis of econometric studies by BrandScience

8. 9
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Bricks & Mortar (“Offline”) Retailers
17
Studies
Brands featured in this presentation are for illustrative purposes only and may or may not be included as part of the study - BrandScience Confidential

9. 10
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Online is the Second Most Efficient Media Behind Print
Bricks & Mortar Retailers
£2.50
£6.41
£2.84
£2.43 £2.21
£0.91
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
£7.00
Radio Print Online TV Outdoor DM
RROI
Revenue Return on Investment
% Media
Mix
4% 40% 16% 20% 9% 12%
Based on a meta-analysis of econometric studies by BrandScience

10. 11
Online Retailers
9
Studies
Brands featured in this presentation are for illustrative purposes only and may or may not be included as part of the study - BrandScience Confidential

11. 12
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Online is the Most Efficient Medium
Online Retailers
£0.71
£1.48
£3.75
£1.02
£0.23
£1.06
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Radio Print Online TV Outdoor DM
RROI
Revenue Return on Investment
% Media
Mix
1% 47% 29% 8% 4% 12%
Based on a meta-analysis of econometric studies by BrandScience

12. What can be gained from increasing the weight of online spend?
Improved online ROI

13. 14
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Introducing Above and Below Median
10 50 70 200 450
Median AboveBelow
• An equal number of campaigns above and below the median
• More accurate than mean average – less skew to higher or lower spending campaigns
500

14. 15
Increase Online Share to Increase Online ROI
Online ROI vs Online Spend
£1.42
£2.24
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Below Median Above Median
OnlineRROI
Online Spend
+58%
£2.51
£5.69
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Below Median Above Median
OnlineRROI Online Spend
+127%
ROI Curve
Based on a meta-analysis of econometric studies by BrandScience

15. Varying online spend can also affect the performance of other media
Improved ROI for TV & Press

16. 18
Increase Online Share to Increase TV ROI
£1.59
£3.91
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Below Median Above Median
TVRROI
Online Spend
+146%
£0.46
£1.63
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Below Median Above Median
TVRROI Online Spend
+254%
Based on a meta-analysis of econometric studies by BrandScience

17. 19
Print ROI Does Not Follow Suit
£9.98
£3.10
£0.00
£2.00
£4.00
£6.00
£8.00
£10.00
Below Median Above Median
PrintRROI
Online Spend
£0.65
£2.43
£0.00
£2.00
£4.00
£6.00
£8.00
£10.00
Below Median Above Median
PrintRROI Online Spend
+274%
Based on a meta-analysis of econometric studies by BrandScience

18. 20
Print ads often have an offline call to action

19. Varying online spend can also affect the life of a campaign

20. 22
Ad Stock – Life of Campaign
AdStock
Time
Carryover rate 90% Carryover rate 50% Campaign Activity
100%
5%
100%
5%

21. 23
Increase the Life of Online Campaigns with More Online Investment
9
10
0
3
6
9
12
15
Below Median Above Median
OnlineLife-Days
Online Spend
7
11
0
3
6
9
12
15
Below Median Above Median
OnlineLife-Days
Online Spend
Based on a meta-analysis of econometric studies by BrandScience

22. 24
Make TV Campaigns Work Harder with Extra Online Spend
38
49
0
10
20
30
40
50
60
70
80
Below Median Above Median
TVLife-Days
Online Spend
49
73
0
10
20
30
40
50
60
70
80
Below Median Above MedianTVLife-Days
Online Spend
Based on a meta-analysis of econometric studies by BrandScience

23. 25
Print Life Can Be Extended for Online Retailers
35
28
0
5
10
15
20
25
30
35
40
45
Below Median Above Median
PrintLife-Days
Online Spend
31
40
0
5
10
15
20
25
30
35
40
45
Below Median Above Median
PrintLife-Days
Online Spend
Based on a meta-analysis of econometric studies by BrandScience

24. What should the media mix be for the industry?

25. 27
£2.50
£2.88
£3.26
£2.00
£2.20
£2.40
£2.60
£2.80
£3.00
£3.20
£3.40
10% 15% 20%
TotalRROI
Level Of Online Investment
Increasing Online Investment
Increase Overall Return on Investment Through Increased Online Spend
Based on a meta-analysis of econometric studies by BrandScience
Current
Industry
Spend
+30%

26. 28
27% 27%
23%
10%
7% 6%
0%
17%
37%
13%
20%
7% 6%
0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
TV Print DM Online Radio Outdoor Cinema
MediaSpendAllocation
Reallocating Spend for Maximum ROI
£2.50 RROI
£3.26 RROI
Reallocate Money to Online and Print from TV and Direct Mail
Based on a meta-analysis of econometric studies by BrandScience

27. 29
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
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Recommendations:
• Retailers should increase the weight of online spend in order to:
• Increase online ROI
• Make TV and press work harder
• Improve efficiency of the entire integrated campaign
• In order to increase retention rates, retailers should explore more creative
online executions and new messaging
• Based on this evidence we believe better creatives and more brand driven advertising will lead to better retention
rates and therefore improved ROI