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FMI Future Connect Leveraging Shopper Insights ‐ Media

5/11/11

• Our mission is to help CPG marketers improve advertising performance by matching the right audience with the right media, measuring the sales impact, and optimizing their media plans. – Connect “Watch” and “Buy” Data – Partner with Retailers and Set Top Box Companies to Deliver Service

• Industry’s leading provider of media and • Industry’s leading provider of consumer marketing measurement services driven marketing programs • Providing nationally representative media • Powered by the world’s largest shopper audience data and all‐outlet consumer data warehouse purchase data

Interviewed 15 Top Advertisers, 5 Media Conglomerates, 5 Global Agencies . . . and here’s what we heard. . .

Target Definition “We put a lot of effort into defining who we want to reach with our marketing strategy, but tend to end up with a broad media target. We need our media spend to reach the right consumers” — CMO, Top 20 U.S. Advertiser

Advertising ROI “I want to see how my combination of touch points sells products at the end of the day. Media needs to be linked to consumer action” —Vice President, Top 10 U.S. Advertiser

Granular Measurement “We need more precision in our understanding of how advertising works and which campaigns are working hardest for my clients’ brands” — President, Top 10 Media Agency

What is the short term sales impact of my campaign?

Which exposed buyer groups What is the ideal recency / respond best? frequency mix required to drive sales?

How does advertising impact price elasticity?

How can we measure the value of branded sponsorship events against traditional media efforts?

What is the impact on With which segments did brand loyalty? my brand resonate?

Anonymous Single Source Match

Catalina FSC Data –60 M HH Nielsen Media Data Nielsen Homescan Data Set Top Box Data

Goal: Robust dataset, projectable to the US population Watch and Buy behaviors

• Panel Data for Representivity • Census Data for Scale – Nielsen Television & Online – National Frequent Shopper Data – Nielsen Household – Set Top Box Tuning Data

Measure

Single Source Buy Plan

Online TV

Mobile Magazine

• #1: How to Optimize a Television Campaign –Find the Key Buyer Groups for Media Plan Optimization

• #2: The Power of Shopper Data on TV –Comparing “buyergraphics” to demographics

• #3: Driving Sales with Online Campaign for Grocery Retailer

ChallengeChallenge For a Brand, understand differing sales lifts/ROI among key buyer groups

ApproachApproach Evaluate the incremental dollars generated by Food Brand Q1 2010 TV campaign

ResultsResults Alter execution for better ROI

Copyright © 2011 Nielsen Catalina Solutions • Confidential & Proprietary 14 How We Did It: 1. Understand Ad Impact Against Key Buyer Groups • 90% of TV Campaign sales lift from competitor buyers – Low Brand Loyals in both Hi/Low Consumption groups • However, Heavy Category / Low Brand Loyals had 10x the response rate of the next most responsive group

90% 10x

Copyright © 2011 Nielsen Catalina Solutions • Confidential & Proprietary How We Did It: 2. Understand TV Exposure by Buyer Group • TV campaign exposure tracked very closely with HH population distribution, but not with HH response

— Half the TV exposures had almost no sales impact 7% of exposures drove 43% of the — 7% of exposures drove 43% of the total incremental sales total incremental 50% ~50% sales

40%

30%

20%

10%

0 Non Category Lo Cat / Lo Brand Lo Cat / Hi Brand Hi Cat / Hi Brand Hi Cat/Lo Brand

Index of Response 39 107 15 18 614 to Exposures % of HH’s % of Exposure % of Total Response

Copyright © 2011 Nielsen Catalina Solutions • Confidential & Proprietary 16 How We Did It: 3. Revised TV Execution for Better Reach • Ranking the viewing in highly responsive HH can help inform suggested shifts in upcoming TV buys and allocations

• Network #1 was 2.5 times more likely to be viewed by Network #1 was 2.5 the highest responding consumer HH than Network #24 times more likely to 300 be viewed by the Net 1 highest responding 250 consumer HH than 2.5x Network #24 200 HH’s

All

vs. Average Ratings Index 150 Index

100 Net 24 Ratings

0 9 8 7 6 5 4 3 1 2

11 10 23 24 22 21 20 19 17 15 14 16 13 12 18

Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Net Networks used in Q1 Campaign

ChallengeChallenge Demonstrate value of reaching “heavy buyers” with media across many categories

ApproachApproach Evaluate multiple CPG brand campaigns to determine exposure patterns and volume response

ResultsResults Reaching top category purchasers drives stronger impact than reaching W18‐49 demographic target

Validate impact of behavior‐based media planning

• 18 CPG brand TV campaigns from 2010 in multiple categories. • Evaluated incremental dollar impact using Test/Control. • Created a multiple regression model to determine the relationship between using Demographics and Purchase Behavioral data in campaign performance.

• Key finding: behavioral targeting delivers 2½ times ROI Leverage than demographic targeting.

$0.18 Demographic Target $0.18 Behavioral Target $0.16 $0.14 $0.13 $0.12 HH HH

$0.10 $0.08 $0.08 Exposed Exposed

Per

Per $0.06

$ $ $0.03 $0.04 $0.02 $0.02 $‐0.02 50 70 90 110 130 150 170 190 210 50 70 90 110 130 150 170 190 210 Delivery Index to Women 18‐49 Delivery Index to Women 18‐49

Results normalized to average category penetration.

• A 20% increase in media delivery to • Campaign impact doubles with a 41% heavy category users yields an increase in media delivery to heavy additional $47 per thousand exposed category users, vs. a 103% increase in HH, compared to $19 for a 20% media delivery to women 18‐49. increase in media delivery to women 18‐49.

Impact of 20% Increase in Media Delivery Increase in Media Delivery Dollars per Thousand Exposed Households Needed to Double Campaign Impact

$47 103%

2½ times more $19 ROI leverage 41%

Demographic Target Heavy Buyer Target Demographic Target Heavy Buyer Target

Household Top 50% Candy Network Program GRPs Candy BRPs Household Index ABC ABC SAT MOVIE OF THE WEEK 3.9 3.2 81 ABC ACADEMY AWARDS 18.5 26.4 143 ABC AMER FUNN HOME VIDEOS 10.2 11.5 113 ABC BACHELOR, THE 22.6 28.6 126 ABC BACHELOR:AFTER FINAL ROSE 11.1 14.8 133 CBS 48 HOURS MYSTERY 11.3 15.1 133 CBS 60 MINUTES 15.2 21.5 142 CBS BIG BANG THEORY, THE 26.6 38.4 145 CBS COLD CASE 26.3 35.0 133 CBS CSI: MIAMI 19.3 25.2 131 FOX AMERICAN DAD 10.4 8.2 79 FOX AMERICAN IDOL-TUESDAY 30.7 42.5 139 FOX AMERICAN IDOL-WEDNESDAY 28.5 39.4 138 FOX HOUSE 12.2 14.9 122 FOX HUMAN TARGET 5.3 6.9 129 NBC BIGGEST LOSER 5.4 6.1 113 NBC CHUCK 6.1 9.4 154 NBC DATELINE FRI 4.5 8.0 177 NBC OFFICE 6.0 9.1 151 NBC PARENTHOOD 6.5 10.6 164 Selected Networks and Programs Listed Alphabetically

ChallengeChallenge For a Grocery Store Retailer, determine sales lifts, ROI and key drivers for online campaign

ApproachApproach Evaluate the sales lifts in total, by creative units, and audience segments

ResultsResults Campaign lifted sales 9%; 10x ROI on media spend; Best Segment accounted for 69% of sales

STEP 1 STEP 2 STEP 3 Segment consumers to Serve ads/promotions to Conduct Behavioral Impact identify meaningful target target consumers as they Analysis focusing on offline group(s) with all‐outlet travel through the web purchase behavior purchase behavior $4.32 $3.80 LOW LOYAL COMPETITIVE BUYERS PORTAL

Overlap Advertised Brand xxMM HHs Unexposed Exposed

HEAVY CATEGORY NIELSEN Difference per Exposed $0.52 BUYERS CATALINA Percent Difference +14% SOLUTIONS Significance Level 97%***

40%

New % +1.9 points 30% 26.3% Total Penetration % 24.4% 20%

10% +2.0 points

3.2% 0% 1.2% Exposed Unexposed

* The percent of US HHs that shopped the retailer during the measurement period that had not shopped there during the 52 wks prior

Online Campaign Driven by Incremental HH Penetration

Exposed Unexposed Difference Sales $/HH $21.57 $19.84 +9%

HH 26.3% 24.4% +8% Penetration Buying Rate $82.08 $81.29 +1%

Trips per HH 2.35 2.49 ‐5%

Dollars per trip $34.52 $32.96 +5%

Campaign Drove a 10x return on Media Investment

Media Cost $1.1m Incremental Sales/HH $1.73 Estimated HHs reached 6.4m Incremental sales $11.0m Sales lift return 10x Sales Lift% 9%

Single‐source methodology integrating shopper data provides unparalleled consumer insights: • ROI of media investment at a granular level ‐‐‐ buyer groups, creative execution, line extensions, etc. • Optimize media plans by reaching most valuable customers • Decompose by key drivers such as penetration, # of trips, dollars/trip, buy rate • Activate across all three screens ‐‐‐ TV, Online, Mobile ‐‐‐ plus, client proprietary data bases

• Advertisers will continue to demand more Accountability, and ad $$ will flow to the most effective (measurable) media

• Media will Continue to Fragment, placing a premium on more precise targeting

• New capabilities (many enabled by Single Source) will dramatically change the level of visibility marketers have into their programs

• Those companies that leverage these capabilities will win in the future

• The media “eco‐system” must evolve to take advantage of these emerging capabilities

• What are the implications of fully activating these innovations at your company?

• Are there barriers in your organization for fully leveraging shopper data for marketing and media?