DENTSU AEGIS NETWORK GLOBAL AD SPEND FORECASTS

July 2019 The forecast and insights published in this report were compiled from around the Dentsu Aegis Network and are based on our local market expertise. The figures were then consolidated and where relevant adjusted centrally in light of global macro-economic drivers. The report includes country, region and global estimates and forecasts for the following media, Television, Digital Media including Display, Online Video, Social Media, Search, Classified, Mobile, Newspapers, Magazines, OOH, Radio and Cinema, as well as share by medium data.

Thank you to all the markets for their forecast, insights and local market expertise and to the creative services team.

FOR ANY ADDITIONAL INFORMATION ON THIS REPORT, PLEASE CONTACT:

Eleanor Kemp, Dentsu Aegis Network, +44 (0) 203 357 4137 [email protected] Lin Liu, Dentsu Aegis Network, +44 (0) 207 550 3451, [email protected]

2 CONTENTS

GLOBAL SUMMARY 5 CENTRAL & EASTERN EUROPE 60 ASIA PACIFIC 102

COUNTRY BY COUNTRY Bulgaria 61 Australia 103 FORECASTS Czech Republic 64 China 107 Estonia 67 Hong Kong 110 WESTERN EUROPE 9 Hungary 70 India 113 Latvia 73 Indonesia 119 Austria 10 Lithuania 76 Japan 122 Belgium 13 Poland 79 Malaysia 126 Denmark 16 Romania 82 New Zealand 129 Finland 19 Russia 85 Philippines 132 France 22 Slovak Republic 88 Singapore 135 Germany 25 Turkey 91 South Korea 138 Greece 29 Taiwan 141 Ireland 32 Thailand 145 Italy 35 Vietnam 148 Netherlands 38 NORTH AMERICA 94 Norway 41 Portugal 44 Canada 95 LATIN AMERICA 151 Spain 47 USA 98 Sweden 51 Argentina 152 Switzerland 54 Brazil 155 UK 57 Colombia 158 Mexico 161

3 CONTENTS

MIDDLE EAST & 164 % SHARE OF AD NORTH AFRICA EXPENDITURE BY MEDIA

MENA 165 Television 195 Egypt 168 Newspaper 197 Lebanon 171 Magazine 199 Radio 201 Cinema 203 ROW 174 OOH 205 Digital 207 South Africa 175

Exchange Rates 209 APPENDICES 178

Global Market Sizes and Growth Rates 179 Television 181 Newspaper 183 Magazine 185 Radio 187 Cinema 189 OOH 191 Digital 193

4 Global Summary

KEY HEADLINES MARKET OUTLOOK • Global ad spend is set to grow 3.6% in 2019. This amounts to total global A reflection of stable global growth ad spend of US$609.9 billion. • The latest Dentsu Aegis Network Ad Spend forecasts show that growth is • Forecasts have slipped globally from January this year due to economic likely to hit 3.6% in 2019 (see Figure 1), amounting to US$609.9 billion. uncertainty affecting consumer activity and lower than expected growth in Forecasts have slipped slightly from January, reflecting the challenging the TV market at the beginning of the year. Growth will accelerate to 4.1% economic environment at the start of the year as momentum slowed globally in 2020 - almost returning to 2018 growth of 4.3%. considerably. Ad spend will rally to 4.1% in 2020, boosted by a year of events • Despite the continued uncertainty around Brexit, the UK market is resilient including the European Football Championships, Tokyo 2020 Olympic & and has been upgraded from our previous forecasts to grow 6.3% in 2019. Paralympic Games and US Presidential elections. • Digital remains the main driver of growth and is forecast to reach a 41.8% share of spend in 2019, an upwards revision from January 2019. Year-on-Year % Growth At Current Prices • Video (20.5%) and Social (19.8%) remain the fastest growing channels within digital, powered by mobile. 4G and 5G will play a pivotal role for mobile, enabling mobile technology to process content a lot quicker for data-hungry users – it will also allow brands to create more innovative content. • Mobile remains the fastest growing platform and is forecast to grow by 21.4% in 2019. • Paid Search sees continued growth and has the largest share of spend in digital. In 2019 this is driven in particular by developments in Amazon’s Search advertising. • India is forecast double-digit 2019 growth of 11.4% (up from the 10.6% forecast in January and 10.8% growth in 2018), with the Cricket World Cup putting growth on the front foot. • Television’s ad spend growth is falling faster than previously forecast, now at -0.1% for 2019, though a slight recovery is forecast for 2020 with 0.6% growth. • Brazil sees a significant revision upwards to 8.8% growth in 2019 driven by Mobile, which will make Brazil the largest digital market in Latin America.

Figure 1: Growth in global ad spend 2018-20f (selected markets)

DENTSU AEGIS NETWORK 5 Global Summary

MARKET OUTLOOK UK: resilient and deeply digital Digital in the driver’s seat • Despite the continued uncertainty around Brexit, the UK market is resilient • Digital continues to power ad spend growth and is forecast to grow globally by and we have upgraded the 2019 outlook from our previous forecast to 6.3% in 11.5% in 2019 amounting to US$249.7 billion and a 41.8% share of global 2019. The UK is also on course for a tenth consecutive year of double-digit spend. In 2020 growth is set to continue at 11% putting digital’s share of ad growth in digital advertising spend, highlighting the digital maturity of the UK spend at nearly 45%. market. The UK is set to see growth in digital ad spend of 10.4% in 2019. This • The number of markets we analysed where digital has the largest share of ad maturity is one factor that may be insulating ad spend growth from spend is up from 21 markets in 2018 to 26 this year. geopolitical uncertainty and the confidence-dampening effects of Brexit. • Our projections for 2020 see digital reaching nearly 45% of total investment (see figure 2). Markets moving up

• While many markets have seen downward revisions in our latest report, along Figure 2: Share of global ad spend by media, 2018-20 (%) with the UK there are notable exceptions. For example, in India our forecasts are revised up from 10.6% to 11.4%, boosted by events such as coverage of this year’s Cricket World Cup.

• In Canada ad spend is expected to rise from 2.7% to 5.3% in 2019, reflecting the continued positive outlook for OOH with the growth and availability of digital outlets, as well as strong growth in travel and telecommunications categories.

• Brazil stands out as a market whose ad spend forecast has seen significant revision from January 2019. This is to reflect a more positive economic outlook as President Bolsonaro promises tax reform and announces visa waivers for the U.S, Canada, Japan, and Australia.

DENTSU AEGIS NETWORK 6 All eyes on Mobile • Within digital, Mobile remains the fastest growing platform and is forecast to grow by 21.4% in 2019. Mobile’s share of ad investment is set to increase from 28.4% in 2019 to nearly a third in 2020. Over 50% of web traffic now happens on a mobile device attracting increasing ad dollars to mirror surging impressions. • Powering this increased spend is the growing consumption of video on Mobile. Video ads on mobile devices are expected to exceed $29billion in 2019 with nearly 50% of video ads viewed on mobile – up from 40% from 2018. • In Japan robust growth in Mobile ad spend is expected to continue with ads embedded in content from traditional newspapers and magazines on mobile also growing. This illustrates the blurring of the lines between digital and other media.

Figure 3: Growth in global ad spend within Digital, 2018-20

DENTSU AEGIS NETWORK 7 Social still going strong • We’ve revised our forecast for Social Media up from January 2019 (18.4%) to 19.8%. Despite continued concern about the dominance of Facebook and brand safety issues on YouTube and Instagram, the number of social network users continues to rise. Statista estimates that there will be 3 billion social network users in 2021 up from 2.62 billion in 2018. In 2020 we forecast investment in Social Media to grow 19.0% (an upwards revision from 14.6% in January 2019) illustrating the continued importance of Social Media to ad budgets despite the drop-off from 2018’s high of 29.0% growth.

• Online Video – powered by social video platforms like Instagram Stories, Snapchat and TikTok – is the fastest growing category within digital and is forecast to grow one-fifth in 2019. TikTok, which has been around for less than two years, launched targeted in- feed ads this year as advertisers strengthen their investment in Online Video. The app has 500 million active users worldwide and is part of the rise of video along with Instagram Stories’ 500 million daily active users.

Figure 4: Share of global ad spend by digital sub-category 2018-20 (%)

DENTSU AEGIS NETWORK 8 Western Europe Market

9 AUSTRIA: ‘The state legislature election in Vienna will have a major impact on ad spend’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST In 2020 there are two big sporting events: The European Soccer Year on year % growth at current prices Championships in June/July and the Olympic & Paralympic Summer Games in Tokyo (July/August). The level of ad spend impact of the European Soccer 2018 2019f 2020f Championship depends on the participation of the Austrian Soccer Team. If the Austrian team qualifies, TV advertising will benefit even more from this Austria 2.2% (2.1%) 1.1% (1.5%) 1.0% (1.3%) event. Usually the Summer Olympic Games have no impact on advertising spend in Austria. The time difference between Austria and Tokyo and the Previous forecasts in brackets from January 2019 lack of interest will result in low TV viewer figures. The state legislature LATEST KEY AD SPEND TRENDS election in Vienna will have a major impact on ad spend. Billboards, Print and Digital will profit the most from the election. • The economic boom in Austria did not influence the 2018 ad spend as positively as expected. We predicted the year on year growth would be 2.7% but in the end we arrived at 2.2%. Key drivers were TV, more than AD SPEND PERFORMANCE BY CATEGORY predicted in the January report, and Digital, at a lower level than The Category “Home and Garden” still shows the biggest year on year loss. forecasted. The reason for this trend is the economic trouble of the Steinhoff-Group, the • We slightly reduced the year on year growth for 2020 and 2019 in second largest spender in this category. “Services” which includes political comparison to the January report because the economic growth rate is parties and governmental departments, overtook “Retail”. The reason for expected to slow down in the next two years. The key drivers of ad spend this is the European Union Parliament elections. growth will also be TV and Digital like the year before. • Mobile Advertising is growing faster than expected compared to the earlier Top 10 Categories 2019f Gross Local 2019f vs. 2018 report. Some advertisers are shifting about 80% of their digital budget to 2019f Currency Million YOY% mobile advertising. This trend continues to be true, so we expect increasing shares. Services 588 3%

Retail 429 3% THE 2019 AD SPEND FORECAST Economic prosperity is expected to slow down in 2019 and the GDP growth Media 351 4% rate will be smaller than the year before. This development influences the ad spend growth rate, which is predicted to slow down in 2019. There are Cosmetics & Pharma 315 10% no big sporting events this year that will have a major influence on ad Tourism 285 0% spend. The elections for the European Union Parliament will have had an influence on the ad spend in May. In Austria, billboards will benefit the Food 280 4% most from the elections. Finance 272 2%

The economic context 261 0% Automotive Experts predict that the economic growth rate will slow down in the next Home and Garden 250 -11% two years with 2% in 2019 and 1.6% in 2020. Responsible for the setback are the weaker global economy and the uncertainty around issues such as IT/Office/Communication 198 15% Brexit. Inflation will slightly grow in 2019 to 2.1%. The unemployment rate will rise slightly, ranging between 7.3% and 7.4%.

DENTSU AEGIS NETWORK 10 ‘TV IS STILL ONE OF THE BIGGEST DRIVERS IN THE AUSTRIAN AD e. Digital MARKET’ The online video share is continuously increasing in every category (“display” and “social media”). Social Media is still recovering from brand BY MEDIA safety in 2018. The y-o-y-growth rate is predicted to drop to 55%. The share of display banners is declining slightly. Mobile is one of the biggest a. Print drivers in the digital market with a y-o-y-growth rate of 100%. Programmatic buying will grow disproportionately high in Austria. A new Print spend will decrease this year (Newspaper y-o-y-growth rate drops to segment that has arisen in programmatic buying since 2018 is Audio ads, minus 0.6% and Magazine y-o-y-growth rate decreases to minus 3.7%) but which will continue to increase steadily in 2019 (at a low level). it is still high in comparison with other European countries. The European Union election will have helped reduce the decline.

b. TV TV is still one of the biggest drivers in the Austrian ad market. The expected y-o-y growth will climb to 6.0% this year and increase to 6.5% next year. The biggest private TV contributor, the ProSieben.Sat.1Puls4 GmbH, continues their successful diversification strategy. The public broadcaster ORF scores with high quality news broadcasts but also with self-produced entertainment content.

c. OOH OOH will also benefit from the European Union Election (May 2019), especially Billboard which is an important channel for political parties. We are expecting the biggest growth rate in this section will be from Digital OOH. These two factors will positively influence the ad spend for 2019, nevertheless, we expect a decline for this category in total. The y-o-y- growth rate is expected to drop to minus 0.7% this year.

d. Radio Radio will slightly increase its y-o-y growth rate in 2019 to 0.9%. If the economy slows down, the cheaper medium Radio benefits from this trend. Programmatic Audio ads will gain more market share in the future and will reduce the radio share.

DENTSU AEGIS NETWORK 11 Austria Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 4.7 6.0 6.5 Television 21.0 22.0 23.2

Newspapers -0.9 -0.6 -2.2 Newspapers 26.8 26.4 25.6

Magazines 1.5 -3.7 -3.1 Magazines 19.0 18.1 17.3

Radio 4.1 0.9 0.6 Radio 5.6 5.6 5.6

Cinema -3.1 -3.0 -1.3 Cinema 0.3 0.3 0.3

OOH -0.5 -0.7 -0.1 OOH 6.0 5.9 5.9

Total Digital 5.1 3.4 3.2 Total Digital 21.3 21.7 22.2

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 5.1 3.4 3.2 Total Digital* 100.0 100.0 100.0

Display 1.1 1.1 1.6 Display 30.1 29.4 29.0

Online Video 14.1 5.5 4.7 Online Video 11.8 12.0 12.2

Social Media 21.3 6.8 4.7 Social Media 11.9 12.3 12.5

Paid Search 3.4 5.0 4.2 Paid Search 29.0 29.4 29.7

Other incl. Other incl. 0.0 0.9 1.9 17.2 16.8 16.6 Classified Classified

Mobile^ 100 39.7 24.7 Mobile^ 9.3 12.6 15.3

Programmatic Programmatic 38.0 24.6 18.3 9.2 11.1 12.7 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 12 BELGIUM: ‘Evolution towards digitalisation’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context Top 10 Categories 2019f Gross Local 2019f vs. 2018 Belgian GDP is expected to see only limited growth in 2019 and Year on year % growth at current prices 2019f Currency Million YOY% 2020. On the one hand, the Belgian economy is heavily dependent 2018 2019f 2020f on exports towards its European neighbours (a.o. Germany, France, The Netherlands); on the other hand, recent elections (both local Retail 722 2,2% and European) have introduced several uncertainties due to the Belgium -1.9% (0.3%) 1.4% (1.7%) 1.1% (2.5%) Automotive 380 3,2% influence of factors like climate change and sustainable growth over economic orientations. Growing social dissatisfaction and the Food 276 7,5% Previous forecasts in brackets from January 2019 polarization of political views are other factors to be reckoned with. Finance & Insurance 246 -1,2% LATEST KEY AD SPEND TRENDS THE 2020 AD SPEND FORECAST • The Belgian media landscape continues its evolution towards The advertising market is expected to grow by 1.4% in 2019 and Cosmetics & Personal Care 257 0,7% digitalisation, particularly Mobile and Social. If one disregards 1.1% in 2020. This forecast is based on the assumption that digital online media (see next point), gross ratecard ad investments spends will still not be accounted for by Nielsen in 2020. Since no Tourism & Transportation 65 7,2% have suffered a negative evolution in 2017 and 2018, but we note decision over the methodology to be applied (declarative, crawling) several discrepancies here: while TV has bounced back and has been taken yet by CIM (the body that oversees all syndicated Pharmaceutical & Medicine 119 -10,1% enjoyed an increase in 2018, print media (particularly media surveys in Belgium), this should be a relatively safe bet. Newspapers) have suffered major decreases, and other media Hence, if the ad expenditures measured are underestimated, their Media 350 -0,3% have remained essentially flat. YOY evolution shouldn’t be drastically affected. Telecommunications 206 3,7% • Nielsen, the operator of our syndicated Adex survey, does not officially monitor digital ad investments, though the above AD SPEND PERFORMANCE BY CATEGORY Beverages 209 -3,2% overview does take their “unofficial” digital monitoring into According to our forecasts based on Q1 expenditures, we should account. Note however that the modest YOY evolution forecasts register in 2019 an Adex increase of the automotive, food and are due to the growing irrelevance of Nielsen digital adex telecom sectors, and a decrease of the pharmaceutical, financial measurement methodology (dwindling number of sites measured, and beverage sectors (the latter follows the 2018 spike, due to the essentially local sites, measured by crawlers, monitoring mostly World Cup competition). display activities).

THE 2019 AD SPEND FORECAST Q1 2019 is essentially flat vs. 2018. While the share of print media keeps on decreasing, Out of Home has been hard hit by the absence of the Brussels Car Fair (which is held every other year) in January 2019. After the May parliamentary elections, the difficult formation of a new government is expected to impact the economic mood and hence ad spend.

DENTSU AEGIS NETWORK 13 ‘TV REMAINS THE LARGEST AD MEDIUM, FOR HOW LONG?’ e. Digital Though digital media are still not officially included in the Belgian BY MEDIA syndicated Adex survey operated by Nielsen, Nielsen monitors the advertising activities of some 165 local sites. This crawler-based monitoring a. TV mostly addresses display and video advertising (desktop only). Due to its technical limitations, it only covers 25% - at most - of the actual digital TV remains the major medium type in Belgium, with a share ranging from perimeter. Should these limitations be overcome, and international (mostly 42% to 47% (depending if digital media – as they are currently monitored - social) sites be monitored, the share of digital Adex could possibly reach +/- are accounted for or not). The French channel TF1 now carries Belgian 40%. advertising, but the major disruption it was expected to bring has yet to materialize.

b. Print The share of ad spend dedicated to print media has been declining for years, reaching about 24.5% in 2018. Both newspapers and magazines have been impacted, and are expected to be further negatively affected in the future, albeit at a lesser pace. Print media are trying to make up for their loss of ad revenue by selling their quality inventory online.

c. Traditional OOH OOH share of ad revenue has remained pretty stable for several years. Together with the concentration of the offer (reduced to 3 major sales houses), we see a decrease in number of the ‘traditional’ OOH sites, together with an increase in quality. We also see a growing tendency to offer smaller ‘networks’, or ad hoc selections of sites, in order to meet specific requirements (POS, particular targets etc.).

d. Digital OOH Digital OOH, though still relatively marginal, is growing at a steady pace thanks to the new possibilities it offers in terms of creativity, interactivity and personalization of the message. New digital screens are now currently offered on a CPM basis.

DENTSU AEGIS NETWORK 14 Belgium Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 2.3 -2.7 2.8 Television 42.0 40.3 41.0

Newspapers -7.4 5.8 1.8 Newspapers 19.2 20.0 20.1

Magazines -10.8 3.6 4.4 Magazines 5.8 5.9 6.1

Radio 1.0 3.6 -0.6 Radio 14.0 14.3 14.0

Cinema 4.3 0.8 2.3 Cinema 0.7 0.7 0.8

OOH 1.2 2.3 0.9 OOH 8.0 8.1 8.1

Total Digital -8.2 5.4 -6.0 Total Digital 10.3 10.8 10.0

DENTSU AEGIS NETWORK 15 DENMARK: ‘Expectation for a small increase of 1-1.5% in 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context There is a favourable economic climate (boom) in Denmark and consumers Year on year % growth at current prices are willing to spend a lot of money on goods and services – countless records are being set when it comes to the amount of shopping being done, both 2018 2019f 2020f offline and online. Denmark 3.0% (1.0%) -1.7% (2.2%) 1.5% (1.1%) CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF

Previous forecasts in brackets from January 2019 AD SPEND Consumers are increasingly using digital media that offers targeted LATEST KEY AD SPEND TRENDS communication, and mobile which offers information on-the-go that can help The first 6 months of 2018 showed a lower increase in spend vs. navigate, co-ordinate chores and provide entertainment in one’s everyday expectations. This was driven by lower spend in general and fewer life. campaigns. Growth is centered around niche-media while digital has experienced a slight decline in spend. We still expect growth, but at a lower level vs. our previous estimates.

THE 2019 AD SPEND FORECAST The total ad spend for 2019 is expected to decrease by -1.7%. We expect a small increase of 1-1.5% in 2020. The main contributors to the growth are digital media. However there is a trend that leads towards smaller campaigns.

Global or local events to boost spend in 2019 Sporting: VM in European Handball in Denmark (January) Political: General Election (by 17 June 2019 at the latest)

RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE PREVIOUS REPORT (JANUARY 2019) Growth in H1 2019 has been much slower than estimated, with digital in a small decline in terms of growth. The missing growth from H1 will most likely NOT be compensated 1:1 during H2 which is why our FY 2019 and 2020/2021 estimates have changed. We expect the trend of smaller campaigns and low digital growth to continue into 2020/2021.

DENTSU AEGIS NETWORK 16 ‘PROGRAMMATIC SOLUTION FOR ADDRESSABLE FLOW-TV EXPECTED IN c. Addressable TV 2019’ Addressable TV is now on the agenda enabling advertisers to buy and distribute ad- server controlled and real-time delivered TV ads. Therefore advertisers can move beyond large-scale traditional TV ad buys and instead focus on relevance and BY MEDIA impact. Web-TV from broadcasters has become addressable, and the next step is to create addressable flow-TV. However, it might take some years before they can The 5 biggest by media ad spend trends in 2019 really manage this task. Addressable flow-TV is sold as digital video in 2018 and we a. Programmatic Buying expect a programmatic solution in 2019. Programmatic is still a popular tool in digital advertising powered by data availability. Programmatic buying was expected to represent more than 60% of d. More Mobile total Display advertising in 2019 and this development is to continue into 2020. Within programmatic and digital advertising, there is a lot of discussion around ad The mobile platform has experienced an increase in daily coverage from 19% in the viewability, the technology behind the optimization of viewability and whether it first quarter of 2017 to 45% in the first quarter of 2019. Thus, mobile is the can be used as a way to measure quality/success. It has become a hot topic ever platform that has increased its coverage the most among Danish Internet users since a report showed that 54% of display ads were not being seen, despite during this period. Mobile ads are expected to account for half of Internet advertisers paying for them*. Since high ROI correlates with improved ad advertising by 2018 and mobile ad spend is set to overtake desktop **. viewability, it is in advertisers’ best interest to improve the visibility of ads. EMERGING TECHNOLOGY E.G. AI. VR. AR, VOICE ACTIVATION e. DOOH We expect more spend on DOOH. Through dynamic DOOH, advertisers are able to What are the opportunities and challenges? buy campaigns automatically in (programmatic) real time. This means that AI and machine learning can help automatize tasks. With all the data that we now campaign distribution is based on data, which ensures that we communicate to the have access to, human resources are not sufficient. Therefore such technologies right people at the right time with the right message. For example, we can now are needed and can help us get to know the digital consumer journey even better activate a campaign during e.g. certain weather conditions. through the analysis of data. The biggest challenge is that 26% of ad spend goes to global leaders such as Facebook, Google, Netflix etc. - they have become very f. Proximity OOH Buying powerful and in some way set the rules for the market in Denmark. Through proximity buying, we can now do more specific OOH buying in terms of where the audience is located and at what time. Furthermore, we can also specify How is your local DAN market taking steps to prepare for this future? real-time content which we think is most likely to obtain a response from the We have started a new department called DDS to make more out of the data that is audience. available and to be better at cross-selling.

b. Declining traditional TV ads So far, consumers’ time spent on watching TV has decreased by 1% in H1 2019, so the decline has stopped. The decline in TV can partly be explained by the fact that consumers are moving their attention to digital (streaming) platforms. Also, when watching television consumers are “second screening’ as they pay attention to content on their smartphones, laptops and/or tablets while they are watching TV. This means that it is no longer the various television programs or ads that compete for media users' attention. Thus, TV ad spend is expected to further decrease.

DENTSU AEGIS NETWORK 17 Denmark Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 4.4% -2.2% 0.0% Television 16.0% 15.9% 15.7%

Newspapers -0.8% -12.0% -9.1% Newspapers 17.3% 15.3% 13.9%

Magazines -15.0% -6.4% 0.0% Magazines 5.6% 5.3% 5.2%

Radio 15.2% 2.2% 2.4% Radio 2.8% 2.9% 2.9%

Cinema 10.0% 13.6% 12.0% Cinema 0.8% 0.9% 1.0%

OOH 16.2% 14.6% 18.2% OOH 3.3% 3.9% 4.5%

Total Digital 4.7% 0.7% 3.7% Total Digital 54.3% 55.6% 56.8%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 4.7% 0.7% 3.7% Total Digital* 100% 100% 100%

Display (Banners) 11.1% -14.3% -5.0% Display (Banners) 29.8% 25.4% 23.3%

Online Video 33.8% 26.2% 31.9% Online Video 6.8% 8.6% 10.9%

Social Media 48.1% 48.1% 25.0% Social Media 1.7% 2.5% 3.1%

Paid Search 0.9% 1.6% 0.8% Paid Search 39.0% 39.4% 38.3%

Other incl. Other incl. 6.0% 7.6% 5.3% 22.6% 24.1% 24.5% Classified Classified

Mobile^ 60.4% 45.6% 13.3% Mobile^ 19.0% 26.3% 30.9%

Programmatic Programmatic 11.2% 17.8% 11.3% 72.0% 77.1% 81.8% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 18 FINLAND: Media market turned to growth in 2018

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Top 10 Categories 2019f Gross Local 2019f vs. 2018 Forecasting 2020 is a difficult task in a constantly transforming market, 2019f Currency Million YOY% Year on year % growth at current prices but we expect there to be 3 main drivers for growth: 1) Digital media, especially Social Media, Online Video and Paid Search. 2018 2019f 2020f Retail 190 -1,15% 2) OOH is expected to keep growing as new formats come available. The Automotive 87 0% Finland 2.1% (0.3%) 1.6% (1.1%) 1.9% (0.9%) introduction of programmatic OOH buying will have a particular significant impact. Food 81 2,5% 3) The slowing down of the decline in Print media - Print still has a Previous forecasts in brackets from January 2019 Sports and free time 46 0% considerable market share in Finland and has been declining 9% on average year on year for the past 10 years. Finance 45 12,5% LATEST KEY AD SPEND TRENDS Travel & • 2018 ad spend growth was more positive than we expected and was AD SPEND PERFORMANCE BY CATEGORY 40 0% driven mainly by social media and paid search. OOH also performed very transportation Retail is still the largest category in terms of ad spend, but it declined by well with 16.1% growth. 6% in 2018. The second biggest is cars and the third is groceries. The Pharmaceuticals 40 0% • Print media continues to decline but still holds more than 30% of market largest growth in 2018 was seen for groceries and the finance sector. share and is something advertisers should consider in Finland. Medias and publishers 38 0% • FOX Media sales rights were bought by Sanoma Media in 2019, which Telecommunications made them the largest TV-house in Finland. The market is now dominated 23 0% by two big players (Sanoma and MTV Media), which will cause price Beauty & personal 18 -5% inflation in the coming years. care

THE 2019 AD SPEND FORECAST This year started with the parliamentary elections, but the market has still been in decline in Q1 according to Kantar media. We expect the market to return to mild growth numbers as the year progresses.

Ice-hockey world championships are a big event in Finland and if Finland reaches the semi-finals or play-offs, it will be one of the highest viewed events of the year in TV.

The economic context The slow down of the global economy has also been felt in Europe. Finland’s economic growth is largely dependent on the Euro zone’s economic growth and due to the slow down our growth estimates have been revised downwards.

GDP is expected to grow 1.7% in 2019 and 1.4% in 2020 according to the Ministry of Finance.

DENTSU AEGIS NETWORK 19 ‘DIGITAL AND OOH DRIVING GROWTH’

BY MEDIA

a. Paid Search Paid search is expected to be one of the main drivers of growth for 2019 as targeting with data is trending and the tools available are increasing. Google still dominates the market with a 97% market share in Finland.

b. OOH OOH experienced the highest growth in 2018 with 16.1% and this trend is expected to continue in 2019. The main reason for growth is the increasing popularity in Digital OOH advertising, which creates new solutions for advertisers where campaigns can be targeted based on weather, location, etc. Programmatic buying is expected to become available for OOH in late 2019 which creates new exciting opportunities.

c. Social Media Social media and especially video formats are extremely popular and we expect this to continue in 2019. Social media is a constantly transforming media category for which the future ad spend is hard to estimate, but we believe that the growth will be at least 15% in 2019. It is important to consider the role of social media in every campaign.

d. Digital Audio Many new audio services have surfaced in recent years and on average, people spend over 80 minutes per week listening to podcasts in Finland. Most report having them on in the background while doing chores or traveling for example, which creates great opportunites for reaching today’s audiences.

Digital audio is most popular with the younger target audiences, with 38% of A15-29 TA reporting that they have listened to a podcast within the last month. Only 23% of 45-54 year olds had listened to a podcast within the last month, but their average listening time is longer at 95.4 minutes per week compared to 89.3 for A15-29.

e. Amazon Amazon is bringing their ecommerce business to Finland which is expected to disrupt the ecommerce market and challenge the current, mostly local, players.

DENTSU AEGIS NETWORK 20 Finland Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 0.2 -1.7 -2.8 Television 20.1 19.5 18.6

Newspapers -10.5 -4.5 -5.0 Newspapers 27.1 25.5 23.7

Magazines -2.2 -4.0 -4.0 Magazines 5.9 5.6 5.2

Radio 5.1 4.0 4.0 Radio 5.6 5.7 5.8

Cinema 3.0 5.0 5.0 Cinema 0.6 0.6 0.6

OOH 16.1 9.0 5.0 OOH 5.5 5.9 6.1

Total Digital 13.7 7.4 9.0 Total Digital 35.2 37.2 39.8

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 13.7 7.4 9.0 Total Digital* 100.0 100.0 100.0

Display (Banner) 1.6 -5.0 -3.0 Display (Banner) 28.2 24.9 22.2

Online Video -36.2 10.0 10.0 Online Video 5.0 5.1 5.1

Social Media 32.6 15.4 10.0 Social Media 21.3 22.9 23.1

Paid Search 20.7 7.5 12.5 Paid Search 32.5 32.5 33.5

Other incl. Other incl. 38.1 20.0 20.0 13.1 14.6 16.1 Classified Classified

Mobile^ 13.3 11.1 8.0 Mobile^ 69.0 71.0 71.0

Programmatic Programmatic 64.7 34.3 21.1 36.0 45.0 50.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 21 FRANCE: ‘Legislative changes could positively impact the market in 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Global or local events to boost spend in 2019 CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD In September the Rugby World Cup in Japan should sustain household SPEND Year on year % growth at current prices consumption to a certain extent. France’s advertising market is forecast to Major consumer trends in France are related to organic, natural products grow by +3.6%, primarily driven by digital investments at +8.9%, TV at and ecology. Although this is not a new trend, the rise in popularity shows 2018 2019f 2020f +0.8% and OOH media up by +2.2%. We expect less of a decline in Print ad that there is still potential for winning new clients. Consumers are also spends: -4.4% vs -6.6% in 2018. At the end of 2018, the government has seeking products - food but also beauty and personal care items - without France 5.3% (3.6%) 3.6% (3.1%) 3.0% (2.5%) reviewed the laws concerning the media chronology of movies, by hazardous or potentially harmful ingredients.

Previous forecasts in brackets from January 2019 shortening the period that TV and VOD platforms have to wait to broadcast The digital revolution is still ongoing and we are monitoring activity movies after their release in theatres. regarding AI, connected speakers etc. LATEST KEY AD SPEND TRENDS Nevertheless the equipment in France is still in its infancy, with only 5,3% • The results published by IREP in March for the year 2018 showed a rise of THE 2020 AD SPEND FORECAST of households equipped with this technology. +6.0% for total media ad spend. The growth has been especially strong For 2020, we forecast a +3.0% rise for all media, slightly lower than in for digital +17.2% vs. 2017, and for OOH +5.1%. By contrast, other 2019. The European football championship in June and the Olympic Games media suffered from the competition from the Internet, including Radio in Tokyo in August 2020 will have a positive impact on TV ad spend, leading 2019f Gross Local 2019f vs. 2018 which declined by -0.9% and Print -6.6%. Television has suffered less but Top 10 Categories to an increase of +1.0%. Furthermore, laws regarding forbidden sectors in 2019f € Million YOY% its growth is limited +0.2%. TV, such as programmatic TV, ads for retailer’s discounts and ads for cinema • The end of 2018 was marked by a social and economic crisis in France, should hopefully be reviewed by the end of the year. If legislative changes Retail 5 551 1,3% with the “Gilets jaunes” or Yellow Vests Movement. There was a slight were decided, the market could be positively impacted in 2020. decrease in media investments for many clients, reluctant to invest in a Programmatic TV buying will open up a new market for smaller advertisers Automotive 3 528 4,8% period of uncertainty. that don’t yet invest in TV; but other media (press, radio and OOH Food 2 595 -1,7% • 2018 GDP growth stood at +1.5% vs +2.3% in 2017. especially), fear a fall in their revenue because of this new legislation. Culture & leisure 2 202 -5,4% RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE THE 2019 AD SPEND FORECAST Beauty care 2 134 -1,4% PREVIOUS REPORT (JANUARY 2019) In 2019, we expect a rise in media ad spend of +3.6% - lower than 2018. Bank & insurance We are expecting an end to the Yellow Vests Movement before Summer, 1 978 -1,7% thanks to the Government’s financial aid for French households. The economic context Tourism 1 724 1,3% European elections will take place on the 26th of May 2019 in France, but We improved our forecasts because the market is recovering, many thanks since this is a global election it won’t have as much impact as a national to digital investments. Household consumption should be spurred on by the Media information 1 494 -3,5% election. This election will have less media coverage than presidential strong boost in buying power (+2.5% according to OFCE), sustained by elections, therefore we don’t forecast any impact on ad spend during socio-fiscal measures taken by the government who are reallocating almost Telecoms 1 413 -0,8% Spring. 12 billion Euros to households over the year. Services 1 380 -1,9%

In June and early July, the FIFA Women’s World Cup is being held in France, AD SPEND PERFORMANCE BY CATEGORY and this should have a positive impact on TV ad spends for the broadcasters Retail is still the best performing category in terms of ad spend, with €5.6 TF1 group and Canal+. Moreover, the anticipated high performance of the billion invested and a forecast increase of +1.3%. Automotive follows with French team will help channels sell the event. €3.5 billion and a forecast of +4.8%. Food is the third most invested category with €2.6 billion, but we foresee a decrease in ad spend of -1.7%. The biggest fall is in the Media Information sector with -3.5%. However only a small change is predicted between 2018 and 2019.

DENTSU AEGIS NETWORK 22 ‘DISPLAY IS FORECAST TO RISE 14.4%, WITH GROWTH ATTRIBUTED TO iv. Programmatic MOBILE AND VIDEO’ In 2019, programmatic buying will continue to grow by +24.0% with a 72.2% share of total buying. BY MEDIA v. Paid Search Paid Search, the second largest digital lever, will grow +5.3% to reach 2,396 M€ a. TV and 45.1% of total investments. We forecast a growth of +0.8% in TV ad spends in 2019, carried by an abnormally busy period with the "Gilets jaunes" crisis – a protest movement that c. OOH begun in November 2018. From the 7th of June until the 7th of July, the FIFA We expect a growth of +2.2% to reach 1,267 M€ in 2019 and a market share of Women’s World Cup should positively affect TV ad spends with high costs for ad 10.4%, carried by DOOH ad spend. Displayce, a digital platform, expects a +78% breaks on TF1 and a very strong national team. increase in DOOH advertising expenditures (end of 2017 to 2019), which will The opening of forbidden sectors (ads for retailer’s discounts, ads for cinema) contribute to growth for the whole media. and the authorization of programmatic buying on TV is a work in progress in France, and the topic is gathering the whole market. The lobbying of TV groups d. Print should lead to a new legislation, most probably in 2020 but with substantial progress in 2019. Towards the end of 2019, ad spend should benefit from the This media is continuing to decline by -4.2% of net ad spend for newspapers and Rugby World Cup in Japan, especially if the French team is successful. We expect -4.5% for magazines. Newspapers (especially the sports news “L'Equipe”) will a +0.8% growth for 2019, with 3,320 M€. benefit slightly from the Rugby World Cup in Japan in September, but for a short time only. Print titles have taken advantage of connected speakers by launching applications such as “Les Echos” and “Vogue”, giving a voice to written content. b. Digital In 2020, ad spend should fall -2.5% for newspapers and -4.0% for magazines. In 2019, total digital is expected to grow +8.9% vs 2018 and should reach Despite good audiences (especially for digital), the press cannot find a virtuous 43.6% of SOM. business model that will lead to dynamic progression. Among digital levers, Display is forecast to rise +14.4%, with a large part of this growth attributed to mobile (+20.9%) and video (+21.0%). Total Display will e. Radio reach 2,259 M€ in 2019 and 42.6% of total investments in digital. Radio is almost flat, with only +0.2% growth in 2019. Classical radio ad spend remains steady and is still sold at a very low price, weakening the media. i. Online Video Nevertheless, digital audio (podcasts, webradio…) presents a great opportunity Total Video should amount to 1,025 M€ and 19.3% of digital investments. The for channels – it opens up new ways of advertising for brands, and has had popular outstream formats and the video instream on the catch-up platforms will impressive success in France. also make it easier to monetize this lever.

f. Cinema ii. Social Media We expect a forecast growth of +3.0% in 2019 thanks to the new screens 4DX We expect a rise of +26.1% in social media investments, much lower than the and ScreenX (a three-screen projection) and the progression of new technology previous year (+62.6% in 2018), reaching a 25.9% share of the market. such as 3D and IMAX. We predict a spend of 95 M€ and SOM of 0.8%.

iii. Mobile Total Mobile investments should reach 1,347 M€ and 59.6% share of display. We expect a rise of +15.0%.

DENTSU AEGIS NETWORK 23 France Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 0.2 0.8 1.0 Television 28.0 27.3 26.8

Newspapers -10.9 -4.2 -2.5 Newspapers 6.3 5.9 5.5

Magazines -9.9 -4.5 -4.0 Magazines 6.9 6.4 6.0

Radio -0.9 0.2 0.5 Radio 5.9 5.7 5.5

Cinema -3.2 3.0 3.9 Cinema 0.8 0.8 0.8

OOH 5.1 2.2 2.4 OOH 10.6 10.4 10.4

Total Digital 17.2 8.9 6.4 Total Digital 41.5 43.6 45.1

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 17.2 8.9 6.4 Total Digital* 100.0 100.0 100.0

Display Banner 13.9 -9.8 -9.2 Display Banner 10.3 8.5 7.2

Online Video 13.2 12.6 13.3 Online Video 7.9 8.2 8.7

Social Media 62.6 26.1 15.3 Social Media 22.3 25.9 28.0

Paid Search 11.0 5.3 3.9 Paid Search 46.7 45.1 44.1

Other incl. Other incl. -5.2 4.5 2.9 12.8 12.3 11.9 Classified Classified

Mobile^ 37.3 14.4 10.7 Mobile^ 56.8 59.7 62.1

Programmatic Programmatic 25.6 18.0 13.1 66.6 72.2 76.8 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 24 GERMANY: ‘Tense global issues dampen ad development’

OVERVIEW OF THE TOTAL ADVERTISING MARKET RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE 2019f Gross Local 2019f vs. 2018 PREVIOUS REPORT (JANUARY 2019) Top 10 Categories Year on year % growth at current prices 2019f Currency Million YOY% There has been little change from previous predictions. 2018 was a little 2018 2019f 2020f below market expectations, especially regarding most classical vehicles. Media 4.909 -1,3% Advertisers are still reluctant as tense global political and economic issues Germany 0.2% (1.0%) 0.4% (0.5%) 0.5% (0.5%) are taking their toll. Retail 4.903 -1,9% Services 3.879 3,7% AD SPEND PERFORMANCE BY CATEGORY Previous forecasts in brackets from January 2019 Most categories are expected to decline in investments – though mostly Automotive 2.367 0,3% on a low scale. Media and Retail will remain the top spending categories Food 2.291 -2,1% LATEST KEY AD SPEND TRENDS with little change in the order expected. Services and Finance will again • The German economy is still losing momentum with a low growth have the largest increase, and Telecommunication will climb into the top 10 Body Care 2.198 -5,0% expectation of 0.5% and a new economic development index of 99.2 for once more. 2019. The unsettled Brexit and trade tensions weigh down recovery. Thus, Note that the ranking is based on gross advertising expenditures by Nielsen. Health & Pharmaceuticals 1.654 -7,9% advertisers are expected to stay reluctant and ad spends in total will be Net ad spends for segments are not available in Germany. less. Home and Gardening 1.538 -0,1% • Classical media channels will suffer most and forecasts have had to be CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD Finance 1.466 5,8% adjusted e.g. for TV and cinema. Clients are still shifting their budgets to SPEND digital media. Telecommunication 1.305 1,1% With a daily average of 10.5h, media consumption in Germany is still very • However, while most of the online channels expect more investment, not high. While most of this time is spent consuming audio-visual media, all of them will sustain the previous growth levels. ¾ of Internet usage is made up of online video and music streaming. 1 New analyses show that only 56% of TV time is used for linear TV, and THE 2019 AD SPEND FORECAST only 32% by younger viewers². The ad market in Germany is moving at a reduced pace so far in 2019. Moreover smartphones are going to become even more important in Despite low unemployment and inflation figures, the economic forecasts terms of ad spend in line with usage e.g. as a central control centre for the have been lowered and global and national political and economic issues IoT – 42% have used it with wearables, 22% with smart TV.³ have decelerated growth rates. Additional boosts from sport events are not Podcasts and smart speakers are two important players in audio usage, and expected. 1 in 4 live in a household with at least one smart speaker. 4 1 Vaunet Mediennutzung in Deutschland 2018 THE 2020 AD SPEND FORECAST ² Best Research 2/19 ³ Bitkom 2/18 4RMS As important international topics such as Brexit and punitive tariffs are expected to be settled (in one way or another) during 2019, the advertising market is expected to recover a little – mainly driven by digital ad spends. Online Video, Addressable TV, Digital Audio and Digital OOH will all become more important.

DENTSU AEGIS NETWORK 25 ‘CLASSICAL MEDIA STRUGGLE WHILE DIGITAL STAYS COMPLEX’ i. Online Video Moreover, as Google switches to first price auction, most programmatic Digital video advertising still grows. Local providers have high utilization auctions will be based on the first price auction type sooner or later. This BY MEDIA rates and international platforms such as Youtube are very popular. It will influence the bidding behaviour of the DSPs - the algorithms are (or remains to be seen, however, whether the renewed scandals of inadequate have already been) adapted by the established DSPs. a. TV content and brand safety will have long-term effects or will only be a Another important issue is connected TV (OTT) i.e. the growing amount of temporary restraint. video content which can be bought programmatically on the big screen. The TV measurement joint-industry-committee AGF and Google presented Programmatic OOH is slow to pick up on, given its publisher and tech the first results of their crossmedia quota-project in early 2019. This is still service provider structure. Programmatic audio is technically very good, but not the long demanded official crossmedia video currency, but it is an On the positive side, the project, which aims to link online video usage data, the demand isn’t high so far. important first step. such as YouTube, to TV, has delivered preliminary interim results. As a Furthermore, AGF will provide convergent streaming data on a daily basis result, the online video market continues to move towards TV. with only 8 days time delay starting mid April, and will expand the mobile v. Paid Search panel on smartphones and tablets. In order to face the predominant GAFA, ii. Social Media Hot topics in 2019 are voice search, AI and machine learning, automation, the demand for sales houses to start building video-platforming-alliances is In the social advertising channels, we can identify two kinds of advertisers. audience management, Online2Offline, Amazon advertising and data driven huge and first solutions are expected within 2019. First Log-In alliances like For the first group the channel is very important - they invest in well-trained attribution. netID and verimi are already in place but still need more partners to staff assisted by bid management tools. For the second group of LinkedIn profile targeting with Bing will become an exciting possibility for increase relevance. advertisers, Brand Safety is very critical - they are critical of the social b2b clients. Amazon Advertising will become a serious challenge for Google. communities with user-generated content, and are therefore very cautious We see a lot of advertisers shifting budget from Google to Amazon. These facts all show that the market is very eager to respond to the about investing budgets. Pinterest and Snapchat will pick up in Germany in Audiences are the new keywords. Keywords are still important, but fundamental questions and circumstances that it is facing (changing user 2019. audience-targeting on the search network will be of at least equal behavior, competition). importance for high performance. iii. Mobile Google will focus on automation and automated solutions like smart bidding or responsive search ads. Smart TV distribution reached more than half of all German households Right now 5G is a key topic in the German mobile market, i.e. the auctions by the end of 2018 and thus ads on Addressable TV are strongly of the 5G frequency blocks. Deutsche Telekom, Vodafone and Telefonica It’s getting more and more important to connect online to offline. Moreover, increasing in 2019. ATV is gaining much more relevance and opens totally have bid in order to remain competitive in the future. Moreover, Pinterest we need a complete view of the entire customer journey so we have a more new spot-optimization-options (already known from digital) for the big launched its marketing offer in Germany. Stories and shopping buttons in accurate understanding of campaign performance and attribution. screen. social media apps are becoming more and more popular - they lead to spontaneous purchases and they’re where discussions about products begin. b. Digital Digital continues to grow and the hurdles of the GDPR seem iv. Programmatic largely overcome. In 2019 the programmatic market will continue to grow. The demand for However, growth is unevenly distributed. Social media will remain largely impact measurement, verification, viewability tracking and ad fraud stable and search engine marketing will grow only slightly. Here a high continues to increase. The silos made by global and national publishers market maturity has a dampening effect. By contrast, video advertising make it increasingly difficult for advertising to implement their in particular continues to grow. The expenditure for retail marketing programmatic campaigns through one DSP. More and more advertisers rely at Amazon and Co. as a comparatively young digital channel is booming. on two or three DSPs. In general, we see a further continuous shift from All in all, the established digital channels are growing only to a limited non-disclosed margin business models to fully transparent models. extent, but new channels such as retail marketing are ensuring constant growth.

DENTSU AEGIS NETWORK 26 c. OOH Despite a decline in gross ad spends, OOH achieved the second-best result in the history of OOH advertising. In 2019, OOH is back on the growth track again and will continue the mostly positive development of previous years. In unison with the seismic changes we are witnessing across the media, marketing and communications world, out-of-home is transforming at pace and is presenting many new and exciting opportunities for advertisers.

d. Print As circulation and ad spend figures decline, publishers are focusing on a range of activities to increase their income. This includes brand extensions (as print spin-off or even on TV/as a product range), cooperation with celebrities/influencers and alliances with digital companies. Newspaper publishers even find additional income in using their skills as regional distributors for logistic topics.

e. Radio Ad investments are staying consistent for audio and there are some upcoming trends driving this development: 5G might be an important topic for the radio market. After the roll-out and the availability of respective devices, connectivity and audio streaming will be supported by the new standard. With the increasing use of smart speakers as audio devices, it is easier to select and switch radio channels. Radio spots must adapt to new habits and become shorter, more concise and more target-group-specific. In the future, this will be made easier by special formats and more automated procedures, planned and offered by radio sales houses.

f. Cinema As cinema is competing with streaming and struggling with decreasing audience figures, movie companies are focusing more and more on improved technology and comfortable cinema atmospheres including high quality customer service. There is still a focus on Event Cinema with live broadcastings of cultural and sports events. And advertising is part of the event: According to a new eye-tracking analysis, 95% of the cinema audience actually view cinema advertising – as opposed to only 55% with TV. Moreover, cinema offers more and more cross media options e.g. via online movie sites and social channels which connect viewers after the movie.

DENTSU AEGIS NETWORK 27 Germany Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -2.0 -3.0 -4.2 Television 31.5 30.5 29.1

Newspapers -3.5 -5.0 -5.0 Newspapers 12.0 11.4 10.8

Magazines -8.0 -8.0 -7.0 Magazines 9.9 9.0 8.4

Radio 1.0 1.5 1.5 Radio 5.3 5.4 5.4

Cinema -15.0 -10.0 -10.0 Cinema 0.4 0.4 0.3

OOH -5.6 1.5 2.0 OOH 4.2 4.2 4.3

Total Digital 7.0 7.1 7.2 Total Digital 36.7 39.1 41.8

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 7.0 7.1 7.2 Total Digital* 100.0 100.0 100.0

Display Banners -7.0 -6.0 -5.0 Display Banner 15.4 13.5 12.0

Online Video 8.0 5.5 4.9 Online Video 8.9 8.7 8.6

Social Media 10.0 10.0 8.5 Social Media 10.5 10.8 10.9

Paid Search 2.0 2.7 2.5 Paid Search 52.8 50.6 48.4

Other incl. Other incl. 68.2 40.4 32.2 12.5 16.3 20.1 Classified Classified

Mobile^ 54.0 41.0 33.0 Mobile^ 11.4 15.0 18.6

Programmatic Programmatic 24.9 23.2 21.4 19.0 22.0 25.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 28 GREECE: ‘Political tension challenges Media Spend Growth’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST The overall economic & business community is expecting 2020 to be Year on year % growth at current prices the first real year of the post memorandum era. 2018 2019f 2020f Conflicts and tension in the political scene are expected to smoothen and the recovery journey is expected to begin. Greece 4.5% (4.5%) 3.3% (4.5%) 5.2% (4.0%)

Previous forecasts in brackets from January 2019

LATEST KEY AD SPEND TRENDS • No significant change has been monitored since the earlier report. • Political tension around the relationship with North Macedonia and the European Parliament elections have negatively impacted business expectations thus resulting in a slight hold on ad spend.

THE 2019 AD SPEND FORECAST 2019 is expected to be another year of sluggish growth as the macroeconomic situation is still uncertain, the unemployment rate remains high and no changes in disposable income are expected. The turmoil in the political scene with the relationships with neighboring countries (North Macedonia & Turkey) plus the 3 elections (National, Regional & European) occurring this year are major drivers of uncertainty. The first half of the year is expected to be slightly lower than last year in terms of ad spend. Industry expectations are that the second half of the year will be in recovery mode.

The economic context GDP growth for 2019 is forecasted to be 2%, slightly lower than originally submitted in the 2019 Government budget.

The unemployment ratio is improving, still high (19%+) especially for young people.

DENTSU AEGIS NETWORK 29 ‘TV STILL ABSORBS THE MAJORITY OF AD SPEND’

BY MEDIA

a. TV In TV, single digit inflation and Energy players are driving the marginal advertising expenditure growth. All licensed National TV channels are heavily investing in programming, mainly in event-based shows and Greek series, thus viewership is expected to retain the high level currently being achieved. In Greece, TV still absorbs the majority of ad spend.

b. Digital GDPR enactment has slightly slowed down the short-term e-commerce and performance related spending, while the industry is in the “getting compliant” phase. OTT and VOD platforms are making ground and will be the major “threat” to 2020 TV spend.

c. OOH OOH ad spend is expected in 2019 to continue along an upward path powered by the upsurge of mobile OOH formats and digital formats integration.

d. Radio and Print Radio and Print media will remain in their roles as smaller tactical media vehicles.

Newspapers and Magazines will continue to shrink, while sluggish growth in Radio will primarily come from regional Radio stations.

Slow but steady recovery is the most likely scenario for the Greek ad spend forecast in the coming year. On the optimistic side, the stabilization of the GDP and the potential improvement of unemployment rates could drive a slight improvement in disposable income and consumption, thus generating a parallel growth path.

DENTSU AEGIS NETWORK 30 Greece Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 6.7 4.7 7.9 Television 59.3 60.1 61.6

Newspapers -1.8 -2.6 -1.4 Newspapers 8.8 8.3 7.8

Magazines -7.3 -2.6 -2.7 Magazines 8.8 8.3 7.7

Radio 5.0 4.8 3.0 Radio 7.3 7.4 7.3

Cinema n.a. n.a. n.a. Cinema n.a. n.a. n.a.

OOH 9.3 6.9 6.4 OOH 5.8 6.0 6.0

Total Digital 6.2 2.3 2.3 Total Digital 10.0 9.9 9.6

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 31 IRELAND: ‘An unprecedented level of uncertainty’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context The outlook for 2019 is characterised by an unprecedented level of 2019f Gross Local 2019f vs. 2018 Year on year % growth at current prices Top 10 Categories 2019f uncertainty, particularly in terms of Ireland’s relationship with external Currency Million YOY% 2018 2019f 2020f trading partners. The continued lack of clarity over the nature of the UK’s withdrawal from the European Union is the most immediate pressing risk to Retail 185,353,547 -0.06% Ireland 2.5% (2.7%) 3.5% (4.4%) 2.8% (5.7%) the Irish economy. Household Services 78,616,186 -2.74% The prospect of a no-deal Brexit also leads to significant variability around Entertainment & The Media 72,203,912 -4.77% short term forecasts for the Irish economy; under a baseline, no-Brexit Previous forecasts in brackets from January 2019 case, we believe the Irish economy would grow by 3.8% in 2019 and 3.2% Finance 71,094,965 11.85% LATEST KEY AD SPEND TRENDS in 2020. However, a no-deal scenario with significant disruptions would • The TV forecast has been revised to almost flat YoY in 2019 and 2020 – reduce these GDP growth rates to 1.2% and 2.4% respectively. Motors 55,277,089 -11.44% previously we were predicting low single digit growth each year but Govt, social, political organisations 52,925,932 12.63% uncertainty around Brexit has led to revenue adjustments by the TV THE 2020 AD SPEND FORECAST stations. Our forecasted position for 2020 is 2.8% growth (an incremental increase of Drink 48,289,699 16.68% • Radio and Cinema are predicted to be flat YoY for this year and next, with +€24million). OOH seeing a slight increase in 2019 but then dropping back to flat in Euro2020 and the Olympics are both huge sporting events in 2020 which Food 44,002,350 0.75% 2020. New radio trading models are being investigated in this market as should drive an increase in ad spend – particularly with Dublin being a host Travel & Transport 42,492,896 -5.63% well as a lot of OOH inventory switching over to digital which is making city for the Euro2020 games. these media very hard to call. Cosmetics & Toiletries 29,559,949 -8.23% These sporting events coupled with further Digital growth – predominately • Newspaper and Magazine spend is again predicted to drop in both 2019 paid search, social media and video will drive the 2020 position. and again in 2020.

AD SPEND PERFORMANCE BY CATEGORY THE 2019 AD SPEND FORECAST Retail is the category that remains the clear leader in the Irish market with There’s a lot of uncertainty around the market surrounding Brexit – from a reported spend of €185m. This represents almost ¼ of the total market. both advertisers as well as media owners. TV is being affected a lot by this Drink, Govt Social & Political and Finance were again the categories with the and we’ve pulled back our forecast position for this year and next on the biggest YoY increase (+16.7%, +12.6% and 11.9% respectively). back of this. Motors is continuing to decrease after a few years of steady increases (-11.4%). The Rugby World Cup in Sep/Oct is likely to see some increased activity across the market – to what extent is currently hard to call as the looming Brexit outcome will likely also effect the level of RWC activity. The time difference with Japan will also have an impact on spend levels as early morning kick offs might discourage some alcohol brands for example.

DENTSU AEGIS NETWORK 32 ‘THE MAIN DRIVERS OF GROWTH IN DIGITAL ARE VIDEO c. AND SEARCH’ The Digital Share of spend now represents circa 48% share of spend vs. 21% in 2012. Search and Social make up 2/3 of digital spend, with Video BY MEDIA showing the largest YoY increase.

a. d. The Drink category, Govt, social and Political and Finance are the categories The big tech companies GAFA (Google, Apple, Facebook and Amazon) are showing substantial growth in the Irish market. impacting growth of the agency digital spend % with some clients spending New legislation is being introduced in Q4 relating to alcohol advertising directly with the tech giants. This is further hindered by the fact both which may have an impact on the availability of inventory – this category is Google and Facebook have large operations based in Dublin. showing signs of ‘spending while they can’ before restrictive laws come into effect. e. • Digital is driving growth with +10% forecasted for 2019. Outside of this, The Irish housing market is again seeing an upward growth curve, in line the only other media showing positive YoY positions are: OOH (+1.6%) with the previous year, meaning lending is back in demand – banks, who and TV (+0.4%). had been quiet for a number of years post recession, are now back spending to fight for house buyers’ business. • Newspaper, Magazine and Radio suppliers are having a turbulent year with the majority of suppliers seeing declines YoY. Some Radio suppliers are b. seeing increases to balance out this medium. Dept of Finance Trade with the UK equates to 35% of Irish GDP. Thus, it is a key trading partner. The UK takes 43% of Irish indigenous firm exports, so • The main drivers of growth in Digital are Video and Search, with Social a the expected negative impact of Brexit on the UK economy will have knock- close 3rd – interestingly, Social is forecasted to flatten out in 2020. on effect in Ireland. Sterling has fallen sharply over Brexit concerns, which hits exports to the UK and impacts Irish firms competing with UK exports to Ireland and elsewhere.

DENTSU AEGIS NETWORK 33 Ireland Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -3.5 0.4 0.1 Television 22.7 22.0 21.4

Newspapers -11.3 -9.8 -9.8 Newspapers 11.9 10.4 9.1

Magazines -9.6 -10.6 -9.5 Magazines 0.5 0.5 0.4

Radio -1.2 0.0 0.0 Radio 9.7 9.4 9.1

Cinema -6.6 0.0 0.0 Cinema 0.7 0.6 0.6

OOH 2.0 1.6 0.0 OOH 9.8 9.6 9.3

Total Digital 12.0 10.0 8.0 Total Digital 44.7 47.5 49.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.0 10.0 8.0 Total Digital* 100.0 100.0 100.0

Display -7.4 -16.1 -11.0 Display 22.8 17.4 14.3

Online Video 35.7 31.6 40.0 Online Video 9.9 11.9 15.4

Social Media 20.5 13.8 0.9 Social Media 24.6 25.5 23.8

Paid Search 16.9 20.4 11.1 Paid Search 37.2 40.7 41.9

Other incl. Other incl. 8.1 -9.5 10.5 5.5 4.5 4.6 Classified Classified

Mobile^ 16.0 13.7 8.2 Mobile^ 58.0 60.0 60.0

Programmatic Programmatic n.a. n.a. n.a. n.a. n.a. n.a. Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 34 ITALY: ‘2020 will suffer at a macroeconomic level’

OVERVIEW OF THE TOTAL ADVERTISING MARKET RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Top 10 Categories 2019f Gross Local 2019f vs. 2018 PREVIOUS REPORT (JANUARY 2019) 2019f Currency Million YOY% Year on year % growth at current prices Among the main causes of forecast downsizing for 2019 and 2020, we must highlight television audiences that are becoming more and more FOOD 891 -1.7 2018 2019f 2020f fragmented. This is also due to the success of new VOD platforms such as AUTOMOTIVE 880 -3.1 Netflix, Amazon Tv, Now Tv and Tim Vision. Italy 2.0% (1.6%) -1.6% (0.8%) 0.6% (1.6%) RETAIL 585 2.0 Moreover, in August 2018 the Government approved the “Decreto Dignità”: Previous forecasts in brackets from January 2019 MEDIA/PUBLISHING 500 2.2 a law that will ban advertising on betting and online games from June 2019. LATEST KEY AD SPEND TRENDS It also adds an absolute and omni comprehensive limitation to any kind of CULTURE/LEISURE 439 -13.6 • The Italian macroeconomic situation shows a negative conjuncture. Fall indirect advertising that arises from sponsorships of market categories, such 2018 has contributed to reaching a “technical recession” that is expected as culture of sport, that were excluded from the previous regulation PHARMACEUTICALS 414 -0.1 to mark the country throughout all of 2019. The main macroeconomic approved in 2015. TELCO indices have been strongly downsized: 2019 +0.2% for GDP and 405 -7.6 consumptions. AD SPEND PERFORMANCE BY CATEGORY FINANCE/INSURANCE 354 1.5 • Standard & Poor’s Agency has confirmed the BBB rating, with a negative The market decrease forecasted for 2019 will affect all of the main BEVERAGES/ALCOHOLICS 347 0.9 outlook for Italy. product groups. • Because of the negative macroeconomic conjuncture, we foresee a Food is expected to decline by -1.7%, Automotive by -3.1% and Telco PERSONAL CARE 330 0.9 contraction of investments driven by multinational corporations. The by -7.6%. The Culture and Leisure category will register a drop in market forecasting has been reconsidered and reduced to -1.6% vs 2018. double figures as it is directly affected by the “Decreto Dignità” and the resulting restriction on Betting, that will cause the category a loss of THE 2019 AD SPEND FORECAST about 70 million. 2019 will not benefit from any significant sport events. The European Elections in May 2019 did not have a significant positive The categories that will be less affected by the crisis are Retail, with a impact on ad investments. growth of +2.0% for the year, and Media/Publishing (+2.2% vs. 2018).

THE 2020 AD SPEND FORECAST The 2020 forecast has also been revised down. Despite some important sports events (The Olympic Games and the European Football Cup), 2020 is expected to suffer at a macroeconomic level, with a GDP forecast at the same level as 2019.

DENTSU AEGIS NETWORK 35 ‘NEW LAW CONTRIBUTES TO THE DECLINE IN TELEVISION’ ii. Social Media 37 million Italians use social networks, with Facebook, YouTube and BY MEDIA Instagram leaders of the market. The Influencer phenomenon is becoming more and more popular and a. TV contributes to the success of Social, with a share of 19.3% of digital In 2019, Television share is forecast to drop below 50%, with a contraction investments and double figure growth (+17,1% vs. 2018). of -4.2%.Two factors can be identified as the main causes for the decline: the lack of major sport events and the new betting law. Both are expected iii. Mobile to have a significant impact on the medium. For the Connected population, the favourite way to access the Internet access is via Mobile. Google, Facebook, YouTube and Whatsapp are the sites Mediaset will suffer compared to the revenue of 2018, that was positively that bring people together the most. affected by the exclusive rights to transmission of the FIFA Football World The double figure growth of Mobile advertising has been confirmed Cup. The closure of the Premium Sports channels in fall 2018 will also (+14.7%) and, with 1.1 million euros, it represents a share of 49.8% of contribute to the drop. Mediaset is expected to register a loss of -5.7% total digital revenue. (around 120 million Euros) as a whole. c. OOH Another factor that has contributed to the decline in Television is DAZN, a Waiting for growth in Digital Sites, in 2019 OOH’s growth is restrained to new player specialising in sport, that has exclusive broadcasting rights to a +0.2%. part of the Serie A football matches (3 out of 10 per day), but whose investments are not included in TV revenues and have reduced investment d. Print in the traditional player Sky. Press taken as a whole is expected to maintain its decreasing trend, with a decline of -10% vs. 2018. Circulations monitoring confirms the Among the main causes of the forecast downsizing for 2019 and 2020 is the decreasing trend. increased fragmentation of the medium TV due to the development of video streaming. Its high personalization possibilities and the ease of contents fruition will contribute to eroding part of TV’s market share in advantage of e. Radio Digital Video, with investments flowing into this category. The medium is showing positive signs, with a slightly positive trend (+0.7%) and a growing share (+6.2%).

b. Digital Listeners are loyal to the medium, and its penetration, that exceeds a third of the population, remains stable. Digital investment makes up around 30% of share of total ad spend, with a positive growth of +6%. 71% of the Italian population surf the net for more Time spent listening is growing too, thanks to out of home listening - car than 3 hours per day; the percentage of penetration for younger audiences radio remains the leading device, but we highlight a significant growth in reaches 97%. Mobile rules the roost, with 15% growth and a 50% share of mobile. total digital ad revenue.

DENTSU AEGIS NETWORK 36 Italy Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 0.7% -4.2% -0.1% Television 51,3% 49,9% 49,6%

Newspapers -4.5% -10.0% -10.0% Newspapers 6,0% 5,5% 4,9%

Magazines -8.1% -10.0% -8.9% Magazines 4,9% 4,4% 4,0%

Radio 5.6% 0.7% 0.5% Radio 6,0% 6,2% 6,2%

Cinema 4.4% -1.0% 0.0% Cinema 0,3% 0,3% 0,3%

OOH 3.0% 0.2% 0.4% OOH 4,7% 4,8% 4,8%

Total Digital 7.5% 6.0% 5.2% Total Digital 26,7% 28,8% 30,1%

Y-O-Y % GROWTH AT CURRENT % SHARE OF TOTAL DIGITAL MEDIA MEDIA PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 7.5% 6.0% 5.2% Total Digital* 100.0% 100.0% 100.0%

Display (Banners) -1.5% -2.1% 0.0% Display (Banners) 19,9% 18,4% 17,5%

Display Performance 5.9% 1.6% 2.5% Display Performance 15,0% 14,3% 14,0%

Online Video 16.0% 14.3% 10.0% Online Video 29,4% 31,7% 33,2%

Paid Search 7.3% 5.5% 4.8% Paid Search 35,7% 35,5% 35,3%

DIGITAL FOCUS DIGITAL FOCUS

Mobile^ 25.3% 14.7% 10.7% Mobile^ 39.1% 41.7% 43.1%

Social Media 18.7% 17.1% 17.6% Social Media 17.5% 19.3% 21.6%

Programmatic Programmatic 33.1% 30.7% 30.4% 17.5% 21.3% 25.9% Spend ^ Spend ^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 37 NETHERLANDS: ‘Volatility caused by calculation changes, but growth nevertheless’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Besides the economic outlook, we expect that ad spend will be demand Year on year % growth at current prices driven, as the major large volume medium types are close to maximum capacity, meaning a general rise in prices, and thus in ad spend. 2018 2019f 2020f

Netherlands 3.3% (1.9%) 2.9% (2.0%) 2.9% (2.1%) AD SPEND PERFORMANCE BY CATEGORY Ad spend will be driven by retail, FMCG and the catering/tourist industries.

Previous forecasts in brackets from January 2019 We also expect a major impact from the transport, government and telco services. The economy will also boost spend in the transport sector. LATEST KEY AD SPEND TRENDS • Growth is back up due to positive market influences & adjusted net calculations. Top 10 Categories 2019f Gross Local 2019f vs. 2018 • The market looks positive for the first few months of 2019. 2019f Currency Million YOY% • The impact of the removal of agency commission by several large sales houses is yet to be determined and is still under debate, making Retail 1.851 +2,5% forecasting extremely difficult and volatile. Food & stimulants 1.041 +2% Catering/Tourist 886 +3% THE 2019 AD SPEND FORECAST industries There are no big events influencing ad spend in 2019. Provincial elections (shredding of the political centre, with large gains for right wing and Green Media 698 +1% parties) and elections for the European Parliament (to be held at the end Transport 675 +6% of May) have no impact on spend levels. This summer, there are no major spend-boosting sport events taking place. Financial 531 +2%

Telco/Ict 529 +4% The economic context

The economic outlook is bright, and the first signs of slowdown have been Government 469 +6% shaken off. We are awaiting the spring report on the Dutch economy and the subsequent plans for the 2019 budget from the Dutch cabinet. Threats Personal care 398 - include the mounting trade wars, the chances of a hard Brexit (which would Other Products & 261 - hurt the Dutch economy), international terrorism (Dutch security agencies Services foiled a direct and imminent attack), and we suffered a direct attack in Utrecht. The reaction was calm and it did not directly influence our economic outlook, however the social shock and outrage was still there. The general impression is that the authorities handled this extremely well.

DENTSU AEGIS NETWORK 38 ‘STAGGERING GROWTH IN MOBILE AND SOCIAL AD SPEND’ c. Surge of online, decline of desktop Similar to point a, the growth across online has been impressive in the last BY MEDIA few years. With 11% growth, it has by far the largest growth across the General: board, more than 3 times its nearest rival, niche cinema (average: 4.2%). • A general trend is the shedding of the 15% agency commission which is When looking at volume media types it is more than 5 times its nearest rival spreading like an oil leak. (OOH). Within online it is mobile that shines alongside social media spend. In 2019, we predict that 50% of display buying will be programmatic, and in • A long-term trend is digitization and RTB buying being used for not just 2020 this will be 56% underlining the rapid acceptance by advertisers & digital but other media too. agencies alike. Overall we advise clients to quickly include RTB in their • The quest for ROI and effectiveness are juxtaposed with the media diet to make use of this window of opportunity. fragmentating media landscape.

d. Print decline continues a. Mobile & Social first The figures speak for themselves: for the past 5 years there has been an It is obvious to see that Digital (average 7% growth from 2018), and mobile average yearly decline of -9% for dailies. For newspapers it is still -3.5% for are performing well. Mobile’s percentage growth each year since 2016 has 2017-2020. For magazines the figures are -7.4% & -5.6% average/year. The been exploding. The launching of the Mobile stack helps clients to make the end is not in sight in terms of decline and reach. What still remains for right choice in deployment. Mobile shares its position with Social Media, publishers? We do see more branded content cooperation, and the tie in which is also growing a staggering 29.7%/year. with digital print is getting better and better. The segments that remain loyal are luxury and/or jewellery, where some positive indices can be found. b. TV turns into AV Although modest in growth (0.9%, 2018-2020) TV is still second in terms of e. OOH moves to digital volume and ROI. Linear viewing is declining with audiences shifting to VOD. The trend in OOH is digital, with all the sales houses investing. This opens Online paid streaming on sites such as Netflix and Videoland is making it up the possibility for RTB, and the first cases have been encouraging. Also harder to shift through clutter. High reach STER has introduced a new the strong tie in with Mobile offers opportunities for both agency as well as buying model, shedding the majority of buying TA’s & ditching the agency advertiser. Rotterdam has been won by JCD, further enhancing their large commission (15%). This will lead to a better offer for small and medium urban offer. Ngage Media is doing really well in digital and Exterion and clients, but will be less advantageous for large clients, since it will be the Clear Channel have also upped their game. end of volume contracts. The other TV sales houses have followed suit, which has in general created confusion about rates and tariffs. Also, RTL has become more powerful after taking over BrandDeli, perceived as a kind of monopoly, due to the lagging behind of Talpa in reach terms. This makes negotiations really challenging.

DENTSU AEGIS NETWORK 39 Netherlands Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 2.2 0.4 0.2 Television 24.3 23.7 23.1 Newspapers -4.7 -3.5 -3.4 Newspapers 10.5 9.8 9.2

Magazines -7.2 -7.4 -3.8 Magazines 6.3 5.7 5.3

Radio 1.3 0.9 0.9 Radio 5.6 5.5 5.4

Cinema -1.3 1.3 12.5 Cinema 0.2 0.2 0.2

OOH 3.3 2.6 2.1 OOH 4.7 4.7 4.6

Total Digital 7.8 7.1 6.3 Total Digital 48.5 50.5 52.2

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 7.8 7.1 6.3 Total Digital* 100.0 100.0 100.0

Display -13.4 -2.1 -1.3 Display 12.2 11.1 10.3

Online Video 20.1 13.3 15.2 Online Video 10.3 10.9 11.8

Social Media 19.5 12.8 8.8 Social Media 17.4 18.3 18.7

Paid Search 8.8 6.5 5.6 Paid Search 46.8 46.5 46.2

Other incl. Other incl. 5.6 5.3 4.7 13.4 13.2 13.0 Classified Classified

Mobile^ 28.1 14.5 17.9 Mobile^ 48.0 52.1 57.8

Programmatic Programmatic 39.3 15.3 29.1 22.8 24.6 29.8 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 40 NORWAY: ‘Moderate growth driven by digital’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST The long term economic trends look fairly positive and stable, and so is the Year on year % growth at current prices ad spend forecast for 2020. This might be threatened by a continued decline in linear TV viewing, but this is expected to be compensated for by 2018 2019f 2020f continued growth in online video and other digital media. Norway 1.4% (1.1%) 1.8% (2.0%) 1.7% (1.7%) AD SPEND PERFORMANCE BY CATEGORY

Previous forecasts in brackets from January 2019 The retail players in Norway have been well known for many years as heavy users of TV, local newspapers and unaddressed DM. In recent years they LATEST KEY AD SPEND TRENDS have started investing more in the digital area, but it differs a lot depending • 2018 ended slightly higher than previously forecasted, driven by digital. on the type of retail. • No significant changes in the over all revised 2019 forecast. All channels The growing popularity of electric cars, which are often in short supply, introduced modest rate card increases, keeping the inflation at a has led to a decrease in spending from the automotive industry. manageable level.

2018 Gross Local 2018f vs. 2017 THE 2019 AD SPEND FORECAST Top 10 Categories 2018 Currency Million YOY% The positive growth trend from last year has slowed down a little in the first quarter of 2019. However, market indications going forward are still solid. Groceries 5 717 2 % This is very much driven by digital, but OOH is also doing well. Consumer. Electronics/ 3 898 0 % While 2018 was event-heavy with the Winter Olympics and the Football Telecoms World Cup, there are no significant events influencing the market this year. Information/Services 3 243 4 % There are local elections in September, but that will have little impact. Automotive 2 395 -2 % • The economic context Furniture/Home/Interior 1 873 1 % • The general economic climate is fairly solid which provides the foundations for a slightly increased ad spend in 2019. It is expected that most DIY 1 743 0 % advertisers will move on after a GDPR driven digital "cool down period" in Travel/Hotels 1 452 3 % mid 2018. However, despite increasing marketing budgets, more and more investments find their way into own channels, ambient media or other Entertainment 1 308 -4 % data/tech investments. Clothing/Fashion 1 036 -5 %

Sports/Leisure 975 -8 %

DENTSU AEGIS NETWORK 41 ‘TRADITIONAL TV HAS STARTED TO DECLINE’ but so far “long format” inventory has been limited. Still, the spending and growth tend to be bigger than reported due to the fact that some online video BY MEDIA spending is hidden within other media groups (display & social). All TV media owners, as well as more traditional web site media, are now TV developing their offers in this area; quickly picking up speed and closing in on the underdog TV player NENT Group which has led the area for a couple of The TV market in Norway has experienced big shifts in the last 2-3 years. years. Even though there is still high viewing, some target groups’ viewing has declined by almost 30%. The youngest target groups are especially declining, but even some female target groups watch TV far less than the total OOH population. TV ad spend was at the highest level of all time in 2017, before Another growth winner in recent years is OOH media. Despite a minor set the decline started in 2018. back in 2018, it is also expected to do well in the coming year(s). OOH is On the back of substantial rate card increases in 2018 to cope with excess enjoying increased budgets not only due to the declining ability of TV to demand, 2019 showed a much more moderate increase. Despite declining quickly build net reach, but also because they are developing their products to viewing numbers, the stations have not been sold out yet, however this may become more and more digital, which opens up lots of possibilities in the use lead to sold out situations in the coming year(s). of data and creatives. The first true programmatic OOH campaigns are expected to take place in 2019.

Digital In practice, the Norwegian OOH market is a duopoly and divided between the two global players JCDecaux and Clear Channel. The latter has recently Digital media will become more and more important to most businesses. After tightened their presence in the capitol Oslo, while on a countrywide basis it is double-digit growth for several years there is still room for further growth, but more evenly split. spending is shifting away from banner ads and moving to search and social media. There will also be a transition to more data-driven and targeted OOH remains strong as a true ‘mass media’. Combined with further digital advertising (programmatic). innovation, we think OOH will gain market share in the coming years. Social media is one of the major drivers of digital spend, shifting from traditional direct buying. However social spend is hard to measure - unofficial Newspapers numbers indicate 10-15% growth in 2019 on top of previous years’ strong One cannot comment on the Norwegian media market without mentioning growth. newspapers, and in particular the local ones. Newspapers have until a few At the same time there is more and more focus on viewability, brand safety years ago been the largest media group in Norway, and even though they and data (GDPR) compliance. We expect to see more private deals/market have lost more than 50% of their advertising revenue since 2007, they have places in the coming year(s). More money will also be put into own channels during the same period nearly doubled the income from online advertising and disappear from the traditional reports. (including online newspapers). 2018 was a turning point for the local newspapers as their combined (digital & Online Video print) subscriber base increased for the first time in several years. They are developing new digital products while milking the old print cow for what it’s One of the fastest growing media groups both in 2018 and 2019 is expected to worth, and apparently that is still quite a lot. This is expected to continue in be Online Video. With traditional TV in short supply there is huge potential, 2019.

DENTSU AEGIS NETWORK 42 Norway Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018 2019f 2020f 2018 2019f 2020f

Television -4.3 -3.0 -1.0 Television 20.7 19.8 19.2

Newspapers -8.7 -9.0 -10.0 Newspapers 13.4 12.0 10.6

Magazines -9.9 -11.0 -10.0 Magazines 2.9 2.6 2.3

Radio -8.7 -2.0 +3.0 Radio 3.5 3.3 3.4

Cinema 15.7 8.0 10.0 Cinema 1.1 1.2 1.3

OOH -1.7 4.0 7.0 OOH 4.0 4.1 4.3

Total Digital 8.4 7.0 5.0 Total Digital 54.4 57.1 59.0

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018 2019f 2020f 2018 2019f 2020f

Total Digital* 8.4 7.0 5.0 Total Digital* 100.0 100.0 100.0

Display (Banners) 11.7 0.0 1.0 Display (Banners) 44.1 41.2 39.7

Online Video 13.6 26.0 20.0 Online Video 4.4 5.2 6.0

Social Media n.a. n.a. n.a. Social Media n.a. n.a. n.a.

Paid Search 9.9 11.0 8.0 Paid Search 31.5 32.7 33.6

Other incl. Other incl. -1.3 12.0 4.5 19.9 20.8 20.7 Classified Classified

Mobile^ 17.4 13.2 8.8 Mobile^ 52.0 55.0 57.0

Programmatic Programmatic 20.4 9.7 13.4 13.6 13.9 15.1 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop. ^Subset of Total Digital Spend 43 PORTUGAL: ‘A slow pace of growth’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Telecommunications For 2020, we estimate that the market will reach around €530 million. The With 33.7 million ad spend for 2019 and +3.6% growth vs 2018, TV and Year on year % growth at current prices market will continue to recover slightly with a growth rate of around 3.4%. Digital lead expenditure in this sector. Altice, NOS Comunicações, Vodafone, Press (newspapers and magazines) will continue to lose its weight (see next Huawei and Nowo are the top 5 companies in this category. 2018 2019f 2020f page) with digital growing its share of total advertising spend. TV will lead advertising expenditure with around a 50% share of total spend, remaining Portugal 3.1% (3.4%) 3.2% (2.7%) 3.4% (2.9%) the main media in Portugal whilst progressively adapting from FTA/linear to 2019f Gross Local 2019f vs. 2018 Top 10 Categories 2019f non-conventional broadcasting. Advertisers and consumers are also Currency Million YOY% Previous forecasts in brackets from January 2019 adapting to this change in TV. Retail 58.6 7.6%

LATEST KEY AD SPEND TRENDS AD SPEND PERFORMANCE BY CATEGORY Automotive 53.5 4.3% • The expected growth of 3.4% for 2018 turned out to be 3.1%. The market Retail Cosmetics/ Beauty/ 51.1 2.4% is facing a slow recovery and for the upcoming years we predict the same Retail, the major category in the market and one of the pillars of ad spend Personal Care pace for advertising expenditure increase. in 2019, will follow this positive trend with 7.6% growth vs. the previous Pharmacy/ Drugs/ 50.5 -0.3% year. Remedies THE 2019 AD SPEND FORECAST TV is the main medium in this category, followed by Digital. Food 42.5 -0.4% The total market has performed positively in Q1, with a 3.3% increase. The top 5 Players are Continente, Lidl, Worten, Intermarché, and El Corte Internet (+8%) OOH (+8%) and Radio (+10%) are the medias with the Inglês. Tourism/ Culture/ Leisure/ 38.2 0.2% highest contribution to that growth. TV is almost flat (-0.3%), and Press Transportations keeps losing investment (-4%). Automotive In 2019 we will have 2 major political events: the European Parliament This category is expected to grow 4.3% in 2019. Consumer confidence Telecom/ Communications 33.7 3.6% elections and the Government elections in October. Both elections are not levels are increasing and some categories will recover along with this expected to affect market evolution or advertising expenditure, however improvement.TV and Digital take the biggest slice of the pie. Renault, Fiat, Finance/ Insurance/ 28.6 4.7% some uncertainty may arise in the market. Mercedes Benz, Nissan and Seat are the top 5 brands in this sector. Banks Beverage/ Alcoholics 23.4 -3.8% The economic context FMCG (Food, Beverage/Alcoholics, Cosmetics/Beauty/Personal Care and House Care 18.3 -1.6% Economic growth indicators point towards a positive trend - all evaluations House Care) With 4 Sectors included, we estimate ad spend of 135.3 million from the EU and ECB point towards an improvement in the short term, but euros for 2019, roughly the same value achieved in 2018. ambitious reforms are essential in the medium term. Unilever, P&G, L'Oréal, Reckitt & Benckiser and McDonald’s are the top On the last evaluation from the European Commission, Portugal still remains advertisers in FMCG. one of the 10 countries with “Economic imbalances”. We moved from “Excessive imbalances” in 2017 to this new situation, but the high level of TV is clearly the media where this category invests the most. public and private debt, the weight of the credit debts in the financial As family consumption and economic confidence is growing, we are system and the low productivity of the economy has lead to us keeping expecting recovery in this sector. this rating.

DENTSU AEGIS NETWORK 44 ‘DIGITAL DRIVEN GROWTH’ Utilizing mobile more effectively should be the next thing on major players’ radars. The prioritization of driving reach on Facebook is a trend. BY MEDIA Driven by Facebook’s high usage and the fact that we are small, it is easy to achieve high target reach at a low cost. a. TV TV still leads advertising expenditure in the market. TV’s share of total ad Portugal is a mature market regarding Paid Search. Advertisers use it spend has slightly declined from 52% in 2018 to 51% forecasted for 2019. according to their goals. Search will grow in line with digital. Mobile search In the near future we will face a shift from TV to Digital, and also from will continue to rise faster then Desktop. “traditional” free to air TV channels to pay TV. Branded Content is gaining in importance vs traditional 30” Spot. However branded content is not yet On Programmatic, all agencies have been focusing efforts on improving their measured in terms of ad expenditure. in-house programmatic offerings, driving strong optimization and efficiencies for advertisers. b. Digital Digital is clearly the 2nd biggest media in Portugal representing 22% of the Branded content and native advertising are beginning to be seen as a way market in 2018 (a large part of the investments made in Google and for brands to communicate their benefits in a more editorial environment. Facebook are not collected and published). If we take those figures into This could be a relevant way of capturing extra budget from brands. consideration, we estimate that the weight of digital would be closer to 35%. For 2019, Digital is expected to growth to 23%. c. OOH Over the years Digital spend has increased and “stolen” advertising Despite the lack of audience data in our market, OOH is the 3rd most expenditure from Press (Newspapers and Magazines). The pre-roll and joint popular media in Portugal with a 13% market share after TV and Digital, reach TV + Video analysis is also a step that advertisers have integrated and shows a continuous growing trend. It is expected that in 2019, OOH will into their plans. have its first audience data, allowing for more relevant and accurate Display represents the largest slice of total digital ad expenditure. Online planning and allocation of media budgets. Digital OOH is trying to gain Video is becoming the most natural choice for advertisers already doing 30” space in the market with some suppliers offering new inventory, however it TV spots, with TV + Online Video PreRoll. Media publishers are improving is not very representative in the overall OOH market. their inventory now that they all want to play a major role in this area.

d. Radio Mobile is becoming the most popular screen used by many target audiences, From simple spots to a more integrated brand presence inside programs, and content/advertising is being delivered, adapting messages, formats and different formats and an integrated approach to brand communication has creative solutions in order to drive high CTRs and conversion rates. allowed Radio to sustain a slice of the pie. Brands are using radio DJ’s, especially on “prime time” (daily morning broadcast shows), to interact, On Social Media, Facebook remains the “player” when using or planning promote, or use their voices for brand communication. Radio is being Social Media, whether it be through Facebook ads, using newsfeeds supported by digital through the use of official Instagram accounts, YouTube effectively, or in tracking lead generation right through from start to finish. channels and Facebook.

DENTSU AEGIS NETWORK 45 Portugal Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 0.4 1.0 2.0 Television 52.3 51.2 50.5

Newspapers -14.2 -13.0 -8.0 Newspapers 2.7 2.3 2.0

Magazines -19.0 -17.0 -8.0 Magazines 2.6 2.1 1.9

Radio 1.8 3.0 2.0 Radio 7.0 6.9 6.8

Cinema 17.8 10.0 8.0 Cinema 0.4 0.4 0.5

OOH 7.5 5.0 5.0 OOH 13.4 13.6 13.8

Total Digital 14.6 12.0 8.0 Total Digital 21.6 23.4 24.5

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 14.6 12.0 8.0 Total Digital* 100% 100% 100%

Display 16.6 11.0 8.5 Display 76.3 75.6 76.0

Online Video 1.8 19.0 4.8 Online Video 16.5 17.5 17.0

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search n.a n.a n.a Paid Search n.a n.a n.a

Other incl. Other incl. 27.7 6.3 10.9 7.2 6.9 7.0 Classified Classified

Mobile^ 0.8 19.7 4.5 Mobile^ 8.0 8.6 8.3

Programmatic Programmatic n.a n.a n.a n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 46 SPAIN: ‘Slight growth expected in 2019’

OVERVIEW OF THE TOTAL ADVERTISING MARKET CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD SPEND Year on year % growth at current prices Household consumption growth has slowed down (still positive, 2.1% 2019f 2018 2019f 2020f vs 2.4% 2018a), and this combined with price inflation, and the lowest household savings rate since 2007, mean that consumption is expected to Spain 2.1% (1.8%) 0.5% (1.2%) 0.4% (0.8%) be moderate in the next few years.

Previous forecasts in brackets from January 2019 2019f NET estimated 2019f vs. 2018 Top 10 Categories 2019f Local Currency Million YOY% LATEST KEY AD SPEND TRENDS

• Political instability and uncertain economic growth are expected to lead to AUTOMOTIVE 531 -6.5% moderate market growth. RETAIL 421 -8.5%

THE 2019 AD SPEND FORECAST FINANCE 432 -4.7% The first quarter achieved moderate growth (+0.8), with TV continuing to PUBLIC&PRIVATE SERVICES 339 -2.7% decline and digital being the media with the highest growth. National and regional elections took place in April and May respectively, BEAUTY&HYGIENE 359 6.2% which mainly had a positive impact on OOH and Print ad spend. FOOD 317 1.6%

THE 2020 AD SPEND FORECAST CULTURE 306 0.4% The Spain ad market is forecast to grow 0.4% in 2020, due to an improvement in the economy and a decrease in market elasticity. TELECOMMS 314 9.7% DRINKS 174 -10.5% RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE TRANSPORT, TRAVEL & TOURISM 199 2.2% PREVIOUS REPORT (JANUARY 2019) We are experiencing a very unstable market situation due to political and economic uncertainty. Consumer demand has decreased and TV is having difficulty monetizing its spaces.

AD SPEND PERFORMANCE BY CATEGORY Automotive remains the sector with the largest ad spend, but it is declining in line with a fall in car registrations (-4.5% Jan-Apr 2019 vs same period 2018). Retail and Finance are also declining due to a lower demand for private consumption. FMCG performance is different by subcategory, and is showing a slight decline overall.

DENTSU AEGIS NETWORK 47 ‘DIGITAL WILL OVERTAKE TV IN 2020’ i. Online Video Online Video is the segment with the second largest growth (+14.3%) BY MEDIA within digital, with most agencies and advertisers planning with an audiovisual approach (TV and online video). Google’s YouTube and Facebook are the leading platforms for online video and traditional TV platforms are a. TV also developing their own digital video offers. Commercial offer concentrated in 2 main groups (Mediaset and A3 ii. Social Media Advertising), that make up 85% of market volume (GRPS), with planning and buying methods based on cost/GRP for standard targets (Housewives Social Media is the highest growing digital segment driven by high and Adults 16+ mainly). penetration and frequency of use. Facebook holds first place, Instagram has grown by 31% into second place, and Twitter is in a stable third position. Social media ad spend is estimated to grow 15.9% in 2019. High clutter in free-to-air channels is moving advertisers towards pay TV channels. Also, pay TV platform penetration has increased to up to 49% of households, boosted by Telco’s combined offer. iii. Mobile Mobile share of internet consumption is approximately 70% (of consumption time), however even with high mobile usage, the advertising market does There has been an important reduction in TV consumption of people under not purchase with device discrimination. the age of 45, that is affecting campaign % reach and GRP delivery. This is stimulating expenditure towards online video, and is capable of balancing reach loss. iv. Programmatic The Programmatic market is growing (+20.1%), and will achieve a 19.4% The TV market is expected to decline in 2019 (-3.0%) and this decline is share of Total Display. expected to continue in the next few years, in contrast with moderate Market data offers are expanding and the main advertisers are investing in market growth driven by digital. digital platforms (DMPS). Therefore programmatic expenditure is expected to continue growing in the next few years.

b. Digital Digital is the second biggest media in Spain, with growth of 9% expected v. Paid Search for 2019.Online penetration is very high (78% daily), with 69% of time Paid Search is growing by 7.8%, which is less than the Display’s growth for spent on mobile (31% desktop). In 2019, Digital and TV will be tied, each 2019. Google is the clear leader in the Spanish market. holding 36% share of total ad spend. 2020 is the year when Digital media is Voice search is increasing but still fairly small as the market needs to expected to take over and achieve market leadership. mature.

DENTSU AEGIS NETWORK 48 c. OOH The two main operators are JCDecaux and Clear Channel. Digital Signage is gaining relevance but only represents around 9% of the OOH market. The programmatic offering of DOOH is expected to be developed in the market in early 2019.

d. Print Print is expected to continue to decline as circulation decreases. Consumer advocacy due to print credibility maintains advertising demand. Overall consumption is stable due to an increase in digital consumption, catering for a range of age groups.

National titles are suffering more than regional, and the consumption shift towards digital media is not fully monetized by media owners. Major publishers are investing and preparing data offerings in order to improve their digital business performance.

e. Radio Competitive costs, flexibility and content integration maintain demand, with 3.3% growth in 2018 and a stable situation expected in 2019 and 2020 with slight growth. National groups have concentrated market share in the last few years, at the detriment of smaller local stations. High saturation at peak time (early morning) is driving price increases in top stations. Radio consumption maintains stable and its digital offer is growing (77% of the population listens to music through the web/apps).

f. Cinema Consumer attendance is stable and young audiences maintain cinema demand with 3.4% growth expected for 2019.

DENTSU AEGIS NETWORK 49 SPAIN Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -0.8 -3.0 -3.3 Television 38.1 36.7 35.4

Newspapers -6.0 -9.4 -9.8 Newspapers 10.1 9.1 8.2

Magazines -5.1 -9.6 -8.2 Magazines 4.1 3.7 3.4

Radio 3.3 0.1 0.4 Radio 8.6 8.6 8.6

Cinema 3.0 3.4 2.7 Cinema 0.6 0.6 0.7

OOH 2.8 0.3 0.9 OOH 6.0 6.0 6.0

Total Digital 9.1 9.0 7.8 Total Digital 32.6 35.3 37.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 9.1 9.0 7.8 Total Digital* 100 100 100

Display 9.7 9.1 8.2 Display 36.7 36.7 36.9

Online Video 14.3 14.3 13.0 Online Video 11.1 11.6 12.2

Social Media 21.1 15.9 15.0 Social Media (1) 28.5 31.2 32.7

Paid Search 7.7 7.8 6.3 Paid Search 51.6 51.0 50.3

Other incl. Other incl. 7.5 12.2 2.3 0.6 0.7 0.6 Classified Classified

Mobile^ 21.6 9.7 12.3 Mobile^ 70.8 72.0 75.0

Programmatic Programmatic 20.2 20.1 26.1 17.8 19.4 22.4 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 50 (1) Social Media and Online video have overlap SWEDEN: ‘The beginning of 2019 indicates some good prospects for the year’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context The Swedish economy is expected to slow during 2019, and many media Year on year % growth at current prices categories are facing strong comparison figures for 2018 which have in part been powered by sports events and elections. Despite this, the market is 2018 2019f 2020f showing some positive signals. Many media categories indicate a good start and the EU elections in May will also contribute to some degree. Digital Sweden 7.3% (6.4%) 4.9% (4.5%) 0.1% (0.4%) investments are expected to bring 2.2 billion SEK into the market during 2019, corresponding with a growth of about 10%. Digital growth thereby Previous forecasts in brackets from January 2019 continues and is in line with European development. This positive digital LATEST KEY AD SPEND TRENDS development, paired with a positive trend for video, out-of-home and radio makes way for yet another year of growth in the market. • OOH is continuing to be sold out in many periods and in the most attractive formats. This will lead to an increase in pricing due to strong demand and will make it difficult for us to negotiate when the rate of sold AD SPEND PERFORMANCE BY CATEGORY out placements is very high. We expect this will be reflected in inflation The retail industry has been in decline and is now forecasted to decrease increases in 2019, and the estimated inflation for OOH is 9%. by -10% in 2019. Categories like Finance & Insurance and • We have seen exceptional inflation in the TV market in the last few years, Organisations/Information will have strong development in 2019, with an which we envision will continue. Estimated inflation for TV in 2019 is 14%. increase of 8-10%. • Digital investments are expected to bring 2.2 billion SEK into the market during 2019, corresponding with a growth of about 10%. Top 10 Categories 2019f Gross Local 2019f vs. 2018 2019f Currency Million YOY% THE 2019 AD SPEND FORECAST Retail 15 828 202 -10% The ad spend forecast for 2019 has been revised downward, from +4.3% to +4.1%. The results for the fourth quarter were in line with Organisations/Information 4 848 425 8% IRM expectations. Automotive 3 396 692 -15%

The beginning of 2019 indicates some good prospects for the year, but Food & Beverage 4 143 760 -1% nevertheless the market appears more cautious, causing IRM to present a Finance & Insurance 10 093 303 10% marginally lower forecast. The winner in the media market is Digital media as before, but OOH, TV and Radio are also showing strong development. Beauty & Personal Care 1 469 752 -22% Print media is in decline. Tourism & Transportation 3 383 210 -8%

As opposed to 2018, there are minimal contributions from political Pharmaceutical & Medicine 2 195 787 -11% and sports events, but the market continues to be supported by a Media 3 867 348 -1% solid economy. Telecommunications 3 131 107 1%

DENTSU AEGIS NETWORK 51 ‘OOH CONTINUES TO EXPERIENCE HIGH GROWTH’ d. OOH. Out-of-home media is continuing to experience high growth driven by high BY MEDIA demand and due to investment into the digitalisation of OOH sites and the establishment of new digital inventory. In Q4 2018, the growth partially a. TV slowed down after it had been on +20% due to the World Cup and the election during 2018. For 2019, the OOH forecast is stable with a The forecast for 2019 TV ad spend in Sweden is flat compared to 2018, strengthened position in ad spend. OOH is continuing to be sold out in many estimated at +0.3%. The demand for GRP in Sweden is now in more periods and in the most attractive formats, and in 2019 we estimate that harmony compared to previous years. There is now a better harmony the rate card will increase by 15%. between supply and demand. The trend among the channel houses is still that they want increased digital share on their AVODs - normally around 10% of the total spend should be on their digital platforms. The inflation for e. DIGITAL linear TV in Sweden is forecasted to be approx. +14% for 2019. Digital media still holds the largest part of the media market and still has one of the highest growth rates. The Swedish Digital media market has been mature and highly consolidated for several years, and the market is The need for an annual agreement to secure airtime is still a factor in 2019. volatile given the market size and the fact that most of the inventory is In Sweden there are now only 3 suppliers of linear TV since A&E closed TNT allocated to a few media houses. Sweden is a sell-side market and that in January. The largest group is TV4 with a commercial share of 60% reflects in the prognoses of inflation for 2019. The media houses prefer a followed by Discovery and Nent with approx. 20% commercial share each. high average on the CPM before volume and new innovations, i.e. creative formats are set to a high price and remain there for several years. b. RADIO The Swedish radio market is in a similar position to the TV market, as the two main national networks Bauer and NENT have a very high degree of being sold out during large parts of the year. We have never consumed sound as much as we are doing right now and have never been investing so much in sound before. The price level on radio is expected to increase by 15-17% in 2019. High demand for radio is expected going forward in 2019.

c. PRINT The print market in Sweden is still in a slow but steady decline, both in terms of readership and in the advertising market. In 2019 we will have additional print medias with competitive packages offering high reach and frequency to the advertisers, at a lower price then before. The large newspaper Metro in Sweden has been closed down and its competitors are now fighting for advertisers, which is leading to lower prices.

DENTSU AEGIS NETWORK 52 Sweden Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 8.4 0.3 -0.7 Television 16.2 15.5 14.4

Newspapers -11.0 -10.5 -31.2 Newspapers 13.0 11.1 7.6

Magazines -10.0 -10.0 -7.0 Magazines 3.5 3.0 2.8

Radio 9.0 5.5 3.7 Radio 2.9 2.9 3.0

Cinema 4.0 2.2 1.6 Cinema 0.5 0.5 0.5

OOH 16.6 8.1 0.0 OOH 5.6 5.8 5.8

Total Digital 12.5 10.2 7.7 Total Digital 58.3 61.2 65.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.5 10.2 7.7 Total Digital* 100.0 100.0 100.0

Display 1.6 1.5 1.5 Display 17.0 15.6 14.7

Online Video 19.8 15.9 30.9 Online Video 8.5 8.9 10.9

Social Media 29.5 20.6 0.4 Social Media 12.1 13.3 12.4

Paid Search 14.5 12.2 10.9 Paid Search 53.2 54.1 55.7

Other incl. Other incl. -0.9 -4.0 -15.5 9.2 8.0 6.3 Classified Classified

Mobile^ 28.5 37.8 29.2 Mobile^ 40.0 50.0 60.0

Programmatic Programmatic n.a n.a n.a n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 53 SWITZERLAND: ‘The outlook for 2019 is less optimistic than previously thought, with an expected GDP growth rate of 1.1%’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context AD SPEND PERFORMANCE BY CATEGORY “The Federal Government’s Expert Group for economic forecasts is lowering At YTD March 2019, several major categories like Food, Retail, Campaigns Year on year % growth at current prices its forecast for GDP growth in 2019 from 1.5% to 1.1%. The global economy and Finance show a heavy decrease in spending according to Media Focus is losing more momentum than previously assumed, which is slowing down data. This is partly caused by the economic downturn in the second half of 2018 2019f 2020f Swiss foreign trade and investment activity. 2018, but it is also caused by the migration of budgets from offline media to digital media, as ad spend by category is mostly only measured for Switzerland 4.4% (5.8%) 3.7% (7.1%) 6.5% (6.7%) In the second half of 2018, Switzerland’s economy cooled off significantly. traditional media by Media Focus. The global economy and world trade lost momentum, which also curbed Previous forecasts in brackets from January 2019 Swiss foreign trade, while domestic demand failed to stimulate growth. Investment activity in particular weakened considerably. Top 10 Categories 2019f Gross Local 2019f vs. 2018 LATEST KEY AD SPEND TRENDS 2019f Currency Million YOY% • Due to a weak second half of 2018, Switzerland’s economy cooled off The Expert Group expects both the domestic and the international economy Food 439 -15.5% significantly and the outlook for 2019 is less optimistic than previously to regain momentum only gradually in 2019. In particular, the outlook in thought, with an expected GDP growth rate of 1.1%. This shows in YTD other European countries has recently become much gloomier, and growth Retail 385 -16.3% March ad spend numbers by Media Focus, that were less than expected. forecasts for major trade partner Germany have been revised significantly Projecting this development of the 2018 full year numbers, we expect less downwards. As a result, international demand for Swiss products is weaker Automotive 375 +4.5% ad spend growth for 2019 than in the previous report. and the export economy is losing momentum.” Campaigns 316 -12.2% • While we actually expect overall ad spend in traditional media to decrease (Source: Economic forecasts by the Federal Government’s Expert Group – spring 2019) in 2019, we assume that a big part of the heavy print losses is reinvested Finance 298 -13.4% in online channels, that are measured and estimated by a separate survey. THE 2020 AD SPEND FORECAST Tourism&Gastronomy 292 -2.1% • Online ad spend numbers are heavily dependant on the “Media Focus “The global economy is expected to gain moderate momentum in 2020. Online Semester Report” that hasn’t been published for 2018 as of yet. Provided that the international trade dispute does not intensify further, Cosmetics&Body Care 267 1.0% Therefore, digital ad spend numbers for 2018 are still forecasts. However global trade will also pick up again. This will support Switzerland’s export we still expect digital ad spend numbers to rise, because agency reality economy. At the same time, domestic growth forces will gain in importance. Digital&Household 265 13.1% has shown that many clients have started shifting their budgets from In particular, the willingness to invest is anticipated to increase considerably offline media to their digital counterparts. Events 261 -3.9% again and private consumption is set to grow somewhat faster in the wake of stronger employment growth and rising real income. The Expert Group is Construction 233 -5.3% THE 2019 AD SPEND FORECAST therefore forecasting higher GDP growth of 1.7% for 2020 (December 2018 In 2019, national parliament elections will take place in Switzerland. The forecast: 1.7%) with annual inflation of 0.6%.” Source: FC done by Dentsu Aegis Network Switzerland based on Media Focus main media categories for political campaigns are print and OOH media. (Source: Economic forecasts by the Federal Government’s Expert Group – spring 2019) Swiss Gross Advertising Pressure Statistics YTD 2019/3, Media Focus Online Therefore, these categories should directly profit from the corresponding As economic outlook for 2020 remains moderately positive, we have only Semester Report 2017/2 and industry expert estimations. media campaigns. Over the past 8 years, average additional ad spend in slightly decreased our previous estimation for 2020. political campaigns for national election years amounted to CHF 20 Million. Therefore, the currently visible strong losses in print and the stagnation in OOH ad spend may be alleviated by the election campaigns.

DENTSU AEGIS NETWORK 54 ‘STRONG LOSSES IN PRINT AND THE STAGNATION IN OOH AD The general upward tendency of TV ad spend is still carried by the SPEND MAY BE ALLEVIATED BY THE ELECTION CAMPAIGNS’ continuing fragmentation of the Swiss TV market (ex TV channel 6+ launched in March 2019). Furthermore, publishers are making a continuous BY MEDIA effort to move ad spend from clients into long tail channels in order to better utilize their long tail portfolio.

a. Search There remains a lot of insecurity about the search ad spend numbers d. OOH reported by Media Focus in the market, as they take up an all market ad The OOH market in Switzerland stays dynamic. Neo Advertising further spend share that doesn’t reflect the reality within a media agency setting. establishes itself as a big player next to APG and Clear Channel by officially Although it seems reasonable that a big share of search ad spend is done by joining the OOH industry association (AWS). Furthermore, all major OOH Micro level local advertisers that have a different advertising behaviour than providers continue to invest in their digital OOH networks, resulting in a large agencies, the overall share seems too high. Furthermore, the bigger inventory and larger ad spend. We expect this trend to continue, but methodology and scope of raising the search ad spend numbers is still being with slightly decreasing growth rates overall. Furthermore, we expect a calibrated by Media Focus as of the time of this report. Therefore, they higher level of OOH spending for the second half of 2019, as national should be taken with a pinch of salt. Moreover the 2018 actual numbers are parliament elections are going to take place in October. still pending as the “Media Focus Online Semester Report” hasn’t been published for 2018 yet. e. Programmatic Advertising Programmatic advertising in Switzerland has been heavily impacted by the b. Newspapers & Magazines ad-fraud and ad-quality debate of the last few years. While originally the Print ad spend has shown an exceedingly large decrease so far (YTD March programmatic dogma stated that advertising environment was mostly 2019). It remains to be seem to what extent this development will continue secondary to reaching the right person, clients and agencies have developed in the remaining two thirds of the year. While Print media traditionally took a stronger conscience for the quality of delivered ad impressions. This (and still takes) a large portion of ad spend in Switzerland, generally it is process has also been driven by 3rd party technology providers, that have one of the categories that is suffering most due to the advancement of provided more transparency about ad-delivery. online advertising. Also the number of advertising clients that insist on In the case of programmatic, this process resulted in ad spend being shifted “digital first” media strategies continue to rise in number. from open exchanges to private deals, improving advertisers’ control of ad environments. While this reduced the immediate amount of relevant c. TV programmatic ad inventory, the improved level of quality ensures that client trust in programmatic advertising remains intact and the share of online Ad spend numbers for TV have turned out suprisingly well so far. As 2018 advertising continues to rise. was a year with big sports events (Feb 2018 – Winter Olympics / July 2018 – Football World Cup), we previously expected TV ad spend to only rise on a moderate level in 2019. Numbers so far are better than expected, but only the summer months will show if this positive development will carry on for the full year.

DENTSU AEGIS NETWORK 55 Switzerland Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 1.6 4.4 4.4 Television 17.3 17.5 17.1

Newspapers -13.4 -18.7 -9.9 Newspapers 13.0 10.2 8.6

Magazines -8.0 -22.4 -7.9 Magazines 9.5 7.1 6.2

Radio -1.9 -11.2 -5.5 Radio 2.9 2.5 2.2

Cinema 0.6 25.8 11.1 Cinema 0.6 0.7 0.8

OOH 1.2 0.3 3.8 OOH 8.6 8.3 8.1

Total Digital 16.4 15.8 13.2 Total Digital 48.1 53.7 57.1

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 16.4 15.8 13.2 Total Digital* 100 100 100

Display Banner 3.7 10.1 6.6 Display 9.0 8.6 8.1

Online Video 16.0 18.2 15.7 Online Video 4.2 4.3 4.4

Social Media 7.4 26.1 18.1 Social Media 1.7 1.8 1.9

Paid Search 20.9 18.3 15.3 Paid Search 68.0 69.5 70.8

Other incl. Other incl. 8.2 9.0 7.5 18.7 17.6 16.7 Classified Classified

Mobile^ 18.6 17.9 15.2 Mobile^ 55.0 56.0 57.0

Programmatic Programmatic 7.1 17.0 12.9 2.9 2.9 2.9 Spend^ Spend^

Source: FC done by Dentsu Aegis Network Switzerland based on Media Focus DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend Swiss Gross Advertising Pressure Statistics YTD 2019/3, Media Focus Online 56 Semester Report 2017/2 and industry expert estimations. UK: ‘10 consecutive years of double-digit Digital growth’

OVERVIEW OF THE TOTAL ADVERTISING MARKET • Global or local events to affect spend in 2019 • However, we have seen a notable improvement in Q2 for Digital, perhaps Year on year % growth at current prices helped by the extension to Article 50 to the end of October, and the outlook is again looking a little more favourable. This is almost an exact 2018 2019f 2020f switch to last year when we saw a strong Q1 and a terrible Q2 due to GDPR. Digital is again predicted to be the main driver of Ad Spend growth UK 8.6% (6.5%) 6.3% (6.1%) 6.6% (7.1%) in the UK in 2019

Previous forecasts in brackets from January 2019 THE 2020 AD SPEND FORECAST • The forecast for 2020 is £24.4 billion, with growth driven by Digital LATEST KEY AD SPENDS mainly. The UK ad market has been incredibly quick to embrace digital • 2018 saw Total Digital UK Ad Spend grow by 15% according to IAB/PWC channels. and AA/Warc. It was the 9th consecutive year of double digit % growth for UK digital. AD SPEND PERFORMANCE BY CATEGORY • Display grew by 21.9%, driven predominantly by 32.7% growth in Video • Among the largest industries spending in advertising in the UK are the ad spend with Search +14.3%. Mobile grew by +31.5% and now accounts automotive, consumer packaged goods (CPG), financial services, retail for 51% of all spend. and travel sectors. We forecast that digital spending for these five • Social Media spend is included within display and we predict that a vast industries will grow in H2 2019 and 2020, while acknowledging the majority of the high video growth came from growth in social video on the uncertainty of how Brexit negotiations to leave the EU may affect the UK large dominant Social platforms FB, Instagram, Twitter, Snap and economy. YouTube, despite YouTube’s challenges with Brand Safety concerns throughout 2017-18. This also explains the high mobile growth with all RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE these main players firmly mobile first platforms. PREVIOUS REPORT (JAN 2019) This is being driven by a slump in spot revenues with continued political THE 2019 AD SPEND FORECAST uncertainty surrounding the UK’s withdrawal from the EU continuing to slow • 2019 got off to a very tough start with Q1 digital spend hit hard due to advertiser investment. This has been further exacerbated by challenges to economic uncertainty leading up to the Brexit Article 50 withdrawal at the traditional retail spenders posed by an emerging ecommerce sector. TV price end of March and a late mid-April Easter also given advertisers further inflation arising from the loss of the measured 16–34 audience inflation is reason to withhold investment. Consumer confidence has been low, so the also becoming painful for advertisers and killing growth in TV ad investment UK population have been spending less and therefore advertisers have in developed economies generally. Facebook is still winning share of audio- been spending less. visual investment and is heavily video biased for large advertisers. However, • DAN UK predicts Digital ad spend to grow by 10.4%, lower growth than in TV is still doing the basic things well. recent years but it should mean we make it 10 consecutive years of double-digit growth, albeit only just.

DENTSU AEGIS NETWORK 57 ‘VIEWING SHIFTS FROM LINEAR TV TO VOD AS LIVE TV AUDIENCES iv. Programmatic CONTINUE TO DECLINE ACROSS THE BOARD’ Programmatic share in digital ad budgets is growing flat (≈2% each year between 2018 and 2020) BY MEDIA v. Paid Search a. TV Search continues to grow actively. It is expected that the Paid search The UK TV market is currently forecast to be flat Year-on-Year in 2019. Any market will continue to show growth as display struggles to optimize with a growth in 2019 can be attributed to broadcaster VoD revenues, included in smaller data set impacted by GDPR. the total TV numbers provided. This is reflective of viewing shifts from linear TV to VoD as live TV audiences continue to decline across the board. c. OOH The OOH advertising market is growing, driven by the development of b. Digital digital formats. Progress in advanced targeting is also incremental, driven The UK is the largest market for digital ad spend in Europe - we forecast by both vendors and agencies. that overall digital ad spend for 2019 will total £14.8 billion accounting for 64.7% of total media ad spend. d. Print Print brands are still losing more in traditional than they gain in digital, but i. Online Video the medium is getting better at collective defence. Display we are predicting to grow by 12%, again driven by continued growth in Video spend (+22%) with Search growth slowing a little to around 8.5%. e. Radio Radio forecast is up, as rising demand pours into well-sold inventory. Radio resilience comes from a relatively limited loss of young audiences; selling an ii. Social Media ambiance rather than programmes; from being a passive medium; and The number of social network users is still growing in UK. being free to the listener. Sports popularity is under attack from festivals, gaming, social media and piracy. Radio suffers none of this. iii. Mobile Brands are getting better at using shopper data to segment consumers and f. Cinema analyse shopping habits. This stimulates the raise of Mobile’s share in ad The cinema market’s share of total ad spend is small (~1%). It is forecasted spend and it could reach up to 60% in 2020 (among total digital spend). to show small growth.

DENTSU AEGIS NETWORK 58 UK Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 0.7% 0.7% 2.0% Television 20.4% 19.3% 18.5%

Newspapers -8.3% -7.0% -7.0% Newspapers 5.3% 4.7% 4.1%

Magazines -16.4% -8.0% -8.0% Magazines 1.8% 1.6% 1.3%

Radio 6.0% 2.0% 2.0% Radio 3.3% 3.1% 3.0%

Cinema 9.3% 3.0% 1.0% Cinema 1.5% 1.4% 1.3%

OOH 3.0% 1.0% 3.0% OOH 5.4% 5.2% 5.0%

Total Digital 15.0% 10.4% 9.9% Total Digital 62.3% 64.7% 66.8%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 15.0% 10.4% 9.9% Total Digital* 100% 100% 100%

Display Banner 14.6% 12.0% 12.0% Display Banner 21.9% 22.2% 22.6%

Online Video 32.7% 22.0% 18.0% Online Video 17.2% 19.0% 20.4%

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search 14.3% 8.5% 7.7% Paid Search 49.5% 48.7% 47.7%

Other incl. Other incl. -1.3% -2.0% 1.0% 11.4% 10.1% 9.3% Classified Classified

Mobile^ 31.5% 20.7% 17.8% Mobile^ 51.2% 56.0% 60.0%

Programmatic Programmatic 20.0% 12.8% 11.8% 82.7% 84.5% 86.0% Spend^ Spend^

DENTSU AEGIS *Includes Mobile/Tablet and Desktop, Subset of Total Digital Spend 59 NETWORK Central & Eastern Europe Market

60 BULGARIA: ‘Media market to start 2019 at new heights driven by increasing inflation’

OVERVIEW OF THE TOTAL ADVERTISING MARKET hand, in 2019 municipal elections will take place in Bulgaria. These elections Pharmaceuticals and Foods will remain the top advertising industries in the will take place in all the regions in Bulgaria given that the goal is selecting Bulgarian market, the latter expected to reach 37% YoY growth as Year on year % growth at current prices office-holders (mayors and councilors) in local governments. Therefore, compared to one-digit growth in 2018, with beers being the main driver for regional and national media will both be used for conveying the candidates’ this outburst. A significant downward trend in terms of YoY growth is 2018 2019f 2020f messages. On the other hand, European elections will also take place this estimated for the Telecommunication services, while the Household year that will amplify the local and national media demand for inventory and Chemistry category is expected to recover and perform with a two-digit Bulgaria 9.1% (9.1%) 9.5% (6.9%) 8.6% (7.3%) will keep the inflation trend growing further. growth trend in 2019 as compared with 1% growth in 2018 vs. 2017. This year does not have as intense a sports curriculum as 2018 but there Previous forecasts in brackets from January 2019 will still be sports events of public interest, e.g. UEFA Euro 2020 qualifications that start in March 2019 and will continue till March 2020. Top 10 Categories 2019f Gross Local 2019f vs. 2018 2019f Currency Million YOY% LATEST KEY AD SPEND TRENDS • Scarce inventory in TV results in nearly 3% increase in the total YOY The economic context Pharmaceuticals 384,647,750 20% percentage growth forecast. Economy growth and a reduced unemployment rate influence the increase Foods 364,699,198 37% • The reason for the increased YOY percentage forecast is mainly due to in household consumption: scarce inventory in TV which boosts inflation rates further and influences The Bulgarian economy grew by 3.4% in Q2 2018. Still, this is the lowest Retail Outlets 267,641,745 15% the upturn in expenditure in the medium. growth rate since 2015. The major reason for economic growth is the Cosmetics 231,642,749 12% • An uplift in inflation and cluttered inventory in radio has also led to 2% household consumption increase (1.8% for Q2 2018 and 4.7% FY 2018). forecasted growth YoY for this medium as well. However, inflation is growing by 3.4%, majorly driven by the utility and Drinks 264,303,862 35% rental costs which will reduce consumption at a certain point in time. • Traditional media continues the trend of transferring their most interesting Telecommunication 147,351,348 6% TV content into interactive online platforms to meet the growing digital The labor market situation is positive, given that the unemployment rate demand, especially for mobile. has reduced to 5.5%. This is considered to be the population’s economic Hobby. Fashion. Sport 115,849,622 22% activity peak. • The forecasted overall inflation in TV is now 13% with 2% additional Financial Services 87,618,683 2% growth from FIFA World Cup advertisers’ activities. THE 2020 AD SPEND FORECAST Household Chemistry 78,654,607 16% The 2020 ad spend forecast is estimated to reach 8.6% growth with main THE 2019 AD SPEND FORECAST Motoring 53,307,139 3% drivers being digital and TV. It is expected that mobile will grow steadily on Total ad spend forecast for 2019 is forecasted to reach 9.5% growth YOY. It the account of desktop ad investments reaching over 38% of total digital ad is most likely to be affected by political rather than sport events. Media expenditure. Digital will continue to take fare share from TV ad spend inflation and current political stability will keep ad expenditure growth on a reaching about one forth of total ad expenditure, while print will give fare stable track. share to radio. UEFA Euro 2020 and the Summer Olympics are the main It is forecasted that 436 million BGN will be spent on ads during 2019. The sport events that are expected to influence total ad spend. forecasted inflation for 2019 is expected to reach 10%, mainly driven by the scarcity of inventory in both TV and digital media. AD SPEND PERFORMANCE BY CATEGORY Retail proceeds to outperform the other categories in terms of YoY growth Global or local events to boost spend in 2019 for a second consecutive year, and is forecast to slow down its upward Political elections – both local and European – will keep the demand for trend but still remain indisputably in the ad spend TOP 3 in 2019, inventory high and will further boost ad spend in 2019. overtaking Cosmetics. This year is very intense with regards to political campaigns. On the one

DENTSU AEGIS NETWORK 61 ‘DIGITAL SHOWS ROBUST GROWTH - BY 2020 MOBILE WILL REACH This is mainly due to the recent activities of the major local publishers OVER 50% OF TOTAL DIGITAL AD SPEND AND WILL STEADILY GET which are already investing in technological solutions that are allowing them AHEAD OF DESKTOP AD INVESTMENTS.’ to automate the sale of their inventory.

BY MEDIA d. Digital Mobile with highest growth YoY Digital Mobile shows the highest expected growth rate YoY with estimates to a. TV to secure its place as top ad spend medium amid increase to 42.1% until the end of 2018, and remain on steady growth until rising inflation 2020. This is mainly due to the major shift in consumer behaviour from The 2018 TV media inflation is estimated to reach 13% by the end of the desktop to mobile and more importantly - the successful adoption of mobile year. The YoY advertising expenditure growth in 2018 is forecast to reach solutions by the major digital media players locally. This reflects 9.1%. The TV growth is expected to drop more than two times in 2019 to enhancement of their overall ad policies towards mobile. By 2020 mobile will 4.6%. The slowing down trend of TV advertising investment growth is outperform desktop ad spends and have over 50% share from the total expected to continue in 2020, when a 4.4% rise is expected. digital ad investments.

b. Digital is closing the gap more aggressively with the market e. Slow down in social media ad investments growth YoY will start to reaching new heights through mobility and personalization recover The Bulgarian advertising market is steadily heading towards digital with Social Media is expected to recover form the slowdown of its growth YoY. significant relocation of resources toward online media within the media During this and next year, the growth in the medium will stabilize and start mix. This is additionally accelerated by the new media policies introduced by to gradually increase reaching nearly 20% YoY growth by 2020. the major local TV media groups that had strengthened their digital The expectations are that the investment in social media will maintain a proposition aiming to increase the ad expenditures in their online channels healthy level compared to 2018 – around 21 million BGN for 2019 and 25 million BGN for 2020. throughout different techniques. The shift from “traditional media” towards digital is forecast to grow steadily in the next three years, reaching nearly 1/3 of total ad expenditures. Technology solutions, especially mobile and programmatic, have already established themselves as the major drivers. Despite the steady growth YoY digital is not expected to outperform TV in the next 3 years.

c. Programmatic with robust growth in 2018 Programmatic Display is forecast to bite over 21% of the share of Total Display spend by the end of the year and continue its steady growth, reaching over 30% by 2020. The growth YoY will gradually increase after the main burst in 2017 and will remain at double digits in 2019 as well.

DENTSU AEGIS NETWORK 62 Bulgaria Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 9.5 9.6 7.5 Television 55.0 55.0 54.4

Newspapers -4.8 -4.5 -14.1 Newspapers 5.0 4.4 3.5

Magazines -6.0 -25.5 -14.3 Magazines 2.4 1.6 1.3

Radio 3.7 3.0 3.0 Radio 4.9 4.7 4.4

Cinema n.a. n.a. n.a. Cinema n.a. n.a. n.a.

OOH 1.5 3.0 3.5 OOH 11.7 11.0 10.5

Total Digital 21.1 21.8 20.6 Total Digital 21.0 23.4 25.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 21.1 21.8 21.6 Total Digital* 100.0 100.0 100.0

Display 28.9 25.2 17.9 Display 38.2 39.5 38.6

Online Video 20.9 20.9 31.5 Online Video 16.5 16.5 18.0

Social Media 15.5 20.8 19.6 Social Media 20.4 20.3 20.1

Paid Search 15.4 16.3 18.3 Paid Search 24.1 23.1 22.7

Other incl. Other incl. 0.0 0.0 0.0 0.8 0.7 0.6 Classified Classified

Mobile^ 42.1 31,7 38.1 Mobile^ 42.7 46.1 52.3

Programmatic Programmatic 74.9 63.8 41.0 21.1 28.4 33.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 63 CZECH REPUBLIC: ‘Strong inflation trends in TV’

OVERVIEW OF THE TOTAL ADVERTISING MARKET AD SPEND PERFORMANCE BY CATEGORY Nearly all categories have risen in gross prices. Retail represents the Year on year % growth at current prices biggest one from a long-term perspective and is also the most dynamic 2018 2019f 2020f category - we expect +10% growth in 2019, followed by Finance with similar growth expected, and Beverages (8% growth expected). Cosmetics, 10.5% Czech Republic 5.7% (5.7%) 8.8% (8.8%) Food, Automotive, Tourism and the Pharma categories are expected to (10.5%) stagnate (growth in range -2% to +2%) in 2019. The only substantially decreasing categories are Media and Telecom (-5%). Previous forecasts in brackets from January 2019

LATEST KEY AD SPEND TRENDS 2019f Gross Local 2019f vs. 2018 Top 10 Categories 2019f Further concentration on the Print market. Bauer Media sold their activities Currency Million YOY% in Czech Republic to MaFra, a publishing house owned by the Prime Minister Mr. Babis. This acquisition will make MaFra the biggest publishing house in Retail 17 950 10% Czech Republic. The Czech economy is in good shape. An increase in TV Finance 8 491 10% investments for a third year in a row, has lead to strong inflation trends in TV. Food 7 958 0%

THE 2019 AD SPEND FORECAST Cosmetics 7 012 2% Global or local events to boost spend in 2019 Media/Entertainment/Publishing 6 810 -5% We expect that the total increase in 2019 will be 8.8% and will be driven

mainly by Digital and partially by TV media. There will be no major sports or Automotive 6 286 0% other events. Tourism/culture/leisure 5 954 -2% The economic context Beverages 5 772 8% The economy is still growing, despite tendencies of the government to have a non-balanced budget. Pharma 5 483 0%

Telecom 2 717 -5% THE 2020 AD SPEND FORECAST Since a crisis has still not come, we expect ad spend growth due to growth in the economy.

DENTSU AEGIS NETWORK 64 ‘MAFRA BOUGHT BAUER MEDIA AND CREATED THE BIGGEST PUBLISHING HOUSE IN THE CZECH REPUBLIC’

BY MEDIA

a. Strong inflation trends. Nova Group +12%, Prima Group +10%. YOY change in broadcasted GRPs for Jan-Sep is +4%, and it is expected to increase until the end of the year. Consumption of TV is not changing. Duopoly of Nova Group and Prima Group will stay unchanged in 2019. New TV channels have been unsuccessful.

b. MaFra bought Bauer Media and created the biggest publishing house in the Czech Republic.

c. Through TV + Radio (Prima Group + Radio) packages, Media Club is pushing an increase in share of investments to the radio stations represented by them. Cooperation between Czexch Radio Center and Media Bohemia will continue in 2019.

d. Bigmedia gave up fighting against the government about a new law prohibiting billboard signs along the highways and started to dismount Their signs. Unclear situation as to who will be selling CLV in the underground in Prague after the contract between Prague and EuroAWK expires. Popularity and usage of digital signs is increasing.

e. One of biggest e-commerce players, Mall.cz, has started its own TV – Mall TV.

DENTSU AEGIS NETWORK 65 Czech Republic Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 3.0% 3.0% 3.0% Television 38.3% 36.3% 33.8%

Newspapers 0.0% -2.0% -2.0% Newspapers 5.5% 5.0% 4.4%

Magazines 0.0% -3.0% -2.0% Magazines 7.6% 6.8% 6.0%

Radio -1.0% -3.0% 0.0% Radio 4.7% 4.2% 3.8%

Cinema 0.0% 0.0% 0.0% Cinema 0.4% 0.4% 0.3%

OOH 0.0% 2.0% 2.0% OOH 5.9% 5.5% 5.1%

Total Digital 12.9% 21.4% 22.8% Total Digital 37.6% 41.9% 46.6%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.9% 21.4% 22.8% Total Digital* 100% 100% 100%

Display (Banners) -10.3% -7.7% -8.3% Display (Banners) 20.0% 15.2% 11.3%

Online Video 23.3% 18.9% 22.7% Online Video 28.4% 27.8% 27.8%

Social Media 28.6% 66.7% 46.7% Social Media 13.8% 19.0% 22.7%

Paid Search 15.7% 24.5% 22.7% Paid Search 27.1% 27.8% 27.8%

Other incl. Other incl. 17.6% 15.7% 25.0% 10.6% 10.1% 10.3% Classified Classified

Mobile^ 109.3% 41.7% 38.4% Mobile^ 33.6% 39.3% 44.3%

Programmatic Programmatic 32.0% 36.6% 41.7% 40.6% 45.7% 52.7% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 66 ESTONIA: ‘TV grows faster than local online’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2019 AD SPEND FORECAST Finance & Insurance As the local Parliament Election was on the 3rd of March and the European In 2018 in the Finance & Insurance sector, the most used media was TV at Year on year % growth at current prices Parliament elections were on the 26th of May, we are expecting market 57%. Then Digital at 25% and OOH 7%. TV group share is as follows: PMG growth of 3.6%. with 44%, then AMB with 44% and BMA at 10%. In this sector, the three 2018 2019f 2020f most active advertisers are Placet Group at 10%, IPF Digital Estonia at 6% and Swedbank with 6%. Estonia 2.4% (3.6%) 3.6% (4.3%) 3.1% (3.7%) The economic context According to Statistics Estonia, in 2018, the gross domestic product (GDP) of Estonia increased by 3.9% compared to 2017. Telecommunication Previous forecasts in brackets from January 2019 The Ministry of Finance is prognosing nominal GDP growth of +3% for 2019 The three most active advertisers are Telia 23%, Elisa 13% and Tele2 11%. and around 3% for 2020. The Estonian Bank estimates economic growth of The three top used medias are: TV 68%, online 18% and OOH 6%. Here LATEST KEY AD SPEND TRENDS +3.5% for 2019 and around +2% for 2020. AMB has the highest share at 61%, and PMG follows with 31%. • There is tough competition between big Media Groups: Postimees Media Group (previously Eesti Media Group) and AMB. AMB is investing more The main contributors to growth covering the majority of economic activities Pharmaceuticals into the TV online platform TVplay. Online video is growing fast and is were construction, manufacturing, professional, scientific and technical Sandoz D.D. with 18% has the highest SOS, followed by Glaxosmithkline great for incremental reach. There is a trend of selling packages (one activities. Net taxes on products did not increase in 2017, while in 2018 with 13% and Reckitt Benckiser with 13%. The most used media is TV at package throughout one media group) and special content solutions – to their growth recovered. In 2018, the exports of goods and services 86%, Digital at 4% and Newspapers and Magazines both at 4%. In this have advertisers’ media communication on several different platforms of increased 4.3%, mainly due to the growth of the services exports. sector, AMB has the higest share of 56% and PMG follows with 33%. one media group. Domestic demand also produced the best results in the last 6 years, • TV viewing patterns are changing and more people have started watching growing 5.3%. recorded TV content on demand rather than live TV. Approx. 20% of Top 10 Categories 2019f Gross Local 2019f vs. 2018 2019f Currency Million YOY% ratings come from viewers using TSV to watch PT programs. ETV THE 2020 AD SPEND FORECAST viewership is increasing and commercial channel programming is Food 83 -4% decreasing due to changing program policy in ETV. • While GDP will be approx. 2.5% in 2020, we predict 3.1% growth of the Retail 70 7% • As one third of the Estonian population are Russian speakers, it is ad market, which will be mostly driven by an increase in media prices. Higher media prices are a result of different factors: deficit of inventory in important to reach for such a big target group. The audience that can be Pharmaceuticals & Med. 50 -3% reached via BMA channels is ageing every year – the proportion of the TV and local online, a new high season cofficient in OOH, and new product economically active audience continually decreases. For the younger prices and the price of content marketing in online and radio. Finance & Insurance 46 10% Russian TG, the most popular channel is TNT (PMG). RTR (AMB) was the Telecommunication 43 -12% Russian viewers’ market leader in 2018. AD SPEND PERFORMANCE BY CATEGORY • Local online channels are trying to compete with international online Retail Automotive 37 -5% channels by offering more and more attractive content. Still the This sector is very competitive. Most active are Coop 17%, Rimi 16%, Beauty & Personal Care 37 1% international online channels Facebook & Google’s investment will Selver 16% and Maxima 15%. The most used medias are TV 61%, online continue to grow. Local online growth has slowed down, but will certainly 13%, OOH 9% and direct mail 9%. In the retail sector, AMB and PMG Beverages 28 -10% be positive. (previously Eesti Meedia) have similar shares: the first has 48% and the Media 19 -20% • Out-of-home (OOH) has benefited from significant technological second has 42%. innovation in recent years. Digital displays across all formats have Tourism & Transportation 18 6% transformed the medium. OOH growth will come from digital formats useage - currently 25% of total OOH is digital.

DENTSU AEGIS NETWORK 67 ‘TV GROWS FASTER THAN LOCAL ONLINE’ Social media trends - Instagram continues to grow, AR is growing in communication applications, there’s a rise in Social opinion culture, changes BY MEDIA. in Facebook have increased Paid Social share, and video continues to rise.

a. Television c. OOH Television net ad-spend rose 3.1% in 2018 and the estimate for 2019 is 3%. The Digital part of OOH is increasing – the digital formats share in 2017 was Commercial channel share was 47% and continues to decrease due to the 23% and 33% in 2018. Providers are Digiekraanid, Linna Ekraanid, popular content of the State channels: ETV and ETV 2. Live daily reach is JCDecaux and Public-TV. The top 3 OOH companies are JCDecaux with 47% stable, but consolidated daily reach is increasing. At the beginning of 2018, (including 12% digiscreens), Digiekraanid with 20% and Linna Ekraanid with official currency is 18 -49 in both big TV Groups AMB and Postimees Grupp 10%. The biggest shopping centers and busiest crossroads in Tallinn are (previously Eesti Meedia Grupp). covered with digital billboards and city lights. The most common formats used in 2018 were: bus shelters 29%, outside TSV viewing share continues to increase in all TG, 20% of commercial Led screens 26% and billboards 14%. While bus shelters are the most channels’ top original programs ratings come from TSV. Russian viewing common formats to use, they are losing their share rapidly. In 2012, bus habits are changing - PBK are losing their viewers, while TNT share is shelters share was 61%. increasing, especially in younget target groups. The TV market is still difficult with more demand than supply of TV ratings due to lost viewers and d. Radio a strong market, which leads to an increase of GRP/sec prices for 2019 at The biggest growth in the Estonian ad net marketing was Radio – 9.1%. The approx. 10% for both of the big Media groups (AMB & PMG). consolidation of radio groups is continuing. Postimees Gupp (previously Eesti Meedia Grupp) owns the Russian radio Narodnoje and DFM, the b. Online leading radio group. Sky Plus Grupp launched Rock Radio in 2017 whis is Both local and international online together hold first position in Estonia. now popular among men. The leading radio channels are: Sky +, Star FM 2018 was surprising – local internet growth was minimal at only +0.5%. The and RetroFM. most popular local sites are www.delfi.ee and www.postimees.ee. International online is approx. the same level as the local online, which e. Print means 20 mio for both, and the real situation is that online ad-spend share All the biggest Daily Newspapers have local owners as they invest in print. is the biggest in the market. Mobile internet weekly reach was 85.5% in Print content is capacious and interesting therefore print sells well. 2018. Facebook has the absolute social media monopoly in Estonia in terms Newspaper’s situation was stable in 2017 vs. a decrease of -0.4% in 2018. of usage and growth estimations. Postimees Grupp owns the biggest newspaper in Estonia - Postimees and Paid Search - Google is a dominant player in the search area. Paid search several local newspapers. Ekspress Grupp owns Eesti Ekspress, Maaleht and has established a strong position as being an inseparable part of almost Õhtuleht. Both groups are investing a lot into web platforms and are every campaign and budget, therefore advertising costs are still growing in developing content marketing. paid search. Magazines - Magazine share is decreasing as the biggest Newspapers are Local VOD is decreasing dramatically – 17% 2017 vs 2018, Internationbal adding extra content. Magazines ad net decrease was the biggest at -3.3%. VOD (YouTube, FB) is increasing. Local VOD reaches are low, compared to The biggest magazine’ group was Ajakirjade Kirjastus, with magazines split YouTube. between Ekspress Grupp and Õhtuleht.

DENTSU AEGIS NETWORK 68 Estonia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 3.1% 3.0% 3.0% Television 22.7% 22.6% 22.6%

Newspapers -0.4% 0.0% -2.0% Newspapers 14.4% 13.9% 13.2%

Magazines -3.4% -3.0% -3.0% Magazines 3.7% 3.4% 3.2%

Radio 9.1% 9.0% 8.0% Radio 9.8% 10.3% 10.8%

Cinema n.a n.a n.a Cinema n.a n.a n.a

OOH 6.1% 8.0% 6.0% OOH 13.9% 14.5% 14.9%

Total Digital 0.7% 2.9% 3.0% Total Digital 35.6% 35.3% 35.3%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 0.7% 2.9% 3.0% Total Digital* 100% 100% 100%

Display 1.0% 2.4% 2.7% Display 64.0% 63.6% 63.5%

Online Video 2.0% 2.0% 2.0% Online Video 6.4% 6.3% 6.3%

Social Media 1.9% 4.9% 5.6% Social Media 14.8% 15.1% 15.5%

Paid Search 1.0% 3.6% 2.0% Paid Search 14.8% 14.9% 14.8%

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ 2.0% 5.0% 5.0% Mobile^ 12.4% 12.7% 12.9%

Programmatic Programmatic n.a n.a n.a n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 69 HUNGARY: Solid growth but still incalculable future

OVERVIEW OF THE TOTAL ADVERTISING MARKET HOW THE ADVERTISING MARKET IS CURRENTLY PERFORMING AD SPEND PERFORMANCE BY CATEGORY Internet is the main driver of the growth where all digital media types are Trading firms Year on year % growth at net-net prices improving. For offline media, TV still owns more than a quarter of total Hypermarkets, electronics retailers and online stores had the highest share media investments, while for other classic media types, investments are of total media expenditure in 2018, closing in on the leadership of OTCS 2018f 2019f 2020f slightly decreasing in the long term where minor corrections can only after 3 years. compensate the slope for a while. 8.1% 6.6% Medicinal Products (OTC) Hungary 9.8% (12.4%) (4.1%) (4.9%) Many macroeconomic indicators show positive trends, such as solid Despite losing its leading position, OTC brands such as Algoflex, Magne B6, consistent GDP growth since 2013, while both Nielsen and Ipsos reported Previous forecasts in brackets from June 2018 Normaflore, etc. still invest heavily in media with a strong focus on TV. record-high consumer confidence in 2018. But trends in the Hungarian State Institutions and Development, Social Organizations LATEST KEY AD SPEND TRENDS media market do not necessarily follow international trends or even the The importance of this category is still growing massively. Beside the • Inspite of positive trends in macroeconomic variables, long term planning changes in the attention of the audience. Conditions of the Hungarian aforementioned government and institutions as advertisers, political parties of consumption or media expenditure is still difficult due to incalculable advertising industry have worsened due to various political acts, and further and organizations from all sides were also active during the campaign for macroeconomic policy and the government’s continuously growing interest limitations might come. The government is influencing the media market in the parliamentary election. OOH is the main battlefield for them, with a in the media market. several ways: significantly higher focus on TV and a relatively low digital share compared As a direct advertiser: the Prime Minister’s Office is still one of the biggest • Three submarkets can be observed in the Hungarian advertising market: to the total market. advertisers in Hungary, despite the fact that its expenditure decreased by a fifth in 2018. Other state institutions and state-owned companies are also Entertainment and Sporting Events Politics-driven market important media investors and, together with the government-friendly In 2018, the FIFA World Cup was one of the main drivers of this category. Due to the state’s growing interest, there is a higher and higher market companies, could seriously influence the total market, accounting for around However many other cultural products have also had significant investments share connected to the government in direct or indirect ways. Media one-fourth/one-third of the market. such as concerts, festivals and movies. Furthermore, gambling is also an expenditures by the Prime Minister’s Office (incl. state-owned companies) As a regulator: after many changes in media law, further regulations could important part of this category. are very important drivers behind the market growth (e.g. 11% of total TV be expected to limit free trade again. Previous regulations such as the fixed expenditures comes from this submarket according to MEME) and this is agency fee have reallocated some expenditure into the direct market and 2019f Net-net Local 2019f vs. 2018 an almost exclusive market only for a limited number of media owners Top 10 Categories 2019f influenced the share between channels. Currency Million YOY% and agencies. As a media owner: businessmen connected to the government party have Trading Firms 21 289 1.20 Direct advertisers dramatically increased their share of every media type recently (e.g. KESMA, Similar to politics-related media investments, share of direct orders are also At Media, Tv2 Group, etc.). By having interests in many media types, the Medicinal Products (Otc) 20 584 1.10 on the rise, although only some media types are influenced by non-proxy government also can influence the media market, both in content and deals such as listings or press. Effects of political acts are important drivers Entertainments & Sporting events 14 985 1.14 inventory. behind direct investments, for instance the 15% fixed agency fee pushed some advertisers to having close agreements with publishers/sales houses State Institutions & Development 12 917 1.19 of certain media types where they felt knowledge is less important such as RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Mass Media 10 803 1.30 in the case of radio or press. SoHo companies also prefer direct deals on the PREVIOUS REPORT (JANUARY 2019) digital market because of similar reasons. This submarket also showed It is difficult to make any forecasts due to the government’s non- Cars, Vehicles 9 479 1.20 extensive growth and professional media agencies are less involved if at all. conventional macroeconomic policy and direct influence into the media Banking 7 301 0.93 Free trade or Agency Market market. The market sometimes acts as a roller coaster, first going downhill The situation of media agencies is more difficult as they have had modest for several media types after the interference of the state which they then Mobile Telecommunication 3 948 0.81 improvement compared to the above two. The increase could have partly try to compensate for through regulations and redirecting expenditures. Catering 3 637 1.05 come from specific fields where their investments into professional staff, Additionally, many media owners are not forced to cooperate with agencies Chocolates, Confectionery 3 409 1.24 data and software are required such as programmatic. Quality-focused or independent advertisers below them as they can sell a high share of their clients are still preferring the expertise of agencies. inventory to the government and their alliance easily.

DENTSU AEGIS NETWORK 70 ‘DIGITAL FURTHER STRENGTHENS ITS LEADING POSITION’ Time shifted viewing is not yet a breakthrough but many leading TV channels have realized the threat that online video content poses and are launching BY MEDIA their own stream sites such as RTL Most.

DISPLAY VIDEO Display remains strong with the highest share of total digital media but its Besides the clear dominance of YouTube, local stream sites are emerging. internal structure is changing due to the rise of programmatic, increase of Online video offers considerable alternatives alongside or sometimes even premium inventory and video formats. Dynamic gain of mobile also forms instead of TV. Many big media houses have established their own stream the profile of display. The importance of international giants such as Google sites and distribute video content previously broadcasted by TV channels, (GDN) and Facebook is also increasing, but this could be changed due to which could be the surviving model for classic media brands such as Tv2. the strengthened Hungarian programmatic market. As a sign of this, local media owners are more open to cooperating with agency trading desks such PRINT as Amnet, but it seems that the strengthened Hungarian programmatic There is a shrinking in readership, content and circulation numbers. Besides market still cannot compensate it. this the government’s intent to restructure has also not had a good influence on the press market. (Such as establishing KESMA, the state’s OOH central publishing company.) Now the state is trying to turn the Although appearing stable with heavy growth in both 2017 and 2018, OOH's decreasing incomes around by ordering a massive amount of sites in future is questionable as billboard – and other large formats - could newspapers and magazines – part of them also owned by the government disappear completely in 2020 due to the new act passed in June. Smaller and its halo. Due to this the print market improved for 2017 and a further rise inner-city sites such as city light posters could remain, however the continued for newspapers, while media expenditure in magazines decreased by 6% this year. currently offline touchpoint is still waiting for its renewal with new digital based solutions. According to a new law modification, entered in January 2018, local municipality can impose tax on the advertisement carrier. As RADIO media owners are unable to pay this themselves, they charge this tax to the Radio is a real rollercoaster market because of the changes in political advertiser – which has increased media prices and caused a historically high relationships. Today government-friendly businessmen own all the important media inflation in the OOH market. radio channels and networks next to the state-owned public service channels. Classic radio is losing its audience among younger age groups: TV according to CCS 2017, about half of 15-24 year olds never listen to the radio. Online radio has a considerable audience but not a typical alternative for Hungarians still spend many hours in front of their television (242 minutes a youngsters since radio has to compete with many other ways of listening to day for the total population in January-September 2018 – Nielsen Audience music such as YouTube, streams like Spotify, etc. However Retro Radio - the Measurement). However, in spite of the wide range of choice it is harder to first channel with nationwide coverage - was launched in 2018, and Radio 1 reach certain target groups, especially youngsters. network also offers countrywide technical penetration, which will both influence ad expenditure.

DENTSU AEGIS NETWORK 71 Hungary Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 16.2 7.9 8.6 Television 27.2 27.1 27.7

Newspapers 8.0 2.0 -4.0 Newspapers 9.9 9.4 8.4

Magazines -6.4 0.0 -4.0 Magazines 7.8 7.3 6.5

Radio -3.9 1.0 -1.1 Radio 4.9 4.6 4.2

Cinema 44.6 1.0 -1.0 Cinema 1.3 1.2 1.1

OOH -0.1 5.0 0.9 OOH 9.7 9.4 8.9

Total Digital 13.7 13.4 11.9 Total Digital 39.1 41.0 43.1

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 13.7 13.4 11.9 Total Digital* 100.0 100.0 100.0

Display (Banners) 10.6 9.9 8.0 Display (Banners) 40.5 39.3 37.9

Online Video 63.9 13.5 5.3 Online Video 4.6 4.6 4.3

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search 13.9 20.6 18.1 Paid Search 40.3 42.8 45.2

Other incl. Other incl. 11.1 3.0 5.5 14.7 13.3 12.6 Classified Classified

Mobile^ 33.9 26.9 21.0 Mobile^ 36.6 41.0 44.3

Programmatic Programmatic 45.3 43.0 38.9 23.0 29.0 36.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 72 LATVIA: ‘Major turmoil in the TOP10 most advertised category list’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Although the first quarter of 2019 was less active among existing Finance advertisers compared to 2018, the opening of Akropole in March gave the In October 2018, new legislature was approved regarding advertising of the Year on year % growth at current prices category a boost. whole consumer loan category. The legislation was targeted mostly at fast- Remedies loan companies, but it will have an effect on most of the loan providers. 2018 2019f 2020f Some of the larger advertisers in the category (e.g. Takeda) have been A transitional period has been set and the new restrictions will come into Latvia 5.8% (4.6%) 2.3% (2.6%) 4.4% (4.8%) significantly less active in 2019 Jan – Mar compared to the same period in effect on the 1st of July 2019. However the drop of advertising investments 2018. Despite the fact that advertising will most likely pick up the pace in in this category has already become apparent – the loan category dropped the remaining year, the overall growth estimation remains negative. by -46% in 2019 Jan – Apr compared to the same period in 2018. And after Previous forecasts in brackets from January 2019 Internet the transitional period the drop is only going to increase, thus contributing LATEST KEY AD SPEND TRENDS Some of the largest online stores had an unusually active first quarter in to an almost -60% yearly decrease of the category. • The growth in 2018 has been slightly larger than previously estimated. 2018, however since then monthly advertising investments have stabilized Furniture • But the growth figures for 2019 and 2020 have been slightly reduced, and have remained stable through Jan-Apr 2019. Therefore the overall On the 30th of August 2018, Ikea opened its first shopping center in Latvia. mostly due to a significant decrease of advertising investments by the growth estimation is negative compared to 2018. In 2019, Ikea immediately entered the category’s TOP3 advertiser list. From non-banking loan category, that is under pressure due to new legislation. Cars Jan – Apr, Ikea’s share of ad spend was 21%, and it has led to overall In Latvia sales of new cars have been constantly growing for the last couple growth of the category, especially Jysk which is a direct competitor to Ikea. THE 2019 AD SPEND FORECAST of years, which is different from other western European countries where Building Materials The European Parliament elections had little effect on the advertising sales of new cars have slowed down. Consequently, the advertising Currently the building sector is booming – labor costs have grown market as previously expected, especially compared to the Parliament investments in this category have been steadily increasing and this trend significantly and so have building material costs. Consequently the elections that took place in October 2018 and the Municipality elections will likely continue in 2019 as well as 2020. competition in the category is intensifying and advertising investments by in 2017. Concerts, Festivals, Shows top sellers are growing. The largest growth has been for K-Senukai, which has almost doubled its ad-spend in 2019 Jan – Apr compared to the same The economic context The economic situation in Latvia has been improving for a while and income period in 2018. Currently the state of the economy is good and it has consequently been has grown faster than inflation, thus allowing people to spend a larger share growing. The Ministry of Finance estimates the real GDP growth for 2019 of their income on different entertainment events. Top 10 Categories 2019f Gross Local 2019f vs. 2018 will reach +3.2%, with average monthly wage growth at +6.5%, thus Mobile Communication 2019f Currency Million YOY% outpacing the inflation that is expected to reach 2.5%. The unemployment Mobile communication has long been one of the top advertised categories. Retail 26.8 m€ +1.8% rate in 2019 is also expected to reach 6.3%, nearing an all time low. The competition is mainly between three operators, therefore the category is saturated. Partly due to the ever decreasing pricing of mobile plans, Remedies 18.6 m€ -2.1% AD SPEND PERFORMANCE BY CATEGORY operators have not been able to increase their advertising investments as Internet 17.5 m€ -5% much as they did a couple of years ago. Retail Cars 13.3 m€ +2.7% Aside from mobile operators, in the last couple of years mobile phone There are huge changes expected in the competitive environment of Concerts, Festivals, producers (Samsung, Huawei) have become increasingly active in terms of 12.6 m€ +4.5% shopping centers by 2020 – significant expansion of two of the largest Shows advertising. However recent restrictions imposed on Huawei by the USA shopping centers, as well as a newly opened (Mar 2019) shopping center could negatively influence advertising investments by Huawei (in 2019 Jan – Mobile Communication 12.4 m€ +2% Akropole, that is currently the largest retail space in Latvia. In combination Apr ~11% of the category) thus slowing down the growth of the whole Finance 11.3 m€ -58% with the negative demographic tendencies, this will lead to approximately category. +28% increase of GLA (Gross Leasing Area in m2) per capita. Such changes Furniture 10.1 m€ +9.2%

are very likely going to intensify the competitive environment between the Building Materials 9.3 m€ +56% shopping centers and should have a positive effect on advertising Sweets & Confectionary 6.7 m€ +/-0% investments in the Retail category.

DENTSU AEGIS NETWORK 73 ‘INCREASINGLY, ADVERTISERS ARE IMPLEMENTING ONLINE VIDEO DOOH is strengthening its presence in Latvia’s advertising landscape INTO THEIR ROUTINE MEDIA PLANS’ Large formats - In a relatively short period of time two local OOH providers have managed to create a relatively equal network of DOOH Walls & BY MEDIA Billboards – Visual Media & Actual City Media (ACM). All Media Baltics (AMB) Sales house continues aggressive price Clear Channel is joining the race and will start selling their first DOOH Wall increase policy in Jun 2019. In an unprecedented deal for Latvia in 2017/2018, providence equity (Bite) Small formats – JCDecaux is developing a premium DOOH network bought the entire MTG Baltics business creating the new TV group – All approximately the size of city lights in the city center and will start selling in media Baltics. This deal includes in itself even more risks than that of 2012 July 2019. when MTG bought LNT. Consequently it is under strict supervision by the Competition Council. One of the Competition Council’s prerequisites for this Clear Channel has chosen a different path – it is developing a network of deal to be allowed was a completely transparent & non-discriminatory small digital stands in Latvia’s largest shopping centers that can be bought advertising sales policy. In theory it was supposed to mean completely at least partly programmatically. Currently Clear Channel is already abandoning historical buying conditions for all clients and applying one operating in three shopping centers – Domina, Riga Plaza, and Akropole. publicly available Rate Card. The DOOH trend will clearly be the main shift in the existing OOH landscape in the upcoming years. However due to the fact that these events occurred at the very end of 2017, when most advertisers had already finished budgeting for next year and The growth rate of Online video remains high due to constantly when such a move would mean that for some clients in some channels growing TV spot advertising prices inflation could reach +300% and more (base price + all the new indexes), The constantly increasing prices of regular TV advertising for the past the Competition Council agreed to soften the transition period of 2018 by couple of years has narrowed the gap between TV and Online video. limiting the weighted base price (new indexes should still be applied) of all Although online video is still more expensive, an increasing number of AMB channels (TV3 & LNT can no longer be freely bought separately) advertisers are implementing it in their routine media plans. inflation to +25%. As a result, online video has grown significantly from ~1.7mEUR in 2015 to an estimated ~5.4mEUR in 2018. This trend is likely to continue in However starting from 2019 there are no more exceptions to the official 2019 as well, when online video is expected to reach ~6.9mEUR in rate card. advertising investments.

DENTSU AEGIS NETWORK 74 Latvia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 2.7 0.1 1.5 Television 38.3 37.4 36.3

Newspapers 10.4 -7.1 -7.0 Newspapers 4.3 3.9 3.4

Magazines 1.5 -5.1 -5.0 Magazines 5.8 5.4 4.9

Radio 1.7 -2.7 0.0 Radio 11.4 10.8 10.4

Cinema 7.3 0.0 0.0 Cinema 0.9 0.9 0.8

OOH 11.9 2.2 5.0 OOH 10.4 10.3 10.4

Total Digital 10.1 10.6 12.4 Total Digital 29.0 31.3 33.7

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 10.1 10.6 12.4 Total Digital* 100.0 100.0 100.0

Display 5.5 3.5 5.0 Display 67.2 62.9 58.7

Online Video 23.2 27.3 25.0 Online Video 20.4 23.5 26.1

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search 16.9 21.4 25.0 Paid Search 12.4 13.6 15.1

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ n.a n.a n.a Mobile^ n.a n.a n.a

Programmatic Programmatic 26.6 30.1 31.5 31.1 36.5 42.7 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 75 Lithuania: ‘2019 ad market boost influenced by major political events’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Weaker-than-expected euro area growth could dampen growth prospects, while Brexit may lower emigrants’ remittances. A faster-than-expected rise Year on year % growth at current prices in unit labour costs could harm competitiveness. On the upside, implementation of productivity-enhancing reforms could boost the outlook. 2018 2019f 2020f

Lithuania 4.9% (3.9%) 7.4% (4.3%) 3.0% (3.6%) THE 2020 AD SPEND FORECAST 2020 ad spend is forecast to show moderate growth of 3% due to the expected slow down of the economy influenced by “Brexit”, but on the other Previous forecasts in brackets from January 2019 hand ad investments will be accelerated 1-2% by the 2020 Summer Olympics. LATEST KEY AD SPEND TRENDS • Actual 2018 market growth was 4.9% which increased by 1% p.p. vs. the AD SPEND PERFORMANCE BY CATEGORY 2018 forecast. Continous competition in Retail, Pharmacy, Beauty and Personal Care will • Market experts (media owners, media agencies and advertisers) are inrease these categories’ ad spend by 80 millions euros gross, while optimistic due to the additional political events advertising, so the 2019 Telecommunications, Media and Automotive will suffer from decline. growth forecast (7.4%) is significantly higher vs. the initial 4.3%. The Still, overall gross spend growth will be from 8-10%. main influence is higher investments in digital which will inrease by 13.1% (digital investment has a 41.5% share of ad spend so it has a major impact on the whole ad market forecast). 2019f Gross Local 2019f vs. 2018 Key categories 2019f • It is recommended to allocate at least 5% more media budget in 2019 vs Currency Million YOY% 2018 in order to stand out in the growing advertising clutter. Retail 178 12%

THE 2019 AD SPEND FORECAST Pharmaceutical & Medicine 88 38%

Major political events (Presidential, Euro Parliament & Municipal Council Telecommunications 85 -11% elections) will boost ad growth by 3-4%. Beauty & Personal Care 67 39% The economic context Food 57 0% Economic output growth is projected to ease to around 2¾ per cent in 2019-20. Weakening external demand growth will continue to be a drag on Finance & Insurance 47 2% exports. Domestic demand will also lose momentum as consumption growth Beverages 39 11% is curbed by a declining labour force, and as investment slows in line with flows of EU funds returning to normal levels. On the other hand, businesses Media 19 -38% are likely to increase investment in automation in an attempt to mitigate Automotive 14 -16% supply-side constraints. The unemployment rate is set to fall to around 6% in 2019-20 and, with wage growth remaining strong, underlying inflation is Tourism & Transportation 12 83% projected to continue drifting up.

DENTSU AEGIS NETWORK 76 ‘DIGITAL WILL EXCEED 40% OF ALL AD SPEND’

BY MEDIA

a. DIGITAL Digital media is the biggest media (from 2016) in terms of revenue from advertising. In 2019, it is expected that it will exceed 40% of all ad spend. Desktop and mobile ad spend will each have a 50% split of Digital spend. Online video and social will grow at high speed by 41% & 27%. Despite advertisers increasing the budget on global networks (Google, Facebook, YouTube, Instagram, etc.), the local players will have a positive turnover of +4.5%, but their growth will be from local video incomes.

b. TV Although online video is growing fast, traditional TV remains the biggest audio-visual format channel (TV market is 3.8 times bigger vs online global + local video ). BMA Russian group has started to sell one more additional channel “Dom kino” (4th channel, in addition to PBK, NTV, REN) and has launched TG groups buying pricing. “Star media” TV group has started sales on the Russian channel “THT” but due to low channel share (0.3%) and competition with the four BMA russian channels, it will not achieve high incomes.

c. RADIO In 2019, growth will be limited to 3.5%. M-1 group (TOP3 stations in monitoring M-1, M-1 plus, Lietus) will increase its gross share up to 48% in 2019 vs. 46.9% while 2nd Tango group (top stations in monitoring Radiocentras, Rusradio, ZIP) will lose 1.7% of its share (40% forecast in 2019 vs. 41.7% in 2018).

d. OOH In 2018, this media grew by 20% because two OOH providers “Neoreklama” & “Kauno arka” were added into the monitoring database. OOH growth of 6.1% is the 2nd biggest of all media types, and it will be influenced by additional budgets from political advertising.

e. Print In 2019, newspapers will shrink by -2.3%, while magazine incomes will remain stable (the results would be lower if there were no political events in 2019).

DENTSU AEGIS NETWORK 77 Lithuania Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 3.2 4.7 1.9 Television 33.3 32.5 32.1

Newspapers 1.2 -2.3 -4.8 Newspapers 5.6 5.0 4.7

Magazines -12.5 0.0 -2.4 Magazines 5.4 5.0 4.8

Radio 7.1 4.8 2.7 Radio 6.8 6.6 6.6

Cinema 45.5 0.0 12.5 Cinema 1.0 1.0 1.1

OOH 20.0 6.1 2.9 OOH 8.5 8.4 8.4

Total Digital 5.9 13.1 5.3 Total Digital 39.4 41.5 42.4

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 5.9 13.1 5.3 Total Digital* 100 100 100

Display Banner 18.7 6.5 2.0 Display Banner 58.8 55.5 53.9

Online Video 7.0 41.8 8.5 Online Video 14.5 18.3 18.9

Social Media -7.1 27.8 8.9 Social Media 12.6 14.3 14.8

Paid Search -10.0 -5.6 11.8 Paid Search 11.5 9.6 10.2

Other incl. Other incl. 0.0 0.0 0.0 2.6 2.3 2.2 Classified Classified

Mobile^ 25.4 42.6 20.6 Mobile^ 39.1 49.3 56.5

Programmatic Programmatic 14.5 27.3 11.0 54.1 60.9 64.2 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 78 POLAND: ‘Economic slowdown fears’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Top 10 2019f Gross Local 2019f vs. 2018 Forecasts say Polish GDP should grow in the next few years, however the Categories 2019f Currency Million YOY% Year on year % growth at current prices growth should lower year by year (4% in 2019, 3.5% in 2020 and 3.2% in 2021). The set of financial decisions taken by the Polish government 2018 2019f 2020f Retail 9 736 8% (like a huge increase in public transfers) may put long-term economic Otc 7 719 -2% performance at risk. Poland 6.5% (6.5%) 4.1% (5.0%) 4.0% (5.3%) Food 6 303 16% Simultaneously, advertisers are tending to reduce the scale of marketing Previous forecasts in brackets from January 2019 Telecom 4 397 -2% investments, and this is related to the overall tendency to optimize the LATEST KEY AD SPEND TRENDS company’s cost structure and the negative expectations towards global Automotive 4 055 12% • Key changes in comparison to the previous report: the current market economic development (a general tendency to reduce spend on marketing growth estimations are less optimistic than the ones shared at the end of activities is visible in the Polish market too - Jula Polska decided to end the Hygene/Beauty 3 510 0% marketing chief position, like Unilever on a global level). 2018; TV ad spend growth has been reduced to 3.27% (vs 4.5% in Finance 2 870 -10% January 2019) and Digital spend has been lowered to 7.8% (vs 8.7%). • The last months of 2018 were very optimistic in terms of growth in media Growth in Digital media is forecast to slow down. Traditional media are Leisure 2 761 23% budgets. The beginning of 2019 brought significant reduction in media losing their audiences. Advertisers will spend more on tactics that guarantee Drinks/Alco 2 415 22% spend. Media owners announced a huge increase in cost (TV stations over effective campaigns (in terms of quality and reach), like programmatic 10%, OOH publishers over 8%). Concurrently, advertisers decided to buying based on advanced analytics. Media 2 635 2% reduce media spend. Finally, the planned and implemented increase in Media budgets will continue to shift to smaller market players (mostly media prices didn’t manage to cover the gap caused by media budget Digital media budgets) or will be spent directly. reduction.

AD SPEND PERFORMANCE BY CATEGORY THE 2019 AD SPEND FORECAST During recent years, the Polish ad market has been driven by retailers’ and Global or local events to boost spend in 2019 OTC producers’ spend. Ad investment in these two sectors has been There are elections in 2019 (to the European Parliament in Spring and to continually decreasing. In the case of retailers, this is partly related to a the Polish Parliament in Autumn). The elections may drive some additional ban on trade on Sundays – there’s limited room for further increase in media spend (i.e. OOH owners claim on average elections drives a 4% media spend (further increase would drive frequency, not reach); OTC increase in total media budgets), but 2019 is also a year of further changes companies tested a small budget reduction in 2019 (i.e. the biggest Polish in the law (the trade ban has been extended to three Sundays a month). advertiser - Aflofarm). There are no other sectors on the radar that could bring momentum back to The economic context the ad market. The Polish economy will follow a positive trend (forecast growth in GDP in 2019 is 4%), but some commentators are becoming more and more sceptical. The first signs of economic slowdown have already been noticed - social protests are gaining momentum (teachers’ strike), and a further increase in national debt may accelerate the slowdown.

DENTSU AEGIS NETWORK 79 ‘SOCIAL REMAINS THE FASTEST GROWING AD MARKET SECTOR’ c. Social remains the fastest growing ad market sector with FB as its absolute BY MEDIA leader (more than 80% of Polish internet users have said they use FB). Advertisers are looking for new, more effective solutions – they’re a. increasingly interested in collaborating with influencers. TV: At the beginning of 2019, TV channels announced a substantial increase in pricelists (above 10%). It looks as if they overestimated market demand, d. as advertisers representing key sectors (mostly retailers and OTC) reduced In 2019, OOH expects additional gains related to European elections their media budgets; simultaneously, since January 2019 we’ve been and elections to the Polish Parliament (up to an additional 4%). observing a continuous drop in media breaks saturation. The overestimated The market leaders (AMS, Ströer, Clear Channel) announced a change in price growth didn’t manage to compensate the drop that resulted from sales policy – in 2019, OOH campaigns will be priced on the basis of both media budget optimization. types/numbers of chosen billboards and the results from audience The gap between public and private channels is growing, which is leading to measurement. Pricelists have gone up, but OOH owners are facing the same duopoly (Polsat – TVN) strengthening. trend as TV owners: a media budget reduction. Therefore the final outcome of the changes is not clear yet. It is most likely that OOH will maintain its b. status quo in 2019 and 2020, without noticeable successes. Advertisers continue to go for quality solutions - they prioritize video formats, programmatic and they increase investment in solutions based on e. AI and machine learning (chat bots have grown in popularity). Print: All print media owners have noticed a further drop in sales. The titles According to market estimations, Google collects around 60% of total Digital portfolio is continually being reduced. spend (both Search and other services) in Poland. Radio: The radio landscape in Poland could change in 2019. Rumour has it that the Polish government may be interested in purchasing one of the top The slowdown in Digital spend has resulted from two trends: media budget radio stations – Radio Zet (EUROZET Group, currently owned by Czech optimization and shifting media budgets from media houses to smaller, Media Invest, CMI). niche market players (which is directly related to lower costs). Bigger advertisers (T-Mobile) are developing in-house units to buy digital campaigns directly.

Threats related to law regulations should also be considered (the first 1 Million fine (PLN) for GDPR violation was imposed on a Polish company, related to an issue with informational obligation toward the data subjects) along with changes in internet users’ behaviour (according to an Ad Blocking Report by Page Fair and Adobe, 33% of Polish internet users use an ad block).

DENTSU AEGIS NETWORK 80 Poland Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 7.3 3.3 3.2 Television 48.9 48.5 48.1

Newspapers -1.0 -1.0 -1.0 Newspapers 1.4 1.3 1.3

Magazines -0.5 -0.5 -0.5 Magazines 4.2 4.0 3.8

Radio 5.0 1.5 1.5 Radio 8.4 8.2 8.0

Cinema 0.0 0.0 0.0 Cinema 1.3 1.3 1.2

OOH 0.9 0.5 0.5 OOH 5.5 5.3 5.2

Total Digital 8.5 7.8 7.5 Total Digital 30.3 31.4 32.4

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 8.5 7.8 7.5 Total Digital* 100 100 100

Display Banner 4.2 3.3 3.0 Display Banner 27.5 26.4 25.2

Online Video 11.3 11.1 9.8 Online Video 9.8 10.1 10.3

Social Media 30.5 22.5 20.0 Social Media 19.4 22.1 24.6

Paid Search 4.3 4.8 4.3 Paid Search 32.6 31.7 30.7

Other incl. Other incl. -1.6 -1.5 -0.5 10.8 9.8 9.1 Classified Classified

Mobile^ 58.2 40.1 23.3 Mobile^ 24.0 31.2 35.8

Programmatic Programmatic n.a. n.a. n.a. n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 81 ROMANIA: ‘High growth of TV prices’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The trend of a decrease in economic growth, which started in 2018, will 2019f Gross Local Top 10 Categories 2019f vs. 2018 continue in 2019 due to both internal and external reasons. Currency (RON) Year on year % growth at current prices 2019f YOY% For this year, the agriculture and trade sectors are forecasted to have the Million most favorable evolutions, while the transportation services could see an 2018 2019f 2020f Pharmaceutical RON 13,906 4% increase as a consequence of the policies to stimulate consumption. Cosmetics & Personal Care RON 7,750 5% Romania 11.2% (7.0%) 12.2% (6.5%) 8.6% (6.8%) THE 2020 AD SPEND FORECAST Food RON 7,467 -1%

Previous forecasts in brackets from January 2019 For 2020 the projection for the country's gross domestic product (GDP) growth is about 3.6% and this should barely influence the Romanian media Drink RON 5,340 3% LATEST KEY AD SPEND TRENDS market. The composition of growth is expected to remain fairly stable, with Retail RON 5,274 -4% • In Q4 2018, PRO TV (our TV market leader) released a very aggressive private consumption still the main driver; the evolution of investment in sales policy for 2019, stipulating tremendous increases versus the 2019 will largely depend on the impact of policies introduced in December Household Care RON 3,524 4% previous year. Once the trend was set, it was soon followed by the next 3 2018 concerning the banking, energy and telecommunications sectors. TV audience providers on the market, so we ended up with an overall Telecoms RON 2,516 -4% market double-digit average inflation. In 2019 we’ll still have to cope with double-digit market inflation, mainly Finance RON 1,993 -1% • To fight ratings and affinities decline, broadcasters have massively resulting from the above-mentioned factors, but also from: the upward Motors RON 1,321 3% invested in local productions (mainly sports entertainment reality shows trend of the macroeconomic indicators, the TV market dynamics (in terms and series). of both GRPs and net spend), the limited GRPs inventory, the governmental Toys/ Sport Equipments RON 1,039 -2% • Besides buying terms optimization, advertisers struggle for elections and the significant investments in the production of local content. visibility/distinctiveness/premium-ness -> big opportunity to charge higher prices/surcharges for better placed, more creative “out-of–break” THE AD SPEND PERFORMANCE BY CATEGORY communication (association with premium shows, brands integration into content, etc.) In 2019, we expect that the 2018 main categories will remain similar to previous years, with “Pharma” in first position, closely followed by “Cosmetics & Personal Care” and “Food”. THE 2019 AD SPEND FORECAST We expect all categories to experience slight growth, except “Food”, “Retail”, 2019 will be an election year on two fronts: the euro-parliamentary and “Telecoms” and “Finance”. Due to a lack of monitoring data on Social media, presidential elections. The elections for the European Parliament will be held Search etc., and with some budgets moved from classical digital banners to in Romania on May 26th; the country has 33 seats in the European these media (especially FB), some categories should have a higher growth. Parliament, one more compared to the last elections.

The economic context The year 2019 will be full of challenges for economic development. Starting under the new fiscal changes adopted by the Government at the end of 2018 which strongly affect the banking and telecommunications sectors, there are expected supplementary increases in the price of utilities and a potential depreciation of the national currency.

DENTSU AEGIS NETWORK 82 ‘DIGITAL VIDEO CONTENT IS RECEIVING MORE AND MORE The biggest TV station in Romania (PROTV) has started to invest in a video INVESTMENT’ content platform with their local productions and is trying to build up a VOD platform. They have had big success with a local production series that is BY MEDIA also broadcast on TV. Even though there is DMP and audiences on the market level in Romania, the big publishers are investing in their own DMP – mainly Bluekai from Oracle. a. TV The RO TV market is still very fragmented and cluttered and the pressure on prices is huge. c. Mobile In the last 6 months, many retailers have been advertising their loyalty cards that also have a mobile app. This means that retailers want to have Trying to solve the massive sold-out issue they had to cope with last year direct access to customers and collect more data about them. The biggest and aiming for a loading of approximately 70%-75%, most stations have TV station in Romania, PROTV, is developing 2-3 mobile apps to access their significantly increased CPP deals as well as other elements impacting prices content. They are working to synchronize the video content from TV with (such as seasonality, daypart coefficients, premium intervals surcharges, the mobile apps. On the TV transmission they are inserting a sound that is etc.). Moreover, many stations adjusted their buying targets in line with the not audible by the human ear - the sound is captured by the mobile app and natural structure of the population. All of this is in the context of ratings and the user can see a personalized message based on the fact that he/she was affinities decreasing, on most targets. exposed to the TV advertising or product placement in a TV show.

In such an inflationary environment, it is obviously a big challenge for d. Radio media agencies to deliver consistently optimized buying terms that advertisers press for, year after year. Radio audience proves to be quite stable from one year to another, as people tend to show a strong loyalty to their Radio consumption routine. Main Radio networks continue to be flexible and open to special projects and In spite of all price increases, the overall market price level is still creative contests. Radio driven campaigns continue to engage listeners in significantly low compared to other countries, so Romania is still a cheap social media, which is the main pillar of long-term strategy. market to advertise in, on TV. There is no TV Programmatic buying yet.

e. OOH b. Digital The first OOH audience study is not yet available - the work is still in Digital video content is receiving more and more investment as advertisers progress.We expect to have the first data starting at the end of Q3 2019. are pushing for video advertising. Video prerolls are preferred mainly because of brand safety and viewability concerns and the need to capture The General Council of Bucharest City Hall adopted two decisions in August, the user’s attention. Big international media players Google and Facebook that have a significant impact on the advertising industry (a draft decision are now focusing more on the Romanian market. Google opened direct regarding local regulation of the placement and authorization of advertising, support for WAZE in Romania (mainly for big agencies and big clients). and the draft decision on the establishment of the Municipal Advertising Facebook has been intensifying its presence in Romania in the last 12 Company and the allocation of the public service regarding the organization months with more meetings and seminars for big advertisers and the main advertising to this new company). These two decisions have not yet media agencies. been implemented.

DENTSU AEGIS NETWORK 83 Romania Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 14.0 13.5 7.5 Television 64.6 65.3 64,7

Newspapers -20.0 -20.0 -15.0 Newspapers 0.9 0.7 0.5

Magazines -15.0 -10.0 -10.0 Magazines 1.1 0.9 0.7

Radio 5.0 5.0 5.0 Radio 5.1 4.7 4.6

Cinema 3.0 5.0 5.0 Cinema 0.5 0.5 0.5

OOH 6.6 5.0 5.0 OOH 6.3 5.9 5.7

Total Digital 10.0 15.0 15.0 Total Digital 21.5 22.0 23.3

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 10.0 15.0 15.0 Total Digital* 100 100 100

Display Banner 0.8 3.0 4.1 Display Banner 36.3 32.5 29.4

Online Video 8.4 14.0 12.2 Online Video 44.1 43.7 42.7

Social Media 7.9 13.1 12.9 Social Media 29.4 28.9 28.4

Paid Search 37.4 39.6 35.0 Paid Search 19.6 23.8 27.9

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ 22.2 37.2 30.2 Mobile^ 40.0 47.7 54.0

Programmatic Programmatic 17.8 25.7 24.4 32.0 35.0 38.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 84 RUSSIA: ‘Market growth slows down’

OVERVIEW OF THE TOTAL ADVERTISING MARKET RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Top 10 Categories 2019f Gross Local 2019f vs. 2018 PREVIOUS REPORT (JANUARY 2019) 2019f Currency Million YOY% Year on year % growth at current prices The previous forecast was lowered from 7% to 5% due to the current decline in TV ad spend. In Russia, TV is the media with the second highest Retail 51 218 7% 2018a 2019f 2020f share of ad spend (~40%). There was a decrease in TV ad spend at the Medicine 41 262 0% beginning of 2019. As TV viewing continues to decline, and audiences switch Russia 12.3% (12.0%) 4.5% (6.9%) 5.8% (6.7%) from traditional TV to other screens, advertisers are shifting their budget in Food 23 784 -5% favor of other media. Previous forecasts in brackets from January 2019 Cars 19 698 5%

LATEST KEY AD SPEND TRENDS AD SPEND PERFORMANCE BY CATEGORY Finance 19 537 7% • In Russia the economic situation is getting worse: GDP is slowing down, For several years, the category "Medicine" held a leading position in the Internet services 19 405 20% inflation growth has sped up, and real incomes are decreasing. This is Russian ad market. In 2018 it moved to 2nd place, showing a modest reflected in consumer activity, which has declined noticeably. In this growth of +2% and this year it has remained static with 0% growth. Retail Beauty 14 824 -7% regard, the growth forecast of the advertising market has been lowered, has become the new leader (7% growth in 2019), driven by increasing compared with January 2019. activity on e-commerce sites. The most actively developing category is Real Estate 12 121 -15%

• TV ad spend will decline by the end of 2019, while online video continues “Internet services”. It grew by 30% in 2018 and is forecast to grow 20% in Means of communication 14 082 5% to grow actively. 2019. Drivers of the growth are mobile apps together with websites. Soft drinks 12 174 -5% • There is development of new media segments in Russia: in 2018 Digital audio ad spend was 3 times larger than in 2017. CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD SPEND THE 2019 AD SPEND FORECAST Mobile is the only media that shows growth in terms of reach with the We are expecting the market to grow by 4-5% in 2019 compared to 2018. number of mobile users increasing in 2018 by +6%. TV viewing has The growth slowdown is associated with economic downturn, decrease in decreased dramatically (minus 18 minutes in 2019) and this has influenced real income, and an increase in non-media marketing activities. In 2018, the activity of advertisers, leading to a decrease in ad spend. the ad market was driven by World Cup FIFA 2018, hosted in Russia. The high spend in 2018 makes it a tough comparator year and this is another explanation for lower ad spends in 2019. The Internet is becoming the main growth driver and the share of other media is declining.

THE 2020 AD SPEND FORECAST We expect the stagnation of the ad market in the next few years – it will increase about 3-6% yearly. Digital will remain the main driver of growth.

*VAT is excluded DENTSU AEGIS NETWORK 85 ‘STAGNATION OF TV AND GROWTH OF OLV MARKET IN THE iv. Programmatic INCOMING YEARS’ Programmatic share in digital ad budget has grown from 5% in 2016 to 9% in 2019. BY MEDIA a. TV v. Paid Search TV ad spend is estimated to decline in 2019. It has been influenced by a Paid search has the highest share of total digital ad spend (more than decline in TV viewing, a decline in demand of advertisers and reduced 80%). It continues to grow actively. It is expected that the Paid search consumer activity. The largest drop is expected in the first quarter of 2019 market will slow down in 2019 but growth will remain high (15-20%). (~8-9%).

c. OOH b. Digital In 2018, the OOH advertising market showed moderate growth of 3%, Digital is the main driver of the Russian ad market. It showed the highest driven by a development of digital formats. Since 2017, the number of growth among all media segments in 2018 (+22%). The Digital market has digital billboards doubled in Russian cities. DOOH ad’s share in 2019 could become the largest media in Russia, surpassing television budgets, mainly reach 30% (of total OOH advertising spend) vs. 18% in 2018. due to the high share of performance investments. In 2019 the digital market is estimated to grow by 15-16%. d. Print

i. Online Video Advertising spend in Print has been declining since 2013. Print advertising shrunk by 12% in 2018, and it’s expected to decrease further in 2019-2020. Online video is the fastest growing media segment (~20-25% annually). This growth is due to the increase of consumption (mainly on mobile), as well as the development of legal video services, including TV channels and e. Radio mobile operators. In 2018, the consumption of legal video content increased Unlike traditional radio, which has shown zero growth in ad spend, by 5 times. digital audio formats have increased threefold in 2018. Among the growth drivers, experts point towards mobile device penetration and radio listening ii. Social Media on smartphones. In terms of audience streaming music services, they are The number of social network users is still growing in Russia. occupying a dominant position as the number of online radio listeners steadily increases.

iii. Mobile f. Cinema Growth of mobile audiences is stimulating the increase of its share in The share of total ad spend for Cinema is small (~1%). The segment grew ad spend which is estimated to reach 50% in 2019 (among total digital by 7% in 2018. It is forecasted to show zero growth in 2019. spend). The development of technologies (advertising in mobile applications, the appearance of new game and interactive formats) also have an effect on market growth.

DENTSU AEGIS NETWORK 86 Russia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 9.4 -4.6 0.2 Television 39.9 36.5 34.5

Newspapers -18.4 -14.5 -12.5 Newspapers 1.5 1.3 1.0

Magazines -7.5 -7.0 -0.4 Magazines 2.3 2.1 1.9

Radio 0.0 0.0 0.0 Radio 3.6 3.5 3.3

Cinema 7.1 0.0 0.0 Cinema 0.8 0.8 0.7

OOH 2.3 0.0 0.0 OOH 8.5 8.1 7.7

Total Digital 22.1 15.5 12.3 Total Digital 43.3 47.9 50.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 22.1 15.5 12.3 Total Digital* 100 100 100

Display 15.8 5.0 5.1 Display 14.8 13.5 12.6

Online Video 27.1 20.4 21.5 Online Video 5.3 5.5 6.0

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search 23.0 17.1 12.9 Paid Search 79.9 81.0 81.4

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ 36.6 25.8 23.1 Mobile^ 41.9 45.6 50.0

Programmatic Programmatic 35.4 25.8 23.1 7.5 8.2 9.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 87 SLOVAKIA: ‘Both economy and inflation drive media spending but a growth slowdown is forecast for 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context

The Slovak economy is currently doing very well - Slovakia is at the Top 10 Categories 2019f Gross Local 2019f vs. 2018 Year on year % growth at current prices forefront of European macroeconomic performance. GDP growth in 2019 is 2019f Currency Million YOY% estimated at 4%, unemployment is at a historical low and average wages 2018 2019f 2020f continue to rise. Retail 305.9 +25 However, Slovakia is heavily dependent on exports to EU countries, Prescription drugs 226.0 +3 Slovakia 6.7% (6.7%) 4.4% (5.7%) 4.4% (5.5%) therefore topics such as the GDP decrease in Germany and Brexit will play a major role in future economic development. Banks 177.9 -15

Previous forecasts in brackets from January 2019 The current estimation is that the economic growth trend should slow down in 2020 and 2021 to 3%. Automotive 123.7 -7 LATEST KEY AD SPEND TRENDS Telco services 111.6 -15 • Revision made to TV spend forecast where there is now a slightly lower Confectionery increase in spend based on actual trends and data. THE 2020 AD SPEND FORECAST 89.5 -10 • It is expected that print – both newspapers and magazines - will decrease • We expect 2020 to be very similar to 2019 in terms of media investments Non-alco beverages 59.6 +5 even more than what was predicted in the previous report. with slight YoY increase (4.4%). This increase will be mainly driven by TV inflation that is still expected to be very high next year. Detergents 43.8 -7 • As the Slovak economy is expected to slow down in 2020, this will also be Bakery 37.1 -7 THE 2019 AD SPEND FORECAST reflected in media spending. On the other hand, events like the Media spend is growing in 2019 in Slovakia based on Q1 data. This is thanks Parliamentary elections and the UEFA Championship will have a positive Hair cosmetics 33.7 -10 to three main factors: good economic development, a huge spend increase effect. in the retail sector, and media price inflation. Currently spend growth is at 5.6% and we estimate the total year increase will be 4.4%. This growth is driven mainly by Digital and TV. AD SPEND PERFORMANCE BY CATEGORY Retail is the biggest and fastest growing segment in Slovakia in terms of 2019 was influenced by important political and sporting events: Presidential media spending. This segment continues to grow significantly in 2019. The elections in Q1 and the EU Parliament election in Q2 mainly affected the second segment with constant YoY grow is Pharma, which is the 2nd biggest demand for OOH advertising. The Ice Hockey World Championship that took segment in Slovakia. Telco and Confectionery are segments that are losing place in Slovakia created a lot of hype during May and affected all media their historical top positions and are following a decreasing trend in media but mainly TV. investments.

DENTSU AEGIS NETWORK 88 ‘PROGRAMMATIC STILL ON THE RISE IN SLOVAKIA’ The demand of local advertisers for Online video (both desktop and mobile video) is still unceasing. Growth of online video is also driven by growing BY MEDIA mobile penetration (approx. 40% of all impressions) and mobile consumption of video content, mostly within social networks such as Facebook and Instagram stories. However the biggest part of video ad a. spend goes towards Google/YouTube. Local media suppliers are still putting The TV situation is still very complicated in Slovakia. The market is a lot of effort and investment into creating and producing relevant content dominated by two strong TV commercial groups and as the demand for TV and special projects. Journalists are also briefed to create short videos in space still exceeds available free TV space on their channels, there is double order to enlarge the video inventory where the video ads might be served. digit inflation announced every year to reflect this situation. Still in 2019, Valetin (local video platform of one of the biggest video suppliers/JOJ.sk) is TV space is almost always sold out, especially in prime time slots. So we enhancing its inventory as well. forecast this trend of high YoY TV inflation will continue into next year and TV spend will therefore still continue to grow, thus share of TV spend is not expected to be lower than 50% until 2021. CME group has admitted it is for d. sale in the Slovak market. Another growing category is Paid search, mostly thanks to its advanced set up features and options. There is also supposition that the growth of the Search category will continue due to “Voice search” however there is still a b. long journey and loads of work to do in terms of SEO of websites. The Print situation is very different from in 2018. There were several changes of ownership and as a result, app. 70-80% of print share is now concentrated to one publisher – News and Media Holding. The OOH situation e. is relatively stable, but there is pressure on the reduction of boards, mainly Despite the fact that it is really hard to measure the exact results of in cities. influencer marketing campaigns, we can say that 2018 was a huge year for influencer marketing. More and more advertising budgets are being allocated to it, and in 2019 we expect advertisers to show a similar c. approach. The fastest growing category within online ad expenditure is still programmatic buying. Slovak media vendors are still very active with the implementation of various SSPs and the monetization of its inventory. We can see the crucial development in willingness to sell out of different sorts of rich media formats, non standard formats, etc. Due to increasing mobile penetration, they do not forget mobile ads as well e.g. Interscroller. They are also ready to create and implement private deals connected with the sell out of its owned data, collected and segmented by many categories.

DENTSU AEGIS NETWORK 89 Slovakia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 7.5 3.8 3.7 Television 50.9 50.6 50.3

Newspapers -3.6 0.0 -11.1 Newspapers 4.4 4.2 3.5

Magazines -5.0 -5.3 -11.1 Magazines 6.1 5.6 4.7

Radio 0.0 -8.3 -9.1 Radio 3.9 3.4 3.0

Cinema 0.0 0.0 0.0 Cinema 0.3 0.2 0.2

OOH 3.4 0.0 0.0 OOH 9.7 9.3 8.9

Total Digital 13.1 12.5 14.7 Total Digital 24.8 26.7 29.4

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 13.1 12.5 14.7 Total Digital* 100 100 100

Display 1.3 4.3 -2.9 Display 51.3 47.6 40.3

Online Video 42.1 33.3 43.3 Online Video 17.5 20.8 26.0

Social Media 20.7 22.7 30.2 Social Media 23.5 25.6 29.1

Paid Search 25.0 12.9 25.0 Paid Search 22.1 22.2 24.2

Other incl. Other incl. 16.7 17.1 15.9 9.1 9.5 9.6 Classified Classified

Mobile^ 60.4 22.7 29.3 Mobile^ 39.0 42.5 47.9

Programmatic Programmatic 73.3 70.0 9.7 15.0 22.3 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 90 TURKEY: ‘The economic situation remains fragile in Turkey’

OVERVIEW OF THE TOTAL ADVERTISING MARKET The economic context Starting from September 2018, an economic recession period has started 2019f Gross Local 2019f vs. 2018 Year on year % growth at current prices Top 10 Categories 2019f and it is still going on. The market has not recovered from the shock Currency Million YOY% 2018 2019f 2020f following the sudden devaluation of the Turkish lira in August 2018. The currency was still losing value in Q1 2019. After a volatile annual GDP Food 545 1% growth in 2016 (+3,2%) and 2017 (+7,4), the Turkey economy grew just Turkey -5.0% (-5.0%) 0.0% (0.0%) 3.0% (3.0%) Retail 485 1% +1.6% in 2018 Q3 and a negative growth was recorded in the last quarter (-3,1%) of 2018, a negative growth for the first time in 10 years. Annual Communication 407 0% Previous forecasts in brackets from January 2019 country growth is now at the lowest level since 2008 levels, realized during Finance 399 -1% LATEST KEY AD SPEND TRENDS the global financial crisis. 2018 annual consumer inflation was over 20% and March 2019 levels remain at the same level. The jobless rate was also • The Turkey market is expected to experience a more moderate mood with Construction & Decoration 394 -1% recorded as 15%, one of the highest rates recorded in recent decade. calmed down political stress until the next presidential elections in 2023. Consumer confidence has also been falling. This started from July 2018 and Personal Care 329 0,5% • March 2019 local election results are still at the top of the country’s reached a 2018 year end index of 58%. agenda as political discussions continue and key macroeconomics have Automotive 270 -1% not balanced yet. The government has declared a couple of reform 247 packages after the currency shock in August 2018 but the positive instant THE 2020 AD SPEND FORECAST Tourism 0,5% effects of declared reforms may not be seen in the short term. 2019 is expected to be a balancing year after a long period with political Drinks 240 0,5% • The fluctuation of key financial indicators is still taking place and is having elections, difficulties in the economy and stress from geopolitical effects. Furniture & Home Textile 201 -0,5% an effect on the advertising & marketing industry. Unbalanced demand & The economy is expected to normalize and consumer demand may reach supply has resulted in noticeable drops in both Consumer and Producers desired levels. With a positive economic forecast, the ad market outlook is Price Index. The consumer confidence index has fallen to 2008-2009 for growth of at least 3% by the end of 2019 compared to 2018. global crisis levels after a long period of stability for a number of years. AD SPEND PERFORMANCE BY CATEGORY THE 2019 AD SPEND FORECAST Foods, Retailers, Cosmetics & Personal Care and Home Cleaning categories Global or local events to boost spend in 2019 were the top players in terms of media investments in 2018. These The first demoralizing effects of devaluation of the lira have been lost in the categories are also leading in terms of media investments in the first market, but it is still too early to say a recovery period will begin after the months of 2019. Finance & Banking, Electronics & white goods and Telecom first quarter of 2019. Recession in the economy is continuing. High sectors had significantly fallen behind the benchmark levels in media consumer inflation ratio especially sourced from major consumer goods like spending and underperformed in 2018 sectoral rankings. Automobile and Foods and Transportation is forcing consumers to save money. Record low construction industries are experiencing hard days due to the low demand sale statistics in key sectors such as Automobile and Construction have led of consumers to the category. to cuts in Marketing & Media budgets. Finance and Telecom brands are also hesitant about spending their media budgets or act with more caution. Handovers in media ownership, closed titles in press, unbalanced demand to TV along with increased withholding taxes over Social Media are setting new challenges to all players of advertising & media.

DENTSU AEGIS NETWORK 91 ‘FAVOURABLE LINEAR TV CONTENT, NEW OFFERS OF ONLINE VIDEO considered too politicized by many marketers. Snapchat has taken a A recently introduced 15% withholding tax on online advertising bought via AND ASSORTMENT OF SOCIAL MEDIA ARE KEY DRIVERS OF THE downfall in terms of usage as they have lost 26% of their active users in non-resident, cross-border service providers (most ad-tech falls in this TURKISH AD MARKET’ Turkey in the last quarter. This may be a result of Instagram’s integration of category) is expected to result in higher growth in 2019 as well. similar products. Being a professional network, LinkedIn is still more niche BY MEDIA for mainstream advertisers. However it now has more potential advertisers, e. Linear TV as the local sales house for LinkedIn ads lets advertisers have access to the TV is still a valuable medium with instant & wide reach building features self-service platform and revokes the minimum budget requirement. a. Online Video with efficient costs. Strong local content & formats are essential instruments OLV still drives growth for digital ad spends in the Turkish market. OLV to reach various target audiences for marketers. The demand for TV is as c. Search investments increased 31% in 2018 while overall digital investments expected with the volume fed by political parties, state-owned brands and increased 14%. YouTube is the most preferable video platform in Turkey, The overall Paid Search investment continues its steady growth, in spite of branding campaign of some key advertisers in the first half of 2018. covering many genres of content from music to influencers, etc. Netflix is the current economic conditions. For most of the advertisers, it becomes However due to unpredictable economic conditions which began in August, becoming bigger in Turkey, The Protector (locally produced content) was even more crucial to prioritize SEA activities since the economic conditions the majority of key TV advertisers have minimized TV budgets in the second aired and the second season is also available. They are also working on a are putting pressure on ROI goals. The market is absolutely dominated by half of 2018. The portion of TV in the media mix is still sustained by the second Turkish title. Besides Netflix, local video streaming platforms Puhu Google Search, as the closest competitor Yandex has only a fluctuation of demand coming from major local advertisers, new local brand launches, Tv and Blu Tv continue to exist whilst they are not making original content around 3% of search volume. This goes for both usage results and giant FMCGs’ launch campaigns or local retailers competing. Audience as much as they did in the past. Twitch is still on the rise – now there are investment into Search advertising technologies and new solutions. measurement for online TV content generated by nationwide TV channels is streamers that have over 1 million subscribers. Many clients are shifting Omnichannel strategies are being developed recently by an increasing in the pipeline. This measurement expansion can provide supportive their OLV buying to Programmatic with its benefits like Data collection, number of Retailers. Turkish media agencies should be more and more rationales for advertisers who are looking for an integrated screen planning reach control and detailed targeting. IG TV is embraced by local accounts as accurate on proving the real attribution of paid search to the offline approach. many of them utilize IG TV for longer videos. Besides all those video purchase decision. There is also an increased adaptation to shopping platforms, Mobile devices became the main medium to watch video. Service campaigns among retailers, as the campaign type grows more profitable providers offer contracts such as the unlimited usage of YouTube, Netflix, with new ways of improvement for higher return of advertising spend. etc. whilst 4.5G coverage is available across all regions of Turkey so people tend to consume on Mobile devices. d. Programmatic Advertising Programmatic ad spend is expected to continue its steady, double-digit b. Socıal Medıa growth in 2019, in line with digital ad spend trends. Publisher adoptions Despite the current economic conditions and the new limitations on rates have increased significantly; and the majority of digital inventory, audience data & targeting due to GDPR, Paid Social media activities including premium video and audio, are now available programmatically. continue at a steady growth rate. Considering over 88% of Turkey’s internet Publishers are also offering a wider range of non-standard formats (page population are active social media users (Jan 2019), it’s reach capabilities skins, native, out-stream video, etc.) driving growth. Although quality 3rd are nearly impossible for marketers to neglect. Facebook Inc owned party data is still scarce, major publishers have made investments into data platforms dominate social media in Turkey by a long way. More than 82% of management solutions and are able to offer their data bundled with the internet users are active on Instagram, Whatsapp, Facebook and 57% on inventory. Shifting spend from traditional buys into programmatic direct Messenger. Facebook Inc’s efforts to integrate all these platforms’ de- and private marketplaces have helped drive this growth as well. Advertisers duplicated unique user base and their offers of various, attractive and easy- generally have a positive attitude towards programmatic potential. However, to-use ad formats still ensure Facebook’s place in digital marketers’ privacy-related concerns and uneasiness with lack of transparency, activities. Among the other social media platforms, Twitter offers a reach of especially in the supply chain, remain major barriers. A limited number of 58% of internet users. Even though it is recognized as a popular platform, it advertisers have chosen in-housing to minimize the risk they associate with is not nearly monetized enough in Turkey, as the platform is often a lack of transparency and data/privacy regulations.

DENTSU AEGIS NETWORK 92 TURKEY Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 51.9 52.2 52.6 Television -3.5 0.5 3.9 Newspapers 9.7 8.1 7.0 Newspapers -27.0 -16.2 -11.0

Magazines 0.8 0.7 0.6 Magazines -31.3 -18.2 -8.9

Radio 2.8 3.0 3.0 Radio -5.0 4.7 3.0

Cinema -9.6 5.3 7.6 Cinema 1.1 1.2 1.2

OOH -1.2 0.5 8.4 OOH 6.1 6.1 6.4

Total Digital 3.5 4.6 4.4 Total Digital 27.5 28.8 29.2

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 3.5 4.6 4.4 Total Digital* 100 100 100

Display (Banners) 2.5 2.5 1.6 Display (Banners) 33.2 32.5 31.6

Online Video 9.4 11.4 10.3 Online Video 9.5 10.1 10.7

Social Media 5.6 7.0 6.6 Social Media 15.5 15.8 16.2

Paid Search 2.3 3.9 4.4 Paid Search 41.8 41.6 41.5

Other incl. Other incl. n.a. n.a. n.a. n.a n.a n.a Classified Classified

Mobile^ 6.5 7.6 5.9 Mobile^ 70.0 72.0 73.0

Programmatic Programmatic 21.0 19.0 17.0 8.0 9.0 10.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 93 North America Market

94 CANADA: ‘Even with the downward movement on 2018, the forecast for 2019 remains strong’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Top 10 Categories 2019f Gross Local 2019f vs. 2018 The forecast for 2020 is $13.5B local currency, with growth driven by the 2019f Currency Million YOY% Year on year % growth at current prices continued positive outlook for Television with stronger measurement tools entering the market, OOH with the growth and availability of digital outlets, 2018 2019f 2020f Retail 865 -2% and the overall digital landscape. The 2020 Tokyo Olympics are expected to provide a boost in summer viewing and advertising spend, along with Automotive 640 -8% Canada 2.7% (3.7%) 5.3% (5.2%) 5.7% (5.1%) counterprogramming efforts by competitive broadcasters. Finance & Insurance 545 -1%

Previous forecasts in brackets from January 2019 RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Entertainment 390 -5% PREVIOUS REPORT (JAN 2019) Restaurants 390 5% LATEST KEY AD SPENDS Changes in ad spend are directly impacted by the delayed availability of • Existing issues around brand safety and ad fraud are still very much 2018 actual spend (available in May 2019). Forecasted % change has not Food 350 -8% been impacted. apparent as advertisers are going to greater lengths to protect themselves Drug Products 293 12% and are increasingly willing to allocate media budgets to 3rd party verification platforms. AD SPEND PERFORMANCE BY CATEGORY Travel & Transportation 279 7% • While VAM (Video Audience Measurement) testing continues, the We expect ad spend within the top 10 highest spending advertisers to Telecommunications 261 5% scheduled release of an STB measurement solution has been put on hold decline with the largest decrease coming from Automotive (National and Local Automotive Dealers 223 -16% while options are being reviewed. local dealers). We project significant growth from the Travel/Transportation • Following cannabis legalization in October 2018, companies are still trying and Telecommunications categories. to navigate Health Canada’s rules regarding marketing, taking risks and displaying creativity in how they deploy the large budgets at their CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE disposal. This category is expected to grow as distribution has extended to retail locations as of April 2019. OF AD SPEND Large brands are investing in personalizing the conversation and we are witnessing the age of conversations with devices. These brands are also THE 2019 AD SPEND FORECAST putting more of an emphasis on developing content, looking to create The total Canadian ad spend forecast for 2019 has a revised estimate of social-worthy moments and experiences. Another consumer trend $12.8 billion local currency, adjusted based on actualized figures for 2018. witnessed is the major digital developments in Canada’s e-commerce space Even with the downward movement on 2018, the forecast for 2019 remains driven by the grocery/food category. strong, with growth expected to continue at a rate of 5.2%.

Global or local events to boost spend in 2019 The success of the Toronto Raptors in the NBA Playoffs to date has not offset the loss of advertising with Canadian teams out of the NHL Playoffs, however it has sustained audience interest in major leagues through to the end of May. In addition, a federal election will occur on October 21st 2019, with spending to increase in the months leading up to that date.

DENTSU AEGIS NETWORK 95 ‘AUDIENCE BASED AUTOMATED BUYING PLATFORMS (AKA c. OOH PROGRAMMATIC TV) HAVE STARTED TO PERMEATE THE LANDSCAPE’ The maturation of the Digital OOH market continues to be the focus of this area of the marketplace, with ties to radio and mobile driving the focus on BY MEDIA data driven activations. Programmatic, delivering audience buying and dynamic creative opportunities are at the forefront, with media owners a. TV including Addressable TV converting existing properties to digital formats. Smarter targeting and measurement remain at the forefront, with broadcasters continuing to focus on providing audience segmentation d. Print products across their properties. As part of this trend, audience based Over the last couple of years we have seen large cross media owners divest automated buying platforms (aka programmatic TV) have started to their holdings of print titles, selling to dedicated owners, a trend that permeate the landscape, however the scale is small and has had little continued in 2019 with Rogers titles moving to St. Joseph’s media, effective impact on traditional trading dynamics. This is expected to grow, 2020. contributing to our projected increase in Television ad spend over the next 3 years. The potential game changer could be the impact of the Bill S-228 which will limit “unhealthy” food advertising to kids. The scope of this Bill is e. Radio still to be determined, however at it’s maximum it would fully restrict the exposure of food, drink products across all media channels, significantly The impact of digital audio is expanding the reach of terrestrial radio – the changing the advertising landscape, and having a heavy impact on audio universe has expanded in time spent by 25% over the last 6 years for Television. Adults 18+. Nearly 1 in 5 Canadians have a smart speaker, spurring more audio listening at home, including AM/FM and podcasts, allowing radio to remain relevant in the Canadian media landscape. b. Digital The issues of consumer privacy and data security remain at the forefront, f. Cinema along with brand safety and ad fraud as advertisers continue to focus on protecting themselves by allocating media budgets to 3rd party verification The cinema landscape has seen some movement with the addition of platforms. Brands are also putting more emphasis on developing content, cinema chains to an OOH company’s network (UBMedia added Landmark and looking to create social-worthy moments and experiences. and Imagine Cinemas), pulling cinema into the Digital OOH landscape as a reliable, interruption-free, contextual environment. The impact of the legalization of cannabis remains an unknown factor, as regulation around advertising continues to evolve and build guardrails around the market.

DENTSU AEGIS NETWORK 96 Canada Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 2.0% 1.0% 3.0% Television 25.1% 24.1% 23.4%

Newspapers -18.0% 0.9% 1.0% Newspapers 12.1% 11.6% 11.1%

Magazines -22.9% 1.0% 1.0% Magazines 2.5% 2.4% 2.3%

Radio 3.0% 0.9% 1.1% Radio 5.3% 5.1% 4.9%

Cinema n.a n.a n.a Cinema n.a n.a n.a

OOH 5.1% 9.9% 7.0% OOH 6.0% 6.2% 6.3%

Total Digital 11.6% 8.6% 8.5% Total Digital 49.1% 50.6% 52.0%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 11.6% 8.6% 8.5% Total Digital* 100% 100% 100%

Display 3.8% 13.0% 15.1% Display 29.3% 29.2% 29.4%

Online Video 29.0% 23.4% 19.6% Online Video 19.5% 21.2% 22.2%

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search 7.5% 10.1% 12.0% Paid Search 48.7% 47.3% 46.4%

Other incl. Other incl. 0.0% -0.9% -0.9% 2.6% 2.2% 1.9% Classified Classified

Mobile^ 38.5% 24.3% 13.7% Mobile^ 63.7% 69.9% 71.0%

Programmatic Programmatic 18.1% 27.1% 22.6% 41.0% 46.1% 50.4% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 97 US: ‘US ad spend continues to grow, as advertisers focus on targeting’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 ADSPEND FORECAST Retail • TV is expected to grow by 1.3% versus 2019. The majority of this will be As consumers habits constantly change, advertisers work to find new ways Year on year % growth at current prices driven by the Olympics, which brings in around $1 billion, and the to drive in customers. Digital outpaces forecasts as brands continue to rely presidential election, which mainly effects Local TV in key markets. We will on the strength of mobile commerce. The importance of brand awareness on 2018 2019f 2020f also see money shift to Advanced TV. Advanced TV being defined as Social Media outlets such as Instagram continues to be a key way to gain addressable, Programmatic TV, Online Video, audience buying tools as well new customers. TV remains significant, with more retailers looking to create US 3.4% (3.4%) 3.1% (3.0%) 3.6% (3.6%) as OTT. meaningful messages to help drive in consumers.

Previous forecasts in brackets from January 2019 • Digital continues to thrive, with an expected growth of +11.2% in 2020. Advertisers will continue to focus on content marketing and delivering Pharma & Healthcare LATEST KEY AD SPEND TRENDS quality material to consumers. Advertisers work towards making deeper Pharma & Healthcare are continuing to blossom, growing +5% YOY, with the • While TV budgets remain stable (+0.3% in 2019), advertisers continue to connections through targeting more precisely their key audience. While bulk of spend still going to traditional TV. Print spend continues to slow with push for better measurement metrics that deliver increased accountability. general audience content is still important, industry experts believe that a reported decline of almost $100 million. The continued need for brands to More networks are announcing attribution solutions to directly relate TV data driven advertising will yield improved results. speak directly to consumers grows, as consumers take more control of their campaign exposure through traditional buys, audience buys, and health. Advertisers are using both Social Media and Digital Video to help addressable. The reality of ratings erosion is putting pressure on the cost RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE support and educate patients directly. As companies modernize how they to buy TV. PREVIOUS REPORT (JANUARY 2019) communicate with consumers, pharmaceutical companies have to make • Digital continues to grow (+12.5% in 2019), with almost 40% of the total • We do not see many changes to the overall spending from the previous sure to continue to follow the regulations put in place by both the FDA and US ad spend going to digital. Social Video is driving growth, with live forecasts for 2019 and 2020. Digital Video spend will grow, as well as shift FTC. Video growing in the Social space, and being leveraged more by Social to audience based buying. OTT will have the highest increase in spend and Influencers. growth potential, as new players enter the market. CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD • Brand Safety continues to be one of the leading forces in the Digital SPEND Marketplace, which means that recent issues within the digital duopoly are AD SPEND PERFORMANCE BY CATEGORY • As consumers continue to cord-cut and move from linear TV to putting added pressure on both Facebook and Google to acknowledge and Automotive connect/smart TV and OTT viewing (67mins per day), advertisers begin to rectify these issues. With about 300 hours of video uploaded every The US Auto Industry remains the largest advertising sector in 2019, and consider new ad models and formats that are more aligned with the on- minute, YouTube has continued to push for a sustainable solution to demand viewing experience. This includes utilizing user metrics and monitor ad supported video. although the market forecast remains static through 2020, there is a shift in spend. Automakers are under increased financial pressure, and are seeing consumer targeting based on what programs they watch as well as budget decreases to help afford the future of automation. There has been a focusing on business outcomes as a metric of success. THE 2019 ADSPEND FORECAST rise of OTT video ads, which shows that automakers are acknowledging the • As mobile usage rates continue to rise (235mins per day), marketers are TV budgets remain flat, with no major sporting events (other than the potential that cross-platform spending can have for a brand. expanding targeting strategies and utilizing new technologies, such as annual events) or major elections in 2019. Due to continued supply geo-marketing, where advertisers are able to serve digital ads to mobile pressures, the upfront marketplace remains critical for advertisers. users within a predefined geographic area, in the hopes to spark interest CPG (Packaged Foods, Beverages, Toiletries, etc.) • Digital Video continues to grow and create different viewing outlets. OTT in that brand and produce higher engagement and brand awareness. Spend on CPG products continues to grow for both TV and Digital. and Addressable allocations continue to see money flow as consumer • As Social Media continues to gain in popularity (142mins per day), Advertisers continue to view linear TV, and more broadly video in general, viewing habits are changing, and the ability to better use audience, data, advertisers are beginning to recognize that posts are not a one-way as a consistent and effective sales driver. CPG companies are experiencing and addressability continue to scale. conversation. Brands are focusing on effective social listening to significant business disruption from the increasing amount of ecommerce, • Digital Ad Spending is still delivering double digit growth. This is largely understand what consumers are looking for in both their product and as more products are going directly to consumers either through due to the growing amount of Video on Social Media. Twitter is one competitors to help build a more personal relationship with their intermediaries such as Amazon, that provide the logistics for the brand, or platform that has benefited from Video Advertising, with ad revenue consumers. There has also been a rise in Direct to Consumer brands that through brands opening their own online stores. predicted to be up 11%. are solely advertising and selling products via Instagram.

DENTSU AEGIS NETWORK 98 ‘WITH THE EXPLOSION OF AVAILABLE DATA, THERE CONTINUES TO i. Online Video v. Paid Search BE A PUSH TOWARD AUDIENCE-LED BUYING DECISIONS.’ Online Video is being largely driven by OTT and Social. Specifically, growth With search spending slowing in growth (+11.1 in 2019 vs 11.5% in 2018), on Hulu and Roku has exceeded expectations, and Video on Facebook and advertisers are looking for new SEO strategies to help target consumers. BY MEDIA Instagram continues to steal share ahead of expectations. Amazon’s growth Amazon is one of the key players to help keep search spend up (combined in Video has inspired other e-commerce players to expand efforts, with Google’s usual strong performance) due to the strength of their a. TV including Addressable TV specifically Walmart, via their proprietary streaming video platform, Vudu, product search. Almost half of all product searches are now through which hosted their first-ever Digital Content NewFronts event. Amazon, with a growing percentage of those searches ending in consumers The linear TV market continues to see ratings erosion across all dayparts clicking on sponsored search results. and demographics. The decline in linear ratings coincides with an increase in OTT viewership in both AVOD (ad supported video on demand) and SVOD ii. Social Media (subscription video on demand). The trend in growth of viewership in non- 2019 has exceeded expectations, with an expected growth of +25.8% and linear platforms will continue. While Hulu and Roku are the dominate ad with a large portion of that growth coming from both Instagram and Twitter. supported OTT platforms in terms of ad revenue, many traditional linear Meanwhile, the once powerhouse, Snapchat, is now facing major declines in partners are handling linear audience guarantee deficiencies by delivering both revenue and users. In order to help drive user engagement, Snapchat advertisers impressions on-line and on OTT. launched a new gaming platform in March in the hopes to bring in additional revenue and combat slowing growth among its core audience, as well as With the explosion of available data, there continues to be a push toward bring in an extended audience network. audience-led buying decisions. This comes in the form of actual transactions on audience guarantees, audience-led optimization of partners iii. Mobile and programs, as well as more money flowing to addressable TV partners. Mobile continues to flourish (+18% in 2019) as users become more reliant Although advertisers are interested in addressable TV, it is still small, but on their devices. (13) Within the Mobile space, growth is driven by Display shows a great deal of potential. and Search, due to the increasing amount of mobile commerce. Advertisers are also utilizing reward video ads, where consumers opt-in to watching a With the Disney/Fox merger officially completed and the expected launch of video in exchange for some type of reward when the ad is viewed to Disney+ (an OTT platform) in late 2019, Disney/Fox will be solidified as a TV completion (this is most prevalent within gaming apps). (18) All eyes are on powerhouse. This merger also means that Disney is now the majority owner Quibi, a mobile-first media platform for high-end short-form content with of Hulu. The AT&T and Time Warner, now WarnerMedia, merger has also high profile management, set to launch in 2020 that will publish over 100 officially been confirmed. pieces of original content weekly.

b. Digital iv. Programmatic Brand Safety issues have continued to plague both YouTube (Google) Programmatic continues to take spend from direct buying, growing 17.1% in and Facebook, and the monetization of this inventory. As the duopoly still 2019. A large share of this growth has gone towards Mobile buys, due to struggles to get past these issues, Twitter announced 13 new video deals key players Google and Facebook. Both OTT and Connect TV ad dollars are that will not only create a brand-safe video destination but also focus on the also beginning to shift programmatically as well, as new measurement tools use of quality media partners to help create curated video content. One of have been released to help Advertisers target consumers more accurately. the main issues YouTube has faced when rectifying these issues is the sheer Although Programmatic is thriving Digitally, it has yet to establish itself at amount of video that is uploaded daily (300 hours of video per minute). scale in any other media type. Overall, premium video across many partners is on the rise.

DENTSU AEGIS NETWORK 99 c. OOH

OOH is expected to grow +2.6% in 2019. This increase is due to the 1) https://content-na1.emarketer.com/these-three-industries-have-huge-potential- increasing amount of formats such as billboards, street furniture, transit, online and place based ads. Digital OOH continues to be a driving force, 2) Kathleen Brogan representing almost 30% of revenue. Programmatic OOH is expected to 3) Diana Anderson make a bigger impact with brands embracing dynamic, creative and more 4) https://content-na1.emarketer.com/us-automotive-industry-statpack-2018 data-led OOH planning. (14) 5) https://content-na1.emarketer.com/us-2018-holiday-season-review-and-2019- preview d. Print 6) Deva Bronson Print advertising investment in the US continues to struggle (-9.3% in 7) Cara Lewis & David Sederbaum 2019). Magazine readership gets a slight bump, as digital readership and 8) https://www.forbes.com/sites/forbesagencycouncil/2019/02/14/five-digital- engagement cross channel is up 23% (Social and Video). We are seeing marketing-trends-for-2019/#7874e952a802 more consumers engaging with magazine content in social and video. Apple 9) https://www.entrepreneur.com/article/326236 News recently announced the purchase of TEXTURE, creating a newsstand with a monthly subscription of $9.99 for unlimited access to magazines 10) https://digitalmarketinginstitute.com/en-us/blog/8-digital-marketing-trends-to- watch-out-for-in-2019 online. (2) 11) https://content-na1.emarketer.com/the-future-of-retail-in-2019 12) https://content-na1.emarketer.com/digital-ad-spending-benchmarks-by- e. Radio industry-2018 Network Audio finished 2018 +1% in expenditures YOY. Networks are 13) file:///C:/Users/azak/AppData/Local/Microsoft/Windows/INetCache/Content.Outl reporting that this trend is continuing so far into 2019 with the marketplace ook/ZU3KEZUT/US_Digital_Ad_Spending_2019_eMarketer.pdf being +0.3%. Innovation and demand continue to be in the Podcast space 14) Jess Freely as the market seeks additional avenues to reach consumers. As a result 15) https://content-na1.emarketer.com/q1-2019-social-trends vendors are searching for and developing great content to supply that very need. Accountability/ROI programs provide smart data-based solutions 16) https://content-na1.emarketer.com/us-programmatic-ad-spending-forecast- update-2018 using an arsenal of full-service research solutions to reach the right consumer with the right message, and prove impact is being utilized across 17) https://www.nielsen.com/us/en/insights/news/2008/in-praise-of-in-cinema- advertising.html our entire client roster. (3) 18) https://content-na1.emarketer.com/mobile-video-advertising-2019 19) Thomas Maiorano f. Cinema 20) https://www.forbes.com/sites/legalentertainment/2019/02/27/att-and-time- Cinema remains small but mighty, growing 6.5% in 2019. This growth can warner-merger-no-time-out/#66594b903fd1 be attributed to box office hits, such as Avengers Endgame, and viewers 21) https://www.vox.com/culture/2019/3/20/18273477/disney-fox-merger-deal- willingness to pay for high quality content. Cinema has remained a safe way details-marvel-x-men for Advertisers to spend money since they literally have a “captive” 22) http://fortune.com/2019/01/23/data-sheet-meg-whitman-youtube-quibi/ audience, where there are limited distractions. One of the main challenges that Advertisers face is creating content that is as stimulating as a movie 23) https://www.axios.com/twitter-unveils-new-targeted-video-strategy-13ca0cae- 2208-4c03-a8bd-1f95d0a581ab.html trailer to help keep viewers engaged. (17)

DENTSU AEGIS NETWORK 100 US Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 1.2 0.3 1.3 Television 36.4 35.4 34.6

Newspapers -10.4 -11.0 -9.9 Newspapers 7.9 6.8 5.9

Magazines -6.0 -7.2 -6.2 Magazines 8.3 7.5 6.8

Radio 1.0 0.3 0.2 Radio 9.0 8.8 8.5

Cinema 5.0 6.5 4.9 Cinema 0.6 0.6 0.6

OOH 2.7 2.6 2.4 OOH 3.8 3.8 3.8

Total Digital 13.5 12.5 11.2 Total Digital 34.0 37.1 39.8

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 13.5 12.5 11.2 Total Digital* 100 100 100

Display Banner 8.0 7.5 6.3 Display Banner 28.3 27.2 26.1

Online Video 25.3 19.4 15.8 Online Video 18.4 19.6 20.5

Social Media 30.2 25.8 26.2 Social Media 5.6 6.3 7.2

Paid Search 11.5 11.1 9.3 Paid Search 39.9 39.6 39.2

Other incl. Other incl. 6.1 5.2 4.6 7.9 7.4 7.0 Classified Classified

Mobile^ 27.2 18.8 15.6 Mobile^ 67.2 71.5 74.8

Programmatic Programmatic 21.0 17.1 13.6 68.2 71.6 73.6 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 101 Asia Pacific Market

102 AUSTRALIA: ‘In 2019, Advertisers will be balancing the opportunity that technology presents with the uncertain outlook of the economy, consumer and business confidence’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2019 AD SPEND FORECAST RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE • 2019 is expected to grow by 1.9% to $16,618m, which is a modest PREVIOUS REPORT (JANUARY 2019) Year on year % growth at current prices increase in overall spend from 2018. Majority of the growth is expected to • We are forecasting an increase of 1.9% and 3.2% for 2019 and 2020 come from Digital and Video channels. respectively. The revised down estimate for 2019 is attributed to a slow 2018a 2019f 2020f • 2019 started off slow with a decline in advertising revenue for January and start to the year ($947M spent YTD), to which is expected to be further February based on the Standard Media Index (SMI), tracking (7.6%) on compounded in H1 period given the election period. Australia 6.6% (3.7%) 1.9% (2.4%) 3.2% (2.6%) LY. All channels are down YoY, Newspapers and TV the most notable at • SMI data for January and February 2019 saw a drop of 7.6% compared to (10.9%) and (16.1%) respectively. Market softness a combination of not the same period in 2018. Most notably in February 2019, SMI data

Previous forecasts in brackets from January 2019 only macro conditions but also the lack of major events scheduled vs. revealed Australia's media agency market went through the lowest 2018’s Winter Olympics. percentage decline in ad demand seen since 2009. February 2019 ad LATEST KEY AD SPEND TRENDS • Both the federal and NSW state election will occur in the first half of 2019 spend slumped by 8.3% compared to the same time last year. TV was a major contributor to the decline in February spend with a drop of 11.4% • Our original forecast was for an increase of 2.4% for 2019, however with which is expected to drive ad spend for the government sector. The in contrast with 2018. such a slow start to the year we've revised this to 1.9%. Based on SMI government sector had a jump in spend of 9.6% for Jan-Feb 2019 when figures, the media agency market was down 7.6% for Jan-Feb 2019 compared to last year. While other major sectors like Automotive, • By looking at Nielsen category data for the first couple of months of 2019 compared to last year. All media channels had a decline in spend. These Entertainment & Leisure, and Communications saw decline in spend for (January and February), seven of the top ten categories posted a decline figures were taken into consideration when the 2019 forecast was revised. the first couple of months of 2019. in spend when compared to the same period last year. The largest decline However, moving into 2020, with increased digital growth set to continue, • The release of the federal budget had little or no impact on the media and in spend came from categories such as Real Estate (19.7%), Finance estimates were revised upwards from 2.6% to 3.2%. marketing sector. With the exception of a modest $60 million increase in (14.4%) and Insurance (20.7%) which all posted double digit declining growth. • While Australia is still a relatively buoyant economic state, the reality for funding for exporters – a grant scheme which subsidises small and the majority of Australians is a stagnant outlook for wages for at least medium exporters’ marketing expenditure. • This was then taken into consideration when the 2019 forecast growth another 18 months, decreasing ‘wealth’ as a homes across Australia lose • The financial sector is expected to pull back on any major campaigns in was revised. The forecast of 2019 will see modest growth and it will market value and increasing debt as Australians are forced to dip into the first half of 2019 as a result of the Royal Commission. The second half largely be driven by three categories. Government, their savings. A negative climate for consumer spending has been evident of 2019 will see major campaigns centred around rebuilding consumer Travel/Accommodation, and Retail started the year off strong, all posting in the market investment across the first two months of this year. trust. growth of 9.6%, 7.4% and 0.8% respectively for Jan-Feb 2019 when compared to the same time last year. • Australia had a federal election in May 2019. Both major political parties faced voter disillusionment. This made for significant election and THE 2020 AD SPEND FORECAST • The total market ad spend for 2019 is looking uncertain with slow growth and cuts on various media channels. government spending. • The ad spend market in Australia is expected to grow by 3.2% to • Innovation across media networks presents a significant opportunity for $17,151m in 2020. • Higher business conditions (an index based on sales, profits and employment) tend to lead to increased investment in advertising, advertisers. Investment in streaming services on demand and broadcast • This increase is in part attributed to increasing share of digital and the however business conditions have fallen to the long-term average, after a video on demand will attract revenue and continue to drive digital growth. growth forecast for that channel This will impact the overall growth of the market as digital share continues period of being well above average. • The Tokyo Summer Olympics will also have a positive impact. The Tokyo to accelerate. • Due to the slow start in 2019, there is very little momentum pushing for Olympics will attract major brands due to the compatible time zone with further spend especially with very few major events besides the state and • MCN launched a new 6 second TV ad format the first time an advertiser the Australian market. The popular events tend to be shown when most federal elections. Brands might increase spend if the government does go can run the short-length format within a custom made ad structure for Australians are watching and with connected devices there are more through with a “cash splash” one time payment to Australians. linear television. opportunities for brands to target consumers. Channels that will benefit from the Olympic games include TV, digital and print. • Print will continue to struggle with major declines in spend. Magazines will suffer more with double digit decreases in spend expected for both • The US 2020 election will play a small role – the last US election had an 2019 and 2020. impact on the Australian trade agreement.

DENTSU AEGIS NETWORK 103 AD SPEND PERFORMANCE BY CATEGORY Banks held back on spend near the end of 2018 but we are anticipating them to be more active in the second half of the year with campaigns centred on rebuilding trust.

Real Estate: The Real Estate sector is expected to underperform in 2019 with a decrease in spend by 5.2% to $560m and this is largely due to pressure coming from falling house prices.

Communications: The communication sector is expected to grow by 14% in 2019 to $556m. The sector will see a boost from the 5G hybrid launch in Australia. The telecommunication brands are expected to produce campaigns around the innovative service and to educate the public. Australia’s largest telco companies have already invested $853 million to secure platforms and infrastructure to support the high speed 5G networks.

Entertainment & Leisure: The Entertainment & Leisure sector is forecast to decrease by 7% to $512m in 2019. Household disposable income is weak and Australians still have high levels of household debt. The sector is Retail: Advertising in Retail is expected to increase by 2.9% in 2019 and expected to struggle throughout the year. will still be the number one category in terms of ad spend. Consumer spending on non-discretionary items has fallen and this has made brands Insurance: The Insurance sector is expected to grow by 2.8%, reaching a hold back on advertising in the first half of the year. total of $352m. This is a modest increase of $10m from 2018 and it’s ultimately due to brands defending market share. The Royal Commission’s Travel: The travel sector is forecast to increase by 10.1% or $91m in 2019. investigation into Australian banks also had few recommendations that will A strong performance this year is expected due to the depreciation of the impact insurance companies. AUD versus USD. The Ministers for Trade, Tourism & Investment are also investing in new campaigns to boost regional tourism in Australia. Services: The Services sector will continue to see a decline in spend which is in-line with previous years. It is forecasted that there will be a 5.0% Motor Vehicles: Automotive is forecast to decrease by 3.0% to $872m in decrease in spend to $318 for 2019. 2019. The sector has struggled with new car sales and 2018 saw an overall drop of 3% in 2018 versus 2017. This will impact how brands spend in 2019 Government: The Government sector will see a large increase in spend due as consumers are more cautious of purchasing large ticket items. to the federal and state elections occurring in the first half of 2019. An increase of 12.5% to $311m is forecast which pushes the Government Finance: The finance sector is expected to grow by 4.9% to $608m in category into the top ten of total ad spend. Channels that will benefit from 2019. Banks were under intense scrutiny by the Royal commission and have the elections include TV, print and radio. evidently lost trust amongst Australians.

DENTSU AEGIS NETWORK 104 ‘DIGITAL NOW TAKES THE MAJORITY OF ADVERTISING SPEND WITH ii. Mobile e. Radio FURTHER GROWTH BEING DRIVEN VIA ONLINE VIDEO AND MOBILE’ Mobile is expected to grow by 17.6% in 2019 and will continue to dominate Radio will benefit from both the state and federal election. The channel will over desktop. Mobile share is 53% versus desktop 47%. have a modest increase of 0.6% in ad spend. There has been innovation BY MEDIA The initial release of 5G will play a pivotal role for mobile – 5G will enable among this particular platform with Commercial Radio Australia (CRA) mobile technology to process content a lot quicker for data hungry users, it investing heavily in promoting radio as a viable channel in media plans. It a. TV including Addressable TV will also reduce latency – this advancement will allow brands to create has also made buying radio easier through an automated holding system and listening even more accessible via RadioApp, DAB+, FM or AM, in the TV spend is projected to increase by 0.2% in 2019 accounting for 21.8% of innovative content. car, on the phone and through smart speakers. total ad spend. Networks are becoming more innovative and creating new ad products to c. OOH enhance the user experience. For example, in January 2019, Nine added The OOH market continues to run on a two-speed Out-of-Home economy. f. Cinema dynamic ad insertion into live streams for their 9Now product. Contributing Due to the limited supply of premium LF static, there are long term Cinema is expected to grow by 2.7% in 2019. Major blockbuster films will to the increase in advertising revenue, is the growth of broadcast video on laydowns within annual commitments, particularly for Large Format (LF) be launching in cinemas such as the remake of Lion King, Aladdin and demand (BVOD). This has been aided by the migration of audiences to static. Dumbo. All are family friendly films that will attract young and new platforms such as Foxtel Now, 9NOW, 7Plus and 10 Play. In contrast there has been a shortening of booking lead times because over audiences but also those who watched the originals film when they were a 50% of the OOH market revenue is now digital which can be effectively child. b. Digital scheduled on shorter lead-times. Digital continues to drive advertising revenue growth – and is expected to Major tenders over the next 12 months, including the long-delayed City of increase by 6.5% in 2019 representing roughly half of total media spend Sydney, will likely increase digital inventory when new contracts come into (53%). There has been double digital growth in previous years however play. However the significant pace of digitisation over the last few years is growth is flattening out with only single-digit growth forecasted for 2020 expected to slow over these next few years. (4.8%). Australians are spending large amounts of time online and hold The early months of 2019 have reflected a slow-down attributed to some various connected devices allowing marketers more opportunities for brands holding back in relation to the Federal Election in H1. OOH has not screen-time. According to IAB Australia, Australians now spend close to 100 seen the same stalling of growth as other media, however the overall hours a month across desktop, mobile and tablets. market and some key OOH categories such as Automotive sales decline are expected to reduce OOH growth from 11.2% in 2018 to 7.5% in 2019. i. Online Video Online video is a key driver for digital spend and is expected to increase by d. Print 22.5% in 2019. Video is the golden child of digital with strong momentum Print will see double digit decline in spend for 2019. Newspaper is expected making up a large proportion of general display. This positive trend is to decrease by 12.5% to 1,451m while magazine is forecasted to decrease backed by publishers as brands continue to seek premium environments in by 29% to 171m. which to showcase their offerings.

DENTSU AEGIS NETWORK 105105 Australia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -2.5 -2.1 -1.4 Television 22.3 21.4 20.4

Newspapers 5.5 -12.5 -9.6 Newspapers 10.2 8.7 7.7

Magazines -18.2 -15.4 -9.8 Magazines 1.5 1.2 1.1

Radio 3.6 -1.0 0.2 Radio 7.3 7.1 6.9

Cinema 0.2 -4.4 0.8 Cinema 0.8 0.7 0.7

OOH 11.2 7.5 7.5 OOH 6.6 6.9 7.2

Total Digital 12.4 6.8 7.3 Total Digital 51.4 53.9 56.0

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.4 6.8 7.3 Total Digital* 100 100 100

Display Banners -6.3 -5.3 -4.6 Display 18.0 15.9 14.2

Online Video 53.9 28.4 24.4 Online Video 20.0 24.0 27.9

Social Media n/a n/a n/a Social Media n/a n/a n/a

Paid Search 10.4 2.2 2.4 Paid Search 44.0 42.1 40.2

Other incl. Other incl. 6.3 6.5 6.4 18.0 17.9 17.8 Classified Classified

Mobile^ 30.8 22.4 15.1 Mobile^ 48.0 55.0 59.0

Programmatic Programmatic n/a n/a n/a n/a n/a n/a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 106 CHINA: ‘Cautiously confident but not overly optimistic’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Global or local events to boost spend in 2019 The Telecommunication vertical obtained the highest growth rate of 34.3% • Local economic growth is backed by the second Belt and Road Forum for powered by a 22.0% increase in TV and 68.7% growth in Digital. Year on year % growth at current prices International Cooperation and the Beijing World Horticultural Exposition Mobile phone and Telecommunications services are the major sub- 2019 in Beijing. The Second China International Import Expo will be held categories driving the growth of Telecommunications. 2018a 2019f 2020f in Shanghai again with a positive impact predicted for business in the city. Beverages achieved the second fastest growth of 20.8% , driven by rise of • 2019 will see a significant volume of sporting events that will have a of 44.3% in Digital and 70.9% in OOH. Baijiu contributed 102.1% growth in China 7.7% (7.8%) 5.4% (7.0%) 6.9% (6.4%) positive impact on ad spend, including the: AFC ASIAN CUP 2019, World OOH. In digital channels, Carbonated drinks contributed 82.1% and the Table Tennis Championship 2019, Women's Football World Cup 2019, FINA highly competitive Tea brands saw a surge of 127.5%. Previous forecasts in brackets from January 2019 World Championship 2019, BWF World Championship 2019, FIBA World Beauty & Personal Care were in the #3 position with a growth rate of Cup China 2019, and the FIVB Women's World Cup 2019. These sporting 20.1%, driven by 64.0% growth in Digital and 44.7% growth in OOH. Skin LATEST KEY AD SPEND TRENDS events will help increase the ad spend in sports related categories like care and Hair care are the major drivers in OOH with separate growth rate drinks and clothing. • For 2018, the total ad spend growth rate was 7.7%, slightly lower than of 63.7% and 53.6%. In Digital, Cosmetics, Skin care and Hair care the previous forecast, largely due to the dramatic drop of TV spending in contributed increases of 107.2%, 62.2% and 51.9%. the 4th quarter – falling 20.7%. Consequently TV year-on-year growth is THE 2020 AD SPEND FORECAST Due to the government's strict supervision of P2P Enterprises but despite adjusted to -8.6%. • As the macro economy is expected to recover, the total ad spend of 2020 the popularity of Mobile Payment, Finance & Insurance will decline 5.8% in • Digital is still the major driver of total growth with a 17.3% increase rate is projected at 6.9% with Digital and OOH as the major drivers. Digital will total. Digital spending in these areas saw a marked decline of 12.8%. Bank and 60.5% share. increase 12.0% with the biggest share of 66.7%. OOH will contribute a cards, Bank service and Securities separately declined 50.9%, 15.1% and 47.8% in Digital. • The decline seen in 2018 Q4 has continued into 2019 Q1, and impacted growth of 8.0% with the third largest share of 9.9%. our evaluation of overall momentum with a shift from 7.0% (2019 Jan estimate) to 5.4%. RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Top 10 Categories 2019f Gross Local 2019f vs. 2018 PREVIOUS REPORT (JANUARY 2019) 2019f Currency Million YOY% THE 2019 AD SPEND FORECAST Although China’s economy had a steady start to the first quarter of 2019, Pharmaceutical & Medicine 213,954 -0.1% China's GDP increased by 6.4% in the first quarter of 2019 – a surprisingly the advertising industry did not reflect this trend. Key economic indexes healthy and stable growth rate, which remains on track despite the showed growth across Q1. In comparison with ad spend, TV has continued Beverages 155,565 20.8% headwinds from the trade tensions with the US. Domestic consumption to fall. The negative growth of TV for 2019 and 2020 has lowered to -6.8% Drink 146,590 4.2% continues to drive growth with various stimulus measures from Beijing such and -5.6%. After consecutive periods of strong growth, Digital declined in the first quarter and the growth rate for the whole year of 2019 is as the extended May public holiday. Automotives 129,662 18.0% accordingly lowered from 12.5% to 10.8%. The long term view is more optimistic. Based on the economic situation in 2020, combined with the In 2019, total ad spending will continue to grow but at a lower rate. Digital Beauty & Personal Care 128,779 20.1% expansion of 5G technology and facilities, Digital is expected to increase and OOH continue to be the drivers of growth, while TV will continue its slightly by 12% in 2020. Retail 80,978 14.9% downward trajectory. Though overall ad spend showed a declining trend (-3.2% for Q1), positive signals in the macro economy were witnessed in Entertainment & Leisure 75,571 18.7% April 2019 and mainstream industry commentators have made predictions AD SPEND PERFORMANCE BY CATEGORY that the Chinese economy will stabilise in Q2 or Q3 with more momentum Only 2 out of the top 10 categories will decline in 2019 with growth rates of Telecommunications 75,002 34.3% towards the end of the year. Overall growth for 2019 is projected to be -0.1% and -5.8%. Pharmaceutical & Medicine is the largest category in the 5.4%. Top 10 categories with year on year stability or perhaps better phrased, Tourism & Transportation 58,458 12.9% stagnation. Finance & Insurance 32,665 -5.8%

DENTSU AEGIS NETWORK 107 ‘DIGITAL UNDERPERFORMED IN THE 1ST QUARTER OF 2019’ i. Online Video v. Paid Search Online video websites continue to improve their dominance over content, Investment on search will keep declining, due to both the impact of feed ads, BY MEDIA with investment in high-quality self-made content and exclusive copyright and also the behaviour change from search platform to vertical search (eg: content at the core of their development and consumer growth strategy. ec and social). Paid Search is stagnant and we expect to see its share TV including Addressable TV The proportion of paid users of online video websites is consistently reduce. increasing, and drives the market scale to grow together with advertising The decline of TV advertising has affected the total ad spend trend. Among support. Online video had the highest growth rate of 31.1% in 2018. the TV media, the ad investments in CCTV and provincial satellite TV are v. eCommerce still on an upward trend, while the ad investments in provincial and local TV Ecommerce is growing consistently strongly taking the biggest share within channels have declined significantly. ii. Social Media Digital. Range and depth of product choices on eCommerce sites are WeChat is still the leading social advertising platform. Mini program abundant. This is attracting consumers to buy online as well as attracting With the popularity of smart TV, the OTT market has attracted the attention advertisements have attracted wide attention because they can provide a advertisers to invest in eCommerce. The growth rate of the social e- of advertisers. More and more advertisers take advantage of OTT as a light and excellent user experience in the WeChat environment and connect commerce mode is significant, with its market share increasing year by year, supplementary media to invest, thus further eroding the budget of multiple online and offline environments (o2o). This is an area of high and the overall growth rate is far faster than that of the traditional e- traditional TV. potential growth - a winning formula of social content combined with commerce market. convenience, commerce and loyalty incentives.

b. Digital c. OOH Digital is still the biggest driver for the growth of total ad spend with the iii. Mobile The OOH market will continue to develop steadily with the third biggest biggest share and highest speed of growth. According to the latest CNNIC report, the Chinese mobile netizen population share of ad spend. Office LCD has maintained a steady growth this year, and In 2018, China’s Internet advertising revenue reached 369.4 billion yuan grew 8.5% in 2018. The transfer of traffic to mobile is also intensifying, alcohol products have increased significantly. with a growth rate of 24.2% over the previous year, accounting for about and the proportion of mobile advertising revenue has increased by 7.5% 4.2% of GDP, about 0.6% higher than last year. (Extracted from the “China to 67.5% compared with last year. With the popularity of 5G, this trend d. Print will continue. Internet Advertising Development Report 2018” issued by Zhongguancun Magazines are still declining, but the pace has slowed. Newspapers are flat. Interactive Marketing Laboratory in January of 2019.) But as Digital’s growth in the first quarter of 2019 declined slightly, the annual growth of Feed advertising has become an important driver for the rapid growth of e. Radio Digital in 2019 is lowered to 10.8%. mobile advertising as users continue to seek a more natural experience and advertisers seek to connect in less invasive push formats. Radio’s upward trend will continue as car ownership continues to increase year on year. But mobile audio apps are moving in which will cause a decline Influenced by the rise of new media giants, the market shares of BAT are in the usage time of traditional radio. gradually being eroded. In 2018, BAT accounted for 69% of China's Internet iv. Programmatic advertising revenue, 2% lower than 2017. In line with rising consumer Programmatic ads see a high growth rate. New technology and methods are spending power, media usage also grew rapidly in the lower tier and rural applied to optimize the performance of programmatic. This trend of markets. Toutiao, Meituan and Pinduoduo are the leading players who have performance-based advertising started in 2017 when artificial intelligence been quick to grow platforms and channels to cater for the media habits and technology was used to help companies continuously optimize bidding rules consumption behavior of these markets. With greater choice and changing and processes for accurate delivery and anti-fraud. Advertisers have consumer behavior, the marketing budget of local advertisers in tier 3 and gradually moved from CPC or CPM to truly targeted and effective delivery. tier 4 cities has also substantially shifted to digital media.

DENTSU AEGIS NETWORK 108 China Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -8.6 -6.8 -5.6 Television 26.4 23.4 20.6

Newspapers -28.0 -25.0 -20.0 Newspapers 1.2 0.8 0.6

Magazines -9.0 -9.0 -9.0 Magazines 0.4 0.3 0.3

Radio 1.0 0.4 0.4 Radio 2.1 2.0 1.9

Cinema NA NA NA Cinema NA NA NA

OOH 14.0 10.0 8.0 OOH 9.4 9.8 9.9

Total Digital 17.3 10.8 12.0 Total Digital 60.5 63.6 66.7

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 17.3 10.8 12.0 Total Digital* 100 100 100

Portals & Vertical Portals & Vertical 8.1 3.1 3.6 12.9 12.0 11.1 Websites Websites

Online Video 31.1 21.6 21.1 Online Video 12.3 13.5 14.6

Social Media 25.6 15.7 17.3 Social Media 9.1 9.5 10.0

eCcommerce 21.8 14.9 15.7 eCcommerce 37.7 39.1 40.4

Paid Search 9.5 3.4 4.0 Paid Search 22.4 20.9 19.4

Other incl. Other incl. 4.3 -1.1 1.9 5.6 5.0 4.6 Classified Classified

Mobile^ 32.0 25.0 20.0 Mobile^ 67.5 76.1 81.6

Programmatic Programmatic 38.2 31.8 28.6 20.1 23.9 27.5 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 109 HONG KONG: ‘Conservative growth forecast in 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 ADSPEND FORECAST • A growth 0.4% is forecasted for 2020, an upward revision from -0.2%, Year on year % growth at current prices reflecting a conservative moderate economic environment with the progress of China-US trade deal to be expected to be closed in 2019, and 2018 2019f 2020f the 2020 Tokyo Olympics. 0.7%% -0.2% Hong Kong 0.4% (-0.2%) (0.3%) (-0.2%) AD SPEND PERFORMANCE BY CATEGORY

Previous forecasts in brackets from January 2019 ‘Banking & Investment’ remains as the top spending category with estimated growth of 12%, strong boost from credit card and virtual banking LATEST KEY AD SPEND TRENDS where virtual banking licenses are granted by HKSAR Government on Mar • Digital ad spend is forecasted to represent 51.3% of total ad spend and 27 this year. ‘Cosmetics and Skincare’ is forecasted to have a 6% growth grow faster than expected at 17.8%, a slight upward revision from 16.3% with the growth in Chinese visitor arrivals, while ‘Pharmaceutical’ keeps a forecast in the January 2019 report. Capturing quality data remains stable growth of 5% due to an ageing population and the rise of health essential to provide informed insights to develop a customized long term awareness. A moderate growth of 5% is predicted for Beverages benefiting omnichannel strategy with personalisation, automation and AI-powered from Infant Milk Powder (more active ad spend from ultra premium infant technology. Customers demand transparency and marketers are expected milk powder brands) and the Tea segment. to follow ethical digital practices. • Video spend is growing faster than expected at +31.6%, attributed by mobile video which is fueling the fast-paced growth of streaming (94% Top 10 Categories 2019f Gross Local 2019f vs. 2018 watch videos online, 88% use mobile to watch video). Short videos 2019f Currency Million YOY% remain on trend in 2019 to fit the growing trend of Mobile Videos, and Banking & Investment creating Video SEO-friendly would be much more important. 2,078 12% • Content still matters as people demand more reputable content to Pharmaceutical & 1,585 5% advertise (41% of internet users have blocked ads on any device each Healthcare month). It is important to provide relevant, engaging and informative Cosmetics & Skincare 1,272 6% content which is customised based on data-driven insights and tech-enabled. Travel & Tourism 1,050 0%

The 2019 ADSPEND FORECAST Toiletries & Household 839 -8% The Hong Kong economy expanded by 3% in real terms in 2018. The weak Beverages 829 5% performance of Retail sales and exports in YTD Feb 2019 (retail sales volume and exports contracted and 4.8% respectively) reflected Property & Real Estate 679 4% consumption sentiment remained cautious and various external Retail 619 2% uncertainties. With the likely deceleration in global and China economic expansion, it is forecast that Hong Kong’s economy is to grow by 2-3% in Media 530 2% 2019. Without any global and local events to boost spend in 2019, we expect the advertising market will decline by 0.2%, unchanged from the Food 527 -5% previous prediction.

DENTSU AEGIS NETWORK 110 ‘KEY GROWTH DRIVERS - ONLINE VIDEO, MOBILE, SOCIAL & PROGRAMMATIC’

BY MEDIA

a. Total digital ad spend is forecasted to grow at 17.8% in 2019, an upward revision from 16.3% since the previous update. It is the only medium with high positive growth and a 51.3% share of spend. It is expected to have similar momentum moving into 2020. Key growth drivers are Online Video, Mobile, Social and Programmatic.

Online Video ad spend is forecasted to have the highest growth at 31.6% in 2019, mainly attributed by the growth of mobile video. Both Youtube and Facebook remain as the core online video drivers recording a rapid increase across desktop and mobile, where Viu has a high growth in mobile video too.

b. A negative growth of TV is predicted at 3.5% in 2019. TVB Jade remains as the dominant channel with estimate TV spending share of 60% while the ad spend in Cable TV is forecasted to decline by 20% to 25%. Pharmaceuticals and Banking remain as the major TV spenders with reported YTD growth of -14% and 5% respectively, followed by Toiletries & Household (-21%) and Travel & Tourism (+2%).

c. Total OOH spend is forecasted to drop by 16% in 2019. MTR remains as the core OOH channel estimated to account for 45% spend. Key categories reported YTD spending drop of 20% and 23% for Pharmaceuticals and Banking & Finance respectively.

d. The spend in Newspapers is forecasted to continue to decline across categories at 26% in 2019, a slight downward revision from -25%. Pharmaceuticals and Travel & Tourism will continue to overtake Banking & Finance as the key spending categories.

e. The continuous decline in Magazine ad spend is observed across categories. Its ad spend growth is forecasted to decline by 40% in 2019. Ad spend share in 2015 was 10.6%, we expect it will decrease to 1.7% in 2019 and 0.9% by 2020.

DENTSU AEGIS NETWORK 111 Hong Kong Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 2.8% -3.5% -6.5% Television 22.7% 21.9% 20.4%

Newspapers -23.9% -26% -32% Newspapers 14.1% 10.5% 7.1%

Magazines -38.8% -40% -45% Magazines 2.8% 1.7% 0.9%

Radio -0.1% -5% -5% Radio 3.4% 3.2% 3.0%

Cinema NA NA NA Cinema NA NA NA

OOH -15.2% -16% -16% OOH 13.5% 11.4% 9.5%

Total Digital 25% 17.8% 15.5% Total Digital 43.5% 51.3% 59.0%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 25% 17.8% 15.5% Total Digital* 100% 100% 100%

Display 5.5% 14.4% 13% Display 30.6% 29.7% 29.1%

Online Video 77.4% 31.6% 25% Online Video 36.3% 40.5% 43.5%

Social Media NA NA NA Social Media NA NA NA

Paid Search 8.5% 6% 5% Paid Search 33.1% 29.8% 27.1%

Other incl. Other incl. NA NA NA NA NA NA Classified Classified

Mobile^ 67.5% 27.6% 21% Mobile^ 57.3% 62.0% 65.0%

Programmatic Programmatic NA NA NA NA NA NA Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 112 INDIA: ‘Cautious spends in the 1st quarter’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2019 AD SPEND FORECAST 2019 should be a better year with positive ad spend growth of around Year on year % growth at current prices 11.4%. However the impact of TRAI is yet to be seen. Latest reports suggest that advertisers are staying away from TV on the back of 2018f 2019f 2020f unpredictable performance.

India 10.8% (9.6%) 11.4% (10.6%) 12.2% (11.6%) The double digit growth is anticipated on the back of World cup Cricket in India. In 2018, we saw consolidation of the entire BCCI Cricket event Previous forecasts in brackets from January 2019 including Digital and Broadcasting rights on One National and International Television network (Star/Fox) which led to lot of disruption in the way IPL LATEST KEY AD SPEND TRENDS was bought. In 2019 all BCCI matches in India shall also be covered by this The current data is till March and the balance data is projected. network, hence we expect an increase in pricing and inventory through expansion across HD and Regional sports Channels which would lead to an Union budget 2019 was focused on employment generation, infrastructure, increase in rates and would further lead to an increase in ad revenue. This and the farming sector. Since December 2018, the TRAI regulations have network is also merging with the Disney network this year so there are been in the news and the implementation got delayed to February as some interesting times ahead with a potential monopolistic situation. of the MSOs and DTH players had filed a case to stop the regulation, which got overruled. Global or local events to boost spend in 2019 The Telecom Regulatory Authority of India announced the enforcing of a IPL, Lok Sabha Elections and the ICC World Cup will increase spend in 2019 new tariff scheme for cable and DTH networks in India. The system was during January – June. Pro Kabaddi League & the ISL are the major events supposed to ensure greater consumer choice by making channels available in July – December. These events are quite critical and should definitely at cheap rates and ridding the networks of junk channels. Prices have gone bring a surge in ad spend. TV spend was dampened because of the TRAI up for the packages that we were buying earlier in most cases. Many regulation in the 1st quarter. Digital has become an all time favourite for advertisers stayed away from TV media around this time. Some slowed advertisers as well as Political parties this year, as there are no associated down their spends by being extremely cautious or sending releases only issues and regulations. weekly.

Despite competition, Indian eCommerce has slowed down due to revised guidelines for FDI & GST. These factors have led to the decline in consumer spending and the shutting down of some e-commerce platforms like Snapdeal…

Surging fuel prices have also impacted the GDP growth in India. The results of the election will decide the year’s economic progress.

DENTSU AEGIS NETWORK 113 INDIA: ‘Cautious spends in the 1st quarter’

RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Ad Spend Performance By Category 2019f Gross Local PREVIOUS REPORT (JANUARY 2019) CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF Top 8 Categories 2019f YOY% Currency Million The regulation of TRAI hit the TV industry quite hard and there were black AD SPEND outs in some markets for a brief period. Advertisers started limiting their Indian’s are some of the biggest multitaskers in the world today – 90% of FMCG 195,580 9% spend and they were so cautious that they even started sending the media consumption occurs in front of a screen. As consumers balance their releases weekly. time between smartphones, tablets, PCs and televisions, they are learning Auto 66,710 5% This caused a behavioural change in the way subscribers choose packages, to use these devices together to achieve their goals. They talk while driving, E-Commerce 65,826 12% which impacted not only viewership but also measurement data, making it respond to emails while eating dinner with family, track cricket scores in a highly volatile. Things will take time to stabilize and numbers will have to be strategic discussion, catch a few minutes of their favorite Netflix show on Consumer Durables 48,510 11% watched closely every quarter. This will also impact 2020 slightly. the go. The language of communication today is Emoji's, GIF’s, audio messages & videos, and written word is losing its importance. BFSI 47,244 9% The economic context This multi-screen behavior is quickly becoming the norm, and understanding it has become imperative for businesses. Hence screen agnostic planning for Telecom 44,250 5% The economy appeared to grow at a steady although slightly slower pace in agencies has become critical. January–March, with survey data for the private-sector pointing to strong Media & Entertainment 41,132 24% growth throughout the period. This comes after economic growth slowed in October–December. Brands can increase their reach to this new consuming class by talking in Retail 35,452 8% their language on their mediums, creating huge opportunities. Brands need to be more than products, they need to create experiences with products & Others 152,214 18% Recently, the main political parties released their general election services, experiences that create a social value more than just simple manifestos. The incumbent Bhartiya Janata Party (BJP) announced it would consumption. Brands need to understand the role of each medium of continue investing heavily in infrastructure and supporting farmers. Aside communication and design their message accordingly. One message fits all from putting more emphasis on social welfare spending than on is no longer relevant – it needs to fit the role the person is playing in a infrastructure expenditure, the economic policy of the opposition Indian specific environment. National Congress does not drastically differ from the BJP. Meanwhile, the World Bank warned on the 4th April that public finances could become more fragile because the revenue from the goods and services tax has been below There is a marked consumer shift towards health and wellness-driven expectations, and political parties are making large spending promises. choices, such as products and services that are perceived to be relatively Economic momentum is expected to remain steady this fiscal year, which healthy and less harmful, or that enhance people’s sense of physical and started in April. Robust government spending should support growth, as mental wellness and the environment. Due to a tie-up & merger in the should looser monetary policy and greater political certainty following the ecommerce industry, ad spends are declining. After Jio launched, a large elections. However, weak public finances and global trade protectionism number of subscribers moved over from Airtel & Vodafone idea. both weigh on prospects. Our panelists expect GDP growth of 7.2% in FY 2019, which is down 0.1 percentage points from last month’s estimate, and 7.3% in FY 2020.

DENTSU AEGIS NETWORK 114 ‘DESPITE DIGITAL GROWTH, TV CONTINUES TO BE DOMINANT AS IT So, these areas are witnessing significantly higher growth compared to the This will also enable marketers to advertise to the BIMARU states and the ENJOYS AN UNMATCHED SHARE OF AUDIENCES’ South where the population is not growing as fast and where literacy levels tier 2 towns with feature phones as well as other forms of advertising. reached a high level as early as the 1990s. Hindi publications registered the BY MEDIA highest annual growth followed by Telugu, Kannada, Tamil and Malayalam. • Social advertising will see further growth, considering smartphones are So, Hindi newspapers not only enjoy larger circulation, but they are also a. Television doubling in penetration and smartphone access is increasing for smaller growing at a faster rate. The Indian Paper Industry accounts for about 2.6% towns and rural areas. TV has immense headroom to grow with 34% of homes still being Non-TV as of the world’s paper production. per BARC. While organic growth is absolute, cyclical events like ICC World • Online video growth which started with YouTube videos, has now picked Factors for this growth are likely to be organic growth from various Print Cup will generate strong advertising demand. Healthy distribution up across all OTT platforms like Hotstar, Sony Liv, Voot, Zee 5, Mx Player, loyalists like Auto, Durables, Education, Mobile handsets, Ecommerce and realization with digitization gaining momentum will reduce dependence on ALT Balaji, Eros Now etc.. Facebook has also started accepting videos Government advertisements. English, Regional high-end and tech savvy advertising and aid broadcasters demand for better yield. Despite digital with different edit sizes opening up a plethora of options on video. Local newsreaders are also shifting to the new age of Digital News apps, with growth, TV continues to be dominant as it enjoys an unmatched share of language OTT platforms which do not belong to any big media house, like increasing smart phone penetration. audiences. With a 40% share of advertising spend, TV will expand in 2019 Hoi Choi in Bengal, have become very popular. and will continue to grow CAGR +12.5% till 2023. Also the cost of imported newsprint has gone up so all the print owners are • Both social and online video will see growth for the next 5 years in our trying their best to increase their ad prices. Channel owners, broadcasters, distributors and other media companies country as we are still evolving into an internet, mobile, cloud audience. around the world have always shown significant interest in the Indian television industry. However, until recently, the limits on foreign direct c. Digital Globally consumers will spend an average of 67 minutes a day watching investment in certain segments limited the interest of such global players. In 2018, digital media grew 42% to reach INR 169 billion. Infrastructure online videos this year, up from 56 minutes in 2017. The time spent The government has now relaxed these limits and has allowed 100% FDI in propelled the growth in digital consumption. Digital ad spend grew 34% to watching videos online is expected to go up to 84 minutes a day for the all segments of the television industry except news and current affairs INR 154 billion and now contributes to around 21% of the ad market. Digital average person by 2020. channels. Apart from the traditional Over-the-Top (OTT) players in the subscription grew 262% to reach INR 14 billion. Video subscription revenues Most of the Election spend has shifted to digital media. market, major broadcasters have also invested in this segment and have almost grew three times in 2018 to reach INR 13.4 billion, on the back of launched their own OTT platforms. Telecommunication networks’ investment new and relaunched video streaming platforms, growth of smartphones, in cheap data plans and Wi-Fi packages are one reason for the rise in online spread of affordable broadband, regional language content, exclusive video consumption in India. content and live streaming of major cricket. There is a rise of visual The Election will have a low impact on TV compared to last Lok Sabha storytelling in the form of video and infographics. The wearable tech trend election. will continue. Messaging apps will be become the next community management platform for brands. Commerce advertising stands to be the biggest beneficiary. Programmatic buying is on the rise. View ability and b. Print Audibility is on the rise. Clients are ready to spend on tech solutions like Ad- The fact that readership has grown across age groups establishes print’s fraudulent and Brand safety. dominance, relevance and growth. English newspapers are facing stiff competition from Digital platforms and this drop in readers is offset by the growth in languages. Publishers are also gearing up to move beyond pure- Brands are unable to track the conversations happening outside regular play print revenue stream. Print will attract a larger pie of the political social media platforms and the size of dark social media is double that of campaigning and Government spend because of elections. Real Estate and standard social media platforms. It’s also about content. The entry of OTT Education advertising reaching its earlier peak will help achieve growth of platforms and the rise of YouTube stars has meant improved content for a +6.2% in 2019. previously under-served youth and millennial population. In the current TRAI scenario, OTT platforms have emerged as beneficiaries as many Hindi print media and the northern region again registered the highest viewers shifted due to rising subscription bills. Also the low data tariffs growth in the country. Hindi-speaking areas have a higher population being offered only encouraged viewers to move to OTT platforms, for not growth rate and their literacy rates have only begun to pick up in the only original content and sports but also catch up TV. last two decades.

DENTSU AEGIS NETWORK 115 d. OOH The sector witnessed growth of 16.5% in value terms between July- India’s internet economy is expected to double from US $125 billion as of It will be a promising year with major contributions from OTT and Mobile September 2018; supported by moderate inflation, increase in private April 2017 to US $250 billion by 2020, majorly backed by ecommerce. Apps along with Telecom and E-commerce. The government’s promotion of consumption and increase in rural income. welfare schemes and the Election spending will sustain this momentum. Retail Estimated to recover with +11.4% growth, the category continues to be Automotive Rising income and demand for quality products is boosting consumer data scarce and shall hold 4-5% share of total spend. Some smart city The Indian auto industry became the 4th largest in the world with sales expenditure. Total consumption expenditure is expected to reach nearly US designers believe advertising will have a crucial role in formulating urban increasing 9.5% year-on-year to 4.02 million units (excluding two wheelers) $3600 billion by 2020 from US $1,595 billion in 2016. Indian retail is one of business models, with ad revenue funding development. Additionally, the in 2017. It was the 7th largest manufacturer of commercial vehicles in the fastest growing markets in the world due to economic growth. India is owners of billboards or street furniture inventory will certainly focus on 2017. the world’s fifth largest global destination in the retail space. The Indian capturing relevant data. The Two Wheelers segment dominates the market in terms of volume owing retail market is projected to grow from US $672 billion in 2017 to US $1.1 to a growing middle class and a young population. Moreover, the growing trillion in 2020. India’s modern retail is set to double in size over the next e. Radio interest of companies in exploring the rural markets further aided the three years. The modern retail market is expected to grow from US $70.45 The Radio segment is facing surplus inventory because of new station growth of the sector. billion in 2016 to US $111.25 billion in 2019. Metro consumers have started launches, and in addition, music streaming apps have become easy to India is also a prominent auto exporter and has strong export growth shifting to online groceries as well, bringing down the footfalls further. The access because of a fall in data prices. Fearing a drop in listenership base, expectations for the near future. Automobile exports grew 15.54% during ad spend has gone down on the key medium. radio stations have cut down advertising load to increase engagement. April 2018-February 2019. It is expected to grow at a CAGR of 3.05% While some of the networks have been able to increase rates, Automobile, during 2016-2026. In addition, several initiatives by the Government of Robust consumption and rural markets are expected to augment the FMCG finance, real-estate and E-commerce are the primary contributors to growth India and the major automobile players in the Indian market, are expected market. The FMCG market is expected to increase to US $103.7 billion by with Government and political spend increasing during the election window. to make India a world leader in the two-wheeler and four wheeler market by 2020 from US $49 billion in 2016. There is increasing participation from Radio is a cheaper option compared to Print & TV and has much less 2020. foreign and private players to boost retail infrastructure. Revenue generated creative restriction, so most political parties increase their radio spend from online retail is projected to grow to US $60 billion by 2020. The Rising during the election period. E Commerce number of tier-2 and tier-3 cities is set to enhance supermarket space in the country. The retail industry, both bricks and mortar and online together, is 2019 has seen a come back of big billion sales and Amazon growing as a expected to grow to US $1.3 trillion by 2020. The advertising is mainly FMCG dominant ecommerce player. Leaders have been up and active during around the festive season and through Print media. TV advertising has also The fast-moving consumer goods (FMCG) sector is the 4th largest sector in festivals with multiple offers. More and more Indians are shifting to digital been heavy again around the festive season. There are innovations in the the Indian economy with Household and Personal Care accounting for 50 per and cashless payments. offering in terms of payment gateway, loyalty cards and promo-offers cent of FMCG sales in India. Growing awareness, easier access and changing Marketing and branding activities are a perennial concern for e-commerce pushed by retailers. The ad spend on OOH will remain similar to last year. lifestyles have been the key growth drivers for the sector. The urban sites. This year however, has seen the advent of performance-based The e-commerce space has been the most active in recent times, with segment (accounts for a revenue share of around 55%) is the largest marketing efforts, which have been booming. This model of marketing will innovative periods of advertising like the Amazon Prime Day sale boosting contributor to the overall revenue generated by the FMCG sector in India. likely grow stronger due to its profitability. The Indian e-commerce industry ad spend. Amazon now also has a Grocery and Household section. Paytm, However, in the last few years, the FMCG market has grown at a faster pace has been on an upward growth trajectory and is expected to surpass the US the revolutionary mobile wallet, also has a thriving online market. in rural India compared with urban India. Semi-urban and rural segments to become the second largest e-commerce market in the world by 2034. are growing at a rapid pace and FMCG products account for 50% of total This category is driven by discounts, loyalty points and promo offers and The e-commerce market is expected to reach US $64 billion by 2020 and US especially during festive and specific occasions. rural spending. $200 billion by 2026 from US $38.5 billion as of 2017. The Retail market in India is estimated to reach US $1.1 trillion by 2020 from US $840 billion in 2017, with modern trade expected to grow at 20- With growing internet penetration, internet users in India are expected to 25% per annum, which is likely to boost revenues of FMCG companies. increase from 481 million as of December 2017 to 829 million by 2021. Revenues of the FMCG sector reached Rs 3.4 lakh crore (US$ 52.75 billion) in FY18 and are estimated to reach US $103.7 billion in 2020. Rising internet penetration is expected to lead to growth in ecommerce.

DENTSU AEGIS NETWORK 116 Media & Entertainment • India is one of the top five markets for the media, content and The advent of OTT players, both domestic and international, is providing The Indian Media and Entertainment (M&E) industry is a sunrise sector for technology agency Wavemaker, where it services clients like Hero consumers with multiple choices around content consumption, to the extent the economy and is making high growth strides. Proving its resilience to the MotoCorp, Paytm, IPL and Myntra among others. that there are OTT players in Regional languages which have become world, the Indian M&E industry is on the cusp of a strong phase of growth, • After bagging media rights to the Indian Premier League (IPL), Star India extremely popular with pure original content. backed by rising consumer demand and improving advertising revenues. has also won broadcast and digital rights for New Zealand Cricket up to The industry has been largely driven by increasing digitization and higher April 2020. India is seeing a shift in consumer’s attitude from content ownership to internet usage over the last decade. Internet has almost become a having easy access to a vast library at any time and place. Telecom plays a mainstream media for entertainment for most people. Telecommunications vital role in giving them the access and ensuring smooth downloads. This India is currently the 2nd largest telecommunication market and has the sector is therefore expected to grow quickly in the next few years. The Indian advertising industry is projected to be the second fastest 3rd highest number of internet users in the world. India’s telephone growing advertising market in Asia after China. At present, advertising subscriber base expanded at a CAGR of 19.22%, reaching 1,194.58 million revenue accounts for around 0.38% of India’s gross domestic product. during FY07–17. Tele-density (defined as the number of telephone The Indian media and entertainment (M&E) industry grew at a CAGR of connections for every 100 individuals) in India, increased from 17.9% in 10.90% from FY17-18; and is expected to grow at a CAGR of 13.10% to FY07 to 92.92% in FY18. touch Rs 2,660.20 billion (US $39.68 billion) by FY23 from Rs 1,436.00 billion (US $22.28 billion) in FY18. India's media consumption grew at a Reliance Jio: Expanded its user base multiple times and penetrated data CAGR of 9% during 2012-18, almost nine times that of the US and two usage among the lower strata and smaller towns. The advertising on times that of China. The industry provides employment to 3.5-4 million Telecom has been steady for the top players and data has been driving the people, including both direct and indirect employment in CY 2017. ad spend further. There has been a merger of 2 big players, Vodafone & Idea (Aditya Birla Group). India's online gaming industry is expected to grow at a CAGR of 22% between FY18-23 to reach Rs 11,900 crore (US $1.68 billion) in FY23. Smartphone penetration (with cheaper smartphones available) has also Recent development: played a key role. The Indian telecom sector’s revenue grew at a CAGR of 7.31% from US$ • Dailyhunt, a regional language news aggregator run by Verse Innovation 19.6 billion in FY06 to US$ 42.6 billion in FY17. During the first half of FY18, Pvt Ltd, will receive investment of US$ 60 million in a new funding round gross revenues of the telecom sector in India reached US$ 20.4 billion. led by Goldman Sachs Investment Partners. Revenues from telecom equipment are expected to grow to US$ 26.38 • As of September 2018, Twitter announced video content collaboration billion by 2020. with 12 Indian partners for video highlights and live streaming of sports, entertainment and news. Telecom has always been very high on OOH and it continues to be. Telecom • As of August 2018, PVR Ltd acquired SPI Cinema for the equivalent ads are also associated with Television and sports - next year’s World Cup is of US$ 94.42 million. something to watch out for. • In H1 2018, 5 private equity investment deals were recorded, worth US$ 115 million. On-demand entertainment services led by audio and video content are • The Indian digital advertising industry is expected to grow at a at the cusp of inflection point in India. Though the traction towards both Compound Annual Growth Rate (CAGR) of 32% to reach Rs 18,986 on-demand download and streaming of the content has just started, a very crore (US$ 2.93 billion) by 2020, backed by affordable data and rising promising supply side ecosystem is evolving for streaming with multiple smartphone penetration. players launching their digital streaming platforms.

DENTSU AEGIS NETWORK 117 INDIA Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 9.9 9.5 9.2 Television 39.6 38.9 37.9

Newspapers 3.7 3.6 3.7 Newspapers 28.8 26.8 24.7

Magazines 1.5 -1.4 -0.9 Magazines 2.6 2.3 2.0

Radio 3.4 3.4 3.1 Radio 3.9 3.6 3.3

Cinema 14.2 14.2 14.0 Cinema 2.0 2.1 2.1

OOH 9.3 9.3 9.0 OOH 5.7 5.6 5.4

Total Digital 32.4 32.7 32.7 Total Digital 17.4 20.7 24.5

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 32.4 32.7 32.7 Total Digital* 100 100 100

Display (Banners) 32.4 33.8 37.9 Display (Banners) 20.9 21.1 21.9

Online Video 41.6 43.5 37.2 Online Video 20.8 22.5 23.3

Social Media 34.1 34.6 34.3 Social Media 28.5 28.9 29.3

Paid Search 25.9 24.3 23.2 Paid Search 24.7 23.1 21.4

Other incl. Other incl. 21.6 14.2 23.7 5.1 4.4 4.1 Classified Classified

Mobile^ 46.1 47.0 49.4 Mobile^ 47.0 52.0 58.6

Programmatic Programmatic 67.5 78.9 32.9 18.4 24.8 24.8 Spend^ Spend^

*Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend DENTSU AEGIS NETWORK 118 INDONESIA: ‘Ad market trend still waiting for the elected president’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 ADSPEND FORECAST 2019f Gross Local 2019f vs. 2018 Top 10 Categories 2019f • Ad spend in 2020 is forecasted to grow by 3.5% higher than in 2019 Currency Million YOY% Year on year % growth at current prices (2.2%). The fundamental economy is getting stronger with annual growth Food & Beverages 48,695,897 15.9% of between 5.3% to 5.6%. This is more optimistic than what international 2018 2019f 2020f institutions such as the IMF and World Bank had predicted that growth Personal Care 28,690,365 10.6% would be, about 5.2% p.a. Indonesia 1.8% (2.2%) 2.2% (3.7%) 3.5% (4.7%) Corporate & Public Services 12,801,255 -13.3% • Emerging E-commerce and payment gateways are expected to drive 2020 adex growth, potentially compensating for the dip of adex in the ‘FMCG’ Pharmaceuticals 14,129,582 12.6% Previous forecasts in brackets from January 2019 category and ‘Corporate & Public Services.’ We are also expecting the E-commerce/Online Service 12,218,898 21.8% LATEST KEY AD SPEND TRENDS Tokyo Olympic 2020 to give a spill-over effect to boost adex in particular Cigarette 6,710,847 12.3% • TV and Digital are the main media with the most allocated ad spend. They from its officials sponsors and event broadcasts. are forecast to grow by 2% and 16% respectively in 2019. Home Care 6,384,835 6.9%

• Print ad revenue continues to suffer due to the continuing decline in AD SPEND PERFORMANCE BY CATEGORY Automotive 5,143,746 7.6% readership. Other media (e.g. Radio, OOH and Cinema) has seen a The ‘Food & Beverages’ category keeps the top position in 2019 it is growth in the region of 3-5%, similar to GDP growth 5.1%. forecasted to grow positively by 16% to reach 48.7 Trillion IDR. ‘Personal Telecoms 4,665,542 10.7% • The emergence of e-commerce and payment gateways (e.g. OVO, Dana, Care’ is the second contributor growing by 11% to 29 Trillion IDR. After the Media & Entertainment 3,934,160 2.6% Go-Pay) can potentially have a positive effect on ad spend and could elected president & legislative members are appointed in Sep 2019, the ad potentially cover the dip in the FMCG category. spending of ‘Corporate & Public Services’ remains highly, but with declining • The emergence of OTT platforms (e.g. HOOQ, Viu, Oona, indihome) growth by -13% to 13 Trillion IDR. Pharmaceuticals and E-commerce/Online funded by traditional TV stations is expected to impact Service are contributing positively by 13% and 22% respectively. media consumption. Cigarette is predicted to increase by 12% to 6.7 Trillion IDR, followed by THE 2019 ADSPEND FORECAST Home Care which is going up to 7% to 6.4 Trillion IDR. Automotive and We had expected the election to increase ad spend but this did not happen Telecoms are promoting positively to ad spending growth by 8% and 11%. as the information broadcast commission of Indonesia limited the airtime Big broadcasters are continuing to provide more investment into Media & and ad-space for political parties considerably. The election outcome may Entertainment, in particular for over-the-top (OTT) emerging platforms to affect the forecast for H2/2019. keep attracting viewers who consumed more digital and multi-platform.

The Election Outcome Impact • With the current president elected (Election result 22 May, 2019), ad spend in the second half of 2019 is expected to increase by 2-3%, on the back of increasing inflow of FDI/FIT into the market. • Had the opposition party won and formed a government, we would expect ad expenditure to be flat/dip by 4% to 5%. This would be on the back of expected policy changes and a lesser optimistic outlook in the business community.

DENTSU AEGIS NETWORK Note: Based on Nielsen Adquest Ad Spending up to 2017 - Mar 2019 for TV and Print 119 ‘SMALL-MEDIUM ENTERPRISES SHOWING SIGNS OF BEING MORE b. Newspapers Video-on-demand or over-the-top (OTT) shows a positive growth trend, ATTRACTED TO UTILIZING DIGITAL/SOCIAL MEDIA & LOCAL TV Readership and ad spend share for Newspaper shows a continuously with massive investments by streaming services and giant broadcasters. THAN LOCAL PRINT’ declining trend to 26% and 21% respectively, due to the influence of digital Improving digital infrastructure across the country is driving increasing newspapers as well. KOMPAS Group & JAWA POS Group still take a lead in reach and demand. Currently, there are three dominant local players in the BY MEDIA. total share of ad spend. Top spending comes from Government/Political OTT landscape in the country, namely HOOQ, iFlix, and VIU as well as the parties followed by Corporate campaigns, Real Estate & Apartment and top player Netflix. a. Television Hotel & Restaurants TV is still dominant, although the total minutes spent watching TV is e. Radio moderately declining, because of the increasing trend of using multi-media c. Magazines Based on Roy Morgan Single Source Data Q4/2018, Radio is currently (especially with Mobile) simultaneously. Overall viewing remains the same, While its readership keeps declining, more publications stopped the printed listened to by about 17% of the population or the equivalent of with slight declines against certain population segments e.g. Males, Younger edition and have started developing the digital edition and content. On approximately 15 million listeners in Urban areas. Its trend, however, keeps audiences. But high channel viewing fluctuations will continue to impact Q1/2019, there are 11 titles of magazine/tabloids that have stopped their declining due to increasing digital/mobile consumption, as well as the performance. We have 15 private and public stations, covering more than printed edition. emergence of music & audio streaming apps e.g. Spotify, JOOX. 80% of the national population and 10 Pay TV providers concentrated in main cities and urban areas. d. Digital Some Radio has tried to survive and remain relevant through integration In 2018, Internet penetration still is growing to 70% of all of the population, with online and activation, by offering bundle packages of on-air, digital and The private stations and Pay TV channels of which 90% accessed via a Mobile phone. Concurrently ad spend allocated off-air activities. Radio in Jakarta hires famous DJs for primetime slots and The top private national stations are owned by 5 media groups, such as to this medium is also going up significantly by 16% to 18%, slightly lower creates additional exposure through social media. MNC Group, Trans Media, Emtek, Viva Group, and Metro. Regionally there than the previous forecast due to privacy issues, election, brand safety, are more than 60 local stations, bringing local and cultural content. viewability concerns. Total share would be higher than print to more than However, Nielsen just monitors one-third of them. 20%. In addition, advertisers have allocated almost half of their Digital advertising budget to Google/YouTube and Social Media e.g. Facebook, TV Establishment Survey 2018 done by Nielsen shows that the Pay TV and Instagram. population is about 11% of the total population in 11 cities. One-third of them still connect to FTA (or using antenna) to watch channels not covered The phenomenon of increasing ad spend in digital is also triggered by an by providers or to watch football matchs. To get more quality screen and increase in the number of new products/services and start-ups. Due to a various entertainment, AB segments and sub-urban residents prefer to limited communication budget, advertisers are preferring to utilize the subscribe to Pay TV or cable TV. Data from top Pay TV providers indicates digital ecosystem (social media, KOL, and online shopping) than TV and that there are 6.5 Mio subscribers, mostly concentrated on main cities in Print to promote and expose their products/services and focus on millennial Java and Sumatera. The top providers are Indovision, First Media, Trans target audiences. Vision, indihome, and BiG. Small-medium enterprises mostly located outside Greater Jakarta also show More than half of total ad spend is still allocated on TV. It is mainly allocated signs of being more attracted to utilizing digital/social media and local TV ad spots during commercial trend. But there is an increasing trend of than local print. It is one of the factors causing/triggering the continuing utilizing content program/non-lose spots (e.g. Digital Branding Integration - decline in ad spend for print in particular for local/regional newspapers. DBI) to enhance viewability and viewer attention.

DENTSU AEGIS NETWORK 120 Indonesia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 1.5 2.0 2.0 Television 54.3 54.2 53.4

Newspapers -8.0 -10.0 -10.0 Newspapers 21.0 18.5 16.1

Magazines -30.0 -30.0 -30.0 Magazines 0.7 0.5 0.3

Radio 5.0 5.0 5.0 Radio 1.5 1.5 1.5

Cinema 5.0 5.0 5.0 Cinema 0.0 0.0 0.0

OOH 12.0 3.1 5.0 OOH 1.7 1.8 1.8

Total Digital 16.0 16.0 18.0 Total Digital 20.7 23.5 26.8

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 16.0 16.0 18.0 Total Digital* 100 100 100

Display n.a n.a n.a Display n.a n.a n.a

Online Video n.a n.a n.a Online Video n.a n.a n.a

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search n.a n.a n.a Paid Search n.a n.a n.a

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ n.a n.a n.a Mobile^ n.a n.a n.a

Programmatic Programmatic n.a n.a n.a n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 121 JAPAN: ‘Digital growth continues’

OVERVIEW OF THE TOTAL ADVERTISING MARKET RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Expenditure by Industry *Four traditional media only PREVIOUS REPORT (JANUARY 2019) Year on year % growth at current prices 2019f Gross Local 2019f vs. 2018 2019 forecasts have been revised upwards following a re-examination of Top 10 Categories 2019f estimates based on the addition of digital advertising carried by traditional Currency Million YOY% 2018a 2019f 2020f media companies for "2018 Advertising Expenditures in Japan", one of the Information / communications 282,800 99.2% bases used for estimation. Japan 2.2% (0.2%) 1.2% (0.6%) 1.8% (2.4%) Cosmetics / Toiletries 262,600 99.9% 2020 forecasts were revised downwards in light of revisions to estimates Previous forecasts in brackets from January 2019 Foodstuffs 251,300 98.8% based on a 2020 nominal GDP of 1.6% (source: figures released by the LATEST KEY AD SPEND TRENDS Japan Center for Economic Research on March 11, 2019), an economic Transportation / Leisure 195,000 100.1% • Advertising expenditures in Japan for 2018 saw significant growth to 2.2% indicator for Japan used as a basis for estimation. from the previous forecast of 0.2%. This was largely attributable to Beverages / Cigarettes 172,900 99.1% greater than expected growth of performance-based ads, despite cause AD SPEND PERFORMANCE BY CATEGORY Distribution / Retailing 158,700 98.2% for concern from factors such as ad fraud. Another positive factor was See table showing figures by industry (four traditional media only). digital advertising carried by traditional media companies (ad spend on Finance / Insurance 152,600 100.4% Internet media and services provided primarily by companies in the four CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE Pharmaceuticals / Medical types of mass media), which has seen rapid growth. 149,000 100.5% Supplies • 2019 forecasts have been revised upwards based on 2018. Following on OF AD SPEND from 2018, growth continued apace for digital advertising carried by According to the “Detailed Analysis of Internet Advertising Media Food Services/Other Services 140,800 100.4% traditional media companies, with Internet ad spend driving overall ad Expenditures for Japan”, which was released by D2C, CCI, and Dentsu spend in Japan. on March 14th 2019, the smartphone advertising and video advertising Automobiles / Related Products 136,800 97.5% • With the Tokyo 2020 Olympic and Paralympic Games set to take place in markets are expected to grow by 22.7% and 39.3% respectively, in 2019. 2020, Japan's advertising market is likely to see big growth. However, forecasts call for a reactionary drop after the Games, partially due to a Smartphone penetration is on the rise across all age categories. lack of major events thereafter. Household smartphone ownership in Japan is 75.1%, surpassing the country's household PC ownership of 72.5% (Source: Ministry of Internal THE 2019 AD SPEND FORECAST Affairs and Communications, White Paper on Information and Communications in Japan). The plethora of models available that are easy • Steady growth of 1.2% is expected to continue for the advertising market for the elderly to use are prompting this demographic, which has long been throughout 2019. Among the major events that will impact the advertising comfortable using conventional cell phones, to switch to smartphones. market are the announcement and start of Japan's new era name in April Preschoolers are also beginning to use smartphones on a daily basis as a and May, respectively; the G20 Summit in Osaka in June; Tokyo 2020 test result of increasing smartphone penetration among their parents' generation. events beginning in July; the Rugby World Cup 2019 in September; and Using readily accessible digital devices such as these, consumers are the consumption tax increase to 10% in October. interacting with a vast array of information and entertainment.

THE 2020 AD SPEND FORECAST • 1.8%. The 2020 Tokyo Olympic and Paralympic Games will be a major factor.

DENTSU AEGIS NETWORK 122 ‘A DIGITAL WAVE WASHES OVER ALL MEDIA’ Also on the rise are video ads intended to be shared on social media. Another factor driving this increase is a re-examination and rearrangement BY MEDIA of commercial formats, resulting in more sophistication, including with respect to ad spot UIs. Regarding digital advertising carried by the TV media companies, video ad spend is showing particular growth on TVer, a TV a. TV program catch-up service. TV ad placement is expected to be more active due primarily to the following four events: the House of Counselors election in the summer; a last minute surge in demand expected ahead of the consumption tax ii. Social Media increase in October; expansion and further development of cashless No accurate forecasts have been made at this time. Social advertising that services; and the Tokyo 2020 Olympic and Paralympic Games. makes effective use of influencer marketing is thought to be increasing and was estimated at ¥400 billion for 2018. This is thought to account for close to 25% of all digital advertising expenditures, and further growth is TV advertising expenditures for 2019 are expected to fall due to, among expected in 2019. other factors, the loss of last year's major sports programs. However, with events such as the FINA World Championships Gwangju 2019, World Judo Championships Tokyo 2019, IAAF World Athletics Championships Doha iii. Mobile 2019, and the Rugby World Cup 2019 in the offing, spend should rise due to Robust growth is expected to continue for mobile ad spend due to very an increase in program commercials beginning in July. high rates of smartphone ownership and usage. Ads embedded in content distributed from traditional newspapers and magazines will grow. b. Digital Furthermore, along with the consumption tax increase in 2019, the Double-digit growth is expected to continue in 2019. Although beset by an government is promoting electronic payment as a convenient way to pay array of problems that include ad fraud and addressability, digital for goods and services. This will lead to e-commerce site ad evolution and advertising will continue to grow, mainly due to performance-based ads. growth as the market anticipates more widespread adoption of mobile Digital advertising carried by traditional media companies continues along a payment methods. strong upward trend, contributing to overall digital ad spend growth. Growth will also continue for video (online) ads and for mobile ads primarily iv. Programmatic delivered to smartphones. The lines separating the Internet from other With data marketing becoming increasingly mainstream, programmatic media continue to blur, and integrated solutions to resolve the issues and people-driven advertisements will grow, driven by creatives using AI affecting the medium continue to be explored. and others.

i. Online Video v. Paid Search Online video ads are expected to rise 29.2%, continuing a strong upward Growth is expected to continue. trend. This has been driven by an increase in carefully-considered commercials aimed not only at selling products but also building a brand.

DENTSU AEGIS NETWORK 123 c. OOH e. Radio Digital signage development and installation is likely to continue to grow Expenditure on radio ads should plateau or increase slightly. across the entire range of OOH media advertising. This includes OOH ads Radiko, nearly synonymous now with radio, is listened to online via devices that lend themselves well to social media sharing, for example ads in train such as smartphones and smart speakers. Digital audio ads on the service cars and buses and at train stations and airports. Along with arresting the are expected to move into full swing. However, digital audio ads are downward decline of paper media advertising (used on train station wall counted in digital advertising carried by radio companies and are included ads, hanging ads on trains, ads above windows, and ads next to doors, for in digital ad spend. example), advertisers will use data such as audience data and third-party data to push digital signage sales growth. This will be the focus of expanding the OOH market.

Places such as airports will continue to see high ad demand, with tailwinds from an increasing number of foreign tourists and the Tokyo 2020 Olympic and Paralympic Games, among other things.

d. Print In newspapers, while there are reasons for concern, such as the continuing fall in readership numbers, growth surpassing last year's is expected due to events related to the New Era, the Rugby World Cup 2019, unified local elections and House of Counselors elections, the consumption tax hike, and being one year away from the Tokyo 2020 Olympic and Paralympic Games, among other events.

Magazines' difficulties will continue in 2019 on account of economic uncertainty persisting for fashion and accessories industries, the largest category for magazine advertising expenditures. Companies are unlikely to alter their digital shift plans. Meanwhile, increased budgets are likely to be allocated to promotional projects (events related to magazine advertising) in 2019.

Even in Cosmetics/Toiletries, although magazine ad spend on paper media is declining, budgets for promotional project advertising are expected to increase. Budgets may also stay flat or increase for women's magazines, mainly beauty magazines.

DENTSU AEGIS NETWORK 124124 Japan Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -1.8 0.0 1.5 Television 29.3 28.9 28.9

Newspapers -7.1 -3.2 -2.8 Newspapers 7.3 7.0 6.7

Magazines -9.0 -9.8 -8.6 Magazines 2.8 2.5 2.3

Radio -0.9 0.5 0.8 Radio 2.0 1.9 1.9

Cinema - - - Cinema - - -

OOH 0.3 0.5 1.2 OOH 8.0 7.9 7.9

Total Digital 16.5 14.5 12.1 Total Digital 26.9 30.5 33.6

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 16.5 14.5 12.1 Total Digital* 26.9 30.5 33.6

Display 22.6 - - Display 52.9 - -

Online Video 72.4 29.2 - Online Video - - -

Social Media - - - Social Media - - -

Paid Search 16.1 - - Paid Search 39.4 - -

Other incl. Other incl. -11.7 - - 7.6 - - Classified Classified

Mobile^ 20.3 21.2 - Mobile^ 70.3 74.4 -

Programmatic Programmatic 20.0 - - 80.3 - - Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 125 MALAYSIA: ‘The projection looks stable for 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET AD SPEND PERFORMANCE BY CATEGORY Generally all top 10 categories foresee negative growth in 2019. Year on year % growth at current prices Top Retail advertisers from Fast Food Centre and Hypermarket have been 2018 2019f 2020f reducing their advertising spend Year-on-Year, resulting in a 9% decline in 2018 for Retail. We foresee a further drop of 7% in 2019. Malaysia -1.0% (-1.0%) -3.7% (3.1%) 3.8% (3.2%) Dairy-Kids Growing Up Milk the number one contributor in Food & Beverages

Previous forecasts in brackets from January 2019 is showing signs of reducing their ad spend in 2019 (Y-t-d March 2019 registered -18% growth). However, Coffee, the second largest spender LATEST KEY AD SPEND TRENDS registered growth of +43% in Y-t-d 2019. This helped the category from • Malaysia was placed 7th globally on the Consumer Confidence Index declining further. (CCI), with an index score of 118 points in Q4 2018, even though there was a drop by 9 points from the previous quarter. Personal & Household Care is forecast to decline by 10% based on the • 4.7% GDP growth in 2018 which is further forecasted to reach 4.9% noticeably reduced advertising activities from the top 2 categories i.e. in 2019. ‘Face Care Women’ and ‘Hair Shampoo & Conditioner’ in the first quarter • 2018 ad spends contracted by -1% despite being an eventful year with of 2019. the Asian Games, Commonwealth Games and the FIFA World Cup, which the media industry had anticipated would provide a positive boost for 2019f Gross Local 2019f vs. 2018 advertising spend. There has not been much of a change in Q1 2019 Top 10 Categories 2019f Currency Million YOY% with ad spends still experiencing a decline. Retail 397.7 -7%

THE 2019 ADSPEND FORECAST Food & Beverages 395.2 -3% In Q1 2019 there has been a decline with only a few sectors such as Travel Personal & Household Care 219.6 -10% seeing growth due to the MATTA Fair Event. Universities/colleges advertised their education fair after the release of SPM results. Also higher advertising Finance & Insurance 109.9 -10% activities from the Retail side such as Ikea (new store opening in Penang), Lazada (7th birthday sales campaign) and Shopee (FA Cup sponsorship). Automotive 104.4 -14% • Q2 2019 is expected to see some growth with Hari Raya Pharmaceutical 101.8 -7% festive advertising. Telecoms 90.1 -9%

Media & Entertainment 73.5 -13% THE 2020 ADSPEND FORECAST Luxury & Fashion 59.6 -5% • Observing the current trend, with ad spend not picking up much in spite of the General Elections, FIFA World Cup and Commonwealth Games last Consumer Electronics 43.1 -5% year, the projection looks stable at +3.8% for 2020 with no significant growth or decline at the moment forecast. It is possible that we will see an increase in ad spends for 2020 with the Summer Olympics in Tokyo in Q2 and US Presidential Election in November 2020.

Note : The above projection is based on Nielsen’s monitored advertising DENTSU AEGIS NETWORK 126 expenditure applied with agency estimated discount factor and excluding Pay TV. ‘SIGNIFICANT INCREASE IN VOICE SEARCH’

BY MEDIA.

a) As access to the internet has reached 75% in this market, there is a major decline in the consumption of traditional mediums.

b) 68% of Malaysians have access to the internet via Smartphones out of which 50% watch Online Video - which is a game changer. Client’s are slowly but steadily shifting their investment to Digital. Video advertising will foresee a 12% growth in 2019.

c) There has been a significant increase in Voice Search over the last 12 months, driven by the development of more voice enabled devices, smarter AI and better speech recognition software. There are no signs of this trend slowing down and by 2020 50% of Searches will be generated by Voice.

d) Online shopping using a Smartphone device is becoming the new norm which eases the journey for the consumer. 22% of total Online Sales in Malaysia was performed by a Smartphone device. Mobile will continue to gain more share from the Digital budget, close to 80%.

e) The Malaysia government announced the newly revised switch-off date for Analogue TV is scheduled to be sometime in mid-2019.

f) Radio, Cinema, OOH and Digital are gaining more shares year-on-year from TV and Newspaper. However, their growth is slowing down with Digital growth projected to slow down in 2020 to +10%.

g) For the first time in Malaysia, geo-targeting TV buys are being implemented by Astro. The targeting of Malay audience/households in the east coast and southern regions. Regional-based TV advertising packages are offered as a way to encourage small budget advertisers in that region to invest money in TV advertising.

DENTSU AEGIS NETWORK 127 Malaysia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -3.6 -2.5 4.6 Television 17.3 17.6 17.7

Newspapers -13.5 -20.5 -3.8 Newspapers 31.6 26.1 24.1

Magazines -4.0 3.1 -1.1 Magazines 1.8 1.9 1.9

Radio 1.6 0.6 5.4 Radio 8.7 9.1 9.2

Cinema 1.2 2.9 4.0 Cinema 2.7 2.9 2.9

OOH 5.3 1.2 1.6 OOH 9.3 9.8 9.6

Total Digital 16.1 10.2 10.0 Total Digital 28.6 32.7 34.6

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 16.1 10.2 10.0 Total Digital* 100 100 100

Display 3.4 0.7 1.3 Display 19.9 18.2 16.8

Online Video 19.6 11.9 12.8 Online Video 14.0 14.2 14.6

Social Media 24.2 14.6 13.6 Social Media 50.4 52.4 54.1

Paid Search 7.3 6.3 4.8 Paid Search 13.7 13.2 12.6

Other incl. Other incl. 10.2 10.2 9.5 2.0 2.0 2.0 Classified Classified

Mobile^ 21.5 13.0 15.7 Mobile^ 77.3 79.3 83.4

Programmatic Programmatic 21.6 13.4 10.0 68.1 70.0 70.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 128 NEW ZEALAND: A soft start to 2019 for agency spend. Direct Search and Display digital growth will offset traditional and agency spend declines

OVERVIEW OF THE TOTAL ADVERTISING MARKET 2019 is forecast to grow at +2.3% in 2019, slightly below the current GDP Top 10 Categories 2019f Gross Local 2019f vs. 2018 Growth of 3%; this difference can be explained by strong performance from 2019f Currency Million YOY% Year on year % growth at current prices companies exporting overseas rather than a buoyant domestic economy. Retail 429.7 +2.3% The continuing digitisation of OOH and Direct Digital Search, Display and 2018a 2019f 2020f Automotive 330.3 +2.3% Social are the main drivers for this growth, offsetting subdued agency and traditional media spend. Leisure, Entertainment 328.1 +2.3% New Zealand 3.5% (2.0%) 2.3% (3.1%) 3.3% (4.1%) Foodstuffs 320.6 +2.3% THE 2020 ADSPEND FORECAST Previous forecasts in brackets from January 2019 Government Departments, 217.9 +2.3% • Ad spend is forecast to sit at +3.3% for 2020 driven by continued Direct Services & Community LATEST KEY AD SPEND TRENDS Digital Search and Display and OOH growth. Investment, Finance, 185.3 +2.3% • 2018 forecasts have been revised upwards as a result of much stronger • Digital OOH opens up new opportunities for audience buying and ways to Banking than expected Search advertising spend. This grew 22% year on year incorporate into programmatic buying, while Programmatic Video, Google Travel 184.1 +2.3% during 2018. and FB/Instagram will continue to grow and take share as media time Pharmaceuticals, Health 169.3 +2.3% • In contrast, traditional media expenditure across the market has softened spent increasingly becomes digital. in recent months, particularly agency-controlled spend. Print media is expected to continue its declines of >15% YOY, while Radio & Telecommunication 165.0 +2.3% • TV slipped into decline during 2018 (-3%). This is predicted to continue TV are predicted to see continued minor spend declines, -1 to -2%. Home Improvements 144.1 +2.3% into 2019 (-1%) and beyond as audiences continue to fall. • The only traditional media business in growth is OOH (5%), driven AD SPEND PERFORMANCE BY CATEGORY primarily by additional digital placements. Categories that drove investment across 2018 were Telecommunications • Digital Display (+5%) and Social (+18.4%) continues to make up for the (+$44m, driven by TV & OOH) and Automotive (+$29m, driven by Radio, shortfall in traditional media spend, particularly Google and Facebook OOH & TV). outside agencies. This was reflected in the latest IAB figures for Q4 2018.

• As a result of the continuing pace of digitisation of traditional media and Key categories offsetting this are Toiletries/Cosmetics (-$12m, with declines audience shifts online, clients need to focus on how to build brands in the driven by TV, OOH, & Magazines), Household Electrical Products (-$10m digital economy to be successful. with declines driven by Newspapers & Radio), and Agricultural (-$5m with declines driven by TV & Newspapers). THE 2019 ADSPEND FORECAST The media agency market has started slowly during 2019, with Jan-Feb Note: Category figures are all based on AQX data, which is measured in agency spend down -5% YOY, driven by Newspapers, Digital and TV (all ratecard value and excludes most Digital spending. sitting down between -6% and -8% YOY).

These months generally under-indexed in terms of ad-spend however, and aren’t predicted to reflect full year performance. CY 2019 YOY spend is predicted to lift later in the year (especially with the Rugby World Cup), with growth predicted to return for the calendar year overall.

Note: As ASA figures for 2018 market expenditure are yet to be release, DENTSU AEGIS NETWORK 129 all 2018 figures remain estimates based on SMI/Nielsen AQX ratecard data ‘OOH CHANNEL SHARE INCREASING’ d. TV On-Demand platforms continue to grow audience, with TVNZ OnDemand BY MEDIA achieving 16.8m streams (+121% YOY) across 631k unique users (+39% YOY) in Mar 2019. Connected TVs (CTVs) are now driving over 40% of a. streams, with the networks investigating methods of monetising this segment of their audience. One new product offered on TVNZ includes a OOH media has experienced strong growth in the past few years (+19% in display ad that fills the CTV screen when pausing a stream. 2017 and +24% in 2016). 2018 revenue is forecast to be 5%, with positive growth forecast to continue for a number of years. Media suppliers are investing heavily in Digital sites, allowing for rotation of ads which is e. multiplying the revenue they can derive from their inventory and also in With Print investment continuing to decline rapidly (Newspapers -15% and new audience measurement systems which allow for a robustness to the Magazines -15%) and growth in publisher online revenue failing to cover all medium that previously did not exist in the New Zealand market. this lost revenue, new sources of income are being investigated. One Digital OOH screens are presenting new and interesting opportunities for strategy recently implemented by NZME has been to introduce a partial clients to work with the medium and channel share is increasing as a result. subscription service to the NZHerald’s online platform.

b. TV spend is projected to decline in 2019 (-1.0%), with investment being pulled towards advertising in the Rugby World Cup, the broadcast for which is to be split with the coverage predominantly on Spark Sports, a new Digital OTT offering in the market, with the remainder on TVNZ. The successful broadcast/reception of the Rugby World Cup on Spark Sports would send a ripple effect across the market, demonstrating to the market their ability to securely deliver sports coverage on a large scale.

c. Online ad spend continues to grow significantly faster than the overall market, with growth for 2017 and 2018 estimated at 18%. It is expected to continue to grow rapidly over the next few years (consistently in excess of 10% p.a.). Amazon does not operate in New Zealand and so Google and Facebook are projected to further dominate the Digital landscape, currently estimated to hold 60%-70% of Digital spend share and projected to contribute 80%-90% of Digital growth.

DENTSU AEGIS NETWORK 130 New Zealand Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -3.0 -1.0 -1.0 Television 20.5 19.9 19.1

Newspapers -15.0 -15.0 -15.0 Newspapers 11.2 9.3 7.7

Magazines -15.0 -15.0 -15.0 Magazines 5.9 4.9 4.0

Radio -4.0 -2.0 -2.0 Radio 10.0 9.5 9.1

Cinema 0.0 10.0 -10.0 Cinema 0.4 0.4 0.4

OOH 5.0 5.0 5.0 OOH 5.5 5.6 5.7

Total Digital 18.2 10.6 11.0 Total Digital 46.5 50.3 54.1

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 18.2 10.6 11.0 Total Digital* 100.0 100.0 100.0

Display 5.0 5.0 5.0 Display 10.4 9.9 9.4

Online Video 15.0 15.0 15.0 Online Video 3.2 3.4 3.5

Social Media 11.8 18.4 13.3 Social Media 15.3 16.4 16.7

Paid Search 22.3 6.1 8.6 Paid Search 53.1 51.0 49.8

Other incl. Other incl. Classified 21.7 19.6 18.0 Classified 17.9 19.4 20.6

Mobile^ 22.3 19.7 19.6 Mobile^ 12.2 13.1 14.0

Programmatic Programmatic Spend^ 22.7 18.6 27.9 Spend^ 22.1 23.6 27.1

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 131 PHILIPPINES: ‘Election boosting ad spend in 2019’

OVERVIEW OF THE TOTAL ADVERTISING MARKET

Year on year % growth at current prices Southeast Asian Games Nov 30-Dec 11, 2019 2019f Gross 2019f vs. 2018 The Philippines will be hosting the SEA Games in 2019. SEA Games related Top 10 Categories 2019f Local Currency YOY% 2018 2019f 2020f ads are expected – TV, OOH & Digital. Million

Personal & Hh Care 77,528.21 16% PHILIPPINES 2.4% (9.5%) 8.9% (10.0%) -1.7% (9.8%) THE 2020 ADSPEND FORECAST Food & Beverages 71,220.20 14% • 2020 not being an election year, deceleration vs. 2019. Previous forecasts in brackets from January 2019 Pharmaceuticals 32,568.73 22% • ATL: Estimated forecast for 2020 is PH258 billion. TV & Radio still leads, LATEST KEY AD SPEND TRENDS while Print declines. Corporate & Institutional 14,604.24 20% • OOH: Estimated ad spend forecast for 2020 is PHP 26.9billion. Factors will • Overall, industry spending is on a decreasing trend as expected except for Alcoholic Beverages 8,172.32 22% the first quarter when growth can be attributed to the influx of Political, be: (a) Continuous addition to the current roster of LED screens (b) Government ads. Addition of in-train inventories (LRT/MRT). Overhead screens are now Telecoms 7,579.40 12% audio enabled and advertisements can be tracked real-time (d) • Government ads are generally present on TV and Radio so were not able Government 6,863.58 48% Expansion of programmatic media buying through technology and data. to arrest the continuously declining Print spend. • Digital: Est. +10% increase in 2020 compared to 2019. Automotive 6,138.60 10% • During January - February 2019, the top 3 advertisers (Unilever, Nestle and P&G) increased spend vs. the same period last year. They account for Media & Entertainment 6,031.84 8% AD SPEND PERFORMANCE BY CATEGORY almost 30% of total industry spend. Retail 3,879.83 6% • ATL: Top 3 categories in Jan-Feb 2019 continue to be: Personal & HH THE 2019 AD SPEND FORECAST Care, Food & Beverages and Pharmaceuticals. This is forecasted to be the trend for FY2019, similar to previous years. • Focusing on TV, Radio, Print - the first two months (Jan-Feb 2019) saw an average increase of +13% vs. the same period last year. • OOH: The following categories remain as the top spenders/active players in OOH - QSR (Jollibee, McDonald’s), Alcoholic Beverages (San Miguel), FMCG. 2019 National Elections • ATL: Jan-Feb 2019, the Government category had an increase of 130% vs. previous year, this is likely due to the 2019 National Elections. This trend is likely to continue until the last day that election related ads are allowed to air – May 11, 2019. • OOH: There have been quite a lot of candidates who advertised through OOH in the form of large format billboards, banner ads, LED and rear bus ads. • Digital: Q1 has started to be cluttered on digital. With National Elections expected to have an impact on inventory and audience supply for platforms that allow bidding such as Facebook and Google, brands have been allowed to reserve buys and ensure audiences are reached.

DENTSU AEGIS NETWORK 132 ‘MORE DATA-LED OOH CAMPAIGNS’

BY MEDIA.

a. TV still has the highest share of spend, but growth is expected to be modest.

b. Print is expected to continue to decrease in 2019 (approximately 27% on average) while online readership is stable.

c. Radio is likely to remain strong, with current numbers (January-February 2019) showing an increase of about 27% vs. the same period in 2018.

d. OOH - It is expected that players will continue to find ways of standing out – aside from special build productions, they can explore dynamic or real-time messaging, geo-location targeting, integration of Mobile with OOH. Digital OOH inventories will continue to expand. We will be seeing more data-led OOH campaigns.

e. Digital – Google and Facebook will continue to take the lion’s share of spend. However we are seeing increasing spends on platforms that generate big data for smarter audience targeting for use with programmatic buying/other technology. eCommerce will grow exponentially due to a surge in online shoppers and the demand for products and services online.

Almost 80% of Filipino urban dwellers are online and more than 90% of them have purchased products online over the past 6 months. E-commerce is on the increase. Lazada and Shopee are the leading purchase platforms for: FMCG, Beauty products, Shoes and Apparel, Bags and accessories. Facebook comes in as the third most popular platform (75% of online Filipinos use Facebook).

DENTSU AEGIS NETWORK 133 Philippines Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -8.3% -4.0% -4.0% Television 53.4% 47.0% 45.9%

Newspapers -16.7% -17.0% -17.0% Newspapers 2.1% 1.6% 1.3%

Magazines -39.7% -50.0% -38.0% Magazines 0.3% 0.1% 0.1%

Radio 25.4% 31.0% -2.3% Radio 32.1% 38.6% 38.4%

Cinema 10.0% 8.0% 9.0% Cinema 0.1% 0.1% 0.2%

OOH 8.0% 14.0% 11.0% OOH 8.8% 9.2% 10.4%

Total Digital 25.0% 10.0% 10.0% Total Digital 3.3% 3.3% 3.7%

Y-O-Y % GROWTH AT MEDIA % SHARE OF TOTAL DIGITAL CURRENT PRICES MEDIA SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 25.0% 10.0% 10.0% Total Digital* 100% 100% 100%

Display 24.8% 10.0% 10.0% Display 32.7% 32.7% 33.9%

Online Video 24.7% 10.0% 0.0% Online Video 39.2% 39.2% 36.9%

Social Media 24.9% 10.0% 10.0% Social Media 24.9% 10% 10%

Paid Search 25.5% 10.0% 10.0% Paid Search 16.4% 16.4% 17.0%

Other incl. Other incl. 26.3% 10.0% 10.0% 11.8% 11.8% 12.2% Classified Classified

Mobile^ 0.0% 10.0% 10.0% Mobile^ 38.0% 38.0% 38.0%

Programmatic Programmatic 25.0% 10.0% 10.0% 90.0% 90.0% 90.0% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 134 SINGAPORE: The continued upward growth trajectory of Digital has displaced TV for the first time in history

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 ADSPEND FORECAST Vitamins/Health prep/health food and tonics: While Singaporeans are • The ad spends in Singapore are expected to decline by 5.6% to $1.83 becoming more health conscious and spent $49 million on vitamins and Year on year % growth at current prices billion in 2020, although this does not take into account the potential of health supplements in 2018, spends are predicted to decrease by 8%, the next General Election (timing TBD in 2019 or 2020) which may provide with the overall economic slowdown. The category will see key advertisers 2018 2019f 2020f a buffer. continuing to dominate in 2019. -8.5% (- -7.5% (- -5.6% (- Banking/Finance: Singapore bank loans shrank to 2.9% in Q1 2019 which Singapore • The projected decline is expected to be led by traditional media, with 8.5%) 7.5%) 5.6%) Newspapers (26%) bearing the brunt of it, followed by OOH (15%) and may lead to a reduction in ad spends. The banking/finance sector is Radio (12%). forecasted to decrease by 13% to $44m. Previous forecasts in brackets from January 2019 • Despite the overall decline, Digital continues to grow and share of spend General range of car/motoring co.: The General range of car/motor LATEST KEY AD SPEND TRENDS is projected at 39% in 2020. company sector is forecast to decrease by 6% to $50mil. This sector is • Singapore’s economic growth in Q1 2019 came in lower at +1.2 per cent. largely dependent of prices of COE which in turn are determined by supply and demand which affects the overall price of car. This is lower than the +1.3 per cent vs. the previous quarter. Due to AD SPEND PERFORMANCE BY CATEGORY continuing global trade tensions which have resulted in sliding business Government Services (Statutory board, government campaign): and consumer confidence - investments and consumption are taking a The Government services category is forecasted to decrease by 4% to 2019f Gross Local 2019f vs. 2018 downward trajectory. Top 10 Categories 2019f $144m in 2019. HPB and Gov.sg will continue to be the biggest advertisers. Currency Million YOY% • As such, a subdued ad spend outlook is expected to carry on into 2020. Corporation: The Corporation sector is projected to maintain at $139m in Govt svcs (stat board, All traditional media channels have been seeing a decline in spends, 144 -4% 2019. Daikin Aircon, Mitsubishi Electric, MCS and Samsung are likely to govt campaign) with only digital spends projected to grow 9% YOY through to 2020. continue investing. Mobile share of spend is expected to reach a dominating 80% of digital Corporations 139 0% spends in 2020. Media: The Media sector is predicted to decrease by 6% to $127m in 2019. SPH and MCS will continue to be the biggest advertisers in this sector. Media 127 -6% • As a nation, we are well placed to leverage Asia’s growth and the rise of Other portals/internet Other portals/internet community/network: The other portals/internet 125 -2% digital transformation and innovative services. With the advancement of community/network technologies, we will also see innovation across media networks which will community/network sector is forecasted to decrease by 2% to $125m. Events/concerts/ Toggle is the biggest spender in 2018 and it is likely to continue in 2019. 82 1% continue to drive digital media growth. performances/theatre Events/Concerts/Performances/Theatre: Travel agencies/ The events/concerts/performances/theatre sector is expected to increase 54 -10% THE 2019 AD SPEND FORECAST tourist commissions slightly by 1% to $82m. If the trend of major performances getting sold out Global or local events to boost spend in 2019 Super/hyper/mini 53 -5% within the hours of release, event organizers do not have to spend much on market/food stores • Singapore turned 200 years old this year, however, the bicentennial advertising as the performers/events sell themselves. Vitamins/health prep/ celebratory mood did not translate to spikes in ad spends with brands 49 -8% Travel agencies/Tourist commissions: The travel agencies / tourism health food/tonics being cautious. commissions sector is forecasted to decline by 10%. Even though outbound Banking/finance 44 -13% • 2019 will continue to see a decline in spend by 7.5% to $1.935 billion departure of Singapore residents saw a YoY growth of 5% in 2018, the • Traditional media continues to be on a downward spiral since 2017. sector is facing stiff competition from OTAs. General range of 38 -28% YoY, Newspapers and OOH are the most notable at (26%) and Super/hyper/mini market/food stores: Spends for this sector is car/motoring co. (15%) respectively. expected to decline by 5%. Newspapers is the lead medium of choice for • However, Digital media spends with its continued upward trajectory is this sector and NTUC is the biggest spender. expected displace that of TV’s in 2019 for the 1st time in history.

DENTSU AEGIS NETWORK 135 ‘5G COMING TO SINGAPORE IN 2020’ e. Digital Digital continues to drive growth with a forecast of 9% increase YoY to BY MEDIA $648m in 2019. Singapore has one of the highest digital consumption rates in the world. Singaporeans are spending large amounts of time online and a. TV hold multiple connected devices; allowing marketers more opportunities for screen-time. TV spends are projected to decrease by 6% in 2019 accounting for 31% of total ad spends. In an effort to win back advertising dollars to TV, Mediacorp introduced a new buying methodology based on a CPM model whereby Mobile is forecast to grow by 20.1% in 2019 and will continue to dominate advertisers can buy using a comparable currency to digital video inventory. desktop. According to IAB SEA+India, by 2020, Mobile will account for 4 The success of this is still TBD. out of every 5 digital ad dollars in Singapore.

b. Newspapers ‘Ultra reliable’ 5G is coming to Singapore in 2020. The advancement in Newspapers will see double digit decline in spend for 2019, by 26% to mobile technologies will see new products and services coming to fruition $331m. The decline can be attributed to YoY declining readership. with creative innovative content poised to engage with the consumers. A whole new world awaits.

c. OOH Out of home is also expected to experience double digit decline as well. Spend is forecast to be $160m. While digital OOH formats, which allows customisation by time, audience and weather, are getting popular and can now be found across Singapore, advertisers are limited by inventory which is currently limiting its potential. It will take time for publishers to scale it to a level whereby it is easily accessible island wide.

d. Radio Even though it is forecast to see a double digit reduction, YoY share of spend still hovers around 7%. Formats and cost for this medium have not seen a evolution.

DENTSU AEGIS NETWORK 136 Singapore Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -5.9 -6.1 -5.9 Television 30.3 30.8 30.7

Newspapers -26.0 -26.1 -26.0 Newspapers 21.4 17.1 13.4

Magazines -13.0 -13.4 -12.1 Magazines 3.2 3.0 2.8

Radio -12.0 -11.8 -12.0 Radio 7.7 7.3 6.8

Cinema NA NA NA Cinema NA NA NA

OOH -15.3 -14.9 -15.6 OOH 9.0 8.3 7.4

Total Digital 13.2 9.2 9.4 Total Digital 28.4 33.5 38.8

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 13.2 9.2 9.4 Total Digital* 28.4 33.5 38.8

Display 11.3 8.0 8.0 Display 42.1 41.7 41.1

Online Video 23.1 10.0 12.0 Online Video 12.4 12.5 12.8

Social Media NA NA NA Social Media NA NA NA

Paid Search 13.2 10.0 10.0 Paid Search 33.8 34.1 34.2

Other incl. Other incl. 10.3 10.0 10.0 11.7 11.8 11.9 Classified Classified

Mobile^ 54.4 20.1 15.6 Mobile^ 69.9 76.5 80.9

Programmatic Programmatic 21.4 11.6 14.3 44.0 45.0 47.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 137 SOUTH KOREA: ‘The 2020 Olympics to positively affect the local market’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 ADSPEND FORECAST 2019f Gross 2019f vs. 2018 In 2020 the Korea ad market is expecting to increase by 5.7% based on Top 10 Categories 2019f Local Currency Year on year % growth at current prices YOY% the Cheil communication report. According to Cheil’s announcement, since Billion Korea is geographically close to Japan, the 2020 TOKYO Olympics will have 2018 2019f 2020f Finance /Insurance 1,327 5% a halo effect on the Korea ad market. In addition, Terr. TV will recover from Computer & the current depression which is caused by the strike at the end of 2017. South Korea 5.2% (2.5%) 5.7% (2.4%) 4.9% (2.3%) Telecommunication / Game 1,116 20% Finally, 5G telecommunication will be used at full scale. 5G will leverage (Mobile) digital media spend growth. Previous forecasts in brackets from January 2019 Household electronics 768 20% However most ad market specialists believe that the 5.7% ad market LATEST KEY AD SPEND TRENDS growth is exaggerated. Food 735 10%

Market projections for 2018 had been around +2.5% however according to Beverage /favourite food 608 12% Cheil Communication’s ad market report, the market increase was much AD SPEND PERFORMANCE BY CATEGORY Service 606 -8% bigger than previously forecast. The most significant difference came from Finance & Insurance: Traditional Finance and Insurance advertising has Digital ad spending. DAN Korea had expected a 7.5% increase in Digital been decreasing. However new mobile Banking services such as Kakao Automobile /Transportation 550 12% spend however Cheil reported a 14% increase. As the Korea market does Bank have launched and the mobilization of bank services drives the not have an official measurement system to evaluate Digital spending, increase in this category. Most of the banks have launched Mobile Household goods 545 -5% there is a high possibility that Digital spend may vary depending on how it applications. In addition mobile direct payment such as Samsung Pay, Medicine / Medical 520 1% is measured. Naver pay and Kakao Pay are competing in the Finance category. Government & Association 507 -2%

3 Key Messages: Computer & Telecommunications and Mobile games (Application): 1. TV especially Terr. TV ratings decrease is getting sharper. TV has lost In this category, the main increase comes from the launch of 5G it’s No.1 SOV position to Digital media. telecommunication and Mobile games/applications. 5G technology 2. A remarkable global Digital media increase is being seen. is igniting advertising. Mobile game and applications are investing Digital media is demonstrating sharp growth, led by Google and huge budgets. Facebook (Instagram). 3. Within Digital, Mobile share of spend is showing a significant increase Household Electronics: New house electronics such as clothes dryers and it will only get higher as the 5G telecommunication begins in 2019. and stylers (cloth maintenance electronics) have become must have items. The most distinguished transformation is diversifying online video Due to the issue of fine dust, air purifiers which are able to filter out fine planforms. SK telecommunication merged with local OTT platform Pooq dust have become must have electrical items. These new electrical items and formed a dominant local OTT platform. These diversified online have caused a remarkable increase in ad spend in this category. platforms will give clients an opportunity to create more specific campaign objectives. Beverage and Automobile: These two categories have had an increase in ad spend due to imported products. Within beverages, 6 to 8 new imported THE 2019 ADSPEND FORECAST beers have been launched whilst other beverage ad spending has been In 2019, there will be no specific local or global sports events or elections. maintained at previous years’ levels. In the Automobile category, imported However the 2020 Tokyo Olympics may affect the local advertising market. automobiles have increased their spend and launched new models. The Several Olympic sponsors may operate pre-Olympic campaigns towards the highest spend increase was witnessed for BENZ, Volvo, Audi and Hyundai end of 2019. with new models launched recently.

DENTSU AEGIS NETWORK 138 ‘THE GROWTH OF CONTENT CONSUMPTION ON THE MOBILE HAS Mobile ad share of voice in Digital is forecasted at 58% in 2019. 5G BEEN REMARKABLE’ telecommunication technology adoption will initiate more precise ad targeting. AI Technology also activates “CHEBOT” which is an abbreviation BY MEDIA of the Chatting Robot that allows communication with customers.

a. Terr. TV d. Overall TV share of ad spend is decreasing. The decrease is occurring on Within Digital media local and portal media such as NAVER, DAUM and NATE Terr. TV. Even though Terr. TV is focused on creating high quality are struggling but global media such as YouTube and Facebook (Instagram) programmes, it will be hard for Terr. TV viewership to recover. In 2019, the have recorded high growth in 2018. Main media share of voice in digital are main battle field of the TV market is procuring killer content. To improve NAVER(25.1%), YouTube(13.7%), DAUM(11.7%), Facebook & the current momentum, Cable TV (CJ ENM) and Comp.TV (JTBC) have been Instagram(11.3%) and NATE(3.6%). The most notable phenomena occurred more aggressively investing in content production. Terr. TV has also been in Search. YouTube Search has had exponential growth. YouTube Search competing in the content production arena. growth has rejuvenated Search growth. Due to YouTube, Search spend will OTT platforms pose a risk to traditional TV ratings. Netflix has been increase and total Search spend will increase in the future. successfully settled since 2018. In addition to Netflix, SK telecommunication has merged with local OTT “Pooq” to become the biggest OTT platform.

b. Print media (Newspaper and Magazine) continue to decline and are trying to expand into Digital media. Newspaper publishers have started to enhance their online platforms focusing on building authenticity. Magazines have already achieved partial success on their digital platforms. Although several magazines have discontinued, publishers have kept alive their digital versions. Total Magazine spending is expected to keep decreasing but Magazine digital spending will increase.

c. Digital media overtook TV spend and became the largest media type in Korea in 2017. In 2018 the gap between TV and Digital becomes wider. Digital’s growth momentum is forecast to be maintained and is expected to grow by +11.3% in 2019 to reach over 40% of total ad spend. Mobile shows the biggest growth +19.6% and accounts for 26.9% of the total market. The main cause of Mobile ad growth comes from a 95% Smartphone distribution rate. The growth of content consumption on the mobile device has been remarkable and Mobile leads total advertising market growth.

DENTSU AEGIS NETWORK 139 SOUTH KOREA Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 1.0 3.3 1.0 Television 33.4 32.6 31.4

Newspapers -0.5 -0.3 -2.0 Newspapers 12.8 12.1 11.3

Magazines -10.4 -5.9 -4.0 Magazines 2.8 2.5 2.3

Radio -9.9 -0.9 -1.0 Radio 2.2 2.1 2.0

Cinema -2.9 3.9 3.0 Cinema 2.0 2.0 1.9

OOH 5.0 3.3 4.0 OOH 7.3 7.1 7.1

Total Digital 14.4 11.3 11.0 Total Digital 39.5 41.6 44.0

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 14.4 11.3 11.0 Total Digital* 100.0 100.0 100.0

Display -34.8 -4.6 -8.3 Display 25.2 21.6 17.9

Online Video 105.0 6.3 19.8 Online Video 19.8 18.9 20.4

Social Media 76.0 0.2 4.8 Social Media 15.0 13.5 12.8

Paid Search 30.8 28.0 18.2 Paid Search 40.0 46.0 49.0

Other incl. Other incl. n.a. n.a. n.a. n.a. n.a. n.a. Classified Classified

Mobile^ 18.8 19.6 16.7 Mobile^ 54.0 58.0 61.0

Programmatic Programmatic 43.0 67.0 25.8 10.0 15.0 17.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 140 TAIWAN: Market Growth in Advertising Comes from Digital Ads

OVERVIEW OF THE TOTAL ADVERTISING MARKET 2019 ad market growth momentum is expected to come from the following: Year on year % growth at current prices 1. Taiwan will hold the presidential election in early 2020, which will influence ad spend by government agencies and candidates beginning 2018 2019f 2020f in mid-2019. Social Media is expected to benefit the most, followed by TV and OOH. Taiwan 2.7% (1.0%) 1.0% (1.5%) 1.2% (1.3%) 2. In November 2019, Taiwan will host the WBSC Premier 12. As the Taiwan team strives for 2020 Olympics qualification, a baseball craze is

Previous forecasts in brackets from January 2019 anticipated in Taiwan. In the past, the ad market has seen significant growth as long as Taiwan’s baseball team is winning. Ad spend on Social LATEST KEY AD SPEND TRENDS Media, MOD and OTT platforms as well as TV is to benefit from the event. • The number of OTT users began to grow significantly in late 2018. 3. The beginning of third-party payment in late 2018 led to NTD$70 million According to Nielsen, the number of people using OTT on their Mobile in ad spend. With the support of the government and the establishment phones grew by +12.6% in 2018. Smartphones have become the major of consumer behavior, Mobile payment competition will become device for accessing Video platforms. As a result, mobile ads have gained increasingly fierce in 2019 and 2020. Companies are expected to invest importance and are a must for advertisers. big-budgets into advertising in order to get major mobile payment market share. TV, Social Media and store-based OOH are predicted to be • In November 2019, Taiwan will host the World Baseball Softball the main media to be spent on. Based on Taiwan market scale, only Confederation (WBSC) Premier 12. As long as the Taiwan team are three to five third-party payment companies are expected to remain in winning, Taiwan ad spend will see significant growth. Investment on Social two years as all others will have gone out of business. Media, MOD, OTT platforms as well as TV is expected to increase due to the popularity of this event. • Starting from July 2019, Chrome will no longer permit full-page ads and other disruptive ad formats. Meanwhile, Apple’s action on implementing ITP 2.1 (Intelligent Tracking Prevention 2.1) on Safari, as well as GDPR’s limitation on tracking, both are expected to have a huge impact on the digital ads market.

THE 2019 ADSPEND FORECAST Growth for the 2019 ad market is forecast at 1.0%. Digital ad spend continues to grow and is expected to reach NTD$22.9 billion in 2019, +10% compared to 2018. As TV viewers further dwindle because of the emergence of OTT, advertisers are spending less on TV: TV ad spend for 2019 is to decline by 5%, with the total at about NTD$19.6 billion. The contraction in spending for Print media will not be as significant (-11% Newspapers and -10% Magazines) and that of Radio will see flat/slight decline. Finally, due to completed infrastructure for DOOH and additional sites at MRT stations, OOH is to see slight growth of 3%.

DENTSU AEGIS NETWORK 141 TAIWAN: Market Growth in Advertising Comes from Digital Ads

THE 2020 ADSPEND FORECAST Third in line is the Real Estate category. As the Real Estate market has The 2020 ad market is to see growth of 1.2%. begun to warm up again, ad spend growth is expected to remain flat or Digital ad growth will persist and traditional ad growth will remain stable. only see a slight decline. Fourth is the “Others” category. Impacted by the 2020 ad market growth momentum is to come from the following: upcoming 2020 Presidential and Legislative Yuan election, there’s a good chance that ad investment will grow at the end of this year. 1. The Telecom industry in 2018 was strongly impacted by a certain provider’s low-cost (NTD$499 per month) unlimited data plan, overturning the common sales approach of the past in which phones The Computers and Accessories category is set at fifth place with slight were given for free with high-cost plans. Thus, telecom service revenue growth of 0.6% as Q1 2019 ads for gaming saw y-o-y growth. Ranking sixth dropped sharply, as did phone sales. This in turn influenced investment is Services, which will see a contraction of 0.7% with Retail channels such into 5G transitioning. The transition was to begin in 2020, but due to as Department Stores, Hypermarkets, and Convenience Stores reducing ad political and economic factors, Taiwan will have to wait until at least expenditure. Ranking seventh, the Culture and Sport category will see 2021. Since the NTD$499/month plan will expire in 2020 and 2021, growth of 1.2% with boosts from ad spending by exercise equipment consumers will be in need of new phones and as a result, Telecom advertisers. Eighth is the Food category, which will see a 5% y-o-y companies will invest greatly in ads for new phones and 5G service. contraction as ad spending during Q1 2019 did not meet forecasts. Ninth is 2. The final qualifying event for baseball for the 2020 Olympics will be the Skincare/Cosmetics category, which will see flat growth or perhaps a held in Taiwan. Whether Taiwan’s team qualifies or not, the event is contraction of 0.9%. Media and Entertainment ranks the 10th category. likely to gain much attention in Taiwan and serve as a warm-up for the Under the influence of government policy to OTT platforms, 2019 Q1 ad 2020 Olympics. spending saw a significant y-o-y decline. Ad spend is estimated to fall by 4.2% for 2019 in this category. 3. The 2020 Olympics will take place in Japan. Viewership of the 2020 Olympics in Taiwan is expected to be high. Baseball a favourite sport of 2019f Gross Local 2019f vs. 2018 the locals is back in the Olympics, in addition Taiwan is close to Japan Top 10 Categories 2019f and shares a similar cultural background. In addition to increased Currency Million YOY%

viewership for terrestrial TV and MOD, Cable TV news channels will also Pharmaceuticals/Beauty 4,965 3.1% see growth. As expected, advertisers from Sports, Snacks and Beer brands are predicted to increase ad spending. If the Taiwan baseball Transportation 2,604 -2.0%

team qualifies for the Olympics, ad expenditure will be even greater. Real Estate 2,476 -0.2%

Others 2,474 0.1% AD SPEND PERFORMANCE BY CATEGORY The Pharmaceuticals/Beauty category is again expected to be the biggest ad Computers and Accessories 2,329 0.6%

spender. With Taiwan’s aging population, ad investment in Health Food and Services 1,866 -0.7% supplements continues to grow. This year is to see a 3.1% y-o-y growth, and the amount spent could break NTD$5 billion. The second biggest Culture and Sport 1,585 1.2%

spender is expected to be the Transportation category with increased Food 1,506 -5.0% spending on SUV ads, while Auto and Motorbike ads will contract. Beauty Aid/Cosmetics This category is to see a slight drop by 2% y-o-y. 1,416 -0.9% Media & entertainment 1,407 -4.2%

DENTSU AEGIS NETWORK 142 ‘SOCIAL MEDIA ADS, OTT PLATFORM ADS, AND PROGRAMMATIC d. Digital Also, Apple’s Safari is equipped with ITP 2.1 (Intelligent Tracking Prevention BUYING ARE THE MAIN FORCES BEHIND DIGITAL AD GROWTH’ 1. Digital ad spend will see growth of +10% in 2019. In addition to 2.1), and with GDPR tracking restrictions, it will be harder to direct ads to continued ad spend growth in Social Media and benefits from online their planned targets, but the influence of these policies on the Taiwan BY MEDIA. influencers as well as live streaming, OTT businesses are expected to market will still have to be watched and evaluated. become even more active (i.e. local UGC and creating strong appeal for a.TV new users) to get a greater share of market, which will in turn stimulate e.OOH advertisers to spend more on OTT Video ads. Meanwhile, the highly 2019 TV ad spend is expected to decline by 5%, with total spend down to As fierce OOH market competition rose between media owners in 2018, targeted Programmatic buying will encourage advertisers to invest NTD$19.6 billion. With OTT business models developed and subscribers to OOH unit cost went up rapidly. With organic market supply and demand even more. MOD breaking 2 million in 2018, even though TV maintains a certain degree adjustment, the price is gradually stable. For 2019, DOOH infrastructure of reach, advertisers are continuing to re-assign TV ad spend to Digital 2. The 2018 Election is a testament to the importance of Social media has been set up. DOOH could work with digital technology to build online to platforms. In response to the aging of TV viewers, TV advertisers are marketing as well as the effects of influencers and live streaming. In offline solutions, allowing advertisers to develop CRM, Social Media sharing turning towards long ads for Health Foods, Nutritional Supplements, and 2019, influencers and live streaming are expected to be used even more and even complete transactions via e-commerce. On the other hand, the Vitamins to make up for the increasing ad contraction. commonly in Digital advertising and Social Media ad investment will launch of Danhai Light Rail and the Taichung Metro means more available grow by about 12.1%. sites for the OOH market. With the additional sites and variety of formats, 3. With a low-cost Telecom plan and a comprehensive 4G service launched the OOH market is seen with growing potential in 2019. b.Newspaper & Magazine in 2018, 4G mobile Internet has a high penetration rate and smooth The 2019 Newspaper and Magazine ad spend is expected to drop 11% streaming. OTT platforms such as iQiyi, Netflix and LINE TV are taking and 10% respectively, a smaller drop than in recent years. This is because advantage of the opportunity to seize greater market share. By largely Print media is using more Digital tools to expand their business scope. increasing their subscribers, the OTT companies are getting advertisers That is, they are directing their longstanding readers towards their digital to invest their budget in OTT than other channels. According to a survey platforms and offline events. These events, along with brand licensing and by Nielsen, the number of people watching OTT on their phones in 2018 e-commerce, have diversified the print media business. Not only do they saw 12.6% y-o-y growth, making the smartphone into the most gain a strong hold on existing readers, but also allow advertisers more commonly used device for accessing Video platforms. As a result, mobile opportunities to reach consumers. In addition, even though a number of ads have gained in importance and are a must-use for advertisers. publications have discontinued their Print operations, others have 4. Programmatic buying allows advertisers to more efficiently and cost- repositioned to focus on smaller, more specific groups to satisfy the effectively reach their advertising target. This type of buying will be different demands of readers from different age groups. adopted by more advertisers on various types of digital ads. Between 2019 and 2020, Programmatic buying is expected to grow by on average c. Radio about 25%. With programmatic buying’s quick growth, the use of big With a large amount of ad spending on Election publicity by candidates and data analysis to more precisely subdivide and categorize consumers into government agencies, Radio ad spend saw growth of +7.7% in 2018. Radio groups has become the most important job for marketers. But with has a high degree of stickiness and clearly distinct features, but advertising concerns about how digital ads affect mobile-phone user experience and in the Radio market has nearly bottomed out in recent years with certain potential endangerment of personal data security, many countries and radio stations terminating operations. With such a small scale, even though businesses have begun to restrict the disruption that digital ads may there will be advertising incentive in late 2019 with the Presidential Election, cause. For example, Chrome (which is used by 85% of desktop computer investment will be limited, and the overall Radio ad market for the year is to users and 38% of mobile phone users in Taiwan) will no longer permit decline by 3%. disruptive ads (such as full-page ad format) starting July 2019.

DENTSU AEGIS NETWORK 143 Taiwan Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -3.3 -5.0 -3.5 Television 38.8 36.5 34.8

Newspapers -12.5 -11.0 -10.0 Newspapers 6.9 6.1 5.4

Magazines -14.4 -10.0 -8.0 Magazines 3.7 3.3 3.0

Radio 7.7 -3.0 -3.0 Radio 3.5 3.4 3.2

Cinema -21.4 0.0 0.0 Cinema 0.3 0.3 0.3

OOH 19.3 3.0 0.0 OOH 7.7 7.8 7.7

Total Digital 12.0 10.0 8.0 Total Digital 39.1 42.6 45.5

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.0 10.0 8.0 Total Digital* 100 100 100

Display 3.6 3.5 2.0 Display 27.0 25.4 24.0

Online Video 18.2 15.8 13.4 Online Video 19.0 20.0 21.0

Social Media 16.5 12.1 10.0 Social Media 26.0 26.5 27.0

Paid Search 12.8 10.4 7.6 Paid Search 28.0 28.1 28.0

Other incl. Other incl. ------Classified Classified

Mobile^ 18.8 15.9 11.4 Mobile^ 72.6 76.5 79.0

Programmatic Programmatic 29.9 29.1 24.2 20.3 23.8 27.3 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 144 THAILAND: ‘Slow investment in general’

OVERVIEW OF THE TOTAL ADVERTISING MARKET AD SPEND PERFORMANCE BY CATEGORY The ‘Media’ sector is the highest spending in Thailand with high growth Year on year % growth at current prices forecast, +58% in 2019 vs. 2018. • Healthy growth in ‘Beauty & Personal Care’ and ‘Pharmaceutical & 2018 2019f 2020f Medicine’, categories in 2019, +16% and +8.0% respectively. Thailand 5.0% (2.5%) 2.3% (0.9%) 4.8% (2.1%) • The Food category is expected to drop significantly in 2019 by a forecast -21%, mainly due to ‘Ice-cream’ (-86% 2019 y-t-d) however it may improve again in the summer. Previous forecasts in brackets from January 2019 LATEST AD SPEND TRENDS 2019f Gross Local 2019f vs. 2018 • 2018 growth of 5.0% driven mainly by TV spending. Key Categories 2019f Currency Million YOY% • The ad market in the first half of the year in Thailand will slow down due to the Political situation and Coronation. Media 13,250 58% • In 2019, digital media spending will increase. Also data collection from Automotive 8,568 0% DAAT will increase from 20 to 40 agencies. Beverages 7,065 -4% THE 2019 ADSPEND FORECAST Telecommunications 7,027 2% At the beginning of the year the Election in March affected overall spending and the Coronation Ceremony in May stopped on air commercial ads for 7 Beauty & Personal Care 6,454 16% days - only corporate ads with blessing messages. Pharmaceutical & Medicine 3,322 8%

THE 2020 ADSPEND FORECAST Finance & Insurance 3,113 2% For 2020, positive growth is expected (<5%) mainly coming from TV, Digital and OOH respectively. The main media type in Thailand is still TV Retail 3,098 -1% accounting for a 57% share of spend in 2019 even though share of spend is on a declining trend and year-on-year growth is in low mid-single digit Tourism & Transportation 2,875 -5% figures. Digital shows high positive growth 37% in 2019, however share of Food 1,888 -21% spend at 17.8% in 2019 remains behind TV’s (57%). The key event in 2020 will be the Olympic games that will be live broadcast from Japan. The Tokyo 2020 games are expected to be popular amongst Thais.

DENTSU AEGIS NETWORK 145 ‘NEW INNOVATION IN SEARCH TECHNOLOGY’ c. Out of Home OOH media spending will continue to grow due to digital transformation and BY MEDIA. the expansion in Transit (BTS Sky-train and MRT Subway) approximately +5% vs. 2018. OOH advertisers will furthermore need to capture consumer a. Television interests by utilizing content strategy. TV media spending will grow by approximately +4% in 2019. Including direct sales, there will be 5 main channels that will show an d. Radio increase. Excluding direct sales there will be only 2 top channels that will The situation in Radio will be maintained in 2019 as the key Radio stations show positive growth. will be the same. Moreover, the stations are also expanding their own platforms online and have more on-ground activity to build consumer loyalty. b. Digital Nowadays, digital media is seen as a new normal. An integrated online/offline campaign is commonplace. With the closure of offline media, e. Print new online platforms are becoming exclusive destinations for a brands’ Termination of offline platforms and transformation to online instead. communication budget. The Top 10 categories are seeing large growth as Newspapers are expected to drop 60% and Magazines by 70%. a result of the expanding adoption of digital advertising.

Internet access among Thai consumers is expanding to rural areas. Through numerous success cases, Thai marketers have come to realise Digital media as an effective tool for raising awareness and triggering consumer purchases. • Facebook and YouTube (growth 24% and 25% respectively) continue to be the leading platforms drawing the largest amount of investment. New innovation in Search technology beyond text such as Google Shopping. The shift in focus towards precision and performance marketing, and always-on strategies allow marketers to engage consumers through Search from the start of their consumer journey to the final online point of sale. • Advertisers expect to see the highest spend growth in Online Video as well as Search in 2019. • Programmatic Buying is expected to become more active. There will be a shift from IO buying to programmatic buying. Growth coming from the mobile platform, representing approx. 70%.

DENTSU AEGIS NETWORK 146 Thailand Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 6.9% 4.0% 3.0% Television 55.7% 56.6% 55.6%

Newspapers -20.8% -60.0% -18.9% Newspapers 5.7% 2.2% 1.7%

Magazines -33.4% -70.5% -32.0% Magazines 1.2% 0.4% 0.2%

Radio 7.3% -5.0% -5.0% Radio 4.5% 4.1% 3.7%

Cinema 7.3% -10.0% 0.0% Cinema 6.8% 6.0% 5.7%

OOH 5.6% 2.5% 2.4% OOH 12.9% 13.0% 12.7%

Total Digital 15.5% 37.0% 19.6% Total Digital 13.3% 17.8% 20.3%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 15.5% 37.0% 19.6% Total Digital* 100% 100% 100%

Display 14.3% -4.9% 7.8% Display 12.6% 8.7% 7.9%

Online Video 22.9% 33.6% 22.8% Online Video 24.3% 23.7% 24.4%

Social Media 14.8% 32.8% 18.2% Social Media 46.4% 45.0% 44.5%

Paid Search 13.4% 71.4% 20.0% Paid Search 8.2% 10.2% 10.3%

Other incl. Other incl. 4.9% 99.0% 26.3% 8.5% 12.3% 13.0% Classified Classified

Mobile^ 23.8% 42.5% 26.5% Mobile^ 75.0% 78.0% 82.5%

Programmatic Programmatic 28.4% 73.6% 29.0% 30.0% 38.0% 41.0% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 147 VIETNAM: ‘Ad spend forecast to accelerate to 7% in 2019’

OVERVIEW OF THE TOTAL ADVERTISING MARKET

Top 10 Categories 2019f Gross Local Year on year % growth at current prices 2019f vs. 2018 YOY% 2019f Currency Million 2018a 2019f 2020f Food 14,396,343 3%

Hygiene & Beauty 7,883,462 -1% Vietnam 4.1% (5.5%) 6.9% (5.4%) 5.1% (5.1%) Drinks 6,760,116 -13%

Previous forecasts in brackets from January 2019 Household Cleaning 3,406,876 3% LATEST KEY AD SPEND TRENDS Pharmacy & Medicine 3,047,435 0% • Media inflation is lower than expected as demand is low for Cable channels. Last year the total ad growth in Vietnam was only 4% Distribution 2,592,069 53% but is forecast to accelerate to 7% in 2019. Telecommunication 1,586,774 -21% • The Top 3 FTA channels have kept their positions. Demand on these channels is expected to increase in 2019. Transporation 1,072,974 88%

• From a client’s perspective, to keep the same performance as 2018, IT & Office Technology 791,389 722% they should increase spending by around 5%. Furniture & Decoration 735,419 68%

THE 2019 ADSPEND FORECAST There are two key events in 2019: Southeast Asian Games, SEAGAMES 2019 in November and World Cup qualification matches. Total market growth is forecast to reach 7% in 2019. The prediction without keys events is growth of 5.6%.

THE 2020 ADSPEND FORECAST • It is estimated that total ad spend in 2020 will reach 1.7 billion USD which is 5.1% higher than 2019. The main factor behind this growth is still TV spend which is projected to grow by 5%. • a. Are there any global or local events to boost spend in 2019? E.g. sporting or political • The Southeast Asian Games hosted in the Philippines November - December 2019 is expected to boost ad spending.

DENTSU AEGIS NETWORK 148 ‘MOBILE VIDEO CONSUMPTION WILL CONTINUE TO SOAR’ d. E-commerce is set for a strong 2019. The e-commerce market has taken off in Vietnam thanks to booming BY MEDIA Internet usage and smartphone ownership, along with massive investments from key retail players. However, e-commerce has faced several barriers deterring its sustainable development, including low consumer trust in a. TV with more than 200 channels, maintains its significant share of total products and services, and worries over online payment security. advertising spend, a forecast 84.3% in 2019. Within this, Free-to-air In addition, most Vietnamese e-commerce websites provide only basic channels capture 70% of TV ad spend, while Cable and Satellite make up services, such as information about products and modes of payment. 30%. Vietnam is experiencing robust economic growth, while TV content Services such as digital marketing optimization and connecting online with and programming is on an improving trend. Future growth in TV advertising offline sales need to be added. is likely to be nominal at best, as market momentum lends towards online and mobile media. e. There will likely be an ever greater focus on data-driven ad targeting within digital – as advertisers (increasingly empowered by their recently b. Mobile Video consumption is trending up according to Ericsson, around developed in-house data management platforms, DMPs) apply their 70% of consumers now watch TV and Video content on a Smartphone— data to programmatic buying. twice as many as in 2012. Mobile Video consumption will continue to soar whilst the Mobile is already viewed as the primary entertainment device. Pay-TV operators need to effectively scale up their online distribution capabilities to deliver content beyond just TV screens.

c. Multi-Media Campaigns There is a gap between how well marketers think they integrate strategies and what consumers see and we need lots of brand integration cues to improve campaign performance. There might be an answer which fit could be better across all channels where consistent use of characters or personalities differentiates the best campaign.

DENTSU AEGIS NETWORK 149 Vietnam Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 3.0 7.2 4.7 Television 84.1 84.3 84.0

Newspapers -15.5 -34.5 -25.6 Newspapers 1.4 0.8 0.6

Magazines -21.0 32.7 2.4 Magazines 0.9 1.1 1.1

Radio 24.0 -16.1 2.0 Radio 2.3 1.8 1.8

Cinema n.a n.a n.a Cinema n.a n.a n.a

OOH n.a n.a n.a OOH n.a n.a n.a

Total Digital 15.0 12.2 11.0 Total Digital 11.3 11.9 12.6

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 15.0 12.2 11.0 Total Digital* 100 100 100

Display 15.0 10.0 7.0 Display 47.4 46.5 44.8

Online Video 15.0 15.0 15.0 Online Video 14.8 15.2 15.7

Social Media 15.0 15.0 15.0 Social Media 29.6 30.4 31.5

Paid Search 15.2 10.0 11.0 Paid Search 8.1 8.0 8.0

Other incl. Other incl. n.a n.a n.a n.a n.a n.a Classified Classified

Mobile^ 50.8 68.2 29.5 Mobile^ 20.0 30.0 35.0

Programmatic Programmatic n.a 39.1 26.7 16.0 20.2 23.0 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 150 Latin America Market

151 ARGENTINA: ‘Advertising investment in 2019 will grow below inflation’

It is expected that the Mercosur agreement with the European Union will OVERVIEW OF THE TOTAL ADVERTISING MARKET Top 10 Categories 2019f Gross Local 2019f vs. 2018 bring economic improvements (mainly with exports). The government 2019f Currency Million YOY% must show economic improvements in view of the presidential elections in Year on year % growth at current prices October. The 2019 budget was approved with the government's proposal to Retail 22,392 30% reduce the primary deficit to reach 0% of GDP, a private consumption drop 2018 2019f 2020f Beauty 20,938 25% of 1.6%, and inflation of 25% (although today it is forecast at 30%). Pharmaceutical 14,601 37% Argentina 16.6% (26.0%) 21.6% (25.0%) 18.7% (19.4%) THE 2020 AD SPEND FORECAST Food 10,077 20% Previous forecasts in brackets from January 2019 Everything will depend on the results of the elections in October 2019. Political 8,401 40% If the ruling party shows and maintains the projected economic policies, Telecommunications 8,023 38% LATEST KEY AD SPEND TRENDS it is possible that there will be economic recovery and that this will mainly • The crisis of the 2nd half of 2018 abruptly cut advertiser’s budgets - the reactivate communication in the sectors of mass consumption. If a new Banks & Finances 6,781 23% AR $ was devalued by 49% and inflation closed at 50%. The 16% growth government arrives with the populist profile of the previous government, is due to inflation. there will be a lot of uncertainty regarding the political and economic Espectaculos 5,953 14% decisions that they will make. This may cause the advertising market to • Growth was expected by the big advertisers who have dollar budgets, but Cleanning 5,808 22% remain hesitant without communicating too much, during the first year of this did not happen. the new government. Drinks Without Alcohol 4,451 18% • Volumes decreased but investment increased due to the media raising their prices, and because demand is still high. AD SPEND PERFORMANCE BY CATEGORY Of the Top Ten categories, Political shows the most growth as expected, and THE 2019 AD SPEND FORECAST the rest all grow below inflation. The other category that shows high growth It’s expected that advertising investment in 2019 will grow below inflation, is Telecommunications, and this is due to Telecom's alliance with Cablevisión and there will be uncertainty about the changes that may be generated in which pushed the whole category to communicate. The Pharmaceutical the political context of the country. Political communication will have a Industry continues to grow although at a slower pace than in 2018. Retail big presence. and Beauty have regained their growth, although always below inflation. Banks and Finance have maintained their advertising communication and 2019 will be a political year, with presidential elections in October. The are trying to offer fixed terms with high rates. communication from political parties grows, and the inventories of audiovisual media are saturated with communication. This is free however as spaces are provided by the government for political parties.

The economic context The economy will decrease 1.2% (according to IMF estimates, WEO report), inflation is expected to be around 30.5%, and unemployment will reach 10%. A dollar exchange rate was created to contain it and interest rates went up – this achieved an economic improvement, but it is still not reflected in society.

DENTSU AEGIS NETWORK 152 ‘DIGITAL MEDIA IS GROWING EXPONENTIALLY’ Integrating specific strategies to identify and communicate with Influencers has become vital to boosting your reputation and strengthening your brand. BY MEDIA Bloggers and youtubers are necessary, as well as improving the traceability of dissemination, improving your content and using social media actions to analyze your reputation. a. Digital Growth vs. Offline Pushed by online video, the growth of social media influencers, big data and programmatic, the use of mobile, and artificial intelligence (chatbots), d. Big Data and Programmatic digital media is growing exponentially and above the rest of media, reaching Programmatic buying is growing rapidly, and in 2018 it represented 38% vs 23% growth in 2018, with a forecast growth of 35% in 2019 reaching a direct purchase. It is estimated that by 2019 it will reach 43% and by 2020 share of 28%. It is expected that digital’s share will rise to 30.5% in 2020. 50%. Television is the only media that is still resisting, and although its share is This is because the amount of information that can be obtained from users reducing little by little, it is not expected to drop below 40%, at least till continues to grow. 2020. The industry has quickly learnt to interpret and use them in favor of more effective and personalized messages. Companies are already using Big Data b. Online Video, Video-News and Live Broadcasts: to understand the profile and the needs of their customers with regards to their products/services. This allows adapting the way in which the company The growth of online video within Digital is forecast at 56% for 2019 and interacts with its customers and how they provide service. 57% for 2020, reaching a 23% and 27% share respectively. There has been a clear increase in the audiovisual format. The visualization of information through mobile phones, the impact of images on text, and e. Mobile the options offered by social networks, have encouraged the use of live It is expected that Mobile will grow 44% by 2018 vs. Desktop and 50% by videos. Companies must adopt live broadcasts and the use of videos in their 2019, with the main reason for growth outlined as the growing penetration marketing communications. Facebook has already bought the transmission of smartphones. According to a study by Kantar Ibope, 53% of people have rights of the Copa Libertadores de Fútbol 2019, and although the experience a smart phone in Argentina, and this has grown by 87% compared to the for users was not good, it’s yet to be seen how they will evolve. previous year (2017). 61% of people use social media whilst watching TV to contact friends, generate content or inform. In a typical day, 37% of people access their social media networks 5 times or more. 49% of smartphone c. Social Media, Influencers, and Reputation Monitoring: users said they had purchased a product or service on the web (in the last 3 The growth of Social Media as part of digital is exponential. In 2019 it is months). estimated that it will reach its peak growth exceeding 50%, while in 2020 it will grow by 38%. In this context, Influencers, as well as the defenders of brands, have become relevant as they affect the reputation of organizations. Employing the most relevant social networks plays a key role as a channel for the dissemination of information and ideas, and for some users to exercise their influence over others.

DENTSU AEGIS NETWORK 153 Argentina Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 12.0% 20.0% 15.0% Television 41.8% 41.3% 40.0%

Newspapers 8.0% 10.0% 12.0% Newspapers 19.7% 17.8% 16.8%

Magazines 10.0% 10.0% 12.0% Magazines 2.0% 1.8% 1.7%

Radio 25.0% 15.0% 15.0% Radio 6.7% 6.3% 6.1%

Cinema 13.0% 15.0% 10.0% Cinema 0.9% 0.9% 0.8%

OOH 30.0% 30.0% 20.0% OOH 3.9% 4.1% 4.2%

Total Digital 30.0% 35.0% 30.0% Total Digital 25.1% 27.8% 30.5%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 30.0% 35.0% 30.0% Total Digital* 25.1% 27.8% 30.5%

Display 37.8% 15.3% 5.0% Display 30.4% 26.0% 21.0%

Online Video 44.0% 56.3% 52.6% Online Video 19.9% 23.0% 27.0%

Social Media 23.1% 50.9% 38.7% Social Media 13.4% 15.0% 16.0%

Paid Search 24.7% 42.2% 33.8% Paid Search 32.3% 34.0% 35.0%

Other incl. Other incl. -6.2% -32.6% -35.0% 4.0% 2.0% 1.0% Classified Classified

Mobile^ 44.1% 50.3% 45.9% Mobile^ 44.0% 49.0% 55.0%

Programmatic Programmatic 127.5% 65.9% 51.2% 35.0% 43.0% 50.0% Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 154 BRAZIL: ‘Economic and social uncertainty still remain due to the political issues of the new government.’

OVERVIEW OF THE TOTAL ADVERTISING MARKET RATIONALE FOR ANY FORECAST CHANGES COMPARED TO THE Top 10 Categories 2019f Gross Local 2019f vs. 2018 PREVIOUS REPORT (JANUARY 2019) 2019f Currency Million YOY% Year on year % growth at current prices Economic and social uncertainty still remain due to the political issues of the Retail 24.245 13,97% new government. 2018a 2019f 2020f Consumer Service 18.769 23,25%

Brazil 7.1% (7.1%) 8.8% (3.6%) 4.5% (6.2%) It is possible that an increase of investment in the digital ads market will Finance 10.698 6,00% occur, since technological developments such as automation and artificial Personal Care 10.145 4,21% Previous forecasts in brackets from January 2019 intelligence are among the top trends of 2019. Pharmaceutical 9.405 8,66% LATEST KEY AD SPEND TRENDS Video ad formats are also increasing in 2019-20, due to growth in the OTT Leisure, Sports, • The financial market remains optimistic with economic growth. Brazil’s 7.684 5,27% (over-the-top) market. Culture and Tourism GDP is expected to grow by 2.57% this year. • President Bolsonaro decided to review the welfare and tax reform Media 6.708 11,24% AD SPEND PERFORMANCE BY CATEGORY legislation in this new government. This is expected to boost the economy Public Administration 5.228 -12,96% and attract new investors to the country. Once elections are over, investment in Public Administration tends to fall, as well as Telecommunication. Considering the optimism of the market due to • To leverage tourism, a visa waiver for U.S, Canada, Japan, and Australia economic growth, there is an expectation that Retail and Consumer Services Telecommunication 5.096 -5,02% was announced, starting on June 17th. Internet searches for flights to will start investing more to attract consumers. Brazil have grown by 36% after the official statement. Beverages 4.810 3,09%

CONSUMER TRENDS DRIVING CHANGES IN THE PROFILE OF AD THE 2019 AD SPEND FORECAST SPEND Historically, Brazil has had a lack of good consumer service. This scenario is Beauty is one of the trends of the year. Consumers are demanding more and changing and, in 2019, investments on Consumer Service ads are more for ads that show diversity - they are starting to accept their increasing, becoming the sector with the highest growth compared to 2018. individual uniqueness and they want to identify themselves with brands that Services such as transportation, IT, administrative support and marketing are aligned with them. might be affected positively.

Many people are trying to spend less and with more caution. This consumer THE 2020 AD SPEND FORECAST profile is increasing due to the economic crisis in the country, in which • Economic and political sectors may be affected positively or negatively by people are having trouble with their paychecks and will be insecure about the 2020 elections of mayors and city councillors. their jobs for the next few years. It may affect the Retail and Leisure • The Olympic Games will be one of the main sports events that has a sectors as well. global impact. When the event is held in Japan, advertising schedules may be changed to coordinate with Oriental time and to make ads more profitable.

DENTSU AEGIS NETWORK 155 ‘THE DIGITAL MARKET IS THE MOST PROMISING AREA FOR MANY iii. Mobile d. Print BRAZILIANS’ Brazil is already the country with the third greatest volume of searches by Print media continues to have low ad spend compared to other medias. Google voice in the world. Voice search is in the process of evolution and However the advertising investment forecasts are positive for newspapers BY MEDIA this interface will take on many different roles that we perform on a daily and magazines. Newspaper has maintained its market share – in total it basis, such as ordering a pizza or calling an Uber. currently accounts for 8.6% of total ad spend. Magazine holds only 3% of a. TV the investment forecasts for this segment. The announcement of the arrival of CNN News Brazil promises to fiddle with iv. Programmatic the setting of Pay TV in Brazil. Currently this market is dominated by Globo Programmatic is increasingly guided by data, which will enable this market e. Radio News (a channel that belongs to the Globo Group). The beginning of the to keep increasing along with the growth of databases. Programmatic tends When we analyze the data for radio in Brazil, we notice a continued broadcast is planned for the end of the year. This movement will promote to be chosen more and more now as data about consumers and their retraction in media investments. For 2019, it is believed that the segment the advertising market and promises to increase the investment in TV preferences becomes richer everyday. There is a also a continuous will grow only 2% compared to last year. by 9%. investment in new technologies and ways to improve user experience to increase retention. f. Cinema b. Digital Considering that some medias are bought in dollars, it is expected that Due to the increased coverage of information from our advertising The digital market is the most promising area for many Brazilians, as it has foreign and multinational companies will start investing more in Brazil this investment data source (Kantar Ibope - Monitor Evolution), there has been space for everyone. It is an extremely dynamic and creative sector and, for year once the Real currency is devalued, favouring buys per dollar. a significant growth in cinema data. Comparing the data for 2018, we any business model, trade mark or design, it is paramount to have a digital predict that the segment will grow 38% in 2019. strategy. The investment in digital should grow 12% until 2021. The figures v. Paid Search show that the digital segment represents 1/3 of the total invested in Paid Search is increasing along with the other sectors. Because it is digital, publicity in the country. there is the opportunity for several companies to offer more affordable prices with a higher range. The continuous improvement in search i. Online Video algorithms will boost the industry both this year and next. This media is also There are two strong trends for online videos in 2019. The first is the viewer influenced by the dollar exchange rate, as well as programmatically. As the no longer taking a passive role and instead interacting and getting involved Real is low in 2019, the industry will attract more investment from foreign with the video they are watching. The second trend is a focus on user companies. experience, ensuring that the viewer is immersed in high-quality content. An example of content that is growing currently is augmented reality. c. OOH The media Out Of Home (OOH) in Brazil has reached a level that shows a ii. Social Media recognition of both its strength and relevance. Last year, the market grew The focus of social networking in 2019 will be on stories and companies 8.6% and occupied third place in terms of advertising investment after TV looking to stay relevant on social networks need to improve their Stories and digital, according to CENP media. The growth prospect for this year is performance across all social media platforms: Instagram, Facebook, optimistic, and it is believed that the segment will grow 14% by the end WhatsApp and Snapchat. Another trend for 2019 is getting the spotlight on of 2019. yours ads on social media. It is important for campaigns to be relevant and generate engagement. There is a reduction of soft banners on the feed and an increase in "full campaigns", designed to boost engagement and discussion, such as on Spotify and Netflix.

DENTSU AEGIS NETWORK 156 Brazil Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 7.7% 9.3% 4.5% Television 71.7% 72.0% 72.0%

Newspapers -2.6% 8.6% -0.5% Newspapers 6.3% 6.3% 6.0%

Magazines -13.0% 3.3% 3.2% Magazines 3.0% 2.8% 2.8%

Radio 18.3% 2.0% 7.8% Radio 4.0% 3.8% 3.9%

Cinema 0.0% 37.7% 27.4% Cinema 1.4% 1.7% 2.1%

OOH -9.6% 14.0% 2.4% OOH 3.0% 3.1% 3.1%

Total Digital 21.1% 4.2% 4.0% Total Digital 10.7% 10.3% 10.2%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 21.1% 4.2% 4.0% Total Digital* 100% 100% 100%

Display 56.3% 18.2% 11.5% Display 59.8% 67.9% 72.7%

Online Video n.a n.a n.a Online Video n.a n.a n.a

Social Media n.a n.a n.a Social Media n.a n.a n.a

Paid Search -9.3% -16.6% -11.6% Paid Search 40.2% 32.1% 27.3%

Other incl. Other incl. n.a n.a -n.a n.a- n.a n.a Classified Classified

Mobile^ 21.1 4.2 4.0 Mobile^ 60 60 60

Programmatic Programmatic n.a n.a n.a n.a n.a n.a Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 157 COLOMBIA: ‘The expected recovery for 2019 will be postponed until 2020’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST Top 10 Categories 2019f Gross Local 2019f vs. 2018 Historically, there has been an important correlation between growth in 2019f Currency Million YOY% Year on year % growth at current prices media investment and GDP; Thus, the reduction in Ad Spend, especially in traditional media, is exacerbated when the economy does not show good Commerce, Tourism 742860 -5.2% 2018 2019f 2020f performance. Telecommunications 593382 9.4% COLOMBIA -1.8% (3.1%) -1.0% (4.3%) 0.3% (3.9%) Civic And Government 520639 -11.0% Then it can be considered that if the economy does not show significant Previous forecasts in brackets from January 2019 growth, that is, close to the growth potential of the economy, which is Services 373162 -4.1% estimated at 3.5%, the Ad spend will not show positive development. LATEST KEY AD SPEND TRENDS Drinks 364831 10.2%

• The recent growth results of the economy have been lower than expected That said, it seems that the consolidation of the expected economic growth Automotive 268096 18.4% (even somewhat disappointing); at the beginning of the year, the for 2019 will be postponed to 2020, where the decreasing tendency of Ad Financial, Insurance 242539 -18.4% government's expectation was to grow above 3.5%, but the final figure for spend should stop, and where there will be positive growth of 0.3% the first quarter was 2.8%, which calls into question whether a significant (although this will be largely due to Digital). consolidation of growth will be achieved this year. Fun And Entertainment 231204 -9.1% • Associations of traditional media, in their internal reports and estimates AD SPEND PERFORMANCE BY CATEGORY Education 204976 4.2% (which have now become confidential), reported a steady decrease in their income some years ago, a situation that continues to occur in the first Trade remains the dominant sector, despite the estimated reduction in Industry And Construction 184660 15.9% quarter of this year. investment. • On the other hand, it is also clear that the local market does not have measurements for new possible destinations of the investment e.g. Automotive is showing a notable recovery compared to 2018. content, better measurement of digital, etc.

THE 2019 AD SPEND FORECAST Two events could generate some dynamism: the Copa América de Football (June) and elections for mayors and governors (second semester); but their real impact will only be seen in the second half of the year.

The economic context As the year progresses, the possibility of significant growth in 2019 weakens (which should be at least 3.5%); the figure for the first quarter was 2.8%; and different analysts began to reduce their expectations, for example BBVA Research went from 3.3% (October 2018) to 3.0% (April 2019)

DENTSU AEGIS NETWORK 158 ‘ONLINE VIDEO STILL DOMINATES SOCIAL MEDIA, BUT THIS SITUATION WILL REVERT IN 2020’

BY MEDIA

a. It is very remarkable that in 2018 the share of mobile over desktop in digital investment is consolidated: mobile already makes 61% of the investment in digital (IAB).

b. Online Video and Social Media were consolidated in 2018 as the most important formats: together they already make up more than 50% of the investment in Digital.

Online Video still dominates Social Media, but this situation will revert in 2020.

c. The reduction in TV share reflects current audience dynamics, for example, the reduction of the Open TV rating or the stagnation of the Pay TV rating, in relation to 2010 or 2011. Even the penetration of Pay TV has started to recede: it went from 88% in 2017 to 84% in 2019.

d. There’s a similar situation in print media: press and magazines.

e. Despite its low share, OOH should show some recovery.

DENTSU AEGIS NETWORK 159 Colombia Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -7.2 -7.7 -9.7 Television 50,4 47,0 42,3

Newspapers -6.0 -4.9 -6.2 Newspapers 17,0 16,3 15,3

Magazines -8.6 -15.2 -19.2 Magazines 2,6 2,2 1,8

Radio 0.4 -6.9 -8.7 Radio 13,7 12,9 11,7

Cinema 0.0 4.1 5.2 Cinema 0,3 0,3 0,3

OOH -16.9 4.1 5.2 OOH 2,7 2,9 3,0

Total Digital 41.4 37.3 39.4 Total Digital 13,3 18,4 25,5

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 41.4 37.3 39.4 Total Digital* 100.0 100.0 100.0

Display 15.9 7.1 0.0 Display 24.1 18.8 13.5

Online Video 44.8 40.6 42.6 Online Video 27.7 28.4 29.0

Social Media 59.3 52.7 53.4 Social Media 25.7 28.6 31.5

Paid Search 58.8 52.3 53.1 Paid Search 19.1 21.2 23.2

Other incl. Other incl. 28.7 23.8 24.1 3.4 3.0 2.7 Classified Classified

Mobile^ 59.7 53.1 53.7 Mobile^ 61.0 68.0 75.0

Programmatic Programmatic 73.7 62.7 61.1 17.4 20.7 23.9 Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 160 MEXICO: ‘Retail ad spend keeps going up’

OVERVIEW OF THE TOTAL ADVERTISING MARKET In addition, as the Mexican economy heavily depends on doing business It’s curious that Restaurants’ ad spend has risen so much, but the rise in with the United States, president Donald Trump has used this to establish retail could have contributed to this. Malls have been opening all over the Year on year % growth at current prices policies like taxes on Mexican goods. These are orientated to force the country at a pace that you couldn’t have imagined years ago. Mexican government to take responsibility for returning thousands of 2018 2019f 2020f migrants trying to reach the United States, to their homeland mainly in A large portion of the population’s consumption has migrated to Central America, when they still are on Mexican soil. Mexico 9.1% (7.9%) 6.0% (6.6%) 4.5% (5.0%) non-traditional channels like telemarketing. This platform has been more People feel less confident to spend or invest in expensive goods likely to push an actual consumer to increase their buying. like properties, because there is less security in their financial and Previous forecasts in brackets from January 2019 employment contexts. LATEST KEY AD SPEND TRENDS Top 10 Categories 2019f Gross Local 2019f vs. 2018 • Government investment has decreased making almost all media channels THE 2020 AD SPEND FORECAST 2019f Currency Million YOY% less saturated than in 2018 when there was high activity with political 2020 follows the decreasing trend from the 2018 political campaigns. The • Retail $21,403 +1.3% campaigns. light growth that’s expected for 2020 is influenced by the same distrust in • This creates an opportunity for advertisers to take advantage over their Mexico’s economic environment. Internet $11,405 -26.9% competitors, occupying these new slots before others. • The Mexican population’s low consumption due to the new government Telemarketing $15,435 +33.4% • Also considering that media channels will be less saturated, they can work prices, product availability, public services etc., could influence the with more efficient communication strategies in a cross media scope to negative trend in ad spend in the next few years. Shampoo $10,114 -4.3% deliver more functional messages, with an audience that will feel they’re Departmental stores $9,664 -25.1% receiving less advertising than last year. AD SPEND PERFORMANCE BY CATEGORY Retail ad spend keeps going up. This is caused by small or local retailers not Anti-flu/Analgesics $9,272 +12.7% THE 2019 AD SPEND FORECAST being able to keep up with big retailers. Sodas $7,901 -5.4% Currently, Mexico’s audience is awaiting 2 soccer tournaments that will be ongoing simultaneously in June: America’s Cup and the Gold Cup. Internet services are also decreasing compared to 2018, where they had an Beers $7,224 -20.1% Digital channels will keep rising up because of the number of basic service important season in which they made these services available to a portion CD music/video $5,365 -12.9% providers that have been migrating their client services onto apps, and of the population that didn’t have access, and where they added new because low costs or promotions on internet services has made it easier to services for families who already had access at home. Restaurants $7,056 +12.7% have contact with these kind of digital solutions.

It’s important to emphasize that last year there was a rise in respiratory The economic context diseases, and therefore the category Anti-flu/Analgesics showed growth. This year, Mexicans are mostly worried about the economic policies that the In the center of the country, the air pollution has been worse than previous national government are standing for, like the policy over the national years, and therefore during the first half of 2019 this topic has been on petroleum company and cutting public aid and budget for public services people’s minds, especially those living in the center of the country but also that the majority of people need in their day to day life: health services, in other regions. childcare, etc.

DENTSU AEGIS NETWORK 161 DIGITAL OOH CONTINUES TO GROW’ c. MAGAZINES i. PROGRAMMATIC TV As with newspaper media, advertisers are more likely to choose digital Programmatic TV: Dish, Totalplay (linear and addressable ads), Decidata BY MEDIA magazine platforms (influencers) instead of print. There are some and Google (YouTube) launched Programmatic TV. We are looking to test advertisers that continue to consider it as their main point of contact e.g. this technology with these business partners. a. TELEVISION in the perfume or luxury industries. Televisa maintains their cost per rating point. They will perform an analysis j. VR & IA (CHAT BOT / Machine learning) for each client about the category behavior, target and audience, with the d. OOH Business Intelligence claim that 8% of internet users that use smart objective of offering an adhoc plan to each client with traditional spots, The new government of Mexico will continue the initiative to regulate this speakers have used voice to shop. The second iteration of Snapchat’s product placement and digital. media in an effort to decrease visual saturation that affects the image of Spectacles are projected to include AR functionality. the city. Digital OOH continues to grow. This format will take a big step in Tv Azteca will have a new scheme for 2019. They will offer an audience the future to evolve in a new way with the ability to buy OOH k. DOOH programmatically and using geolocation. guarantee under the model called CPM (Cost per Thousand) with two DOOH: Nowadays only Clear Channel have the technology to sell models of purchase (free and horizontal). The horizontal model will allow programmatic audience on OOH. The benefit of using DOOH is that it having spots in their 4 channels at the same time. e. RADIO allows changes “in real time” to ads. This media continues with the same business scheme - by cost per spot. Imagen TV maintains the CPR as the essential way of commercialization. l. BRAND CONTENT In addition, Open TV is evolving into the platforms digital and Pay Tv. The f. CINEMA • Content continues to grow from 8% to 13% vs. 2018. consumption of Open TV has been modified, because of the growth in Coverage continues to expand based on an increased number of movie • Based on data generation, the personalization of content will lead Digital screens. theaters - the accelerated growth of construction, specifically of shopping strategies. malls, has increased the number of complexes and has made movies more • 80% lead by video content. accessible to greater numbers of people. In 2019, Broadcaster Dish launched a new channel on Open TV with their • Fast content will become the new ads. own programming and with a multitarget audience. • Message apps have become a new channel for distributing content this Izzi has grown in coverage from 4.3 million to 4.4 million households. g. DISPLAY year. Paid TV is increasing their Digital platform and they are maximizing their There has not been a change of formats. On display what is being • VOD is the principal ambition for clients. content using the strength of influencers. exploited the most is content, and there is a tendency of the budget • From a client perspective, the ROI is much more efficient. moving to programmatic. Notes: b. PRINT-NEWSPAPERS There is uncertainty surrounding the new government that begun in h. AUDIO SYNC This medium is mainly affected by digital. Advertisers are migrating to December 2018. We need to be alert to any factors that could impact digital platforms and so newspaper publishers are starting to add digital Audio Sync: Digital Sync is increasing in the Mexico market and this year media consumption. components to reach digital audiences too. we can connect our radio campaigns using audio sync.

DENTSU AEGIS NETWORK 162 Mexico Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 1.8 0.7 0.5 Television 43.0 40.8 39.3

Newspapers -2.1 -2.0 -3.0 Newspapers 4.9 4.5 4.2

Magazines -7.8 -8.0 -8.9 Magazines 3.3 2.9 2.5

Radio -2.8 -1.0 -1.2 Radio 5.7 5.4 5.1

Cinema 2.3 0.8 1.1 Cinema 0.7 0.7 0.7

OOH 19.1 1.5 1.3 OOH 6.9 6.6 6.4

Total Digital 24.6 17.0 12.0 Total Digital 35.4 39.1 41.9

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 24.6 17.0 12.0 Total Digital* 100.0 100.0 100.0

Display 19.4 17.4 12.2 Display 38.2 36.7 34.3

Online Video 33.0 35.0 37.0 Online Video 28.7 31.7 36.2

Social Media 37.0 28.7 24.7 Social Media 25.0 26.4 27.4

Paid Search 20.2 18.1 12.4 Paid Search 28.9 27.9 26.2

Other incl. Other incl. Classified 7.4 4.6 6.7 Classified 4.3 3.7 3.3

Mobile^ 37.8 25.0 21.0 Mobile^ 63.8 68.1 73.6

Programmatic Programmatic n.a. n.a. n.a. n.a. n.a. n.a. Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 163 Middle East & North Africa Market

164 MENA: ‘Economic growth will gain steam’

LATEST KEY AD SPEND TRENDS THE 2020 AD SPEND FORECAST • Economic growth in the Middle East and North Africa region will gain MENA is the underperforming market, but the market is to stabilize steam this year on the back of an expected increase in oil prices, bold it’s spend by 0.4% in 2020 and grow by more than 1% in 2020. fiscal support and accommodative monetary conditions. Search and Social will drive the growth in this region. • A major contributor to growth will be the EXPO 2020 taking place in UAE. This will help clients to grow their spends. AD SPEND PERFORMANCE BY CATEGORY • Aside from the introduction of VAT in UAE & KSA last year, this year it is There is a drop in spends in the top ten category spenders by 7% followed by 5% VAT in Bahrain which may be adapted by other GCC over 2018. Servicing companies (Public sector, Trading Companies, countries. Education Institute, Gift) have shown growth by +18% over 2017. Automotive, Telecommunication have dropped in 2018 by more than The 2019 ad spend forecast 15% and are expected to fall in 2019 too. Global or local events to boost spend in 2019 Banking and Property Building has shown growth in this region purely Ad spend is expected to drop by around 8.5% in 2019, with a forecast 5% due to EXPO 2020 and the Football World Cup in Qatar 2022. drop in 2020. Programmatic advertising will spread further and deeper into various media, including OOH, and into premium formats and inventory. The digitization of marketing has seen Google and Facebook claim an ever- Top 10 Categories 2019f Gross Local 2019f vs. 2018 higher share of total investments in MENA. Other media will see their share 2019f Currency Million YOY% of the total decline further. Mobile marketing will keep on growing. Hygiene & Beauty Care 1472 -7.9

Entertainment & Leisure 1100 -8.1 The economic context The past year has seen a number of positive developments in the Middle Servicing Companies 1102 18.0 East and North Africa region. Recovery and reconstruction efforts are Foods 888 -0.3 underway in Iraq following the liberation of its territory, while countries such as Egypt and Saudi Arabia have undergone major economic and social Telecommunication 599 -16.4 reforms. Moreover, growth has picked up across the region and almost all Websites 654 2.0 MENA countries have moved to reduce or eliminate energy subsidies, identify new sources of non-oil revenues, and expand social safety nets to Automotive 368 -22.4 shield the poor from the adverse effects of change. Upkeep Products 480 3.8

Economic growth in the MENA region is forecast to improve modestly, Banking & Finance 457 5.6 reaching an average of 2.6% in 2019-2020. Oil exporters will significantly Property & Building & Acc. 395 1.9 benefit from higher oil prices and external oil demand that will likely remain high, as well as domestic reforms. Oil importers are expected to benefit from reforms, rising trade with Europe and China, and financial inflows from MENA oil exporters.

DENTSU AEGIS NETWORK 165 ‘GROWTH IN DATA-DRIVEN, CONTENT DRIVEN d. Artificial Intelligence MARKETING SERVICES’ With everybody talking about AI, it has for sure a significant impact on our clients. Mechanisms will be helpful in analyzing the consumers’ behavior and BY MEDIA their Search patterns. One will be able to track the customer journey and understand how the users are and how they are looking for desired products a. TV and services. All this may lead to a straightforward better understanding of our customers and a more effective performance of our content. TV ratings in the region have been dropping by 15% approx. on a year on year basis. In order to keep up viewership there has been a launch of new reality shows every quarter on the leading TV stations. e. Programmatic Advertising Shows like ‘Arab Got Talent’, ‘The Voice’, ‘Carpool’ have been the most With Programmatic advertising, which will make our campaigns more cost- popular in terms of ratings. effective. An automated bidding on advertising inventory in real time is a Aside from regular TV sponsorships of programmes, the brands are also perfect opportunity to show an ad to a specific customer and in desired exposed with Product Placement, Integration, Dedicated branded areas, context. With reduced budgets and impressions, wastage decreased by 30 Brand activations supported by 360 degree media promotions. per cent, it ensures operational efficiency as well, both from buyers’ and sellers’ perspective. Programmatic marketing will be the best supporter in planning your marketing budget for 2019 and 2020. b. Digital Digital is rising rapidly, even at the expense of TV, but particularly Print. As budgets are under pressure and market conditions are soft, clients are prioritizing short-term results and investing more and more in Data and Technology, Programmatic, Content and Influencer marketing. In turn, we’re seeing growth in more data-driven and content-driven marketing services, as well as our technology and transformation consulting services.

c. Evolving of Social Media Stories are set to overtake news feeds as the primary means for getting updates on Social Media. Social Networks are responding to this trend by creating opportunities for brands to embrace this trend. The rise of stories is part of the next phase in social media’s evolution; a move which – despite some success stories – has seen the plateauing of Facebook, Twitter and Snapchat in many markets.

DENTSU AEGIS NETWORK 166 MENA Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -7.3% -9.7% -5.7% Television 56.5% 55.8% 55.4%

Newspapers -16.6% -14.5% -11.8% Newspapers 13.0% 12.1% 11.3%

Magazines -24.6% -10.3% -9.5% Magazines 2.9% 2.8% 2.7%

Radio 6.6% -4.2% 1.4% Radio 9.4% 9.9% 10.5%

Cinema 4.8% 1.6% 1.7% Cinema 1.0% 1.1% 1.2%

OOH 2.5% -1.9% -0.4% OOH 16.8% 18.0% 18.9%

Total Digital n.a. n.a. n.a. Total Digital n.a. n.a. n.a.

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 167 EGYPT: ‘The market is witnessing TV Market Monopolization Another football year is deriving campaign opportunities’

OVERVIEW OF THE TOTAL ADVERTISING MARKET THE 2020 AD SPEND FORECAST 2019 (Q1) Gross 2019(Q1)vs. 2018 Top 10 Categories The forecast for 2020 is still unpredictable given that the economy is still Local Currency (Q1) Year on year % growth at current prices 2019(Q1) stabilizing. However there are indications that there will be an increase/rise Million YOY% in foreign investments, funds etc - there has been a noticeable increase 2018a 2019f 2020f Telecom 1,856m Egp 361% behind Tourism which is a huge variable for the Egyptian economy. 19.7% Therefore, when brands especially the multinationals start witnessing the Public Sector 1,389m Egp - Egypt -4.9% (9.0%) 3.1% (17.8%) (19.8%) stabilization in the country and in specific the customs costs decreasing Real Estate 1,196m Egp 1% (behind the USD stabilization) for the importation of products. This will Previous forecasts in brackets from January 2019 increase brands’ confidence in marketing their products in Egypt. Another Ghee 546m Egp 2748% LATEST KEY AD SPEND TRENDS point is that by mid year the media market research should be operating Pharmaceutical again since it has been terminated since May-17, which will allow brands to 655m Egp 17740% • Monopolization of the TV market where key TV network concessions have Products be able to measure their campaigns and KPIs on TV as before, thus merged as one entity under silent government supervision, creating prompting brands to further increase their investments and advertise on Diapers 604m Egp 63% agency limitation and power on negotiations and allowing key suppliers to Television with more confidence in planning deliveries. monopolize the market and inflate ratecards. Medical Servicing 677m Egp 107%

• Direct CPM buys continue to diminish with clients moving towards Washing Detergent 654m Egp 41% performance-based platforms and sponsorships/takeovers. AD SPEND PERFORMANCE BY CATEGORY • Telecommunications, Public Sector and Real Estate are the top Lighting 416m Egp - 3 category spenders throughout 2019 (YTD). THE 2019 AD SPEND FORECAST Toothpaste 377m Egp 74% Global or local events to boost spend in 2019 • Pharmaceutical, Ghee and Telecom are witnessing significant spend growth throughout 2019 YTD, other categories also showing spend The market has been active in early 2019 yet the increase in investment increase are Diapers, Toothpaste and Washing Detergent. has been moderate. However, it is definitely expected to improve drastically in Q2 given the upcoming Africa Cup of Nations (CAF) tournament during • Other categories have witnessed stability in spending such as Public June-July as the majority of clients have shifted spend to adapt their Sector and Lighting. communication to be driven behind the CAF communications and are currently preparing for their key campaign launches to support the tournament.

The economic context With a shaky start during the third quarter of fiscal year 2019, there is some hope of an improvement especially since the government has approved the FY2020 budget. The finance package is in line with the government’s IMF-backed reform program, given that they are targeting a lower level of fiscal deficit, with a restrained rise in spending and strong economic growth boosting revenues. In addition to strong beliefs that there will be economic growth from higher investments from the government and a rise in natural gas production.

DENTSU AEGIS NETWORK 168 ‘FACEBOOK AND INSTAGRAM CONTINUE TO BE THE LARGEST SOCIAL PLATFORMS IN EGYPT’

BY MEDIA

a. TV spend continues to increase YOY given the importance of this medium in Egypt, however there is a noticeable shift from TV to Digital communications.

b. Investment in local Display platforms has decreased significantly whilst investment in performance-based platforms have increased.

c. Facebook and Instagram continue to be the largest Social platforms in Egypt in terms of penetration and therefore continue to be key platforms for advertisers.

d. Due to the drop in investments on local Display platforms, suppliers are integrating more content and Social media benefits within their sponsorship packages and offerings.

e. Due to the efficiency of Programmatic buying, suppliers are recreating the same programmatic buying offering across all of their combined platforms.

DENTSU AEGIS NETWORK 169 EGYPT Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television 24.0% 10.0% 20.0% Television 71.2% 82.4% 95.9%

Newspapers -30.0% -9.9% -14.6% Newspapers 1.7% 1.6% 1.3%

Magazines -33.3% 0.0% -25.0% Magazines 0.1% 0.1% 0.1%

Radio 32.9% 9.9% 4.5% Radio 2.3% 2.7% 2.7%

Cinema n.a. n.a. n.a. Cinema n.a. n.a. n.a.

OOH n.a. n.a. n.a. OOH n.a. n.a. n.a.

Total Digital 12.9% -48.8% n.a. Total Digital 24.7% 13.3% n.a.

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 12.9% -48.8% n.a. Total Digital* 100% 100% 100%

Display n.a. n.a. n.a. Display n.a. n.a. n.a.

Online Video n.a. n.a. n.a. Online Video n.a. n.a. n.a.

Social Media n.a. n.a. n.a. Social Media n.a. n.a. n.a.

Paid Search n.a. n.a. n.a. Paid Search n.a. n.a. n.a.

Other incl. Other incl. n.a. n.a. n.a. n.a. n.a. n.a. Classified Classified

Mobile^ n.a. n.a. n.a. Mobile^ n.a. n.a. n.a.

Programmatic Programmatic n.a. n.a. n.a. n.a. n.a. n.a. Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 170 LEBANON: ‘Situation remains volatile’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Top 10 Categories 2019f Gross Local 2019f vs. 2018 2019f Currency Million YOY% Year on year % growth at current prices

Banking 225,404,072 -9% 2018 2019f 2020f Beer 43,519,568 -21% Lebanon -0.2% (-0.2%) 4.4% (4.4%) 1.5% (1.5%) Cars 61,320,219 25%

Previous forecasts in brackets from January 2019 Food shops 22,393,415 -122%

Telecom 32,896,946 -18% LATEST KEY AD SPEND TRENDS Industry 28,592,304 -35% • There has been no significant changes in this market in 2018 or 2019 to warrant any correction of the forecast data. Jewellery 36,958,728 8% • But the political situation remains volatile which affects the local economic situation although we had elections during the month of May they did not Shampoo 22,012,876 -72%

affect the economic situation in Lebanon. Juice 26,239,368 -29%

Furniture 19,352,396 -79% THE 2019 AD SPEND FORECAST Global or local events to boost spend in 2019 • Nothing in the pipeline.

The economic context The economic situation is stable in Lebanon in terms of the local currency versus the USD. However any political issues may affect spends in the markets.

DENTSU AEGIS NETWORK 171 ‘ALWAYS ON’

BY MEDIA.

• Social Media spends are increasing over time, clients are shifting their strategies to ‘Always On’ paid Social by promoting posts on pages to increasing continuous engagement.

• Mobile spends are growing at a low pace.

• Online Video is getting a higher share of spends vs. previous years.

• Programmatic spends are still minimal, however we do forecast higher spends in the near future.

• TV continues to receive the largest share of media spends and is the battlefield for any active category.

• Radio has witnessed positive growth of 90% from 2005 to date, although there is a slight declining trend in listenership.

• Some Magazines have launched their online versions.

• Longstanding respected Newspapers are adapting to consumer demand through digital capabilities as is visible from the cross-media presence of the top 5 newspapers.

DENTSU AEGIS NETWORK 172 Lebanon Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -1.7 4.7 2.9 Television 51.5 51.7 52.4

Newspapers 0.7 0.0 -15.4 Newspapers 5.8 5.5 4.6

Magazines -15.0 -1.0 0.0 Magazines 3.8 3.6 3.6

Radio 6.8 6.3 2.9 Radio 7.1 7.2 7.3

Cinema 3.3 6.5 Cinema 0.7 0.7 0.7

OOH 1.8 5.0 2.0 OOH 31.1 31.3 31.4

Total Digital n.a. n.a. n.a. Total Digital n.a. n.a. n.a.

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 173 Rest of World

174 SOUTH AFRICA: ‘Diversifying offering and consumer touchpoints are key to winning in the battle for attention in the South African Economy’

OVERVIEW OF THE TOTAL ADVERTISING MARKET Moreover, streaming has positively impacted TV, video and music. Potential changes to social media polices on advertising and data mining Increasingly TV and internet advertising are becoming interlinked. However, (i.e. privacy) and changes in legislation around alcohol advertising may Year on year % growth at current prices newspapers and magazines will continue to see a decline into 2022. There impact spend in this area, however, spend share is still relatively low (but has also been an increase in the number of smaller specialist consulting growing slowly) in South Africa and will not significantly effect advertising 2018 2019f 2020f agencies. The improving economy and more positive outlook will see the spend as a whole. market stabilizing, however, media agencies must ensure that they are able South Africa 2.9%(-3.8%) 8.4% (6.6%) 8.3% (6.6%) to offer a full service, fully integrated and ROI based media solutions. AD SPEND PERFORMANCE BY CATEGORY Previous forecasts in brackets from January 2019 Advertising regulations have caused a significant decline in the ad spend of Global or local events to boost spend in 2019 Tobacco & related categories. In April 2018 there was an increase in VAT LATEST KEY AD SPEND TRENDS The South African advertising market is only impacted by very major from 14% to 15%. This had a significant impact on consumers. Both Retail • Rapid digitization is seeing the growing convergence of the entertainment sporting events (i.e. mostly Soccer World Cup and local elections, and to and FMCG brands will have to reassure consumers, as this is where it is and media industry. As a result, the battle for the consumer’s attention is a lesser degree Rugby & Cricket events). Interest and advertising around most felt. A positive economic outlook should encourage both sales and becoming increasingly evident across various sectors. Furthermore, this is events such as the Rugby World Cup also tends to be limited to specific competition for larger priced items such as motor vehicles. leading to a plethora of media platforms that are creating digital audiences (i.e. young men) although one can see a general increase in extensions of itself e.g. digital OOH, Radio Podcasts, TV streaming media coverage, which can have an impact on programming, ratings and Food needs to work hard to recover lost ground from 2017. We are also services as well as applications as a means to access content. behaviour. In the same breath, due to political instability and low purchase likely to see a growth in Government spending to inform the public on • Media research is still in a state of flux, with lack of consensus for some power in 2018, the soccer world cup did not sway advertising spend changes in the unstable economic times within the South African landscape. significantly with only 3% growth year on year. This is a clear indication data as well as best practice methodologies. Forecasting accurate results Zero tax rated pink products will see this category perform better as well. and conducting adequate trend analysis is thus an ongoing challenge that even with the elections, rugby and cricket world cup in 2019, this is within the South African landscape. This causes complications for not expected to yield significant changes in advertising investment budgeting and auditing. Creative use of data, such as fusion and mining growth overall. Top 10 Categories 2019f Gross Local 2019f vs. 2018 alternative sources, e.g. social media trends will start to gain more 2019f Currency Million YOY% traction over the coming years. The economic context Retail R10 23 130 828 7% • The elections (May 2019) will determine South Africa’s long term The election of Cyril Ramaphosa as President has seen a positive swing in economic prospects; possibilities include continuous rise in interest rates, attitude and economic forecasts are expected to improve. However, Financial Services R7 075 972 419 4% downgrade of South Africa’s credit rating, inflation rates rising etc. Even the outcome of the elections (May 2019) may further improve the FMCG – Health & Beauty R4 704 820 899 10% though, financial institutions seem more willing to extend credit which economy or result in even deeper uncertainty and further loss of should boost spending a bit more, the cost of living is increasing so international investments. Travel Sport and Leisure R3 288 684 303 14% disposable income is not as pertinent as it should be. Zero rated tax products should see an increase in investment from an FMCG category Automotive R3 211 388 864 2% THE 2020 AD SPEND FORECAST point of view. 2020 is expected to see good growth in advertising spend, +8.4%. There Multimedia R2 982 651 290 9% are a number of reasons; by 2020 the new economic policies that are being FMCG-Beverages R2 430 796 946 0% THE 2019 AD SPEND FORECAST put in place to encourage growth and investment should be taking effect; Advertiser confidence was impacted by the political and macroeconomic positive sentiment will influence budget size and attitude; policies around FMCG Food R1 602 243 779 3% environment in 2017, the total entertainment and media revenue rose at a jobs and education should see the unemployment rate going down slightly. Professional Services R1 523 264 636 7% low rate of 6.8% YoY. The Internet segment will continue to boost revenue The elections in 2019 will see additional advertising spend both around the Government Education and video games is set to become the third highest contributor within the R1 254 020 375 3% elections and start building momentum in 2019. and Health consumer segment.

DENTSU AEGIS NETWORK 175 BY MEDIA Smaller local stations are gaining both listeners and advertising money. e. Their ability to customize campaigns to suit the marketer is an incentive. Long and short forms of video content has taken off in South Africa. There Spend forecasts for 2019 are anticipated to grow regardless of the technical Radio podcasts and live streaming is also a growing trend amongst the was a large growth in live streaming on social media platforms. Video story recession that has governed most of consumer behaviour in 2018. 2019 is South African consumer. telling allows a brand to be both relevant and engaging whilst still supplying also a national election year in South Africa with the resulting political party brand information. Despite the still high cost of data in South Africa, smart spending. Print, Cinema and OOH are declining in investment year on year c. phone access proliferates, enabling internet and video access across a but is still growing at an incremental rate. Digital is expected to grow The line between traditional media and digital media is blurred – consumers broader sector of the South African population. There is a move in South upwardly with more businesses seeing the value of investing in online want more flexibility and freedom in how they consume content.” Africa to explore the right to universal access to online information, to declare internet access a basic human right – to give all South Africans platforms as well as the digital versions of traditional media e.g. digital print After more than a decade of digital disruption, the African entertainment basic minimum levels of access to free public Wi-Fi and through it, content. newspapers and digital OOH screens. and media industry has entered a new landscape – one where the media is YouTube saw a decline in investment from blue chip clients due to no longer divided into distinct traditional and digital spheres, according to a questionable content but internet spend is increasing in share of ad market a. report from PwC titled Entertainment and media outlook2018 – 2022 (South overall. Brand safety and transparency are key issues in the South African Africa – Nigeria-Kenya). The Outlook forecasts that South Africa’s Television remains the largest medium and will continue to grow for the market as is globally. Internet access will represent 44% of the market in entertainment and media industry is expected to grow from R129.2 billion in foreseeable future. However, for the first time in South African television 2022 with a projected 11 million new unique subscribers by 2022. history, there was a drop in advertising spend since 1996 (earliest data 2017 by 7.6% (to R139 billion) by the end of 2018, at a compound annual available). This was a result of the cut or total withdrawal of some major growth rate (CAGR) of 6.5%. Before the technical recession, there has been advertisers. Business to business and government had negative growth, inflated reporting of entertainment and media industry predictions, but with spending less in 2017 than 2016. Beverages are expected to see a consumer spending on the decline year on year by an average of 0.8% reduction in spend due to the increase in legislation around alcohol (PWC), there is increasingly a lack of investment in media. Advertisers need advertising. However, digital spend within these sectors is anticipated to to be more savvy in the way they are optimising their media investments or see incremental growth. significantly increase their media spends to get valuable exposure.

On the positive side for 2019, television data is becoming more stable and d. trends will start to emerge, making planning more predictable. On demand Social media is becoming the key to a successful marketing campaign, both television/streaming is growing and the traditional linear way of viewing as a platform and as an information tool. Utilizing social listening, marketers television/any medium is changing. Second screening is growing rapidly need to be flexible and agile to ensure that strategies align with the especially amongst the younger millennials which has its own challenges for opinions and attitudes of the market, while still being sensitive around advertisers, as consumer attention spans are depleting and the demand for issues of privacy. This is as relevant in South Africa as in other countries. content marketing is defining the means of communications going forward. Consumers want to be treated as individuals and it is important not to let technology get between your brand and your customer. The ‘human’ b. approach; showing a genuine interest in their opinions is key to keeping a positive brand reputation. Content needs to be relevant and authentic. Local Radio’s popularity fluctuates, as it is seen as a more tactical medium by South African content, whether a Video on Instagram or a Facebook post, advertisers, however its share of spend continues to grow. Radio streaming needs to be accessible and current to have greater success in capturing the is growing, particularly among younger audiences and will become most endearing consumer. Using Social Media as a communications tool is increasingly important as data costs come down and WIFI access increases. ever more important in building an authentic relationship between the brand Radio saw an increase in advertising spend in 2018. This was partly due and consumer as a means to building brand equity. to marketers shifting money from television to a medium that is more flexible, has a lower entry point and which tends to perform well on call to action campaigns.

DENTSU AEGIS NETWORK 176 South Africa Data Tables

Y-O-Y % GROWTH AT % SHARE OF TOTAL MEDIA MEDIA CURRENT PRICES ADVERTISING SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Television -2.6% 7.6% 7.6% Television 50.3% 50.0% 49.6%

Newspapers -4.7% 4.9% 4.9% Newspapers 14.0% 13.5% 13.1%

Magazines -26.9% 4.9% 4.9% Magazines 3.2% 3.1% 3.0%

Radio -14.7% 11.2% 11.2% Radio 15.8% 16.2% 16.6%

Cinema -23.6% 2.2% 2.2% Cinema 0.9% 0.8% 0.8%

OOH -24.2% 2.2% 2.2% OOH 2.9% 2.7% 2.6%

Total Digital 14.2% 13.4% Total Digital 12.9% 13.6% 14.3%

Y-O-Y % GROWTH AT % SHARE OF TOTAL DIGITAL MEDIA MEDIA CURRENT PRICES SPEND

2018a 2019f 2020f 2018a 2019f 2020f

Total Digital* 329% 14.2% 13.4% Total Digital* 100% 100% 100%

Display 64.0% 14.3% 13.4% Display 20.4% 20.4% 20.4%

Online Video n.a. n.a. n.a. Online Video n.a. n.a. n.a.

Social Media 14.2% 14.2% 13.4% Social Media 44.2% 44.3% 44.3%

Paid Search 14.2% 14.2% 13.4% Paid Search 34.1% 34.1% 34.2%

Other incl. Other incl. 5.0% 5.0% 5.0% 1.3% 1.2% 1.1% Classified Classified

Mobile^ 5.3% 10.5% 8.0% Mobile^ 33.4% 33.9% 33.9%

Programmatic Programmatic n.a. n.a. n.a. n.a. n.a. n.a. Spend^ Spend^

DENTSU AEGIS NETWORK *Includes Mobile/Tablet and Desktop, ^Subset of Total Digital Spend 177 Appendices

178 Global Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 3,113 3,236 3,307 3,344 3,378 5.6 4.0 2.2 1.1 1.0 Belgium 4,606 4,822 4,729 4,797 4,849 6.4 4.7 -1.9 1.4 1.1 Denmark 2,053 2,122 2,186 2,148 2,181 3.6 3.4 3.0 -1.7 1.5 Finland 1,323 1,327 1,354 1,376 1,402 1.1 0.3 2.1 1.6 1.9 France 12,232 12,631 13,305 13,783 14,191 1.1 3.3 5.3 3.6 3.0 Germany 17,441 17,807 17,842 17,906 17,988 2.8 2.1 0.2 0.4 0.5 Greece 446 466 487 503 530 4.2 4.5 4.5 3.3 5.2 Ireland 943 945 968 1,002 1,029 3.9 0.2 2.5 3.5 2.8 Italy 8,367 8,443 8,616 8,480 8,527 4.1 0.9 2.0 -1.6 0.6 Netherlands 4,388 4,464 4,612 4,745 4,880 2.7 1.7 3.3 2.9 2.9 Norway 1,999 2,097 2,128 2,167 2,204 -2.0 4.9 1.4 1.8 1.7 Portugal 528 545 562 580 600 5.2 3.3 3.1 3.2 3.4 Spain 6,073 6,200 6,329 6,362 6,391 6.8 2.1 2.1 0.5 0.4 Sweden 3,425 3,719 3,989 4,185 4,188 9.8 8.6 7.3 4.9 0.1 Switzerland 4,064 5,016 5,238 5,431 5,786 2.9 23.4 4.4 3.7 6.5 UK 24,251 25,852 28,079 29,837 31,807 7.4 6.6 8.6 6.3 6.6 Western Europe 95,251 99,692 103,732 106,643 109,929 4.5 4.7 4.1 2.8 3.1 Bulgaria 202 211 231 253 274 2.5 4.7 9.1 9.5 8.6 Czech Republic 682 723 764 831 919 9.0 6.0 5.7 8.8 10.5 Estonia 122 128 132 136 140 4.4 5.2 2.4 3.6 3.1 Hungary 640 722 793 858 914 3.4 12.9 9.8 8.1 6.6 Latvia 93 98 104 107 111 5.3 5.7 5.8 2.3 4.4 Lithuania 159 167 175 188 194 17.3 5.0 4.9 7.4 3.0 Poland 2,178 2,230 2,375 2,472 2,571 2.7 2.4 6.5 4.1 4.0 Romania 435 489 544 611 664 7.1 12.5 11.2 12.2 8.6 Russia 5,546 6,354 7,138 7,458 7,891 11.6 14.6 12.3 4.5 5.8 Slovak Rep 317 329 351 367 383 5.9 4.0 6.7 4.4 4.4

Turkey 1,319 1,286 1,222 1,222 1,259 42.9 -2.5 -5.0 0.0 3.0 C&EE 11,693 12,740 13,829 14,501 15,319 11.4 8.9 8.6 4.9 5.6 Europe 106,944 112,431 117,561 121,144 125,249 5.2 5.1 4.6 3.0 3.4

DENTSU AEGIS NETWORK 179 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 204,751 210,103 217,150 223,798 231,834 5.0 2.6 3.4 3.1 3.6 Canada 8,414 8,878 9,121 9,601 10,147 0.1 5.5 2.7 5.3 5.7 North America 213,165 218,981 226,271 233,399 241,981 4.8 2.7 3.3 3.2 3.7 Australia 10,641 10,889 11,610 11,835 12,214 4.5 2.3 6.6 1.9 3.2 China 82,520 87,753 94,479 99,550 106,448 8.8 6.3 7.7 5.4 6.9 Hong Kong 2,639 2,431 2,449 2,445 2,456 -12.3 -7.9 0.7 -0.2 0.4 India 7,387 8,046 8,914 9,929 11,143 49.4 8.9 10.8 11.4 12.2 Indonesia 5,245 5,096 5,189 5,303 5,487 6.6 -2.8 1.8 2.2 3.5 Japan 56,874 57,803 59,063 59,792 60,860 1.9 1.6 2.2 1.2 1.8 Malaysia 1,277 1,332 1,318 1,270 1,318 4.5 4.3 -1.0 -3.7 3.8 New Zealand 1,674 1,753 1,814 1,855 1,916 0.2 4.7 3.5 2.3 3.3 Philippines 3,586 4,510 4,620 5,031 4,945 23.4 25.7 2.4 8.9 -1.7 Singapore 1,902 1,687 1,544 1,428 1,347 20.6 -11.3 -8.5 -7.5 -5.6 South Korea 9,107 9,362 9,850 10,411 10,919 3.2 2.8 5.2 5.7 4.9 Taiwan 1,725 1,681 1,727 1,744 1,764 -4.2 -2.6 2.7 1.0 1.2 Thailand 3,682 3,243 3,404 3,483 3,649 -6.5 -11.9 5.0 2.3 4.8 Vietnam 1,433 1,493 1,554 1,660 1,745 7.6 4.2 4.1 6.9 5.1 Asia Pacific 189,694 197,079 207,535 215,737 226,210 6.6 3.9 5.3 4.0 4.9 Argentina 1,833 2,516 2,933 3,567 4,236 38.4 37.3 16.6 21.6 18.7 Brazil 14,857 15,382 16,481 17,923 18,734 1.4 3.5 7.1 8.8 4.5 Colombia 1,575 1,516 1,488 1,474 1,478 -7.3 -3.8 -1.8 -1.0 0.3 Mexico 4,166 4,382 4,780 5,067 5,296 6.2 5.2 9.1 6.0 4.5 Latin America 22,431 23,795 25,682 28,031 29,744 3.9 6.1 7.9 9.1 6.1 Bahrain 100 80 74 75 77 2.7 -19.6 -8.3 2.0 2.0 Egypt 66 104 124 118 122 -7.7 57.3 19.7 -4.9 3.1 Kuwait 374 348 338 334 318 -16.1 -7.0 -2.9 -1.1 -4.7 Lebanon 514 451 450 470 477 -23.5 -12.4 -0.2 4.4 1.5 Morocco 736 774 804 804 849 2.3 5.2 3.8 0.0 5.6 Oman 129 108 99 88 80 -14.9 -16.0 -8.4 -11.4 -9.0 Pan Arab 4,899 4,028 3,634 3,191 2,933 -0.6 -17.8 -9.8 -12.2 -8.1 Qatar 243 202 181 157 141 -17.8 -17.1 -10.2 -13.2 -10.4 Saudi Arabia 839 735 684 604 553 -16.0 -12.4 -6.9 -11.6 -8.5 UAE 1,479 1,311 1,227 1,123 1,065 2.8 -11.3 -6.4 -8.5 -5.2 MENA 9,379 8,140 7,615 6,964 6,615 -4.5 -13.2 -6.5 -8.5 -5.0 Israel 973 1,010 1,040 1,070 1,102 2.5 3.7 3.0 2.9 2.9 South Africa 3,221 3,168 3,259 3,532 3,826 7.5 -1.6 2.9 8.4 8.3 Other 4,194 4,178 4,299 4,602 4,928 6.3 -0.4 2.9 7.0 7.1 GLOBAL 545,807 564,605 588,963 609,877 634,725 5.3 3.4 4.3 3.6 4.1

DENTSU AEGIS NETWORK 180 Television Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 623 663 694 735 783 7.9 6.4 4.7 6.0 6.5 Belgium 1,982 1,942 1,987 1,932 1,986 10.9 -2.0 2.3 -2.7 2.8 Denmark 341 334 349 341 341 2.1 -2.0 4.4 -2.2 0.0 Finland 287 272 272 268 260 -1.1 -5.1 0.2 -1.7 -2.8 France 3,685 3,721 3,730 3,760 3,797 0.4 1.0 0.2 0.8 1.0 Germany 5,701 5,741 5,626 5,457 5,228 3.1 0.7 -2.0 -3.0 -4.2 Greece 248 271 289 302 326 6.3 9.1 6.7 4.7 7.9 Ireland 249 228 220 221 221 1.9 -8.6 -3.5 0.4 0.1 Italy 4,447 4,388 4,420 4,236 4,231 6.3 -1.3 0.7 -4.2 -0.1 Netherlands 1,122 1,096 1,120 1,124 1,127 0.4 -2.3 2.2 0.4 0.2 Norway 459 461 441 428 424 1.9 0.3 -4.3 -3.0 -1.0 Portugal 289 293 294 297 303 4.4 1.2 0.4 1.0 2.0 Spain 2,403 2,427 2,409 2,337 2,260 5.5 1.0 -0.8 -3.0 -3.3 Sweden 590 596 646 647 602 -1.3 1.0 8.4 0.3 -7.0 Switzerland 888 894 908 948 989 7.6 0.8 1.6 4.4 4.4 UK 5,826 5,684 5,727 5,766 5,881 4.7 -2.4 0.7 0.7 2.0 Western Europe 29,139 29,010 29,131 28,800 28,761 4.2 -0.4 0.4 -1.1 -0.1 Bulgaria 112 116 127 139 149 2.7 3.3 9.5 9.6 7.5 Czech Republic 268 284 293 301 310 5.0 6.0 3.0 3.0 3.0 Estonia 28 29 30 31 32 -3.0 3.8 3.1 3.0 3.0 Hungary 160 186 216 233 253 -1.0 16.3 16.2 7.9 8.6 Latvia 38 39 40 40 40 -0.2 3.1 2.7 -0.1 1.5 Lithuania 55 57 58 61 62 5.6 2.7 3.2 4.7 1.9 Poland 1,076 1,083 1,161 1,199 1,238 0.6 0.7 7.3 3.3 3.2 Romania 275 309 352 399 429 5.0 12.0 14.0 13.5 7.5 Russia 2,298 2,605 2,850 2,718 2,724 10.3 13.3 9.4 -4.6 0.2 Slovak Rep 154 166 179 186 192 13.3 8.1 7.5 3.8 3.7

Turkey 672 657 634 637 662 51.3 -2.1 -3.5 0.5 3.9 C&EE 5,136 5,530 5,940 5,945 6,092 10.7 7.7 7.4 0.1 2.5 Europe 34,275 34,540 35,071 34,745 34,853 5.2 0.8 1.5 -0.9 0.3

DENTSU AEGIS NETWORK 181 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 77,783 78,027 78,934 79,189 80,204 4.0 0.3 1.2 0.3 1.3 Canada 2,138 2,241 2,287 2,309 2,379 -9.9 4.8 2.0 1.0 3.0 North America 79,921 80,269 81,221 81,498 82,583 3.6 0.4 1.2 0.3 1.3 Australia 2,704 2,650 2,583 2,530 2,494 -2.8 -2.0 -2.5 -2.1 -1.4 China 28,893 27,303 24,951 23,254 21,952 -3.7 -5.5 -8.6 -6.8 -5.6 Hong Kong 607 540 556 536 501 -9.2 -11.0 2.8 -3.5 -6.5 India 2,973 3,214 3,531 3,867 4,223 67.1 8.1 9.9 9.5 9.2 Indonesia 2,903 2,777 2,819 2,875 2,932 7.4 -4.3 1.5 2.0 2.0 Japan 17,780 17,618 17,297 17,297 17,563 1.7 -0.9 -1.8 0.0 1.5 Malaysia 234 237 229 223 233 3.0 1.4 -3.6 -2.5 4.6 New Zealand 380 384 373 369 365 -7.0 1.3 -3.0 -1.0 -1.0 Philippines 2,137 2,689 2,465 2,366 2,272 22.9 25.8 -8.3 -4.0 -4.0 Singapore 550 498 469 440 414 46.0 -9.5 -5.9 -6.1 -5.9 South Korea 3,314 3,254 3,287 3,396 3,430 -0.1 -1.8 1.0 3.3 1.0 Taiwan 731 693 670 637 614 -6.7 -5.2 -3.3 -5.0 -3.5 Thailand 2,089 1,773 1,895 1,971 2,030 -12.3 -15.1 6.9 4.0 3.0 Vietnam 1,250 1,268 1,306 1,400 1,465 6.3 1.4 3.0 7.2 4.7 Asia Pacific 66,545 64,898 62,430 61,162 60,490 1.1 -2.5 -3.8 -2.0 -1.1 Argentina 785 1,095 1,227 1,472 1,693 34.3 39.6 12.0 20.0 15.0 Brazil 10,876 10,970 11,812 12,908 13,483 12.8 0.9 7.7 9.3 4.5 Colombia 872 808 750 693 626 -7.5 -7.4 -7.2 -7.7 -9.7 Mexico 2,081 2,019 2,055 2,069 2,079 1.0 -3.0 1.8 0.7 0.5 Latin America 14,614 14,892 15,844 17,142 17,881 10.5 1.9 6.4 8.2 4.3 Bahrain 5 5 12 12 13 2.0 3.4 135.9 2.0 2.0 Egypt 60 71 88 97 117 -8.0 19.3 24.0 10.0 20.0 Kuwait 38 29 25 23 23 -66.6 -24.3 -13.5 -5.0 -2.0 Lebanon 278 236 232 243 250 -30.0 -15.0 -1.7 4.7 2.9 Morocco 209 241 236 236 241 4.3 15.5 -2.0 0.0 2.0 Oman 7 7 5 4 4 36.8 7.1 -29.0 -10.0 -10.0 Pan Arab 4,786 3,939 3,566 3,137 2,886 0.1 -17.7 -9.5 -12.0 -8.0 Qatar 18 16 15 14 13 -45.3 -16.1 -2.3 -10.0 -5.0 Saudi Arabia 23 25 71 72 74 -37.9 10.6 182.3 2.0 2.4 UAE 95 73 51 46 44 45.8 -22.8 -29.7 -10.0 -5.0 MENA 5,517 4,642 4,302 3,886 3,664 -3.2 -15.9 -7.3 -9.7 -5.7 Israel 360 375 385 395 407 -0.6 4.1 2.6 2.8 2.8 South Africa 1,809 1,684 1,640 1,765 1,899 12.6 -6.9 -2.6 7.6 7.6 Other 2,169 2,059 2,025 2,160 2,306 10.2 -5.1 -1.6 6.7 6.7 GLOBAL 203,041 201,299 200,891 200,593 201,776 3.3 -0.9 -0.2 -0.1 0.6

DENTSU AEGIS NETWORK 182 Newspaper Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 888 896 888 882 863 4.9 0.9 -0.9 -0.6 -2.2 Belgium 1,030 979 907 959 976 6.1 -4.9 -7.4 5.8 1.8 Denmark 406 382 379 334 303 -7.5 -6.0 -0.8 -12.0 -9.1 Finland 453 410 367 350 333 -4.6 -9.5 -10.5 -4.5 -5.0 France 999 946 842 807 787 -11.9 -5.3 -10.9 -4.2 -2.5 Germany 2,364 2,226 2,148 2,041 1,939 -4.5 -5.8 -3.5 -5.0 -5.0 Greece 48 44 43 42 41 -2.3 -7.9 -1.8 -2.6 -1.4 Ireland 154 130 115 104 94 -9.3 -15.4 -11.3 -9.8 -9.8 Italy 592 545 520 468 421 -4.7 -8.0 -4.5 -10.0 -10.0 Netherlands 558 507 484 467 451 -10.7 -9.1 -4.7 -3.5 -3.4 Norway 363 312 285 259 233 -19.0 -14.0 -8.7 -9.0 -10.0 Portugal 22 18 15 13 12 -22.3 -18.9 -14.2 -13.0 -8.0 Spain 737 678 637 577 521 -6.5 -8.1 -6.0 -9.4 -9.8 Sweden 669 583 519 465 320 -9.1 -12.8 -11.0 -10.5 -31.2 Switzerland 832 784 679 552 498 -8.6 -5.7 -13.4 -18.7 -9.9 UK 1,876 1,632 1,496 1,391 1,294 -24.0 -13.0 -8.3 -7.0 -7.0 Western Europe 11,990 11,072 10,325 9,713 9,087 -9 -7.7 -6.7 -5.9 -6.4 Bulgaria 13 12 12 11 9 -13.6 -5.4 -4.8 -4.5 -14.1 Czech Republic 44 42 42 42 41 -5 -3 0 -2 -2 Estonia 19 19 19 19 19 -4.5 -2.1 -0.4 0 -2 Hungary 68 73 79 80 77 -14.6 7.7 8 2 -4 Latvia 5 4 4 4 4 -8.1 -13.2 10.4 -7.1 -7 Lithuania 10 10 10 10 9 -9.9 -6.6 1.2 -2.3 -4.8 Poland 42 33 33 33 32 -13.1 -20.1 -1 -1 -1 Romania 8 6 5 4 3 -20 -20 -20 -20 -15 Russia 155 134 110 94 82 -17.7 -13.4 -18.4 -14.5 -12.5 Slovak Rep 18 16 15 15 14 -20 -12.5 -3.6 0 -11.1

Turkey 178 163 119 100 89 23 -8.5 -27 -16.2 -11 C&EE 559 513 448 411 379 -5.3 -8.4 -12.7 -8.2 -7.8 Europe 12,550 11,584 10,773 10,123 9,466 -8.9 -7.7 -7.0 -6.0 -6.5

DENTSU AEGIS NETWORK 183 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 20,945 19,060 17,082 15,210 13,703 -9.0 -9.0 -10.4 -11.0 -9.9 Canada 1,465 1,349 1,107 1,117 1,129 -11.5 -7.9 -18.0 0.9 1.0 North America 22,410 20,409 18,189 16,327 14,832 -9.2 -8.9 -10.9 -10.2 -9.2 Australia 1,167 1,119 1,181 1,034 934 -14.9 -4.1 5.5 -12.5 -9.6 China 2,636 1,516 1,091 819 655 -33.8 -42.5 -28.0 -25.0 -20.0 Hong Kong 582 455 346 256 174 -23.1 -21.9 -23.9 -26.0 -32.0 India 2,398 2,475 2,567 2,659 2,757 37.4 3.2 3.7 3.6 3.7 Indonesia 1,343 1,185 1,090 981 883 -4.4 -11.7 -8.0 -10.0 -10.0 Japan 4,912 4,655 4,327 4,190 4,073 -4.4 -5.2 -7.1 -3.2 -2.8 Malaysia 486 481 416 331 318 -2.0 -1.0 -13.5 -20.5 -3.8 New Zealand 283 240 204 173 147 -12.0 -15.3 -15.0 -15.0 -15.0 Philippines 138 115 96 79 66 -0.4 -16.6 -16.7 -17.0 -17.0 Singapore 598 446 331 244 181 8.9 -25.4 -26.0 -26.1 -26.0 South Korea 1,302 1,272 1,265 1,261 1,236 -2.0 -2.3 -0.5 -0.3 -2.0 Taiwan 165 136 119 106 95 -21.0 -17.6 -12.5 -11.0 -10.0 Thailand 311 243 192 77 62 -20.0 -21.8 -20.8 -60.0 -18.9 Vietnam 34 25 21 14 10 -10.3 -25.6 -15.5 -34.5 -25.6

Asia Pacific 16,356 14,363 13,246 12,224 11,593 -8.5 -12.2 -7.8 -7.7 -5.2 Argentina 425 534 577 635 711 24.7 25.7 8 10 12 Brazil 1,042 1,059 1,032 1,121 1,116 23.7 1.6 -2.6 8.6 -0.5 Colombia 291 269 253 240 226 -14.7 -7.4 -6 -4.9 -6.2 Mexico 240 239 234 229 222 -1 -0.5 -2.1 -2 -3 Latin America 1,998 2,102 2,096 2,225 2,275 13.1 5.2 -0.3 6.2 2.2 Bahrain 81 64 52 53 54 2.9 -20.5 -18.5 2 2 Egypt 3 3 2 2 2 -5 -14.3 -30 -9.9 -14.6 Kuwait 214 153 118 112 93 -4.7 -28.4 -23 -5 -17.3 Lebanon 30 26 26 26 22 -30 -15 0.7 0 -15.4 Morocco 78 54 51 51 48 8.9 -30.5 -6 0 -6 Oman 114 93 85 74 67 -17.6 -18.2 -9 -12.5 -10 Pan Arab 29 19 14 11 9 -46.1 -34.4 -24.2 -19.8 -20 Qatar 142 132 118 100 87 -20.7 -6.5 -10.8 -15 -13.5 Saudi Arabia 406 319 275 234 211 -32 -21.4 -13.7 -15 -10 UAE 420 322 247 181 154 -23.1 -23.5 -23.2 -26.8 -15 MENA 1,516 1,185 988 845 745 -21.6 -21.9 -16.6 -14.5 -11.8 Israel 146 134 131 129 130 -12.6 -8.3 -2.2 -1.9 1.3 South Africa 492 479 456 478 502 -6.2 -2.7 -4.7 4.9 4.9 Other 638 612 587 607 632 -7.7 -4.0 -4.2 3.4 4.1 GLOBAL 55,467 50,256 45,880 42,352 39,542 -8.6 -9.4 -8.7 -7.7 -6.6

DENTSU AEGIS NETWORK 184 Magazine Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 614 619 628 604 586 1.1 0.8 1.5 -3.7 -3.1 Belgium 319 306 273 283 295 -3.3 -4.3 -10.8 3.6 4.4 Denmark 147 143 122 114 114 -2.5 -3.0 -15.0 -6.4 0.0 Finland 85 82 80 77 74 -8.9 -4.0 -2.2 -4.0 -4.0 France 1,136 1,026 924 882 847 -6.9 -9.7 -9.9 -4.5 -4.0 Germany 2,054 1,910 1,757 1,617 1,504 -3.1 -7.0 -8.0 -8.0 -7.0 Greece 49 46 43 42 41 -4.4 -4.7 -7.3 -2.6 -2.7 Ireland 7 6 5 5 4 0.0 -13.3 -9.6 -10.6 -9.5 Italy 488 455 418 376 343 -3.3 -6.8 -8.1 -10.0 -8.9 Netherlands 335 313 290 268 258 -7.2 -6.8 -7.2 -7.4 -3.8 Norway 77 70 63 56 50 -11.2 -10.0 -9.9 -11.0 -10.0 Portugal 22 18 15 12 11 -14.1 -18.4 -19.0 -17.0 -8.0 Spain 286 272 258 233 214 -1.2 -4.8 -5.1 -9.6 -8.2 Sweden 171 155 139 125 117 16.7 -9.5 -10.0 -10.0 -7.0 Switzerland 576 543 500 387 357 -0.6 -5.8 -8.0 -22.4 -7.9 UK 734 602 503 463 426 -15.2 -18.0 -16.4 -8.0 -8.0 Western Europe 7,101 6,564 6,017 5,545 5,240 -4.5 -7.6 -8.3 -7.8 -5.5 Bulgaria 8 6 5 4 3 2.2 -29.6 -6 -25.5 -14.3 Czech Republic 60 58 58 56 55 -3.0 -3.0 0.0 -3.0 -2.0 Estonia 6 5 5 5 5 0.0 -23.2 -3.4 -3.0 -3.0 Hungary 64 67 62 62 60 -5.5 4.1 -6.4 0.0 -4 Latvia 7 6 6 6 5 -19.8 -10.6 1.5 -5.1 -5 Lithuania 13 11 10 10 9 1.8 -13.5 -12.5 0.0 -2.4 Poland 111 99 99 98 98 -7.6 -10.8 -0.5 -0.5 -0.5 Romania 8 7 6 5 5 -10.0 -15.0 -15.0 -10.0 -10.0 Russia 185 178 165 153 152 -6.2 -3.6 -7.5 -7.0 -0.4 Slovak Rep 25 23 22 20 18 -12.0 -9.1 -5.0 -5.3 -11.1

Turkey 17 15 10 8 7 50.8 -15.8 -31.3 -18.2 -8.9 C&EE 504 474 447 428 418 -5.0 -6.0 -5.6 -4.3 -2.2 Europe 7,605 7,038 6,464 5,973 5,658 -4.6 -7.5 -8.2 -7.6 -5.3

DENTSU AEGIS NETWORK 185 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 20,510 19,280 18,119 16,820 15,773 0.3 -6.0 -6.0 -7.2 -6.2 Canada 273 292 225 228 230 -15.3 7.2 -22.9 1.0 1.0 North America 20,783 19,572 18,345 17,047 16,003 0.1 -5.8 -6.3 -7.1 -6.1 Australia 263 210 172 145 131 -9.5 -20.1 -18.2 -15.4 -9.8 China 561 397 362 329 299 -20.6 -29.1 -9.0 -9.0 -9.0 Hong Kong 187 110 67 40 22 -41.4 -41.1 -38.8 -40.0 -45.0 India 223 229 233 230 228 37.0 3.0 1.5 -1.4 -0.9 Indonesia 83 54 38 26 18 -17.0 -35.2 -30.0 -30.0 -30.0 Japan 2,011 1,830 1,665 1,501 1,373 -9.0 -9.0 -9.0 -9.8 -8.6 Malaysia 24 24 23 24 24 1.0 1.0 -4.0 3.1 -1.1 New Zealand 135 125 106 90 77 -5.2 -7.5 -15.0 -15.0 -15.0 Philippines 30 20 12 6 4 -16.8 -33.0 -39.7 -50.0 -38.0 Singapore 64 57 49 43 38 13.7 -11.5 -13.0 -13.4 -12.1 South Korea 335 304 273 257 246 -9.3 -9.0 -10.4 -5.9 -4.0 Taiwan 101 75 64 58 53 -24.5 -25.6 -14.4 -10.0 -8.0 Thailand 92 62 41 12 8 -31.6 -32.3 -33.4 -70.5 -32.0 Vietnam 18 18 14 19 19 -18.4 2.4 -21.0 32.7 2.4

Asia Pacific 4,125 3,517 3,121 2,781 2,541 -12.3 -14.8 -11.3 -10.9 -8.6 Argentina 48 53 58 64 71 21.9 10.0 10.0 10.0 12.0 Brazil 567 565 492 508 524 29.1 -0.3 -13.0 3.3 3.2 Colombia 46 42 39 33 27 -21.4 -8.3 -8.6 -15.2 -19.2 Mexico 173 173 160 147 134 3.1 0.4 -7.8 -8.0 -8.9 Latin America 834 834 748 751 756 18.3 0.0 -10.2 0.4 0.6 Bahrain 11 8 7 7 7 0.7 -24.8 -15.1 2.0 2.0 Egypt 0 0 0 0 0 -33.6 0.0 -33.3 0.0 -25.0 Kuwait 26 17 13 12 11 11.1 -33.4 -23.8 -4.6 -10.0 Lebanon 24 20 17 17 17 -30.0 -15.0 -15.0 -1.0 0.0 Morocco 39 36 34 34 32 8.9 -7.6 -6.0 0.0 -6.0 Oman 6 4 4 4 3 -0.9 -28.8 10.5 -20.0 -15.0 Pan Arab 85 70 54 42 38 -11.3 -17.6 -22.8 -21.2 -10.0 Qatar 14 7 6 6 5 22.5 -49.6 -11.8 -10.2 -5.0 Saudi Arabia 17 9 9 8 7 -13.9 -44.5 -10.3 -10.0 -5.0 UAE 175 118 74 66 56 -7.8 -32.7 -36.9 -10.9 -15.0 MENA 396 290 219 196 178 -7.1 -26.8 -24.6 -10.3 -9.5 Israel 29 28 24 22 18 -14.9 -4.3 -14.2 -9.1 -19.1 South Africa 146 143 104 110 115 -6.2 -2.3 -26.9 4.9 4.9 Other 176 171 128 131 133 -7.8 -2.7 -24.8 2.3 0.9 GLOBAL 33,918 31,421 29,024 26,880 25,267 -2.4 -7.4 -7.6 -7.4 -6.0

DENTSU AEGIS NETWORK 186 Radio Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 175 178 185 187 188 6.7 1.5 4.1 0.9 0.6 Belgium 631 653 660 684 679 8.4 3.6 1.0 3.6 -0.6 Denmark 53 53 61 62 64 5.8 0.0 15.2 2.2 2.4 Finland 69 72 76 79 82 2.9 3.9 5.1 4.0 4.0 France 806 786 779 781 785 -1.1 -2.5 -0.9 0.2 0.5 Germany 918 940 949 963 978 3.3 2.4 1.0 1.5 1.5 Greece 33 34 36 37 38 3.6 3.4 5.0 4.8 3.0 Ireland 96 95 94 94 94 -5.6 -1.2 -1.2 0.0 0.0 Italy 469 492 520 523 526 0.9 5.0 5.6 0.7 0.5 Netherlands 255 256 259 262 264 0.0 0.4 1.3 0.9 0.9 Norway 83 81 74 72 74 -3.8 -3.0 -8.7 -2.0 3.0 Portugal 36 38 39 40 41 7.6 5.5 1.8 3.0 2.0 Spain 519 527 545 545 548 0.8 1.7 3.3 0.1 0.4 Sweden 93 107 117 123 128 14.6 15.2 9.0 5.5 3.7 Switzerland 165 153 150 134 126 -1.6 -7.1 -1.9 -11.2 -5.5 UK 806 863 914 932 951 4.6 7.0 6.0 2.0 2.0 Western Europe 5,207 5,328 5,457 5,519 5,565 2.6 2.3 2.4 1.1 0.8 Bulgaria 10 11 11 12 12 4.8 8.6 3.7 3.0 3.0 Czech Republic 37 36 36 35 35 -1.0 -2.0 -1.0 -3.0 0.0 Estonia 10 12 13 14 15 3.0 14.3 9.1 9.0 8.0 Hungary 40 40 39 39 39 -8.5 1.5 -3.9 1.0 -1.1 Latvia 12 12 12 12 12 6.4 0.7 1.7 -2.7 0.0 Lithuania 10 11 12 12 13 4.7 10.1 7.1 4.8 2.7 Poland 185 189 199 202 205 2.3 2.3 5.0 1.5 1.5 Romania 25 26 28 29 30 2.0 5.0 5.0 5.0 5.0 Russia 251 258 258 258 258 6.5 2.4 0.0 0.0 0.0 Slovak Rep 14 14 14 12 11 0.0 0.0 0.0 -8.3 -9.1

Turkey 40 37 35 36 37 118.0 -8.3 -5.0 4.7 3.0 C&EE 634 645 655 661 667 6.6 1.8 1.5 0.9 0.9 Europe 5,841 5,974 6,112 6,179 6,232 3.0 2.3 2.3 1.1 0.9

DENTSU AEGIS NETWORK 187 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 19554 19389 19590 19641 19679 1.9 -0.8 1.0 0.3 0.2 Canada 439 469 484 488 493 -2.8 6.8 3.0 0.9 1.1 North America 19993 19859 20074 20129 20173 1.8 -0.7 1.1 0.3 0.2 Australia 815 819 849 840 842 3.4 0.4 3.6 -1.0 0.2 China 1985 1985 2006 2014 2022 2.1 0.0 1.0 0.4 0.4 Hong Kong 82 83 83 79 75 3.7 0.7 -0.1 -5.0 -5.0 India 328 335 346 358 369 54.3 2.0 3.4 3.4 3.1 Indonesia 70 73 77 81 85 7.3 5.0 5.0 5.0 5.0 Japan 1162 1167 1156 1162 1171 2.5 0.4 -0.9 0.5 0.8 Malaysia 109 112 114 115 121 4.0 3.0 1.6 0.6 5.4 New Zealand 184 188 181 177 173 0.4 2.2 -4.0 -2.0 -2.0 Philippines 860 1182 1482 1941 1897 34.8 37.4 25.4 31.0 -2.3 Singapore 158 135 119 105 92 19.4 -14.5 -12.0 -11.8 -12.0 South Korea 269 246 222 219 217 2.5 -8.7 -9.9 -0.9 -1.0 Taiwan 67 56 61 59 57 -23.8 -16.4 7.7 -3.0 -3.0 Thailand 166 141 152 144 137 -7.3 -14.9 7.3 -5.0 -5.0 Vietnam 4 29 36 30 31 29.1 648.2 24.0 -16.1 2.0 Asia Pacific 6,261 6,552 6,882 7,324 7,289 7.6 4.6 5.0 6.4 -0.5 Argentina 111 156 196 225 259 61.2 41.3 25.0 15.0 15.0 Brazil 448 557 659 672 725 -6.8 24.4 18.3 2.0 7.8 Colombia 199 203 204 190 174 -4.9 2.1 0.4 -6.9 -8.7 Mexico 282 282 274 272 268 -1.0 0.0 -2.8 -1.0 -1.2 Latin America 1,041 1,200 1,334 1,359 1,425 -0.4 15.3 11.2 1.9 4.9 Bahrain ------Egypt 3 2 3 3 3 -1.9 -15.6 32.9 9.9 4.5 Kuwait 12 14 16 16 17 -13.4 13.6 10.8 3.8 2.0 Lebanon 37 30 32 34 35 -20.0 -20.0 6.8 6.3 2.9 Morocco 181 189 219 219 254 -6.6 4.6 16.0 0.0 16.0 Oman ------Pan Arab ------Qatar ------Saudi Arabia 216 170 146 128 115 15.1 -21.4 -13.9 -12.3 -10.0 UAE 236 269 302 287 273 23.0 13.8 12.5 -5.0 -5.0 MENA 686 674 719 688 698 6.1 -1.7 6.6 -4.2 1.4 Israel 68 58 59 59 60 3.9 -15.1 1.6 0.0 1.6 South Africa 522 604 515 573 637 10.7 15.8 -14.7 11.2 11.2 Other 590 662 574 632 697 9.9 12.2 -13.3 10.1 10.3 GLOBAL 34,411 34,920 35,694 36,312 36,514 3.2 1.5 2.2 1.7 0.6

DENTSU AEGIS NETWORK 188 Cinema Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 10 10 10 10 10 0.0 3.9 -3.1 -3.0 -1.3 Belgium 36 34 35 36 37 -14.6 -6.3 4.3 0.8 2.3 Denmark 15 15 17 19 21 3.1 0.0 10.0 13.6 12.0 Finland 6 8 8 8 9 13.3 31.4 3.0 5.0 5.0 France 102 108 104 107 111 9.8 5.6 -3.2 3.0 3.9 Germany 83 87 74 67 60 -7.1 4.8 -15.0 -10.0 -10.0 Greece ------Ireland 7 7 6 6 6 0.0 1.7 -6.6 0.0 0.0 Italy 25 26 27 27 27 -3.0 2.4 4.4 -1.0 0.0 Netherlands 8 9 9 9 10 -9.1 14.3 -1.2 1.3 12.5 Norway 19 20 23 25 28 16.1 8.3 15.7 8.0 10.0 Portugal 2 2 2 3 3 27.5 -8.4 17.8 10.0 8.0 Spain 26 38 39 41 42 2.7 49.1 3.0 3.4 2.7 Sweden 16 19 20 20 21 6.4 17.3 4.0 2.2 1.6 Switzerland 29 31 32 40 44 -11.5 9.0 0.6 25.8 11.1 UK 360 374 409 421 425 16.0 4.0 9.3 3.0 1.0

Western Europe 743 789 816 839 854 6.7 6.1 3.5 2.8 1.8 Bulgaria ------Czech Republic 3 3 3 3 3 0.0 0.0 0.0 0.0 0.0 Estonia ------Hungary 6 7 10 10 10 2.5 9.9 44.6 1.0 -1.0 Latvia 1 1 1 1 1 13.4 11.8 7.3 0.0 0.0 Lithuania 1 1 2 2 2 66.7 10.0 45.5 0.0 12.5 Poland 32 32 32 32 32 6.5 0.8 0.0 0.0 0.0 Romania 3 3 3 3 3 2.0 3.0 3.0 5.0 5.0 Russia 50 53 57 57 57 -19.5 6.1 7.1 0.0 0.0 Slovak Rep 1 1 1 1 1 0.0 14.3 0.0 0.0 0.0

Turkey 15 15 14 14 16 52.9 2.5 -9.6 5.3 7.6 C&EE 111 116 122 123 125 -3.8 4.2 5.3 0.8 1.1 Europe 855 905 938 962 978 5.2 5.8 3.7 2.5 1.7

DENTSU AEGIS NETWORK 189 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 1,213 1,274 1,338 1,425 1,495 5.0 5.0 5.0 6.5 4.9 Canada ------North America 1,213 1,274 1,338 1,425 1,495 5.0 5.0 5.0 6.5 4.9 Australia 86 92 92 88 89 10.0 7.0 0.2 -4.4 0.8 China ------Hong Kong ------India 143 158 181 207 236 3.0 10.5 14.2 14.2 14.0 Indonesia 1 1 1 1 1 5.0 5.0 5.0 5.0 5.0 Japan ------Malaysia 32 36 36 37 39 10.0 10.0 1.2 2.9 4.0 New Zealand 7 7 7 8 7 11.1 10.0 0.0 10.0 -10.0 Philippines 6 6 7 7 8 10.0 7.0 10.0 8.0 9.0 Singapore ------South Korea 199 202 196 204 210 6.2 1.3 -2.9 3.9 3.0 Taiwan 7 7 6 6 6 -37.7 11.0 -21.4 0.0 0.0 Thailand 172 215 231 208 208 6.1 25.2 7.3 -10.0 0.0 Vietnam ------Asia Pacific 653.0 725.0 757.0 765.0 802.0 4.1 11.0 4.4 1.1 4.8 Argentina 21.0 24.0 28.0 32.0 35.0 26.7 16.0 13.0 15.0 10.0 Brazil 49.0 226.0 226.0 311.0 396.0 21.9 364.8 0.0 37.7 27.4 Colombia 4.0 4.0 4.0 4.0 5.0 7.0 1.0 0.0 4.1 5.2 Mexico 32.0 33.0 34.0 34.0 35.0 -1.6 2.4 2.3 0.8 1.1 Latin America 106.0 288.0 292.0 381.0 470.0 13.8 170.9 1.3 30.7 23.3 Bahrain ------Egypt ------Kuwait ------Lebanon 2.0 1.0 3.0 3.0 3.0 -30.0 -30.0 138.1 3.3 6.5 Morocco 17.0 16.0 16.0 16.0 16.0 28.0 -7.4 1.0 0.0 1.0 Oman 2.0 4.0 5.0 5.0 6.0 9.0 63.2 28.5 15.0 10.0 Pan Arab ------Qatar - 2.0 2.0 2.0 2.0 - - 41.7 -4.0 -4.5 Saudi Arabia ------UAE 56.0 52.0 52.0 53.0 53.0 8.0 -7.5 0.0 1.0 1.0 MENA 77.0 74.0 78.0 79.0 80.0 10.5 -3.9 4.8 1.6 1.7 Israel 10.0 11.0 10.0 11.0 11.0 -11.6 13.5 -5.7 3.2 3.0 South Africa 37.0 37.0 29.0 29.0 30.0 0.5 0.4 -23.6 2.2 2.2 Other 47.0 48.0 39.0 40.0 41.0 -2.3 3.2 -19.5 2.5 2.4 GLOBAL 2952.0 3314.0 3441.0 3652.0 3867.0 5.2 12.3 3.8 6.1 5.9

DENTSU AEGIS NETWORK 190 OOH Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 191 201 200 198 198 3.0 5.0 -0.5 -0.7 -0.1 Belgium 376 374 378 387 390 0.3 -0.6 1.2 2.3 0.9 Denmark 61 63 73 83 99 -1.0 3.0 16.2 14.6 18.2 Finland 56 65 75 82 86 2.5 15.1 16.1 9.0 5.0 France 1,364 1,336 1,404 1,435 1,469 3.2 -2.1 5.1 2.2 2.4 Germany 717 785 741 752 767 3.9 9.5 -5.6 1.5 2.0 Greece 25 26 28 30 32 4.8 3.2 9.3 6.9 6.4 Ireland 91 93 95 96 96 5.3 2.5 2.0 1.6 0.0 Italy 390 396 408 408 410 -4.1 1.4 3.0 0.2 0.4 Netherlands 205 208 215 221 225 4.6 1.7 3.3 2.6 2.1 Norway 75 86 85 88 94 8.7 15.3 -1.7 4.0 7.0 Portugal 63 70 75 79 83 8.2 10.1 7.5 5.0 5.0 Spain 363 370 380 382 385 -2.0 1.7 2.8 0.3 0.9 Sweden 170 191 223 241 241 26.5 12.2 16.6 8.1 0.0 Switzerland 428 444 449 450 467 8.2 3.6 1.2 0.3 3.8 UK 1,485 1,485 1,529 1,545 1,591 7.8 0.0 3.0 1.0 3.0 Western Europe 6061 6191 6357 6477 6634 4.4 2.1 2.7 1.9 2.4 Bulgaria 26 27 27 28 29 1.2 1.3 1.5 3.0 3.5 Czech Republic 45 45 45 46 47 -5.0 0.0 0.0 2.0 2.0 Estonia 12 17 18 20 21 10.0 48.6 6.1 8.0 6.0 Hungary 68 77 77 81 82 -1.8 13.1 -0.1 5.0 0.9 Latvia 9 10 11 11 12 12.3 5.5 11.9 2.2 5.0 Lithuania 12 12 15 16 16 7.4 6.8 20.0 6.1 2.9 Poland 129 130 131 132 133 1.3 0.5 0.9 0.5 0.5 Romania 30 32 34 36 38 3.0 5.4 6.6 5.0 5.0 Russia 533 591 605 605 605 9.0 10.9 2.3 0.0 0.0 Slovak Rep 33 33 34 34 34 3.6 0.0 3.4 0.0 0.0

Turkey 81 75 74 74 81 34.0 -7.0 -1.2 0.5 8.4 C&EE 978 1049 1071 1082 1096 7.4 7.2 2.1 1.00 1.2 Europe 7040 7240 7429 7560 7730 4.8 2.8 2.6 1.8 2.3

DENTSU AEGIS NETWORK 191 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 7,897 8,134 8,352 8,568 8,770 4.0 3.0 2.7 2.6 2.4 Canada 427 518 544 598 641 5.2 21.3 5.1 9.9 7.0 North America 8,324 8,652 8,897 9,167 9,411 4.1 3.9 2.8 3.0 2.7 Australia 641 685 762 819 881 9.4 6.9 11.2 7.5 7.5 China 7,680 7,795 8,886 9,775 10,557 4.0 1.5 14.0 10.0 8.0 Hong Kong 408 391 331 278 234 -4.0 -4.3 -15.2 -16.0 -16.0 India 434 465 509 556 606 16.2 7.1 9.3 9.3 9.0 Indonesia 74 81 91 94 98 0.0 10.0 12.0 3.1 5.0 Japan 4,701 4,712 4,725 4,747 4,806 -0.7 0.3 0.3 0.5 1.2 Malaysia 115 117 123 124 126 2.2 1.8 5.3 1.2 1.6 New Zealand 80 95 100 105 110 24.2 18.6 5.0 5.0 5.0 Philippines 316 377 407 464 515 17.1 19.3 8.0 14.0 11.0 Singapore 205 164 139 118 100 26.2 -20.1 -15.3 -14.9 -15.6 South Korea 694 685 719 743 773 -1.1 -1.2 5.0 3.3 4.0 Taiwan 119 111 132 136 136 -6.4 -6.9 19.3 3.0 0.0 Thailand 369 417 440 451 462 25.6 12.9 5.6 2.5 2.4 Vietnam ------Asia Pacific 15,835 16,095 17,364 18,411 19,404 3.5 1.6 7.9 6.0 5.4 Argentina 49 87 113 147 177 10.4 79.2 30.0 30.0 20.0 Brazil 695 544 492 561 574 41.9 -21.7 -9.6 14.0 2.4 Colombia 55 49 41 42 45 -6.3 -10.3 -16.9 4.1 5.2 Mexico 271 278 331 336 340 2.0 2.5 19.1 1.5 1.3 Latin America 1,070 958 977 1,087 1,136 24.7 -10.4 1.9 11.2 4.5 Bahrain 3 3 2 2 2 5.0 -15.5 -21.4 2.0 2.0 Egypt ------Kuwait 84 135 166 170 175 18.5 60.2 23.5 2.0 3.0 Lebanon 143 138 140 147 150 -4.0 -4.0 1.8 5.0 2.0 Morocco 213 238 248 248 258 3.7 12.1 4.0 0.0 4.0 Oman ------Pan Arab ------Qatar 69 45 39 35 34 9.7 -34.7 -13.0 -10.0 -5.0 Saudi Arabia 177 211 183 162 146 12.6 19.2 -13.4 -11.3 -10.0 UAE 496 478 500 490 485 26.4 -3.8 4.7 -2.0 -1.0 MENA 1,186 1,248 1,279 1,255 1,250 13.9 5.2 2.5 -1.9 -0.4 Israel 68 74 78 82 84 33.4 8.9 5.6 5.2 1.8 South Africa 121 123 94 96 98 7.7 2.0 -24.2 2.2 2.2 Other 189 198 172 178 182 15.7 4.5 -13.0 3.6 2.0 GLOBAL 33,644 34,391 36,118 37,656 39,112 4.9 2.2 5.0 4.3 3.9

DENTSU AEGIS NETWORK 192 Digital Market Sizes & Growth Rates

COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f Austria 611 669 703 727 750 9.8 9.5 5.1 3.4 3.2 Belgium 232 533 489 516 485 -4.7 129.8 -8.2 5.4 -6.0 Denmark 1,029 1,132 1,186 1,195 1,239 10.6 10.0 4.7 0.7 3.7 Finland 367 419 477 512 558 13.4 14.2 13.7 7.4 9.0 France 4,140 4,709 5,521 6,011 6,394 7.6 13.8 17.2 8.9 6.4 Germany 5,603 6,118 6,546 7,009 7,512 8.5 9.2 7.0 7.1 7.2 Greece 44 46 49 50 51 11.4 3.8 6.2 2.3 2.3 Ireland 340 386 432 476 514 16.3 13.7 12.0 10.0 8.0 Italy 1,955 2,142 2,303 2,441 2,569 6.9 9.6 7.5 6.0 5.2 Netherlands 1,905 2,074 2,235 2,394 2,546 11.3 8.9 7.8 7.1 6.3 Norway 923 1,068 1,157 1,238 1,300 4.6 15.7 8.4 7.0 5.0 Portugal 92 106 121 136 147 20.5 14.7 14.6 12.0 8.0 Spain 1,740 1,888 2,060 2,246 2,421 22.7 8.5 9.1 9.0 7.8 Sweden 1,715 2,068 2,325 2,563 2,760 21.8 20.5 12.5 10.2 7.7 Switzerland 1,146 2,165 2,520 2,919 3,304 10.2 89.0 16.4 15.8 13.2 UK 13,166 15,213 17,501 19,319 21,239 17.3 15.5 15.0 10.4 9.9 Western Europe 35,009 40,738 45,628 49,751 53,789 13.0 16.4 12.0 9.0 8.1 Bulgaria 32 40 48 59 71 10.6 23.9 21.1 21.8 20.6 Czech Republic 226 254 287 348 428 28.6 12.6 12.9 21.4 22.8 Estonia 46 46 47 48 50 13.5 0.2 0.7 2.9 3.0 Hungary 234 273 310 352 394 22.2 16.4 13.7 13.4 11.9 Latvia 23 27 30 33 38 28.7 21.1 10.1 10.6 12.4 Lithuania 58 65 69 78 82 51.3 12.0 5.9 13.1 5.3 Poland 604 664 720 776 834 10.9 9.9 8.5 7.8 7.5 Romania 85 106 117 135 155 25.0 25.0 10.0 15.0 15.0 Russia 2,073 2,535 3,094 3,573 4,013 21.1 22.3 22.1 15.5 12.3 Slovak Rep 73 77 87 98 112 9.5 6.3 13.1 12.5 14.7

Turkey 317 325 336 352 367 34.9 2.4 3.5 4.6 4.4 C&EE 3,771 4,413 5,146 5,852 6,543 20.9 17.0 16.6 13.7 11.8 Europe 38,780 45,151 50,774 55,603 60,332 13.7 16.4 12.5 9.5 8.5

DENTSU AEGIS NETWORK 193 COUNTRY BY COUNTRY MARKET SIZES AND GROWTH RATES

Adspend (US$m) at current prices % Change Market 2016 2017 2018 2019f 2020f 16 vs 15 17 vs 16 18 vs 17 19f vs 18 20f vs 19f USA 56,849 64,939 73,734 82,945 92,209 16.7 14.2 13.5 12.5 11.2 Canada 3,672 4,008 4,475 4,860 5,276 14.7 9.1 11.6 8.6 8.5 North America 60,522 68,947 78,208 87,805 97,484 16.5 13.9 13.4 12.3 11.0 Australia 4,964 5,314 5,970 6,379 6,843 15.9 7.0 12.4 6.8 7.3 China 40,766 48,756 57,184 63,360 70,963 28.1 19.6 17.3 10.8 12.0 Hong Kong 772 852 1,065 1,255 1,449 1.5 10.2 25.0 17.8 15.5 India 887 1,169 1,547 2,053 2,725 66.1 31.7 32.4 32.7 32.7 Indonesia 771 925 1,073 1,245 1,469 35.0 20.0 16.0 16.0 18.0 Japan 11,849 13,652 15,909 18,216 20,420 13.0 15.2 16.5 14.5 12.1 Malaysia 277 325 377 415 457 20.9 17.0 16.1 10.2 10.0 New Zealand 605 714 844 933 1,036 11.3 17.9 18.2 10.6 11.0 Philippines 100 122 152 167 184 25.0 21.6 25.0 10.0 10.0 Singapore 326 387 438 478 523 12.1 18.8 13.2 9.2 9.4 South Korea 2,994 3,399 3,889 4,330 4,806 12.7 13.5 14.4 11.3 11.0 Taiwan 536 603 675 742 802 19.4 12.5 12.0 10.0 8.0 Thailand 482 391 452 620 741 20.6 -18.9 15.5 37.0 19.6 Vietnam 128 153 176 197 219 35.5 19.4 15.0 12.2 11.0 Asia Pacific 65,458 76,761 89,751 100,391 112,637 23.0 17.3 16.9 11.9 12.2 Argentina 395 565 735 992 1,290 71.4 43.3 30.0 35.0 30.0 Brazil 1,180 1,460 1,768 1,842 1,917 -56.5 23.7 21.1 4.2 4.0 Colombia 108 140 197 271 378 26.6 28.9 41.4 37.3 39.4 Mexico 1,085 1,358 1,692 1,980 2,217 25.0 25.1 24.6 17.0 12.0 Latin America 2,768 3,522 4,392 5,085 5,802 -29.0 27.2 24.7 15.8 14.1 MENA ------Israel 292 330 352 372 393 13.0 12.9 6.9 5.7 5.4 South Africa 94 98 421 481 546 5.0 5.0 328.9 14.2 13.4 Other 386 428 774 854 939 11.0 11.0 80.8 10.3 9.9 GLOBAL 167,914 194,809 223,899 249,738 277,194 17.0 16.0 14.9 11.5 11.0

DENTSU AEGIS NETWORK 194 TV % Share of Advertising Expenditure

TELEVISION % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 22.3 18.9 19.4 19.9 19.6 20.0 20.5 21.0 22.0 23.2 Belgium 40.5 40.1 39.4 38.5 41.2 43.0 40.3 42.0 40.3 41.0 Denmark 19.9 21.6 18.1 17.2 16.9 16.6 15.8 16.0 15.9 15.7 Finland 21.1 21.3 22.8 22.5 22.1 21.7 20.5 20.1 19.5 18.6 France 33.0 32.5 32.2 30.3 30.3 30.1 29.5 28.0 27.3 26.8 Germany 40.1 32.1 32.3 32.4 32.6 32.7 32.2 31.5 30.5 29.1 Greece 58.3 58.4 57.6 57.8 54.5 55.6 58.0 59.3 60.1 61.6 Ireland 28.5 28.7 28.2 27.0 26.9 26.4 24.1 22.7 22.0 21.4 Italy 53.6 51.6 52.1 52.6 52.1 53.2 52.0 51.3 49.9 49.6 Netherlands 23.6 25.5 25.6 25.8 26.1 25.6 24.6 24.3 23.7 23.1 Norway 21.0 22.2 22.2 21.8 22.1 23.0 22.0 20.7 19.8 19.2 Portugal 57.4 57.6 57.6 56.2 55.2 54.8 53.8 52.3 51.2 50.5 Spain 40.7 39.2 39.4 41.0 40.1 39.6 39.1 38.1 36.7 35.4 Sweden 22.0 22.5 21.6 21.2 19.2 17.2 16.0 16.2 15.5 14.4 Switzerland 24.1 21.6 21.6 21.4 20.9 21.8 17.8 17.3 17.5 17.1 UK 26.7 25.7 24.4 24.3 24.6 24.0 22.0 20.4 19.3 18.5 Western Europe 34.3 31.8 31.1 30.7 30.7 30.6 29.1 28.1 27.0 26.2 Bulgaria 56.8 58.3 58.6 56.2 55.5 55.6 54.8 55.0 55.0 54.4 Czech Republic 44.6 45.1 41.6 40.4 40.8 39.3 39.3 38.3 36.3 33.8 Estonia 31.6 30.8 31.5 25.4 24.6 22.9 22.6 22.7 22.6 22.6 Hungary 30.1 29.7 28.0 27.0 26.0 24.9 25.7 27.2 27.1 27.7 Latvia 45.1 45.7 44.3 44.0 42.7 40.4 39.4 38.3 37.4 36.3 Lithuania 47.5 47.3 44.7 41.4 38.5 34.7 33.9 33.3 32.5 32.1 Poland 56.9 56.2 50.0 50.9 50.4 49.4 48.5 48.9 48.5 48.1 Romania 72.6 69.9 67.3 64.5 64.6 63.3 63.0 64.6 65.3 64.7 Russia 49.7 47.6 46.7 45.1 41.9 41.4 41.0 39.9 36.5 34.5 Slovak Rep 44.6 44.3 45.4 45.0 45.4 48.6 50.5 50.9 50.6 50.3

Turkey 56.4 56.4 56.8 48.8 48.1 50.9 51.1 51.9 52.2 52.6 C&EE 51.4 49.9 47.5 45.8 44.2 43.9 43.4 43.0 41.0 39.8 Europe 36.1 33.7 32.9 32.4 32.1 32.0 30.7 29.8 28.7 27.8

DENTSU AEGIS NETWORK 195 TELEVISION % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 40.0 40.2 39.6 39.3 38.4 38.0 37.1 36.4 35.4 34.6 Canada 34.4 31.6 30.4 29.4 28.2 25.4 25.2 25.1 24.1 23.4 North America 39.8 39.8 39.2 38.9 38.0 37.5 36.7 35.9 34.9 34.1 Australia 31.2 31.1 31.4 30.1 27.3 25.4 24.3 22.3 21.4 20.4 China 53.9 51.8 50.1 45.5 39.6 35.0 31.1 26.4 23.4 20.6 Hong Kong 25.7 25.4 24.5 23.5 22.2 23.0 22.2 22.7 21.9 20.4 India 37.2 36.8 36.5 37.2 36.0 40.2 40.0 39.6 38.9 37.9 Indonesia 56.6 57.1 56.4 56.5 55.0 55.4 54.5 54.3 54.2 53.4 Japan 43.2 44.2 43.8 43.3 42.4 41.9 40.4 38.4 36.7 35.5 Malaysia 18.2 19.3 19.8 20.0 18.6 18.3 17.8 17.3 17.6 17.7 New Zealand 29.8 29.9 29.3 26.8 24.4 22.7 21.9 20.5 19.9 19.1 Philippines 56.8 61.9 62.1 60.6 59.8 59.6 59.6 53.4 47.0 45.9 Singapore 27.5 25.7 25.6 25.1 23.9 28.9 29.5 30.3 30.8 30.7 South Korea 38.3 37.3 36.2 37.4 37.6 36.4 34.8 33.4 32.6 31.4 Taiwan 51.9 52.2 53.9 43.3 43.5 42.4 41.2 38.8 36.5 34.8 Thailand 55.3 57.2 60.0 61.5 60.4 56.7 54.7 55.7 56.6 55.6 Vietnam 83.1 83.8 87.3 88.7 88.2 87.2 84.9 84.1 84.3 84.0 Asia Pacific 46.5 46.2 45.8 43.5 40.3 38.0 35.5 32.3 30.1 28.2 Argentina 44.0 45.0 43.9 43.1 44.1 42.8 43.5 41.8 41.3 40.0 Brazil 68.0 63.3 63.3 64.5 65.8 73.2 71.3 71.7 72.0 72.0 Colombia - 53.9 53.7 53.9 55.5 55.4 53.3 50.4 47.0 42.3 Mexico 62.6 61.2 59.4 58.0 52.5 50.0 46.1 43.0 40.8 39.3 Latin America 65.9 61.5 61.0 61.4 61.3 65.2 62.6 61.7 61.2 60.1 Bahrain 12.9 17.4 6.0 11.1 5.1 5.0 6.5 16.6 16.6 16.6 Egypt 66.5 85.3 88.1 92.2 90.9 90.6 68.7 71.2 82.4 95.9 Kuwait 31.4 29.0 28.3 35.7 25.3 10.1 8.2 7.3 7.0 7.2 Lebanon 70.0 52.6 56.1 58.0 59.0 54.0 52.4 51.5 51.7 52.4 Morocco 34.3 33.1 29.9 30.3 27.8 28.4 31.1 29.4 29.4 28.4 Oman 3.6 3.1 2.5 2.8 3.2 5.1 6.5 5.0 5.1 5.0 Pan Arab 94.8 95.9 96.1 96.3 97.0 97.7 97.8 98.1 98.3 98.4 Qatar 4.0 3.9 4.8 13.0 11.4 7.6 7.7 8.4 8.7 9.2 Saudi Arabia 5.8 4.6 4.2 4.3 3.7 2.7 3.4 10.4 11.9 13.4 UAE 4.4 4.4 3.9 5.0 4.5 6.4 5.6 4.2 4.1 4.1 MENA 54.2 55.0 54.3 56.8 58.1 58.8 57.0 56.5 55.8 55.4 Israel 40.6 41.3 41.9 39.2 38.2 37.0 37.1 37.0 36.9 36.9 South Africa 44.2 45.1 45.7 50.2 53.6 56.2 53.1 50.3 50.0 49.6 Other 43.1 44.0 44.8 47.4 49.9 51.7 49.3 47.1 46.9 46.8 GLOBAL 42.1 41.6 41.2 40.4 39.0 38.2 36.6 34.9 33.6 32.4

DENTSU AEGIS NETWORK 196 Newspaper % Share of Advertising Expenditure

NEWSPAPER % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 31.5 31.9 31.8 29.7 28.7 28.5 27.7 26.8 26.4 25.6 Belgium 25.1 24.6 25.0 24.8 22.4 22.4 20.3 19.2 20.0 20.1 Denmark 41.1 37.1 27.3 24.7 22.2 19.8 18.0 17.3 15.5 13.9 Finland 43.2 43.8 40.2 37.9 36.3 34.2 30.9 27.1 25.5 23.7 France 13.3 12.1 11.7 10.1 9.4 8.2 7.5 6.3 5.9 5.5 Germany 26.6 19.2 17.4 16.0 14.6 13.6 12.5 12.0 11.4 10.8 Greece 13.0 12.5 12.0 11.5 11.4 10.7 9.4 8.8 8.3 7.8 Ireland 30.3 26.8 23.8 20.9 18.7 16.3 13.8 11.9 10.4 9.1 Italy 12.1 11.2 9.7 8.6 7.7 7.1 6.5 6.0 5.5 4.9 Netherlands 26.3 22.1 19.1 16.7 14.6 12.7 11.4 10.5 9.8 9.2 Norway 37.4 35.3 31.2 27.0 21.9 18.1 14.9 13.4 12.0 10.6 Portugal 5.2 7.6 6.7 6.3 5.5 4.1 3.2 2.7 2.3 2.0 Spain 18.8 17.7 16.2 15.1 13.9 12.1 10.9 10.1 9.1 8.2 Sweden 34.0 30.7 28.8 26.8 23.6 19.5 15.7 13.0 11.1 7.6 Switzerland 34.5 27.6 25.4 24.9 23.0 20.5 15.6 13.0 10.2 8.6 UK 18.4 16.8 15.8 13.3 10.9 7.7 6.3 5.3 4.7 4.1 Western Europe 21.8 19.4 18.0 16.2 14.5 12.6 11.1 10.0 9.1 8.3 Bulgaria 8.6 8.9 8.4 8.5 7.6 6.4 5.8 5.0 4.4 3.5 Czech Republic 9.4 8.1 8.1 7.7 7.3 6.4 5.9 5.5 5.0 4.4 Estonia 27.4 26.8 24.3 18.2 17.3 15.9 14.8 14.4 13.9 13.2 Hungary 15.8 15.0 14.2 13.1 12.8 10.6 10.1 9.9 9.4 8.4 Latvia 10.6 9.1 8.9 7.6 5.7 5.0 4.1 4.3 3.9 3.4 Lithuania 17.6 16.1 13.8 10.7 8.4 6.5 5.8 5.6 5.0 4.7 Poland 6.6 5.3 3.3 2.7 2.3 1.9 1.5 1.4 1.3 1.3 Romania 3.4 3.5 3.1 3.0 2.4 1.8 1.3 0.9 0.7 0.5 Russia 7.8 7.0 5.7 4.9 3.8 2.8 2.1 1.5 1.3 1.0 Slovak Rep 11.4 10.1 8.9 7.8 7.6 5.7 4.8 4.4 4.2 3.5

Turkey 21.8 21.4 20.5 17.0 15.6 13.5 12.6 9.7 8.1 7.0 C&EE 9.3 8.4 7.3 6.4 5.6 4.8 4.0 3.2 2.8 2.5 Europe 20.5 18.3 16.9 15.1 13.6 11.7 10.3 9.2 8.4 7.6

DENTSU AEGIS NETWORK 197 NEWSPAPER % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 16.5 14.5 13.8 12.8 11.8 10.2 9.1 7.9 6.8 5.9 Canada 25.1 23.5 21.8 20.7 19.7 17.4 15.2 12.1 11.6 11.1 North America 16.8 14.9 14.1 13.2 12.1 10.5 9.3 8.0 7.0 6.1 Australia 27.2 23.5 19.2 15.8 13.5 11.0 10.3 10.2 8.7 7.6 China 15.1 12.6 9.9 7.5 5.3 3.2 1.7 1.2 0.8 0.6 Hong Kong 32.8 29.5 30.1 25.7 25.2 22.1 18.7 14.1 10.5 7.1 India 40.0 38.9 37.6 37.6 35.3 32.5 30.8 28.8 26.8 24.7 Indonesia 35.5 32.9 32.5 30.9 28.6 25.6 23.3 21.0 18.5 16.1 Japan 15.0 14.7 14.2 13.4 12.5 11.6 10.7 9.6 8.9 8.2 Malaysia 53.0 50.8 49.4 47.3 40.6 38.0 36.1 31.6 26.1 24.1 New Zealand 28.1 26.3 22.9 21.1 19.3 16.9 13.7 11.2 9.3 7.7 Philippines 7.6 6.6 5.7 5.7 4.8 3.8 2.5 2.1 1.6 1.3 Singapore 41.4 40.8 38.8 37.5 34.9 31.5 26.5 21.4 17.1 13.4 South Korea 20.3 19.0 17.4 16.0 15.1 14.3 13.6 12.8 12.1 11.3 Taiwan 21.2 20.7 18.8 13.9 11.6 9.5 8.1 6.9 6.1 5.4 Thailand 15.2 13.5 12.9 11.5 9.9 8.4 7.5 5.7 2.2 1.7 Vietnam 7.7 6.5 4.5 3.3 2.8 2.3 1.7 1.4 0.8 0.6 Asia Pacific 18.6 16.8 14.8 13.0 10.9 9.3 7.9 6.8 6.0 5.4 Argentina 34.8 33.6 29.3 27.1 25.7 23.2 21.2 19.7 17.8 16.8 Brazil 12.0 10.3 9.0 7.3 5.8 7.0 6.9 6.3 6.3 6.0 Colombia - 22.5 22.2 22.1 20.1 18.4 17.8 17.0 16.3 15.3 Mexico 7.9 7.4 6.9 6.5 6.2 5.8 5.5 4.9 4.5 4.2 Latin America 11.7 11.4 10.5 9.3 8.2 8.9 8.8 8.2 7.9 7.6 Bahrain 73.8 73.8 81.3 74.7 80.4 80.6 79.7 70.9 70.9 70.9 Egypt 28.5 12.4 9.7 5.7 5.1 5.3 2.9 1.7 1.6 1.3 Kuwait 57.9 56.8 58.9 50.4 50.4 57.2 44.0 34.9 33.5 29.1 Lebanon 5.6 9.3 7.4 7.6 6.4 5.9 5.7 5.8 5.5 4.6 Morocco 14.8 15.1 13.6 11.3 9.9 10.6 7.0 6.3 6.3 5.6 Oman 91.9 93.2 93.9 91.9 91.7 88.8 86.5 85.8 84.8 83.9 Pan Arab 1.6 1.2 1.3 1.3 1.1 0.6 0.5 0.4 0.4 0.3 Qatar 74.1 78.0 76.8 52.0 60.3 58.2 65.6 65.2 63.8 61.6 Saudi Arabia 64.6 61.5 60.5 58.9 59.8 48.4 43.4 40.3 38.7 38.1 UAE 42.5 41.6 41.4 41.3 38.0 28.4 24.5 20.1 16.1 14.4 MENA 25.5 24.7 24.4 21.7 19.7 16.2 14.6 13.0 12.1 11.3 Israel 26.0 24.2 21.0 18.8 17.6 15.0 13.3 12.6 12.0 11.8 South Africa 23.5 22.4 25.8 19.2 17.5 15.3 15.1 14.0 13.5 13.1 Other 24.3 22.9 24.7 19.1 17.5 15.2 14.7 13.7 13.2 12.8 GLOBAL 18.2 16.3 15.1 13.6 12.1 10.4 9.1 8.0 7.1 6.3

DENTSU AEGIS NETWORK 198 Magazine % Share of Advertising Expenditure

MAGAZINE % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 24.0 22.9 22.9 21.5 20.6 19.7 19.1 19.0 18.1 17.3 Belgium 7.6 7.3 7.0 6.8 7.6 6.9 6.3 5.8 5.9 6.1 Denmark 8.1 7.7 8.7 8.5 7.6 7.2 6.7 5.6 5.3 5.2 Finland 11.7 10.3 9.3 8.1 7.1 6.4 6.2 5.9 5.6 5.2 France 13.9 13.5 12.5 10.7 10.1 9.3 8.1 6.9 6.4 6.0 Germany 21.4 15.0 14.5 13.5 12.5 11.8 10.7 9.9 9.0 8.4 Greece 12.6 11.6 11.3 11.1 11.9 10.9 10.0 8.8 8.3 7.7 Ireland 2.1 1.3 1.2 0.8 0.7 0.7 0.6 0.5 0.5 0.4 Italy 9.4 8.7 7.4 6.7 6.3 5.8 5.4 4.9 4.4 4.0 Netherlands 12.9 11.5 10.3 9.3 8.5 7.6 7.0 6.3 5.7 5.3 Norway 6.8 6.4 5.6 4.8 4.3 3.9 3.3 2.9 2.6 2.3 Portugal 10.2 6.5 6.2 5.8 5.2 4.2 3.4 2.6 2.1 1.9 Spain 6.9 6.8 5.9 5.5 5.1 4.7 4.4 4.1 3.7 3.4 Sweden 7.5 6.7 5.5 5.1 4.7 5.0 4.2 3.5 3.0 2.8 Switzerland 20.6 17.2 16.6 15.9 14.7 14.2 10.8 9.5 7.1 6.2 UK 7.6 6.6 5.8 4.8 3.8 3.0 2.3 1.8 1.6 1.3 Western Europe 12.1 10.7 9.9 8.9 8.2 7.5 6.6 5.8 5.2 4.8 Bulgaria 5.7 4.8 4.3 4.1 4.1 4.1 2.7 2.4 1.6 1.3 Czech Republic 11.2 10.3 10.6 10.0 9.8 8.7 8.0 7.6 6.8 6.0 Estonia 6.4 6.6 6.8 5.7 5.6 5.3 3.9 3.7 3.4 3.2 Hungary 14.6 14.4 12.9 11.7 10.9 10.0 9.2 7.8 7.3 6.5 Latvia 9.7 10.0 10.5 10.2 9.4 7.2 6.0 5.8 5.4 4.9 Lithuania 10.3 10.1 9.9 9.7 9.1 7.9 6.5 5.4 5.0 4.8 Poland 9.0 7.8 7.8 6.5 5.7 5.1 4.5 4.2 4.0 3.8 Romania 3.5 3.5 3.2 2.7 2.2 1.9 1.4 1.1 0.9 0.7 Russia 7.5 6.7 5.5 4.7 4.0 3.3 2.8 2.3 2.1 1.9 Slovak Rep 13.6 12.1 10.6 9.8 9.5 7.9 6.9 6.1 5.6 4.7

Turkey 2.2 2.0 1.8 1.4 1.2 1.3 1.1 0.8 0.7 0.6 C&EE 8.2 7.3 6.6 5.7 5.1 4.3 3.7 3.2 2.9 2.7 Europe 11.7 10.4 9.6 8.6 7.8 7.1 6.3 5.5 4.9 4.5

DENTSU AEGIS NETWORK 199 MAGAZINE % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 12.2 12.0 11.7 11.1 10.5 10.0 9.2 8.3 7.5 6.8 Canada 5.3 4.8 4.6 4.3 3.8 3.2 3.3 2.5 2.4 2.3 North America 11.9 11.7 11.4 10.8 10.2 9.7 8.9 8.1 7.3 6.6 Australia 5.8 4.8 4.4 3.1 2.9 2.5 1.9 1.5 1.2 1.1 China 2.0 1.8 1.5 1.2 0.9 0.7 0.5 0.4 0.3 0.3 Hong Kong 15.6 15.3 14.5 12.1 10.6 7.1 4.5 2.8 1.7 0.9 India 4.3 4.1 3.8 3.6 3.3 3.0 2.9 2.6 2.3 2.0 Indonesia 3.1 2.7 2.6 2.4 2.0 1.6 1.1 0.7 0.5 0.3 Japan 6.4 6.0 5.8 5.5 5.4 4.7 4.2 3.7 3.2 2.8 Malaysia 2.7 2.5 2.1 1.9 2.0 1.9 1.8 1.8 1.9 1.8 New Zealand 10.1 10.2 9.8 9.2 8.5 8.1 7.1 5.9 4.9 4.0 Philippines 2.1 2.3 1.8 1.6 1.2 0.8 0.4 0.3 0.1 0.1 Singapore 5.7 5.5 5.0 5.0 3.6 3.4 3.4 3.2 3.0 2.8 South Korea 6.0 5.8 5.2 4.7 4.2 3.7 3.3 2.8 2.5 2.3 Taiwan 11.3 11.6 11.5 8.5 7.4 5.9 4.5 3.7 3.3 3.0 Thailand 6.1 5.0 4.8 4.3 3.4 2.5 1.9 1.2 0.4 0.2 Vietnam 5.1 4.4 3.0 2.0 1.6 1.2 1.2 0.9 1.1 1.1 Asia Pacific 4.6 4.2 3.7 3.3 2.9 2.4 1.9 1.6 1.4 1.2 Argentina 4.8 4.6 3.9 3.3 3.0 2.6 2.1 2.0 1.8 1.7 Brazil 7.4 5.8 4.9 3.8 3.0 3.8 3.7 3.0 2.8 2.8 Colombia - 5.1 4.9 4.4 3.5 2.9 2.8 2.6 2.2 1.8 Mexico 6.4 6.4 5.9 5.1 4.3 4.1 4.0 3.3 2.9 2.5 Latin America 7.1 5.9 5.1 4.1 3.3 3.7 3.5 2.9 2.7 2.5 Bahrain 9.3 7.1 10.3 11.0 11.4 11.2 10.4 9.7 9.7 9.7 Egypt 1.0 0.4 0.3 0.3 0.3 0.2 0.1 0.1 0.1 0.1 Kuwait 6.6 5.9 6.1 4.3 5.2 6.9 4.9 3.9 3.7 3.5 Lebanon 5.8 8.2 6.2 5.5 5.0 4.6 4.5 3.8 3.6 3.6 Morocco 7.4 7.5 6.8 5.7 5.0 5.3 4.6 4.2 4.2 3.7 Oman 4.5 3.7 3.7 4.0 3.8 4.4 3.7 4.5 4.1 3.8 Pan Arab 3.5 2.9 2.6 2.4 1.9 1.7 1.7 1.5 1.3 1.3 Qatar 1.6 2.0 3.2 3.1 3.9 5.7 3.5 3.4 3.5 3.8 Saudi Arabia 2.2 1.4 1.7 2.1 2.0 2.0 1.3 1.2 1.3 1.3 UAE 18.6 17.8 15.7 14.0 13.2 11.9 9.0 6.1 5.9 5.3 MENA 6.3 5.7 5.3 4.7 4.3 4.2 3.6 2.9 2.8 2.7 Israel 4.3 4.6 4.0 3.8 3.6 3.0 2.8 2.3 2.0 1.6 South Africa 9.1 7.8 5.6 6.1 5.2 4.5 4.5 3.2 3.1 3.0 Other 7.6 6.9 5.2 5.5 4.8 4.2 4.1 3.0 2.9 2.7 GLOBAL 9.4 8.7 8.2 7.5 6.9 6.4 5.7 5.0 4.5 4.1

DENTSU AEGIS NETWORK 200 Radio % Share of Advertising Expenditure

RADIO % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 5.7 6.0 6.0 5.7 5.6 5.6 5.5 5.5 5.4 5.4 Belgium 12.4 12.9 13.1 13.9 13.4 14.1 14.4 14.7 15.0 15.3 Denmark 2.4 2.6 2.3 2.4 2.5 2.5 2.5 2.5 2.5 2.5 Finland 4.3 4.2 4.4 4.9 5.1 5.3 5.5 5.8 6.0 6.3 France 7.1 7.2 7.4 6.8 6.7 6.7 6.6 6.5 6.4 6.3 Germany 6.9 5.5 5.6 5.3 5.2 4.6 4.3 3.9 3.6 3.2 Greece 7.9 7.5 7.5 7.2 7.4 7.1 7.0 6.9 6.7 6.6 Ireland 13.9 13.6 12.5 11.4 11.2 10.3 9.5 8.8 8.0 7.3 Italy 5.6 5.7 5.7 5.5 5.8 5.7 5.7 5.7 5.8 5.8 Netherlands 6.2 5.9 6.2 6.2 6.0 6.1 6.1 6.1 6.1 6.1 Norway 3.5 3.7 3.5 4.1 4.2 4.4 4.6 4.8 5.0 5.2 Portugal 6.8 7.4 7.0 7.0 6.7 6.8 6.8 6.7 6.7 6.6 Spain 9.5 9.8 9.3 9.1 9.1 8.9 8.7 8.5 8.4 8.2 Sweden 2.9 2.5 2.2 2.6 2.6 2.4 2.3 2.3 2.2 2.1 Switzerland 5.9 5.1 5.1 4.7 4.2 3.9 3.6 3.2 2.9 2.5 UK 4.0 4.0 3.6 3.5 3.4 3.2 3.1 2.9 2.8 2.6 Western Europe 6.2 6.0 5.8 5.7 5.6 5.4 5.2 5.1 4.9 4.7 Bulgaria 7.1 5.0 4.8 5.1 4.9 4.1 3.7 3.2 2.8 2.4 Czech Republic 6.8 6.4 6.4 6.1 6.0 5.8 5.6 5.4 5.2 5.0 Estonia 9.9 10.1 9.9 8.7 8.6 8.2 7.8 7.4 7.0 6.6 Hungary 8.3 6.7 7.8 7.3 7.0 6.8 6.6 6.4 6.3 6.1 Latvia 10.6 10.7 11.7 13.3 12.3 13.5 14.2 14.8 15.4 16.0 Lithuania 7.9 7.8 7.5 7.6 7.1 7.0 6.8 6.7 6.5 6.3 Poland 8.4 8.6 8.0 8.3 8.5 8.3 8.3 8.3 8.3 8.2 Romania 5.6 6.1 6.2 6.2 6.0 6.3 6.4 6.5 6.6 6.7 Russia 4.6 5.0 5.2 5.0 4.8 5.0 5.1 5.1 5.2 5.2 Slovak Rep 6.7 6.3 5.9 4.9 4.5 3.9 3.3 2.7 2.2 1.6

Turkey 2.8 2.5 2.3 2.0 2.0 1.7 1.5 1.3 1.1 0.9 C&EE 6.1 6.1 5.9 5.8 5.7 5.5 5.4 5.3 5.2 5.1 Europe 6.2 6.0 5.8 5.7 5.6 5.4 5.2 5.1 4.9 4.8

DENTSU AEGIS NETWORK 201 RADIO % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 10.6 10.3 10.4 10.2 9.8 9.5 9.2 9.0 8.8 8.5 Canada 6.0 5.6 5.8 5.5 5.4 5.2 5.3 5.3 5.1 4.9 North America 10.4 10.1 10.2 10.0 9.7 9.4 9.1 8.9 8.6 8.3 Australia 8.0 8.1 8.1 8.1 7.7 7.7 7.5 7.3 7.1 6.9 China 3.0 3.0 2.8 2.7 2.6 2.4 2.3 2.1 2.0 1.9 Hong Kong 3.5 3.0 2.9 2.5 2.6 3.1 3.4 3.4 3.2 3.0 India 4.8 4.8 4.9 4.7 4.3 4.4 4.2 3.9 3.6 3.3 Indonesia 1.8 1.5 1.5 1.3 1.3 1.3 1.4 1.5 1.5 1.5 Japan 3.1 2.9 2.9 2.8 2.8 2.7 2.7 2.6 2.5 2.4 Malaysia 6.7 6.7 6.4 6.0 8.6 8.5 8.4 8.7 9.1 9.2 New Zealand 11.9 12.1 12.4 12.2 11.0 11.0 10.7 10.0 9.5 9.1 Philippines 24.3 19.2 19.1 20.4 22.0 24.0 26.2 32.1 38.6 38.4 Singapore 8.1 7.9 8.3 8.6 8.4 8.3 8.0 7.7 7.3 6.8 South Korea 3.2 2.7 2.5 2.9 3.0 3.0 2.6 2.2 2.1 2.0 Taiwan 8.2 7.7 6.8 5.5 4.9 3.9 3.4 3.5 3.4 3.2 Thailand 6.2 5.7 5.4 4.9 4.5 4.5 4.4 4.5 4.1 3.7 Vietnam 0.2 0.1 0.1 0.1 0.2 0.3 2.0 2.3 1.8 1.8 Asia Pacific 4.1 3.9 3.7 3.6 3.6 3.6 3.6 3.6 3.6 3.4 Argentina 3.2 3.7 3.7 4.6 5.2 6.0 6.2 6.7 6.3 6.1 Brazil 4.0 3.6 3.6 3.4 3.3 3.0 3.6 4.0 3.8 3.9 Colombia - 11.5 11.8 11.9 12.3 12.6 13.4 13.7 12.9 11.7 Mexico 8.2 8.0 7.8 7.6 7.3 6.8 6.4 5.7 5.4 5.1 Latin America 5.0 5.2 5.1 4.9 4.8 4.6 5.0 5.2 4.8 4.8 Bahrain 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Egypt 4.0 1.9 1.8 1.8 3.7 3.9 2.1 2.3 2.7 2.7 Kuwait 1.7 1.3 1.4 2.1 3.2 3.3 4.1 4.6 4.9 5.2 Lebanon 5.4 8.4 7.3 6.7 7.0 7.3 6.6 7.1 7.2 7.3 Morocco 17.4 16.5 23.5 24.7 26.9 24.6 24.4 27.3 27.3 30.0 Oman ------Pan Arab ------Qatar 1.5 2.1 1.9 2.1 3.0 0.0 0.0 0.0 0.0 0.0 Saudi Arabia 10.5 13.2 14.9 18.3 18.8 25.8 23.1 21.4 21.2 20.9 UAE 6.1 8.0 11.8 9.1 13.3 16.0 20.5 24.6 25.6 25.6 MENA 4.1 4.4 5.7 5.7 6.6 7.3 8.3 9.4 9.9 10.5 Israel 6.0 6.3 6.5 6.7 6.9 7.0 5.7 5.7 5.5 5.4 South Africa 14.4 15.5 14.9 15.7 15.7 16.2 19.1 15.8 16.2 16.6 Other 11.7 12.8 12.9 13.4 13.6 14.1 15.8 13.3 13.7 14.1 GLOBAL 7.3 7.0 7.0 6.8 6.6 6.5 6.3 6.2 6.1 5.9

DENTSU AEGIS NETWORK 202 Cinema % Share of Advertising Expenditure

CINEMA % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 0.4 0.3 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 Belgium 0.9 0.9 1.0 1.0 1.0 0.8 0.7 0.7 0.7 0.8 Denmark 0.5 0.6 0.6 0.7 0.7 0.7 0.7 0.8 0.9 1.0 Finland 0.2 0.2 0.2 0.3 0.4 0.4 0.6 0.6 0.6 0.6 France 1.0 1.0 0.9 0.8 0.8 0.8 0.9 0.8 0.8 0.8 Germany 0.0 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.3 Greece ------Ireland 0.9 1.0 1.0 0.8 0.7 0.7 0.7 0.7 0.6 0.6 Italy 0.5 0.5 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Netherlands 6.2 5.9 6.2 6.2 6.0 5.8 5.7 5.6 5.5 5.4 Norway 0.9 0.9 0.9 0.7 0.8 0.9 1.0 1.1 1.2 1.3 Portugal 0.4 0.4 0.3 0.2 0.3 0.4 0.4 0.4 0.4 0.5 Spain 0.5 0.5 0.5 0.6 0.4 0.4 0.6 0.6 0.6 0.7 Sweden 0.5 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Switzerland 0.7 0.5 0.7 0.7 0.8 0.7 0.6 0.6 0.7 0.8 UK 1.3 1.5 1.2 1.2 1.4 1.5 1.4 1.5 1.4 1.3 Western Europe 0.7 0.8 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 Bulgaria ------Czech Republic 0.5 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.3 Estonia ------Hungary 0.7 0.9 0.8 0.9 1.0 1.0 1.0 1.3 1.2 1.1 Latvia 0.5 0.5 0.4 0.6 0.8 0.8 0.9 0.9 0.9 0.8 Lithuania 0.3 0.4 0.5 0.4 0.5 0.7 0.7 1.0 1.0 1.1 Poland 2.1 2.5 1.5 1.4 1.4 1.4 1.4 1.3 1.3 1.2 Romania 0.6 0.6 0.7 0.7 0.6 0.6 0.6 0.5 0.5 0.5 Russia 1.6 1.7 1.7 1.5 1.3 0.9 0.8 0.8 0.8 0.7 Slovak Rep 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.2

Turkey 1.2 1.1 1.1 1.1 1.0 1.1 1.2 1.1 1.2 1.2 C&EE 1.4 1.5 1.4 1.2 1.1 1.0 0.9 0.9 0.8 0.8 Europe 0.7 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

DENTSU AEGIS NETWORK 203 CINEMA % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 Canada ------North America 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 Australia 0.6 0.7 0.8 0.7 0.8 0.8 0.8 0.8 0.7 0.7 China ------Hong Kong ------India 3.1 3.1 3.0 3.0 2.8 1.9 2.0 2.0 2.1 2.1 Indonesia 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Japan ------Malaysia 0.4 0.6 0.6 0.7 2.4 2.5 2.7 2.7 2.9 2.9 New Zealand 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Philippines 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.2 Singapore 0.4 0.3 0.4 0.6 0.5 0.0 0.0 0.0 0.0 0.0 South Korea 1.2 1.8 1.9 1.9 2.1 2.2 2.2 2.0 2.0 1.9 Taiwan 0.4 0.4 0.5 0.5 0.6 0.4 0.4 0.3 0.3 0.3 Thailand 7.6 7.0 4.5 3.8 4.1 4.7 6.6 6.8 6.0 5.7 Vietnam 0.4 0.4 0.5 0.5 0.6 0.4 0.4 0.3 0.3 0.3 Asia Pacific 0.4 0.4 0.4 0.3 0.4 0.4 0.4 0.4 0.4 0.4 Argentina 1.3 1.3 1.2 1.2 1.3 1.2 1.0 0.9 0.9 0.8 Brazil 0.3 0.3 0.3 0.3 0.3 0.3 1.5 1.4 1.7 2.1 Colombia - 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 Mexico 1.1 1.0 1.0 0.9 0.8 0.8 0.8 0.7 0.7 0.7 Latin America 0.5 0.5 0.4 0.4 0.4 0.5 1.2 1.1 1.4 1.6 Bahrain 2.8 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Egypt ------Kuwait ------Lebanon 0.2 0.3 0.2 0.4 0.4 0.3 0.3 0.7 0.7 0.7 Morocco 0.7 0.7 0.9 1.4 1.9 2.3 2.0 2.0 2.0 1.9 Oman 0.0 0.0 0.0 1.2 1.3 1.7 3.3 4.6 6.0 7.3 Pan Arab ------Qatar 0.0 0.0 0.0 0.0 0.0 0.0 0.8 1.3 1.4 1.5 Saudi Arabia ------UAE 1.0 1.4 1.8 3.1 3.6 3.8 4.0 4.2 4.7 5.0 MENA 0.3 0.3 0.3 0.6 0.7 0.8 0.9 1.0 1.1 1.2 Israel 1.0 1.2 1.2 1.1 1.2 1.0 1.1 1.0 1.0 1.0 South Africa 1.6 1.7 1.3 1.3 1.2 1.2 1.2 0.9 0.8 0.8 Other 1.4 1.6 1.2 1.2 1.2 1.1 1.2 0.9 0.9 0.8 GLOBAL 0.6 0.6 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6

DENTSU AEGIS NETWORK 204 OOH % Share of Advertising Expenditure

OOH % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 5.7 6.3 6.2 6.2 6.3 6.1 6.2 6.0 5.9 5.9 Belgium 8.2 8.7 8.5 8.6 8.7 8.2 7.8 8.0 8.1 8.1 Denmark 5.5 5.1 3.3 3.1 3.1 3.0 3.0 3.3 3.9 4.5 Finland 3.3 3.3 3.5 3.7 4.2 4.2 4.9 5.5 5.9 6.1 France 11.4 11.4 11.5 11.0 10.9 11.2 10.6 10.6 10.4 10.4 Germany 4.9 3.7 3.8 3.8 4.1 4.1 4.4 4.2 4.2 4.3 Greece 4.0 4.1 4.1 4.3 5.6 5.6 5.5 5.8 6.0 6.0 Ireland 7.2 7.2 7.8 9.3 9.5 9.6 9.8 9.8 9.6 9.3 Italy 6.1 5.8 5.4 4.8 5.1 4.7 4.7 4.7 4.8 4.8 Netherlands 4.2 4.3 4.3 4.3 4.6 4.7 4.7 4.7 4.7 4.6 Norway 3.5 3.6 3.5 3.2 3.4 3.7 4.1 4.0 4.1 4.3 Portugal 13.9 12.2 11.9 12.3 11.7 12.0 12.8 13.4 13.6 13.8 Spain 7.2 7.0 6.5 6.3 6.5 6.0 6.0 6.0 6.0 6.0 Sweden 4.5 4.2 3.7 4.2 4.3 5.0 5.1 5.6 5.8 5.8 Switzerland 10.3 9.6 10.5 9.9 10.0 10.5 8.8 8.6 8.3 8.1 UK 6.6 6.9 6.7 6.3 6.1 6.1 5.7 5.4 5.2 5.0 Western Europe 6.9 6.6 6.5 6.3 6.4 6.4 6.2 6.1 6.1 6.0 Bulgaria 12.0 12.3 12.3 13.0 13.1 13.0 12.6 11.7 11.0 10.5 Czech Republic 9.3 8.9 8.9 7.9 7.6 6.6 6.2 5.9 5.5 5.1 Estonia 9.2 9.2 10.2 8.5 9.0 9.5 13.4 13.9 14.5 14.9 Hungary 11.8 11.7 11.9 11.9 11.2 10.7 10.7 9.7 9.4 8.9 Latvia 9.3 9.7 10.4 10.1 9.2 9.8 9.8 10.4 10.3 10.4 Lithuania 8.1 7.4 7.0 7.8 8.0 7.3 7.5 8.5 8.4 8.4 Poland 7.1 6.9 6.4 6.2 6.0 5.9 5.8 5.5 5.3 5.2 Romania 7.4 7.1 6.9 7.6 7.3 7.0 6.6 6.3 5.9 5.7 Russia 12.9 12.5 12.1 11.4 9.8 9.6 9.3 8.5 8.1 7.7 Slovak Rep 10.1 9.5 9.1 10.8 10.6 10.4 10.0 9.7 9.3 8.9

Turkey 7.4 7.4 7.5 6.6 6.5 6.1 5.8 6.1 6.1 6.4 C&EE 10.2 10.1 10.1 9.6 8.7 8.4 8.2 7.7 7.5 7.2 Europe 7.2 7.0 6.9 6.7 6.6 6.6 6.4 6.3 6.2 6.2

DENTSU AEGIS NETWORK 205 OOH % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.8 3.8 3.8 Canada 5.2 4.7 4.9 4.8 4.8 5.1 5.8 6.0 6.2 6.3 North America 4.0 3.9 3.9 4.0 3.9 3.9 4.0 3.9 3.9 3.9 Australia 4.9 5.0 5.0 5.3 5.8 6.0 6.3 6.6 6.9 7.2 China 11.0 11.3 10.4 10.2 9.7 9.3 8.9 9.4 9.8 9.9 Hong Kong 16.2 17.4 15.5 14.5 14.1 15.5 16.1 13.5 11.4 9.5 India 7.5 7.6 7.8 7.3 7.6 5.9 5.8 5.7 5.6 5.4 Indonesia 2.9 2.7 2.7 1.9 1.5 1.4 1.6 1.7 1.8 1.8 Japan 12.0 11.7 11.7 11.6 11.5 11.1 10.8 10.5 10.1 9.7 Malaysia 10.1 9.0 9.2 9.6 9.2 9.0 8.8 9.3 9.8 9.6 New Zealand 4.0 3.3 3.5 3.6 3.9 4.8 5.4 5.5 5.6 5.7 Philippines 7.5 8.0 8.8 9.1 9.3 8.8 8.3 8.8 9.2 10.4 Singapore 9.5 11.1 11.9 10.9 10.3 10.8 9.7 9.0 8.3 7.4 South Korea 8.5 8.7 8.9 8.1 8.0 7.6 7.3 7.3 7.1 7.1 Taiwan 7.0 7.4 8.5 7.1 7.1 6.9 6.6 7.7 7.8 7.7 Thailand 8.9 9.1 8.8 8.5 7.5 10.0 12.9 12.9 13.0 12.7 Vietnam ------Asia Pacific 10.2 10.3 9.9 9.6 9.4 9.0 8.8 9.0 9.1 9.0 Argentina 5.1 4.3 4.0 3.6 3.3 2.7 3.5 3.9 4.1 4.2 Brazil 3.1 2.8 3.1 3.4 3.3 4.7 3.5 3.0 3.1 3.1 Colombia - 2.9 2.9 2.9 3.4 3.5 3.2 2.7 2.9 3.0 Mexico 7.1 7.1 7.0 6.9 6.8 6.5 6.3 6.9 6.6 6.4 Latin America 4.1 3.7 3.9 4.0 4.0 4.8 4.0 3.8 3.9 3.8 Bahrain 1.2 1.3 2.4 3.1 3.1 3.2 3.4 2.9 2.9 2.9 Egypt ------Kuwait 2.4 7.0 5.2 7.4 15.9 22.5 38.7 49.3 50.8 54.9 Lebanon 13.0 21.2 22.8 21.7 22.2 27.8 30.5 31.1 31.3 31.4 Morocco 25.4 27.0 25.3 26.5 28.5 28.9 30.8 30.8 30.8 30.4 Oman ------Pan Arab ------Qatar 18.8 13.9 13.3 29.8 21.3 28.5 22.4 21.7 22.5 23.9 Saudi Arabia 17.0 19.3 18.7 16.4 15.8 21.1 28.8 26.7 26.8 26.4 UAE 27.5 26.7 25.4 27.5 27.3 33.6 36.4 40.8 43.6 45.6 MENA 9.7 9.9 9.9 10.5 10.6 12.6 15.3 16.8 18.0 18.9 Israel 4.9 4.9 4.9 5.3 5.4 7.0 7.4 7.5 7.7 7.6 South Africa 4.6 5.0 4.1 4.3 3.8 3.8 3.9 2.9 2.7 2.6 Other 4.7 5.0 4.3 4.6 4.1 4.5 4.7 4.0 3.9 3.7 GLOBAL 6.7 6.7 6.5 6.5 6.4 6.3 6.2 6.3 6.3 6.3

DENTSU AEGIS NETWORK 206 Digital % Share of Advertising Expenditure

DIGITAL % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f Austria 10.4 13.6 13.3 16.7 18.9 19.6 20.7 21.3 21.7 22.2 Belgium 5.3 5.6 6.0 6.3 5.6 5.0 11.1 10.3 10.8 10.0 Denmark 22.5 25.3 39.7 43.3 47.0 50.1 53.4 54.3 55.6 56.8 Finland 16.3 16.9 19.6 22.7 24.8 27.8 31.6 35.2 37.2 39.8 France 20.5 22.3 23.8 30.2 31.8 33.8 37.3 41.5 43.6 45.1 Germany 0.0 23.9 26.0 28.5 30.5 32.1 34.4 36.7 39.1 41.8 Greece 4.2 5.8 7.5 8.1 9.3 9.9 9.8 10.0 9.9 9.6 Ireland 17.1 21.5 25.4 29.9 32.2 36.0 40.9 44.7 47.5 49.9 Italy 12.7 16.4 19.4 21.4 22.7 23.4 25.4 26.7 28.8 30.1 Netherlands 26.7 30.5 34.4 37.5 40.0 43.4 46.5 48.5 50.5 52.2 Norway 26.8 27.8 33.2 38.3 43.3 46.2 50.9 54.4 57.1 59.0 Portugal 6.2 8.3 10.4 12.1 15.3 17.5 19.4 21.6 23.4 24.5 Spain 16.4 19.1 22.1 22.4 25.0 28.7 30.5 32.6 35.3 37.9 Sweden 28.5 33.0 37.7 39.6 45.1 50.1 55.6 58.3 61.2 65.9 Switzerland 4.0 18.4 20.1 22.6 26.3 28.2 43.2 48.1 53.7 57.1 UK 35.5 38.5 42.3 46.6 49.7 54.3 58.8 62.3 64.7 66.8 Western Europe 18.0 24.7 27.9 31.4 34.0 36.8 40.9 44.0 46.7 48.9 Bulgaria 9.7 10.7 11.6 13.1 14.8 16.0 18.9 21.0 23.4 25.9 Czech Republic 18.2 20.7 23.9 27.5 28.0 33.1 35.2 37.6 41.9 46.6 Estonia 15.5 16.6 17.3 33.6 34.9 38.0 36.2 35.6 35.3 35.3 Hungary 18.7 21.6 24.4 28.1 31.0 36.6 37.8 39.1 41.0 43.1 Latvia 14.2 14.4 14.0 14.1 19.9 24.4 27.9 29.0 31.3 33.7 Lithuania 8.4 10.9 16.6 22.4 28.4 36.6 39.0 39.4 41.5 42.4 Poland 9.9 12.6 23.0 24.0 25.7 27.7 29.8 30.3 31.4 32.4 Romania 6.8 9.3 12.6 15.3 16.8 19.6 21.8 21.5 22.0 23.3 Russia 15.9 19.6 23.0 27.3 34.4 37.4 39.9 43.3 47.9 50.9 Slovak Rep 13.4 17.4 20.0 21.5 22.1 22.9 23.4 24.8 26.7 29.4

Turkey 8.3 9.2 9.9 23.1 25.5 24.0 25.3 27.5 28.8 29.2 C&EE 13.4 16.6 21.3 25.5 29.7 32.2 34.6 37.2 40.4 42.7 Europe 17.5 23.8 27.2 30.8 33.6 36.3 40.2 43.2 45.9 48.2

DENTSU AEGIS NETWORK 207 DIGITAL % SHARE

2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f USA 16.3 18.5 20.1 22.0 25.0 27.8 30.9 34.0 37.1 39.8 Canada 24.0 29.8 32.5 35.3 38.1 43.6 45.1 49.1 50.6 52.0 North America 16.6 19.0 20.6 22.6 25.5 28.4 31.5 34.6 37.6 40.3 Australia 22.3 26.7 31.3 36.8 42.1 46.7 48.8 51.4 53.9 56.0 China 14.9 19.6 25.3 32.8 42.0 49.4 55.6 60.5 63.6 66.7 Hong Kong 6.2 9.5 12.5 21.6 25.3 29.3 35.0 43.5 51.3 59.0 India 3.0 4.7 6.4 6.6 10.8 12.0 14.5 17.4 20.7 24.5 Indonesia 0.0 3.0 4.3 7.0 11.6 14.7 18.2 20.7 23.5 26.8 Japan 20.2 20.4 21.6 23.3 25.5 27.9 31.3 35.3 38.7 41.3 Malaysia 8.9 11.1 12.5 14.5 18.8 21.7 24.4 28.6 32.7 34.6 New Zealand 15.8 17.8 21.8 26.6 32.6 36.1 40.7 46.5 50.3 54.1 Philippines 1.5 1.8 2.3 2.5 2.8 2.8 2.7 3.3 3.3 3.7 Singapore 7.3 8.8 10.1 12.5 18.4 17.1 22.9 28.4 33.5 38.8 South Korea 22.6 24.8 27.8 29.0 30.1 32.9 36.3 39.5 41.6 44.0 Taiwan 0.0 0.0 0.0 21.2 24.9 31.1 35.9 39.1 42.6 45.5 Thailand 0.7 2.5 3.6 5.4 10.2 13.1 12.1 13.3 17.8 20.3 Vietnam 3.9 5.2 5.0 5.9 7.1 8.9 10.2 11.3 11.9 12.6 Asia Pacific 15.6 18.3 21.7 26.6 32.6 37.4 42.0 46.4 49.4 52.4 Argentina 6.8 7.4 14.0 17.1 17.4 21.5 22.5 25.1 27.8 30.5 Brazil 5.3 13.9 15.8 17.4 18.5 7.9 9.5 10.7 10.3 10.2 Colombia - 3.8 4.3 4.6 5.0 6.9 9.2 13.3 18.4 25.5 Mexico 6.6 9.0 12.1 15.0 22.1 26.1 31.0 35.4 39.1 41.9 Latin America 5.7 11.8 14.0 15.9 18.1 12.3 14.8 17.1 18.1 19.5 MENA ------Israel 17.1 17.5 20.5 25.0 27.2 30.0 32.7 33.9 34.8 35.6 South Africa 2.5 2.5 2.6 3.2 3.0 2.9 3.1 12.9 13.6 14.3 Other 7.2 6.8 6.8 8.8 8.8 9.2 10.2 18.0 18.6 19.0 GLOBAL 15.7 19.1 21.5 24.7 28.5 31.6 35.4 38.9 41.8 44.5

DENTSU AEGIS NETWORK 208 AVERAGEAVERAGE YEARYEAR TOTO DATEDATE AGAINSTAGAINST US$US$ ArgentinaArgentina ARSARS 40.07240.072 AustraliaAustralia AUDAUD 1.4041.404 ExchangeExchange RatesRates AustriaAustria EUREUR 0.8830.883 BelgiumBelgium EUREUR 0.8830.883 BrazilBrazil BRLBRL 3.8023.802 CanadaCanada CADCAD 1.3321.332 ChinaChina RMBRMB 6.7406.740 CzechCzech RepublicRepublic CZKCZK 22.67822.678 DenmarkDenmark DKKDKK 6.5926.592 EgyptEgypt EGPEGP 17.51817.518 EstoniaEstonia EUREUR 0.8830.883 FinlandFinland EUREUR 0.8830.883 FranceFrance EUREUR 0.8830.883 GermanyGermany EUREUR 0.8830.883 GreeceGreece EUREUR 0.8830.883 HongHong KongKong HKDHKD 7.8467.846 HungaryHungary HUFHUF 281.534281.534 IndiaIndia INRINR 70.18970.189 IndonesiaIndonesia IDRIDR 14,142.30014,142.300 IrelandIreland EUREUR 0.8830.883 IsraelIsrael ILSILS 3.6313.631 ItalyItaly EUREUR 0.8830.883 JapanJapan JPYJPY 110.560110.560 LatviaLatvia LATLAT 0.8830.883 LebanonLebanon USDUSD 1.0001.000 LithuaniaLithuania LITLIT 0.8830.883 MalaysiaMalaysia MYRMYR 4.0984.098 MexicoMexico MXNMXN 19.14219.142 MoroccoMorocco MADMAD 9.5849.584 NetherlandsNetherlands EUREUR 0.8830.883 NewNew ZealandZealand NZDNZD 1.4731.473 NorwayNorway NKONKO 8.5788.578 PhilippinesPhilippines PHPPHP 52.26852.268 PolandPoland PLZPLZ 3.7963.796 PortugalPortugal EUREUR 0.8830.883 RomaniaRomania ROLROL 4.1884.188 RussiaRussia RUBRUB 65.61165.611 SaudiSaudi ArabiaArabia USDUSD 1.0001.000 SingaporeSingapore SGDSGD 1.3551.355 SlovakSlovak RepublicRepublic EUREUR 0.8830.883 SouthSouth AfricaAfrica ZARZAR 14.04914.049 SouthSouth KoreaKorea KRWKRW 1,129.8551,129.855

DENTSUDEN T S U AEGISA E G IS NETWORKN E T W O R K SpainSpain EUREUR 0.8830.883 209207 SwedenSweden SEKSEK 9.2169.216 SwitzerlandSwitzerland CHFCHF 0.99980.9998 About Dentsu Aegis Network

Part of Dentsu Inc., Dentsu Aegis Network is made up of ten global network brands - Carat, Dentsu, Dentsu X, iProspect, Isobar, mcgarrybowen, Merkle, MKTG, Posterscope and Vizeum and supported by its specialist/multi-market brands. Dentsu Aegis Network is Innovating the Way Brands Are Built for its clients through its best-in-class expertise and capabilities in media, digital and creative communications services. Offering a distinctive and innovative range of products and services, Dentsu Aegis Network is headquartered in London and operates in 145 countries worldwide with more than 45,000 dedicated specialists. www.dentsuaegisnetwork.com

DENTSU AEGIS NETWORK 210 Price: £495

For any additional information on this report, please contact:

Eleanor Kemp, Dentsu Aegis Network, +44 (0) 203 357 4137, [email protected]

Lin Liu, Dentsu Aegis Network, +44 (0) 207 550 3451, [email protected]

20 Triton Street, Regents Place, London, NW1 3BF, United Kingdom

DENTSU AEGIS 211 NETWORK