RTL GROUP AD TECH STACK March 2019 Entertain. Inform. Engage. Introduction – Market dynamics ‘Total Video’ is at the heart of our consumer and brand-centric strategy LINEAR NON-LINEAR CONTENT TECH & DATA Total Total Total TV Video Video Video Leading Expanding Growing Leverage European FTA VOD and MPN position drama slate & digital ad-tech and data 2 Introduction – Market dynamics TV business is undergoing structural changes – implying more future risks CORE TV ▪ Shift from linear to non-linear (Linear & non- ▪ TV advertising markets stagnating linear) ▪ Pressure from (managed/digital) platforms ▪ Unprecedented race for exclusive/creative content CONTENT ▪ Challenges for entertainment shows ▪ More demand resulting in scarcity of talent and IP Total Video DIGITAL, ▪ Continuous surge of (global) online video offerings TECH & ▪ Profitability in digital models remains challenging DATA ▪ Need to invest into enablers (data/AI/media-tech) ▪ Further consolidation expected (as seen in US) MARKET ▪ New digital offers are surging incl. GAFAN ▪ Increasing complexity and regulatory challenges 3 Introduction – Market dynamics Future growth to come from non-linear and content, but linked by tech & data LINEAR NON-LINEAR CONTENT TECHTECH & & DATA DATA Total Total Total TV Video Video Video Leading Expanding Growing Leverage European FTA VOD and MPN position drama slate & digital ad-tech and data 4 Strategic priorities, Prepared for digitalization of TV – covering ‘Total Video’ advertising chain LINEAR NON-LINEAR TV / Set top boxes PC / Mobile OTT TV / Dynamic Linear TV Programmatic Programmatic Addressable TV ad-insertion / household level Online Video linear TV (Hbbtv) SSDAI targeting RTL GROUP INVESTMENTS Still in pilot phase Cross-screen planning Forecast Book Execute Optimize Vision: Build global broadcaster-friendly “Total Video” monetization platform 5 Overview SpotX Core ad stack asset SpotX repositioned and further integrated in 2018 Gross ad-spend at SpotX platform Strategic Priorities In $ million Expanded from Video SSP into a Premium holistic publisher platform +49% Move to premium paying off SpotX footprint end of 2018 576 with strong growth in OTT/CTV, net revenue in HY2 2018 grew 242 52%34% +32% 334 386 11% Integration 19% 16 40% Expand SpotX solutions into our 66% broadcaster footprint 70% 26% ▪ HQ in Denver, Colorado 2017 2018 Organic growth Foster organic growth in the ▪ Step up to 100% and integration with Key clients Smartclip started 2017 OTT/CTV market following Yospace investment ▪ EU tech hub at SpotX EU (Germany) 6 Overview Yospace Latest acquisition Yospace with cutting-edge SSDAI technology Key functions Key benefits One of the most advanced technologies for Server-Side Dynamic Ad Insertion (SSDAI) TV-like quality of service for Key TV clients AD users and advertisers with right ads at right time SSDAI Ability to innovate & scale dynamic ad-insertion as usage of Over-the-top TV grows Eliminates most forms of ad- blocking & signal interference Complements RTL Group’s Ads and content are inserted in ad-stack one single stream 7 Overview Clypd Collaboration of SpotX and Clypd bridges linear TV and OTT Targeted market Key benefits Leading data-enhanced linear TV ad platform $4.8bn $3.8 bn Working with 96 networks, representing 80% of national cable and b´cast $48bn spend National inventory with full $96m $144m $400m daypart representation $120m Total Linear / Data Addr. OTT OLV video manual enhanced STB clypd and SpotX agreed on a multi-year partnership to Bridge to linear TV Video is consumed across wide spectrum, bridge linear and OTT spend in linear TV still dominating 8 Overview VideoAmp Solving cross-screen media planning and measurement Key benefits Product: Self-service software for marketers, agencies and media companies that >100 data sources across all provides data analysis and automated workflow required to enable these transactions screen types, with >190m data sets for adults Planning: Execution: Measurement: Effectively allocate Automate the contract and Measure ROI - against PARTNERSHIPS marketing investment delivery process of the real business outcomes across all channels investment and sales lift Data science Measuring deduplicated reach & Trad. TV OTT Desktop Mobile Tablet Social frequency (linear) Gained traction among agencies Connecting audiences across screens to deliver a holistic view to solve the cross-screen challenge 9 Bertelsmann Data Exchange Initiative to foster knowledge-sharing and build a data-analytics community PRH – BI & Launched 2015 Analytics cases by Bertelsmann dedicated to optimize the use of Exec Board, e.g. Bertelsmann Corporate Amazon data chaired by Arvato IT – Image & Video Object FS and RTL Detection Group CEOs 260+ registered colleagues in two key worksream: e.g. G&J - Content Data analytics Recommendation Engine and business Arvato Systems – AI competence cluster knowledige sharing 10 RTL Group tech heatmap NON EXHAUSTIVE How emerging technologies may impact media Interfaces & AI & Machine Mixed Data & Security & Cloud & Edge Virtual Blockchain 5G Learning Reality Analytics Privacy Computing Assistants Broadcasters Content Production Ad Tech MPNs • AI/ML for sales/advertising (cross-device, audience forecasting, pricing) • Digital distribution and • Big data handling / processing • Content recognition, library monetization (e.g. auction platform, real- and archiving, dubbing and • Content pilots (A/B testing) time TV data ingest) buisness analytics / BI Relevance based on business potential (revenues, savings), maturity of technology and disruption potential (impact on business models): Very high High Moderate Low Marginal/ no effect 11 NON EXHAUSTIVE Exemplary initiatives at RTL Group Tech and market asking drive our strategic initiatives to remain competitive Cross-boarder ad sales ─ Collaboration via Net ID ─ an industry- Convergence ─ Smart advertising via RTL AdConnect independent user privacy solution across screens OUR INITIATIVE ▪ RTL AdConnect acts as global access ▪ Net ID launched as industry-independent ▪ Expand local cross-screen planning point for advertisers, offering a one stop solution offering transparent opt-in and measurement system (via JIGs) shop for Total Video campaigns management for users (reaching up to 160m viewers across in ▪ Introduce addressable TV solutions 1 100+ TV channels) ▪ +35m users from start, continuously and harmonize standards (e.g. HbbTV) growing through partner network ▪ Use of advanced insights and access ▪ Advocate relaxation for local regulation to Total Video Solutions to increase for (cross-screen) addressability in TV competitiveness with digital platforms Increasing need for more integrated and compatible tech infrastructures 12 1 Sources: AGOF daily digital facts 2017-12; United Internet Media Conclusion Like in the early days of TV, technology is the future connecting layer More As TV and digital a moving closer together, convergence so will our tech requirements need more integrative approaches OUR AIM: More Blurring lines of B2C and B2B tech services and capabilities require complexity further invest Grow new harmonized tech solutions across the Group – allowing High pace of emerging tech requires agility and new skills, More more scale, less but race for efficiencies/automation continues competition duplication and more (e.g battle for outsourcing vs. In-house skills) room for innovation to drive business More Decentrality has limitations - but we have many compentencies coordination in each BU which need to be bring together in a more coordinated way 13 THANK YOU Entertain. Inform. Engage. [PRELIMINARY VIEW] Overview on technology collaboration / partnerships Good starting point to utilize Group‘s footprint beyond main BU‘s PARTNER / TOPIC License with SpotX Germany SpotX Benelux Spotx EU / SpotX UK [Freewheel] JV JV extension partnership … SSP planned (Latam) Ongoing SpotX Germany Discussion for discussion for RFI ongoing Video JV switch … ad serving SpotX Interested Planned Planned Planned Planned … SSDAI Local Alliance w/ Sygma – Alliance DSP pubcaster (TF1/M6/FTV) Videology UK (ATV / OV) … RTLadconnect Strong Interest 6play VOD Tech (+BE/HR/HU) Potential … Ongoing Salto 15 Partnership: In Place Ongoing talks Possible / neutral Unlikely .