The Power Of TV:

1
The Power Of TV

• TV is as popular as ever
• TV amplifies other media and works across
  platforms
• TV remains the most effective medium
• TV pays back

2
TV is as popular as ever!
Monthly Reach by Hour
Source IPA Touchpoints Hub Survey (other media)
and BARB for TV Monthly Reach by Hour
3
TV viewing hours unchanged for 15 years
Average Daily Hours Viewed
Source BARB/TNS Infosys Individuals Jan-Mar
08
4
TV is constantly on the consumers radar!
Source Television Opinion Monitor Q1-Q2 2007/
Sample UK adults (1224)
5
The DTR has enhanced TV viewing

• Sky homes watch 20 mins more TV per day and 21
  more commercial TV than non-Sky homes
• Most viewing is still live (88) in PVR homes
• Most time-shifting programmes watched on same
  day as recording
• 42 of time-shifted breaks viewed at normal
  speed
• DTRs increase commercial impacts by 5!
• Thinkbox 2007 Engagement Study found a much
  higher concentration on the TV screen when
  commercials are being fast forwarded

Source BARB, ACB/LBS and Skyview, Thinkbox
6
Consumers are investing in TV
The celebration bit...

• One flat-screen TV sold every six seconds
• Over 3 million sold in 2006
• Average screen size growing by an inch per year
• 45 of new TVs bought in last year cost 500

7
New Functionality Supporting TV Viewing
Personal Video Recorders (PVRS)
Video On Demand (VOD)
Internet Protocol TV (IPTV)
Interactivity
Guides Interfaces
Mobile TV
Hard disk based on demand and interactive
services advertising
Server, broadcast and download based mobile
content services
EPGs, Sky Active menus
Interactive TV services and ads
TV and ad content delivered via the internet
Server based on-demand services and ads
8
TV has unrivalled ability tocreate viewer
response and engagement
Source BARB/ITV Consumer/YouTube
9
TV content works across many platforms ITV 360
The Viewer Experience
0800 On bus read Piers Morgans blog via BGT WAP
site
2200 Talent Extra on ITV2
2145 Vote via Red Button. Please dont let Paul
go out just yet!
0900 Catch-up on latest goss in Friends Reunited
BGT group
2100 The show!
1100 Email clips to my friends from ITV.com
1930 Share mobile clip in pub with friends
1300 Lunchtime catch-up show on ITV2
1800Receive email newsletter with link to show
preview
1500 Watch best clips on BGT branded You Tube
channel
1630 Watch exclusive behind-the-scenes video on
itv.com
10
Engagement with TV Content Online
done in last 6 months
Source nVision Research The Future Of TV -
Base All Internet users aged 15, 2007
11
The young are still spending more time with TV
1534 - Daily Minutes Viewed / Visited
Source TV BARB Weeks 1-11 2008 / Press TGI
Q1 2008 / Radio RAJAR Q4 2007 / Internet
Comscore Feb 2008
12
and they are less ad averse
agree
Source Other Lines/TGI
13
15-34s Daily Reach
Reach in millions
Source TV BARB Weeks 1-11 2008 / Press TGI
Q1 2008 / Radio RAJAR Q4 2007 / Internet
Comscore Feb 2008
14
16-34 viewing has remained consistent
Weekly reach in millions
Source BARB/TNS 2003-2007 1634 Weekly Reach
15
and they are switched on for just as long
Average daily hours viewed
Source BARB/TNS 2003-2007 1634 Weekly Reach
16
TV Amplifies Other Media
17
The true return of each medium needs to be
identified
Source Mediacom / Thinkbox Event / Example Client
18
TV can drive consumers online
You may not believe this, but last week I stood
in front of a major media agency and 50 or so of
their clients and sold TV. I told them that TV
and search are highly compatible and that money
should be taken from below the line and pushed
back into TV alongside (obviously) massive growth
in search. This is a common theme of mine as we
see huge spikes in query volume following TV
exposure both editorial ads. Mark Howe, MD
Google Media Sales
19
Amplifies other media
Britains Best Dish October 2007 Daily Website
Traffic
Final Pork Belly recipe wins
Best Apple Pie Recipe
Source ITV Consumer
20
TV Spend and Unique Users Relationship
Unique Users 000s
Media Spend -
Source Comscore and NMR Ad Dynamix
21
Britains Got Talent 2008 sees itv.com video
views soar and Dominos Pizza sales up 10 in
first 2 weeks!
Total video views
Page impressions
2.5 million
7.1 million
0.89 million
Source ITV Consumer and ITV Sales
22
TV is becoming more effective over time
The launch of multi-channel is making it easier
to reach consumers
Average market share gain ( points) where TV is
the lead medium
Source IPA - Marketing in the Era of
Accountability
23
TV prices have continued to fall in the last 7
years
The rise of multi-channel means more competition
making TV more cost efficient
Real CPT (1985 100)
Year Base 100 1985
Source IPA - Marketing in the Era of
Accountability
24
ITV1 prices have continued to fall in recent years
Real CPT (2001 100) ITV Costs indexed against
2001
Year Base 100 1985
Source ITV Salesnet, CPTs indexed on 2001 figures
25
TV Pays Back !
26
Thinkbox Payback in the Third Age of Television
27
The Main Drivers of TV Effectiveness and Value

• Amplification of Other Media
• Fame and Awareness
• Emotional and Implicit Associations
• Immediate Benefits and Long Term Value

28
The Power of Emotion and Fame
29
(No Transcript)
30
Case Study

• 2006 45 million advertising campaign
• Food category exclusively TV
• Every execution outperformed branding and
  
  recognition tracking norms
  
• National stampede on hot chocolate puddings!
• Food sales up 8.4
• Halo Effect UK sales up 9.1

IPA Grand Prix and Gold Winner 2006
Source Guardian, Campaign, Marketing, Telegraph,
FT Nov-Dec 2007
31
Case Study

• Started in August 2007
• Initially multimedia then 100 TV
• YouTube received 500,000 page views
  in the first week
  ad went on air
• By end November 2007 had been viewed over 6
  million times
• Weekly sales up 9 year on year during period on
  air
• Exceeded revenue growth targets of 4-6

Source Guardian, Campaign, Marketing, Telegraph,
FT Nov-Dec 2007
32
Brands that shout louder grow faster!

Source IPA - Marketing in the Era of
Accountability Oct 2007
33
TV enhances campaign efficiency
Market share point gain per 10 point excess
share of voice
Source IPA - Marketing in the Era of
Accountability
34
TV leads to greater business successes
Reporting very large business effects over the
last 26 years
Source IPA - Marketing in the Era of
Accountability
35
Immediate Benefits and Long Term Value
36
On average, TV Advertising generates a 4.4 sales
uplift within 4 weeks
Increase in FMCG purchasing within 4 weeks
Avg 4.4
Source TNS Mediaspan, database of case studies,
1995-2002
37
Case Study

• December 2007 campaign 2 weeks
  ITV1 Wales only
• Budget under 15,000
• Campaign seen by 1.3 million adults
• Footfall raised by 20 when most Cardiff
  retailers struggling

This was the first time wed been on TV for over
10 years and the help and service we received
from ITV throughout the entire process was second
to none. We worked with a production company who
produced a high quality product at a very good
price and the results were fantastic. Although
television is a more expensiveoption it was well
worth it. Mark Nott, General Manager
Source ITV Wales December 2007
38
Case Study

• March 2007 campaign 4 weeks
  ITV1 Meridian only
• Budget 22,000
• Campaign seen by 2.7 million adults
• Response to campaign instantaneous increased
  phone calls, website hits and sales
• Booked 4-month 2008 campaign

In the past we had used local radio and press,
but this time needed quicker results the
instant response rate spoke for itself and far
surpassed that of other local media. Due to
the campaigns success we were able to book a
second campaign with ITV, this time for four
months! Steve Dale, Marketing Manager
Source ITV Meridian March 2007
39
Case Study

• 14 million national TV campaign
• Christmas ad featuring Lulu, Denise Van Outen etc
• Strongest Xmas results ever delivered
• Double level of growth than Tesco, Sainsburys,
  Waitrose
• 4 million more shoppers attracted over 6 weeks to
  06 Jan 08
• Year on year sales up 9.5 and operating profit
  up 50

Source Telegraph, Guardian, IGD Retail Analysis
Feb 2008
40
Low Loyal Consumers respond most to TV Advertising
increase in purchasing in first 4 weeks
tvWorks
Source tvWORKS, Jan01-Dec03, saw at least 1 spot
in prior 28 days, loyalty reflects spend on brand
as of spend on category, low loyal 0-10,
medium loyal 10-39, high loyal 40-100
41
Low Loyal consumers are most effected by the
absence of TV Advertising
Sales index
Minimum days elapsed since advertising was last
seen
Source tvWORKS, 2 years to Jan03, loyalty
reflects spend on brand as of spend on
category, low loyal 0-10, high loyal
40-100, the sales index compares the amount of
purchasing of the brand at each point in time to
the amount of purchasing at the control
42
The effects of TV last for a longer term

• Nearly 45 of TVs revenue effects are delivered
  after the year of the investment

Source PWC/Thinkbox Payback Study Oct 2007
43
Thinkbox and PWC analysed long-term effectiveness
706 brands, 10 years of data, 41 brand surveys,
7 categories (significant spend, various price
points)
Car Insurance
Auto x 3
Hair-care
Fruit Juices
Cereal
volume, pricing ad data
lower medium, upper medium, premium exec
Source PWC/Thinkbox Payback Study Oct 2007
44
Longevity is key to long-term value. Most brands
are short-lived
Take the cereal market as an example
11
born post 91 alive post 05
born post 91 dead pre 06
born pre 91 dead pre 06
born pre 91 alive post 05
8.9 years
14.5 years
4.1 years
7.2 years
Lifespan
Source PWC/Thinkbox Payback Study Oct 2007
45
Brand value is just as important as longevity
31p 1m per year
49p 400m per year
Source PWC/Thinkbox Payback Study Oct 2007
46
TV core medium for nearly all leading brand value
owners
m
Source PWC/Thinkbox Payback Study Oct 2007
47
TV investment delivers a clear increase in revenue
On average a 1m increase in TV investment yields
a 4.5m increase in revenue
Source PWC/Thinkbox Payback Study Oct 2007
48
TV Pays Back!

• Immediate effects on sales at all stages of a
  brands lifecycle
• 4.4 increase in FMCG sales within the first 4
  weeks of TV advertising with 4 more repeat
  purchases
• Lead medium for most successful brand value
  owners
• Delivers its value over a much longer time frame
  (45 after year 1) which is financially useful
• A 1 million increase in TV investment yields a
  4.5 million increase in revenue

Source PWC/Thinkbox Payback Study Oct 2007 /
tvWorks Dec 2003 / IPA Marketing In The Era of
Accountability 2007
49
TV remains central in the lives of consumers and
in the success of brands

• TV still as popular as ever and so drives
  emotional associations between brands and
  consumers
• TV amplifies other media works on many platforms
• TV pays back
• Immediate sales benefits
• Long-term brand and shareholder value
• ITV remains the nations most popular commercial
  channel

50
The Case for Continuous TV Advertising
51
Effects of Advertising During Recession
Share change in first 2 years of recovery
Advertising during recession
Source Profit Impact of Marketing Strategy, IPA
Breakfast Conference 18 Oct 2007, Data2Decisions
52
People remember advertising
and people forget advertising
53
The effects of TV last for a longer term

• Nearly 45 of TVs revenue effects are delivered
  after the year of the investment

Source PWC/Thinkbox Payback Study Oct 2007
54
No TV advertising for a year produces a 13
decline in purchasing
Sales index
Minimum days elapsed since advertising was last
seen
Source tvWORKS, 2 years to Jan03, the sales
index compares the amount of purchasing of the
brand at each point in time to the amount of
purchasing at the control (when advertising had
been seen in the last 28 days).
55
TV Helps Maintain Brand Thrust

• During a recession
• Build market share at lower cost
• Strong signal of commitment and confidence in
  brand
• Increased revenue and profit when conditions
  improve
• Increase/maintain ad spend maintained
  shareholder value

m
Source Paddy Barwise/London Business School,
Advertising in a Recession, 1999.
56
Appendix extra charts
57
Fame Metrics 2006 Objectives

• A continuation from the Fame Ratings project of
  2005 pioneered by BBH and licensed to ITV
• Statistical analysis of the 110 brands rated in
  the 2005 Fame Ratings project
• Market share
• Communications spend
• Purchase frequency
• Test effects of brand fame on profitability and
  market share
• Explore the roles of different media in driving
  fame
• 3 key industry specialists used OMD Metrics,
  PIMS and Pravda

58
TV amplifies the media schedule
Change of ROI per Medium
Source ITV Fame Metrics 2006
59
TVWorks study

• Single source piece of research covering
• FMCG purchasing
• TV viewing
• Conducted independently by TNS
• 3000 homes nationally
• 5 million purchases
• 28 FMCG product categories 243 brands
• 3 years of data to December 2003
• Results analysed in terms of purchase occasions

60
Lightly advertised brands decline faster in the
absence of TV advertising
Sales index
Minimum days elapsed since advertising was last
seen
Source tvWORKS, 2 years to Jan03, heavily
advertised brands spent 10m on TV over prior 3
years (1999-2001), lightly advertised brands
spent 2.5m or less on TV over the same 3 years,
the sales index compares the amount of purchasing
of the brand at each point in time to the
amount of purchasing at the control
61
Case Study

• Started in March 2007 TV lead medium
• Victoria Wood, Lisa Tarbuck, Ian Wright,
  Julie Walters
• Campaign reached 87 of target audience
• First series of adverts repaid the production
  investment and media costs inside 3 months
• Asda market share increased by 0.3 year on year
• Served a million extra customers in the week
  before Christmas year on year
• Exceeded its 2007 sales and profit plan and had
  its best ever Christmas

Source Telegraph, FT Nov-Dec 2007, Thinkbox,
Talkingretail.com Jan 2008