Pacific BrandsRegional TV Effectiveness Review

November 2011

www.regionaltvmarketing.com.au

RTM is the marketing bureau for Regional free to air TV

Regional markets justify first choice selection for Pacific Brands media investment

• Regional women are better off, have more kids , buy more of Pac Brands products and have higher usage of key retail channels

• Regional men are far more likely to buy work wear

• Regional spending outlook is better than metros

• Regional TV is 40% more cost efficient than metro TV and is guaranteed to deliver higher ROI

Regional TV covers all areas outside capital

cities and reaches 36% of

populationQLD

NNSW

SNSW

TAS

VIC

REG. WA

DIARY

Regional TV coverage

includes large cities and fast

growing coastal suburbs

Newcastle & Central Coast

Gold Coast

Wollongong & Illawarra

Canberra

Diary markets: 19% of total regional population

Regional WA

Port Pirie/ Broken

Hill

Satellite

Griffith

Mildura

Darwin

Loxton/Mt Gambier

Populations of major regional TV markets are comparable with the metros

SydneyMelbourne

Reg NSWBrisbane

PerthReg QLDAdelaideReg VIC

DiaryWATAS

0m 1m 2m 3m 4m 5m

4,6354,528

3,4892,982

1,8561,764

1,4081,171

969585

510

People

Source: ATR & OZTAM 2011, Nielsen Media Research 2010

NNSW 2,079

SNSW 1,410

Population Increase: 2001 vs. 2011

Source: ATR & OZTAM 2011

Australian population moving North and to the coast. Over 30% growth in 10 years in some regional areas

MARYB

MACKA

YBRIS

NOR RIV

CAIRNS

TOW

NS

PERTH

ROCK

TOOW

CANB

GIPPS M

EL

TAM/T

AR

ALBURY

WOLL

BALLSY

DADEL

NEWC

HOBART

BEND

LAUNCE

SHEP

P

O/D/W

0%5%

10%15%20%25%30%35%40%45%

National average

QLD NSW VIC TAS METRO

Urbanisation and high population growth changing the profile of regional Australia

• Seachange: Baby boomers and young families

• Lower cost of living and lifestyle are main attractions

• Rural populations moving to regional hub towns

• Less than 4% of households depend on farming

3 %7live in Regional TV markets

Source: OzTam AGB Nielsen 2011

1,573,000

Australian teens age 13-17

3 %8live in Regional TV markets

Source: OzTam AGB Nielsen 2011

1,547,000 Australian GB’s with children

5-12

3 %9Source: OzTam AGB Nielsen 2011

3,141,000

Australian 55+

live in Regional TV markets

Seachange…

… for baby boomers

…for families

“Typical” Seachanger

Ryan, 36. Wollongong NSW

Made the seachange from the “Shire” to the “Gong”. Owns a small business in building trade

Above average income & primary focus is kids and lifestyle.

Loves footy , cars and teaching kids surfing.

Regional women are more likely to live in a

house and have bigger family

Source: Roy Morgan Research (12 months to June 2011)

W 25-54 Metro Regional

Married / defacto 70% 70%

3+ children in home 11% 13%

Live in apartment 10% 6%

Live in house 80% 88%

Younger regional women are 40% more likely to

have two or more kids and have higher income

Source: Roy Morgan Research (12 months to June 2011)

W 18-30 Metro Regional

2+ children in home 16% 23%

Have a baby (age 0-2) 16% 25%

Live in house 71% 79%

Household income $70k+ 31% 34%

Source: Roy Morgan Single Source (12mths to June 2011), * Filter – Bought Clothing in past 4 weeks

Regional buying in Pac Brands categories is

same or stronger than metro

% of Women 18-39*Clothing items bought P4W… Metro Regiona

l

Underwear / Sleepwear 44% 44%

Socks / Hosiery 22% 21%

Women's underwear / sleepwear 40% 40%

Baby clothes 23% 25%

Kids clothes 41% 48%

Kids shoes 17% 22%

Manchester 10% 13%

Big difference in regional retailing is higher use of mass retailers and lower

department store % of Women 25-54*

Stores bought anything from P4W…

Metro Regional

Department stores 20% 8%

Big W 22% 23%

Best & Less 14% 19%

Kmart 25% 27%

Target 33% 32%

Shop online 18% 19%

Source: Roy Morgan Single Source (12mths to June 2011), * Filter – Bought Clothing in past 4 weeks

Regional mum’s show the same preference

for mass retailers

% of GB’s + kids 6-13*Stores bought anything from

P4W…Metro Regiona

l

Department stores 15% 7%

Big W 24% 28%

Best & Less 17% 21%

Kmart 28% 29%

Target 33% 30%

Shop online 16% 17%

Source: Roy Morgan Single Source (12mths to June 2011), * Filter – Bought Clothing in past 4 weeks

New regional mums are most likely to shop

online% of GB’s + baby (0-2)*

Stores bought anything from P4W…

Metro Regional

Department stores 17% 5%

Big W 32% 29%

Best & Less 20% 25%

Kmart 32% 32%

Target 41% 35%

Shop online 20% 26%

Source: Roy Morgan Single Source (12mths to June 2011), * Filter – Bought Clothing in past 4 weeks

Hard Yakka: Regional young men are almost twice as likely to be tradie or labourer

SYD MEL BRI ADE PER NNSWSNSW VIC QLD TAS Diary0%

10%

20%

30%

40%

50%

% of M18-39 who work as a Tradesperson/Labourers

Source: Roy Morgan Single Source (12mths to June 2011)

SYD

MEL

BRI

ADE

PER

NSW

VIC

QLD

TAS

Diary

0k 20k 40k 60k 80k 100k 120k 140k 160k 180k

165153

12658

66154

5593

1988

43% of all Oz tradies live in Regional TV markets – regional NSW a bigger market than Melbourne

000s of M18-39 who work as a Tradesperson/Labourers

Source: Roy Morgan Single Source (12mths to June 2011)

Regional young men shopping in KMart and

online – key channels for Hard Yakka

Source: Roy Morgan Single Source (12mths to June 2011), * Filter – Bought Clothing in past 4 weeks

% of M16-24*Stores bought anything from

P4W…Metro Regiona

l

Department stores 20% 7%

Big W 15% 15%

Best & Less 2% 10%

Kmart 17% 30%

Target 11% 18%

Shop online 15% 16%

• News & current affairs• Local TV ads• Promotions • Community sponsorships

TV plays a greater role in regional life…it’s part of

the community

Watch

TALKING REGIONAL VIDEO FROM RTM

Reg. TV CPM is 40% below national TV average CPM

SYD MEL BRI ADE PER NNSWSNSW VIC QLD TAS40

60

80

100

120

140

160

180164

104

98

7989

71 70

5361

70

Ind

ex

TV market CPM indicesNational average CPM P18+ = 100

Source: Regional TV Agency Survey 2010

SYD19%

MEL19%

BRI12%

ADE6%

PER8%

Reg36%

SYD34%

MEL21%

BRI12%

ADE5%

PER7%

Reg23%

Share of national population

Share of national TV budget for equal weight campaign

Lower regional CPM means regional TV needs only 23% of national budget to reach 36% of population

13/06/2010

4/07/2010

25/07/2010

15/08/2010

5/09/2010

26/09/2010

17/10/2010

7/11/2010

28/11/2010

19/12/2010

9/01/2011

30/01/2011

20/02/2011

13/03/2011

3/04/2011

24/04/2011

15/05/2011

5/06/2011

26/06/2011

17/07/2011

7/08/2011

28/08/2011

18/09/2011

9/10/20110%

5%

10%

15%

20%

25%

Metro Regional

Launch week of 7mate &

Gemw/c 26/9/10

Launch week of Eleven

w/c 9/1/11

Free TV multi-channels are more popular in regional – higher penetration and desire for choice

Source: Mediaweek, Metro data from OzTAM C1 and Regional data from Regoional TAM. All People 18:00 - 23:59

June 2010 Sept 2010 Dec 2010 March 2011 June 2011 Sept 2011

Media landscape in regional markets is broadly similar to capital cities – outdoor lower

W25-54 Metro Reg

Watch 2hrs+ TV per day 52% 59%Listened to any commercial radio

weekday 65% 60%

Accessed the internet 87% 87%

Watch daytime TV 71% 76%

Own digital TV at home 76% 80%

Watched Pay TV in the last 7 days 20% 21%

Saw outdoor 51% 25%

Source: Roy Morgan Single Source (12mths to June 2011)

Regional consumers’ willingness to spend grew this year by 9% – against national trend

Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

2006 2007 2008 2009 2010 20110

50

100

150

200

250

300

350

Metro

Spending per discretionary $1000

Home price to income ratio is significantly lower in regional TV markets

Sydney Melbourne

Brisbane Adelaide

Perth

5.6 5.6 4.2 4.3 4.3

NNSW SNSW Reg. VIC Reg. QLD Tasmania Rural

4.2 3.9 3.1 3.7 3.8 2.8

House price vs. income multiple

Source: Residex median house *(includes apartment price) Jan – Jun 2011 & Roy Morgan Single Source 12 mths to March 2011

Average household incomes in regional TV markets are within 10% of national average

Regional Metro

NNSW $89,690 Sydney $112,380

SNSW $102,500 Melbourne $101,840

Victoria $84,470 Brisbane $104,970

Queensland $95,080 Adelaide $91,530

Tasmania $84,170 Perth $119,600

Rural $106,690

Source: Roy Morgan Single Source (12mths to Mar 2011 )

P25-54: Average household Income

Incomes in regional and rural Australia are growing well above the national average

Metro National Regional Rural0%

20%

40%

60%

80%

+38% +42% +48%+63%

Average household income growth since 2004 (P25-54)

Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 )

Regional consumers are more optimistic about their current financial outlook…

…and are more likely to spend on discretionary items over the coming year.

Regional markets justify first choice selection for Pacific Brands media investment

• Regional women are better off, have more kids , buy more of Pac Brands products and have higher usage of key retail channels

• Regional men are far more likely to buy work wear

• Regional spending outlook is better than metros

• Regional TV is 40% more cost efficient than metro TV and is guaranteed to deliver higher ROI