Project ApolloFocused Direction for Reaching Your Most Valuable Consumers

© 2005 Arbitron Inc. and VNU

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The Vision

Deliver brand messages with greater relevance

Enable direct ROI measurement

Project Apollo: »National marketing research service

»Multi-media and commercial exposure

»Purchase behavior/sales results and attitudinal information

…..FROM A COMMON SAMPLE OF CONSUMERS

© 2005 Arbitron Inc. and VNU

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The Technology Foundation

PPM

Database Integration

Online Surveys

Homescan

© 2005 Arbitron Inc. and VNU

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Project Apollo Single-Source Pilot5,000-Household (~11,000 Person) National Consumer

Database

Multiple Media and Marketing Touch Points» Network TV, syndication, cable network TV, network radio media use» Commercial exposure

» Magazine, daily/national newspaper, FSI/pre-print readership

Purchase Behavior» Product purchase information from either in-home scanner

and/or online surveys » Retail store visits (via in-home scanner)

Lifestyles and Attitudes

» Surveys or other sources such as Spectra Geo-demographic coding

» Integration of proprietary databases

From The Same Consumer

© 2005 Arbitron Inc. and VNU

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Time Line for Media MeasuresTechnology Advancements, Industry Cooperation andPotential Partnerships

Cinema

Video Games

Internet

Current Next Steps Future Capabilities

Electronic Print Measurement

Billboard/Outdoor

Direct MailPOP/In-Store

Store/Office Media

Exposure

Network RadioBroadcast Network TV

Cable Networks

Commercials

Streaming Media

Electronic Measurement

Consumer Magazines

Daily/National Newspapers

Retailer Circulars

Surveys

© 2005 Arbitron Inc. and VNU

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Project Apollo Single-Source Pilot Objectives

Superior Targeting

Return on Investment

Campaign Performance

Commercial Exposure

Competitive Advantage

Validate the technologies and methodologies which will be utilized as part of Project Apollo

© 2005 Arbitron Inc. and VNU

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Segmentation via On-Line Survey Capabilities

7.8%

8%

8.3%

11.5%

13.7%

18.1%

19.6%

Arthritis Osteo

Anxiety / Depression

Joint / Neck / Back Pain

Acid Reflux

Cholesterol

High Blood Pressure

Allergies

% of HH Members

Q: What health conditions / ailments…. You or any member… over last 6 months?

Estimated sample size based on 5k panel, Individual level, media and respondent static applied.

Sample Size

1,499

1,387

1,046

878

633

610

597

© 2005 Arbitron Inc. and VNU

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Different Media Choices/Dayparts, Programs ….. Using Behavior-Based Media Planning

“Idol” and “Housewives” move down on the list when buyers and spend levels are incorporated in to the planning process

© 2005 Arbitron Inc. and VNU

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Targeting Dollars and a More Relevant Consumer Can Have a Significant Affect on Top-line Growth as well as ROI

Group

Percent Sales

ImpactPre-

campaign CampaignIncremental

Sales

Demo Targeted Campaign

7% $20.20 $21.61 28.2 Million

Behavioral Targeted

Campaign7% $24.03 $25.71 33.6 Million

$5.4 million difference from a slightly higher quality target – same reach of 20 million

© 2005 Arbitron Inc. and VNU

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Quantify ROI

Campaign had stronger ROI with Behavior – Based Targeting

Demo TargetBehavior-

Based Target

Incremental Retail $ Sales Gain $28.2 $33.6

Brand A Variable Profit (as% of Retail Selling Price)

39.5% 39.5%

Gross Profit From Ad $11.1 $13.3

Campaign Program Cost 5.8 6.1

Return-On-Investment 192 217

© 2005 Arbitron Inc. and VNU

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Pilot Objective: Campaign Performance and Commercial Exposure

The campaign reached heavier brand buyers on ABC Primetime with a buying rate index of 145 compared to NBC and CBS where buyers who viewed the commercials were only average spenders

© 2005 Arbitron Inc. and VNU

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The Promise of Project Apollo

Efficient Targeting……better results for the same spend and the same reach

Effective Targeting…….reach a more relevant consumer with a much more targeted message

Sales Impact for each Campaign

Refinement of Marketing Program based on understanding of behavioral response to the program

© 2005 Arbitron Inc. and VNU

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Project Apollo

Thank you

© 2005 Arbitron Inc. and VNU

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Future of Audience Measurement

The “Future is Now”»Convergence of “discontinuous change” (Christiansen) and

tipping point psychology (Gladwell)

»Little change in media, and media research, in many decades – Rapid change now

© 2005 Arbitron Inc. and VNU

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Discontinuous Changes

No Yes

1. MediaSatellite Radio iPods/MP3s

DVR’s/HDTV, Plasma Screens Convergence of TV, Internet, Computer,Cell Phone, (later WiFi) distribution

2. AdvertisingConsolidation/Media Buying Shops Advertiser leadership on database

integration/analytics – media planning

3. Media ResearchPPM, LPM Apollo (end of silos, performance CPMs,

provable power of creative, ROI)

© 2005 Arbitron Inc. and VNU

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Why is Change Coming so Fast? A Tipping PointThe technology is available (unlike ScanAmerica)

Economics of status quo eroding»Slow growth in traditional media

»Non ad supported media revenue exceeds ad supported (2004)

»In 2005 “new media,” with performance metrics, took dollars

Radio has committed to change to reignite growth»LIM

»Digital

»Electronic Measurement

© 2005 Arbitron Inc. and VNU

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Why is Change Coming so Fast? A Tipping Point (continued)Most important – advertiser taking direct role

»Slowing unit growth, little pricing power

»Marketing efficiency mandatory

»SOX (role of CFOs, Purchasing)

»Accountability (Stengel ANA Speech)

»“Perfect” is the enemy of “better.”

© 2005 Arbitron Inc. and VNU

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What Does This Mean?

Silo’d databases will recede

Media planning and buying will use adjusted CPMs»Planning will be more directive

»EDI

New relationships»Bolder initiatives by media research

»Industry acceptance of total quality/holistic metrics

»Voluntary code of conduct for MRC (vs. legislation)

»Acceptance of likelihood of rapidly evolving measurement– “perfect” is the enemy of “better”