BSAC keynote address

Advertising Trends

February 2014

Subject to final review

1© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

David Elms,

Head of Media, KPMG UK

WelcomeSubject to final review

2© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Advertising trends

The rise of digital and mobile

Real time advertising

The importance of data

Disintermediation and SoLoMo

Subject to final review

3© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

230 224258

273294 292

314 303319

336

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

Global ad spending, 2006-2015E(GBP billions)

Advertising spending moving northwards globally and in the UK

Source: ZanithOptimedia

12.2 13.1 12.711.2 12.3 12.7 13.0 13.9 14.8 15.1

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

UK ad spending, 2006-2015E(GBP billions)

Subject to final review

4© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

39%

19%

8%

14%

6%

7%

6%

1%

Global ad spend share across segments, 2013 and 2016

TV still retains the largest slice of ad spend

40%

18%3%

17%

8%

7%

7%1%

TV

Desktop internet

Mobile internet

Newspapers

Magazines

Outdoor

Radio

Cinema

2016

Source: JenithOptimedia, December 2013

Subject to final review

2013

5© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Internet advertising is catching up

Source: Nielsen global-adview-pulse-2013-q3-lite, October 2013

Subject to final review

6© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Internet advertising set to be the growth engine of the future

14.016.9

22.5

35.0

41.444.8

52.2

66.0

75.9

1.9 2.7 3.3 3.5 4.0 4.7 5.3 6.2 7.0

2006 2007 2008 2009 2010 2011 2012 2013E 2014E

Internet ad spend, 2006-2014E(GBP billions)

Global UK

Global display advertising

across the web, mobile

internet and apps

collectively grew by

32.4% in 2013

Internet advertising driven by digital innovations – such as better measurement of exposure to advertising, greater

localisation, and integration with mobile devices – and online video and social media

Internet advertising driven by digital innovations – such as better measurement of exposure to advertising, greater

localisation, and integration with mobile devices – and online video and social media

Expected to contribute

66% of growth in ad

expenditure, globally

Source: JenithOptimedia

Subject to final review

7© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Mobile ads driving the internet advertising market

5

18

2012 2015

Global mobile ad spending, 2012-2015(GBP billion)

UK mobile ad spending, 2008-2013(GBP million)

29 38 83203

526

1,196

2008 2009 2010 2011 2012 2013E

127% Y-o-Y growth *

* Estimated by KPMG based upon H1 growth

Subject to final review

8© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Evolution of advertising – towards multi screen and social media

2011-20142008-2010

2000s 2015 and beyond

Pro

min

ent

Em

erg

ing

Subject to final review

9© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

The importance of data - increased focus on targeted advertisingSubject to final review

10© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Social media and the speed of response

Thursday, 4pm

Catherine (Duchess of Cambridge)

spotted on Olympic Park, StratfordThursday, 5.30pm

Link on Home Page set-

up

Thursday, 4.15pm

Link posted on Facebook

page

Friday AM

Full Home Page

feature

Friday AM

Social

Engagement

1

2

3

4

5

Subject to final review

11© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

Real time advertising and the big blockbuster creative campaignsSubject to final review

12© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

The rise of SoLoMo and disintermediation Subject to final review

13© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a

Swiss entity. All rights reserved.

No ads, no games, no gimmicks – for how long?Subject to final review

© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of

KPMG Europe LLP and a member firm of the KPMG network of

independent member firms affiliated with KPMG International Cooperative,

a Swiss entity. All rights reserved.

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International).

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examination of the particular situation.

Thank You