esome Price Index Q4/2017

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1 esome Price Index Q4/2017

2 About this price index Christmas special The data for this price index has been aggregated from more than 200 clients social advertising campaigns in the German market spanning all major industries. Data has been weighted depending on the clients spend. Data from Q4/2016 serves as the basis and all subsequent quarters have been normalized against Q4/2016. For the calculation of CTR and CPC, only campaigns with the objective Website Traffic have been adducted. Video content has been considered separately. This price index especially focusses on the price and spend trend during the Festive Season one of the most competitive times of the year that is highly important to many brands. The trends presented consecutively bear on data from social advertising campaigns that have been executed by esome advertising. About esome advertising esome advertising is a social media advertising specialist located in Hamburg, Düsseldorf and Belgrade. The company currently employs more than 110 people and is a certified Facebook, Twitter and Instagram Marketing Partner. esome advertising operates in the field of paid advertising and optimizes performance and branding campaigns in social media and display. The esome approach is based on comprehensive knowhow and technology integration, aiming to achieve superior brand and performance KPIs. The proprietary esome technology and the team of experienced social media advertising experts are the heart of esome s work.

3 Inflation Total Year Year To Date Quarter % +38% +48% % +37% +26% Inflation rate grew by more than 35% each year Year to Date values equal total year values as both cover the same period of time An impression in Social Media has been 2/3 more expensive in Q4/2017 than in Q4/

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5 Total Cost per Mille (CPM) Cost per Link Click (CPLC) Link ClickThroughRate (LCTR) 160 1,% 1 1,20% 120 1,00% 0,80% ,60% 0,% As expected, advertising spend rose by 50% in Q4 compared to the previous quarter CPM reached maximum of the considered period again, strongly driven by the Christmas business 20 0,20% CTR (1.16%) at alltime high the positive Facebook trend balanced the negative trend on other platforms in the overall view Click prices stayed stable and ranged below the price level of Q4/

6 Christmas campaigns BRANDING INTERACTION TRANSACTION Spend rise CW CW 41 CW 42 CW 43 CW 44 CW 45 CW 46 CW 47 CW 48 CW 49 CW 50 CW 51 CW 52 Just as last year, rising budget trend until the week before Christmas Strong drop of spend after December 25 th Well balanced share of branding (Ø 38%), interaction (Ø 36%) and transaction campaigns (Ø 26%) in total Shift to transactionfocused campaigns as of CW 47 Share of branding campaigns continuously shrank until Christmas after a high in November

7 Facebook Cost per Mille (CPM) Cost per Link Click (CPLC) Link ClickThroughRate (LCTR) 180 1,% 160 1,20% ,00% 0,80% ,60% 0,% 0,20% Facebook continuously shapes the total trend over all platforms CPM rose considerably and climbed to an allyear high (+80% compared to Q4/2016) CPC stayed stable and ended far below the value previous year CTR rose considerably again (to 1.25%) which underlines the increasing user activity during the Christmas time Placements next to Facebook benefit from the increased use of Placement Optimization: Spending on Instagram and FAN doubled At a similar CPM as on Facebook, Messenger spend rose considerably

8 Instagram Cost per Mille (CPM) Cost per Link Click (CPLC) Link ClickThroughRate (LCTR) 160 0,45% 1 0,% 120 0,35% 0,30% 80 0,25% 0,20% Instagram had an alternating year ,15% After three stable quarters, CPM rose again by 29% in Q4 and climbed to an alltime high ,10% 0,05% Still, CPM on Instagram was significantly lower than on Facebook (29%) which illustrates the branding focus that advertisers put on Instagram After a high in Q2 and Q3, CTR declined to a level similar to the previous year in Q4 Low CTR caused a significantly increased CPC which ranges nonetheless far below the CPC in Q1

9 Facebook Audience Network Cost per Mille (CPM) Cost per Link Click (CPLC) Link ClickThroughRate (LCTR) 250 2,50% 200 2,00% 150 1,50% 1,00% After two quarters of a declining CTR, it recovered in Q4 and grew slightly to 1.36% 50 0,50% Despite the CTRdrop in 2017, that has partially been caused by a change in metrics, FAN offered the highest CTR compared to the other platforms in Q4 again The rising CPCtrend continues but prices are still competitive and lowest in platform comparison The CPMtrend for FAN equals Facebook CPMtrend but in a smaller dimension Still, CPM on FAN is lower than on any other platform of the Facebook universe

10 Twitter Cost per Mille (CPM) Cost per Link Click (CPLC) Link ClickThroughRate (LCTR) 1 1,% 120 1,20% 1,00% 80 0,80% ,60% 0,% 0,20% With rising prices in Q4/2017 compared to Q3, CPCtrend is similar to Instagram By the end of the year, prices for ad impressions continued to go down and reached an allyear low regardless of the Festive Season After growing throughout the whole year, CTR declined in Q4 and ended at 0.61%

11 Snapchat Cost per Mille (CPM) Cost per Swipeup Swipeup Rate 200 0,80% 180 0,70% ,60% 120 0,50% ,% 0,30% 0,20% 0,10% Advertisers still benefit from a very low CPM when booking Snap Ads, despite a rise in prices from Q3 to Q4* Swipeup Rate (comparable to CTR) sank since the opening of Snapchat for media advertising campaigns in summer 2017* Relatively low Swipeup Rate compared to CTR on other platforms which is caused by the focus on branding campaigns on Snapchat Direct response product innovations were released in Q4and further development will be monitored Going along with the low Swipeup Rate the Cost per Swipeup increased Nonetheless the Cost per Swipeup is below the level of CPC in the overall comparison *Pricing trend will become clearer over time, limited number of data points due to launch

12 Video Cost per View (CPV) CPV 10sec ViewThroughRate 10sec (VTR) 1 12,00% ,00% 80 6,00% ,00% 2,00% View Rate (share of videos that have been watched at least for 10 seconds) further increased considerably The maximum VTR underlines that users have not stopped to consume video content more intensively by the end of the year CPV and CPV (10 second views) climbed due to an increasing booking volume to an allyear high and added 16% compared to Q4/

13 Forecast At the beginning of the new year Facebook announced some changes in their algorithm that will change user experience: Users will see more posts from friends and family in their newsfeeds. The first quarter of 2018 will show whether and how these changes will influence prices for advertising campaigns. In a fitness deep dive, the influence of new year resolutions on advertisers and consumers will be evaluated furthermore. esome advertising technologies GmbH Hohe Bleichen Hamburg info@esome.com