Aegis group plc Perfectly Positioned David Verklin, CEO Aegis Media Americas and APAC Sarah Fay, President Isobar US Lehman Brothers Presentation - June 12, 2006
Discussion Topics Aegis 2005 business highlights Changing media markets... the rise of digital Award winning work Media services... the brightest future in the advertising business The road ahead
Aegis At A Glance Aegis Aegis Media Media 539.9m 539.9m revenue, revenue, 106.5m 106.5m operating operating profit profit in in 2005* 2005* Synovate Synovate 330.5m 330.5m revenue, revenue, 25.3m 25.3m operating operating profit profit in in 2005* 2005* World s largest independent media communications specialist In 62 countries throughout the world Leader in most of its markets Leading international outdoor media specialist Rapidly growing global presence Sector leading capability World-leading full-service provider of digital marketing services Global network in 32 markets worldwide; search, transactional, creative Revenue doubled in 2005 Challenger media brand, founded in 2003 Broad presence in Europe and Asia Pacific, with operations in 25 countries Top five survey-based research firm Particular expertise in Fast Moving Consumer Goods Specialist practises include Healthcare, Motor and Loyalty Unique global approach to clients and solutions Present in 51 countries worldwide Significant engineering market exposure Note: (*) Underlying operating profit stated before corporate costs
Rapid Growth Across Both Media & Research Revenues m Aegis Media Synovate 473.0 152.5 529.0 185.1 CAGR + 13% 648.8 591.9 218.9 211.4 747.0 272.4 870.4 330.5 320.5 343.9 380.5 429.9 474.6 539.9 2000 2001 2002 2003 2004 2005 2000-2004 reported under UK GAAP; 2005 under IFRS
Organic Revenue Growth Outpaces Market 8.4 Market, % Aegis, % 6.7 7.2 5.2 4.4 3.4, % 2003 2004 2005 At constant currency
2005 Highlights Record financial performance Isobar recognized as the largest and best resourced global digital communications network - $600M billings Aegis Media wins $1.6B global billings while setting the benchmark for innovation and leadership Posterscope increases global market share of the Out Of Home sector Synovate achieves year on year growth at almost twice the industry level Competitors take notice
Changing Media Markets 100% 90% Radio Penetration, % total US market 80% VCR Cellphone 70% 60% 50% Telephone PC Internet DVD 40% 30% 20% Television Games console Broadband 10% DVR 0% 1940 1960 1980 2000 Source: Isobar
Digital Content & Delivery Is The New Battlefield Average hours per week media consumption 100 90 80 70 60 50 40 30 20 10 0 80% of all media digital by 2020 66% of all media digital by 2010 50% of all media digital by 2007 Analogue radio Print Cinema Outdoor Analogue TV Games Wireless Digital radio Digital TV Internet Source: Carat 1900 1920 1940 1960 1980 2000 2020
Aegis Media Vision Consumer Centric Digitally Led Transformational Communication
The Aegis Advantage Consumer Centric Digitally Led Communications Planning Motivational research Consumer Connections Survey Synovate proprietary research Word of mouth Isobar 3C s Carat Digital Isobar Mobile Posterscope electronic OOH
About Isobar Full service Integrated Digital Marketing Network
The Network
Isobar Network Coverage Amsterdam Athens Auckland Barcelona Bratislava Brussels Budapest Copenhagen Edinburgh Hamburg Helsinki Istanbul EMEA Lisbon London Madrid Milan Oslo Paris Prague Rome Stockholm Vienna Warsaw Wiesbadn Americas Atlanta Boston Chicago Dallas Los Angeles Montreal New York San Francisco Toronto Asia Pacific Auckland Bangkok Beijing Hong Kong Kuala Lumpur Melbourne Seoul Singapore Shanghai Sydney Taipei Tokyo 32 countries 65 offices 1584 staff
Global Presence No 1 Ranking No 2 Ranking
Isobar s Coverage Mirrors Internet Usage No 1 Ranking No 2 Ranking
Global Capability & Scale To Leverage Share London EMEA Global APAC North America
Isobar s Mission We want to be transformational A new kind of Marketing Services Group structure A different kind of network specifically designed for a digital centric world Central global management with local expertise
The New Digital Landscape
We are living in a Media Fragmented World
But it is also totally connected at the same time
The New Digital Consumer Increased consumer control when, where, and how Proactive advertising avoidance/ permission-based marketing Multi-tasking is the norm New habits and expectations mobile, collaborative, content portability Democratization of content/ user-generated content emerging
Participatory media must be understood not as a publishing phenomenon but a social phenomenon The Economist, April 22 2006 Clips uploaded per day Clips watched per day Source: WSJ Dec 2005 8,000 3m June 2006 50,000 50m
In the time it took to read this article, 400 people have joined MySpace - The Economist, March 30 2006
The Brands That Will Win Are Those Whose Consumers Tell The Best Stories
Create Time
Build Connections Between People
You Talkin To Me?
Video CLIENT: adidas CAMPAIGN: Impossible is Nothing http://www.caratfusion.com/reel/adidas/ads_ iin_laila_510x425videoad.html GOAL Present the new adidas brand positioning online with high-profile, video enabled ad units RESULTS: Most successful interactive ad unit to appear on the homepages of Yahoo & MSN 6MM commercial views within 24 hrs Average stream of television commercial rose from 1500 views per day to over one million at the inception of the online creative
Advergaming CLIENT: Wachovia Bank GOAL: Create a viral game component to support promotions, branding efforts, and product launches RESULTS: Interaction rates 2-8x higher than conventional ad units http://rsrc.caratinteractive.com/wachovia/champion ship17/
Mobile CLIENT: UPN CAMPAIGN: Veronica Mars Mobile GOAL: Increase ratings for the television show, increase traffic to the supporting site, and create buzz for the show RESULTS: Website traffic was increased 500% 8% click through on WAP ads Ratings for the show doubled Subscription increased 100% week over week for the 3 week duration of the program
Viral CLIENT: BMW Mini Cooper CAMPAIGN: Dish The Dirt GOAL: Change Males perception of the Mini http://www.aveaword.com/ RESULTS: Perception modification in process
Community CLIENT: Coca-Cola CAMPAIGN: icoke.com GOAL: Cost saving on PIN redemptions found on specially marked Coca-Cola product. 10mm users by end of year RESULTS: As of May 31, 2006 9.3 mm users have registered, 10% of total online users in China
Aegis Media Perfectly Positioned?
Digitally Lead Media Services The Brightest Future in the Advertising Business Yesterday s Ad Agency Talent management focused against creative first Marketing services silos Low operating margins impacted by creative fees Inadequate investment behind program measurement Traditional TV centric thinking Slowing growth trends Aegis Media Today Talent management refocused against knowledge managers Integrated groups/solutions High operating margins driven by diversified marketing services Development of in-house ROI metric evaluation systems Digital communications at hub Accelerating growth momentum
The Road Ahead Change is being thrust upon clients creating new opportunities and challenges Creative agencies are struggling to adapt Media services agencies will lead in the future Strategic growth initiatives will include: digital communications, developing markets, out of home, experiential programs/events, content development, sports and sponsorship marketing Bigger and bolder ideas will be the new currency Speed to market & innovation is the new battle cry
2006 Outlook Confident on a good result for the year Healthy market fundamentals Aegis unique business mix concentration in high growth market segments is well positioned Full benefits of 05 acquisitions to come Aegis Group plc is perfectly positioned to win
adidas: Impossible Is Nothing Q & A s