Capital Markets Day December 6, 2017 ROUNDTABLE PRESENTATIONS DATA, ADTECH & ADDRESSABLE TV Christof Wahl, Dr. Jens Mittnacht
LARGE ADDITIONAL POTENTIAL FOR ADDRESSABLE TV ATTRACTING DECENTRAL, NICHE, AND PERFORMANCE BUDGETS ADDRESSABLE TV MARKET POTENTIAL Attracting new budgets [2016, in EUR bn] 3.1 1.7 0.8 Decentral Niche branding Performancedriven Addressable TV Potential Note: Based on Nielsen data and P7S1 own estimates 44
ON TOP OF LINEAR TV WITHOUT CANNIBALIZATION DRIVING NEW TV MARKET GROWTH HOW WE PREVENT CANNIBALIZATION P7S1 TV GROWTH POTENTIAL UNTIL 2022 Focus on new TV advertisers Focus on new TV advertising budgets Establish intelligent pricing model to prevent loss of monetization of wastage 2017 (Total TV) Linear TV Addressable TV 2022E (Total TV) 45
WE FORESEE A SIGNIFICANT POTENTIAL PRICING UPSIDE DRIVEN BY GRANULAR ADDRESSABLE TV TARGETING 3x 10x Expected realizable pricing upside dependent on granularity of target group 46
GENERAL PRINCIPLE OF OUR ADDRESSABLE TV ROADMAP OUR INITIATIVES IN DIGITAL PAVE THE WAY FOR ADDRESSABLE TV Step 1: Digital excellence Step 2: Transfer digital skills to Addressable TV 47
FIVE KEY ENABLERS FOR ADDRESSABLE TV 1 AD FORMATS 2 DATA / TARGETING 3 PROGRAMMATIC BOOKING 4 MEASUREMENT 5 PERFORMANCE MINDSET 48
AD FORMATS 1 INDEPENDENT ADDRESSABLE TV DUE TO HBBTV COOPERATIONS AND PARTNERSHIPS AS LEVER FOR ADDITIONAL POTENTIAL Addressable TV reach 11.5m TV DEVICES ADRESSABLE VIA HBBTV FURTHER EXPECTED HBBTV GROWTH ADDITIONAL POTENTIAL VIA CO-OPS 49
AD FORMATS 1 OUR ADDRESSABLE TV AD FORMATS LEVERAGING MAINLY HBBTV TECHNOLOGY SWITCH-IN BRANDED RED BUTTON FULL SPOT OVERLAY Partial HbbTV overlay ad on top of TV content in the event of a switch-in to one of our channels Partial HbbTV overlay ad on top of an existing linear TV commercial, e.g., with additional info as regional dealers Full overlay of an existing linear TV commercial, e.g., via HbbTV 1.5/2.0, or via partners on SmartTVs and Set Top Boxes 50
AD FORMATS 1 OUR SWITCHIN FORMAT ATTRACTS NEW ADVERTISERS ESPECIALLY CUSTOMERS WITH DECENTRAL TARGET GROUPS BOOK ADDRESSABLE TV C&A Bonn Lotto Bayern (Bavaria) Gamescom Cologne 51
AD FORMATS 1 WE ARE WORKING ON OFFERING FULL SPOT OVERLAYS SUCCESSFUL TEST WITH HBBTV 1.5 HBBTV PENETRATION SmartTVs supporting HbbTV in Germany [in %] HbbTV 1.0 HbbTV 2.0 HbbTV 1.5 We initially aimed to overlay full TV commercials with targeted ads just with HbbTV 2.0 45 Total: 11.5m 55 We are testing a solution to overlay full spots already via HbbTV 1.5, which is more widely distributed <1 We successfully executed first live tests of that solution with Johnson & Johnson and MediaMarkt Source: P7S1 internal estimates 52
AD FORMATS 1 SUCCESSFUL LIVE TESTS OF FULL SPOT OVERLAY WITH MEDIA MARKET AND JOHNSON & JOHNSON VIA HBBTV 1.5 Linear broadcast TV Addressable TV commercial by 53
DATA/TARGETING 2 WE ARE EXTENDING OUR TV TARGETING CAPABILITIES PLANNING TO OFFER CROSS-DEVICE TARGETING IN 2018 IP-BASED Decentral and weather targeting based on the TV s IP address PREDICTIVE BEHAVIORAL Targeting of attractive target demos (e.g., Singles, Families, 50+, high net income) based on TV viewing behavior CROSS-DEVICE TV/DIGITAL Targeting of households/users based on their digital profiles (e.g., retargeting Verivox visitors with interest on car insurances on TV) 54
DATA/TARGETING 2 WE COLLECT VERY BROAD & DEEP TARGETING DATA COMBINING VALUABLE PROPRIETARY DATA WITH EXCLUSIVE DATA PARTNERS P7S1 digital data Exclusive partnerships HbbTV data DOOH Beacon NEW PLANNED One data management platform 55
DATA/TARGETING 2 OF WHICH WE BUILD ATTRACTIVE SEGMENTS IN DIGITAL TARGETING OF 20+ PERSONAS AND 115+ INTEREST GROUPS PERSONAS Exemplary INTERESTS Exemplary 20+ Business Partner Sport Enthusiast Millenials & Digital Natives Luxury & High Value Shoppers Tech Lovers & Gamers Trendsetter Edgy Individualist Party People & Festival Visitors Smart & Sale Shoppers DIY, Handymen & Hobby Gardeners Classic Lover Spirituals, Health-Conscious, Eco & Green Art & Design Lovers Families and Homemakers Entertainment Nerds Pet Owners & Animal Friends Adventurers & Travelers Beauty Queens & Kings 115+ Home/Garden Relocation Furniture Kitchens Telco DSL & Landline Change Mobile Change Fashion/Beauty Shoes Clothing Perfume Fin/Insurance Car Financing Gas Change Electricity Change Travel Automotive Flight Middle Class Hotel SUVs Winter Sports Cabrios & Coupés People/Family 50+ Job Starters Toddlers Tech/Game Playstation XBOX iphones Food/Bev Foodie & Gourmet Health & Bio Beer & Spirits Music/Ent Rock & Pop Comedy & Love Horror & Sci-Fi 56
DATA/TARGETING 2 OUR NEW HBBTV NEWS PORTAL AS SOURCE FOR DATA NEW HBBTV RED BUTTON PORTAL New HbbTV Red Button portal will offer a lot of complementary news content on the TV set By tracking its usage, we ll learn about the interests from each TV household (e.g., sports, fashion, business) HbbTV portal usage thereby becomes crucial data enabler for Addressable TV targeting 57
DATA/TARGETING 2 NEW LOG-IN ALLIANCE EXPANDS REGISTRATION BASE ENABLING AND PROTECTING FUTURE TARGETING PRODUCTS LOG-IN ALLIANCE One login angemeldet bleiben Initial reach of 45m users across founding partners New open log-in standard open for further partners First partner Enabling essential digital business models post expected eprivacy Regulation 58
DATA/TARGETING 2 OUR VISION: ADDRESSABLE TV BASED ON DIGITAL DATA EXAMPLE: RETARGETING OF FLACONI VISITORS ON TV Full spot overlay Interest data, e.g., Perfume Cross-device match (e.g., via IP address) 59
PROGRAMMATIC BOOKING 3 WE ACQUIRED OUR OWN AD TECH STREET ENABLING BEST-IN-CLASS PROGRAMMATIC ACCESS TO OUR AD PRODUCTS ADTECH PRODUCT HOUSE INDEPENDENT, SECURE, INNOVATIVE Advertiser BUY-SIDE (DSP) SELL-SIDE (SSP) Publisher Programmatic access AUDIENCE DATA (DMP) Exclusive media & data products 60
PROGRAMMATIC BOOKING 3 WE DRIVE EXCLUSIVE PROGRAMMATIC INNOVATION EXCLUSIVE PRODUCTS ON ACTIVE AGENT, PLUS NEW PARTICIPATION IN BUZZBIRD EXCLUSIVE MEDIA AND DATA PRODUCTS THAT WE MAKE PROGRAMMATICALLY AVAILABLE PROGRAMMATIC BRANDED DATA PROGRAMMATIC DIGITAL OUT-OF-HOME PROGRAMMATIC ADDRESSABLE TV PROGRAMMATIC INFLUENCER MARKETING exclusive on exclusive on exclusive on NEW Note: Buzzbird transaction signed, closing expected in Dec. 2017 61
PROGRAMMATIC BOOKING 3 INVESTMENT INTO BUZZBIRD MAKING INFLUENCER MARKETING SCALABLE, MEASURABLE, AND PLANNABLE Influencer category Sales/ Platform Leading influencer marketing platform 1% Top influencers Platform to make influencer marketing scalable, measurable, and plannable 10% Professional influencers / Enabling efficient access to mid- and long-tail influencers 40% Semi-professional influencers (mid-tail) Paving the way for programmatic buying of influencer marketing 49% Micro influencers (long-tail) Note: Buzzbird transaction signed, closing expected in Dec 2017 62
MEASUREMENT 4 ADCLEAR PROVIDES ATTRIBUTION TECHNOLOGY MEASURING TV AD IMPACT WITHIN THE TOTAL CUSTOMER JOURNEY Customer journey tracking & attribution Linear TV First attribution solution w/ access to HbbTV data! Video Search Addressable TV Display banner Purchase Note: AdClear transaction signed, closing expected in Q1 2018; AdClear is a majority acquisition by Virtual Minds AG 63
PERFORMANCE MINDSET 5 ESOME COMPLEMENTS OUR AD SALES PORTFOLIO ADDING LOWER-FUNNEL PERFORMANCE CAPABILITIES MARKETING FUNNEL Awareness (CPM) Interaction (CPV, CPA) Transaction (CPO, CPL) NEW 2018: KPI-driven Addressable TV Note: esome transaction signed, closing expected in Q1 2018 CPM: Cost per Mille (1 000 impressions); CPV: Cost per View; CPA: Cost per Action; CPO: Cost per Order; CPL: Cost per Lead; CPcV: Cost per completed View 64
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