Digital Influence Index

Slide 1: The Digital Influence Index Study: Understanding The Role Of The Internet In the Lives of Consumers in the UK, Germany and France Research conducted in December 2007 and January 2008 by Fleishman-Hillard and Harris Interactive Questions about methodology and Questions about details of research findings: conducting additional online research: FH Research, Brian McRoberts, Harris Interactive, AFitzgerald@harrisinteractive.com brian.mcroberts@fleishman.com

Slide 2: Quick Background On The Study • Interviewing for the online survey took place between December 2007 and January 2008. • We interviewed 4,921 Internet users across three countries: UK = 1933 respondents France = 2013 respondents Germany = 975 respondents • The data was quota sampled and then weighted using a proven bias correction method called Propensity Scoring to ensure a representative sample of internet users across each country. 2

Slide 3: What types of questions are answered by insights from the digital influence index study? Question #1 - Influence: What is the influence of the internet compared to other media? Question #2 – Adoption of Behaviours: What online behaviours are consumers adopting? Question #3 – Impact on Decision-making: What is the impact of the internet on specific consumer decisions? Question #4 - Attitudes: What are consumer attitudes towards the internet? Question #5 - Differences by Country: What are the differences by country? 3

Slide 4: Insight #1 – Influence: How influential is the Internet? Influence of each media on decisions Share of Influence (Based on Point Allocation) Radio, 14% Newspaper, Internet, UK 12% 42% Magazines, 9% TV , 23% Radio, 13% Newspaper Internet, , 14% 40% Germany Magazines , 11% TV , 22% Radio, 16% Internet, Newspaper 37% , 10% France Magazines , 11% TV , 25% 4

Slide 5: Insight #1 – Influence: How influential is the Internet? Weekly time spent per media Time Spent by Media Share of Time 43.5 Total Media Time 38.4 Radio, 22% Internet, 39.8 30% UK 16.2 Newspaper, 6% TV 12.7 Magazines, 13.9 4% TV , 38% 13.0 Internet 11.6 14.6 Radio, 21% Internet, 30% 10.5 Germany Radio 9.4 Newspaper, 7.4 8% Magazines, 7% 2.2 TV , 33% Newspapers 2.6 1.8 Radio, 17% UK Newspaper, Internet, 1.6 Germany 5% 38% Magazines, Magazines 2.1 France 6% 2.1 France 0 10 20 30 40 50 TV , 35% 5

Slide 6: Insight #1 – Influence: How influential is the Internet? Media that has no time spent or influence % With No Time Spent In Average Week In Media % Who Say Media Has No Influence On Decisions 28% 32% Magazines 13% Magazines 15% 18% 13% 26% 25% Newspaper 14% Newspaper 12% 25% 18% 11% 22% Radio 10% Radio 14% 13% 9% 3% UK 10% UK TV 5% Germany TV 8% Germany 8% France 6% France 0% 5% 10% 15% 20% 25% 30% 0% 5% 10% 15% 20% 25% 30% 35% 6

Slide 7: Insight #1 – Influence: What is the Digital Index? Creation of Digital Influence Index Benchmark 5 different media types Time spent with media Watching TV ● Reading Newspapers Influence of media type in a typical week Reading Magazines ● Listening to Radio Using the Internet A = % share of time spent B = % share of influence of Internet on Internet vs. other media vs. other media helping to make (typical week/hours) everyday decisions Digital Influence Index Score = A + B% Benefits: easy to understand, replicable across countries/sectors, trackable Caveats: self reported, does not incorporate outcomes 7

Slide 8: Insight #1 – Influence: What are the Digital Influence Index scores telling us? Media Index Scores by Country UK Internet 44% TV 34% The Internet is more impactful than Newspapers 5% other forms of media … Germany Internet 45% TV 30% … more than traditional media forms Newspapers 7% such as TV and newspapers … France Internet 46% TV 33% … and this is remarkably consistent Newspapers 3% across countries. 8

Slide 9: Insight #2- Adoption of Behaviours: How are online behaviours organized? Early Web Behaviours Behaviours Examples People consume content on the internet to find Read information on politics Research information that helps them make decisions or and current events as entertainment. People use the internet to communicate with Communication Web 1.0 other people. Use instant messaging People use the internet to purchase goods and Commerce Make purchases online services or actively manage finances. People use the internet to express themselves Publishing Web 2.0 by generating content. Rate products and services People are free from the fixed points and use Surf the Internet – Mobility Web 3.0 internet technologies while on the go. mobile device Advanced Behaviours 9

Slide 10: Insight #2- Adoption of Behaviours: What online behaviours are consumers adopting? Behavioural Index Scores by Country 44% Total Digital Index 45% 46% 53% Research Index 63% 60% 49% Commerce Index 61% 43% 41% Communication Index 44% 48% 30% Mobility Index 34% 24% UK 16% Germany Publishing Index 22% France 16% 0% 10% 20% 30% 40% 50% 60% 70% 10

Slide 11: Insight #2- Adoption of Behaviours: What research behaviours are consumers adopting? 84% Looking for information that compares prices and options for an upcoming major purchase 87% 82% 65% Reading information on current ev ents or politics 71% 75% 63% Finding information on trav el destinations, flights and hotels 74% 64% 57% Finding information and directions for ev ents in y our area 77% 73% 53% Finding listings and directions for shops in y our area 61% 82% 51% Listening to music online (Internet radio/streaming or dow nloaded) 50% 55% 50% Reading information on a health condition or illness 56% 59% 49% Reading information that helps manage y our finances 38% 35% 48% Reading information on Wikipedia 83% 57% 44% Reading professional online articles and publications 63% 53% UK 44% Germany Watching online v ideos (dow nloaded or streaming) 51% 54% France 23% Reading w eblogs (blogs) 30% 34% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 11

Slide 12: Insight #2- Adoption of Behaviours: What online behaviours are consumers adopting? (A few nuggets) Over 80% of online consumers in each country use the internet to conduct comparison shopping for major purchases. Over 3 out of 4 online consumers use the internet to manage bank accounts. A vast majority of consumers (70%+) are now using their mobile phones to send and receive text messages. Over 2/3rds of online consumers use the internet to keep up with current events or politics. Around 30% of online consumers post a comment to an online newsgroup or a website during a typical week. Less than one in five consumers have adopted mobile behaviours which let then take videos, surf the internet, send and receive email or play video. 12

Slide 13: Insight #2- Adoption of Behaviours: How do different behaviours relate to the influence of the internet compared to their adoption levels? Low adoption, but very important to High adoption and very important the influence of the internet to the influence of the Internet. Relationship Important Growth Behaviours Key Behaviours to Digital Influence Post comments to a website Looking for information that compares prices Index Reading weblogs (blogs) Reading information on current events or politics Create an online profile Reading information on Wikipedia Personalise web pages Reading professional publications Write a blog Emergent Behaviours Mature Behaviours Rate things Send & receive text messages - mobile device Select a doctor Buy an item from a website Surf the Internet - mobile device Finding information and directions for events Tag and Categorise content Reading information on health Contribute to wikis such as Wikipedia Pay bills Low adoption and not as important High adoption, but not as important to the influence of the internet to the influence of the internet. 50% ADOPTION Adoption 13

Slide 14: Insight #3 - Impact on Decision-making: Made a decision and did the internet help? Example of some of the 35 life decisions Made a Decision In Past 12 Months Internet helped with the decision Purchased Purchased airline/train 57% airline/train 89% tickets tickets Purchased a Purchased a plasma/LCD 18% plasma/LCD 74% television television Entered into a Entered into a contract with a contract with a 26% 64% Mobile Network Mobile Network Operator Travel/Leisure Operator Health/Fitness Applied for a Major Purchases Applied for a 19% 62% credit card credit card Service Contracts Personal Finance Campaigned on Campaigned on Political Decisions an issue that was an issue that was 61% 30% of particular of particular interest to you interest to you Purchased Purchased healthcare 70% healthcare 30% products products 0% 10% 20% 30% 40% 50% 60% 70% 80% 0% 20% 40% 60% 80% 100% 14 Note: Weighted total across UK, Germany and France.

Slide 15: Insight #3 - Impact on Decision-making: How did the internet help? A snapshot of the impact of sponsored content compared to consumer-generated content (Web 2.0) Consumer Visited Company or Consumer Looked for Comments and vs. Politically Sponsored Content Advice from Other Consumers Entered into a Entered into a contract with a contract with a 55% 28% Mobile Network Mobile Network Operator Operator Applied for a Applied for a 45% 19% credit card credit card Travel/Leisure Purchased a Purchased a Health/Fitness plasma/LCD 42% plasma/LCD 49% television Major Purchases television Service Contracts Purchased Personal Finance Purchased airline/train 34% airline/train 5% Political Decisions tickets tickets Purchased Purchased healthcare 29% healthcare 30% products products Campaigned on Campaigned on an issue that was an issue that was 26% 56% of particular of particular interest to you interest to you 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60% 15

Slide 16: Insight #3 - Impact on Decision-making: How did the internet help? Degree of available choices vs. whether consumers look for sponsored or consumer-generated content (web 2.0) Company/Government Dominant Consumer Opinions Dominant High with Many Choices with Many Choices Degree of Applied for a credit card Secured a loan from a bank or Purchased a games console Purchased a PC/Laptop other finance provider Available Made investments such as Purchased an MP3 player Participated in computer stocks, shares, unit trusts, bonds Purchased sports equipment gaming Purchased a digital camera Choices etc. Purchased a mobile Selected a new doctor/dentist Made a donation to a charity Purchased private healthcare phone/Blackberry/i-phone Made hotel reservations Purchased a plasma/LCD Made mortgage arrangements television Purchased books/CDs/DVDs Purchased healthcare products Purchased a holiday such as pain medication, cough/cold remedies, vitamins, dietary supplements Company/Government Dominant with Consumer Opinions Dominant Limited Choices with Limited Choices Purchased car hire Purchased tickets for leisure events, Campaigned on an issue that was of particular interest to you sporting, music, cinema Entered into a contract for Fixed Line Voted for a candidate in a national, regional, local election Telecoms Made pension arrangements Entered into a contract with a Mobile Entered into contract with an Electricity Campaigned on behalf of a political party Network Operator provider Purchased airline/train tickets Entered into contract for cable/satellite TV Purchased/renewed car insurance Entered into contract for Broadband connection to the Internet Purchased gym/health club/spa membership Entered into contract with a Gas provider Purchased tickets for leisure events, Entered into contract with a Water sporting, music, cinema supplier High Ratio of Looking for Comments from Other Consumers 16

Slide 17: Insight #3 - Impact on Decision-making: How did the internet help? Another view of six ways internet can help Looked for/read comments from others Visited a politically-oriented Read an online advertisement website Visited a product/price Visited a company website comparison website Purchased airline/train tickets Purchased a plasma/LCD television Used a search engine Campaigned on an issue that was of particular interest to you 17 Note: Weighted total across UK, Germany and France.

Slide 18: Insight #4 - Attitudes: What are consumer attitudes towards the Internet? Benefits of the Internet Trust and Safety on the Internet I believe that it is safe 55% 79% to communicate with 23% I believe that the other people on the 52% internet saves 75% Internet me time 81% I believe that it is very 50% safe to sell and buy 36% things on the Internet 42% I believe that the 65% I trust the information internet helps 28% on the Internet that is keep me 57% 32% provided by connected to my 28% 75% companies friends and family I trust the information 29% on the Internet that is 24% provided by 66% 35% I believe that the governments internet helps me UK UK 71% I trust the information make better 21% Germany on the Internet that is Germany decisions 50% 26% France provided by other France 26% Internet users 0% 20% 40% 60% 80% 100% 0% 10% 20% 30% 40% 50% 60% 18

Slide 19: Insight #5 - Differences by Country United Kingdom At 31%, British online consumers are the most likely to work on an online profile (Example: Facebook) as part of a social network compared to only 14% of French online consumers. British consumers are less likely to engage in most online researching behaviours. Germany German consumers are more likely to read information on Wikipedia (83%) or read professional articles (63%.) The Germans (11%) are also more likely to contribute to wikis. Germans are more likely to play online games (22%). German consumers are much more likely (86%) to buy and sell (61%) items using an online auction. Germans (21%) are much more likely to remix materials they find online into a new creation. France French consumers are much more likely to use the internet to find listings and directions for local shops (82%.) French consumers are more likely to read blogs (40%). Over 7 in 10 of the French Instant Message. 19

Slide 20: What are the Insights of the Digital Influence Index Study? Insight #1 - Influence: The Internet is by far the most important medium in the lives of European consumers…but companies are underinvesting in that influence. Insight #2 – Adoption of Behaviors: Consumer use of the Internet falls into five distinct classes of behaviours. Smart marketers will clearly understand the mix of behaviours that is most critical to their business — and formulate integrated campaigns to address that mix. Insight #3 – Impact on Decision-making: Consumers use the Internet in different ways to make different decisions. The differences are driven by the impact of the decision on their lives and the range of available choices. Insight #4 - Attitudes: Consumers see the clear benefits of the Internet to their lives, but they still have strong concerns that need to be addressed. Insight #5: Differences by Country: Although most survey results were consistent across all three countries studied, several interesting distinctions emerged. 20

Slide 21: Key Implications of Findings Marketers and communications specialists can use the insights in this study of more than 30 life decisions to help plan the emphasis of a digital strategy for influencing consumer choices about their product or service. Some macro-level steps are recommended: Audit the space around your brand, products, and services Establish the best mix of Web 1.0 and Web 2.0 behaviours for campaign planning Recognise the proper role of the companies engaging in Web 2.0 behaviours is to participate and not control 21

Slide 22: Key Implications of Findings Digital Presence: Almost all consumers use the Internet to find information to better inform their decisions. It is important for a company to actively manage its digital presence: Search and online visibility are key: Have a good Search Engine Optimisation (SEO) program to drive search visability. Build a strong website: It is often the first and only time a consumer will interact with a brand or organisation. Wikipedia. Many consumers are using Wikipedia as a key source. Companies need to actively engage in shaping their Wikipedia entries and not be defined by others. Join the online conversation. Actively engage with consumers and influencers, both the supporters and detractors, and maintain open dialogue. Mobility. Internet content is increasingly being consumed on smart mobile devices, so a company needs to make sure that its content is mobile-ready: 22

Slide 23: Key Implications of Findings Consumers clearly embrace the Internet because of its benefits, but they still have strong concerns about trust and security that need to be addressed. Any engagement with consumers in the digital world needs to be based on an open and honest representation of interests and positions. To do otherwise will likely backfire. Consumer conversations, opinions, and ratings are indelibly documented online. Resolving issues online quickly and satisfactorily is imperative to both immediate and long-term reputation. 23

Slide 24: Appendix 24

Slide 25: How influential is the Internet? Influence of each media on decisions Importance ratings: At least half of online consumers across all three markets say that the Importance Rating to Decisions Internet is important to life decisions, comparable to (Very/Extremely/Absolutely) offline word of mouth from friends and family 54% members and much more than other forms of media Internet 79% 54% such as TV or Newspapers. Share of influence: The Internet is by far most 61% Word-of-mouth 78% influential of all media. 53% 20% Newspaper 46% 33% 20% Radio 32% 34% Question: Method 1: We’d like you to think for a moment about how important each of the following is to helping you make decisions in your everyday life. 26% TV 43% Please tell us how important each is by assigning points. You have a total 28% of 100 points you can spend on each item below in anyway that you want UK as long as they add to 100. 12% Germany Method 2: In general, how important is information that you obtain from each of the following sources when making decisions in your daily life? Magazines 31% France 21% Notes: Both methods were used in the survey and presented above. Share of influence is based on the point allocation method. 0% 20% 40% 60% 80% 100% 25

Slide 26: Background As the Internet continues to increase its role as a critical force in a wide range of our life decisions it is important to understand the real extent of its influence in the decision making process and as a media channel in its own right. The Internet is established and growing in the three markets reviewed (France, Germany, UK) with around 60%+ penetration, compared to just over 70% in the USA. Improvements in broadband delivery mean that the Internet is now a more usable tool with content becoming more sophisticated at a rapid pace. Mobile Internet has provided consumers with the opportunity to access the Internet on the move and the enhancements that smart phone technology has delivered will remove some of the “pain” previously associated with mobile Internet, although there is still a way to go. Despite the central and growing role of the Internet, very little research has been conducted to understand and quantify its influence, particularly when compared to other more traditional media channels. This creates a situation where it can be very difficult for companies to arm themselves with the information required to intelligently support their products and services through this new channel. In order to develop a broad based understanding of the influence of the Internet Fleishman-Hillard and Harris Interactive , conducted a wide ranging study to look at a number of aspects as to how individuals currently engage with the Internet. This study brings together the thinking of market research practitioners and communications professionals. It explores a broad set of media questions among the growing online population in three major European markets (UK, Germany and France) and sets a benchmark for monitoring the deepening role of the Internet in the lives of consumers in coming years. 26

Slide 27: Key Objectives, Questions and Measures Key Objective: Establish the level of influence of the Internet on decision making Key Questions: Can we develop an effective benchmark measure? What role does the internet play at influencing different types of life decisions? Which online behaviours are most related to the influence of the internet? What online behaviours are consumers adopting? What role do attitudes play at driving online behaviours? What is the degree of engagement in advanced Web 2.0 behaviours? Do different types of people have different index profiles? Key Measures Time spent Influence of Which online What are their What impact across media media types activities attitudes did the internet types/typical to daily are they towards the have on specific week? decisions? engaged in? internet? decisions? 27

Slide 28: Methodology Design and analysis of this study was conducted by FH The data was weighted to online population targets Research, working in conjunction with Harris Interactive. including those based on the following: The field work for this study was conducted by Harris age Interactive, London through a comprehensive, 25 minute gender online survey among a representative sample of 4,921 Internet users in the UK, France and Germany. education region UK = 1933 respondents internet usage France = 2013 respondents propensity Germany = 975 respondents In addition, further weighting was applied to analyse the Fieldwork for the survey took place between December combined results, to reflect the online population sizes in 2007 and January 2008. Respondents to the survey each country. were recruited from the various panels managed by Harris Interactive across the markets surveyed. The data was weighted using a proven bias correction method used by Harris Interactive called Propensity Scoring to correct for self selection biases known to exist among respondents who have chosen to join an Internet panel and chosen to take part in an online survey. 28

Slide 29: Where does influence lie? Online Population % of all media time % of media influence as % of total spent on internet of the internet UK 66% 30% 42% Germany 65% 30% 40% France 55% 38% 37% Source: Online population from Nielsen NR June and November 2007 All other data from the Digital Influence Index Study 29

Slide 30: Insight #2- Adoption of Behaviours: What communication behaviours are consumers adopting? 99% Sending or receiv ing e-mails 100% 100% 51% Sending or receiv ing instant messages 42% 74% 29% Posting comments to an online new s group or 29% w ebsite 31% 15% Play ing an online v ideo game w ith other people 22% 18% UK 12% Talking to other people using VoIP (Voice ov er Germany 25% Internet Protocol) France 19% 0% 20% 40% 60% 80% 100% 120% 30

Slide 31: Insight #2- Adoption of Behaviours: What commerce behaviours are consumers adopting? 81% Buy ing an item from a w ebsite 86% 70% 78% Manage Bank Accounts 80% 77% 64% Pay Bills 80% 41% 61% Making a reserv ation for trav el including airflights, trains and or hotels 48% 52% 54% Buy ing an item using an online auction or online classified ad 81% 42% 35% Selling an item using an online auction or online classified ad 61% 28% Making a pay ment in order to access or dow nload digital content, such as music, v ideo, or 21% 28% new spaper articles 22% 10% Activ ely managing inv estments by trading stocks, mutual funds or other inv estments 12%