The Era of

Digital Video

Advertising

Video Viewership is Changing

2

Non-TV Households Grow

2007 2 MILLION homes without a working TV set.

3

Source: Nielsen; Huffington Post “Nielsen Viewership: TV Ratings Will Change With New Measurements”

5 MILLION

2013

The Reach of Online Video is Growing

4

0

50

100

150

200

250

2012 2013 2014 2015 2016 2017

Digital Video Viewers Smartphone Video Viewers Tablet Video Viewers

MILLIONS

57

142

61 117

172

205 +19%

+149%

+92%

Source:eMarketer, Digital Video Viewers (August 2013), Smartphone and Tablet Viewers (March 2014)

Digital Video Reaches Coveted Millennials

5

Time Spent on Online Video (Hours:Minutes)

6:08

7:50

11:20

13:14

Boomers

Gen X

Older Millennials

Younger Millennials

Millennials’ time with online video is around

double that of Gen X and Boomers.

Boomers: 50-64 years old; Gen X: 35-49 years old; Older Millennials: 25-34 years old; Younger Millennials: 18-24 years old

Source: Nielsen, “The Cross-Platform Report: Q4 2013, March 2014

Digital video ad spend will grow to $13 billion in the next 4 years. $13

Billion

Digital Video Ad Spend

Ad Spending:

Television vs. Digital Video

Digital video ad spend will more than double in the next 4 years.

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018

Digital Television

+15%

+113%

$ BILLIONS

Source: eMarketer, June 2014

Digital Video Ad Spending:

Desktop vs. Mobile

Digital video ad spend will grow for both online and mobile.

0

1

2

3

4

5

6

7

2013 2014 2015 2016 2017 2018

Desktop Mobile

+47 %

+322%

$ BILLIONS

Source: eMarketer, June 2014

Breakdown Silos:

Think “Total Video” and not

Television vs. Digital

Opportunity to Optimize Advertising Budget 10

75% Digital is maturing and becoming a viable

competitor to television 49%

Likely to Shift TV Dollars to Digital Video

Top Reasons

Digital has superior targeting and is

more measureable 46%

Digital provides higher ROI than television 33%

Online and Mobile video ads are becoming

viewed as equivalent to television 15%

Source: Interactive Advertising Bureau, “Digital Content NewFronts”, August 2013

Source: Cowen and Company, “Advertising Outlook: Cowen Ad Buyer Survey Says…”, January 2014

Shifting up to 15% of Ad Spend to online provides incremental and effective reach.

11

% of Television Budget Shifted to Online

58% Reach

60% 61% 62%

0% 5% 10% 15%

9%

4%

47% 42% 38%

13%

6%

16%

8%

Television Only Television/Online Online Only

Source: Nielsen TV/Internet Fusion (January 2011-March 2012)

Higher Message Recall

Duplicated Reach provides the greatest lift in message recall.

12

52

35

29

17

44

26

19

13

0%

10%

20%

30%

40%

50%

60%

TV Ad GeneralRecall

TV Ad BrandRecall

TV Ad MessageRecall

TV Ad Likeability

TV + Premium Online Video TV Only

+18%

+35%

+53%

+31%

Source: Nielsen IAG, A18-49, Premium Online Video Measurement (2008-09)

More vehicle buyers are turning to the Internet, so leverage online video to help enforce offline campaign tactics.

Sources Used To Shop

More buyers are turning to the Internet for their vehicle shopping needs.

Source: 2014 IHS Automotive Buyer Influence Study, in partnership with AutoTrader.com

Base: New-vehicle Buyers 2011 = 2005, 2014 = 1008

14

Significantly higher / lower than 2011

5% 7% 10% 15% 17% 20%

28%

79%

9% 13% 16%

28% 24%

34% 32%

71%

RadioOutdoorAds

DirectMail

NewspaperMagazineTelevisionReferralInternet

2011 2014

Time Spent Researching

While overall research time is down, time spent online has increased.

Source: 2014 IHS Automotive Buyer Influence Study, in partnership with AutoTrader.com

Base: New-Vehicle Buyers (2011 = 2005, 2014 = 1008)

15

Significantly higher / lower than 2011

0

4

8

12

16

20

2011 2014

Offline

Online

16h 12m 18h 18m

11h 12m 12h 6m

Online Video is Part of the

Overall Digital Universe

Video Sites

Watch a

Video

Compare

Models

Share

Search

Engines

Request

a Quote

Locate a

Dealer

Radio

Television

Consumer

Review Sites

Dealer Sites

Third-Party

Sites

OEM Sites

Follow

24 Research Touch-Points

(on average)

Source: Google, Millward Brown Digital and Polk, “Digital Drives Auto Shopping”, Nov 2013

How Important

are Online Videos?

Video is important to vehicle shopping, and growing in importance.

17

Somewhat

Important

41%

Very

Important

27%

Not Very

Important

25%

Not At All

Important

6%

+2%

+2%

Source: J.D. Power Third Party

Automotive Website Evaluation Study,

2014

Time Spent Watching Videos is Growing 18

50%+

+1hr

1-in-4 watched

while researching, which is up 57% over last year.

Over half of auto shoppers now watch 30 minutes or more.

Source: Google, Millward Brown Digital Vehicle Shopper Path to Purchase Study, September 2013

The Video Completion Rate is Higher Than Average for auto.

19

0% 20% 40% 60% 80% 100%

Electronics

Travel

Retail

Entertainment

Financial

Telecom

CPG

Auto

Video Completion Rate

Source: DG MediaMind, “Mobile Benchmarks”, December 2013

Videos can drive results for

advertisers across all three tiers.

Ads Prompt Brand Consideration

25%

27%

30%

31%

32%

32%

34%

35%

36%

37%

0% 10% 20% 30% 40%

Billboard/Outdoor Ad

Newspaper Ad

Email Ad

Television Ad

Magazine Ad

Online Site Ad

Cell Phone Ad

Direct Mail

Tablet Ad

Online Video AdOnline video was the top ad format for driving Brand Consideration.

21

Source: Millward Brown Digital/Google

Vehicle Shopper Path to Purchase

Study, September 2013.

Q. What role did each of the following

advertisements play while you were

shopping for cars/trucks?

After Watching Online Video

61% Used computer to find

more information

Source: Google, Millward Brown Digital and Polk, “Digital Drives Auto Shopping”, Nov 2013

After Watching Online Video

% Visited a Dealership

Source: Google, Millward Brown Digital Vehicle Shopper Path to Purchase Study, September 2013

AutoTrader.com visitors are highly

engaged with video content.

Average monthly views are up over last year 77% Source: AutoTrader.com Site Data

A Large and Growing Library

25

600 original videos

Over

Videos for

nearly every

model.

Adding Video to a Rich Media Campaign 26

22% Higher Click-thru Rates

Results

in

17% And Boosts Interaction Rates

an Average of

Source: AutoTrader.com Site Data

“This was actually a lot of

fun to watch and I felt like

it was really happening

before my eyes.”

Visitors Like Our Video Ads

27

“I did find this ad interesting and

it held my attention more than

most other car ads.”

“Ads like this catch and hold my

attention more so than still/static ads.”

“I really love this ad and hope other

manufacturers do something similar. It

certainly was not boring, but it told me a

lot about the car.”

“This video is so much fun to

watch and is so different from

regular car commercials. I wanted

to join them in their ride.”

Source: AutoTrader.com Market Research Online Community, 2014

Video Ads Best Practices

Break Through the Clutter

0%

50%

100%

150%

200%

250%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Frequency of Online Video Ads

2013

58%

204%

Source: comScore; average number of ads per viewer (2013); desktop/notebooks only

Video Best Practices

Videos should not be longer than 30 seconds (0:15 or less is ideal).

Animated thumbnail images can be used to make a single video more obvious; however, videos should not auto-play with audio.

Some vehicle attributes are easier to illustrate with video (infotainment, technology, vehicle handling).

Shoppers want videos of how features work, and how the vehicle would function in real life.

Videos should be used as a supplement to information, rather than a replacement.

30

Source: J.D. Power Third Party Automotive Website Evaluation Study

The Era of

Digital Video

Advertising

THANK YOU!