ZO status on Microsoft partnershipRedmond , 29 March 2011

Agenda

1. Upfront comments2. Processes in place in markets per region/ market3. “Game changing” briefs in the works4. Other opportunities

Agenda

1. Upfront comments2. Processes in place in markets3. “Game changing” briefs in the works4. Other opportunities

Upfront comments

1. Good relationship across markets • Microsoft remains overall ZO number 1 media partner across all key markets

(excluding search)

2. Across ZO markets we identify a clear trend of spend towards 3 key areas• Performance/DR campaigns• Online video• Social media

Upfront comments - continued

3. Microsoft weaknesses to be addressed for ZO to increase spend* across all major markets:

• Pricing is a major concern• Information gathered is that MSN is 10%+ more expensive than its competitors

• Need a more efficient MSN network with• Better targeting / retargeting solutions • Lower CPAs:

• Average CPAs are higher than competition in all markets • Average CPAs are 10%+ higher Vs year ago

• Need more online video inventory • At more competitive CPM

• Need stronger deeper content offering against 15+ target groups• Currently spend are shifting to Facebook and local social media properties (Deezer in

France, Twenti in Spain...)

*Weaknesses discussed at EMEA Microsoft / ZO quarterly steering committee meeting, 2 March 2011

Summary July 10 – Feb 11 (exc US & Canada)Jul 10 – Feb 11 Total: $19,764 ($5,774 Dec-Jan)

• Pricing: $16,529 ($3,093)• Product Offerings: $964 ($783)• Poor Performance: $2,084 ($1,898)• MSFT Opt Out: $187 ($0)

Major Clients: • RB $16,366 ($3,033)• L’Oreal $791 ($731)• Congstar $434 ($434)• Telefonica $212 ($52)• Cosmodirekt $163 ($61)

Markets:• Germany $884 ($678)• Singapore $584 ($584)• UK $2,212 ($1,882)• Spain $84 ($0)• Multi-market $16,000 ($2,666)

Key reasons for non-approval:• Inappropriate pricing offered –

Cosmodirekt• Failure to meet required price-points – RB• Uncompetitive VoD pricing – RB• Lack of innovation in brief – L’Oreal• Refusal to use local market tracking tools –

L’Oreal• Unsuitable creative – Telefonica• Lack of VoD inventory at required price –

Telefonica• Failure to respond to brief – BMW,

Telefonica, Qantas• Client/product clash – Telefonica• Campaign sold to alternative

advertiser/agency - Toyota

• North America Dec-Jan estimate: $21,713• Grand Total >$45,000 Jul-Feb

Figs are $000s

Summary - North America Dec10- Jan11Dec10- Jan11 Total: $21,713

• Pricing: $313• Product Offerings: $2,479• Poor Performance: $0• MSFT Opt Out: $556• Outside of MSFT $18,365

Major Clients: • Verizon $1,380• HomeAway & Dennys $300• Scion $100• Chase $500• Nestle $800• RB $6,330

Key reasons for non-approval:• Inappropriate pricing offered –Nestle• Lack of CPA opportunities – RB• Lack of innovation in brief – RB• Unsuitable creative – Telefonica• Lack of VoD inventory for required target –

Aviva, Emirates, Chase• Unavailable content for endemic alignment

– Nestle, Chase, Puma• Failure to deliver desired volumes - RB

Figs are $000s

Agenda

1. Upfront comments2. Processes in place in markets3. “Game changing” briefs in the works per region / market4. Other opportunities

Processes /relationships in place in all major markets

• We have put in place a number of initiatives over the last 12 months, to ensure we are maximising investment into MSN

• Quarterly steering committee at regional level in place to review overall

business opportunities• Bi-weekly local market meetings between trading teams with attendance from

both senior ZOG and Microsoft personnel• Forecasts, performance and opportunities/potential growth areas are main agenda points

• Microsoft are receiving first call and last call on all digital briefs/campaigns• Microsoft given opportunity to re-pitch proposals in the event of their original

proposal not meeting client requirements• Specific feedback to Microsoft at a campaign level• A number of client specific days have been set up with Microsoft to discuss

client specific challenges• Microsoft invited as key partner on first day of ZO WW Digital and Technology

on 13 April 2011

• In 2010 – ZO and MSFT had quarterly F2F meetings and monthly finance calls• Main purpose 1H 2010 was to increase the spend figures, 2nd half to drive

training, education and local MSN adoption.• Targeting key clients were discussed but never materialised – Nestle in India,

L’Oreal in China, Toyota in Singapore.• MSFT is not a major publisher in APAC, but we worked on a plan to increase

growth in ZO’s major markets and spend increased in CY2010:• ZO’s spend on MSFT - USD 2.7m (’09) to USD 4.5m (‘10) – 69% YOY growth• India – 149% YOY growth• China – 81% YOY growth• Singapore – 55% YOY growth

• 2011 – Slow start as MSFT has changed their leadership, Richard Dunmall moved to NYC, Jason Scott has replaced him.

• Gareth has now (w/c 7th March) met Jason and there will be a Regional finance call on 21st March 2010.

• Followed by a F2F VivaKi meeting on 8th April, with country heads attending. Attention will be made on how to grow ZO’s bigger clients on the MSFT platforms. But also discuss, where MSFT are small and expensive compared to the local or global competitors.

Processes/relationships in place in APAC

Agenda

1. Upfront comments2. Processes in place in markets3. “Game changing” briefs in the works per region / market4. Other opportunities

Summary of all ZO major briefs in the works with Microsoft

• WORLD PLAN $6.2m• USA $4.5m• EMEA - big 5 markets $14.55m• APAC – Sing, China, Australia $0.6m

• Total opportunities in the works: $25.85m

WORLD PLAN CLIENTS

Wordlplan clients summary of briefs in the works

• L’Oreal LPD – Chrismas corridor: X markets, €1.5m - $2.1m• Toyota Its a long way from Kansas: X markets, €1.2m - $1.7m• L’oreal Cannes Festival: X markets, €1m - $1.4m• Electrolux: Le menu de Cannes X markets, €0.5m - $0.7m• Biotherm: Lifestyle X markets, €0.2m - $0.3m• Nestle: HW with Kids proactive: # markets, budget tbc

Microsoft briefed on a total of €4.4m* / $6.2m + of new opportunities

*No overlap with local markets briefs

L’Oreal LPD Christmas Corridor – €1.5m

L’oreal Paris – Cannes Festival - €1m

Concept: Microsoft creates the world’s biggest interactive fashion shoot using the Croisette as a stunning backdrop

Film Aid International uses the power of film and

video to reach the world’s most vulnerable

communities with messages that inspire them,

address their critical shared needs, and effect

social change

Toyota – A Long Way from Kansas - €500k to €1.2m

Multi market activation across all Microsoft platforms

Electrolux “Le Menu de Cannes” – €0.5m

• Bespoke presence on local MSN sites, including:• Editorial content around Food/Style/Design, (all markets), recipes (FR

and RU only)• ‘Live from Cannes’ – video content and photo galleries (all markets)• Interactive quizzes (all markets)• Competition for to win a VIP trip to Cannes (all markets)

• Supporting display activity across the MSN network, including Women’s, Lifestyle, Entertainment, Hotmail and Messenger (all markets)

Main Page – Mock Ups

21

Biotherm – €200k

Nestle: Pro active brief on how to reach HW with kids across Microsoft franchise – budget tbc

RETAIL

PRE-PURCHASE

RESEARCH

ZenithOptimedia (London – Zenith HQ) 13th AprilDuration: 5 hours Brief: Showcase partnership through an innovative and inspiring half day digital conference within the context of the overarching event theme – LIVE

MARKETING

Event Positioning: MSA to provide a dialogue on some of the key challenges facing our industry; a view on harnessing the latest media + technology techniques to transform consumer engagement; and thoughts on future advertising trends; we intend to bring together a wide range of speakers, external and internal, to excite delight and inspire the audience around the power of digital and our industry.

Event Objective: Position MSA and ZenithOptimedia as thought leaders; provoke discussion and introduce new ideas, enhance existing media relationships, drive incremental revenue, increase awareness of MSA’s broad capabilities through demonstration of innovative and effective applications of media + technology that underscore the relevance of having Microsoft as your partner.

1.20 – 1.30(Confirmed)

Olivier Van Duüren and Steve King (Zenith Worldwide CEO)

Welcome and context setting

1.30 – 2.00 TBC The Microsoft Consumer Story / Innovation Story – What’s next, Approach to Innovation, Romancing the Present

2.00 – 2.30 Natasha Hritzuk (Director Global Research and Analytics)

The Consumer Path / Insights & Analytics Vision with references to recent work (Context Matters & Shopper Journey’s)

2.30 – 3.00(Confirmed)

Panel / Moderator: Contagious

A perspective on consumer advertising from an key audience – Youth/ Post Grad Students (A debate about advertising saturation/ is about advertising dead?)

20min BREAK 3.20 – 3.40(Confirmed)

Dean Carignan (E&D Director Advertising Sales)

The Vision for Interactive TV / An industry perspective

3.40 – 4.10(Paul Confirmed, Stephen tbc)

Paul Kemp-Robertson (Contagious) & Stephen Kim (GM Global Creative Solutions)

The new advertising model is not 360 it’s 365: The marketing industry is shifting from hermetically sealed ad campaigns, to on-going (always on) marketing projects; supported by a showcase of successful and innovative campaigns: A look at the possibilities when creativity and technology fuse, create, and transform; also includes an MSA perspective

4.10 – 4.40 (Confirmed)

Dave Coplin (Director Search / Social Media UK)

What ‘Does Always On’ mean for businesses and brands?

4.40 – 5.10 Speaker + ZO Panel Q&A. Moderator: Contagious

5.10 – 5.30 Consumer Experience Centre / Zenith Reception

Surface, display of Microsoft’s latest technology via touch screen e.g., Deep Zoom, Pivot, HTML5, Photosynth, WP7, Xbox (Kinect): Multiscreen, Targeting and Social Media collateral available. Each station will have an individual presenter. Use the LIVE MARKETING theme to theme room coupled with MSA brand.

6.00 – 8.00 Networking / Drinks 100 people for drinks reception and nibbles, venue tbc but will align to LIVE MARKETING theme

Digital days partnership – 13 April / Draft Agenda

USA- UPDATE

Summary – USA opportunities

Zenith:• RB $0.5M• Nestle $0.3m• Chase $0.5m

Optimedia:• T mobile $1.8m

Moxie: $1.4m

Microsoft briefed on a total of $4.5m + opportunities

• GLO CUSTOM PROGRAM

100% SOV Custom Full-Screen Editorial Galleries – Large scale 935x600 Ad Unit• Girl Crush: Mom and Daughter Duos • Sidewalk Style: Moms Edition • Editor’s Picks: Mother’s Day Gifts

• 100% SOV Custom 300x250 Editorial Galleries • Mother’s Day Style Guide • Mother Knows Best • Celebrity Close-Up: Mom Edition • Everyday Einstein • Keep Your Closet Organized

• 100% SOV “Gotta Have It!” Sponsorship

• 100% SOV Custom Style Index Page Sponsorship (1 Month Sponsorship, timing TBD)

• Glo Full-Screen Style & Beauty 935x600 Rotation

• Glo Targeted Style Rotation

• Glo Sitewide Rotation

Note: Only one ad per page vs. competition’s 2-4 per page*

PROGRAM OVERVIEWGlo will create custom editorial galleries which focus on the themes of Fashion & Beauty and the Mother’s Day Holiday in order to create a highly contextualized and relevant environment for Woolite. Woolite will have the opportunity to reach their target audience through their alignment with this custom content, as well as make an impact with visually stunning large-scale ad units. Beginning in April and continuing through June, Glo will create the following custom content to elevate the Woolite brand among consumers:

Zenithmedia US – RB – $200k

Purchase Based Targeting In partnership with comScore

GoalsDrive trial & awareness of Finish Quantum by targeting

consumers who have a high propensity to purchase mono dose dishwasher detergents

StrategyTargeting: Microsoft will create a audience model for

Finish, based on offline purchase data and online research behavior, in partnership with comScore

Post Campaign Research: Finish will receive a Campaign Essentials report that provides valuable insight on consumers who purchase Finish Quantum & Cascade All-in-1 ActionPacs

TimelineApproval required by 2/18/11 for a 4/1 launch.

Approval by 2/25 will allow for a 4/5 launch, etc.

Purchase Based Targeting: Mono-Dose Dishwasher Detergent

Purchasers

For Finish, Microsoft will build a custom lookalike model using a sample of consumers who are:

• Purchasers of Cascade All-in-1 ActionPacs & of Finish Quantum

Zenithmedia US – RB - $300k

Nestle to Leverage MSN Video High Impact Contextual Alignment + Mass Reach MSN Video Network

GoalsGenerate awareness of Pizza Plus new product launch by

utilizing Online Video assets:• :15 sec spots recommended to run in front of Short Form

Content• High-Impact placements around video – to be created by

vendors

Tactics• Content Targeted Pre-roll Video across MSN

Entertainment, Lifestyle, Sports (Fox Sports)• Demo-Targeted Pre-roll Video across MSN Video Ad

Network to maximize reach• Companion banners negotiated as added value

TimelineAwaiting client approval for 4/4 launchFlight scheduled for April – June 2011

Zenithmedia US – Nestle - $100k

Nestle to Take Over MSN Wonderwall Program DetailsShowcase new Skinny Cow products and packaging using fun, engaging, rich media units on MSN Wonderwall:

• Site Takeovers• Skins • Content Integration• Custom slideshow integration 6x’s throughout flight

Product LaunchesSkinny Cow Ice Cream Clamshell packaging Skinny Cow

Confections

TimelineApproved and preparing to launch April – August 2011$200,000 Net

Zenithmedia US – Nestle – $200k

Within Xbox LIVE, users will be compelled to interact with

custom content by…

Xbox Live Advertising: Thought-Starters for Chase

For the entire month of April– when finances are top of mind – Xbox LIVE users will

have 3 reasons to thank Chase!

Pending Xbox Marketing approval

With a Chase Flash-Enabled Branded Destination Experience

(BDE) – the Xbox LIVE equivalent of a microsite – users will learn valuable

information about the usage and acquisition promotions on separately branded tabs within

the Experience.

This Flash BDE can also contain any relevant video

content (including commercials) for that time

frame, as well as animation, sound and custom

downloadable content in the form of theme packs and gamer pics that are

both free to Chase and the user!

2. Messaging on Xbox will also encourage users to sign up for a Chase card to earn a full year Gold

subscription.**

3. Chase card holders that make any purchases on Xbox LIVE using their Chase credit

card will receive 3% cash back.***

1. Xbox LIVE users who opt-in and purchase 2000 or more Microsoft points

($25 value) with their Chase credit card will

receive a free 3-month Gold subscription to Xbox

LIVE!*

Awaiting approvals/confirmation on:*Ability to identify Chase CC users on Xbox LIVE – MS purchases cards/manages/fulfills**Requires MS to supply Chase with 12-month Gold subscriptions – Chase to set up unique URL (i.e. chase.com/Xbox), Chase manages/fulfills***Chase manages/fulfills using Chase numbers/reporting

For a spend of $500k+, we can also include a research

study to support the campaign. Research study

will require a signed release form and a 5-week lead time

prior to campaign launch.

Zenithmedia US – Chase– $500k

Optimedia US Clients Summary - T mobile $1.8m

• T-Mobile Spring Window• Affordability: $400K• Network: $400K• Device: $1MM

A total of $1.8MM in opportunities for Microsoft

Moxie clients summary of briefs in the works

• Verizon Wireless– Custom BDE – Xbox Integration: National, $250,000• Purchased

• L’oreal - Custom BDE – Xbox Integration: National, $500,000• Under consideration

• 20th Century Fox – Custom BDE – Xbox Integration: National, $300,000• Under consideration

• 20th Century Fox – Sweepstakes program: National, $100,000• Under consideration (smaller portion of above program)

• AutoTrader – Custom BDE – Xbox Integration: National, $250,000• Not moving forward at this time

A total of $1.4MM of opportunities for Microsoft

Summary – EMEA big 5 markets opportunities

• France $2m+ (PMU, Bouygues)• Germany $5.5m (Telefonica, Postbank, Toyota..)• UK $1.4m* (O2, HTC, L’Oreal, Toyota...)• Spain $5.3m+ (P&G, Mercedes, Caja...)• Italy $0.35m (Swarowski, Puma, GNV)

Microsoft briefed on a total of $14.55m+ opportunities

*UK opportunities for Q4 2011 only

FRANCE – UPDATE

France key opportunities

PMU• Good partnership, to be renewed (circa m1€+) • CPA disappointing on MSN network and a lot of missed opportunities: CTR and CVR divided by 2 in Jan 11 Vs

Jan 10! • Volumes of impressions not delivered to objective:

In 2010 average monthly spend: €85KIn 2011 average monthly spend: €36K

Bouygues Telecom• MSN is first partner for branding opportunities. • Short term opportunities will continue to come up on a very competitive market... • However loss opportunities on performance campaigns

• evaluated at circa €30K of loss per month due to declining CPA Vs yag• Innovation opportunities: Xbox, Kinect (under discussion ...)

Missed opportunity: €50K / Month

France - Other opportunities

Budgets not yet defined, but Microsoft will be briefed

France

L’Oreal• Big issue around launch of “Glo” (woman/luxury channel of MSN)

• ZO proposed to Lancôme clients the exclusive sponsorship around the launch - no possible negotiation

• MSN goes to Lancôme direct with a negotiated offer for same package! (lower CPM)

• Client agrees on price and ask ZO to book• MSN discovers that Dior had put an “option 1” and confirmed booking• Big clash scaled up to MD of Lancôme.• ZO now negotiating with MSN for compensation

• Annual brief for global partnership to come in March : might be endangered by the Lancôme issue

GERMANY- UPDATE

Telefonica – €2.5m / $3.5m

• MSN is #1 publisher overall• Finalising agency trading agreement within the next two weeks. • Actual payfactor is not competitive with Yahoo! (index 115) – therefore still in

negotiations with MSN.

Postbank – €400k / $0.6m

• In the works: cooperation for IE9 launch, where Postbank would be exclusive partner.

• 100 k€ on top of regular branding budget.

Toyota - €350k / $0.5m

• Finalising the trading agreement (April 2011 – March 2012)• Launch: Only Yaris NG in september – still no brief available, probably focus on

women target group• Shift to Online Video – lack of inventory then might be an issue

Post/DHL - €300k / $0.4m

• „E-Post Brief“: Branding potential (150 k€)• „DHL Empfänger Campaign“: Branding Potential (100 k€)• Mein Paket: new marketplace like ebay / Amazon. Planning to sign

performance deal in combination with E-Post and DHL Branding budget - potential 50 k€ - 100 k € depends on performance.

Congstar - €200k / $0.3m

• Performance disappointing: 15% under average competitors• 2010 Order-Forecast per month not achieved = overall commitment of

500.000€ could not be spent generating a 325 k€ lost revenue!• 2011 even more focus on performance

Generali - €150k / $0.2m

• Cosmos: Performance disappointing: 20% under average (100 k€ lost revenue)• Central: Requested targeting (AOS) not available (60 k€ lost revenue)

ITALY - UPDATE

Italy - €250K / $0.35

• Swarovski: • St. Valentine promotional campaign: €35K

• Puma: • Social media: €40K

• Manneti & Roberts: • Video adv: €20k

• GNV- Grandi Navi Veloci: • Performance: €35K

• HTC: • Video Marvel --> young target (18-24 anni), overlay and full screen hp and messenger.

Budget: €50K• Flyer --> welcome to new tablet htc. Hp takeover. Budget: €40K• Saga --> 25-54 yo, video advertising. Budget: €30K

SPAIN - UPDATE

Spain -€3.75m / $5.3m

ZENITHMEDIA 1. P&G 900.000 €2. MERCEDES 375.000 €3. CAJA MADRID New client with a minimum 100.000€ to spend on MSN4. SYMIO 10.000 €/ month but we only achieved 5.000 € / month with the same CPL than last year, Vs

20.000€/month at the beginning of 20105. GENETSIS 200.000 € DR action6. IBERDROLA 50.000 € DR action

7. OPENBANK 150.000 €8. LDA (DirectLine) Not in the media plan due to too high CPL , there would be opportunities if the price matched with

100€ brief

OPTIMEDIA1. TOYOTA / LEXUS 450.000€2. MUTUA 60.000 € - potential to increase if CPL improves3. HEINEKEN 325.000 €4. PERNOD RICARD 300.000€5. YOIGO 175.000 €

ZO BARNA1. WEIGTHWATCHERS 25.000€2. NESTLE 220.000€3. MEDIAMARKT 300.000€4. NESPERESSO 60.000€

UK- UPDATE

ZOG Q4 Opportunities

O2’s second quarter spend is currently being re-forecasted• Experian performance currently weak. MSN currently delivering £1000 CPA vs target

of £75. O2 keen to get this working.• Take That Campaign late Mar-May close to sign off, potential of £100k+ investment

to MSN.• Spend expected to go up versus the Q1 spend.• Exclusive access to O2 container tags• Microsoft have more scope to re-target and capture potential O2 customers than

their competitors

British Airways• Planning is now ad-hoc as majority of funding comes from tourist boards

• Meeting took place on 15th Feb to take MSN through previous poor performance issues, spend could be up to £200k Q2 if you can make the activity work

Transitions Optical Lenses Campaign• Brief has just come in for April-May activity. MSN currently on the plan for £35k

• Activity likely to be predominantly VOD.

HTC• Three handset briefs expected for Q2, potential to MSN up to £40k

Aviva/RAC• Aviva Life budget has moved to Search due to continued poor performance. RAC

budget dependent on MSN delivery. Currently projected at £50-£100k

Mars Petcare• Client is starting to buy into Digital. Hopeful of up to £60k’s worth of VOD investment

with MSN. Currently awaiting client sign off

LG• Currently working through a new business brief. Xbox and standard display with

possible microsite production in the pipeline. Investment potential of £90k

ZOG Q4 Opportunities

• L’Oreal• Men Expert launch in Q2, MSN likely to take £30-£40k. Limited spend on

Maybelline and Paris, but potential of £20k on Vichy and Gel Liner in April

• Warner• MSN already taking a significant share of Warner monies. Warner are looking

for a new angle from MSN. Previously all spend through Messenger.

• BBC• No actual spend from the BBC, however 2e (division of BBC WW) will be

spending consistently from Q2.• E1

• One HPTO planned on key launch, additional messenger activity taking potential up to c£80k

• Lexus/Toyota• Traditionally briefed late, initial suggestions that we will spend c£30k and

£40k respectively

ZOG Q4 Opportunities

• Reckitt Benckiser• Finally starting to spend outside of online video. Two campaigns

planned in for Q2, E45 and Actimist –potential investment £30k

• Qantas• Performance continues to be weak, based on current performance

investment is likely to be c£15 in Q2.

• Molson Coors• Continuation of Carling VOD activity. Previously had inventory issues,

is there scope for us to spend more?

ZOG Q4 Opportunities

APAC CLIENTS

APAC clients summary of Business with MSFT – $660K

• Honda Jazz launch: Australia, $100k• Qantas Rugby World Cup Sponsorship: Australia, $100k• NAB Brand campaign phase 3: Australia, $100k• Mengniu (Milk Powder brand): China, $60k• Dior launch campaign: China, $75k• Emirates ongoing campaigns: China, $150K• Armani – Jeans and underwear: China, $75K

Please note that MSN is a JV in China, so it is advertising only as they don’t provide bespoke content. The above spends are small compared to other regions, but large for their respected markets.

ASEAN (Singapore) and India have no current big projects in the pipeline.

Honda Jazz launch in Australia – $100k

Timing: 8 May – 15 June

Qantas – Rugby World Cup Sponsorship – $100k

Qantas is a proud supporter of Australian Rugby Union and is the official airline of the Qantas Wallabies. 2010 saw improved results in the Tri-Nations series, with two wins against South Africa awarding the Qantas Wallabies the Mandela Challenge Plate and ensuring they retained second place both in the 2010 Tri-Nations competition and IRB World Rankings.The Qantas Wallabies will play four matches in 2011 in the Southern Hemisphere's toughest competition, the Tri-Nations. They will kick off their international campaign against South Africa on 23 July in Sydney before taking on the traditional rival New Zealand in Auckland on 6 August. Next the Qantas Wallabies will play against the Springboks in South Africa on 13 August before the team return to Australia to play on home soil against the All Blacks in Brisbane on 27 August. The Qantas Wallabies will then launch into their campaign on rugby's grandest stage at the World Cup in New Zealand on 11 September, competing throughout the month against Ireland, Italy, Russia and the USA in the group stages of the tournament.We wish the Qantas Wallabies the best of luck in their quest for glory in New Zealand.

Timing: TBC

Nab – Brand campaign phase 3 – $100k

Timing: TBCObjective: Extension of February/March activity

Thank you