WHY WE NEED MORECOURAGE

ADVERTISINGFOR GOOD

A Publisher Case Study by the example of

Huge advertising formats cover the entire contentof the website. Annoyed users searching desperately for whatthey really want to read. The big marketers play hardball toprofitably operate digital platforms.

This is how it looked like in 2015 in the digital advertising world.

Why we need to rethink?

As the digital advertising arms race led the industry to dedicatemore and more space to digital ads, users were getting fed up withthe experience and responded by installing ad blockers.

This presented a difficult situation for publishers focused on reach,user growth and quarterly revenue goals. Would it be possible tochange the user’s experience without losing users or advertisers?Could a company manage to change advertising into a positiveexperience for all involved without sacrificing essential sales?

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Advertising as a positive experience forusers AND advertisers

In this context, the Coalition for Better Ads, a global joint industryinitiative, was established in 2016 to develop user feedback-basedstandards for better advertising.

The Coalition for Better Ads uses the results of user surveys andthe expertise of its members from across the digital advertisingsupply chain to develop and implement the global the Better AdStandards to promote a user-centered approach to digitaladvertising and, in doing so, combat ad blocking.

At the same time, in December 2015, the publishing houseBurdaForward became the first German publisher to free itswebsites from the often-annoying advertising flood. They namedtheir approach, still an active program today at the Burdasubsidiary: Goodvertising

Burda quickly realized that the Goodvertising mission could not berealized with minor measures on websites and marketingconcepts. This realization led the publishing house, mainly knownfor the two flagship brands CHIP and FOCUS Online, to large-scale website rebuilds that required a long-term interdisciplinaryeffort. The results were the launch of a new advertising model thatattracted attention.

The Good into thePot, the Bad intothe Pot

Only those who really meet the user and appreciate him, get attention and sympathy.

And that is exactly the goal of better advertising. We have

noticed and proved: our "Goodvertising“ approach

can do that.

Martin Lütgenau (CMO BurdaForward)

„ „

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It is not done with a few activities

The Goodvertising formula

The first step that BurdaForward took was the elimination of alladvertising formats that obscured editorial content in any way. Atthe same time, the marketer, together with its in-house publishers,decided to rebuild the websites in a way that the surfingexperience for the user was significantly improved by betterplacement of the advertising experiences. In addition to thereduction in advertising space, BurdaForward invested heavily inthe quality of the formats being deployed. Another importantaspect of the transformation saw Burda build a ten-person NativeAdvertising team to develop creative and relevant content forcustomers.

LESS ADVERTISING SLOTS

FASTER LOAD TIMES THROUGH RE-LOADING ADs

NO ANNOYING FORMATS

HIGHERVISIBILTY

MORE ATTENTION THROUGH REDUCTION OF THE AD CLUTTER

RESPONSIVE PLAYOUT

AD

Content

Content AD

Content

THE USER IS INTHE CENTER

ADVERTISING PARTNERS BENEFIT

Massive investment in thequality ofadvertisingformats

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Increasing usage and interaction

It quickly became clear that following the introduction of the newad model at dmexco 2016 (concurrent with the announcement ofthe Coalition for Better Ads) and the elimination of "bad ads", theadvertising available on the BurdaForward brands has becomemore and more popular with users.

Within a year, the click rate of a legacy advertising experiences onFOCUS Online has increased by 58 percent. After a single yearthe portal has benefited from the redesign of the advertisingmodel: users have been more intensively involved with the contentof the page and generated more than 17 percent more pageviews. This trend has continued in the subsequent years.

Clickrate

Internal clickrate-numbers in percent, classical Billboard on FOCUS Online, period: full year 2015 vs. 2016

Page Impressions

5

0,360,57

+ 58,3%

Source: IVW, absolute PI-numbers in billions, FOCUS Online; period: full-year 2015 vs. 2016

6,03 Billion

7,09Billion

+ 17,6%

In the months immediately following the introduction of theGoodvertising model, evidence of a positive impact on reach onthe FOCUS Online website was clear.

The changes brought about by the Goodvertising approach yieldednot only immediate benefits but continue to deliver sustainable,long-term increases in the number of users visiting the sites. Thenet reach of FOCUS Online between 2015 and 2019 grew fromabout 17 million unique users to more than 23 million uniqueusers.

Unique User

Increase of monthly net reach FOCUS Online (average monthly UU in millions per year). Source: agof digital facts, single month, basictotality: 18 years and older

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17.73 17.7720.5 21.88 23.3

2015 2016 2017 2018 2019 YTD

What do the users say?

In order to measure the true success of the measures, however,those who really deal with the product need to be interviewed,users who regularly visit, search and consume information onFOCUS Online.

To measure this, BurdaForward leans on the well-known "best forplanning" German market study. The study shows that users lookfavorably on the new Goodvertising approach across a variety ofdimensions. These results are contrary to the general markettrend.

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The attitude ofFOCUS Online users towardsadvertising isdevelopingpositively -contrary to theprevailing markettrend

Internet advertising is…

Approved statements of FOCUS Online users to the options „internetadvertising is …“, user precentage, b4p 2015 vs. 2017, basic totality: 14+

34

12

18

14

19

18

15

32

26

32

12

19

14

17

18

17

30

29

31

12

20

15

19

20

17

31

30

…annoying

...trustworthy

...interesting

...entertaining

...superfluous

...useful

...purchase stimulating

...distracting

…belongs to the content

2015 2016 2017

The study shows that users are more and more pleased with thenew Burda advertising approach. Goodvertising ads pique greaterinterest, are more entertaining, more useful and relevant to theusers, and influence their buying decisions positively. The numberof users who find advertising annoying begins to decline in 2016 for the first time. These positive initial results all continue toimprove.

With a larger content team, the BurdaForward marketing unitfocuses on providing integrations and native content solutions aswell as providing users with help and information focused on theircurrent concerns.

The solution-oriented approach is recognized by users: By 2017,54 percent of the polled FOCUS Online users agree with thestatement "Advertising is very helpful for me„, a six percentimprovement over the course of two years. Over the same timeperiod, the proportion of the total German population that classifiesadvertising as helpful has decreased.

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Above all solution-oriented ad formatsfind positive recognition of theusers

Advertising is helpful to me…

Approved answers to the statement "Advertising is actually quitehelpful for me", percentage of users, b4p 2015 vs. 2017, population: 14+

+ 6%

51

5554 54

FOCUS Online Total population

2015 2017

User statements on „new advertising“

Statements of FOCUS Online users in direct comparison of the oldand the new design of the homepage

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male, aged 30

"The advertising isvery chic and doesnot bother too muchnow."

female, aged 24

„Looks cool. So it's definitely cooler thanpushing it away and it's still noticeable. Because nothing is more annoying thanhaving to click away the ad all the time untilyou can continue reading. That's why I find that (...) attentive, definitely."

male, aged 30

"So it looksbetter, definitely."

male, aged 36

"I think it's relativelypleasant, I have tosay."

The User is happy - but what about therevenue?

Despite positive user reactions, the launch of Goodvertising raisesthe same question for publishers and marketers worldwide:

How can you earn money by reducing the number of adexperiences in the visible range from four to one? Can it be donewithout experiencing revenue erosion?

The assumption made by BurdaForward was that a site can beboth user-focused and ROI-focused has been confirmed. Byincreasing the quality of the existing advertising experiences aswell as the Brand Safety provided to the advertiser, the Burdasales team quickly realized an increasing willingness amongadvertisers and agencies to pay a premium for Burda inventory.The increase in inventory quality rapidly increased demand for thereduced ad inventory available and even drove sales growth. Thechallenge for publishers taking on a similar approach is that theyhave to invest ahead of financial results but the higher net CPMand the larger volume of sales year-over-year shows thatGoodvertising is a sales driver.

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"From the verybeginning, we hadthe firm belief that a good product thatthe users like will also bring in money. That hascome true. “

Martin Lütgenau

Is Goodvertisingpaying off?

Sales development

FOCUS Online revenue reporting, Index values based on 2015, reporting period: fullyears 2015 - 2018, display advertising.

2015 2016

+ 44 %

126100

2017 2018

130 144

Message to the market

Systematically integrating Better Ads into corporate strategypromotes greater user adoption and long-term revenue growth.

This requires a close interaction between publishing teams and theteams involved in the development of user-friendly advertisingformats. It also requires acceptance from partners throughout thedigital advertising supply chain that annoying advertising has along-term negative impact on the ecosystem.

The consistent implementation of the Goodvertising strategy, withearly consideration of the CBA market standards, has sustainablyincreased user acceptance of the BurdaForward websites as wellas the effectiveness of their online advertising.

These effects can be seen in all relevant KPIs: reach, traffic,advertising performance, and also in the ad blocking rate, whichhas not increased since 2016.

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Goodvertising haspositive effects on all relevant KPIs

Imprint

BurdaForward Advertising GmbHSt.-Martin-Straße 66

81541 Münchenkommunikation@burda-forward.de

Managing Director: Martin LütgenauAmtsgericht München HRB 213376

Imprint

Coalition for better AdsWashington D.C.

Neal Thurman, Directorneal@betterads.org