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Slide 1: Impacts and ROI of Internet Local, Classifieds, and Directory Advertising Research and Analysis from comScore Networks, Inc. March 13th , 2006
Slide 2: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 3: Study Objectives  Measure the effectiveness of classifieds, directory, and local advertising on the Internet:  Across a variety of representative industries  Incorporating all aspects of ROI including impressions linked to offline value and branding  Considering metrics related to sales, awareness, and branding  Using a high quality methodology that:  Reflects real market conditions  Provides a non-artificial test environment to the extent possible  Offers adequate sample for statistical significance
Slide 4: Why Case Studies?  Each publisher has a unique business model  Cost-per-lead  Flat listing fees  Dramatically different industries  “Marketer” has a different meaning across each publisher  Cars.com focus is on “dealerships” collectively  Verizon Superpages.com focus is on small businesses organized by category  CareerBuilder.com focus is on employers of “Top 4 Accounting Firm” and “Leading International Bank”  Yahoo! Local focused on “Ford Rental”  No comparisons to other mediums  Cost prohibitive  Difficult to collect
Slide 5: Participating Publishers and Marketers
Slide 6: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary – Case Studies • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 7: Step 1: Study Details By Publisher  10 publisher and marketer combinations tested Publisher Cars.com CareerBuilder.com Yahoo! Local Verizon Superpages.com Marketers Car Dealerships Around the Country Big 4 Accounting Firm and a Major International Bank Ford Rent-a-Car Hospitality, Real Estate, Retail, Prof. Services, Autos, Retail      Population: Passive Data Collection: Survey Field Dates: POLK Data Match: Sample Sizes: Total U.S. January 2005 through September 2005 June through September 2005 April 2004 to June 2005 ~ 200 survey completes per cell on average (ranging from 138 to 256) ~ 1,000 to 60,000 passive ad exposures per cell ~ 165,000 records matched to POLK automotive database
Slide 8: Step 2: Passively Track Exposure  Example of Listing Exposure at
Slide 9: Step 3: Create Test and Control Cells Survey Test – Control Design For  comScoreQ2 conducted 355 Internet surveys in the US from August 31, 2005 through September 19, 2005. Definition Test Group Respondents ages 18 and up who have used CareerBuilder.com to search for a job in the past 6 months. Respondents ages 18 and up who were aware of CareerBuilder.com, but who used other sites to search for a job in the past 6 months. Sample Size 217 Control Group 138
Slide 10: Step 4: Automotive database match  POLK covers ~ 70% of new and used car sales in the U.S. AK OR WA MT ID WY NV CA HI AZ NM TX OK AR MS LA FL AL GA UT CO NE KS ND MN SD IA IL MO TN IN OH KY SC WV WI MI PA VA NC NY CT NJ DE MD VT ME NH MA RI Full Coverage of new and used vehicle sales Partial Coverage of new car sales. No used car sales information.
Slide 11: Step 5: Targeted surveys for offline details SURVEY FLOW FOR ALL STUDIES Survey Section Screener Awareness & Usage Perceptions Demographics - Eligibility metrics - Age - Gender - Brand awareness -Unaided -Aided - Ad recall - Usage - Action (s) taken - Likelihood to re-use - Likelihood to recommend - Attribute ratings - Overall impression - Impact of advertiser - Frequency of local search - Tenure of local search - Education - Annual household income - Zip location
Slide 12: Step 6: Passive Data “Funnel” Analysis:  Funnel to conversion for Ford rent-a-car Searched Keywords yp.yahoo.com Saw Ford Rental Listing & Clicked Thru to Dealer Locator Page Clicked Thru to Search for Availability Online Clicked Thru to Rent Car Offline Phone or Visited Dealer to Rent Car Rented Car
Slide 13: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 14: Monthly Market Penetration and Size   The majority of the Internet population is now using directories Even unique life events (like car buying or job seeking) are common 150,000 72% Reach Unique Visitors (MM) 125,000 100,000 75,000 50,000 25,000 0 29% Reach 27% Reach Directories/ Resources Source: comScore MediaMetrix; Total US Internet February 2006 Automotive Careers
Slide 15: Cumulative Reach by Category   Over a 6 month period, the cumulative reach continues to grow Offering marketers a huge opportunity to touch consumers 83% 74% 53% 48% 58% 53% 62% 56% 65% 61% 87% 89% 90% 92% 32% 29% 45% 41% 5-Aug 5-Sep 5-Oct 5-Nov Careers 5-Dec 6-Jan Directories / Resources Source: comScore Marketing Solutions; Total US Internet January 2006 Automotive
Slide 16: Five Month Retention By Category   Retention remains strong even over long periods of time Once engaged, it’s clear consumers value these category resources 87% 85% 83% 81% 81% 58% 55% 52% 50% 49% 45% 46% 39% 47% 46% 5-Sep 5-Oct Directories / Resources 5-Nov Careers 5-Dec 5-Jan Automotive Source: comScore Marketing Solutions; Total US Internet January 2006
Slide 17: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary – Case Studies • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 18: Case Study: Yahoo! Local and Ford Rental  Business Model  Pay-per-listing model  Objective to drive converting consumers to Ford Rental site  Conversion Funnel      Search for Car Rentals Clicked on Ford Listing Availability Check Requested Rental Converted Online 100% 40% 31% 5% 3%  ROI Calculation: Total revenue over total cost     Projected consumers exposed to a listing Conversion both online and offline Calculate total dollars in rentals for Ford Divided cost of Yahoo! Local Listing
Slide 19: Case Study: Yahoo! Local and Ford Rental Conversion Results  ROI calculations must include offline conversions 3.8% Online 3.2% Offline Nearly 40% of Conversion Occurs offline Total Conversion is 7% Source: comScore Marketing Solutions; Total US Internet October 2005
Slide 20: Case Study: Yahoo! Local and Ford Rental Conversion Results What prevents consumers from converting online?  Availability and selection of rental cars  This is a potential revenue loss of ~$1.3 Million* per month Online * Monthly UV’s exposed to Ford x drop of rate during availability check x average revenue per car rental
Slide 21: Case Study: Yahoo! Local and Ford Rental Cars ROI Conclusion   The average price of a rental car transaction is $130 according comScore eCommerce data Ford ROI is strong even at much lower average transaction sizes $$ Per Rental 7.8X ROI 6.5X ROI 8.7X ROI Source: comScore Marketing Solutions; Total US Internet October 2005 $100 $117 $130
Slide 22: Case Study: CareerBuilder.com, Accounting Firm and International Bank  Business Model  Pay-per-listing model  Objective to connect employers with qualified job seekers  Conversion Funnel     Saw Job Listing Applied online and offline Interviewed Received Job Offer Accounting Firm 100% 35% 13% 2% Bank 100% 36% 20% 14%  ROI Calculation: Cost Per Job Offer     Job seekers viewing listing pages Conversion to application, interview, and finally job offer Total cost of job listings Costs divided by offers made = Cost Per Job Offer
Slide 23: Case Study: CareerBuilder.com and Big 4 Accounting Firm Conversion Details   Percentages calculated among those who viewed a “job details” page One third of applicants applied offline after viewing an online listing 23.2% 11.6% 13.3% 2.2% Source: comScore Marketing Solutions; Total US Internet October 2005
Slide 24: Case Study: CareerBuilder and International Bank Conversion Details   Percentages calculated among those who viewed a “job details” page One third of applicants applied offline after viewing an online listing 25.8% Average length of time to fill a position: 30 Days Source: The EDGE Report – August 2005 20.4% 14.3% 10.3% Source: comScore Marketing Solutions; Total US Internet October 2005
Slide 25: Case Study: CareerBuilder.com Cost Per Job Offer Made ROI Calculation   Cost per job offer made based on listing fees of $389 Differences driven by number of listings, job appeal, and brand equity $283 Average length of time to fill a position: 30 Days Source: The EDGE Report – August 2005 Median permanent placement fee via staffing firm/recruiter: $8,592 Source: Staffing Analysts Industry, Inc. - 2005 $30 Accounting Firm International Bank Source: comScore Marketing Solutions; Total US Internet October 2005
Slide 26: Case Study: Verizon Superpages.com  Business Model  Pay-per-listing model  Objective to connect consumers with a local service provider  Conversion Funnel     Viewed listings page Clicked listings detail page Took an online action Took an offline action Retail Category Example 100% 25% 8% 17%  ROI Calculation: Total revenue over total cost     Projected number of listings viewers Number of leads converting online and offline Calculate total revenue generated Divided total cost of listings
Slide 27: Case Study: Verizon Superpages.com Site Reach By Category  Majority of Listings Views are in Hospitality (41.7%)  Higher consideration categories are less frequented 41.7% Site Reach By Listings Category: Based on Search Activity 29.2% 16.6% 6.8% 4.0% Real Estate 1.8% Construction and Contractors Hospitality Professional Services Retail/Shopping Automotive Source: comScore CMS, Total Internet Population, Average Monthly Estimates Base: ~60,000 Directories Users between January 2005 July 2005
Slide 28: Case Study: Verizon Superpages.com Total Conversion By Category  Conversion varies dramatically by category  High conversion categories linked to an “immediate need” Total Conversion By Listings Category: Based on Listing Page Exposure 25.0% 25.0% 21.3% 13.3% 12.7% 6.4% Construction & Contracters Retail Automotive Hospitality Professional Services Real Estate Source: comScore CMS, Total Internet Population, Average Monthly Estimates Base: ~60,000 Directories Users between January 2005 July 2005
Slide 29: Case Study: Verizon Superpages.com ROI Summary By Category  Average ROI is across all categories $10.60 for every $1 spent $25 $22.54 $18.85 $13.60 $20 $15 $10 $5 $1.93 $0 Hospitality Retail Real Estate Automotive $1.21 Prof. Services $0.31 Construction & Contractors Source: comScore Marketing Solutions; Total US Internet October 2005
Slide 30: Case Study: Cars.com  Business Model  Subscription model  Objective to connect dealers with prospective car buyers Conversion Funnel  Viewed dealer listing pages  Searched for vehicle  Viewed detailed vehicle listings  Contacted a dealer  Converted Offline 100%  38%*  ROI Calculation: Cost Per Sale  Number of unique visitors viewing dealer listings  Percentage converting based on POLK data match  Number of vehicle sales to Mid/Low funnel visitors  Total listing costs divided by total sales = cost per sale * 35 States that report all new & used car sales
Slide 31: Case Study: Cars.com ROI Conclusion  cost-per-sale 7.7 X more cost effective than the industry average** Cost Per Sale $493* $68 Cars.com *Source: NADA 2005 **Dealerships all media channels Industry Average
Slide 32: Marketer Site Metrics (Lift)  Marketers often improve their branding among consumers vis-à-vis the favorable environments provided by the publishers Metric Ford Rent-a-Car on Yahoo! Local 7% 12% 15% 10% International Bank on CareerBuilder.com 10% 10% 11% 9% Accounting Firm on CareerBuilder.com -1% 4% -1% -2% Favorable Overall Impression Likely to Use Again Likely to Recommend Is a Name I Trust Lift=Metric (Test)-Metric (Control) Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What is your overall impression of_________? Q (Ford Rent-a-Car): How likely are you to use _____the next time you rent a car? Q (Bank, Accounting Firm): How likely are you to search the _____job listings the next time you search online for a job? Q (Cars.com): How likely are you to search on Cars.com the next time you search online for a new or used vehicle? Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): How likely are you to recommend_________ to a friend, family member or colleague? Q: Please indicate the extent to which you agree or disagree with the following statements, Attribute rating: I trust this brand. Base=Respondents aware of marketer
Slide 33: Other Ad Effects (Lift)  Even ad recall, a high hurdle for an online listing, jumps among test consumers in a few select cases  Marketers can impact ad recall if focused on the limited creative element  Most respondents who visit these sites take some desired action – few are “just browsing.” Other Effects Ford Rent-a-Car on Yahoo! Local -1% 91% International Bank on CareerBuilder.com 5% 76% Accounting Firm on CareerBuilder.com 11% 91% Dealerships on Cars.com 17% 55% Recall Online Advertising Took Action1 Lift=Metric (Test)-Metric (Control) Notes 1-Asked of Test Group respondents only; Q (Ford Rent-a-Car, Bank, Accounting Firm): Where have you seen or heard the following _________advertised or promoted in the past 6 months? Q (Cars.com): Where have you seen or heard the following _________advertised or promoted in the past 12 months? Q (Ford Rent-a-Car, Bank, Accounting Firm, Cars.com): What action did you take, if any, after visiting _________? Base=Respondents aware of /used marketer
Slide 34: Other Ad Effects (Lift) Most recall Verizon Superpages.com online advertising. Overall, Verizon Superpages.com experiences an 18 point lift across the board. Other Effects Recall Online Advertising Real Estate Professional Services 19% Automotive Trade Services 9% Hospitality Retail 14% 16% 19% 23% Lift=Metric (Test)-Metric (Control) Q : Where have you seen or heard the following sites advertised or promoted in the past 6 months? Base=Respondents aware of /used Verizon Superpages.com
Slide 35: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 36: Annual Household Income by Category  Consumers in these categories are an attractive high income target for marketers 30% Annual Household Income 20% 10% 0% $100K + $75K $99K $60K $75K $40K $60K $25K $40K $15K $25K Under $15K Total Internet Directories / Resources Careers Automotive Source: comScore MediaMetrix; Total US Internet February 2006
Slide 37: Category Intensity of Use  These consumers are engaged with the online channel Pages Per User Minutes Per User 124.7 61.2 38.3 23.9 29.7 62.2 Careers Automotive Source: comScore MediaMetrix; Total US Internet February 2006 Directories / Resources
Slide 38: Percentage of Unique Visitors By Category that Buy Online  On average, category visitors are more likely to convert online compared to the average Internet visitor. Online Conversion Automotive 30% Careers 29% Directories / Resources 25% Total Internet 20% Source: comScore Marketing Solutions; Total US Internet January 2006
Slide 39: Agenda Overall Study Objectives Methodology Review Summary of Results  Addressable Market and Opportunity  Ad Effectiveness Summary • Conversion • Return on Investment • Other Advertising Impacts  Value of Consumer Target Key Conclusions and Implications
Slide 40: Key Conclusions  Online Classifieds and Local Advertising is a highly effective form of advertising  The case studies show positive ROI The majority of the value of online advertising is realized via offline sales  Tracking offline conversion is critical to fully understand ROI  Secondary branding impacts are often present User experience is critical to converting consumers  Significant attrition occurs in the case  Marketers must take care not to neglect the online use experience  
Slide 41: Key Conclusions (continued)  Marketers must recognize the size and scope of the online local marketplace  All forms of local advertising reach a significant portion of consumers  The channel “flow” may be reversing – online pushing to offline? The local space attracts highly valuable consumers  More likely to convert – online AND offline  Higher income  More likely to spend time online than average (which means they are spending less time in offline channels) 
Slide 42: Key Implications  Classified and local search listings must offer consumers multiple ways to complete sale  40% of Ford’s car rentals were completed offline…by phone, email or dealer address provided in listing  Classified and local search listings are not just about moving product today, but about impacting brand image  Ford and an international bank saw 15% and 11% increases respectively in “likelihood to refer brand to a friend”  Ford and an international bank saw 10% and 9% increases in “trustworthiness of brand”  Classified and local search listings must sell not just list  Ads must provide product/service benefits and availability
Slide 43: Thank you IAB Research Doron Wesly Director, Industry Research +1 (212) 380-4714 doron@iab.net comScore Networks Erin Hunter Senior Vice President +1(650) 244-5408 ehunter@comscore.com