CAPITAL MARKETS DAY PROSIEBENSAT.1 MEDIA AG AD SALES - THOMAS EBELING, OCTOBER 5, 2011 - PROSIEBENSAT.1 ...
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Capital Markets Day
ProSiebenSat.1 Media AG
Ad Sales
Thomas Ebeling, October 5, 2011
Page 1
Strong sustainable position in an attractive market
with significant upside potential
1 ProSiebenSat.1 with strong sustainable position in attractive market
2 TV media mix winner as the most effective and indispensable media
3 We stick to our guidance in 2011 with usual low visibility in Q4
4 TV rests on solid fundamentals with significant upside potential
Page 2
7.1M with strong and stable position in TV ad market
Net Share of Advertising* (estimate)
44
42
40
2007 2008 2009 2010 2011
Page 3
* P7S1 excl. N24, 9Live and Sixx; RTL Group excluding RTL II
Source: Own market estimates
Strong 4 channels with complimentary market positioning …
Target group structure and audience shares
14-49, all day, in percent
male
share 14-49
at 14+: 53.4%*
6.0% 11.6%
share men
at 14+: 48.4%*
old 10.6% young
0.3%
female
Page 4
Source: AGF/GfK Fernsehforschung / TV Scope / Audience Research [BS]
… and higher, stable power ratio
Power Ratio = Net Share of Advertising/Audience Share*
1.6
1.5
1.4
2007 2008 2009 2010 2011
Page 5
* P7S1 excl. N24, 9Live and Sixx; RTL Group excluding RTL II
Source: Own market estimates
RTL audience share gains mainly in low ad spend slots…
RTL audience share gain, Share of ad spend,
viewers aged 14-49 years, %pt; in percent
0.2
0.1
1.4
2.1 100
60
0.5 21
9 10
Morning Noon/ Access/ Night Total Morning Noon/ Access/ Night Total
afternoon Prime afternoon Prime
Page 6
* Morning: 3:00-12:00; Noon/Afternoon: 12:00-17.30; Access/Prime: 17:30-23:00; Night: 23:00-3:00 / 1.1.-31.8. 2011 vs. 31.8. 2009, pp
Source: AGF/GfK-Fernsehforschung, TV Scope / Nielsen Media Research, 1.1.-31.8.2011
… and with unattractive target group segments
Characteristics of RTL afternoon audience
comparison of structure shares, in %
63
43
31
17
13
8
High income** Higher education Brand consciousness
RTL scripted reality core audience others
Page 7
* Morning: 3:00-12:00; Noon: 12:00-14:00; Afternoon: 14:00-17.30; Access/Prime: 17:30-23:00; Night: 23:00-3:00
**Income>2.000 EUR / Source: AGF/GfK Fernsehforschung, TV Scope / own calculations
Strong sustainable position in an attractive market
with significant upside potential
1 ProSiebenSat.1 with strong sustainable position in attractive market
2 TV media mix winner as the most effective and indispensable media
3 We stick to our guidance in 2011 with usual low visibility in Q4
4 TV rests on solid fundamentals with significant upside potential
Page 8
TV and Online are the media mix winner
Development of net advertising share by media in Germany1
in percent
0.8 6.02
65.9 57.1
24.4 26.3
2000 2010
Page 9
Based on ZAW data; excluding direct mail and directories 2 Including display (banner and video), excluding Search and affiliate
Source: ZAW; OVK; Screen Digest; McKinsey
TV winner of the last crisis
TV share in Net Media Mix
Percentage
100%
TV increased media-mix-
share in crisis by 1.3%pt
+1.3%
25.0% 26.3%
2009 2010
GDP declined
by -3.4%
Page 10
Source: ZAW; OVK; McKinseyTV usage in main target group 14-49 further increasing
Average daily usage in Germany: viewers 14-49 years
In minutes
210
180
206 min.
150
120
90
78 min.
60
30
27 min.
0
2002 2004 2006 2008 2010
TV Print Online
Note: Excl. passive Online usage starting from 2008
(18% of total Online usage)
Page 11
Source: TimeBudget / SevenOne Media / forsa. / GfK ENIGMA / mindline, Basis: 2,021 interviewees.
Note: Print including Magazines and Newspapers.Even young viewers keep high TV-usage – no cannibalization
Average daily usage in Germany: viewers 14-29 years
In minutes
180
152min.
150
120
120min.
90
60
30
21min.
0
2002 2004 2006 2008 2010
TV Print Online
Note: Excl. passive Online usage starting from 2008
(18% of total Online usage)
Page 12
Source: TimeBudget / SevenOne Media / forsa. / GfK ENIGMA / mindline, Basis: 2,021 interviewees.
Note: Print including Magazines and Newspapers.TV is the most attractive medium
1 Highest and fastest reach
2 Strongest emotional impact
3 Cost efficient compared to other media types
4 Leading to highest ROI – even indispensable for Internet companies
5 Delivers value for agencies
Page 131. Unrivalled daily reach – even kabel eins is above Bild
The Power of TV ProSiebenSat.1 example
Page 14
Source: AGF/GfK-Fernsehforschung; TV Scope, Fernsehp.(D+EU), weighted by person, time shifted utilization, product related (r,v,z),
01.03.2009-31.03.2009, for Fact viewers: Exposure time: 00:01:00; ma 2009 Presse II2. TV has strongest emotional impact
Medium for strongest emotions
%
Other
15
Internet
5
Radio 4
Print 4
72
TV
Page 15
„Which medium is most emotional, is most likely to make you cry or laugh? Basis: n=1.000
persons 14+ Source: forsa.3. TV is cost efficient compared to other media types
Net CPM ranges, in Euro
50
40
25
15 15
10
5 0.5
TV Newspapers Magazines Online
Page 16
Source: Solon estimate4. TV advertising is working superbly with highest ROI
Stronger brand Higher probability TV stimulates
image / power of purchase online shopping
Brands with high TV Probability of purchase 73% more consumers
presence twice is 35% higher two days if TV and Internet
as frequently in after TV spot combined
consumer’s relevant set
Page 17
Source: GfK-study „Markenmotor TV“ / AC Nielsen / JupiterResearch Consumer Survey.4. TV-ROI even higher than search-ROI
1.53€
1.22€
TV-ROI 25% above
Internet Search ROI
TV Internet
Search
Page 18
ROI: Based on net CPM pricing.4. TV is even indispensible for Internet companies
e-Commerce companies strongly … and spend 60% of budgets on TV
increase TV spendings … Share of media spendings, YTD 2011
Growth of gross TV ad spendings
Other
85%
4%
Print
x5 8%
x5
29% 59%
Internet
TV
16% 30%
x 12
2.5%
2010 YTD 2011
eCommerce TV market
Page 19
Source: Nielsen Media Research, Product group „E-Commerce“, YTD: Jan-Aug 20114. TV ads immediately lead to Internet traffic
Ad Investments and Internet Search Zalando
T€ and Index
12,000 100
10,000 80
8,000
60
6,000
40
4,000
20
2,000
0 0
Dec 09 Mar 10 Jun 10 Sep 10
Ad pressure TV Google Searches
Almost linear correlation between TV ads and Internet Search
Page 20
Based on gross advertising investments and queries (indexed to the maximum value = 100) Source: Nielsen Media Research, Google Insights for Search5. TV delivers higher value to agencies
Other Other
Online Online
Print Print
TV
TV
Share of net spendings Share of Agency profit
(estimate) (estimate)
Page 21
Based on ZAW data; excluding direct mail and directories 2 Including display (banner and video), excluding Search and affiliate
Source: ZAW; OVK; Screen Digest; own estimatesTV ad market in Germany underproportional as % of GDP
Ad intensity: TV Advertising as % of GDP, 2010
0.39
0.29
0.23
0.22
0.21
0.21
0.17
0.16
France Italy Spain UK Western USA
Europe
Page 22
Source: Zenith Optimedia Advertising Expenditure Forecasts July 2011Strength of TV could lead to increasing share in media-mix
100 100
Other 11% 10%
Online 6% 10%
51%
Print 57%
- TV most effective media
- TV underproportional
in Germany
29%
TV 26%
2011e 2015e
Page 23
Based on ZAW data; excluding direct mail and directories 2 Including radio, cinema, outdoor 3 Including display (banner and video), excluding Search and affiliate
Source: ZAW; OVK; Screen Digest; own estimates; outlook based on PWC Entertainment & Media Outlook 2011-2015 and Zenith Advertising Expenditure Forecast 2011-2013Strong sustainable position in an attractive market
with significant upside potential
1 ProSiebenSat.1 with strong sustainable position in attractive market
2 TV media mix winner as the most effective and indispensable media
3 We stick to our guidance in 2011 with usual low visibility in Q4
4 TV rests on solid fundamentals with significant upside potential
Page 24Commitment growth 2011 driven by smaller customers
Closed Commitments
2011 vs. 2010, %
Top 50 Non Top 50 Total
Page 25Most industries positive
Nielsen Gross
TV Spendings Top 10 TV industries EURm (gross) 2011 YTD
Deviation vs. 2010 YTD in EUR m
TV spend
White Line in EUR m
Food -89 -71 1.025
Cosmetics 4 799 Food impacted by several
different possible transient
Trade & shipment 54 520
factors (e.g. raw material
Services 61 468 cost increase)
Motor vehicles 39 459
Beverages 9 423
Telecommunication -5 373
Finance 15 351
Pharmacy -17 285
Detergents -25 234
Total 158 6.400
Page 26
YTD: Jan-Aug 2011, excl. Media; Television advertising market, gross Source: Nielsen Media
Research/SevenOne Media, Market Intelligence (0180411)Positive development since Q2
Revenues 2011 vs. 2010, in percent
Q1 Q2 Q3 (estimate)
+3-5% +3-4% +3-4% +3-4%
- 4% - 2% Market 7.1M Market 7.1M
ex N24 in ex N24 in
2010 2010
Market 7.1M
ex N24 in
2010
Page 27
Note: Q1 and Q2 adjusted for N24 disposal in 2010 (deconsolidation on June 30, 2010)We confirm flattish* outlook for German TV ad revenues
Scenario 1: Scenario 2:
Same on-top bookings as in 2010 Less on-top bookings as in 2010
Initial yearly/
+3-4% +3-4%
commitments
On top 9% less than 2010 5-6%
bookings as in 2010
Total
+3-4% flat
revenues
Page 28
* adjusted for N24: German TV ad revenues for P7S1 with slight growth; underlying revenue performance for
German-speaking segment with at least low single digit percent growthStrong sustainable position in an attractive market
with significant upside potential
1 ProSiebenSat.1 with strong sustainable position in attractive market
2 TV media mix winner as the most effective and indispensable media
3 We stick to our guidance in 2011 with usual low visibility in Q4
4 TV rests on solid fundamentals with significant upside potential
Page 29Earlier this year: External market research firms expect
growth in German Net TV ad market
German Net TV ad market Prognosis 2012
+ 4.4%
+ 2.3%
+ 3.5%
Page 30
Quellen: Zenith Optimedia: Advertising Expenditure Forecasts July 2011, WARC International Ad Forecast July 2011, PWC: Global entertainment and media outlook
2011-2015 | SevenOne Media, Market IntelligenceFuture growth potential of TV until 2015
1. Print cannibalization/media mix
2. Pricing/ad intensity recovery
3. Large HD & 3D screens
4. HbbTV
5. Combination TV/Online/Mobile
6. Regional advertising targeting
7. Ban public sponsoring/advertising
8. New market segments
Page 311. Cannibalization of print as potential key growth driver
Media usage and net media mix
%
40 39%
30 27%
26%
1pp increase in media
mix equals ~150m EUR
20
for the market and
~ 60m EUR for P7S1
10%
10
3% 2%
0
TV Newspaper Magazine
Share of net media usage 2010 Share of media spendings 2010
Page 32
Based on ZAW data; excluding direct mail and directories
Source: ZAW, OVK, mindline media, OVK Werbestatistik (Onlineinvestments inkl. Search und Affiliate) / SevenOne Media Market Research2. Strong recovery of net CPT drives market growth
Net TV ad market, Net CPT
EUR m, Index: 2007 = 100
100 99 102 1pp net CPT increase
99 95
90 equals ~ 40m EUR for
the market and
~ 16m EUR for P7S1*
2007 2008 2009 2010 2011e 2012e
Net TV ad market NET CPT
Ad intensity: Net TV ad market as % of GDP
0.17 0.16 0.15 0.16 n/a n/a
Page 33
* Assumption: 50% of price increase leads to market growth, 50% to decrease in sold minutes Basis: All TV-HH, A 14-49, CPT: 9-channel market
Source: AGF/GfK Fernsehforschung, DAP TV Scope, Nielsen Media Research, ZAW, estimate2. TV with relatively small share of advertised products
FMCG ONLY
Total advertised products vs. TV advertised products
25%
Total = 32,600
TV = 8,083
8%
Total = 77,550
TV = 6,318
10%
Total = 71,709
TV = 7,234
12%
10% Total = 39,300
TV = 4,696
Total = 56,400
TV = 5,793
Page 34
1 Total number of advertisers and total number of products estimated
Source: IP: Television 20102. Thus underproportional ad intensity in German TV market
Ad intensity: TV Advertising as % of GDP, 2010
0.39
0.01% recovery in ad
intensity equals ~250m EUR
0.21 for the market and ~ 100m
0.21 EUR for P7S1; reaching
0.16
European average would
mean 1.25bn EUR for the TV
ad market
Western USA
Europe
Page 35
Source: Zenith Optimedia Advertising Expenditure Forecasts July 20113. Large HD & 3D screens drive TV and ad impact
We believe:
Better screens > more ad impact > higher prices > growing market
Page 36
Television Sales, PC and smartphones are estimated by EITO (European Information Technology Observatory), in cooperation with Bitkom4. HbbTV convert TV ad into direct sales impact
• Establish direct response channel to generate additional revenues
• Drive interaction models (e.g. leads, coupons)
Page 375. Potential ad impact of combined TV, Online & Mobile
campaigns
buy Online
coupon
identified
via GPS buy in store
TV
drives reach + Online & Mobile drive interaction
and conclude the on/offline sale
Page 386. Regional TV might attack print budgets
• Regional TV ads specifically attack
large regional print spend
• Technology now available for regional
TV over cable
• Primarily focus on tapping advertising
budget of new clients currently not
advertising with TV or P7S1
• USP: regionally targeted ads in highly
attractive national broadcasting
Upside potential of
~100m EUR for market and
40m EUR for P7S1
Page 39
Source: P7S1 own estimate7. Significant upside potential through public ad ban
EUR m
~ 250 market
~ 100 PS71
Significant upside
potential through
public ad ban
~ 50 market
~ 20 PS71
Ban ads at public Ban sponsoring
stations at public stations
(2013)
Page 40
Source: P7S1 own estimate8. New market segments (example betting)
• Ban of TV advertising in online betting
segments challenged by EU commission
• TV highly attractive for betting companies
Additional market potential of > 80m EUR
Page 41In summary: German Net TV ad market with significant
upside potential
EUR m 80 5,255
300
100
50
375 1,105 1,350
~ 3,900 450
3,900
Net TV ad Media mix gain Recovery TV ad Transaction Regional/TV Ban Public New Market Net TV ad
market 2011 (+3%pt; print intensity models Sponsoring / Segments market
cannibalization) (+0.015%) (Hbbtv, advertising* (e.g.Betting) potential
Mobile) 2015
With net SoA of 42% increase of >500m EUR for P7S1 possible;
conservative approach reflects ~1/3 (>150m EUR)
Page 42
Source: P7S1 own estimatesGerman TV ad market scenarios 2015
EUR bn Maximum Historic Conservative Flat 2010 Market
potential market scenario downturn
Market size
5.3 4.3 4.2 3.9 3.6
2015
1.4
0.4 0.3
Market 0
growth
-0.3
Sales growth > 0.5 ~ 0.15
~ 0.2 0
P7S1
~ -0.12
Conservative 150m EUR growth approach
allows for more upsides than downside risks
Page 43TV market risk perception might not materialize at all...
1. TV loosing to online
• Young viewers continue to watch TV
• Online reach additions limited
• Online ad more costly than TV; superb ROI doubtful
• Hybrid TV usage penetration possibly slower than in other key markets
2. TV pricing declining
• Net CPM already below other media CPM
3. Economic downturn
• Germany still a very attractive market
Page 44... and TV ad market has further potential beyond 2015*
1. Premium pricing for selected target groups through
individualized targeted TV ad campaigns
2.
HbbTV is a major success
3. Premium entertainment TV channels for elderly people allow
for premium pricing
4. Additional new categories (innovations, prescription
pharmaceuticals)
Page 45
* not reflected in revenue potentialsConservative German ad sales assumptions leave high
upside potential
• Conservative approach with >150m EUR growth in Germany for P7S1
• > 50m EUR for P7S1 in Austria/Switzerland
• Significantly more upsides than downsides until 2015 and beyond
TV will remain medium leader for reasonable growth
P7S1 will sustain its strong position in an attractive market
Page 46Disclaimer
This presentation contains "forward looking statements" regarding ProSiebenSat.1 Media AG ("ProSiebenSat.1 AG"), its
subsidiaries/affiliates and/or ProSiebenSat.1 Group as a whole (all hereinafter collectively referred to as “P7S1 Group”),
including opinions, estimates and projections regarding P7S1 Group's financial position, business strategy, plans and
objectives of management and future operations and including opinions, estimates and projections regarding the
markets in which it presently operates or in which it expects to operate in the future. Such forward looking statements
involve known and unknown risks, uncertainties and other important factors that could cause the actual results,
performance or achievements of P7S1 Group to be materially different from future results, performance or achievements
expressed or implied by such forward looking statements. These forward looking statements speak only as of the date of
this presentation and are based on numerous assumptions which may or may not prove to be correct.
No representation or warranty, express or implied, is made by ProSiebenSat.1, its subsidiaries/affiliates or P7S1 Group
as a whole with respect to the fairness, completeness, correctness, reasonableness or accuracy of any information and
opinions contained herein. The information in this presentation is subject to change without notice, it may be incomplete
or condensed, and it may not contain all material information concerning P7S1 Group. ProSiebenSat.1 and its
subsidiaries/affiliates undertake no obligation to publicly update or revise any forward looking statements or other
information stated herein, whether as a result of new information, future events or otherwise.
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