This document summarizes key findings from a UK research study on word-of-mouth marketing conducted by Keller Fay Group. The study found that: 1) Face-to-face conversations dominate word-of-mouth in the UK, accounting for over 90% of conversations; 2) Word-of-mouth is mostly positive, with 62% of brand references being mostly positive; and 3) Influencers engage in twice as much word-of-mouth as average consumers and their word-of-mouth is 3.8 times more valuable.

1. New UK Research on Online & Offline Word of Mouth Presentation to WOMMA UK & IPA By Brad Fay London 4 March, 2011 © 2011 Keller Fay Group LLC @kellerfay Not to be quoted or distributed without written permission

2. Who We Are Research-based marketing consultancy Exclusive focus on word of mouth Who, what, how and why of WOM Only firm to measure all WOM Continuous measurement in US since ’06 Launching in UK 2011 RESEARCH EXCELLENCE AWARD WINNER ARF INNOVATION GRAND AWARD WINNER 2

3. The Power of Word of Mouth “The rewards of pursuing excellence in word-of-mouth are huge, and it can deliver a significant competitive edge few other marketing approaches can match” “It’s the most disruptive factor in marketing” “Marketing-induced consumer-to-consumer word of mouth generates more than twice the sales of paid advertising” McKinsey Quarterly, April, 2010 3

4. Social Media Are Exploding 4

5. Word of Mouth Is More than Social Media 5 Word of Mouth: The act of consumers providing information to other consumers. Word of Mouth Marketing: Giving people a reason to talk about your products and services, and making it easier for that conversation to take place. It is the art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications. For examples of award winning WOM campaigns, go to http://www.womma.org/WOMMY/

6. What percent of WOM happens on social media, blogs, chat rooms? But is All the Action Really in Social Media? US = 7% Britain = 7% Australia = 7% US = 91% Britain = 92% Australia = 91% Source: TalkTrack®: US, July 2009 – June 2010; Australia, April 2010, Britain, May 2010 6

7. Regardless of Category or Market, Face-to-Face Conversations Dominate 7 Mode of Conversation Financial Services Technology Beverages Beauty & Personal Care All WOM US US US US US Britain Britain Britain Britain Britain Australia Australia Australia Australia Australia Base: Conversations (US/Britain/Australia Shown: All WOM, n=196,216/16,682/17,653; Beauty, n=9,113/649/634; Beverages, n=16,872/1,630/1,390; Tech, n=15,017/1,203/1,368; Finance, n=10,626/1,063/1,003) Note: Percentages will not add to 100 because “other” not shown. Source: Keller Fay Group’s TalkTrack® US, Britain, and Australia

10. Australia - 2010All Categories All Dimensions Media Audiences All Brands

11. Britain’s WOM Conversation: Key Insights Into Word of Mouth Behaviour © 2011 Keller Fay Group LLC @kellerfay Not to be quoted or distributed without written permission

12. Average Number of Weekly Branded Conversations Per Person Britons Like to Talk In the U.S., the total public engages in 65 weekly branded conversations, on average. Total Public Men Women Base: Respondents (Total Public, n=2,578; Men, n=1,284; Women, n=1,294) Source: TalkTrack® Britain (May 14th – 31st 2010)

13. % of people having conversations by category in past day They Talk About Many Categories Compared to U.S. consumers, British consumers more conversations in most categories, especially Travel (+24 points), Shopping/Retail (+12), Financial Services (+10), & Technology (+10). Base: Respondents (Total Public, n=2,578) Source: TalkTrack® Britain (May 14th – 31st 2010) 12

14. Which Brands Get the Most WOM? 13 1. 8. 6. Two of the top 10 brands in Great Britain are also top 10 U.S. brands: Coca-Cola, #1 and Apple, #7. 7. 3. 4. 9. 2. 5. 10. Base: Brand Mentions (n=26,499) Source: TalkTrack® Great Britain (May 14th – 31st, 2010)

15. 62%of brand references in word of mouth conversations are “mostly positive” … Seven times the rate of “mostly negative” references (9%) Implication: Don’t be afraid to engage in the conversation! Word of Mouth Is Mostly Positive Source: TalkTrack®, Britain (May 14th – 31st, 2010) 14

16. More Consistency in Quality of WOM Across Country than Across Category 15 Mixed Mostly Negative Mostly Positive US All WOM Britain Australia US Beauty & Personal Care Britain Australia US Britain Beverages Australia US Britain Technology Australia US Financial Services Britain Australia Base: Brand Mentions (US/Britain/Australia Shown: All WOM, n=171,152/13,414/14,939; Beauty, n=7,401/574/441; Beverages, n=17,967/1,439/1,247; Tech, n=13,624/1,077/1,125; Finance, n=8,359/917/904) Source: Keller Fay Group’s TalkTrack® US, Britain, and Australia

17. Media Play a Big Role in Driving WOM 16 Half of consumer brand conversations refer to marketing or media …led by: Internet (15%) television (13%) newspapers (5%) magazines (4%) direct mail/email (4%) Marketing and media are tools for encouraging WOM! Source: TalkTrack(® Britain

18. In All Countries, WOM Tends to be Driven by TV, Point of Sale (POS), & Internet Touch Points (Comparing Countries) Media and Marketing References Cited in WOM (% of WOM conversations citing media or marketing; top 3 references highlighted) Base: Brand Mentions (US/Britain/Australia Shown: All WOM, n=170,380/13,414/14,939; Beauty, n=7,361/574/441; Beverages, n=17,822/1,439/1,247) *Up to two media/marketing references can be selected so figures will not add to this total row. Source: Keller Fay Group’s TalkTrack®, November 2009 – October 2010 17

19. % of WOM With or Without a Media/Marketing Reference Containing a Recommendation to “Buy/Try” a Brand or Product Active Advocacy More Likely in Conversations That Reference a Brand’s Media/Marketing This is similar to what is seen among U.S. consumers, with brand conversations that reference some form of media or marketing being more likely to contain a positive recommendation (44%) compared to those that do not contain a reference (39%). Base: Brand mentions where someone else provided advice (Media/Marketing Cited in WOM, n=4,008; No Media/Marketing Cited in WOM, n=4,638) Source: TalkTrack® Great Britain (May 14th – 31st 2010) 18

20. How Impactful Is WOM?(% rating WOM highly credible/highly likely to inspire action, “9” or “10” on 0-10 scale) While WOM credibility is similar to what is seen in the U.S., behaviors based on WOM are considerably lower. Base: Brand mentions where someone else provided advice (n=8,646) Source: TalkTrack® Great Britain (May 14th – 31st 2010) 19

21. 8% of population, influencers engage in 2x as much WOM as others Influencer WOM is 3.8x as valuable Influencers are “everyday people”but are distinguished by: Larger than average social networks Keep with what’s new Are sought out for their advice When it Comes to Conversation, Not All Consumers are Created Equal 20

22. Influencers Talk About Twice as Many Brands Per Week Number of weekly brand mentions per person +104% Total Public Conversation Catalysts Base: Respondents (Total Public, n=2,578; Conversation Catalysts™, n=213) Source: TalkTrack® Britain (May 14th – 31st 2010) 21

23. % of Category Conversation Catalysts™ among the total public British Consumers are Catalysts in a Number of Product Categories Base: Respondents (Total Public, n=2,578) Source: TalkTrack® Britain (May 14th – 31st 2010) 22

24. The New Media Landscape Bought Owned Earned The virtuous circle

25. A 360 degree view of Category Catalysts Demographics Product use Location Who with Media Category Catalysts Life Activities Source:IPA TouchPoints3

26. Time Spent Consuming Media in an Average Day 25

27. Receptiveness to Advertising Compared to All Adults 26

28. Correspondence Map of Category Catalysts (Red) v. Media Usage/General Activities (Green) 27

29. Targeting Media to Deliver Category Catalysts 28

32. Word Of Mouth Advertising What We Know Now 31

33. Keller Fay Finds About One-Fifth of WOM Directly Stimulated by Ads Chart reflects percentage of conversations about brands where participants say somebody directly referred to advertising as a source of brand information in the conversations Not included are conversations influenced by advertising that was unmentioned by any conversation participant 32 32

34. Multiple Touchpoints Contribute to WOM (Top 10 touch-points shown; % of word-of-mouth driven by media/marketing) Base: Brand conversations across all categories (n=165,352) Source: TalkTrack®, January – December 2010 33

35. The “two-step flow” (1955) “Media have only ‘limited effects’ in the process of mass persuasion” “ ‘Selectivity’ in exposure and perception used by individuals to ‘protect’ pre-existing cognitive structures” “A campaign of persuasion is more likely to reinforce than convert” “Messages are filtered through social networks and vetted in the light of group norms” “Where you find an opinion leader, you are bound to find a conversation” “Try to identify the points at which media enter the conversation” Re-thinking How Mass Communication Works 34

36. All media are “social” Implication 35 And so are we….

37. 36 First: The Power of People Second: Enabled by Technology

38. Keller Fay Group Keller Fay Group 65 Church Street, 3rd Floor New Brunswick, NJ 08901 +1.732.846.6800 (Tel) +1.732.846.6900 (Fax) Facebook.com/Kellerfay Twitter: @kellerfay Brad Fay bfay@kellerfay.com Andrew Smith asmith@kellerfay.com 37

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