© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Making Publications Personal, Measurable and Interactive

Dr. Douglas Sexton Publishing Market Development Inkjet High-speed Production Solutions Hewlett-Packard Company

Online Advertising

Attractions • Measurable • Targetable • Customizable • Enables a direct customer response

Attractions & Myths

Myths • That is it cheap. • Average cost-per-click is over

$1.30 (USD) … and rising • Average Click-thru rate is 0.9%

Source: Wordstream.com . “The Most Expensive Keywords in Google AdWords.” July 2011

Web ads are frequently actively avoided or ignored

Magazine Ads Are a More Positive Experience

• Consumers frequently desire both editorial & ads

• Many magazines like fashion or hobbies are bought for ads

• Considered a more casual browsing experience

• Web browsing is generally more purposeful

Many magazine are purchased for ads

Consumers Trust Magazine Publishers

69%

25%

6%

If a magazine publisher requests information regarding your preferences

and interests to help them send you more customized and relevant

information, would you supply it?

Yes Maybe No

63%

37%

Would you go online for more information if the advertising in your printed subscription

magazine was customized?

Yes No

Source: Chief Marketing Officer (CMO) Council, “The Impact of Relevance in Publishing and Advertising”, 2010.

Willing to share preferences, seek customization & web content

Magazine Readers Want Cross-Media Publications

87% of those interested in reading magazines on a digital device still want a

printed copy. Source: CMO Council, 2010

75% of consumers feel that digital content complements print, yet 25% feel it replaces

print. Source: Harrison Group/Zinio/

MEMS Technologies, 2010

87% want digital + print 75% feel digital

complements print

25% feel digital replaces

print

Digital supplements print – It doesn’t replace it

Hearst Personalization Platform

Helps Hearst deliver more

value to advertisers through: − Targeting

− Personalization

− Measurement

− Response actions

Increases the monetary value of ads

Improves Hearst magazines competitive profile

First demonstrated in Nov ’11 Popular Mechanics Magazine

HP & Hearst – Popular Mechanics Magazine

Combined with offset pages & inserted in polyethylene bag

2x 8 page regionalized onserts

4.8M+ pages

2 page personalized onsert

600K pages

300k Copies of November 2011 issue for 12 US Cities

What Was Customized?

Image for each city (Regional)

Name on mailbox

Greeting above first paragraph on front

Location of nearest store

(Best Buy, Staples)

Personal URL

Personalized QR code

300k Copies of November 2011 issue for 12 US Cities

High-speed Inkjet Web Press Makes It Possible

Technologies Converging

What’s Happening: 1. Personalized content at high volume drives reader engagement/relevance 2. Image links (QR codes or image/text strings) drive to web/mobile platforms 3. Printed page becomes a portal to broader web content

Image/Code Read Mobile Computing High-speed inkjet web printing

HP & Hearst – Popular Mechanics Consumer

• 12,008 unique visitors

• Over 4% response rate

− > 4x direct mail industry avg

• 86% visitor-to-entry rate

• 39% mobile participation rate

• 1,427 QR clicks from associated insert content links to web content

VISITOR CONVERSION

Entered Contest

Visited w/o Entry

86% Visitor Entry Rate

Outstanding response rates!

Hearst’s Next Step:

• Harper’s Bazaar Magazine - March Issue – 300k copies

• Neimen Marcus - Annual Fashion Week Sale

• Personalized name and closest store location

• On new glossy Appleton Utopia Inkjet media

• Now planning 4 sequential campaigns

High-end US fashion retailer

Major fashion magazine

From Technology to Fashion

Some of Aurasma’s many magazines partnerships

Top Gear Magazine – Case Study

• The Top Gear magazine franchise is produced in 30 countries

• The UK edition has over 1.8 million readers monthly

• The UK magazine approached Aurasma with the following challenges:

– Strengthening the links between the Top Gear television series and its growing magazine franchise

– Translating the high octane energy and dynamism of the television show into traditional print media

– Maximising the value and reach of video content from the television show

– Engaging a younger audience while continuing to appeal to the magazine’s traditional demographic

• Top Gear UK began using Aurasma’s free platform to deliver video through its print to editions in

December 2011

Partnering with Aurasma enabled the magazine editors to :

• Make greater use of expensive video footage • Support print sales, mobile use and web hits • Boost magazine subscriptions and increase advertising revenue • Connect with smartphone owning demographic in an innovative

way

Top Gear Magazine – Goals

After two months of using Aurasma

Top Gear’s own market research showed that:

• 50% of the readership owned a smartphone

• 85% of the entire readership were aware of the Aurasma

content in the magazine

• 27% of the entire readership had used Aurasma in the magazine

Top Gear Magazine – Results

• Top Gear has now embedded Aurasma in its own app – TG Mag

Extra

• Rolling Aurasma out across the rest of their 30 country franchise

• In February, Top Gear won the prestigious FIPP Digital Choice

award for their use of Aurasma

Top Gear Magazine – Digital Future

Launched July 11 & already 4,000 Partners in 80 Countries Partners in every vertical: Newspapers Magazines Broadcasters Travel & Hospitality FMCG Museum guides Advertising Network operators Retail Fashion Games Online retail Clothing Film studios Consumer products Financial Services Sports Education Automotive

UK • USA • Russia • China • Latin America • France • Italy • Spain • Japan

Summary

• Publishers are creating new value for advertisers and consumers

• Using personalization to make publications more relevant to consumers

• High quality and productivity HP inkjet web presses enable mass customization on a scale never before possible

© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Thank you