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Back to School Strategies in 2010

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BACK TO SCHOOL TIMING - HITWISE

Data Source: Hitwise share of “back to school” keywords in all categories in 2009 Media Analytics Services

• July 4th weekend appears to be the beginning of the Back to School shopping season according to Hitwise• Keywords gain the most search share over the next 5 weeks, and then begin to slowly taper off during a 5-6 week

period ending in mid-September• Though online searching and research occurs during this entire timeframe, the peak purchasing

season is the month leading up to the start of school

Back to School Keyword Popularity by Share (Hitwise)

Research Shopping

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BACK TO SCHOOL SHOPPING SEASON - NRF

Data Source: NRF/BIGResearch 2009 Back to School Survey Media Analytics Services

• 94% of all Back to School shopping will have begun at least 1 week prior to the start of school, which, in many areas is the week after Labor Day, September 6, 2010

• Based on that most Back to School shopping will occur during the month of August• Almost two thirds of Back to School shopping will begin in the first half of August

When Will You Begin Shopping for Back to School?

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BACK TO SCHOOL SPENDING - NRF

Data Source: NRF/BIGResearch 2009 Back to School Survey Media Analytics Services

• *The 2009 spend figure of $548 was an estimate given prior to the 2009 Back to School shopping season and will be confirmed by NRF prior to the 2010 Back to School shopping season getting underway

• The recession most likely had a significant effect on last year’s B2S spending, with signs of a slow recovery in the economy this year, a minimal shift upwards from last year’s number is expected.

Average Back to School Spending by Year*

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Net Average Spend % Buying

BACK TO SCHOOL SPENDING BY CATEGORY - NRF

Data Source: NRF/BIGResearch 2009 Back to School Survey Media Analytics Services

Insights & Actions

• Net average spend is a reflection of 1) the actual amount respondents planned to spend on these categories multiplied by 2) the % who planned to buy them• For example, Electronics has a larger average spend amount ($260), but after the 58 % likelihood of being purchased

is factored in, the net average spend amount is $151• Almost everyone shopping for back to school will buy clothing, footwear, and school supplies with 90%+ plan to purchase• Electronics category is the only one with a smaller net average spend amount for B2S than B2C

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Net Average Spend % Buying

BACK TO COLLEGE SPENDING BY CATEGORY - NRF

Data Source: NRF/BIGResearch 2009 Back to School Survey Media Analytics Services

Insights & Actions

• Net average spend is a reflection of 1) the actual amount respondents planned to spend on these categories multiplied by 2) the % who planned to buy them• For example, Electronics has a larger average spend amount ($445), but after the 48% likelihood of being purchased

is factored in, the net average spend amount is $212• Back to college shopping is less consistent than back to school shopping when you consider only 1 category (school

supplies) has more than 65% of shoppers expected to purchase compared to 3 categories for B2S shopping surpassing 90%

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BACK TO SCHOOL KEYWORDS on BING

Data Source: adCenter KW Traffic from AdIntelligence Media Analytics Services

Insights & Actions

• Traffic on Back to School related keywords are averaging 48% more traffic in 2010 than 2009• Traffic expectations and budget levels for 2010 should be adjusted according to the 48% rise in popularity• August was the clear traffic winner on Back to School related terms, with July the second highest monthly total and

September was third indicating a tendency to earlier season online research and shopping than last minute efforts

Y-o-Y Traffic Trends

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Y-o-Y Traffic Trends Y-o-Y CPC Trends

B2S CLOTHING & FOOTWEAR CATEGORY on BING

Data Source: adCenter verticals Media Analytics Services

Insights & Actions

• Traffic to the Clothing & Footwear category maintained a steady but elevated level through the peak Back to School shopping season of August

• Traffic to this category then continued to climb beyond the Back to School shopping season into October thanks in part to the growing strength of the Bing launch

• 2009 saw a decreased average CPC level compared to years past with one brief spike of roughly $0.05 during the middle of August when advertisers were more aggressive with their bids during the peak B2S shopping season

adCenter data for Clothing & Footwear vertical adCenter data for Clothing & Footwear vertical

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Y-o-Y Traffic Trends Y-o-Y CPC Trends

B2S SPORTS & RECREATION CATEGORY on BING

Data Source: adCenter verticals Media Analytics Services

Insights & Actions

• Traffic to the Sports & Recreation category continued to climb through the Back to School shopping season in 2009 but also maintained an elevated traffic level well beyond the peak B2S shopping season of August into October thanks in part to the growing strength of the Bing launch

• 2009 saw average CPCs for this category maintain the high level they had in 2008 with a slightly elevated rate during the second half of August while advertisers were more aggressive with their bids during the peak B2S shopping peak season into the last minute season

• Aggressive advertisers should start their aggressive bid efforts earlier in the B2S shopping season as July has proven more active than September

adCenter data for Sports & Recreation vertical adCenter data for Sports & Recreation vertical

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Y-o-Y Traffic Trends Y-o-Y CPC Trends

B2S BEAUTY & PERSONAL CARE CATEGORY on BING

Data Source: adCenter verticals Media Analytics Services

Insights & Actions

• Traffic to the Beauty & Personal Care category really grew from the beginning of July, but rather than peak it continued to grow to even higher traffic levels well into September thanks in part to the power of the Bing launch

• 2009 saw average CPCs for this category also grow along with the traffic as advertisers looked to take advantage of the traffic trend with aggressive bids that took the average CPC from $0.30 in late June to an average over $0.40 for most of August

• Building on that growth this year, advertisers should seek to match the traffic growth with aggressive bids for the duration of the heightened traffic levels, clicks may have been lost in September 2009 when CPCs dropped but traffic continued to grow

adCenter data for Beauty & Personal Care vertical adCenter data for Beauty & Personal Care vertical

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Y-o-Y Traffic Trends Y-o-Y CPC Trends

B2S FURNITURE CATEGORY on BING

Data Source: adCenter verticals Media Analytics Services

Insights & Actions

• Traffic to the Furniture category grew from the beginning of July, with a brief peak in mid-August, but then resumed its growth to higher traffic levels into October 2009 thanks in part to the strength of the Bing launch

• 2009 saw higher average CPCs for this category throughout the Back to School shopping season, but there was very little movement in those levels showing a reticence on behalf of advertisers to be aggressive and raise bids

• Furniture advertisers who wish to capture more traffic on Bing this year should consider being more aggressive during the traffic peaks and also be vigilant of what other competitors on the space are doing for the duration of the season

adCenter data for Furniture vertical adCenter data for Furniture vertical

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Y-o-Y Traffic Trends Y-o-Y CPC Trends

B2S OFFICE SUPPLIES CATEGORY on BING

Data Source: adCenter verticals Media Analytics Services

Insights & Actions

• The Office Supplies category saw a resurgence on Bing in 2009 as traffic levels finally caught and surpassed 2007 levels during the beginning of August

• Advertisers must be encouraged to see that the 2009 CPC levels were below 2008 levels pretty much for the duration of the summer

• If traffic levels in 2010 continue to maintain the 48% higher level they’ve been averaging, I would expect to see some Office Supplies advertisers attempt to steal clicks through aggressive bidding tactics during the peak Back to School shopping season of mid-August

adCenter data for Office Supplies vertical adCenter data for Office Supplies vertical

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Top Back to School KWs (Hitwise)

BACK TO SCHOOL KEYWORDS - HITWISE

Data Source: Hitwise Industry comparison May 2009 to May 2010 Media Analytics Services

Back to School KWs   Back to School KWsschool uniforms cheap school books for collegebackpacks for school back to school dealsschool supplies school supplies listschool uniforms on sale back to school bargainsschool specialty teacher school suppliescheap school uniforms school supplies couponsschool backpacks school clothes for girlswalmart school supplies school supplies for kidsback to school supplies messenger bags for schoolcheap school supplies coupons for school suppliesfree school supplies wholesale school suppliesback to school sales rolling backpacks for schoolback packs school supplyback to school clothes school locker shelvesschool supply list wholesale school uniformsdiscount school uniforms school supply storesschool box back to schoolkids school backpacks cheap school uniforms for kidsschool bags school supplies for teacherskids backpacks for school children's backpacks for schoolschool locker accessories cheap school books

• Many of the popular Back to School keywords fall into categories for Clothing and Uniforms, Backpacks and Bags, general Back to School supplies, and Books, focus on these for top traffic opportunities.

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BACK TO SCHOOL DEMOGRAPHICS - BING

Data Source: MAI May 2010. Note: Breakouts may not total 100% due to data limitations at searcher level. Media Analytics Services

• Most of the College & Dorm related keywords were dominated by the younger college-age demographic, with an assist from the 35-49 age demographic, particularly on the dorm furniture, bedding, and refrigerator related keywords

• Kindergarten and pre-school words were dominated by the 25 – 34 and 35-49 age demographics, but some of the activities, crafts and supplies related keywords had traction in the 18-24 age group most likely from young/new teachers

• Overall women were the most popular gender demographic with regards to Back to School research with men having above average percentages on tech and generic product queries

• AdCenter’s Demographic and Gender targeting will help advertisers tailor messages to those querying these items

Keyword Age18_24 Age25_34 Age35_49 Age50_64 Age65Plus Female Male

back to school survival kit 0.00% 42.86% 42.86% 14.29% 0.00% 71.43% 7.14%

back to school 12.23% 25.90% 38.13% 10.07% 13.67% 36.55% 48.28%

backpacks 12.32% 22.55% 35.95% 16.45% 12.73% 43.55% 40.99%

cheap dorm room furniture 60.00% 0.00% 20.00% 0.00% 20.00% 40.00% 0.00%

college dorm bedding 35.29% 0.00% 30.88% 22.06% 11.76% 62.82% 16.67%

college dorm decorating 57.14% 0.00% 42.86% 0.00% 0.00% 57.14% 14.29%

dorm supplies 58.82% 3.92% 29.41% 3.92% 3.92% 62.71% 27.12%

Pacsun 34.88% 21.19% 26.94% 6.63% 10.36% 51.85% 32.05%

preschool bulletin boards 9.09% 54.55% 18.18% 0.00% 18.18% 75.00% 8.33%

Laptops 15.26% 23.70% 29.96% 16.67% 14.41% 36.33% 48.02%

preschool activities 13.02% 30.54% 32.56% 13.33% 10.54% 61.73% 20.93%

preschool crafts 14.90% 27.22% 32.38% 13.18% 12.32% 61.31% 20.44%

preschool supplies 24.39% 24.39% 48.78% 2.44% 0.00% 69.05% 21.43%

laptop computers 8.99% 15.31% 29.79% 26.89% 19.03% 38.47% 44.43%

school supplies 13.54% 29.38% 30.21% 15.83% 11.04% 57.94% 27.58%

school supplies list 20.00% 20.00% 35.00% 15.00% 10.00% 61.54% 26.92%

mini refrigerators 4.62% 26.15% 20.00% 32.31% 16.92% 39.71% 45.59%

teacher supplies 9.06% 28.52% 33.22% 14.43% 14.77% 60.78% 18.30%

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Most Clicked Beauty KWs (Bing)

BACK TO SCHOOL KEYWORDS - BING

Data Source: adCenter data, aggregate last 30 days ending May 4, 2010 Media Analytics Services

Back to School KWs   Back to School KWsBackpacks back to school hairstylesback to school welcome back to school letterschool supplies back to school dealsbulletin board ideas kindergarten activitiesfirst day of school activities preschool bulletin board ideasback to school coloring pages fall bulletin board ideasback to school activities fall hairstylesback to school bulletin boards September bulletin board ideasloft beds back to school nightwelcome back to school back to school clothesfall fashion back to school bulletin board ideasback to school pictures back to school suppliespreschool printables back to school partyfall decorations back to school fashionback to school ideas dorm refrigeratorskindergarten worksheets small refrigeratorsback to school crafts compact refrigeratorspreschool activities dorm furnitureback to school worksheets back to school shoppingback to school tips school supplies listkids backpacks preschool backpacks

• Many of the popular Back to School keywords on Bing are covered by the Clothing and Uniforms, Backpacks and Bags, general Back to School supplies, and Activities and Bulletin Boards categories, focus on these categories and terms for top traffic opportunities on Bing.

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Downstream Traffic on Back to School Keyword Categories

BACK TO SCHOOL DESTINATIONS - HITWISE

Data Source: Hitwise downstream traffic aggregated across keywords for 12 weeks up to 10/3/2009 Media Analytics Services

• Downstream traffic according to Hitwise shows the popularity of many top sites and retailers relative to their competition, if a retailer isn’t listed here we can help them identify ways to become a part of this list or adjust their position on it.

• More details on these results are available through Hitwise, and 1:1 consultations with MAS can also be helpful in addressing these results and how to improve an advertisers share on them

Back to School Sale KWs

Old Navy

Coupon Mountain

Target

Walgreens

Sears

Back to School Supply KWs

Office Depot

Abercrombie & Fitch

Target

Apple

Amazon

Back to School General KWs

Yahoo

Target

Staples

Walmart

Payless Shoes

Back to School Apparel KWs

Kohl’s

Garnett Hill

JC Penney

Office Max

eBay

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BACK TO SCHOOL KEYWORDS POSITIONAL ANALYSIS

Data Source: adCenter, August 2009 Historical Position Analysis Media Analytics Services

ML = Mainline, SB = Sidebar

Mother’s Day Click Volume by Position* Mother’s Day CTR and Average CPC by Position*

Insights & Actions

• Looking at only the performance of Back to School related keywords on Bing we see that advertisers who are below the Mainline (ML) positions suffer in click volume while also paying a premium CPC relative to the volume they produce

• More than 76% of clicks are on ads in the top 3 ML positions and more than 57% of clicks come from positions 1 & 2• The share of clicks for all Sidebar (SB) positions combined is almost 24% yet the CPCs by comparison are only 36%

discounted from the average CPCs in the ML positions• Advertisers not in the mainline are competing over 24% of clicks at a CPC that’s only 36% less than mainline positions• Advertisers must find a way to be in the top 4 positions whether their goal is volume or efficiency

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Insights & Actions

BACK TO SCHOOL AD COPY BEST PRACTICES

Data Source: adCenter August 2009 ad copy result samples from 20 Back to School retailers Media Analytics Services

• If there’s a theme to successful ad copy tactics for Back to School it’s focusing on the deals and bargains for shoppers by using phrasing like “Coupon,” “Deal,” and “Sale.”

• Other beneficial tactics include relevance to the season and shoppers by incorporating “back” (from back to school), “school,” and “student,” to your ad copy.

• As a whole bargain copy was producing average CTRs over 9% while school-related copy was averaging over 4%

Messaging Tactics That Produce CTR Lifts

Of the 20 retail advertisers analyzed for their Back to School copy this is the number of the 20 selected whoEmployed the corresponding tactics in their copy

Messaging Tactics That Produce CTR Lifts

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KEY TAKEAWAYS

OVERALL: Back to School is big in July, HUGE in August, and still a solid traffic driving opportunity in

September With the economy showing signs of life and Bing driving more traffic while its search share

continues to expand, many categories should see positive traffic growth on Bing and budget accordingly

In 2010 back to school related keywords are driving an average of 48% more traffic than in 2009

AD COPY BEST PRACTICES:Retail advertisers can gain additional share of this growing traffic opportunity by incorporating ad copy best practices, particularly coupon/deal/sale/bargain phrases in ad copy, and targeting school-related researchers and shoppers with messaging for the season1. “Coupon” in the Body and Title (provides largest CTR lift)2. “Deal” in the Body3. “Official” in the Body and Title4. “Sale” in the Body and Title5. “School” or “Student” in the Body Copy or Title respectively

ADDITIONAL BEST PRACTICES: Leverage demographic insights to target the right audience with the right message Capture the greatest traffic by focusing on the seasonal rise and fall of both Back to School

shopping habits and your category trends, with leveraging keywords from Bing & Hitwise

Media Analytics Services