2015 H1 China media scene

1. CHINA ECONOMIC OVERVIEW

2. CHINA GDP AND GDP PER CAPITA 3 Source: National Bureau of Statistics – Jun 2015 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 0% 5% 10% 15% 20% 25%GDP PER CAPITA (USD) Source: National Bureau of Statistics, IMF RMB 45,385 (USD $7,262) 2014 GDP Per Capita - China USD$10,923 2014 GDP Per Capita – Global Average +4% YOY VS. CHINA'S GDP GROWTH YEAR-ON-YEAR 8.1% 7.6% 7.4% 7.9% 7.7% 7.5% 7.8% 7.7% 7.4%7.5% 7.4% 7.3% 5.8% 6.5% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% Q1 2012 Q2 Q3 Q4 Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 7.2% Chinese economy slows down in 2015 with growth dropping to 6.5%. GDP per Capita- China inches closer to the global average.

3. CONSUMER CONFIDENCE 4 Source: National Bureau of Statistics – Jul 2015 CONTRIBUTION FACTORS • GDP distribution structure adjustment (shift from heavy industrial production based economy towards services focused enrironment) • Central bank further lower rates and loosened loan restrictions • Consistent low unemployment rate • Steady development of disposable household income • Government’s policy to encourage consumption, especially for lower tiers CHINA CONSUMER CONFIDENCE 85 90 95 100 105 110 115 Even with a slowdown in the Economy China’s consumer confidence remains well above 100 and well above the 2008 crisis levels.

4. CHINA ADVERTISING OVERVIEW

5. Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015; iResearch 2014-2015 TOTAL MONITORED AD INVESTMENT 6 17.0% -1.3% 0.2% -3.0% -18.8% -12.6% -13.2% -14.6% 4.1% -4.8% -1.9% -4.3% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth TOTAL MONITORED AD INVESTMENT (Jul 2014 - Jun 2015): RMB 1,243,336 MILLION RMB: Million H1 2015 -7% YOY Growth Advertising investment declines by 7% in 2015.

6. MONITORED SPENDING BY INDUSTRY 7 2% 18% -21% -1% 3% -10% 4% -25% 25% -18% -1% -24% 1% 11% -12% 157% -50% 0% 50% 100% 150% 200% - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Jan-Jun 2014 Jan-Jun 2015 YOY RMB: Million TOTAL MONITORED AD INVESTMENT BY SECTORS (Jan-Jun 2014 & 2015) Food and drink still dominates among all categories; Pharmaceuticals keeps stable growing pace and move its place to No.2 while toiletries drops in the opposite. Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015; iResearch 2014-2015

7. OVERALL MEDIA LANDSCAPE

8. 39% digital 61% traditional 34% digital 66% traditional 31% digital 69% traditional 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 SHARE OF TIME SPENT 2012-2015 Internet via mobile phone Internet via others TV Magazine Newspaper Radio 29% digital 33% digital 39% digital 42% digital 67% traditional 71% traditional 61% traditional 58% traditional MEDIA COVERAGE BY CHANNELS 10 18% 19% 74% 59% 33% 28% 96% 95% 62% 71% 23% 58% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 Q1 MEDIA PENETRATION 2012-2015 TV Internet via others Newspaper Internet via mobile phone Magazine Radio +9% +35% Source: CMMS Summer 2013-2015 Note: Internet in Share of time spent including PC and mobile internet. Digital media continues to grow penetration at a steady pace of 9% while Mobile internet consumption sees a massive jump in penetration of 58%.

9. CROSS TIERS MEDIA CONSUMPTION 11 Source: CMMS Summer 2013-2015 0.2 0.2 0.2 0.2 0.1 0.2 0.2 0.2 0.2 0.5 0.5 0.4 0.4 0.4 0.3 0.4 0.4 0.3 0.1 0.1 0.1 0.0 0.0 0.0 0.1 0.1 0.1 3.0 3.0 2.8 2.6 2.4 2.4 2.3 2.2 2.1 1.8 2.0 2.0 1.1 1.3 1.2 1.1 1.1 1.0 0.3 0.6 0.8 0.3 0.5 0.8 0.4 0.6 0.8 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2013 2014 Tier 1 2015 2013 2014 Tier 2 2015 2013 2014 Tier 3 2015 TIME SPENT ON MEDIA PER DAY, BY CITY TIER 2013-2015 Internet via mobile phones Internet via others TV Magazine Newspaper Radio 36% digital 41% digital 45% digital 30% digital 37% digital 41% digital 34% digital 37% digital 41% digital Tier 1 continues to consume more media while increase in Digital consumption across tiers.

10. 2.4 1.8 1.9 2.0 2.1 2.3 3.0 1.4 1.4 1.8 2.0 1.9 1.7 0.7 0.8 1.0 1.3 1.3 1.1 0.9 0.3 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Total population 15-19 20-24 25-29 30-34 35-39 40+ TIME SPENT ON MEDIA PER DAY, BY AGE GROUP 2015 Mobile Internet via mobile phone Internet via others TV Magazine Newspaper Radio MEDIA CONSUMPTION BY AGE 12 Young people continue to drive heavy digital consumption, in contrast to the 40+ age group. Source: CMMS Summer 2015 52% digital 57% digital 56% digital 52% digital 48% digital 22% digital 42% digital

11. CHINA DIGITAL LANDSCAPE

12. TOTAL POPULATION 27.8%72.2% OF NETIZENS URBAN RURAL INTERNET PENETRATION6% YOY 49% OF TOTAL POPULATION668,000,000 NETIZENS 594,000,000 89% OF NETIZENS MOBILE WEB MOBILE NETIZENS 13% YOY Nearly half the population has internet access with higher growth in mobile netizens of 13%. Sources: National Bureau of Statistics of China Dec 2014; CNNIC July 2015 DIGITAL LANDSCAPE 1,367,820,000 14

13. NETIZENS GROWTH RATE Growth rate of netizens and mobile netizens is slowing down. Sources: CNNIC July 2011-2015 485 538 591 632 668 318 388 464 527 594 15% 11% 10% 7% 6% 15% 22% 20% 14% 13% 0% 5% 10% 15% 20% 25% 0 100 200 300 400 500 600 700 800 2011 2012 2013 2014 2015 TOTAL NETIZEN & MOBILE NETIZEN GROWTH(2011-2015) Netizens Mobile Netizens Netizen Growth Mobile Netizen Growth Units: Million 15

14. 31% 32% 20% 19% 13% 12% 2% 7% 8% 6% 5% 5% 5% 4% 11% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 14-Jun 15-Jun SHARE OF TIME SPENT Video IM Game Finance Social Search E-comment Entertainment News Others MEDIA CONSUMPTION ON PC -20% -15% -10% -5% 0% 5% 10% 15% 0 100,000 200,000 300,000 400,000 500,000 600,000 Search IM Video News Social E-commerce Entertainment IT Finance Email Life Education Game Auto Marketing RealEstate OnlineRecruitment Traveling BBS MONTHLY COVERAGE BY CATEGORY Jun-14 Jun-15 YoY Growth -1% 1% Source: iUserTracker Jun 2014 & 2015, including key categories (IM) of PC software. (‘000) 5% 16 On PC, user behavior across categories remained relatively unchanged for most categories however categories like IT and finance witness big spikes in growth.

15. MEDIA CONSUMPTION ON MOBILE -20% 0% 20% 40% 60% 80% 100% 0 100,000 200,000 300,000 400,000 500,000 600,000 MONTHLY COVERAGE BY CATEGORY Jan-15* Jun-15 Growth(Jun/Jan) 22% 24% 17% 18% 12% 8% 7% 7% 5% 6% 4% 5%4% 4%3% 2% 21% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan-15* Jun-15 SHARE OF TIME SPEND IM Online Video Theme Plug-in Game Search Browser Social E-reading News&Information Online Shopping Others 2% Source: mUserTracker Jan & Jun 2015 (*not compare with Jun 2014 due to huge gap after panel change), search combine both APP and site. (‘000) 1% -4% 17 IM is the most used on Mobile and still growing. Travel witnesses massive growth in 2015

16. DIGITAL AD SPENDING BY FORMAT 18 27.7% 26.5% 28.5% 29.4% 30.8% 31.0% 31.1% 23.3% 27.1% 26.0% 27.9% 29.2% 29.7% 30.5% 29.4% 24.0% 21.2% 18.2% 16.2% 15.4% 14.3% 6.2% 7.2% 8.0% 8.6% 9.2% 9.7% 10.2% 13.4% 15.2% 16.3% 15.9% 14.6% 14.2% 13.9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015e 2016e 2017e 2018e SHARE OF DIGITAL AD SPENDING IN CHINA BY FORMAT Keyword Search EC Search & Display Display/Banner Pre-roll Others Source: 2014 China Online Advertising Report - iResearch - May 2015 Notes: “Others” include rich media, text link, classifieds, email etc. -3 pts. +2 pts. +1 pts. Ad investments witness a slight shift from display/banner towards pre-roll and search.

17. INTERNET+ BOOST FASTER TRANSFORMATION 19 KEY FEATURES OF INTERNET+ Traditional companies are expected to achieve rapid transformation under the Internet+ policy, as well as internet giants struggle for further growth. • Internet+ is a new generation of ICT (Information Communication Technology), which connect any traditional industry with internet. • It was proposed by Pony Ma (Chairman of Tencent) in NPC&CPPCC early 2015, further supported by government with action plan, and become a hot topic in China Internet Conference. CROSS BOUNDARY 跨界融合 INNOVATIVE DRIVEN 创新驱动 STRUCTURAL REMODELLING 重塑结构 RESPECT HUMANITY 尊重人性 OPEN ENVIRONMENT 开放生态 CONNECT EVERYTHING 连接一切 - 1,000 2,000 3,000 4,000 5,000 6,000 INDUSTRY INVESTMENT OF KEY DIGITAL COMPANIES IN 2014 Baidu Alibaba Tencent Qihoo360 Xiaomi Source: ITJUZI.COM

18. WECHAT OPEN CONNECTION TO ALL 20 O2O CONNECTION THROUGH IBEACON ENABLED SHAKE FUNCTION HARDWARE CONNECTION THROUGH OPEN API PHOTO SHARING DEVICE SPORTS TRACKING DEVICE HEALTH TRACKING DEVICE TOY INTERACTIVE FUNCTION TV INTERACTIVE FUNCTION AIR CONDITONER CONTROL

19. THE INTERPRETATION OF NEW ADVERTISING LAW 21 New Advertising Law Approved on：2015.04.24 Force on：2015.09.01 Detailed Rules：41 Added Rules：33 All Rules：75 Introducing a More Detailed Regulatory Framework The existing law is very short and has been widely criticized for being too vague. The amended law is almost double in length and is much more prescriptive. The key elements of the rules cover alcohol, health food, medicine, medical device advertising etc. For example, Drinking gestures are banned in alcohol advertising; no one is allowed to promote products of medicine and health food advertising. Focus on Children and Celebrities Under the new law, children under age 10 cannot endorse products at all and celebrity endorsers can be held responsible for false claims in ads. If someone makes misleading claims about the product，they will be prohibited endorsement for 3 years. Tightening Oversight of Mass Media Advertising Release Behavior Any advertisement published via mass media shall be marked conspicuously as "advertisement" so as to distinguish it from other information and avoid misleading consumers. Radio stations and TV stations shall, when publishing advertisements, comply with the provisions of the relevant authorities under the State Council on the length of time and means of publishing, and provide clear indications on the length of time of advertisements. Added a Slew of Rules Targeting Internet Users Internet users must be able to close a pop-up ad with a single click, an EDM must contain the users real identity, including their contact details, and any other form of electronic direct marketing is prohibited unless the recipient has consented. "False Advertising" Defined The new law clarifies the scope of "false advertising". This would include, for example, fabrication of product efficacy, or claims about a product/service which do not match the actual conditions and which have a substantive effect on the decision to purchase. 1 2 3 4 5

20. MOBILE

21. REACH BY DEVICE 24 Source: CNNIC Jan 2010 – Jul 2015 Units: Million Source: MIIT Communication Operation Report, May 2015 83% 80% 82% 79% 78% 71% 71% 70% 70% 70% 71% 68% 35% 40% 50% 49% 49% 45% 46% 47% 44% 44% 43% 43% 69% 72% 72% 70% 73% 72% 74% 79% 81% 83% 86% 89% 35% 34% 16% 16% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% INTERNET PENETRATION BY DEVICE Desktop Laptop Mobile Phone Tablet TV 401.6 485.3 466 97.3 178 0 100 200 300 400 500 600 2013 2014 2015 TOTAL 3G & 4G USERS IN CHINA 3G Users 4G Users Mobile reach now overtakes desktop and laptop which have remained flat for sometime. Meanwhile more mobile users upgrade to high-speed 3G and 4G connections.

22. TIME SPENT ON MOBILE PHONE VS. OTHER DIGITAL 25 Sources: CMMS Summer 2015 1.4 1.4 1.8 2 1.9 1.7 0.7 0.8 1 1.3 1.3 1.1 0.9 0.3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Total population 15-19 20-24 25-29 30-34 35-39 40+ TIME SPENT ON MOBILE INTERNET VS. DESKTOP INTERNET Internet via others Internet via mobile phone 36% on mobile phone 42% on mobile phone 42% on mobile phone 39% on mobile phone 37% on mobile phone 35% on mobile phone 30% on mobile phone Teens and college-age users are the heaviest mobile consumers, with mobile phones taking up 42% of digital consumption.

23. SMARTPHONE OS 26 20.1% 79.0% 0.5% 0.1% 0.3% 2015 JUNE SMARTPHONE SALES iPhone Android Windows Blackberry Others Source: Kantar Worldpanel Jun 2015 MEDIAN HOUSEHOLD INCOME BY OPERATING SYSTEM Source: CMMS Summer 2015 Unit：RMB 9,060 11,081 9,807 8,331 7,992 0 2000 4000 6000 8000 10000 12000 Android iOS Windows Phone Blackberry Other OS IOS continues to expand share with increasing ads investment, driven by need of target higher income mobile users.

24. MOBILE VS. PC ADS INVESTMENT 27 93% 88% 81% 72% 61% 53% 48% 7% 12% 19% 28% 39% 47% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015e 2016e 2017e 2018e MOBILE VS. PC ADS INVESTMENT PC Mobile Share of Mobile investments continue to grow and expected to reach 52% by 2018. Source: iResearch Internet Advertising Industry Report, Apr 2015, mobile excludes SMS.

25. ADVERTISING FORMATS ON MOBILE 28 19.8% 20.3% 28.5% 49.9% 50.6% 51.0% 51.0%7.2% 12.4% 22.4% 19.8% 22.5% 24.2% 26.7% 12.4% 17.3% 12.9% 6.6% 5.8% 5.0% 4.3% 0.5% 1.1% 4.1% 11.0% 12.8% 13.6% 13.3% 51.6% 42.6% 30.0% 11.7% 7.2% 4.7% 3.4%8.3% 6.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 2015e 2016e 2017e SHARE OF MOBILE AD SPENDING IN CHINA BY FORMAT Search In-app Browser Video SMS Others -3 pts. +21 pts. +7 pts. -6 pts. Source: eMarketer Jan 2015, search may also include some display ads Search continues to grow share of mobile advertising, taking share from SMS, in- app and browser display ads.

26. FORMATS & CASES

27. DISPLAY GAMIFICATION FUNCTION FOCUS ON STORYTELLING. USE SLIDESHOW OR ANIMATION TO TELL THE BRAND/PRODUCT STORY OR THE MECHANISM OF A CAMPAIGN INTEGRATE BRAND/PRODUCT INTO A MINI GAME TO BOOST ENGAGEMENT AND SHARING SERVE AS A LONG TERM FUNCTIONAL MOBILE PAGE, WHERE CONSUMER CAN FIND SERVICES SUCH AS E-COMMERCE. KEY WAYS OF H5 USAGE 30

28. NATIVE EXPERIENCE 31 《这个陌生来电你敢接吗？》 Incoming Call from Avengers Dianping played a virtual call game from character of The Avenger 2 to promote its discounted movie tickets, which is the first widely distributed campaign using the “incoming call” interactive. 《吴亦凡即将入伍》 The Unexpected Entrance of Kris Wu Tencent game WeFire attracted consumers’ eyeball with a news-like H5 page, to broadcast rumor of celebrity Chris Wu joining army, ended with Chris jump into screen to clarify it himself. 《滴滴打车再见》 The Goodbye of Didi Taxi Didi leveraged the mobile phone interface by testing consumers to keep only one APP, and make it a teaser for its new branding campaign, claiming even the last one will be beaten by Didi. Imitative H5 interactives tailor-made for the native environment and occasions are able to generate surprises and further drive to viral.

29. CONNECTED EXPERIENCE 32 Fall in Love with Summer Six God Love More Mercedes-Benz Connecting two mobile phone through QR code becomes a new trend on Valentine’s Day. Utilizing the appeal of love couple, Mercedes-Benz and Six God both launched a mobile campaign by this mechanism on Chinese Valentine’s Day (Qixi). One user scan the QR code on another’s phone, then the animations in both phones will go synchronous. Multi-screen interactives now able to transform and cater to varied viewer type with experiences that connect them to real people offline.

30. VIRTUAL EXPERIENCE 33 Yili cooperated with Baidu to show their global factories and production lines in a close distance. Scan the milk package with Baidu Show virtual earth with AR technique Visit Factory introduced by Baidu Robert assistant Duer (度秘) See real production line with Baidu panoramic technique Durex build a virtual art museum to deliver brand spirit and further link to sales. Interactives now supported with 3D or AR tech with ability to connect virtual world with reality. Global Factory Tour Yili Virtual Museum Durex

31. 34 Mobile is quickly becoming the devise for convergence between online and offline. The growth of mobile will be further boosted by the government's new Internet + Policy.1. When creating H5 interactives, keep in consideration the environment and the purchase journey stage the consumers might be in. Native format help build up relevance and enhance creative effectiveness. 2. Make good use of technology to deliver greater brand experience however make sure it is aimed at achieving business objective.3. VIEWPOINT ON MOBILE Use mobile to deliver greater brand experience however do not compromise on reach.4.

32. TV & OTV

33. Source: CMMS Summer 2015 59% watch OTV 98% watch TV 54% watch both 5% watch OTV only OF THE TV/OTV VIEWING POPULATION: 44% watch TV only (+4%) (-4%) (+0.3%) (+0.3%) (+4%) 43% 45% 46% 45% 43% 41% 38% 57% 55% 54% 55% 57% 59% 62% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% All 15-19 20-24 25-29 30-34 34-39 40+ SHARE OF TIME SPENT ON TV/OTV – OTV VIEWERS OTV TV +1% +1% +1% +1% +2% +2% +2% TV & OTV COVERAGE 36 TV only watchers drops by 4% as multi-screen viewing habits continues to grow.

34. HOT SHOWS ON OTV 37 Source: TV from CSM national rating, include re-broadcast, period cut by one week after first round broadcast; OTV include both PC & mobile, claimed by vendors by Aug 2015. Impression per episode('000) TV* OTV 奔跑吧兄弟第二季 Running Man 2 603,006 6,232,153 我是歌手第三季 I am a singer 3 550,610 1,005,309 最强大脑第二季 Super Brain 2 379,054 832,097 花儿与少年第二季 Divas hit the road season 2 370,470 361,405 PROGRAM IMPRESSIONS PER SEASON (‘000) TV* Online Video * Shows with strong viewership on TV also have strong OTV viewership.

35. MORE TV STATION JOIN OTV BATTLE 38 Following Hunan PSTV, Zhejiang PSTV also officially launched their own online broadcast platform “China Blue TV” (CZTV.com). Highly associated with The Voice of China “China Blue TV” search index: Peak always happen on VOC S4 broadcast day Same trend for website traffic even from S3 before the official launchPV UV

36. TV & OTV INTEGRATION 39 HALF HOUR DAILY CLIPS ON TV 24H/7D LIVE BROADCAST BULLETS SCREEN REAL TIME CHATTING 360 DEGREE PANORAMA VIEW Tencent launched a long term survival challenge reality show, which was promoted across multi-platform. ALWAYS ON ONLINE FOLLOW & DISCUSS CUSTORMIZ ED APP VOTE & CHEER

37. TV

38. MONITORED TV ADVERTISING 42 RMB: Million TOTAL MONITORED TV AD INVESTMENT (Jul 2014 - Jun 2015): RMB 912,464 MILLION -1.6% -1.3% -4.9% -8.6% -11.2% -14.7% -5.7% 7.1% -4.7% -1.7% 1.9% 1.8% -20% -15% -10% -5% 0% 5% 10% 62,000 64,000 66,000 68,000 70,000 72,000 74,000 76,000 78,000 80,000 82,000 84,000 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth H1 2015 0% YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 TV investment growth remains slow even though TV has the highest share on investments.

39. PRIME TIME TV AD INVESTMENT 43 RMB: Million TOTAL MONITORED TV IN PRIME TIME (17:00-24:00) AD INVESTMENT (Jul.2014-Jun.2015): RMB 597,775 MILLION 3.1% 3.9% 0.7% -2.9% -6.8% -9.0% -5.0% 7.8% -8.4% -5.4% -1.7% -2.9% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 0 10,000 20,000 30,000 40,000 50,000 60,000 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth H1 2015 -3% YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Prime time investments are similar across months. H1 2015 sees a slight decrease in the average investment.

40. TV AD INVESTMENT BY CATEGORY 44 RMB: Million TV MONITORED AD INVESTMENT BY SECTORS (Jan-Jun 2014 & 2015) 19% 0% 13% -23% 1% 4% -10% -13% 29% 10% -15% 29% -22% -26% -25% -4% 13% 14% -12% -11% 179% -50% 0% 50% 100% 150% 200% 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Jan-Jun 2014 Jan-Jun 2015 YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Pharmaceuticals continue to strengthen investments on TV, while massive -23% drop for toiletries.

41. AHTV CONDUCTED THE LARGEST REVISION IN 18 YEARS ON JULY 2015 45 Data Source：Infosys 2013/1/1-2015/6/6；1800-2330； Target：P20-45 ；cities group 1.4 1.5 1.8 1.7 1.6 1.5 1.4 1.2 1.3 1.2 1 1.2 1.4 1.6 1.8 2 2.2 2013 Q1 2013 Q2 2014 Q1 2014 Q2 2014 Q1 2014 Q2 2015 Q1 2015 Q2 2015 Q1 2015 Q2 2013-2015 part of STV’s market share AHTV Shandong STV Dragon STV Beijing STV Market share% Mon Tue Wed Thu Fri Sat Sun 19:30 The first dolphin theatre (1) 20:30 The first dolphin theatre (2) 21:20 Ten years younger Super Clinic supernanny The end of the world into boys and girls Super idol /Law of the jungle Good luck belongs to you How the Super scholar Was Tempered 22:00 Good luck Best choice BABY GO I love the peach garden 22:30 Chinese far mers song Super idol replay23:00 Beautiful reinforcem ent The masters of cooking Distance- close Distance-close Mon Tue Wed Thu Fri Sat Sun 19:33 The first dolphin theatre (1) 20:30 The first dolphin theatre (2) 21:20 Ten years younger BABY GO MythBuster s The Survival Distance- close Super Speaker To find you 22:00 Starlight dolphin theatre (1) Starlight dolphin theatre (1) 22:55 Starlight dolphin theatre (2) Starlight dolphin theatre (2)23:05 Starlight dolphin theatre (1) AHTV shifted focus from dramas and introduced 15 big ticket programs. Original arrangement New arrangement 剧集时长综艺时长其他剧集时长综艺时长其他剧集时长综艺时长其他 Different type of programs of AHTV broadcast time percentage during 1930-2345 Before: the drama broadcast time percentage is about 70% After: the variety broadcast time percentage is about 50% Before “One Drama, Two Satellites” issued After “One Drama, Two Satellites” issued After revision

42. All TV stations and program owners can connect to Wechat system and activate audiences with shake function. WECHAT OPEN SHAKE FUNCTION FOR TV 46 Improve TV Rating Expand Content Connect Commercial Value 180mil+ participants, 60+TV stations, 110+ programs, 100mil+ coverage excluding gala. Source: Tencent, May 2015

43. 3RD PARTY PROVIDERS HELP TO BUILD BETTER CONNECTION 47 TV LINK: TV CONTENT MOBILIZATION TV WATCH: LIVE TV INTERACTIVE 3rd party platform (e.g. TVM) also provide interactive service to connect mobile consumers with TV stations/programs through or throughout Wechat. TV Studio TVM system Connect through mobile Mobile Users

44. OTV

45. 461MILLION USERS 69%* REACH AMONG ALL NETIZENS 8 DAYS PER MONTH 52 MINUTES PER USAGE DAY PC MOBILE 63% REACH AMONG ALL NETIZENS 13 DAYS PER MONTH 43 MINUTES PER USAGE DAY ONLINE VIDEO OVERVIEW 50 Source: Total netizen number from CNNIC, PC & Mobile reach number (based on CNNIC netizen), days and time spent from iUserTracker & mUserTracker Jun 2015; * PC reach has been adjusted to align with CNNIC penetration limit.

46. MEDIA SHARE OF TIME SPENT ON PC AND MOBILE TIME SPENT BY VIDEO PLATFORM 51 PC 2% +2% -5%-2% Source: iUserTracker & mUserTracker Jun 2014 & 2015, PC exclude software +1% 4% 20% 19% 11%11% 8% 6% 4% 4% 3% 2% 12% iQiyi Youku LeTV Sohu PPTV Tudou iMangoTV Tencent Xunlei CNTV Others PC viewership remained comparatively more stable than mobile, Youku’s leads however share slight decline with the growth of IQIYI. Mobile Jun-2015Desk Jun-2015 30% 27% 16% 8% 6% 5% 5% 2% Youku iQiyi Tencent PPS Sohu PPTV Tudou LeTV Funshion Others -2% +7% MOBILE

47. Source: Claimed Publisher Data VIDEO VIEWS BY DEVICE 52 Viewer prefer tablets and phone for online video especially when logged on to Tencent, Youku&Tudou video platforms. 20% 30% 45% 46% 51% 54% 54% 55% 67% 73% 55% 46% 48% 38% 39% 36% 27% 26% 7% 16% 9% 7% 12% 7% 10% 18% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Tencent Youku&Tudou PPTV MangoTV iQiyi&PPS LeTV Sohu Video Baofeng Funshion VIDEO VIEW % BY DEVICE PC PHONE TABLET

48. ONLINE VIDEO ADVERTISING REVENUE 53 Source: iResearch Yearly Data Release 2014 – Online Video 0.2 0.5 3.2 7.3 13.5 21.9 31.8 6.5 9.3 12.0 15.6 18.8 20.8 22.3 3% 5% 21% 32% 42% 51% 59% 0% 10% 20% 30% 40% 50% 60% 70% 0 10 20 30 40 50 60 2012 2013 2014 2015e 2016e 2017e 2018e 2012-2017 ADVERTISING REVENUE FOR ONLINE VIDEO (MOBILE & PC) Mobile Advertising Non-Mobile Advertising % of All OTV Advertising RMB: Billion Mobile video share of revenue grows massively from 21% to 32% in 2015.

49. YOUKU & TUDOU’S CHANGE OF STRATEGY FOCUS PGC + UGC MORE THAN 10 MIL CHANNELS MORE THAN 10 BIL INVESTMENT “The end of pure video media, evolution from a video platform, to an entertainment eco-system” Fan & Fun Integrated Content Marketing IP focused Innovative Interactive Integrated I 4 1. SHOW 2. FAN 3. CULTURE 4. JOURNEY 1. Eyeballs 眼球经济 2. Fan Economy 粉丝经济 3. Vertical Marketing 垂直人群 4. Social Hot Topics 社会话题 54

50. LETV: MULTIPLE SPORTS PPTV: LFP TENCENT: NBA IQIYI: CHINA OPEN THE CONTENT COMPETITION EXPAND TO SPORTS PROGRAM 55 With the content competition turning red-hot, and release of sports strategy from government, video platforms are expanding their battlefield to sports area. 500 mil: exclusive online broadcast right for NBA in next 5 years 250 mil EURO: exclusive online broadcast right for LFP in next 5 years Exclusive online broadcast right for China Open from Oct 2015-2018 Get broadcast right for 120+ sports competitions in past 2 years.

51. FORMATS & CASES

52. PRODUCT PLACEMENT THROUGH HOLOGRAPHIC PROJECTION POST-PRODUCTION CONTENT PLACEMENT 57 PRODUCT PLACEMENT THROUGH MAGIC POST New technology allows brands to do product placement in online programs after production.

53. WATCH & BUY ON TV 58 VARIETY SHOW TO BUY DRAMA TO BUY ADS TO BUY TV station and programs now are able to link all content to purchase. 3 spots of interactive ads open during “Dad, where are we going” S3: Wukonglicai, Ly.com and Inoherb.

54. 59 Purchase function are placed on relevant video content, for higher noticeability and conversion. ORIGINAL COOPERATION CELEBRITY COOPERATION CATEGORY PRODUCT CO-OP Note: coming soon in iQiyi WATCH & BUY IN OTV

55. SKIPPABLE PRE-ROLL 60 Key video platforms now allow consumers to skip pre-roll therefore advertisers only pay for the true view (actual exposure). YOUKU & TUDOU 享看广告 IQIYI 悦享看 BUYING MODEL CPV (0.3/PER VIEW, >8s) CPM (200/CPM) REGULAR CHARGE By pre-estimated views, or by actual delivery if lower than estimation By actual delivered impression SPECIAL CHARGE By baseline CPM (5s pre-roll) If viewer rate lower than 5% Pause when bounce rate too high LINK OUT 2 Links 1 Link GEO-TARGETING No YES (extra cost) Exclusive displayed 1-3 minutes long Skippable after 5 seconds Charge after 30 seconds Frequency cappingPC Only KEY DIFFERENCES

56. CASE: SMART CREATIVE PLAY 61 L'Oréal group make advertising on OTV more noticeable by combining “display” with video and adding strong call for action message.

57. DRAMA VARIETY SHOW CASE: RIO’S OCCASION CONTENT PLACEMENT 62 From popular drama My Sunshine to hot variety show Running Man, RIO invests on a series of content placement as the look to build strong association with friends gathering.

58. CASE: HOT ONLINE SHOW SPONSORSHIP 63 i MATCHING CONCEPT FLEXIBLE FORMAT COMPREHENSIVE PRESENCE Make fun of advertiser Simple but funny Tailor-made style Contestant’s clothes “Qipa” & “The Unusual Way” With the rise of online self-produced programs, U CAN U BIBI becomes one of the most popular show that achieved highest bidding (50 mil for S2) among all online sponsorships. It also developed a special style of delivering brand message for advertisers such as METERSBONWE.

59. CASE: MENGNIU FIRST AD FOR FIRST DAY 64 Teaser - Raise Curiosity 5 Weibo posted by Deluxe during 5 days before new year to warm up for the new release, get 64k forwards, 12.7k comments Warm up - Create Hot Topic Media and KOL joined the discussion, achieved 90 mil coverage, 61.6k forwards and 15.4k comments Tipping Point - Interactive Live Topic + First Ad Release Host invited audience to guess and count down for the new year, together with first 90s TVC release, which delivered the brand value of “better 2015” at the most relevant moment. Mengniu associated with Hunan PSTV for their New Year celebration live broadcast. The brand welcomed the first day of 2015 with their new ad which gained massive attention. At the same time it created interactive on social supported by impact display cross big digital platforms

60. 65 To build brand association with content look to go beyond single devise consider TV and OTV ( PC +Mobile). Try to leverage all elements of the content such as celebrity, fans, events etc. 1. Consider post-production opportunities if budget doesn’t allow for in program integration, however all initiatives should always connect and drive to brand platforms.2. Test True View pre-roll, compare visits and actual conversion per reach point for regular vs True View pre-roll.3. Look to collaborate with online PGC & UGC program opportunities to increase interaction and deliver brand experience in a native environment.4. VIEWPOINT ON VIDEO & OTV

61. SOCIAL

62. 606* MILLION USERS 77%* REACH AMONG ALL NETIZENS 21 DAYS PER MONTH 29 MINUTES PER USAGE DAY PC MOBILE 87% REACH AMONG ALL NETIZENS 19 DAYS PER MONTH 39 MINUTES PER USAGE DAY SOCIAL OVERVIEW 68 Source: Total netizen number from CNNIC (*include and refer to top one “IM”), PC & Mobile reach number (based on CNNIC netizen, mobile also include IM), days and time spent from iUserTracker & mUserTracker Jun 2015; Note PC also include social shopping here, while mobile doesn’t.

63. 71% 7% 5% 4% 6% QQ Q-Zone Sina Weibo Aliwangwang Baidu Tieba Qtalk Waiwai Sina Blog Others 44% 41% 6% 2% 3% Wechat QQ Sina Weibo Q-Zone Momo Baidu Tieba Qiushibaike QQ Light Others 11% -5% -1% 5,156,434,000 hours 38% of TTL social time spent +3 % YOY 8,584,827,000 hours 62% of TTL social time spent +139 % YOY +3%-2% -1% TOP SOCIAL PLATFORMS ACROSS DEVICES 69 Source: iUsertracker & mUsertracker Jun 2015 SHARE OF TIME SPENT ON SOCIAL (Social includes IM, SNS, Weibo,Blog) PC MOBILE Wechat drives the growth in share for Social on Mobile to 62%.

64. MONTHLY REACH OF TOP PROGRAMS 70 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% PC - SOCIAL REACH(%) QQ Q-Zone Sina Weibo Baidu Tieba Aliwangwang Douban Tian Ya Source: iUsertracker & mUsertracker Jun 2015, mobile data doesn’t include 2014 since it changed panel in Jan 2015. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MOBILE - SOCIAL APP REACH* (%) Wechat QQ Sina Weibo Qzone Momo Wangxin Baidu Tieba ChatOn No significant movement among the top 10 platforms on both devices.

65. VERTICAL SOCIAL APPS 71 Q&A SOCIAL PICTURE SOCIAL SPORTS SOCIAL MOM SOCIAL CAREER SOCIAL Vertical platforms driven by diverse consumer needs and interests. - 1,000 2,000 3,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Monthly Coverage (K'000) 3,000 3,500 4,000 4,500 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Monthly Coverage (K'000) 2,600 2,800 3,000 3,200 3,400 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Monthly Coverage (K'000) - 500 1,000 1,500 2,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Monthly Coverage (K'000) - 200 400 600 Monthly Coverage (K'000)

66. FORMATS & CASES

67. WECHAT OPEN MOMENT ADS SYSTEM TO ALL 73 1 2 3 4 5 AVATAR + NAME PROMOTION TAG LINK TO DETAILS PICTURES (9 MAX) LIKE / COMMENT EXPOSE TO HIGH ACTIVE USERS EXPOSE TO MORE OF THEIR FRIENDS IF THEY INTERACTIVE WITH THE ADS DATA ANALYSIS FROM WECHAT ADS ENGINE FEEDS 4+ FOR ADS TO BE DELIVERED POSITION 5th AFTER THE 4+ FEEDS TIME SPAN 6H WITHOUT INTERACTIVE RESERVED 7D & ONE AD TO ONE PERSON IN 48H VIEWABLE 100% ADS SHOWN IN THE SCREEN EXPOSURE 3WAYS FEEDS, DETAILED PAGE, SHARE OUT PROTECT 10MINS CHARGE ONCE FOR FEED ADS* PROTECT 4MAX CHARGE TIMES WITHIN 7 DAYS FORMAT MECHANICS EXPOSURE COST 40 CPM WITHOUT GEO-TARGETING 140 CPM FOR BJ&SH TARGETING 90 CPM FOR OTHER KEY CITY TARGETING 1.1X FOR GENDER TARGETING 1.2X FOR LINK TO DETAILS

68. NATIVE WECHAT EXPERIENCE 74 The movie “Tiny Time” are promoted through series of fake Wechat dialogues posted by actors and actress. Users are also invited to check more details after sending out a default message. L’Oreal Paris promote Cannes campaign by creating a fake moment page, in which celebrities are posting latest content in Cannes Film Festival, and consumers can also like or type in comment, exactly like how they do in the real moment. 《时代姐妹花，邀你来撕逼》 The Invitation of Tiny Time 《戛纳明星朋友圈》 The Moment of Celebrities in Cannes Brand look to deliver stronger brand experience with native advertising on Wechat.

69. CASE: CHANDO DELIVERS DIFFERENT MESSAGES TO DIFFERENT GROUPS 75 Moments Ads Three different versions of landing page Vivian Xu’s “private” moment page To leverage the current hot topic ‘sleepless new moms’, Chando utilized its spokesperson Vivian Xu and launched a Wechat campaign to promote anti-aging product “Sleep” cream. Different from other H5 interactive, Chando gave out 3 different versions of communication and was able to become a part of the conversation. Share to separate groups in real moment in Vivian’s tone

70. China World Trade Corporation - Milan Expo campaign Wanda Half-year Celebration HONDA MODE Launch QUICK FLASHING IN WECHAT MOMENTS 76 To achieve this effect, participants need to spontaneously change their avatar and post similar information required by organizer/brand in their personal moments. Flash mob activity could be a way to activate fans and drive public attention in short time without paid ads, but it requires loyalty or attractive incentive.

71. 77 Use Wechat Moment Ads to reach out to a large audience base. Include call to action mechanism which drives consumers to sign up for the brands’ Wechat accounts for always on interaction. 1. Use Wechat to deliver richer brand experience while Weibo to create hot topics to keep brand fresh in the category. Brand needs to find the right balance depending on the objective. 2. Use other social platforms to strengthen brand specific association and incremental reach. Also can be used to reach the core target.3. VIEWPOINT ON SOCIAL

72. MAGAZINE AND NEWSPAPER

73. 31% 68% 63% 31% 16% 95% 30% 64% 67% 46% 16% 96% 28% 59% 71% 58% 19% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Magazine Reach Newspaper Reach Internet Reach Mobile Internet Reach Radio Reach TV Reach 2013-2015 REACH OF PRINT MEDIA 2013 2014 2015 PRINT MEDIA OVERVIEW 80 Source: CMMS Summer 2013-2015 14.6 minutes on magazine 35.4 minutes on newspaper DAILY TIME SPENT ON PRINT Print readership continues to decline as viewer shift online.

74. -10.9% -17.9% -18.4% -15.2% -22.7% -19.9% -14.3% -25.8% -29.1% -25.9% -30.1% -26.6% -35% -30% -25% -20% -15% -10% -5% 0% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 July 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth Total Monitored NP Ad Investment (Jul 2014 - Jun 2015): RMB 71,455 Million RMB: Million NEWSPAPER AD INVESTMENT 81 H1 2015 -26% YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Newspaper advertising spend declined dramatically, falling by 26% YOY for H1 2015.

75. NP Monitored Ad Investment By Sectors (Jan-Jun 2014 & 2015) The Ad spend in Newspaper decreases among all categories. NEWSPAPER AD INVESTMENT BY INDUSTRY 82 RMB: Million -27% -44% -17% -7% -28% -45% -2% -23% -28% -40% -21% -29% -30% -2% -56% -47% 2% -15% 71% 148% -56% -100% -50% 0% 50% 100% 150% 200% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Jan-Jun 2014 Jan-Jun 2015 YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015

76. MAGAZINE AD INVESTMENT 83 Total Monitored MG Ad Investment (Jul2014 - Jun2015): RMB 16,902 Million -13.5% -11.2% -9.6% -11.1% -13.4% -12.3% -10.8% -3.8% -14.1% -18.7% -20.8% -16.4% -25% -20% -15% -10% -5% 0% 0 500 1,000 1,500 2,000 2,500 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth RMB: Million H1 2015 -15% YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Declining investment on magazine slipped for 15% YOY for the first half of 2015.

77. MAGAZINE AD INVESTMENT BY INDUSTRY 84 MG Monitored Ad Investment By Sectors (Jan-Jun 2014 & 2015) -14% -8% -19% -26% -15% -25% -30% -17% -22% 2% -32% -19% -18% -19% -35% -36% -5% 41% 94% 80% -62% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 0 500 1,000 1,500 2,000 2,500 Jan-Jun 2014 Jan-Jun 2015 YOY Growth RMB: Million Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Ad spend on magazine drop in all the key categories.

78. FORMATS & CASES

79. CASE: VIVO CREATE HOT TOPIC WITH SPECIAL EXECUTION IN NEWSPAPER 86 D1: Scan QR code to Wechat page, with teaser message “See you at Wechat on May 14 th D2: Wechat ads on May 14th As a teaser of new product launch, Vivo bought 4 full pages in People’s Daily with most of the space in blank except for eye-catching copy and QR code, which were also handed to attendees during the launch event hosted on the same day generating curiosity and talk ability.

80. 87 When investing in magazine & newspaper, think in a long term view, be more focused in title selections to leverage key assets of major publication.1. Use print to further widen reach however need to link or drive traffic to other media especially brand owned platforms. This will help maximize the impact of print.2. VIEWPOINT ON PRINT

81. RADIO

82. 90 Source: CMMS Summer 2013-2015 1 hour 5 minutes on radio -3.5% YOY Car Owners Non Car-Owners 58 minutes on radio 1 hour 11 minutes on radio DAILY TIME SPENT ON RADIO (YESTERDAY) -1.7% YOY 16% 48% 13% 16% 49% 10% 19% 53% 13% 0% 10% 20% 30% 40% 50% 60% Total Population Car Owners Car Non-Owners MONTHLY REACH OF RADIO 2013-2015 BY CAR OWNERSHIP 2013 2014 2015 -6.8% YOY Total Population RADIO OVERVIEW Radio continues to increase reach among car owners, however time spent per person declines with increase in light listeners.

83. 45% 8% 3% 3% 2% 2% 2% 1.3% 0.7% 0.6% 0.3% 2% 7% 2% 2% 1% 1% 1% 0.4% 0.3% 0.3% 0.4% 57.6 63.6 57.6 58.8 70.8 52.8 45.6 62.4 73.8 79.8 88.8 57.6 79.2 57.6 58.8 77.4 66 76.2 57 67.2 73.2 54.6 0 10 20 30 40 50 60 70 80 90 100 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Private Car Home Taxi Bus Company Public Area Park/Green Belt School Metro Cycling/Walking Company Car LOCATION & TIME SPENT - CAR OWNERS VS. NON CAR OWNERS Petration - Car Owners Petration - Non Car-owners Time Spent - Car Owners Time Spent - Non Car-owners RADIO CONSUMPTION 91 MinutesPenetration Car owners spend averagely more time in radio when travelling in other transportations, however non car-drivers spend more when staying at fixed places.

84. RADIO AD INVESTMENT 92 TOTAL MONITORED RD AD INVESTMENT (Jul 2014 - Jun 2015): RMB 36,356 MILLION 23.0% 23.1% 17.2% 19.6% 28.3% 19.6% -2.4% 17.2% -3.6% 7.6% 6.7% 10.5% -10% -5% 0% 5% 10% 15% 20% 25% 30% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY GrowthRMB: Million H1 2015 6% YOY Growth Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Radio investments grow at a steady pace of 6%.

85. RD MONITORED AD INVESTMENT BY SECTORS (Jan-Jun 2014 & 2015) 17% 11% -6% -6% -10% 13% 0% 25% 26% 20% 8% -8% -3% 40% 86% -4% -13% -20% -7% 119% 2% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan-Jun 2014 Jan-Jun 2015 YOY Growth RMB: Million RADIO AD INVESTMENT BY CATEGORY 93 Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 Business & services, automobiles are top spenders and they continue to grow their investments on Radio.

86. FORMATS & CASES

87. CASE: LIVE BROADCASTING IN CADILLAC 95 • Monday - Tuesday: free oral broadcast + ads clip, as preview for Friday • Friday: freestyle oral broadcast, with car features introduced also through HIT FM Weibo during 16:00 - 19:00 CADILLAC cooperated with HIT FM, and delivered special features of ATS-L through interactive broadcasting experience, with one DJ seat in the room and another in the moving car, a first for the radio station.

88. 96 Radio works well to reach middle and upper classes, especially car owners however due to the high clutter need to create stand out communication.1. Leverage RJs and in program integration to stand out and also drive local area activations at relatively lower costs.2. VIEWPOINT ON RADIO

89. OOH

90. OOH AD INVESTMENT 98 Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 TOTAL MONITORED OOH AD INVESTMENT (Jul 2014 - Jun 2015): RMB 40,640 MILLION 14.6% 11.2% 14.8% 14.5% 8.7% 7.7% 0.9% 5.7% 4.0% -3.7% -3.3% -9.2% -15% -10% -5% 0% 5% 10% 15% 20% 2,800 2,900 3,000 3,100 3,200 3,300 3,400 3,500 3,600 Jul 2014 Aug Sep Oct Nov Dec Jan 2015 Feb Mar Apr May Jun Ad Investment YOY Growth RMB: Million OOH investments remain stable, with only 1% decline in H1 2015. H1 2015 -1% YOY Growth

91. OOH AD INVESTMENT BY INDUSTRY 99 Media: Exclude all no-cost items & Hong Kong Media Source: CTR AdEx Power 2014-2015 OOH Monitored Ad Investment By Sectors (Jan-Jun 2014 & 2015) 2.3% 4.5% 10.8% 15.3% 2.7% -0.2% 21.5% -5.2% 13.9% -39.3% -26.3% 7.6% -15.3% 15.6% -27.8% -19.3% -3.7% -5.7% -10.5% 200.1% -32.1% -1.3% -100% -50% 0% 50% 100% 150% 200% 250% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jan-Jun 2014 Jan-Jun 2015 YOY Growth RMB: Million Beverages & Food reduce investment by 26% while Business & Services, Real Estate and Post & Communication continue to increase investments.

92. TOP 10 OOH ADVERTISER IN 2015 H1 100 Online brands join in the competition, with 4 out of 5 new entries coming from digital roots - 58.com, Tu’niu, Liepin and Tmall; Mengniu also show strong presence in H1 2015; KFC and Nongfu Spring still secure their top 2 position. Source：CODC Jan-Jun 2015 482 505 598 604 614 619 621 634 794 1,176 - 200 400 600 800 1,000 1,200 1,400 Tmall Liepin.com Suning Appliance Mengniu Gold Jiangnan Tuniu.com Suning Commerce 58.com Nongfu Spring KFC Growth(vs Jan- Jun,2014) 27% -29% 109% 124% 70% 61% 146% -4% 96% 21486% RMB: Million

93. DIFFERENT MEDIA WITH DIFFERENT DEVELOPMENT 101 Screen, Metro and Airport show stable growth with development of tier 2&3 cities. Source: CODC Jan-Jun 2014 & 2015 Description: Metro, bus and taxi screens are included in screen media; Railway expand tracking coverage into more stations in 2015. 31,157 12,336 4,627 4,237 3,086 2,436 749 443 35,107 13,466 4,717 4,921 3,029 2,440 730 2,440 13% 9% 2% 16% -2% 0% -2% 451%* -300% -200% -100% 0% 100% 200% 300% 400% 500% 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Screen Metro Single Airport Bus Body Bus Shelter Network Railway* OOH SPENDING BY FORMAT 2014 Jan-Jun 2015 Jan-Jun YTD Growth RMB: Million

94. SCREEN AND METROS STILL THE KEY 102 Sources：CODC Jan-Jun 2014 & 2015 Unit：RMB Million Metro, 20% Single, 7% Airport, 7% Bus Body, 5% Bus Shelter, 4% Network, 1% Railway Station, 4% Building LCD, 34% LED Screen, 10% Metro TV, 3% Bus LCD, 3% Metro LCD, 1% Taxi Screen, 1% Screen 53% Screen Media Comparison (Unit : RMB Million) Media Type 2014 Jan-Jun 2015 Jan-Jun Growth% Building LCD 18,140 22,586 25% LED Screen 6,233 6,722 8% Metro TV 1,989 2,096 5% Bus LCD 1,719 2,323 35% Metro LCD 1,420 780 -45% Taxi Screen 1,657 601 -64% Total 31,157 35,107 13% Screen Media Share 53% 53% Following 2013 trend, screen media takes half the share of total OOH Spending, while Bus LCD grows the fastest, and Metro LCD and Taxi Screen witness a drop.

95. OOH TREND ACROSS TIERS 103 Source: CODC Jan-Jun 2015 Units：Million RMB 50%, Screen 24%, Metro 6%, Single 8%, Airport 4%, Bus Body 3%, Bus Shelter 1%, Network 4%, Railway Screen Metro Single Airport Bus Body Bus Shelter Network Railway 54%, Screen 19%, Metro 7%, Single 7%, Airport 5%, Bus Body 4%, Bus Shelter 3%, Railway Screen Metro Single Airport Bus Body Bus Shelter Network Railway 58%, Screen 4%, Metro 13%, Single 5%, Airport 6%, Bus Body 8%, Bus Shelter 3%, Network 4%, Railway Screen Metro Single Airport Bus Body Bus Shelter Network Railway SHARE OF OOH FORMAT INVESTMENT CROSS TIERS Metro in T1&2 are slowing down while screen media, airport develop faster in Tier 3 due to improvement in infrastructure. Bus body and shelter still maintain their importance however decline in T1&2.

96. FORMATS & CASES

97. OOH GOING MORE “REAL” 105 REAL PRODUCT DISPLAY REAL 3D EFFECT AUGMENTED REALITY More real products are displayed extra to the regular format or original placement More vivid animation are created in LED screen through upgraded tech More engaged experience are activated through new technology

98. NEW UMAX SCREEN IN CINEMA TO CREAT STRONGER IMPACT • The UMX screen is set in theaters with 3 big screens that can surround the audience by 270 degrees. • It was launched in Beijing, Shanghai, Shenzhen and Chengdu first from July 2015, and expected to extent to 10 cities by the end of 2015. In 2015, Dior wanted to boost sales on its Miss Dior fragrance by capitalizing on the peak sales time during Chinese Valentine’s Day. As movie theatres are considered a top “to-go” place to celebrate the occasion, Miss Dior utilized an impactful 270 degrees UMAX screen theatres. The campaign succeed to generate high sales increment versus previous year. CASE: Miss Dior Valentine’s Day 98

99. PRECISE TARGETING THROUGH CHINA POST SCREENS 107 AUDIENCE RECOGNITON ‘biometric feature signature’  Individuals  Directional movement  Number of glances  Dwell time of each glance IMON TargetEngage™ launched new OOH targeting format with real-time programmatic buy by upgrading traditional street kiosk space into mobile connected screens. WIFI HOTSPOT

100. VARIOUS INTERACTIVE THROUGH IWON 108 Banners served after Wi-Fi connecting Customized individual e-coupons Brand/product placement in interactive game Brand Involvement with educational cartoon

101. BAIDU SINAN HELP WITH BETTER OOH ANALYSIS 109 Baidu launched outdoor version of Sinan, which integrated consumers’ search behavior and geographic data from Baidu Map, to better understand OOH targeting.  Precise lock target audience  Evaluate current ads resources  Indicate offline store opening and marketing activities SEARCH BEHAVIOR DATA GEOGRAPHIC DATA Reach 95% netizens 6 bil search quires per day 600K website in network Reach 400 mil mobile netizens 7 Bil location quires per day 2K cities covered

102. 110 With the improvement in OOH and Mobile technology, OOH can enable integration of offline and online activities to deliver stronger brand experience. Mechanics need to be simple and user friendly. 1. Combination of AOD technology with OOH can help turn OOH into a more targeted medium.2. Using new data system to improve pre-campaign evaluation and post-campaign measurement to evaluate the true value of the investment.3. VIEWPOINT ON OOH

103. E-COMMERCE

104. 374 MILLION USERS 56%* REACH AMONG ALL NETIZENS 7 DAYS PER MONTH 15 MINUTES PER USAGE DAY PC MOBILE 46% REACH AMONG ALL NETIZENS 9 DAYS PER MONTH 11 MINUTES PER USAGE DAY E-COMMERCE OVERVIEW 112 Source: Total netizen number from CNNIC, PC & Mobile reach number (based on CNNIC netizen), days and time spent from iUserTracker & mUserTracker Jun 2015; * PC reach has been adjusted to align with CNNIC penetration limit,, both PC and mobile here don’t include social shopping.

105. 56% 19% 11% 2% Taobao Tmall JD.com VIP.com Suning Meituan (GB) Dangdang Yhd.com Amazon Others -1% +3% Source: iUserTracker & mUserTracker Jun 2014-2015 64%7% 6% 4% 3% 2% 2% Taobao Meituan (GB) Jindong Tmall VIP Mogujie Meilishuo Jumei Juhuasuan (GB) Nuomi (GB) Others PC MOBILE -3% TOP EC PLATFORMS ACROSS DEVICES 113 SHARE OF TIME SPENT ON EC +3% -2% +9% Alibaba drives growth with increased share on mobile. * Dianping ranks after JD if added.

106. B2C vs. C2C 114 Source: iResearch Yearly Data Release 2014 – E-commerce B2C is expected to take more than half share of all transactions, dominated by TMALL and JD. 25.3% 34.6% 40.4% 45.3% 51.0% 56.0% 60.6% 63.5% 74.7% 65.4% 59.6% 54.7% 49.0% 44.0% 39.4% 36.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 2015e 2016e 2017e 2018e ONLINE SHOPPING MARKET - B2C VS. C2C BY TOTAL TRANSACTIONS B2C C2C 60.4% 19.5% 3.0% 2.9% 1.7% 1.5% 1.4% 1.3% 1.1% MARKET SHARE OF TOP B2C PALYERS BY TOTAL TRANSACTIONS (2014) TMALL JD.com VIP.com Suning.com Gome.com.cn yhd.com Dangdang Amazon.cn Yixun.com Jumei.com Other

107. SHOWROOMING AMONG SEARCH SAVVY MOBILE USERS While in brick and mortar stores many actually search on their mobile devices and make online purchase. Source: McKinsey iConsumer China 2015 74% of shoppers who use mobile search are showrooming – checking out products in store but buying online or from other competitor’s retail channels 115

108. E-COMMERCE CATEGORIES Most frequent online purchases are packaged and fresh food – though the most popular category overall is still apparel at 66% penetration and 2,700RMB spent per year. Source: McKinsey iConsumer China 2015 Consumer usage of online food shopping is very high in China at 40+% versus under 10% in the US. Buying food online is becoming more feasible due to quicker delivery time, with roughly 40% using same or next day delivery. 116

109. M-COMMERCE 117 98.5% 94.2% 85.5% 66.3% 49.4% 38.9% 32.4% 28.8% 1.5% 5.8% 14.5% 33.7% 50.6% 61.1% 67.6% 71.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 2015e 2016e 2017e 2018e SHOPPING TRANSACTIONS - MOBILE VS. PC PC Mobile Source: iResearch Yearly Data Release Jun 2015 – E-commerce Mobile will account for more than half of all transactions, growing speed slows down but still higher than 100%. 69% 45% 45% 14% 7% 5% 4% 4% 426% 490% 298% 243% 115% 61% 38% 23% 0% 100% 200% 300% 400% 500% 600% 0 10,000 20,000 30,000 40,000 50,000 60,000 2011 2012 2013 2014 2015e 2016e 2017e 2018e SHOPPING TRANSACTION – MOBILE vs PC PC Mobile PC growth Mobile growth

110. THE RISING OF OVERSEA PURCHASE Both external & internal platforms put efforts to make oversea purchase easier, while verticals see a boom quickly, especially in beauty and infant milk category. 淘世界 118

111. MORE FUSION FOR ONLINE AND OFFLINE Both traditional and digital giants are building their O2O ecosystem with a focus on data integration and varied services . ALIBABA EXPAND TO OFFLINE WANDA EXPAND TO ONLINE DASHANG EXPAND TO ONLINE Wanda announced the cooperation with Tencent and Baidu for e-commerce business in 2014, and officially launched its first physical platform Feifan by end of July, 2015. Dashang Group, one of the biggest retailers in China, launched its own e-commerce platform Tiangou in Nov 2014. Alibaba invested in Intime in March 2014, and further became its No.1 shareholder in July 2015, meanwhile launched APP “Miaojie” to serve for offline shopping. 119

112. GROUP-BUY UPGRADE USER FLOW WITH MOBILE PAYMENT 120 Group-buy service are upgraded, from “pay and consume” to “consume and pay”, with simplified flow facilitated by mobile and flexible discount operation. “SHANHUI”/”FLASH DISCOUNT” FROM DIANPING “DISCOUNT PAYMENT” FROM MEITUAN DIANPING IS THE PLATFORM TO INITIATE THIS SERVICE, FOLLOWED BY MEITUAN

113. FORMATS & CASES

114. USER GENERATED CONTENT BRIDGE FOR SALES 122 Taobao opened its mobile platform to public to encourage high quality user generated content while also sharing revenue with generators. One of the most valuable writers earned 136K within 7 days by producing hundreds of qualified content.

115. 123 E-commerce is no longer just about purchase it is a medium which can drive also awareness and consideration. Communication needs to be developed accordingly.1. New brands entering China can test the market with E-commerce while for existing brands can use E-commerce to locate threats from new and up coming brands.2. Brands need to converge all resources such as KOL’s, branded and associated content, reviews etc. to drive greater conversion on purchase.3. VIEWPOINT ON E-COMMERCE

116. SEARCH

117. 536 MILLION USERS 76% REACH AMONG ALL NETIZENS 12 DAYS PER MONTH 9 MINUTES PER USAGE DAY PC MOBILE 68%* REACH AMONG ALL NETIZENS 10 DAYS PER MONTH 13* MINUTES PER USAGE DAY Source: Total netizen number from CNNIC, PC & Mobile reach number (based on CNNIC netizen), days and time spent from & mUserTracker Jun 2015; * Mobile reach refer to CNNIC mobile phone usage number as minimum, time spent refer to APP usage (while days refer to website usage). SEARCH OVERVIEW 126

118. SEARCH RANKING BY PAGE VIEWS 127 Change in Reach -1% +4% +2% Change in Reach +9% -19% Source: iUsertracker & mUsertracker Jun 2014-2015, use site data for mobile, but Shenma is not well tracked according to the market share published by CNZZ, Mar 2015 Note: PVs are within iResearch panel geography, scale may not be representative of the total online population - 50,000 100,000 150,000 200,000 250,000 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 PV OF SEARCH ENGINE ON PC (Mil) Baidu Haosou Sogou Etao Google Soku Bing - 10,000 20,000 30,000 40,000 50,000 60,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 PV OF SEARCH ENGINE ON MOBILE (Mil) Baidu Easou Sogou Etao Bing +9% Baidu, 80% Shenma *, 13% Sogou, 6% MARKET SHARE OF MOBILE SEARCH Usage of 360 search continues to grow, though still dwarfed by Baidu’s dominant share of search. Sogou surpassed Easou in mobile, also Shenma gains share rapidly with the support of UC browser.

119. PC & MOBILE DIFFERENCES CROSS TIME 128 0 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 Monday Tuesday Wednesday ThursdayFriday Saturday Sunday PC MOBILE Source: Baidu Tanxing Jul 2015 PC dominates working time (day and week days) while mobile spikes up during me time (night and weekends). PC VS. MOBILE SEARCH CROSS THE DAY PC MOBILE PC VS. MOBILE SEARCH CROSS THE WEEK

120. THE RISING OF VOICE & PICTURE SEARCH 129 Voice and picture search is predicted to grow by 50%. Source: Baidu Mobile Website Trend Report, Jan 2015 VOICE & PICTURE SEARCH INDEX GENERAL SEARCH INDEX J a n F e b M a r A p r M a y J u n J u l A u g S e p O c t N o v D e c VOICE SEARCH VOICE INPUT VOICE TRANSFORMING VOICE HELPER

122. White book launched for Guerlain AR campaign - in cooperation with Baidu big data department Grand media launched to push white book content- display in baidu knows, video, experience music channel CASE: GUERLAIN LEVERAGE BAIDU DATA 131 Starting page Whose life is the toughest? Reasons for being stressed Guerlain will help your skin survive this stressful life Baidu Knows Baidu Experience Baidu Video SPECIAL COLUMN DISPLAY TO DRIVE TRAFFIC

123. Cooperate with Baidu Travel and utilize soft placement ads cross both PC and mobile, to drive higher attention to LV foundation exhibition in Beijing Campaign specific search format to build the image of LV foundation SOFT CONTENT IN TRAVEL CHANEL PAID SEARCH FOR IMAGE BUILDING CASE: LV COOPERATE WITH BAIDU TRAVEL 132 PC Campaign Zone Mob Campaign Zone PC PPC Baidu Travel APP boost Baidu Travel Scenic spot Individual Scenic spot page Mobile PPC

124. Keep a close watch of 2nd, 3rd players in both PC and mobile beyond Baidu (e.g. 360, Shenma), as they also have strong background, and are trying hard to grab share.1. Optimize delivery across time bands and devices when doing search campaigns.2. Pay attention to the rise of picture and voice search, start to integrate this new tech in campaign where necessary.3. When investing in search platforms, especially Baidu, look to leverage key assets of the ecosystem beyond paid search.4. 133 VIEWPOINT ON SEARCH

125. PROGRAMMATIC BUYING

126. PROGRAMMATIC INVESTMENT USA VS. CHINA 136 4% 9% 15% 21% 0% 10% 20% 30% 40% 50% 60% 70% 0 5 10 15 20 25 2013 2014e 2015e 2016e INVESTMENT OF PROGRAMMATIC DISPLAY IN CHINA Programmatic digital display ad spending Programmatic mobile ad spending % of total digital display ad spending 24% 45% 55% 63% 0% 10% 20% 30% 40% 50% 60% 70% 0 5 10 15 20 25 2013 2014e 2015e 2016e INVESTMENT OF PROGRAMMATIC DISPLAY IN USA Programmatic digital display ad spending % of total digital display ad spending BILLION (USD) BILLION (RMB) China witnesses a rapid growth in programmatic investments however way behind USA. Source: USA data from eMarketer Oct 2014, China data from iResearch programmatic report 2014

127. DATA TECHNOLOGY EMPOWERING PROGRAMMATIC EFFICIENCY 137 1st party data 1st Party Data Visitors’ cookies Mobile Phone No. QQ number Payment Card Contacts … 3rd Party Data Provider • Online Behavior • Purchasing Behavior programmed buy Inventory Bidding Performance Optimization … 3rd party data 2nd party data 2nd Party Data Ad Placement IP ISP URL … • Cookies Cleaning • Audience Verification • Data Segments • Data Safety • … Audience Insight Inventory Estimation • Comprehensive data processing for client’s first party data to command programmatic targeting • Integrate offline database, CRM for data cleansing, mining, analytics and look-alike modeling • Consumer insight research to facilitate decision making of planning and strategy

128. EXTENDED TARGETING BEYOND AUDIENCE SEGMENT 138 • Targeting based on public interests, completed integration with Baidu Search Index & Taobao Purchasing Index • Targeting based on environmental factors, weather, temperature, air quality, and other event based signals • Extension of TV ad to cover incremental reach on PC and mobile, full media channel coverage for audience interaction with brand Search Index Purchase Index Sync with Localized Online Index Trigger Ads Based on Real-time Data Across Platforms Weather Index Sports Index Purchasing Index Search Index More.. TV Trigger Ads on 2nd And 3rd Screens Based on TV Ads

129. SOCIALLY INTELLIGENT MEDIA VIA PROGRAMMATIC 139 • Integrated with leading social platforms, taking advantage of effective and timely reach audience • Harness valuable social data, listen and respond to social trend promptly depending on different attitude • Tailor campaign objectives flexibly according to negative, neutral or positive attitude Listen What Your Customers Are Saying Influence TA with 1:1 Creative Based on Individuals’ Attitude Listen Analysis Response Listen social feedbacks on brands by contextual targeting in UGC on mainstream social media via API Analysis whether audiences’ attitude based on AOD are negative/neutral/posi tive about the brand according to UGC, Key Word and Tags. Response promptly by displaying the 1:1 dynamic creative ads on vertical media platform accordingly in real time Negative Branding Ads From 0 to 1 AOD social serves as instant online crisis PR specialist, bridges consumers with brand in a positive way Build consumers’ confidence to brand and brand recognition Positive/Neutral Promotion Ads 1+1>2 AOD social is complementary to traditional advertising and offline PR Enhance brand preference and brand loyalty

130. BE WHERE YOUR USERS ARE 140 • Focus on mobile data analytics of location and purchasing transactions, target audience from different view • Consolidated footprint and location technologies, reverse predict audience offline behavior • Integrated offline transaction platform, closing the loop of offline sales attribution to online promotion Offline Capture Online Profiling Offline Transaction Online Tracking Consumers’ Purchasing Behavior Data in Circle Capture consumers’ purchasing behavior from their offline purchase history data Launch Ad campaigns for selected TA on multiple online platforms Profiling data is done by matching raw data with AOD demo database to lock in TAs Drive TAs to purchase at offline stores and feedback the purchasing data to AOD at the same time Feedback the tracking data to database and refine the profiling process 21 3 4

131. HOLISTIC INVENTORY SOLUTION FOR PROGRAMMATIC BUYING 141 • Precise cross media frequency control by audience maximizing media ROI • Established returnable video inventory management platform with major video publishers, control inventory distribution by audience • VivaKi verified media to ensure brand quality and premium inventory supply Available PMP Models: Preferred Deals & Programmatic Direct Buy Frequency Capping on Premium Inventory Returnable Premium Audience Buying Preferre d Deals Program matic Direct Buy （PDB） BiddingFixedprice Reserved Banner Reserved OTV QualityLow High Private Auction Open Bidding （RTB ） Low Frequency Reach 1+ 2+ High Frequency Reach 5+ 6+ Brands PMP SelectionReturn

133. TRAVEL BEAUTY BEAUTY CAMERA LIFE LAUNCH CAMPAIGN AT RIGHT TIME AND RIGHT MESSAGE IN RIGHT PLACE 143 Ads triggered only when temperature > 25°C Deliver relevant message in relevant environment with different mindset Campaign Goal Educate consumers for hair removal Enhance brand preference with limited budget Where & Who Target young female in selected key cities through mobile programmatic buy Result 200% higher CTR and time spent than expected 70% search query increase in mobile Unaided awareness raise 25% 25°C

134. UPLIFT BRAND THROUGH SOCIAL PROGRAMMATIC BUYING 144 Campaign goal Brand Awareness Solution AOD Social Solution Est. Result Buzz increase 20%+ Brand reputation uplift 4%+ When audiences’ attitude is…. Positive/Neutral Negative Promotional Ads Affiliate Ads Emotional Leading Branding Ads Reduce Concerns

135. IMPROVE TA% INTELLIGENTLY WITH PMP 145 Campaign goal Frequency Capping Improve the ratio of TA (4 times reach) Launch Model PDB (Private Direct Buy) Result 4 times UV is 23.4% Only 2% reach over frequented

136. 146 Continue increasing investment in programmatic buys for greater efficiency and precision targeting.1. Leverage the power of data from both partnership, and real time connection or tracking, to generate stronger consumer understanding and insights.2. Upgrade from standard version to customized version which is built to target the potential consumers of the specific brand with the right communication.3. Optimize current investment through PMP, to control frequency cross platforms, as well as secure premium inventories among qualified target audience.4. VIEWPOINT ON PROGRAMMATIC BUYING

137. MYKIM CHIKLI CEO ZENITHOPTIMEDIA GROUP CHINA SHANN BIGLIONE HEAD OF STRATEGY ZENITHOPTIMEDIA GROUP CHINA SAMEER SINGH HEAD OF CHANNEL PLANNING ZENITHOPTIMEDIA GROUP CHINA OLIVIA ZHANG ASSOCIATE DIRECTOR STRATEGY ZENITHOPTIMEDIA GROUP CHINA MOLLIE CHEN SUPERVISOR STRATEGY ZENITHOPTIMEDIA GROUP CHINA VIVI WAN DESIGNER BUSINESS DEVELOPMENT ZENITHOPTIMEDIA GROUP CHINA

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