ROPO effect... or what does it mean for your business - VIDEO http://youtu.be/AvtpdRa3qrI

1. Research Online, Purchase
Offline
…because search is more than a click
August 2012
Google Confidential and Proprietary 1

2. Google Confidential and Proprietary 2

3. Agenda
1 Online purchasing in Czech Republic
2 What does it mean “ROPO effect”
3 Why this research
4 Objectives, methodology and products included
5 ROPO effect for Vodafone
Google Confidential and Proprietary 3

4. CZ leads in CEE with the highest % of online retail
and with sales of Czech e-shops of ~ 37 bn CZK
1 2 3 4 5
Online retail as a percentage of total retail Sales growth of e-shops in CZ
[in %, 2010] [in bn. CZK]
Czech e-shops [billion CZK]
UK 8%
DEN 5%
Leaders
+20%
SWE 4% 37
27 33
DE 4%
CZ 3%
Region CEE
SK 1% 2009 2010 2011
PL 2%
HU 1%
Source: Euromonitor International 2010, Czech Association for Electronic Commerce CZ (APEK) 2011,
Slovak Association for Electronic Commerce (SAEC) 2011 Google Confidential and Proprietary 4

5. 2.6 million Czechs purchased online last year
and this number is growing fast over the years
1 2 3 4 5
Individuals* purchasing online as a percentage Total number of orders via e-shops
of online population aged 16-74 [in thousands orders]
As a % online population Total number of orders
Czech Republic
+10% +23%
26% 37% 41% 9,785 11,425
7,609
2006 2009 2011
2009 2010 2011
Abs. [mil.] 1.1 2.1 2.6
** cetelem.sk, hej.sk, hop.sk, mall.sk, martinus.sk, obchodny-dom.sk a pelikan.sk
Source: Eurostat, ČSÚ (Czech Statistic office), Netmonitor.cz, Aim monitor, APEK, SAEC, Alza.cz, estimates
* Individuals that purchased or booked online in last 12 months any item or service for their personal purpose Google Confidential and Proprietary 5

6. Despite the growing popularity of online
shopping, ~8 out of 10 people purchased offline
1 2 3 4 5
Purchase offline Purchase online
Source: Consumer Commerce Barometer – available at: http://www.consumerbarometer.eu/ Google Confidential and Proprietary 6

7. However, ~4 out of 10 offline sales in Czech
Republic are influenced by online
1 2 3 4 5
% of consumers that did research online and purchased
the product offline
[in % of respondents]
51 %
47 % 48 %
44 %
30 %
CZ UK HU PL SK
Source: Consumer Commerce Barometer – available at: http://www.consumerbarometer.eu/
Note: CCB research on online population Google Confidential and Proprietary 7

8. It is not easy to understand each step in
consumer path to purchase…
1 2 3 4 5
Video ads
Display ads
Web
Website Visit to
Dealer visit* Purchase
traffic
visits dealer (*)
Search
Offline media
(*) Dealer visit = Person who visited the store of the dealer
Direct impact In-Direct impact
Source: Google Google Confidential and Proprietary 8

9. ROPO effect... or what does it mean for your
business
1 2 3 4 5
Researched online Purchased offline
Google Confidential and Proprietary 9

10. First study on Czech market thanks to MB and
Vodafone about internet impact on offline sales
1 2 3 4 5
• What is the percentage of total sales influenced by online?
Objective
• Usage and importance of online / offline sources on the path to
purchase
• Better understanding of consumer`s usage of online sources
Products Methodology
• CATI (phone interviews) from Vodafone database
• Base, N = 2 000
• Database consisted of Vodafone customers
(updated on weekly basis)
New Vodafone tariff Mobile phone sales • Criteria was the customer, who bought Post Paid
SIM card or Handset in Vodafone store last week
Source: Online to store research with Millward Brown, Vodafone and Google (April 2012, n = 2000) Google Confidential and Proprietary 10

11. More than 30 % of total sales in Vodafone stores
are influenced by online
1 2 3 4 5
Vodafone Sales by sales channel
(in %)
New Vodafone tariff Mobile phone sales
Online shop 4% Online shop 5%
Influenced
27% Influenced
by online 40% by online
Vodafone Store 56% Vodafone Store 50%
73%* 60%*
Call Centrum
Call Centrum
40% and others
45%
and others
Source: Online to store research with Millward Brown, Vodafone and Google (April 2012, n = 2000)
*Note: Purchase influenced by other than online sources (e.g. by information obtained in Vodafone Stores, among friends, Google Confidential and Proprietary 11
in newspaper or magazines etc.)

12. 27 % of customers used internet while doing
research before purchasing a new tariff
1 2 3 4 5
New Vodafone tariff
27% used online sources 73% used offline sources
Used sources
Vodafone Website 26% Vodafone Store 38%
Friends and
Search Engine 5% acquaintances 17%
Price comparison Other carrier
websites
2% provider stores 5%
What kind of information they were looking for?
Type of info
Parameters of tariffs 40 %
Comparison of price offers 38 %
Other users‘ experience 17 %
Base: Tariff purchasers (905)
Source: Online to store research with Millward Brown, Vodafone and Google (April 2012, n = 2000) Google Confidential and Proprietary 12

13. 40 % of customers used internet while doing
research before purchasing mobile phone
1 2 3 4 5
Mobile phone sales
40% used online sources 60% used offline sources
Used sources
Vodafone Website 32% Vodafone store 39%
Friends and
Search Engine 15% acquaintances 15%
Websites interested
in handsets 12% Catalogue / magazine 7%
What kind of information they were looking for?
Type of info
Comparison of price offers 40 %
Parameters of handsets 36 %
Other users‘ experience 14 %
Base: Handset purchasers (1069)
Source: Online to store research with Millward Brown, Vodafone and Google (April 2012, n = 2000) Google Confidential and Proprietary 13

14. Internet plays a crucial role in driving sales
in Vodafone stores
For one customer which purchased online, there are ~4 customers which
researched online and then purchased in Vodafone store
For 1 purchase in e-shop
there are…
~4 purchases in Vodafone
stores, which are influenced by online
Source: Online to store research with Millward Brown, Vodafone and Google (April 2012, n = 2000) Google Confidential and Proprietary 14

15. Key take-aways
1 Internet has a significant impact on driving
offline sales
2 To be able to evaluate the right ROI of your online
marketing campaigns, it is important to know
the value of ROPO effect in your industry
3 In case of Vodafone, for 1 purchase in e-shop
there are ~4 purchases in Vodafone stores,
which are influenced by online
Google Confidential and Proprietary 15

16. Thank you
Research Online, Purchase Offline
...because search is more than a click
Google Confidential and Proprietary 16

17. Appendix
Google Confidential and Proprietary 17

18. ROPO efekt in different categories
1 2 3 4 5
% of consumers that purchased % of consumers that did research online and purchased
the product online the product offline
In specific category within last 12 months In specific category within last 12 months
[in % of respondents] [in % of respondents]
CZ 30 % CZ 48 %
Půjčky
UK 46 % UK 24 %
Bílé elektro
CZ 30 % CZ 51 %
UK 41 % UK 32 %
Zdroj: Consumer Commerce Barometer – dostupný na: http://www.consumerbarometer.eu/ Google Confidential and Proprietary 18

19. Reasons for not searching online
Many people still prefer the traditional way of gathering information before the purchase. Half of those who
did not search online just asked someone else for advice (who might have searched online) For others even
getting handset or tariff is a spontaneous decision and they don’t have time or don’t feel need to search for
information.
Reasons for not searching online (%) One of the reasons Main Reason
I like being able to talk to someone directly 47 53
It never crossed my mind 10 19
Had enough
I don’t have easy internet access 6 12 information (11%)
Didn’t have time (7%)
I don’t use internet at all 5 9 Didn’t care – spontaneous decision (3%)
I don’t trust the information on the internet Doesn’t like/can’t search the web (4%)
1 6
Prefers personal contact (2%)
I don’t know where on the internet I should look for the info 1 4
Other reason 25 27
Doesn’t know 3
Base: Those who did not search online (674)
C13. You stated that you didn’t use the internet to search for the information before the purchase, why did you Google Confidential and Proprietary 19
not use this option? C14. Which of these reasons was the main one?