Richard Lords presentation at the AIMIA V21 conference held in Melbourne, Australia

1. V21 2009 New Business not New Media Richard Lord – Chief Marketing Officer 18th March 2009 Final

2. Who am I & Why am I Here? Hyro Limited is Australia’s largest and Oldest PURE Digital Services Company We have now worked with more than 500 different companies and government agencies in more a dozen countries I am an “Old Man of the Internet” I started Australia’s FIRST web developer in 1994 and have delivered many “firsts” for the Australian online Industry I have the privilege of working with around 350 of the brightest, most innovative digital professionals in Asia

3. Australian Digital Industry Insights In 2008 AIMIA, Hyro and IBM Australia Collaborated on the inaugural AIMIA Digital Services Index™ We used independent researcher Springboard Research to interview 107 companies and government agencies about their investment / expenditure on digital 77% of respondents were >1,000 employees Data collection covered ALL aspects of digital; from infrastructure and hosting through to online advertising and all things in between

4. 40% of customers engaged through Digital Services in 2009 Australian Digital Industry Insights

5. 25% of customer revenuetied to Digital Servicesin 2009 Australian Digital Industry Insights

6. 14.3% of enterprise S,G &A expenditure on Digital Services Or to put it another way AUS$17.9 Billion spent on Digital Services in 2008 Australian Digital Industry Insights

8. Confirms that Digital is MORE THAN Online Advertising

9. Online Advertising is only 1/3 of the total expenditure on Marketing via Digital Channels….

10. … and about 9% of the overall spend on Digital ServicesAustralian Digital Services Industry A$17.9Bn A$4.5Bn A$1.5Bn Total Digital Marketing Spend Online Advertising Australian Digital Industry Insights

12. And are taking their BUSINESS with them … with 25% of corporate revenue driven by Digital Channels in 2009

13. Yet INVESTMENT is still lagging as only 14.3% of corporate expenditure is directed to Digital Services

14. Some of this is represented by the relative cost efficiency of digital, but Australia remains UNDER-INVESTED39.8% 24.8% 14.3% Customer Engagement Share of Corporate Revenue Digital Services Investment Australian Digital Industry Insights

15. Our Perspective on the Future There is a “confluence of forces” affecting digital At the same time as companies are reviewing the effectiveness of their traditional advertising spend, their customers are driving a shift to digital channels “The global ad market could shrink by 10-15% (by 20% in the US ) in 2009”Source Interpublic – Australian Financial Review 16th March 2009 Traditional Media Channels (TV, Print, Radio) are under pressure – we cannot assume that they will continue to exist in their current form. They will need to either transform or perish. This is the RISE of DIGITAL

16. Our Perspectives on the Future Business of Significance – risk management, performance, managing yield becoming MUCH more important Commercial Focus – transaction capability, data gathering, commercial value becoming MUCH more important

17. What is the New Business of Media EVERY corporation or government agency MUST take greater hands on ownership for distributing their marketing message This means: Acquiring, managing and leveraging good DETAILED information about your customers Having the right infrastructure to distribute your own messages Having the right teams to manage your Digital Presence as a core capability Traditional Media will need to adapt to provide robust channels to well qualified groups of customers – and that means good systems, data & customer intelligence(& they’ll have to watch out for Google)

18. Important things to consider in 2009 Get your platform right – if you don’t have control of your data, your channels, your security and your transactions you WILL be disadvantaged coming out of this recession downturn Get your channels right – now is the time to have an integrated, cross channel capability. There are BIG moves afoot in mobiles andother channels you need to be ready. Get your operations right – Digital is core to the success of your business, but many companies still try to cobble together an internal team of generalists and do it on the cheap. Work with experts and consider outsourcing.

19. Thank You Richard Lord www.hyro.com richard.lord@hyro.com

20. Ongoing Insights Working together, AIMIA, Hyro and IBM Australia are continuing the work of the AIMIA Digital Services Index™ in 2009 Today we are launching our 2009 Online Survey An interim survey measuring key intentions for Digital Services in 2009 12 questions (it takes about 10 minutes) http://www.digitalservicesindex.com.au/ The 2009 AIMIA Digital Services Index™ will kick off in July for release in September