TV Still King, But Young Audience Defections/Poor Measurement Limit Growth

Spurred by Mobile Technologies, Time Spent with Media and ecommerce Continue Growing

GroupM today published Interaction 2017 , a state of the union assessment of digital advertising worldwide with forecasts on
technology developments, media marketplace trends and evolving consumer behaviors informed by experts from WPP's worldwide network of
communications, marketing and data companies. The report offers in-depth insights underpinning digital advertising growth forecasts in 46
markets. Topics covered include ad fraud and marketplace integrity, fake news, privacy, ad blocking, artificial intelligence, augmented and
virtual reality, video competition across platforms, live video, advanced television, streaming and on-demand audio, and much more. In the
report, GroupM's Global Chief Digital Officer, Rob Norman, and Adam Smith, Futures Director, also share views on media pricing, the
consolidation of economic value in media among a small group of companies, and media consumption and ecommerce trends.


Global Interaction Metrics
2014 2015 2016f 2017f
Media day weighted by 7.72 7.86 8.01 8.11
population (in hrs)
Adult Internet Users 1.97B 2.16B 2.34B 2.54B
Digital Ad Investment (USD) 119.13B 140.42B 160.97B 182.38B
From TYNY 2016
Digital % Share of 24.6 27.9 30.7 33.3
Media Investment
Digital Ad Investment 61 65 69 72
Per User (USD)
Total e-commerce 1.26T 1.56T 1.87T 2.21T
spend (USD)
Average e-commerce 641 721 801 869
spend per user (USD)

As reported in its This Year, Next Year, worldwide media and marketing forecast, GroupM predicts that digital advertising will
capture 77 cents of every new ad dollar in 2017; TV will capture 17 cents. Despite challenges around standards, measurement and supply chain
integrity, digital advertising continues to grow rapidly as marketers follow consumers to the media destinations where they spend their
time, and increasingly transact for goods and services. Digital investment has already surpassed TV in ten markets* and another five will
cross this bar in 2017 (France, Germany, Ireland, Hong Kong and Taiwan), GroupM predicts.

As the competition for consumer attention and advertiser investment escalates, people worldwide are spending more time with media.
On a population-weighted average, the overall time spent with media (the 'media day') grew by nine minutes to eight hours in 2016, but time
spent with online media grew by 14 minutes. This is attributable to the greater access to media that mobile technologies provide. Mobile
similarly contributed to the growth of adult internet users to 2.34B in 2016.

However, GroupM's data shows that for now, TV is still king with advertisers when global data is aggregated. TV's share of
advertising investment was largely stable at 42% in 2016; GroupM predicts a share decline to 41% in 2017. TV rode a five-year peak share at
44% from 2010-2014, with only minimal share shedding since then.

Still, linear TV demographics continued shifting in 2016, with the loss of the 16-24 year-old demographic remaining one of its
biggest challenges. Though the global population of 16-24 year-olds only decreased 1% 2014-2016, the average "tonnage" of the 16-24 linear
TV audience shrank 16%, with some markets reaching numbers closer to 30%. GroupM clarifies that some of this loss is exacerbated by TV's
other big challenge – the inadequate measurement of TV's total audience across platforms. GroupM continues to advocate measurement
improvements to better evaluate television across all devices in markets across the globe. The absence of close substitutes means that for
now, those advertisers seeking this young adult TV audience can be willing to bear price inflation in proportion to its rising scarcity.

In the report, GroupM also examines the coalescing of economic value among six global companies who hold the lion's share of
digital ad spending, with Google and Facebook at the forefront. GroupM notes that these companies have very different business models than
the owners of linear TV, and they also attract different advertisers. Advertisers accounting for 90% of TV advertising revenue represent
between 30% and 40% of the revenue earned by the digital giants. The other 70% of their revenue comes from a combination of small and local
businesses, often ones that trade in digital products or services. This bifurcation among classes of advertisers is subject to change as
television becomes more data-fueled and targeted (more like digital) and as video content on digital platforms continues to be enhanced with
greater quality (more like TV).

"Google and Facebook attracted the vast majority of incremental digital ad investment growth in 2016," said Adam Smith, Futures
Director. "In 2017, the industry will be watching closely to see how Snapchat or Amazon may creep into Facebook's and Google's value chain,
and if the stronghold that 'BAT' (Baidu, Alibaba, Tencent) has in China can expand to international markets."

Interaction 2017 also looks at consumer purchase behaviors. In 2016, ecommerce totaled USD 1.874 trillion, globally, fully 20%
more than the USD 1.558 trillion logged in 2015.GroupM forecasts 18% growth for ecommerce in 2017, surpassing the two-trillion mark to USD
2.205 trillion. On average, online shopping per user is projected at USD 869 in 2017. The U.K. remains home to the most active online
shoppers, predicted to average USD 4,000 per user in 2017. Combined, Amazon and Alibaba represent more than half of all e-commerce
(excluding the travel category).

"Last year, we were cautious in our estimation of the rate of change, but this year we are less so in the face developments in
hardware and software technologies that are advancing us from the information age to the intelligence age," said Rob Norman, Global Chief
Digital Officer. "To help shape our thinking and speculation in this year's Interaction, we invited more than 20 partners** to discuss AI,
augmented and virtual reality, video competition, advanced and data-driven TV, streaming and on-demand audio, the Google/Facebook digital
duopoly, live video, ecommerce, marketplace integrity and fake news. The result is both one of the most comprehensive pieces on the state of
digital we've ever written and also a springboard for marketers to think long and hard about their future. We invite debate that will
undoubtedly ensue."

* Australia, Canada, China, Denmark, Finland, the Netherlands, New Zealand, Norway, Sweden, United Kingdom
** Amazon, AppNexus, comScore, DoubleClick, eMarketer, ESPN, Facebook, Google, Hulu, IAB, IBM, LinkedIn, NBCU, Pandora, Pinterest,
The New York Times, Snapchat, Turner, Twitter, Vox Media, YouTube

About GroupM

GroupM is the leading global media investment management company serving as the parent to WPP media agencies including Mindshare,
MEC, MediaCom, Maxus, Essence and m/SIX, as well as the programmatic digital media platform, Xaxis, each global operations in their own
right with leading market positions. GroupM's primary purpose is to maximize the performance of WPP's media agencies by operating as leader
and collaborator in trading, content creation, sports, digital, finance, and proprietary tool development. GroupM's focus is to deliver
unrivaled marketplace advantage to its clients, stakeholders and people, and is increasingly working closely for the benefit of clients with
WPP's data investment management group, Kantar. Together GroupM and Kantar account for over 50% of WPP's group revenues of more than $20
billion.

Discover more about GroupM at www.groupm.com .
Follow @GroupMWorldwide on Twitter
Follow GroupM on LinkedIn - https://www.linkedin.com/company/groupm

Media Contacts:

David.Grabert@GroupM.com
+1 212.297.8092 (U.S & Global)

Samantha.Kops@GroupM.com
+1 917.421.3019 (U.S. & Global)

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