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Embargoed until Tuesday, August 26, 2014, 12:01AM GMT

Press Contact: Dan Friedman Daniel.Friedman@mbww.com

MAGNA GLOBAL’S US AD FORECAST UPDATE: 2015 Ad Growth Forecast Increased To +4.9%1, Highest Rate in Ten Years

The US market will outgrow the previous all-time high of 2007, at $172 billion One in three ad dollars will be spent with digital media

MAGNA GLOBAL Advertising Forecasts are based on independent research that examines media owners’ revenue trends as well as macro-economic data. They are updated on quarterly basis.

Top Stories

• MAGNA GLOBAL is forecasting US media owners advertising revenues (core media) to grow by +5.1% this year, to $167bn.

• This is a decrease from our previous forecast of +6.0% (April 2014) that is mostly due to a lower estimate for incremental advertising spend generated by non-recurrent Political and Olympic (P&O) ad campaigns this year, and a softer-than-expected market in 2Q.

• Excluding those cyclical P&O events, the underlying/normalized growth will be +3.5% this year, (previously +3.9%). Year-to-date, the market grew +3.2% compared to the first half of 2013.

• Market growth slowed down significantly in 2014 with most traditional media categories flat or down year-over-year, following a strong 1Q. However we believe the 2Q softness was mostly circumstantial and stronger advertising spending growth should resume in 3Q and 4Q.

• Television was among the media categories most affected by the 2Q slowdown, with local TV revenues flat year-over-year and English networks ad sales heavily down.

• We believe the dip in TV sales was partly circumstantial (e.g. Olympics pulling budgets in 1Q at the expense of 2Q, political spending slower to take off compared to previous cycles) and partly structural (acceleration in the long-term shift of ad dollars towards cable TV, Spanish networks and online video).

• Digital media advertising revenues are forecast to grow by +17.4% this year to reach the $50 billion mark. Within digital segments, mobile-based ad sales will grow by +64% (vs. +8% for desktop-based advertising).

• Our 2015 forecast is increased to +3.3% (core media, incl. P&O), up from +2.4% previously. Excluding P&O effects, growth is forecast to reach +4.9% (previously: +4.5%). This revision is mainly driven by a stronger economic outlook.

• This level of growth will be the highest in ten years, bringing the US ad market to a new all-time high of $172 billion (vs. 169bn in 2007).

• Digital media will reach a 34% market share in 2015 driven by social (+32%) and mobile (+51%). It will outgrow television by 2017, when ad revenues will reach $72 billion (38% market share).

1 Excluding cyclical political and Olympic spending

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2014 First Half: Putting the Television Dip into Perspective Media owners advertising revenues increased by +3.2% between January and June, compared to 2013 (excluding incremental revenues generated by Political and Olympic spending, P&O). The first half of 2014 was marked by a huge contrast between the first and second quarter. Advertising spending growth slowed down sharply in 2Q following a decent 1Q. Excluding P&O, 1Q was up +4.6% yoy and 2Q was up only +2.0% yoy (all media). Keeping in the P&O dollars, the slow-down looked even bigger, with 1Q up +6.1% (driven by Winter Olympics) and 2Q up a mere +2.3% (driven by Political). That was at odds with an opposite cycle observed in the economic environment with a mini recession in 1Q (real GDP -2%) followed by strong recovery in 2Q (real GDP +4%). MAGNA GLOBAL sees several causes behind that timing discrepancy and many of them are circumstantial. First, the dip in economic activity in 1Q was so sudden and unpredicted that it took several weeks for decision makers to realize how slow business and sales were, and when it was finally assessed some decided to cut on marketing spend in 2Q and perhaps freeze part of the annual budget. Now that the economic signals are robust again for the rest of the year (3Q and 4Q real GDP forecast to grow by +3% or more; job market improving faster than anticipated), we are confident that most, if not all, of those budgets will be re-activated in the second half of the year. Second, the dip is partly the legacy of an imbalanced first half in 2013. Last year 1Q was soft and 2Q was much stronger, so the comparison effect is optically penalizing 2Q. Third, we believe that some advertisers, for instance in the automotive sector, chose to move budgets from 2Q into 1Q to fuel marketing and advertising opportunities in and around the Winter Olympics, despite the fact that auto sales were actually slow in 1Q and much better in 2Q. That marketing planning probably contributed to drain 2Q, so we shouldn’t read too much into the soft spending by some categories in 2Q. The soccer World Cup staged in June/July may have played a similar but reverse role in attracting money in 2Q at the expense of 1Q and 3Q, but it was at a on much smaller scale (approximately $100 million compared to $500 million) so it couldn’t have offset the Olympic factor. Looking at individual media categories, we see the same 1Q/2Q pattern in most of them, but it was most noticeable in television. Local broadcast television revenues, for instance, were up +6% in 1Q and flat in 2Q, including political and digital sales, which translates into +4% and -3% respectively after excluding political and digital. Automotive is by far the biggest spending category for local television and, despite the fact that the bulk of local spend comes from local and regional dealers rather than manufacturers, ad spend was also concentrated in 1Q this year at the expense of 2Q. Also political spending has been slower to take-off this year compared to the previous election cycles. Ballot issues campaigns in particular, that represent approximately 20% of total political spending are trending very much below 2012 and 2010 at this stage. Political spending (candidates+ ballot) over January-July typically represents only a third of full-year spending in an election year that is heavily concentrated on September and October. So it’s not too late for political spending to catch-up with the record spend witnessed previously. We have, however, reduced our previous forecast for full-year spending in view of the year-to-date trend. We now anticipate the incremental part of political spend to total $2.3 billion this year, i.e. 18% less than the previous cycle in 2012 but 5% more than the previous mid-term elections.

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For national television, we estimate that the second quarter was essentially flat year-over-year, following a first quarter that was up +3% even without factoring the incremental Olympic spend. Looking at the main segments, the bulk of the drop was concentrated in English-speaking broadcast networks. Ad sales at the five networks decreased by approximately -9% year-over-year, following to a first quarter that was up +1% excluding Olympics (+14% including Olympics). The mediocre performance of network TV was a combination of flat pricing (a soft scatter market) and poor ratings performance: the four main broadcast networks showed average primetime ratings down, ranging from -4% (ABC) and -22% (Fox) with an overall average of -12% (primetime C3 ratings, adults 18-49, including sports and specials, source Nielsen). English-speaking broadcast TV revenues in 2Q were also hurt by the decision of many sports-oriented advertisers to move money in 1Q to fuel their Olympic effort and to move some budgets to Spanish television and cable to take advantage of the FIFA World Cup in June/July (the 64 soccer games were broadcast on Univision and ESPN, with only the final games on ABC and partly into July). Some programming circumstances also made 2Q ratings and ad sales look excessively weak: NBC broadcast much fewer hours of its most powerful program The Voice in 2Q this year, as the Spring season of the show was scheduled earlier and it ran over fewer evenings; ABC had two fewer NBA finals games this year (five compared to seven last year and game seven had achieved huge ratings). That, too, moved ratings and ad dollars from 2Q to 1Q. Beside the circumstantial factors, another cause for the slowdown in broadcast TV revenue in 2Q lies in an acceleration of the gradual media spending shift towards digital media, and, in the specific case of national television, the growth of online video advertising. The growth of online video (estimated to be +15% in 2Q) is mostly fueled by budgets moved out of traditional television. While some of the video advertising budgets go to digital pure players like YouTube and to non-TV content, traditional television broadcasters retain a large share of it through their own digital presence. The ‘broadcast’ numbers mentioned in the previous paragraph exclude the ad sales generated by the broadcasting companies from online viewings of their shows; If we factor in the revenues broadcast networks derive from their Full Episode Players (FEPs) (e.g. abc.go.com) and their share of Hulu’s ad sales, the total video revenues for broadcasters would look slightly better, although still negative for the quarter (-8% instead of -9%). Because they represent only +3% of the broadcasters’ total ad revenues (approximately $450m out of a total of $14.5bn in 2013), broadcasters’ online video ad sales cannot offset the decrease in traditional sales for the time being. Other TV segments performed better in the quarter: cable networks ad sales slowed down too but still grew by +2.8% (+3.5% year-to-date) and Spanish-speaking broadcast networks revenues increased 43% year-over-year (29% year-to-date) driven by more than $100 million of incremental ad sales generated by Univision on the FIFA World Cup. Compared to the previous World Cup four years ago, ratings grew significantly on almost every demographic on Spanish-speaking Univision, and they grew even more on English-speaking ESPN (between 50% and 70% across targets), suggesting that soccer is becoming increasingly popular among non-Hispanics too. Factoring the various transfers between segments, overall TV advertising was flat in the second quarter (-0.2% excl. P&O, +0.7% incl. P&O). Over the entire first half revenues were up +4% (+1.8% excl. P&O). On a full-year basis, we lower our television forecast from +8.3% to +6.1% incl. P&O (+2.2% excl. P&O). Ad sales English-speaking broadcast networks are now forecast to decrease by -0.5% (-3.7% excl. P&O).

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The volume of sales in the recent upfront sales for the broadcast season 2014-2015 was down, for broadcast and cable networks, when compared to last year, and we do take this as a sign that more advertisers may be willing to diversify their spending outside national TV or even outside traditional linear media. However, it is also likely that the softness observed in 1H and 2Q in particular, reflected in low scatter prices, may have caused some advertisers to spend less than usual in the upfront sales, not necessarily because they wished to drastically reduce their total television budgets, but rather because they consciously chose to keep budgets for future scatter buys between 4Q14 and 3Q15, as they anticipated the scatter market to continue being cheaper than in recent years. If the economy improves as much as predicted in the next few months it is possible that this gamble might backfire, as more demand (e.g. budgeted annual dollars) would flow into the market in 4Q14 or 1H15 and generate cost inflation, especially if ratings continue to disappoint during the next broadcast season and supply is scarcer than expected. Most other traditional media categories recorded decreasing revenues in the second quarter and the first half. Print media suffered the most: newspapers revenues decreased -9.5% year-over-year in 2Q (-9.9% for 1H); magazines ad sales shrank by 11.6% in 2Q (-10.6% for 1H). Radio ad sales were down 4.7% in 1H (-3.6% for 1H). Out-of-home advertising revenues were flat in 2Q and 1H (+0.9% including cinema) slowing down from a robust growth in 2013 (+4.3%). Overall traditional media (television, print, radio, out-of-home) revenues decreased by -3% in the second quarter, and by -1.8% in the first half. It’s the sign of a re-acceleration in the pace of the shift of media mix towards digital media, as traditional media ad sales decreased by “only” -0.2% in 2013 (and by -1.8% in 2012). By contrast, digital media ad sales increased by an estimated +18.3% in the first half of the year, jumping to a market share of 29.5%, compared to 27% in 2013. It must be noted that this share is still relatively low compared to many other markets (e.g. UK 43%, China 36%) suggesting more shift to come in the next few months and years. Full Year 2014: We Still Forecast Decent Growth (+3.5% excl. P&O) As anticipated, the US economy recovered strongly in the second quarter, with real GDP growing by +4% (source BEA 07/30/2014), following the first quarter dip (now revised to -2.1%). Economists are now confident that 1Q was a temporary incident in an otherwise steady recovery, partly caused by the severe weather affecting large parts of the country. The job market fared well throughout the first half. The volume of non-farm jobs increased by 209,000 in July, as the unemployment rate reached 6.2%. The economy has now experienced six consecutive months of job growth above 200,000 (source: BLS). It’s the first time since 1997 that the job market improved with that consistency over a six-month period. However the solid improvement on the job front is yet to trigger a noticeable upgrade on the confidence levels and the consumption front. Retail sales were essentially flat in the second quarter; and despite the good job climate, consumer confidence has not visibly improved year-to-date, staying at around 80 since January, apart from a short lived spike in May (84). August was just reported at 79. Looking at a crucial advertising category, car sales improved in 2Q (+7% yoy) following a stand-still in 1Q (+1%) that was partly caused by the weather. 1H overall was +4.9%, roughly as forecast. 2Q was probably due to delayed purchased and we should expect lower growth in 3Q-4Q (+3 to +4%).

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According to the August update of the “Survey of Professional Forecasts” (SPF) by the Philadelphia Fed, real GDP growth is expected to stabilize at +3% in 3Q and 4Q. However due to legacy of the Q1 incident (-2.1%) and despite the strong rebound of 2Q, the full-year growth for real GDP is now expected to be +2.1%, slightly below the previous (May) forecast (+2.4%). To summarize, many factors point towards isolated and circumstantial causes behind the 2Q slow-down, including the delayed market response to the 1Q economic dip. For that reason we are not significantly changing our forecast for the next two quarters and we are still expecting decent advertising growth on a full-year basis in 2014. We are now forecasting US media owners advertising revenues (core media) to grow by +5.1% this year, to $167bn. This is approximately one point below our previous forecast of +6.0% (April 2014). Approximately one-third of that revision is due to the softer-than-expected market in the first half and lower full year macro-economic outlook, and two-thirds is due to a lower estimate for the incremental advertising spend generated by non-recurrent Political and Olympic (P&O) ad campaigns this year. Excluding cyclical P&O events, the normalized growth will be +3.5% this year (previous forecast: +3.9%), compared to +4.4% in 2013. Television will grow by +2.2% and digital media will increase by +17.4% in line with 2013 growth. As media spending follows the consumer into digital media, print ad sales will continue their long-term decline: newspapers -8.9%, magazines -10.9%. Radio was relatively resilient in 2013 (-1.2%) but sales will decrease by -3.0% this year. Outdoor media sales will grow by only +1.7%, a significant slow-down compared to the mid-single-digit growth rate enjoyed in the past three years. 2015: Strongest Growth in Ten Years (+4.9% excl. P&O) Real GDP is forecast to accelerate to +3.1% in 2015 according to the August SPF, compared to +2.1% this year. That forecast did not change in the last six months. However the outlook for job creation has improved and the unemployment rate is now forecast to go down to 5.7% in 2015 (compared to 6.1% six months ago). Moreover, the SPF forecast for Personal Consumer Expenditure (PCE) - one of the macro-economic indicators most correlated to advertising spending in our experience - has been upgraded to +4.8% (compared to +4.5% in the February publication). Consumer Price Inflation (CPI) is expected to remain moderate, at +2.2%. This stronger economic outlook leads us to increase our forecast for advertising revenues to +3.3% (core media, incl. P&O), up from +2.4% previously. Excluding P&O effects, the 2015 growth is forecast to reach +4.9% (previously: +4.5%). This will mark a noticeable acceleration compared to 2014 (+3.5%) and 2013 (+4.4%). It will be the strongest growth rate (in normalized terms) since 2005 (+5.5%). Core media advertising will grow to a new all-time high of $172 billion (vs. $169bn in 2007). Following the heavy decline of 2008-2009 (-20% in two years) it will have taken six years for the market to fully recover and reach pre-recession levels. By comparison, the global marketplace recovered as early as 2011 but many countries in Europe are still significantly smaller than their 2008 peak. (If we add direct marketing categories - direct mail, directories -, the 2015 market will reach $193 billion, still 6% smaller than its 2007 level). Television ad revenues will increase by +2.3% (previously +3.8%). We also reduced our long-term forecast for the share of television, as we are now considering lower supply

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and lower pricing than previously anticipated in the mid-term. Supply will gradually shrink due to acceleration in the erosion of viewing. Average CPM inflation was lower than previous years, for both broadcast and cable networks, in the recent upfront TV sales for the broadcast year 2014-2015. In addition, the advent of programmatic buying in digital media and the stabilization of cost for premium video inventory is now making digital media more attractive to categories of advertisers that were until now very loyal to traditional television, in particular the consumer package goods sector (food, drinks, personal care and household goods), automotive and the entertainment sector (movie releases). Marketers in these sectors have started to explore the increasing opportunities created by the integration of consumer and sales data in digital media buying and targeting. We therefore increase our forecast for digital media growth to +15.7% (from +12.8% previously). Digital media sales will be driven by video formats (+31%) and social media (+32%) whilst search will remain dynamic (+15%). The rapid shift to mobile-centric advertising will continue as mobile-based formats (within search, video, social, display) will grow by +51% to reach $17.5bn (30% of total digital spending); meanwhile non-mobile digital advertising will grow by a modest +5%. We are anticipating digital media to become the number one advertising category in 2017 when digital ad sales will reach $72bn (38% market share) compared to TV sales of $70.5bn. The rest of traditional media will benefit from stronger ad growth overall but continue to lose market share and ad dollars to digital in 2015: newspaper ad sales will decrease by -6.2%, magazine sales by -9.4%; radio ad sales will stabilize at +0.5% and OOH will recover at +3.4%. Vincent Letang, Director of Global Forecasting at MAGNA GLOBAL, said: “Despite the dip in advertising spending growth during the second quarter, we anticipate ad demand to pick up in the second half, so that 2014 will grow by +3.5% this year. In 2015, as the economy improves and consumption finally strengthens, the US ad market will enjoy its strongest year-over-year growth in ten years (+4.9%) to reach a new all-time high ($172bn).”

-------------- About MAGNA GLOBAL Advertising Research For more than 60 years, MAGNA GLOBAL forecasts have been the industry’s leading source for measuring and forecasting advertising revenues. MAGNA GLOBAL forecasts media owners’ advertising revenues in the US and around the world through financial analyses of media companies’ public filings, government reports, trade association data and local market expertise. MAGNA GLOBAL’s new methodology was introduced to the industry in 2009 and has redefined measurement for the advertising-supported media economy, delivering unparalleled authority and accuracy. Our Global Media Suppliers Advertising Revenue Forecasts include television (pay and free), internet (search, display, video, mobile, social), newspapers, magazines, radio, cinema and out-of-home (traditional and digital). Our report monitors media suppliers’ revenues in 73 markets, including all major countries, representing 95% of the world’s economy. Detailed forecasts are updated twice a year and available to our subscribers. Our US Advertising Revenue Forecast study, first published in 1950, includes detailed data for more than 40 categories of media on a quarterly basis from 1990 to 2012 and on an annual basis

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from 1980 to 2019, updated quarterly. Please contact vincent.letang@magnaglobal.com for further details. About MAGNA GLOBAL MAGNA GLOBAL is the strategic global media unit of IPG Mediabrands, comprised of two key divisions. MAGNA GLOBAL Investment harnesses the aggregate power of all IPG media investments to create power and leverage in the market, drive savings and efficiencies, and ultimately make smarter, more effective media investments on behalf of our clients. With a stated goal of reaching 50% automated buying by 2016, the team in North America invests across digital, programmatic, broadcast and all traditional media platforms and is therefore considered the most comprehensive buying and negotiating unit in the media industry. The architects of the MAGNA Consortium – a powerful committee of executives from A&E Networks, AOL, Cablevision, Clear Channel Media and Entertainment, ESPN and Tribune – MAGNA North America is also dedicated to shaping industry automation and audience specific buying. MAGNA GLOBAL Intelligence has set the industry standard for more than 50 years by predicting the future of media value. MAGNA GLOBAL Intelligence produces more than 40 annual reports on audience trends, media spend and market demand, and ad effectiveness. MAGNA GLOBAL has offices in 24 countries around the world. For more information, please visit www.magnaglobal.com or follow us @MAGNAGLOBAL.

About IPG Mediabrands Founded by Interpublic Group (NYSE: IPG) in 2007 to manage all of its global media-related assets, IPG Mediabrands invests $37 billion in global media on the behalf of its clients, employs over 7,500 diverse and daring marketing communication specialists worldwide and operates company businesses in more than 127 countries. A proven entity in helping clients maximize business results through integrated, intelligence-driven marketing strategies, IPG Mediabrands is committed to driving automated buying, pay-for-performance and digital innovation solutions through its network of media agencies including UM, Initiative, BPN, Orion Holdings, and ID Media. Its roster of specialty service agencies including MAGNA GLOBAL, Ansible, Mediabrands Audience Platform, Mediabrands Publishing, IPG Media Lab, Ensemble, and Identity offer technologies and industry moving partnerships that are recognized for delivering unprecedented bottom line results for clients. For more information, please visit www.ipgmediabrands.com or follow us on Twitter at @IPGMediabrands.

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Appendix

TABLE 1: US Media Owners Ad Revenues (Core Media) (2014-2015) 2014 Incl. P&O Excl. P&O

Advertising revenues ($bn) 166.8 164.1

yoy growth 5.1% 3.5%

previous forecast (Apr'14) 6.0% 3.9%

2015 Incl. P&O Excl. P&O

Advertising revenues ($bn) 172.3 172.1

yoy growth 3.3% 4.9%

previous forecast (Apr'14) 2.4% 4.5% Source: MAGNA GLOBAL, August 2014. Note: “Core Media” above includes television, print, out-of-home, radio and digital media.

TABLE 2: US Media Owners Advertising Revenues by Media Category (year-on-year growth, including P&O)

including P&O 2013A 2014E 2015E Total TV -0.6% 6.1% -0.9% Digital Media 17.0% 17.4% 15.7% of which Mobile 110.2% 63.7% 51.1% of which Desktop 7.5% 8.2% 5.0% Newspapers -8.2% -8.9% -6.2% Magazines -5.1% -10.9% -9.4% Radio -1.2% -3.0% 0.5% OOH 4.3% 1.7% 3.4% Total Core Media 2.4% 5.1% 3.3% Directories -23.9% -26.9% -28.0% Direct Mail 0.8% 2.5% -3.2% Total Incl. DM 1.6% 4.2% 2.2%

Source: MAGNA GLOBAL, August 2014

TABLE 3: US Media Owners Digital Advertising Revenues by Format and Platform (year-on-year growth forecasts)

2014 Mobile Desktop Total 2015 Mobile Desktop Total Search 44.0% 11.1% 17.4% Search 41.3% 7.1% 15.2% Video 101.1% 18.2% 28.6% Video 65.4% 22.8% 31.1% Display 20.9% 0.6% 2.1% Display 125.4% -4.8% 6.5% Other 61.5% 1.7% 3.9% Other 39.2% 0.4% 2.6% Social 128.5% 12.5% 60.8% Social 50.2% 4.7% 31.6% Total Digital 46.1% 7.9% 13.4% Total Digital 51.4% 5.1% 13.6%

Source: MAGNA GLOBAL, August 2014