CEO Eye Corp's Review

In 2008 our team has striven to advance the EYE brand and its fundamental characteristics – accountability, innovation and everywhere – to further our growth story.

Wherever we operate, EYE is:

• accountable. We continually invest in tools that confer deeper understanding of how our formats and audience environments work to confirm client return on investment. These include: our own and industry-driven audience measurement frameworks; EYE proprietary research; proof-of-posting tools; championing the out-of-home (OOH) sector; and of course our demonstrable commitment to client service.
• determinedly advancing its reputation as an innovator, both through our sophisticated, constantly evolving digital inventory and the way we evaluate advertising environments, strategically positioning our products to ensure maximum impact. With an ongoing focus on technological improvement, EYE will continue to raise the bar.proudly everywhere, delivering high-value OOH audiences through quality inventory in distinct lifestyle environments: Drivers, Flyers, Shoppers and Students. With assets right around the globe, EYE is ideally positioned to engage these very important audience sets.

This approach has underpinned EYE’s remarkable journey from a leading Australasian OOH player to a successful international business in the space of only three years.

While market conditions have been challenging, the majority of EYE’s current major capital projects were conducted in financial year 2008 – most significantly the current re-build of Sydney Airport Terminal 2 and the opening of Singapore Changi Airport Terminal 3.

EYE’s Australasian operations continue to deliver industry-leading margins, providing the model for our promising new businesses in the United Kingdom and United States of America.

The year ahead will see us reinforce the value of our assets, further demonstrating OOH’s effectiveness and enhancing EYE’s long-term profitability.

Accountability

In all our territories EYE delves deep into consumer attributes and attitudes, demonstrating the value of our assets through accurate and timely audience measurement. In many instances we are breaking new ground – particularly in the USA with Eye Shop and in Asia and the UK through Eye Fly.

Although we prefer to work with the industry in our various markets to create uniform, accepted, sector-wide currencies, EYE never hesitates to take the first step in establishing systems to ensure our offerings are properly understood and valued for clients.

In the next 12 months each of our territories – whether as part of the industry or through a bespoke EYE initiative – will have world-class measurement and accountability standards.

For example, our Eye Tracking study, launched at Singapore Changi Airport earlier this year, is already providing invaluable insights on traveller behaviour. Capturing eye movement of real-time passengers in an unobtrusive, natural manner, the study monitors people’s actual behaviour between check-in counter and departure gate. Among other insights, the first research wave revealed business travellers were more than 20 per cent more likely than leisure travellers to view advertising displays, and they did so more frequently. Meanwhile, although their overall viewing was lower, the prompted recall rate was higher among leisure travellers, particularly for more casual creative, suggesting they are more inclined to engage with messages that reflect their elevated moods.

By the end of this financial year, the Eye Tracking methodology used at Singapore Changi Airport will be deployed at Manchester International Airport for Eye Fly and Auckland University for Eye Study. Early Eye Tracking results indicate 100 per cent of students are engaging with our Eye Study advertising formats, seeing one in three panels passed, and this viewing pattern is constant throughout a student’s time on campus. This reinforces Eye Study as the most effective bridge between marketer and student.

In the USA, EYE has commissioned leading media and marketing research firm Arbitron to conduct a shopper profile and segmentation study to provide our advertisers with a new level of information and build understanding of the unique and positive engagement that Eye Shop provides. The study will also include teens, a particularly valuable group of shoppers about whom to date there has been limited information.

Now in its second year Verifeye, in association with prominent USA research firm Millward Brown, confirms the high correlation between campaign weight/frequency and shopper awareness. This research underscores the huge potential to influence consumer decisions at point-of-purchase.

We are particularly proud of our contribution, as part of the Outdoor Media Association of Australia (OMA), towards the world-leading OOH audience measurement initiative: MOVE (Measurement of Outdoor Visibility and Exposure). MOVE will assess all mainstream OOH formats, considering both macro and micro audience movements at a level not previously available anywhere, in a single reach and frequency system. MOVE will elevate the Australian OOH sector to world’s best practice. The OMA has worked closely with the Media Federation of Australia in developing the system to ensure relevance to clients and agencies. We look forward to data becoming available in early 2009 which, we have no doubt, will confirm EYE’s sector leadership.

All EYE’s research and verification work aims to enhance the accountability of our assets to advertisers, thereby supporting the entire OOH sector as a growing and indispensable component of a marketer’s media mix.

Innovation

With the roll-out of new or upgraded digital inventory in Australia, New Zealand and USA Eye Shop largely completed in financial year 2007, we have concentrated on Eye Fly in 2008.

Most significantly, EYE recontracted with Sydney Airport Corporation Limited (SACL) for Terminal 2 (T2). T2 has enjoyed unprecedented passenger growth over the past two years, aided by extensive SACL investment in passenger facilities. We are extensively redeploying EYE’s T2 inventory, including a large number of new digital displays, featuring a ‘landmark’ Landscape Digital panel that is the first of its kind at an Australian airport.

Captivating digital signage is Eye Fly’s consistent signature. LED and LCD technology features widely and builds on our considerable success with this cutting-edge inventory at Singapore Changi Airport and Manchester Group airports.

Demand for digital steadily increases as marketers appreciate its benefits over traditional media, including higher frequency (shorter-term campaigns), flexibility, creative enhancements such as moving content, and near instantaneous, remote updating.

Continual technology advances are as important in delivery as display. EYE’s newest web-based proof of performance system, Eye Proof, has been operating in malls across the USA since January, making it simple for advertisers to track the progress of their campaigns. Eye Proof confers absolute confidence by providing clients current posting details, including photos and tracking, all via secure internet connection. The service will progressively roll out to EYE inventory in Australia, New Zealand, Singapore and the UK.

ADVAL (Eye In-Store) will complete a significant investment program in state-of-the-art and environmentally-enhanced print technology by the end of calendar year 2008, with upgraded digital print capabilities creating a new standard for large
format imagery.

Everywhere

While 2008 has brought more challenging trading conditions in most markets, we remain confident that our expansion program has brought EYE to the right places at the right time. We are fully operational in Singapore, the UK and the USA, building on the success of our established Australia/New Zealand businesses.

EYE’s leadership is absolutely clear. We reach:

• 6.2 million Drivers in Australian metro areas every weekday and 4.3 million on weekends via 562 Eye Drive sites in Australia and 56 sites in Indonesia.
• More than 171 million Flyers each year through Eye Fly’s 1700-plus airport sites and displays (internal, external and promotional zones).
• 200 million Shoppers every month in Australia, New Zealand and the USA via Eye Shop encompassing 350-plus premium shopping malls. In terms of mall numbers and geographic spread, EYE is one of the largest mall media networks in the United States.
• More than 1.3 million students at 100-plus higher education campuses across Australia and New Zealand through Eye Study.

The EYE team, in all of our markets, continually communicates our strength in delivering these distinct, highly valuable audiences to ensure advertisers understand the results EYE and OOH deliver.

We are a much bigger company than we were even two years ago, with most of our headcount growth outside Australia. EYE today is a multi-faceted organisation powered by a multi-cultural team with diverse backgrounds, relationships and experience. I congratulate them for effecting positive change and helping us understand and unlock the potential of our new businesses.

In all EYE’s territories, clients are seeking new audiences and the most effective ways to reach them. OOH offers outstanding value and effective cut-through in all economic climates, especially when strong and capable operators come together to develop the sector by offering sound audience measurement tools, effectively marketing our medium, partnering clients to create impactful campaigns and working with property owners to improve the OOH offering.

I am proud to say EYE is at the forefront of such activity in all our territories. Increasing emphasis on proving campaign effectiveness, along with improvements in technology and format standardisation, will further boost OOH as a serious media option, especially as inventory becomes more audience specific.

We are genuinely excited about our future. By expanding EYE’s presence, driving product innovation and seeking increased accountability we are achieving in all markets. While we continue to reinvest earnings in our developing businesses, we are as committed as ever to EYE’s expansion strategy.

To the EYE management team, our staff, the board of Ten Holdings and our shareholders, I thank you for your enthusiasm towards the EYE story.

GERRY THORLEY / CHIEF EXECUTIVE OFFICER - EYE GROUP