Gemstar-TV Guide International Announces Positive Research Results from Major IPG Advertising Effectiveness Study

Business Wire, Sept 3, 2002

Business Editors

PASADENA, Calif.--(BUSINESS WIRE)--Sept. 3, 2002

Gemstar-TV Guide International, Inc. (Nasdaq:GMSTE) ("Gemstar-TV Guide" or the "Company") today announced that it has received the final report of a major Advertising Effectiveness Study conducted by IPSOS-REID in conjunction with its affiliated company IPSOS-ASI, a leading industry advertising research firm. The Study measured the effectiveness of advertising on TV Guide Interactive(SM) ("TVGI") -- one of the Company's interactive program guides ("IPG") currently deployed in more than 8 million digital cable set-top boxes in the United States. The results, based on three key effectiveness measures that advertisers use as standard metric proofs of performance, provided clear evidence that the IPG is a powerful and effective advertising delivery vehicle, generating recall levels consistent with print advertising or television commercials. Test advertising among TVGI households generated lifts in recall levels consistent with print advertising or an investment of between 200 to 400 Targeted Rating Points ("TRPs") on television commercials. The Company commissioned the study.

This benchmark market research initiative included six major brands that advertised on the IPG over a period of two weeks. The Study used three measures to determine results: Related Recall specific to TVGI (asked to playback ads seen on TVGI and prove recall by noting elements contained within the ads); Prompted Recall/Brand Recognition (asked to recognize the TVGI advertised brand when prompted with specific ad descriptors); and Related Recall across all media (asked to describe ads recalled for specific brands across ALL media, then the level of elements associated with TVGI test ads was isolated). The effectiveness of TVGI as an alternative medium for advertising was demonstrated on all three recall measures asked in this study.

According to IPSOS-ASI, "It is often difficult to isolate recall from media other than TV in tracking studies. Given this background, the results achieved when asking about the IPG advertising were surprisingly strong and consistent. We would hypothesize that this has something to do with the degree of focused attention respondents are paying to the Guide screen while advertising is occurring."

Within the Study, Related Recall specific to the universe of TVGI households, a standard test of performance where viewers are prompted with both the brand names and the medium where they were advertised, all six brands showed significantly higher recall post versus pre advertising exposure. With an average lift of 5.6 percentage points, the lift generated by the Company's IPG platform was found to be comparable to the lift that would be generated by a network TV ad campaign of 400 TRPs. This test, according to IPSOS-ASI, produced strong results for a media other than television.

Prompted Recall/Brand Recognition is a measure where television commercials and print both perform well. When ads appearing on TVGI were described, all six brands show branded recognition post exposure; three of the six brands did not advertise in other media and generated recall levels equivalent to those achieved for an average print ad and an average network TV commercial campaign with 400 TRPs.

On the most demanding proof of performance, Related Recall based on all media, where television typically performs most strongly, the Company's IPG platform performed above expectation. For the three brands with a media schedule outside TVGI less than 500 Gross Rating Points, generated an average lift of 4.3 percentage points, a level comparable to the lift generated with a network TV spend of 200-250 TRPs. "We were surprised to see significant results for a secondary media with this type of questioning," commented IPSOS-ASI.

"We will continue to conduct advertising proof of performance studies to validate IPG advertising effectiveness," said Dr. Sharon Polansky, Senior Vice President of Corporate Market Research for Gemstar-TV Guide. "When these results were recently previewed, we received positive response and I feel confident that each study will add to the credibility of this exciting new platform and help convince more and more advertisers that the IPG should have a regular place in their media schedules."

The Study concluded that TVGI advertising represents an opportunity for advertisers to recapture the attention of viewers who regularly switch to TVGI during commercials and are less likely to see traditional advertising. About two-thirds (66%) of TVGI users surveyed in this Study use the IPG (most of the time/always/sometimes) when a commercial comes on the channel they are watching. Further, ad recall rates are higher among those most likely to use TVGI during commercial breaks. The fact that one must focus specifically on the Guide in order to use it appears to contribute to the stronger than expected results (for a secondary media) achieved.

Stringent protocols were utilized in the design of this research. These included both a test group (TVGI digital cable users) and a control group (digital cable subscribers who do not have TVGI) who were interviewed before engaging in the Study to assess levels of recall prior to exposure to TVGI advertising. The groups were also interviewed post-advertising to measure shifts in recall from advertising in other media between pre- and post-exposure waves. A total of 1,174 interviews were conducted among adults, 18 , 587 pre-advertising and 587 post-advertising. Interviews were conducted between June and July, 2002. The TRP equivalents provided by IPSOS-ASI are based on its normative database of 2000 ads.