Lending & Debt Trends and Opportunities: Econometric and UK Consumer Trends.

Lending & Debt Trends and Opportunities:Econometric and UK Consumer Trends

Contents

Market Environment Advertising MarketConsumer Trends

Market Environment

The Bank of England base interest rateFebruary 2011 forecast

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%1

98

01

98

11

98

21

98

31

98

41

98

51

98

61

98

71

98

81

98

91

99

01

99

11

99

21

99

31

99

41

99

51

99

61

99

71

99

81

99

92

00

02

00

12

00

22

00

32

00

42

00

52

00

62

00

72

00

82

00

92

01

02

01

12

01

22

01

32

01

42

01

5

Source: Oxford Economics/nVisionBase: UK

6.0

5.1

4.03.7

4.44.7 4.6

5.5

4.7

0.6 0.5

3

1.8 1.7

2.9 32.8

3.2

4.34

-0.5

4.1

0.81.2 1.3 1.4 1.3

2.12.3 2.3

3.6

2.22.4

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

%

Average base rate RPI CPI

Savers face pressure from low rates and rising inflation…

Average annual changes in the bank base rate, RPI and CPI – UK, 2000-10

Bank base rate and quoted household rates (%) for savings accounts,

January 2000-November 2010

Source: Bank of England 0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan

-00

Jul-

00

Jan

-01

Jul-

01

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

%

Official Bank Rate Instant-access deposits from households

Fixed-rate bond deposits from households Cash ISA deposits from households

Time deposits households

Source: Office for National

Statistics/Bank of England

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Consumer Trends – Debt and Lending

Consumer net lendingAnnual % change

February 2011 forecast

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Consumer credit Mortgages

Source: Oxford Economics/nVisionBase: UK

While there has been reduced levels of lending in the market, these are forecasted to increase in the future

Net unsecured lending to individualsQuarterly, seasonally adjusted, in millions

-£2,000

-£1,000

£0

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000

£7,000

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Total unsecured debtCredit card debt

Non-credit card unsecured debt

Source: Bank of England/nVisionBase: UK

Overall there has been a reduction in the NET unsecured debt market other than that in credit cards

Difficulty accessing financial services% who find the following difficult

“Please tell me to what extent you find it difficult or not to get access to the following financial services”

0% 20% 40% 60% 80% 100%

Difficulty accessinga basic bank

account

Difficulty accessinga bank/payment

card

Difficulty accessinga credit card

Difficulty accessinga mortgage

Difficulty accessingconsumer loans

Not difficult

Difficult

Don't know

Source: Eurobarometer/nVisionBase: 1,000 respondents per country aged 15+, 2010

Advertising Climate

The internet is an effective way of reaching the target audience

Internet

Radio

Newspapers

MagazinesCinema

TGI GB Q1 2011Base: 18+ Take loan out with specialist company & only when absolutely necessary

Online Advertising

• 69% say the internet is the first place they look when they seek information (index 122)

• Engaged – 1 in 5 say they often notice advertisements on the internet

• The audience are 13% more likely to be regular users of MSN/ WLTGI GB Q1 2011Base: 18+ Take loan out with specialist company & only when absolutely necessary

Media Spend• Financial

advertisers tend to spend the most on advertising on TV and Direct mail advertising followed by the Press

• On average the industry spent around 6% on Internet advertising (not including search)

Source: NNR adDynanix : 2009 - 2010

Impressions and Audience by Publisher - AdMetrix

• While Microsoft does not have the most impressions for this sector, it does have the most Unique Visitors

Source: ComScore AdMetrix Jan 2011

Advertiser performance

For the same volume of impressions, Microsoft reaches significantly more UU’s

comScore AdMetrix Feb 2011Business/ Finance category (includes Wonga.com)

Search Traffic KPIsOverall Finance Traffic

• Loan traffic was up 16% overall for 2010

• Looking specifically at Unsecured loans, these KWs received 31% more traffic over 2010 than in 2009 while payday loan products experienced 109% increase in traffic

2011 Unsecured Loan Product Growth (Jan-Feb)

• Unsecured Loans up 13%• Payday Loans up 23%

1. Microsoft Advertising Intelligence Tool2. Hitwise

Bing Finance Searchers are…

Source: NNR JULY 2010 – JANUARY 2011

Loan KW Demographics and Daily Trends:

1. Microsoft Advertising Intelligence Tool

Microsoft Media Network Trends

Network: Day of the Week• There is a slight decline in impressions through out the week

however consumers are more likely to click during first half of the work week and on Sunday

• Conversions have two peaks on Tuesday as well as at the end of the week on Friday

Source: Microsoft Media Network : July 2010 – March 2011

Network: Time of Day• There is a build of

Impressions and Actions during the early afternoon and a slight elevation in the early evening

• There is one main peak that occurs post-lunch before the end of the work day

Source: Microsoft Media Network : July 2010 – March 2011

Finance OpportunitiesLending PositioningBecause of so many variables in the market place, positioning of your product is key

Demographic/MosaicThe users and searchers for this type of product index well in demographic sectors and can be targeting with our Mosaic offering

Search and Display – Better TogetherUse both offerings to help boost your ROI moreover, use our display offering to help boost your brand campaign. Particularly when we have seen good increases in traffic in the start of 2011