The Mendelsohn Affluent Survey The Affluent and Luxury

The Mendelsohn Affluent Survey: The Affluent and Luxury Marketplaces February, 2008 Monroe Mendelsohn Research, Inc. • 841 Broadway • New York, NY • 10003 -4704 • 212 -677 -8100 • FAX 212 -677 -8833 - 1 -

Agenda • Monroe Mendelsohn Research • Selected Results from The 2007 Affluent Survey • The 2008 Affluent Survey - 2 -

Monroe Mendelsohn Research - 3 -

Monroe Mendelsohn Research • Founded in 1958 by Monroe Mendelsohn. • Business grew based on high-quality research and integrity. • MMR conducted only custom marketing research until 1978, when The Mendelsohn Affluent Survey was launched. • Recently launched The Affluent Omnibus Survey. • Continues to conduct custom marketing and media research studies. - 4 -

Mendelsohn's Affluent Survey • An annual syndicated survey now going into its 32 nd year. • Measures "affluent" households across America — the top quartile ($85 K+ in 2007). • Collected data in 2007 by mail using a 16 -page questionnaire that covered many topics. • Produces an annual database of approximately 13, 000 affluent respondents. • Used for strategy, marketing, selling, and media selection purposes by many advertisers, ad agencies, publications, and cable networks that market to the many segments of affluent America. - 5 -

Mendelsohn's Affluent Omnibus Survey • A new, recontact survey that complements the Affluent Survey. • Allows subscribers to insert their own custom questions into the 2008 Mendelsohn Affluent Survey. • Will be used for marketing and media purposes by participating advertisers, ad agencies, publications, cable networks, digital networks and other organizations that market to the many segments of affluent America. - 6 -

Selected Results from The 2007 Affluent Survey - 7 -

The Affluent Using MMR's definition of Affluent, there are slightly more than 29 million Affluent households according to the U. S. Census's latest survey. - 8 -

The Affluent (continued) These 29 million Affluent households comprise 25% of the U. S. population, but they earn more than half the total income. - 9 -

The Affluent (continued) • The 2007 Mendelsohn Affluent Survey projects that there about 2. 6 million "High Net Worth" households (with $1 million+ in liquid/investable assets) living in the U. S. They are labeled as "HNW" in this presentation. • Households with $250 K+ household income, the other Affluent segment profiled in this presentation, are labeled as "$250 K+". - 10 -

The Affluent (continued) HNW households tend to be older than $250 K+ households - 11 -

The Affluent (continued) About a third of HNW households report HHI of $250 K+ - 12 -

The Affluent (continued) More than one third of the $250 K+ segment report liquid assets of $1 million+ - 13 -

The Affluent (continued) The 867, 000 households that have both $250 K+ household income and liquid assets of $1 million+ constitute a prime target $250 K+: 2, 245, 000 Both: 867, 000 HNW: 2, 600, 000 - 14 -

The Affluent (continued) The Affluent are overwhelmingly white - 15 -

The Affluent (continued) The majority of the Affluent have attended college - 16 -

The Affluent (continued) The Affluent are overwhelmingly married/partnered - 17 -

The Affluent (continued) Compared with all U. S. households, the affluent are currently more likely to live in the Northeast or the West - 18 -

The Affluent (continued) A good number of the HNW segment is retired - 19 -

The Affluent (continued) Professional/managerial adults in the $250 K+ and HNW segments are likely to be C-suite types - 20 -

The Affluent (continued) The $250 K+ and HNW segments tend to have substantial total assets - 21 -

The Affluent (continued) The majority of the Affluent use financial advisors - 22 -

The Affluent (continued) The Affluent own their principal residence - 23 -

The Affluent (continued) The $250 K+ and HNW segments are more likely to own multiple residences - 24 -

The Affluent (continued) The $250 K+ and HNW segments also own other real estate - 25 -

The Affluent (continued) The $250 K+ and HNW segments are active in investing, traveling, etc. - 26 -

The Affluent (continued) The $250 K+ segment tends to travel frequently - 27 -

The Affluent (continued) The $250 K+ segment is more likely to fly "private" - 28 -

The Affluent (continued) Europe is the most visited foreign travel destination among the $250 K+ and HNW segments - 29 -

The Affluent (continued) The Affluent are civic-minded - 30 -

The Affluent (continued) The Affluent, especially the $250 K+ and HNW groups, are spenders - 31 -

The Affluent (continued) The Affluent are involved culturally - 32 -

The Affluent (continued) The Affluent join private clubs - 33 -

The Affluent (continued) Some of the Affluent enjoy boating - 34 -

The Affluent (continued) The $250 K+ and HNW segments are more likely to have wine cellars and to purchase by the case - 35 -

The Affluent (continued) Wine is the Affluent's favorite alcoholic beverage - 36 -

The Affluent (continued) The Affluent use the Internet - 37 -

The Affluent (continued) The Affluent use the Internet to communicate and get information - 38 -

The Affluent (continued) The Affluent also use the Internet to conduct business - 39 -

The Affluent (continued) There are many cable networks that reach the Affluent - 40 -

The Affluent (continued) The cable networks with the highest concentrations of $250 K+ and HNW are the following - 41 -

The Affluent (continued) The Affluent still read publications and can be reached by them - 42 -

The Affluent (continued) The publications with the highest concentrations of $250 K+ and HNW in rank order are the following - 43 -

The Affluent (continued) As has been demonstrated, there are two ways of segmenting and targeting the luxury market—income and wealth. $250 K+: 2, 245, 000 Both: 867, 000 HNW: 2, 600, 000 - 44 -

Questions about the 2007 Survey - 45 -

The 2008 Affluent Survey - 46 -

The 2008 Affluent Survey • Will again measure "affluent" households across America — the top quintile in 2008 ($100 K+ in 2008 compared to $85 K+in 2007). • Will collect data by mail using a 20 -page questionnaire in 2008 that will cover a number of new topics (compared to the 16 -page questionnaire in 2007). • Will add digital media brand audience metrics in 2008 (those URLs accessed by mobile phones and/or PCs) using a single source survey methodology. • Will obtain details on usage of web-enabled mobile phones and PC’s in 2008. - 47 -

The 2008 Affluent Survey (Continued) • Will use “enhanced” category expenditure, investment and savings, real estate, and personal/household income scales in 2008. • Will add a substantial number of category topics and expenditures in 2008. • Will add use of video games (web and console-based) in 2008. • Will add writing and reading blogs in 2008. • Will add viewing of broadcast networks in 2008. • Will add listening to satellite radio in 2008. • Will add upscale stores shopped in 2008. - 48 -

The 2008 Affluent Survey (Continued) • “Enhanced” category expenditure scales will increase from a high of $7, 500+ to $15, 000+. • “Enhanced” investment and savings scales will increase from a high of $2 Million+ to $3 Million+. • “Enhanced” real estate scales will increase from a high of $1 Million+ to $3 Million+. • “Enhanced” personal income scale will increase from a high of $200 K+ to $500 K+. • “Enhanced” household income scale will increase from a high of $1 Million+ to $4 Million+. - 49 -

Questions about the 2008 Survey - 50 -