Radio: They Are Listening Katz Radio Group June 18, 2014

Contents  Radio in the Media Landscape  Radio as America’s Companion  Radio vs. Music Streaming Services  Radio’s Unique Capabilities  Radio: Advertising that Works

1950 Today Up 1,200,000 listeners in the past year in the US alone! Source: March 2014 RADAR® 120 National Radio Listening Report Mon- Sun 12A- 12A persons 12+ and RADAR 116 March 2013; New York-Philadelphia Special Combo Metro (NJ Counties only) P 12+ / M-Su 6a-12Mid, Fall 2013 and 2012 Radio continues to be a “Big Three” mass medium Radio reaches 7,100,000 New Jersey consumers per week who spend 2 hours/day listening Up 197,000 listeners in the past year in NJ alone! Radio reaches 244,500,000 US consumers per week who spend 2-3/4 hours/day listening

Nearly everyone uses radio. In real time. Every week. Radio reaches over 90% of virtually every segment of the population. Radio reach 9 out of 10 consumers of virtually every demo in New Jersey, too. 4 Source: March 2014 RADAR® 120 National Radio Listening Report Mon- Sun 12A-12A persons 12+ and RADAR 116 March 2013; New York- Philadelphia Special Combo Metro (NJ Counties only) P 12+ / M-Su 6a-12Mid, Fall 2013 and 2012

Radio is the dominant reach medium for young adults Source: Scarborough USA Release 2 Total (Aug Sep 2013) Persons who used the medium within the last 7 days

Radio is a dominant medium for adults in New Jersey Source: Scarborough New York/Philadelphia Local Market Mix 2013 Release 2 NJ Counties only, Total (Aug 2012 – Aug Persons who used the medium within the last 7 days

Source: Scarborough USA Release 2 Total (Aug Sep 2013) Persons who used the medium within the last 7 days Radio is the #1 choice for reaching adults 25-54

Radio is the #1 reach medium for adults in New Jersey Source: Scarborough New York/Philadelphia Local Market Mix 2013 Release 2 NJ Counties only, Total (Aug 2012 – Aug Persons who used the medium within the last 7 days

Radio accounts for 23% of all daily entertainment Source: USA TouchPoints. Persons Note: AM/FM Radio includes Radio Station Streaming; Internet excludes , but includes internet usage via computer and mobile devices; Cable TV includes English language channels only; Newspaper and Magazine include digital readership Radio 23% Broadcast TV 22% Cable TV 24% Internet 16% Mobile App 6% Mobile Internet 5% Music Streaming Service 2%

TV Internet Radio Newspaper $75 $33 $16 $23 Ad Spend Pro Forma by Usage US Ad Spend (USD in Billions) Source: SNL Kagan. 2011; Nielsen Cross Platform Report March 2014; Newspaper -- Arbitron Inc and Edison Research The Infinite Dial 2013 Yet its share of budget falls short of its share of consumer usage Advertising spend pro forma by usage 10

Contents  Radio in the Media Landscape  Radio as America’s Companion  Radio vs. Music Streaming Services  Radio’s Unique Capabilities  Radio: Advertising that Works

80% Have called into a station, met a DJ in their community, or interacted in some other manner 70% Consider radio personalities to be regular people like themselves, who are “relatable” and “authentic” and would truly miss them if they were gone 66% Agree that their favorite radio stations reflect who they are as a person* 60% Think radio hosts are “like a friend,” whose opinions they trust and value Sources: Woodley, P. Parasocial Interaction between On ‐ air Radio Personalities and Listeners. USC, Annenberg School for Communication & Journalism,, released April 14, 2014 ** Latitude Research and OpenMind Strategy. State of Listening in America. May 2013 This relationship carries over to advertisers who become a part of these “Virtual Neighborhoods”. Radio has the power of personal connection

13 People are more connected to their favorite radio station than to facebook Read: I would be very disappointed if… Source: Alan Burns/Triton Digital “The Future of Radio” September 2012 National Consumer Database; 25,000,000 Panelists; August & September 2012;All Ages, Genders and Format Fans; Total Polled = 41,252; Roughly in Line with 2010 Census;

Radio is very different from music collections

“Radio is my community”  Connections to personalities, on air and online with two-way communication  A place to belong to, identify with… a TRIBE, and VIRTUAL NEIGHBORHOOD  Local information -- entertainment, news, traffic, weather, opinions, sports, events, opportunities  Community support and involvement  Instant information about disasters or other critical community news Broadcast Radio’s role is unique Consumers look for different things from Radio that Music Streaming Services cannot match “Radio is my community”

Broadcast Radio dominates the audio universe Radio provides a live, immersive entertainment experience, driven by local on-air personalities with an emotional connection to a loyal listener—one that can’t be redefined or replaced by music streaming. Source: USA TouchPoints. Share of Daily Time Spent Listening for Persons and Note: AM/FM Radio includes Radio Station Streaming Music Streaming Service 8% AM/FM Radio 92% Daily Time Spent Listening

96% of all music streaming service users in New Jersey and 94% in the USA also listen to AM/FM radio weekly Source: Scarborough USA Release 2. Persons 18+ and 25-54; New York/Philadelphia Local Market Mix 2013 Release 2 Total (Aug Aug 2013) New Jersey Counties Consumers think of Pandora as technology that replaces their personal CD and MP3 collections, not as something that replaces their favorite radio stations. They’re still tuning to Radio more than ever. What about music services like Pandora? And they spend more time with radio than non-music site streamers do.

Sources: Broadcast Radio data: Arbitron RADAR Weekly Users Adults 12+Mon-Sun 6A-Mid from; Internet Radio data: Arbitron/Edison Research Infinite Dial data, Adults 12+ Who Use Weekly Mon-Sun 6A-mid – NOTE – includes AM/FM Streaming; Satellite data: Scarborough Release – 2013, Adults 18+ Who Use Weekly Mon-Sun 6A-mid Decade of growth of Broadcast Radio vs. Internet Radio # of Adults 12+ Who Are Weekly Users in Millions Radio continues to dominate even as digital grows 64 million new listeners (+253%) in the last decade 16 million new listeners (+9%) in the last decade 19 million new listeners (+211%) since 2006

Jan – June 2012 Broadcast Radio 61% Satellite Radio 10% All Streaming Audio 7% Personal Music Collection (CD’s, iPod, MP3) 22% Broadcast Radio 63% Satellite Radio 10% All Streaming Audio 10% Personal Music Collection (CD’s, iPod, MP3) 17% Consumers are listening to less of their personal music collections, not less Radio Source: USA TouchPoints. Share of Daily Audio Usage for Persons Comparison of Jan-Jun 2013 vs. Jan-Jul Note: Broadcast Radio is defined as terrestrial AM/FM; Streaming Audio includes Music Streaming Services as well as Broadcast Streaming Jan – June 2013 Source: USA TouchPoints. Share of Daily Audio Usage for Persons Comparison of Jan-Jun 2013 vs. Jan-Jun Note: Broadcast Radio is defined as terrestrial AM/FM; Streaming Audio includes Music Streaming Services as well as Broadcast Streaming

Radio digital offerings continue to grow Technology has allowed Radio to touch listeners across devices and platforms Personalities in just the top 25 markets have more than 37 million Facebook friends and 59 million Twitter followers More than 7,200 streaming Radio stations in 2013 More than 20 million HD radios now in use (15 million+ in automobiles) Databases and outbound texting ability remain a source for targeted marketing by advertisers Sources: Inside Radio / M Street Corp., No Canadian or Mexican stations are included ; HD Radio stat from iBiquity ; RadioWorld.com “Automakers Speed HD Adoption” 2/13/2014; KMS Radio personality Facebook and Twitter accounts research February 2014

Contents  Radio in the Media Landscape  Radio as America’s Companion  Radio vs. Music Streaming Services  Radio’s Unique Capabilities  Radio: Advertising that Works

Mass Media with the Community Touch Whether it’s on-air personal endorsements, community events, sampling or local sponsorships… no other medium gets your brand closer to consumers in their own neighborhoods. Local Radio Consumers Personal Endorsements Community Event Sponsorships Experiential Brand Events Product Sampling

23 People hear commercials on radio -- tune-in is high during commercial breaks across ages and gender Radio’s Audience Delivery During an Average Minute of Commercial Breaks by Age/Gender Source: Arbitron, Media Monitors and Coleman analyzed 17.9 million radio commercial breaks from October 2010 to September 2011 across the aggregate markets measured by PPM and Media Monitors, comparing the audience level for each minute of a commercial break to the audience for the minute before the commercials began.

The Power of When -- Radio tops all other media during the day Source: USA TouchPoints. Percent of Adults using medium daily Monday-Friday 6A-6P. Note: Radio includes radio station streaming, Internet excludes , Television includes live and time-shifted; Cable TV includes English language channels only (Adults / M-F 6A-6P) (Closest to where it matters… consumers spending their money shopping, going to the movies, finding a restaurant, looking for something to do, etc.) (Adults / M-F 6A-6P)

(Adults / M-SU 6AM – 6PM) Source: USA TouchPoints. Share of daily minutes spent Out of Home with each medium; Radio includes radio station streaming, Internet excludes , Television includes live and time-shifted; Cable TV includes English language channels only People spend more time OOH with Radio during the day than Broadcast TV, Cable TV, Print or the Internet

AM/FM radio is used 6x more often than other in-car commercial audio options Base: Driven/Ridden in Car in Last Month, age 18+ % Using “Almost All of the Times” or “Most of the Times” in the Car Source: Triton Digital and Edison Research, Infinite Dial 2014 Radio delivers the message at the moment of maximum receptivity

% of consumers using an advertising supported medium one half-hour before shopping 48% of purchase decisions occur within 30 minutes of the purchase -- Radio engages more consumers in that period than any other medium Source: Arbitron Inc. and Edison Research. The Infinite Dial 2013; POPAI 2014;

Radio can reach mass audiences AND target effectively

Heavy Radio listeners are prime consumer targets Source: Scarborough 2012 Release 1 (12 Month Survey) / 207,442 total respondents Source: Source: Scarborough USA Release 2. Heavy Radio Users Index Wireless Bill $150+ Adults Last month Convenience Store Adults HH shopped in the past 7 days Fast Food Restaurants Adults 18+ Frequented 10x in past 30 days Luxury Vehicles Adults HH plans to buy/lease vehicle $45,000+ Consumer Electronics Store Adults Purchased in the past year

Primary Demos % Contribution to Category Usage Primary Demos % Contribution to Category Usage Source: 2013 Doublebase GfK MRI. %’s are based on Adults 18+ (except for beer, A21+) Radio reaches the entire brand user group. …and Radio reaches consumers beyond your target demo The power of Radio Broadcasting allows you to reach all your customers

Heavy Radio listeners are also heavily engaged with social media  15% more likely to write online blogs  14% more likely to have visited Twitter yesterday  7% more likely to have used Facebook yesterday vs. the average US adult Source: 2013 Fall GfK MRI. Persons 18+ Heavy Radio Listeners (I & II)

Radio 29B Billions in Word-of-Mouth Impressions across all key product categories 49% more… Word of Mouth, Recommendations, Introductions, Trials & Sampling, Passing Along, Town Criers, Buying for Two, Friends Talking to Friends, Maven Activity, Spreading the Word …Consumer Buzz Social Media 19.4B Radio’s inherent social programming + Radio’s active social listener = Massive Brand Amplification Source: Keller Fay Group. 2013

Contents  Radio in the Media Landscape  Radio as America’s Companion  Radio vs. Music Streaming Services  Radio’s Unique Capabilities  Radio: Advertising that Works

34 What is radio ROI? A breakthrough collaboration between Nielsen and various partners creating the first single-source ROI tool for radio. NIELSEN AUDIO DATA CONSUMER DATA Copyright ©2014 The Nielsen Company. Confidential and proprietary

$6.21 All Category Average $11.15 Retail Spending on Radio make you money…over $6 of incremental sales for every $1 spent PAYBACK Per $1 Ad Investment $1.81 Breakfast Bar $7.33 Snacks $4.17 Beer Ratio of incremental sales revenue per thousand to advertising cost per thousand = Payback $3.81 Soft Drink $4.33 Snacks $23.21 Retail $1.38 Soft Drink $3.12 Candy $1.97 Soft Drink Source: Nielsen Catalina Solutions Studies of 10 radio ad campaigns, March 26, 2014

Nine Study Average % Lift: Radio’s emotional connection drives brand metrics associated with WOM (Exposed consumers vs. unexposed consumers) Source: Ipsos MediaCT / OTX Custom Research

% Brand Awareness 300% People exposed to a Radio campaign about Teen driving safety by Toyota had an unaided brand awareness lift of 4 points higher than the control group (+300%) Toyota TeenDrive365 Campaign Source: IPSOS/OTX study 2014 Not Exposed to Radio Exposed to Radio Radio advertising drives brand awareness

Brand Awareness Levels 34% Including radio in media campaigns significantly improves consumer awareness Macaroni Grill and Clear Channel Campaign -- Using a mix of 77% TV and 23% Radio Source: Marketing Evolution Study for Macaroni Grill and Clear Channel 2014 Not Exposed to Radio Exposed to Radio Radio adds value to TV ads  Adding radio to the mix can positively impact not only short term retail traffic objectives, but branding and sales metrics as well. Eric Solomon, Senior Vice President and Managing Partner for Universal McCann

Reallocating 15% of Budget From TV Only to Add Radio Increases Reach, Frequency and Receptivity of Message Substantially Average Weekly Campaign Metrics % Improvement By Substituting Radio for 15% of TV Budget – All Three Campaign Metrics Increased In Every Case Source: MBI TouchpointsTM ; results in each case study based on the specific target audience for that particular client; MBI TouchPoints measures the social-emotional context of target audiences’ lives to identify the moments of highest receptivity – something they identify as the Receptivity Potential Index

Brand $ Share 45% Households exposed to a Radio campaign for Dove had a brand share lift of 1.3 points higher than the control group (+45%) Dove Men+Care Deodorant and Clear Channel Campaign Source: Nielsen/Catalina Custom Research 2013 Not Exposed to Radio Exposed to Radio Radio advertising drives sales

Why Radio drives results  Massive reach of everyone, everywhere, with a high share of consumer usage but deserves a larger share of advertising budgets – Radio in the Media Landscape  Status as a trusted friend, with local focus and personal connections to content – Radio as America’s Companion  Dominant and unique position and experience in the audio universe, not replaced or displaced by music streaming services – Radio vs. Music Streaming Services  Real time use, dominating out of home and in car, generating traffic at the point of sale and highly targetable – Radio’s Unique Capabilities  Unique ability to generate advocacy, brand affinity, intent to purchase and, ultimately, sales – Radio: Advertising that Works