The Future of Generating Revenue Online Executive Presentation for Jacobs Media Summit Gordon Borrell, CEO Sept. 19, 2006.

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Presentation transcript:

The Future of Generating Revenue Online Executive Presentation for Jacobs Media Summit Gordon Borrell, CEO Sept. 19, 2006

Some Of Our Clients New York Times Cox Radio Interactive MediaNews Group Tribune Interactive WorldNow Lee Enterprises Cox Newspapers Autotrader.com Vehix.com Hearst Newspapers HouseValues.com Capital Broadcasting Journal Broadcasting McGraw-Hill Broadcasting Google Inc. Schurz Communications Digital Sports Saga Communications Landmark Communications A.H. Scripps Co. Television Advertising Bureau Times Shamrock Times Shamrock Corp. Circuit City Stores Inc Emmis Interactive Belo Corp. © Copyright 2006, Borrell Associates Inc.

Core Research © Copyright 2006, Borrell Associates Inc. Local ad spending data from any U.S. market Local online ad revenue data from 2,600 newspaper, TV, radio and pure-play sites More than 300 individual market audits Regular discussions with advertisers and Internet pure-play companies Panel of 400 local advertising experts

Goals for Today © 2006, Borrell Associates Inc. Perspective on online advertising Benchmark radio Web sites Focus you on opportunity, not threat Challenge your current thinking

Internet Advertising © 2006, Borrell Associates Inc. Surpassed $19 billion last year Has surpassed billboards Has surpassed magazines Has surpassed yellow pages May pass radio by 2010

Local Online Ad Spending (in Millions) © 2006, Borrell Associates Inc. Albany, GA:$ 6.94 Cedar Rapids:$ Columbus, OH:$ Houston:$ Jacksonville, FL:$ Louisville, KY:$ Myrtle Beach:$ Peoria:$ Rapid City, SD:$ 5.52 San Francisco:$ Terre Haute:$ 8.73 Toledo:$ Wilkes Barre:$ 26.09

Local Online Ad Spending (in Millions) © 2006, Borrell Associates Inc. Biloxi:$ 6.67 Boise$ Charlottesville, VA:$ 3.03 Dayton:$ Dallas:$ Fort Wayne:$ Greensboro, NC:$ Milwaukee:$ Norfolk, VA:$ Philadelphia:$ Tyler, TX:$ Wheeling, WV:$ 7.01 Yuma, AZ:$ 2.06

A Counting Exercise …

Core Research © Copyright 2006, Harvard Business School.

Sources: Universal McCann, Ad Audit Services Ad Share Trends: Radio Broadcast TV & Newspapers TV, Radio & Newspapers

Growth Patterns © Copyright 2006, Borrell Associates Inc. Radio

Growth Patterns © Copyright 2006, Borrell Associates Inc.

Growth of Local Online Advertising © Copyright 2006, Borrell Associates Inc.

National-to-Local Ad Ratio Will Move to “Equilibrium” Online Advertising All Advertising © 2006 Borrell Associates Inc. Why Local Is Growing So Fast

Market Trends Local online advertising growing fastest First decade of Internet: Text and pictures Second decade: Multimedia Radio well positioned to accelerate Radio online revenues doubled in 2005 Projecting 50% growth in 2006 © 2006, Borrell Associates Inc.

Many Sites Generate More $ Than Largest- Grossing Radio Station in Their Market ($ in Millions) © 2006 Borrell Associates, Inc. Source: Borrell Associates, Inc., Deutsche Bank Margins: +60%

© 2006 Borrell Associates Inc. Online Ad $ Per Cluster

© 2006 Borrell Associates Inc. Average Per-Station Online Revenue by DMA Market Grouping

Online $ Per Station up to $200k © 2006 Borrell Associates Inc.

Online Ad $ Per Station: All

© 2006 Borrell Associates Inc. Online Ad $ Per Cluster

Average and High/Low Share of Local Online Advertising for Radio Clusters, 2005 © 2006 Borrell Associates Inc.

Online Ad Share Per Cluster © 2006 Borrell Associates Inc. The Green Zone

Green Zone Characteristics © 2006, Borrell Associates Inc. Multiple revenue streams Top-level executive support Greater independence Online-only sales force

Conclusions/Recommendations © 2006, Borrell Associates Inc. Significant advertising medium is at hand Don’t underestimate it Invest aggressively, but wisely Leverage biggest asset: promotion and creativity Maintain a high level of staff separation Hire salespeople

Thank You! Gordon Borrell