Optimizing the Internet in Local Markets Tips to Viewing PowerPoint On-Line in Slide-Sorter View (multiple slides): 1. Right click anywhere on this slide. 2. Choose “Edit Slides” from the drop- down list. 3. In the lower left corner of the window, choose the icon. Updated June 2009 Optimizing the Internet in Local Markets 6-09

Broadcast Television and the Internet both offer unique advertising opportunities. Both TV and the Internet play critical roles in the purchase funnel. This presentation will help demystify and quantify both roles in the local advertising marketplace.

Deconstructing the Internet Content - News, information and entertainment. Communications - Email and instant messenger. Commerce - Shopping online. Community - User-generated content and communication. Search - Prioritized results based on specific criteria from user-generated requests.

Internet Activity Is Varied by Format Internet Activity Index April 2009 Share of Time Spent Online Content 41.3% Communications 26.4% Commerce 13.3% Community 13.7% Search 5.3% Source: IAI Internet Activity Index, online-publishers.org Optimizing the Internet in Local Markets 6-09

Spending Reflects the Diversity of the Internet as an Ad Medium U.S. Online Ad Spending by Format – 2008 Annual Revenue in Millions Source: 2008 IAB/PricewaterhouseCoopers data, IAB.net press release 3/30/09 Optimizing the Internet in Local Markets 6-09

Search and Digital Video are Top Formats for Growth Internet Ad Revenues by Ad Format 2008 ($Millions) % Market Share 2008) 2007 Share 2007 Type of Advertising Keyword Search 10,546 45% 8,805 42% Banner Ads 4,877 21% 4,456 Classifieds 3,174 14% 3,321 16% Rich Media 1,642 7% 1,656 8% Referrals/Lead Generation 1,683 1,584 Sponsorship 387 2% 636 3% E-mail 405 424 Digital Video 734 324 TOTALS 23,400 100% 21,200 Source: Interactive Advertising Bureau, Press Releases, 3/30/09 Optimizing the Internet in Local Markets 6-09

Majority of Advertising is Based on Transactional or Direct Marketing Models Top 25 Internet Advertisers Advertising Dollars (000) Full Year 2008 Scotttrade Inc. $597,352 Tree.com Inc. 522,024 TD Ameritrade Holding Corp. 269,298 Bank of America Corp. 223,222 FMR Corp. 212,743 E-Trade Financial Corp. 207,091 General Motors Corp. 187,727 Experian Group LTD 151,129 Verizon Communications Inc. 143,266 Walt Disney Co. 108,731 Apollo Group 107,124 News Corp. 100,763 Capital One Financial Corp. 83,566 Expedia Inc. 79,352 Netflix Inc. 78,103 Time Warner Inc. 76,848 United Online Inc. 74,341 AT&T Inc. 69,552 Target Corp. 68,955 Comcast Corp. 63,065 ING Groep Nv 61,670 Privacy Matters 61,445 Housevalues Inc. 60,545 Ford Motor Co. 57,946 Hewlett-Packard Co. 57,830 Source: TNS Media Intelligence Full Year 2008 Optimizing the Internet in Local Markets 6-09

Internet Allocation for Top 20 Ad Categories Ad Categories Total Ad $* Internet Ad $ Full Year 2008 (000) (000) % of Ad $ in Internet Retail 11,078,803.4 597,758.6 5.4 Automotive, Access. & Equip. 10,813,553.0 544,070.1 5.0 Media & Advertising 9,236,055.7 1,424,895.0 15.4 Financial 9,004,310.3 2,944,045.3 32.7 Communications 7,950,531.4 469,693.8 5.9 Medicines & Prop. Remedies 7,485,780.0 211,793.9 2.8 Direct Response Companies 7,358,353.2 54,321.5 0.7 Services & Amusements 7,149,321.9 573,645.2 8.0 Government, Politics & Organ. 5,480,433.6 202,149.6 3.7 Insurance & Real Estate 5,247,333.8 333,608.0 6.4 Restaurants 5,237,012.3 68,074.8 1.3 Public Trans., Hotels & Resorts 4,596,455.8 463,640.8 10.1 Automotive Dealers & Services 3,884,115.3 121,843.9 3.1 Cosmetics & Beauty Aids 2,733,854.7 42,748.7 1.6 Department Stores 2,656,002.6 53,543.4 2.0 Dairy, Produce, Meat, Bakery Goods 1,971,536.1 27,600.9 1.4 Personal Hygiene & Health 1,872,509.2 42,049.6 2.2 Discount Dept. & Variety Stores 1,862,580.3 92,419.6 5.0 Prepared Foods 1,792,090.0 30,554.7 1.7 Beverages 1,648,788.4 26,576.7 1.6 * 14 Measured Media Source: TNS Media Intelligence 2009 Optimizing the Internet in Local Markets 6-09

Web ROI Models National portal advertising is primarily direct marketing, based on cost-per-click or cost-per-acquisition web ad models such as Search. Most local websites are content driven, based on a cost-per-thousand or flat rate model. However, they are increasingly supporting local search and directory formats. Optimizing the Internet in Local Markets 6-09

Media Influence Through Funnel: Automotive Purchase Preference Consideration Awareness TV 44% Newspaper 6% Magazine 6% Internet 19% TV 40% Newspaper 7% Magazine 3% Internet 17% TV 35% Newspaper 4% Magazine 4% Internet 12% TV 22% Newspaper 1% Magazine 3% Internet 12% Source: TVB/Yankelovich “How Media Works,” April 2009 Optimizing the Internet in Local Markets 6-09

Automotive Advertising Impact at Various Stages of the Consumer Purchase Funnel Awareness Interest Consider Want to Visit Make Purchase Purchase Store/Website Purchase Source: TVB/Yankelovich “How Media Works,” April 2009

Automotive Media Impact at Various Stages of the Consumer Purchase Funnel Media cited by less than 3% of respondents were incorporated into the total for “other.” Source: TVB/Yankelovich “How Media Works,” April 2009

The Automotive Purchase Funnel The research has shown that the auto purchase process begins within six months from the eventual acquisition and consists of three stages: “Needs Phase” (6 – 4 months prior to purchase) Intenders are assessing the options that are available for basic consumer needs and desires — size, space and styling. “Features Phase” (3 – 2 months prior to purchase) Intenders have narrowed their choices and are now comparing options within a single segment focusing on product features. “Price Phase” (final month prior to purchase) Cost becomes paramount as the intender visits dealerships (usually for the first time) and makes final comparisons that lead to purchase. Source: Time Inc. Automotive Purchase Process © Optimizing the Internet in Local Markets 6-09

Purchase Funnel Reality In the real world, there are many factors which drive consumer behavior, independent of the stages in the funnel: Big Sale Special prices / financing Launch of new products or models Source: Wordpress.com Optimizing the Internet in Local Markets 6-09

In Fact, Consumers Are Always in the Purchase Funnel Cycle There are always consumers in the purchase funnel at varying stages in their purchase decisions. Advertisers who maintain a broadcast schedule reach consumers who are learning about a brand or narrowing down choices for future purchases. Broadcast ads are also reaching consumers post-purchase to re-enforce proof of performance and promote related items. Optimizing the Internet in Local Markets 6-09

Purchases Are Relatively Constant Throughout the Year U.S. Car & Light Truck Sales by Month 2008 Total Car & Truck Index to Sales 2008 12-Month Average January 1,045,102 105 February 1,176,254 118 March 1,357,281 136 April 1,248,549 125 May 1,397,410 140 June 1,189,577 119 July 1,136,539 114 August 1,249,976 125 September 965,160 97 October 838,592 84 November 747,544 75 December 894,967 89 12-MONTH AVG. 2008 1,103,912 100 Source: Automotive News Data Center Optimizing the Internet in Local Markets 6-09

The Majority of Consumers in the Purchase Funnel are Outside the Price Phase In 2008, 13 million* cars and light trucks were sold in the U.S. 1,103,912 were sold per month on average. If you consider a typical 3-year cycle for auto purchases, 39 million vehicles are sold within that time . . . 1,103,912 sold per month 39 million sales within a 3-year cycle in the funnel = 3.1% of consumers in the “price phase” each month If you advertise only to the bottom of the funnel (price phase consumers) you may reach only 3.1% of potential customers *Source: Automotive News 13,247,431 U.S. Car & Light Truck registrations Optimizing the Internet in Local Markets 6-09

TV and Internet Relative Reach TVB’s Media Comparisons Study 2008 shows that despite the strength of the Internet, Television reaches more adults: % Reached Yesterday Demographic Television Internet Adults 18+ 90.2 65.6 Adults 18-49 89.3 73.8 Adults 25-54 90.0 72.1 Adults 35-64 90.7 69.5 Source: TVB, Nielsen Media Research Custom Survey 2008 Optimizing the Internet in Local Markets 6-09

The Value Proposition of Local TV & Local TV Station Websites Broadcast TV and the Internet are complementary ad environments in providing news, entertainment and video content. Awareness about products and services seen on TV send consumers to websites to learn more detail and find local retail outlets. Advertisers using television advertising to drive awareness of a new campaign can measure response or purchase intent through the Internet. Optimizing the Internet in Local Markets 6-09

Adults Turn to Local Television Station Websites for Local News and Event Information (%) 18+ 18-34 18-49 25-54 Local Broadcast TV Station Site 33.4 39.5 39.3 39.0 Local Newspaper Site 25.7 29.3 28.9 28.3 Local Radio Station Site 7.3 6.2 6.4 7.0 Some Other Type of Local Website 4.6 6.4 5.8 5.1 Some Other Type of Non-Local Site 5.5 7.2 6.4 6.3 None/Don’t Use Websites 28.2 16.4 17.6 17.8 Source: TVB, Nielsen Media Research Custom Survey 2008

TV-Web Usage Complement Each Other by Daypart 80% 70% 60% 50% 40% 30% 20% 10% Source: Online Publishers Association Optimizing the Internet in Local Markets 6-09

Local Television Websites Provide Top Drivers for Local Consumers Top 10 Local Content Source: Frank N. Magid Associates, Inc. Hearst-Argyle News Study 2007 Optimizing the Internet in Local Markets 6-09

TVB Suggested Strategy Television has the largest ad impact of any media at all stages of the Automotive purchase funnel, from Awareness through Purchasing, according to the Yankelovich Study findings. Internet advertising has the second highest media impact in the Automotive purchase funnel and is a complementary ad environment to Broadcast TV. Newspaper is declining. Be aware of local online opportunities – local broadcast websites included – for reaching “price phase” consumers with search, directories and classifieds. Consider marketing dollars independent of your advertising budgets to maintain share of voice. Optimizing the Internet in Local Markets 6-09