1. Optimizing the Internet in Local Markets
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Updated June 2009
Optimizing the Internet in Local Markets 6-09

2. 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.

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

4. Internet Activity Is Varied by Format
Internet Activity Index
April 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

5. 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

6. 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%
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

7. 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 ,298
Bank of America Corp ,222
FMR Corp ,743
E-Trade Financial Corp ,091
General Motors Corp ,727
Experian Group LTD 151,129
Verizon Communications Inc ,266
Walt Disney Co. 108,731
Apollo Group 107,124
News Corp ,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

8. 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, ,
Automotive, Access. & Equip. 10,813, ,
Media & Advertising 9,236, ,424,
Financial 9,004, ,944,
Communications 7,950, ,
Medicines & Prop. Remedies 7,485, ,
Direct Response Companies 7,358, ,
Services & Amusements 7,149, ,
Government, Politics & Organ. 5,480, ,
Insurance & Real Estate 5,247, ,
Restaurants 5,237, ,
Public Trans., Hotels & Resorts 4,596, ,
Automotive Dealers & Services 3,884, ,
Cosmetics & Beauty Aids 2,733, ,
Department Stores 2,656, ,
Dairy, Produce, Meat, Bakery Goods 1,971, ,
Personal Hygiene & Health 1,872, ,
Discount Dept. & Variety Stores 1,862, ,
Prepared Foods 1,792, ,
Beverages 1,648, ,
* 14 Measured Media
Source: TNS Media Intelligence 2009
Optimizing the Internet in Local Markets 6-09

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

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

17. 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

18. 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
Adults
Adults
Adults
Source: TVB, Nielsen Media Research Custom Survey 2008
Optimizing the Internet in Local Markets 6-09

19. 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

20. Adults Turn to Local Television Station Websites for Local News and Event Information (%)
Local Broadcast TV Station Site
Local Newspaper Site
Local Radio Station Site
Some Other Type of Local Website
Some Other Type of Non-Local Site
None/Don’t Use Websites
Source: TVB, Nielsen Media Research Custom Survey 2008

21. 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

22. 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

23. 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