This was presented to a packed room at the TAB annual convention. The hourlong presentation not only showed how much broadcasters are making in digital sale but also challenged them to think of themselves as digital-only entities in competition with all media, not just TV or radio stations.

1. Let’s Get Real:
How Much Digital Advertising
Is REALLY Out There?
August 8, 2012 Texas Association of Broadcasters Convention and Trade Show

2. About this presentation
The following presentation was made by CEO
Gordon Borrell at the Texas Association of
Broadcasters Convention and Trade Show at the
Renaissance Austin Hotel on Aug. 8, 2012
© 2012 Borrell Associates Inc.

3. What You’re About to Witness…
 Advertising
 Online spending data: Info on 23 million advertisers
 Online revenue data: Info from 5,700 media companies
 Verification/Forecasting: Annual surveys of 40,000+ local businesses
 Consumer Usage
 Scarborough, Claritas
 Ongoing surveys of web users
 Media company strategies
 More than 1,100 clients

4. Benchmarking
 Annual Report
• 10th year
• 5,756 companies
 Specific reports for:
• Arbitron
• Television Bureau of Advertising
• Local Media Association
• Individual media companies

5. The Digital Stream: How Big?

6. Local Online: Stream of Dollars Keeps Flowing
$30
$27.9
$26.6
$ in Billions
© 2012 Borrell Associates Inc.
$24.8
$22.7
+21% $19.9
$16.4
$13.6
11.2% CAGR
$12.9 $13.4
$8.2
$5.5
$4.2
$2.0 $2.1
Mobile Ad $
$-
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f

7. © 2012 Borrell Associates Inc.

8. Radio’s Online Performance
© 2012 Borrell Associates Inc.
+35%
How $303 million stacks up
against $16.4b 2011
Source: Borrell Associates Inc. Digital Sales AE Survey, Nov. 2011-Jan. 2012

9. TV’s Online Performance
© 2012 Borrell Associates Inc.
+35%
How $2.0 billion stacks up
against $16.4b 2011
Source: Borrell Associates Inc. Digital Sales AE Survey, Nov. 2011-Jan. 2012

10. ‘Digital Ready’ Local Sales Forces
© 2012 Borrell Associates Inc.
Source: Borrell Associates Inc. Digital Sales AE Survey, Nov. 2011-Jan. 2012

11. Gross Online Revenue Per Sales Rep
Broadcast sites that have
© 2012 Borrell Associates Inc.
a digital-only sales staff
enjoy 2x to 3x digital ad
revenue per rep.
Source: Borrell Associates Inc. Digital Sales AE Survey, Nov. 2011-Jan. 2012

12. How Much Do Sites Make?

13. What Three-fourths of
Radio
© 2012 Borrell Associates Inc.
radio clusters made
< $500,000
Clusters
Made in
2011
Source: Borrell Associates Inc.; Borrell/Arbitron Benchmarking Report, April 2012

14. Per-Cluster Revenue by Market Size
© 2012 Borrell Associates Inc.
Source: Borrell Associates Inc.; Borrell/Arbitron Benchmarking Report, April 2012

15. What More than two-thirds
© 2012 Borrell Associates Inc.
of TV stations made
TV Sites < $1 million
Made in
2011
Source: Borrell Associates Inc.; Borrell/Arbitron Benchmarking Report, April 2012

16. TV Site Revenue by Market Size
© 2012 Borrell Associates Inc.
Source: Borrell Associates Inc.; Borrell/Arbitron Benchmarking Report, April 2012

17. Share of Locally Spent Online Advertising for 5,700 Media Companies
© 2012 Borrell Associates Inc.

18. Share of Locally Spent Online Advertising for 5,700 Media Companies
© 2012 Borrell Associates Inc.

19. Share of Locally Spent Online Advertising for 5,700 Media Companies
© 2012 Borrell Associates Inc.

20. © 2012 Borrell Associates Inc.

21. © 2012 Borrell Associates Inc.

22. How Much is Out There?

23. Market: Austin
© 2012 Borrell Associates Inc.
Online media buys now account
$101 million in local ad spending in
the Austin TMA. This 20.9% share
now surpasses newspapers and all
other media.
Competing Media Share Estimates:
• A local daily newspaper: 5% -10% share.
• A local TV station: 1% to 4% share.
• A local radio cluster: 1% share.
Source: Borrell Associates Inc.; www.adspending.com

24. Market: Sherman
© 2012 Borrell Associates Inc.
Online media buys now account
$12 .3 million in local ad spending
in the Sherman-Ada TMA. This
18.5% share is the second highest
among all media.
Competing Media Share Estimates:
• A local daily newspaper: 1% -3% share.
• A local TV station: 1% to 6% share.
• A local radio cluster: <1% share.
Source: Borrell Associates Inc.; www.adspending.com

25. Get Ready for Digital Marketing Regions (DMRs)
© 2012 Borrell Associates Inc.
Ad Spending in Texas DMRs
Source: Borrell Associates Inc.; www.adspending.com $ in Millions

26. The Mass Media Mindset

27. Average daily time spent
Television 4.67
© 2012 Borrell Associates Inc.
Online Devices* 2.22
Radio 1.65
(hours per day)
Print Newspapers 0.42
Print Magazines 0.30
Print Yellow Pages 0.02
* Includes non-work time spent using
computers, smart phones, or tablets.
Sources: Veronis Suhler Stevenson, eMarketer; 2012.

28. A minute of your time is worth…
Radio $0.31
© 2012 Borrell Associates Inc.
Television $0.35
Online Devices* $0.73 Ad revenue per minute spent
with each medium—all adults
Print Newspapers $2.25
Print Magazines $2.29
Print Yellow Pages $12.48
* Includes non-work time spent using $0 $2 $4 $6 $8 $10 $12 $14
computers, smart phones, or tablets. In $ Thousands
Sources: Veronis Suhler Stevenson, eMarketer; 2012.

29. Top 20 Local
Online Media
Companies
© 2012 Borrell Associates Inc.
Source: SEC Documents, company statements, Inc. Magazine, B. Riley & Co., Borrell Associates Inc., 2011

30. Biggest Mistakes
 Chasing after shiny new things
 Thinking this is a mere brand extension
 Not knowing the size of the pie
 Comparing yourselves against other broadcasters

31. Questions?
Gordon Borrell, CEO
Phone: 757-221-6641
gborrell@borrellassociates.com