KOB ADVERTISING

WHY

Why TV in 2018?

Advertising in Today’s Complex Media World

Media is evolving.

Media consumption habits are changing.

Advertisers must engage consumers where they spend the most time, and are most influenced.

All media can be effective. But they work in different ways.

2

The early years

The last 20 years

Now:

Connected TV

Targeted Video

Targeted Display

Geo Fence

Device ID

Twitter

Facebook

Email Blasts

Satellite Radio

Internet

Direct Mail

Mobile & Text

Sign/Billboard Newspaper Yellow Pages Radio Cable & Satellite TV

Broadcast TV

YouTube

ROKU

hulu

Banner Ads

Live Television Dominates OTT Viewing

• Even amongst heavy OTT

households, live television viewing is

still double that of OTT viewing

• OTT is growing, but is supplemental

rather than primary in households

with access to Live TV

Copyright ComScore 2016

Copyright Scarborough Research 2017

In the ABQ/SF Market

TV Continues To Be The #1 Media of Choice

For All Key Demographics

Demo Local

Broadcast TV

in 7 days

Local News

past 7 days

Hulu Past 30

days

Netflix past 30 days

A18-34 75% 57.9% 10.9% 45.1%

A35-49 83.7% 68.7% 8.0% 24.2%

A50-64 90% 77.6% 5.7% 13.2%

A65+ 83.6% 85.4% 1.7% 8.8%

NOTE: Phoenix is an adjacent LPM market. LPMs provide Minutes Watched Information.

2015 Viewing Habits by Age Group for Phoenix’s Local People Meter Market

Source: Nielsen LPM Phoenix May 2015 average viewership M-Sun 5a-5a.

In the Phoenix LPM Market

TV Continues To Be The #1 Media of Choice

For All Key Demographics

*Note: Over The Top stands for “over-the-top,” the term used for the delivery of film and TV content via the Internet, without requiring users to subscribe to a traditional cable

or satellite pay-TV service like a Comcast or Time Warner Cable. OTT can largely be broken down into three different revenue models: SVOD (subscription-based services such

as Netflix and Hulu); AVOD (free and ad-supported services such as Crackle and Hulu); and TVOD (transactional services such as iTunes, Vimeo On Demand and Amazon

Instant Video

Age Group Traditional TV Time Shifted TV

Over the top TV

(Netflix, Hulu,

etc.)*

Streaming on

PC Internet Surfing

A18-34 21:38 3:30 2:02 2:08 5:42

A18-49 25:19 4:46 2:56 2:03 7:55

A25-54 30:13 5:33 2:35 3:09 10:00

A 55+ 44:00 6:53 0:32 2:08 7:00

Television Has the Highest Share of Daily Media Use Among Adults

Source: Nielsen Total Audience Report Q2 2017

How Do Consumers Buy?

Visit Store/Website

Want to Purchase

Consideration

Interest

Awareness

Make the Purchase

Reaching Consumers Early

Influencing the Decision

Making a Purchase

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What Influences Consumers Most: Top 12

Visit Store/Website

Want to Purchase

Consideration

Interest

Awareness

Make the Purchase 9 Source: GFK TVB Purchase Funnel 2017 A18+ Most important for media that registered 2% or higher.

62 57

50 50 46 43

4

4

4 3 4

4

4

4

4 3 4

4

3

3

3 3

3 3

3

3

4 3

3 3

2

2

3 3

3 3

2

2

2 2

2 2

2

2

2 2

2 2

2

2

2 2

3

2

2

2

2 2 2

2

2

2

2 2 2

2

2

1

[VALUE] 1 2

1

Interest Consideration Want To Purchase Visit Store/Website Make Purchase Awareness

Television Newspaper Network TV Website Local TV Station Website

Email Internet Search Engine Internet Video Ad Radio

Social Media Outdoor Internet Display Ad Streaming TV or Movies Online

What Influenced Consumers Most: Awareness Stage

62% 64% 58% 58% 61% 64% 65%

7% 5%

7% 5%

9% 7% 4%

4% 4% 5% 5%

4% 2% 3%

4% 4% 3% 3%

4% 4% 2%

4% 5%

3% 5%

4% 2%

3%

3% 2%

2% 7%

2% 4%

4%

3% 2%

4%

2% 2% 3% 3%

2% 1% 2%

1% 2% 2%

1% 1% 2% 3% 2%

6 Categories Auto Furniture Medical Banking QSR/CasualDining

Legal

Television Mail Newspaper (Print Only) Local/Net TV Website or App Radio Outdoor Social Media Email Magazine

10 Source: GfK TVB Purchase Funnel 2017 A18+ (% Most important media type among those who saw/heard ads in at least 1 media source)

How Do Advertisers Reach TV Viewers in New Mexico?

11 Source: The Nielsen Company, May’16

50.5%

24.6%

23.3% Satellite

OTA

Cable

Reach Viewers Over the Air Who Don’t Have Cable or Sat

Cord Cutting in Bernalillo County

12

Comcast 29%

Other, 1%

OTA 39%

Satellite 32%

Almost 40% of Viewers Watch Over The Air 132,980 Households in the metro are OTA

Source: The Nielsen Company, May’17

Broadcast TV reaches 100% of Homes in Albuquerque

13 Source: The Nielsen Company, May’16

Broadcast 100%

14

-

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

18-34 35-49 50-64 65+ Total

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Nielsen Age Groups Sources: Nielsen National Data applied to Nielsen New Mexico HUTs

Television Viewership per Week: 2011 vs 2017 - Down 12.4%

2011 Hours/Week

2017 Hours/Week

TV Viewership in NM

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How Much to Reach ONE Person?

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Direct Mail = 36¢ Yellow Pages = 35¢ Newspaper = 10¢ Cable = 7¢ Radio = 3¢ Broadcast TV = 1¢

2017 2011

TV is Still The Big Dog!

Video Leads the Pack!

Live TV 33% Mobile 27% Desktop/Laptop** 17% Radio* 12% Other Digital 5% Print 3%

Other (Non-Digital) 3%

Source: eMarketer, October 2017 Includes “multi-tasking” on multiple devices at once * Excludes Digital ** Includes all internet activities on desktop or laptop computers

KOB Video Platforms

Broadcast + OTT

Working Together

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TV Internet

Social Media’s Most Effective Use

Connecting with customers at a personal level

Public Relations

To be in front of shoppers who are already online

Global reach

Social Media’s Limitations

Not a branding medium

Not a primary influencer

Can’t measure ROI

Widespread buzz but participation is limited to heavy users:

12% of Facebook users make up 66% of total visits*

73% of Twitter users have tweeted less than 10 times*

Source: *Barracuda Labs 20

65% 13%

22%

Column1

Yes

No

Do not Search

Television Ads Motivate Further Research Online

21 Source: GfK TVB Mentor Survey 2017 Persons 18+. Respondents asked when doing online search how often, if at all, have TV Ads you have seen influence you in some way in your search

Has an advertisement on television motivated you to go the Internet to find out more information

about that product or service?

Is TRUST an Issue …for your customers?

TRUST is Built, over Time, by Experience

TRUST can be Borrowed, or Transferred

How do you BUILD Trust?

Source: Tim Daniel – The New Nobility

“I trust the news I see/hear on this media source”

40%

53%

63%

65%

66%

67%

68%

72%

72%

73%

74%

76%

79%

81%

Social Media

All other Internet Websites/Apps

Websites/Apps Radio

Websites/Apps Cable News

Websites/Apps Broadcast National News

Websites/Apps Newpapers (Local or Nat'l)

Websites/Apps Local Broadcast News

National Newspapers

Cable News Channels

Radio

Public Television

Broadcast National News

Local Newspapers

Local Broadcast TV

Agree with this statement

23 Source: GfK TVB Purchase Funnel 2017 A18+ (Agree Strongly + Agree Somewhat)

Traditional Media

Digital Media

Awareness

Interest

Decision

Action

Use TV + Digital to Impact Consumers at the right time…..

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To Harvest Low-Hanging Fruit, You have to have a Healthy Tree!

TV fills the top of the funnel and motivates consumers to go online.

Digital captures the low hanging fruit.

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Take-Aways

All media can work, but in different ways

Television is the #1 influencer across all six steps of the consumer decision process

When evaluating the cost of reaching one person, Broadcast TV is the most cost efficient medium you can buy

Broadcast stations offer one-stop media solutions

Broadcast TV stations are your partner to help you grow your business

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Sources & Terminology

Terminology OTT = Over The Top = CTV = Connected TV = Subscription / Streaming TV

TV Everywhere

OTA = Over The Air = Broadcast TV

FEP = Full Episode Player

Digital Video = vs. Broadcast Video

Digital Display = Banner Ads

SEM = Search Engine Marketing

SEO = Search Engine Optimization

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Nielsen = TV Ratings, National & Local, Monthly & Overnights, Meters, People Meters, Diaries, ABQ DMA = ~ 375 Meters Scarborough = Qualitative/Consumer Behavior, Top 75 markets ABQ DMA: ~ 2,000 Booklets/TV Diaries

Comscore = TV Ratings, National & Local, “2-way TV”, Big Samples: ABQ DMA = ~ 160,000 set top boxes Simmons = Qualitative/Consumer Behavior, National, ~ 50,000 Booklets/TV Diaries, modelled to Local

IAB = Internet Advertising Bureau – “the Bible” for digital audience measurement

TVB-commissioned National / Custom Research Studies