1. Digital Media Expo, Victoria, Texas May 30, 2013 The Exploding Digital Marketing Scene

2. About This Deck The following presentation was delivered by Gordon Borrell on May 30, 2013, at the Digital Media Expo at the Leo J. Welder Center for the Performing Arts in Victoria, Texas. Slides may be used publicly with attribution to Borrell Associates. For questions or clarification on slides, contact Abby Sineni at abby@borrellassociates.com.abby@borrellassociates.com

3. So Why Are You Here?

4. Agenda  What’s Advertising?  Media Trends  The Rise of Digital Services  Drilldown on Victora  Q&A

5. Advertising

6. www.borrellassociates.com Reach Frequency Two words to know

7. www.borrellassociates.com Branding Lead-Generation Two (more) words to know

8. www.borrellassociates.com Brands speak for themselves

9. www.borrellassociates.com Which is better? Bob’s Hardware We’re Here For You! Bob’s Hardware Free Hammer This Saturday!

10. Stages of Business Marketing Activity Source: Borrell Associates, Inc. 2012

11. "Advertising is the 'wonder' in Wonder Bread." Jef I. Richards (1995), advertising professor at The University of Texas at Austin "Ads become information when they're in context." Steve Larsen "Many a small thing has been made large by the right kind of advertising." Mark Twain

12. "Stopping advertising to save money is like stopping your watch to save time." Henry Ford “Under-spending in advertising is like buying a ticket halfway to Europe. You've spent your money but you never get there." Morris Hite

13. www.borrellassociates.com A Great Retailer Once Said… John Wanamaker 1838-1922 “Half the money I spend on advertising is wasted. Trouble is, I don’t know which half."

14. www.borrellassociates.com Big-Picture Trends  Advertisers always skeptical of ROI  Omnipresent cycle of “new media” disruptions  New media feeds on that skepticism  …But never kills off any competing media Historic Trends

15. www.borrellassociates.com Micro Trends  Radio advertising: 1920  Television advertising: 1950 (30 years)  Cable advertising: 1980 (30 years)  Internet advertising: 1995 (17 years)  Mobile advertising: 2010 (15 years)  …and something else will probably arrive by 2023 Media’s Disruptive History

16. Historic Trends

17. Advertising 100 years ago. (1913)

18. 3

19. Advertising 50 years ago. (1963)

20. 7

21. Advertising 25 years ago. (1988)

22. 8

23. Advertising in 2013.

24. 10

25. Something Else Was Happening While We Took A Bathroom Break

26. www.borrellassociates.com Big-Picture Trends

27. www.borrellassociates.com Big-Picture Trends

29. www.borrellassociates.com Big-Picture Trends 100?

30. www.borrellassociates.com Over-Exposure 5,000 285 6 (maybe) Number of ads a person passes per day: Number of ads a person might actually see: Number of ads a person notices: Sources: Yankelocich (5,000); BBDO (285)

31. The Distracted Generation

33. www.borrellassociates.com © 2012 Borrell Associates Inc. All Rights Reserved.

34. www.borrellassociates.com Q 19. How likely is it that you will incorporate mobile elements in your advertising and marketing efforts to reach potential customers in 2013? Used Mobile N = 245 Q 22. How likely is it that you will incorporate mobile elements in your advertising and marketing efforts to reach potential customers in 2013? Not Used Mobile N = 757 What’s Fueling Mobile Forecasts © Borrell Associates, Inc. 2013

35. Questions?

41. www.borrellassociates.com Source: © Borrell Associates, Inc. 2013 Local Online Advertising, 2004-2013 Victoria, Texas: 2008: $5.9 million 2009: $6.0 million 2010: $6.2 million 2011: $7.6 million 2012: $9.1 million 2013: $12.0 million 2017: $25.2 million

42. The Big Marketing Shift

43. www.borrellassociates.com Advertising Is Declining Source: Borrell Associates, Inc. 2013 $ in Billions In 2012, businesses spent 6% less on advertising than they had a decade earlier.

44. www.borrellassociates.com Promotions Are Increasing Source: Borrell Associates, Inc. 2013 $ in Billions In 2012, they spent 88% more on promotions than they had a decade earlier.

45. www.borrellassociates.com What are Promotions? What are Promotions? Source: Borrell Associates, Inc. 2013 Coupons Coupons Discounts Discounts Rebates Rebates Contests Contests Events Events Sponsorships Sponsorships Signage Signage Printing Printing And a whole lotta digital stuff And a whole lotta digital stuff Uh-oh. The deer have the guns.

46. Digital Services

47. www.borrellassociates.com The Online Marketing Stool Hosting Email management Social Media management Reputation Management SEO Ad/Video production

48. www.borrellassociates.com Growing Opportunity: Loyalty Marketing Q 28. Does your store or business maintain a formal "loyalty rewards" or "frequent buyer" program? N = 1,282 Q 26. Does your business maintain a "current customer" database or list for use in marketing and sales? N = 1,287 © Borrell Associates, Inc. 2013

49. The Victoria Digital Marketing Region Calhoun De Witt Goliad Jackson Karnes Lavaca Refugio Victoria

50. www.borrellassociates.com Victoria advertisers spend $47 million Two-thirds of all advertising is spent on these four types of media. Traditional media is still heavily favored by local advertisers: 80.5% of their ad dollars are spent there. But The Times They Are A-Changin’

51. www.borrellassociates.com Then Now

52. www.borrellassociates.com % How $9.1 million was spent

53. www.borrellassociates.com Look What Happens by 2017

54. Putting it all together

55. www.borrellassociates.com Traditional Media Mix  Newspaper  Broadcast TV  Cable  Radio  Outdoor  Direct Mail  Interactive

56. www.borrellassociates.com Local Online Media Mix  Target your local audience – Where are they going?  Invest in multiple ad formats  Do branding and lead generation  Give it some time  Don’t under spend

57. How Much Should You Spend?

58. www.borrellassociates.com © 2013 Borrell Associates Inc. All Rights Reserved. Victoria Car Dealers

59. www.borrellassociates.com © 2013 Borrell Associates Inc. All Rights Reserved. Victoria Restaurants

60. Questions? Gordon Borrell Follow me on Twitter: @goborrell Connect with me on LinkedIn: www.linkedin.com/in/gordonborrell

61. Thank You! Gordon Borrell, CEO Phone: 757-221-6641 gborrell@borrellassociates.com