1. Regional TV Essentials August 2011 Brian Hogan General Manager RTM

2. www.regionaltvmarketing.com.au RTM is the marketing bureau for Regional free to air TV

4. Training agenda Market structure Demographics & social outlook Spending and economic outlook Media consumption and outlook Effectiveness studies

5. Regional TV Markets

6. Regional TV provides three main networks and FTA multi channels to all areas outside 5 cap. cities QLD NNSW SNSW TAS VIC REG.SA, MILDURA, GRIFFITH REG. WA SATELLITE

7. Regional TV markets total 36% of Australian population People Source: ATR & OZTAM 2011, Nielsen Media Research 2010 NNSW 2,079 SNSW 1,410

8. Major regional markets are know as “Aggregated markets” Rural markets QLD NNSW SNSW TAS VIC REG.SA, MILDURA, GRIFFITH REG. WA SATELLITE

9. Regional TV markets do not follow state lines or expected “regional and rural” profile Rural markets QLD NNSW SNSW TAS VIC REG.SA, MILDURA, GRIFFITH REG. WA SATELLITE

10. Aggregated markets can be split to “sub-markets” Rural markets QLD NNSW SNSW TAS VIC REG.SA, MILDURA, GRIFFITH REG. WA SATELLITE

11. Aggregated Markets QLDNNSWSNSWVICTAS Sub markets CairnsNorthern RiversCanberraAlburyHobart TownsvilleTamworth/TareeOrange/Dubbo/ Wagga BendigoLaunceston MackayNewcastleWollongongShepparton RockhamptonGippsland MaryboroughBallarat Toowoomba

12. Aggregated Markets QLDNNSWSNSWVICTAS Sub markets CairnsNorthern RiversCanberraAlburyHobart TownsvilleTamworth/TareeOrange/Dubbo/ Wagga BendigoLaunceston MackayNewcastleWollongongShepparton RockhamptonGippsland MaryboroughBallarat Toowoomba Further non-surveyed signal splits available: Sunshine Coast Central Coast Gold Coast Wollongong Wagga

13. Rural markets – aka “diary markets” Regional WA GWN (7) WIN (9,10) Port Pirie/ Broken Hill GTS/BKN (7) STHN X 10 (10) Satellite IMPARJA (9) SEVEN CENTRAL (7) Griffith WIN (9), WIN (7) Mildura WIN (9), PRIME (7) Darwin NINE/NTD-8 (9) STHN X DARWIN (10) DARWIN DIGITAL TV These markets have two FTA stations, except Darwin and Mildura which have 3. Loxton/Mt Gambier RTS/SES (10) WIN SA(7)

14. Satellite broadcasts into 5 states and territories PORT PIRIE & BROKEN HILL Pop: 137,000 GTS/BKN (7) STHN X 10 (10) NT Pop: 94,136 22% of SATELLITE IMPARJA (9) 7CEN (7) Rural QLD Pop: 173,381 41% of SATELLITE Rural NSW Pop: 80,366 19% of SATELLITE Rural VIC Pop: 33,813 8% of SATELLITE Rural SA Pop: 42,481 10% of SATELLITE Loxton/Mt Gambier Pop: 126,000 WIN SA (7) RTSSES (9) Source: Nielsen Media Research Regional TV Diary Markets

15. Gold Coast Cairns Townsville Mackay Sunshine Coast Toowoomba Newcastle Wollongong Central Coast Bendigo > 500,000 > 250,000 > 100,000 > 50,000 Population: Bundaberg Rockhampton Tweed/Byron Ballarat Launceston Hobart Albury/Wodonga Mandurah Bunbury Canberra 80% Urbanised

16. www.regionaltvmarketing.com.au RTV Google maps API

17. RTV Google maps API: Submarket level

18. Gippsland Wikipedia link

19. WORKSHOP - in pairs match markets to map

20. Sub-markets & rural markets 1.Maryborough 2.Northern Rivers 3.Canberra 4.Bendigo 5.Cairns 6.Newcastle 7.Wollongong 8.Albury 9.Tamworth/Taree 10.Launceston 11.Toowoomba 12.Gippsland 13.Hobart 14. Rockhampton 15. Ballarat 16. Orange / Dubbo / Wagga 17. Mackay 18. Shepparton 19. Townsville 20.Satellite 21.Pt. Pirie/Broken Hill 22.Loxton/Mt. Gambier 23.Griffith 24.Darwin 25.Regional WA 26.Mildura

21. 1 3 2 5 4 6 7 8 9 10 11 12 13 23 26 21 22 15 14 20 17 16 19 24 M 25 18 P P A B S

22. Demographics

23. Urbanisation and high population growth changing the profile of regional Australia Lower cost of living and lifestyle are main attractions Rural populations moving to regional hub towns Less than 4% of households depend on farming

24. 3 % 7 live in Regional TV markets Source: OzTam AGB Nielsen 2011 1,573,000 Australian teens age 13-17

25. 3 % 3 live in Regional TV markets Source: OzTam AGB Nielsen 2011 3,035,000 Australian youths age 16-24

26. 3 % 9 Source: OzTam AGB Nielsen 2011 3,141,000 Australian 55+ live in Regional TV markets

27. Regional Hyundai buyers slightly older, affluent and female vs. metro buyer Source: Roy Morgan Research (12 months to Sep 2010 - own new Hyundai bought in the last 5 years)

28. Seachange… … 20% for baby boomers …80% for families

29. “Typical” Seachanger Ryan, 36. Wollongong NSW Made the seachange from the “Shire” to the “Gong”. Owns a small business in building trade Above average income & primary focus is kids and lifestyle. Loves footy, cars and teaching kids surfing.

30. Population Increase: 2001 vs. 2011 Source: ATR & OZTAM 2011 Australian population moving North and to the coast. Over 30% growth in 10 years in some regional areas National average QLDNSWVICTASMETRO

31. Regional people start their family life younger than in the capital cities Source: Roy Morgan Single Source (12mths to March 2011)

32. Regional Mum’s spend more on groceries due to more kids Source: Roy Morgan Single Source (12mths to March 2011)

33. Regional is perfectly representative of the dominant Australian lifestyle: Suburban Experiential International Libertarian Practical Communitarian Self Reliant Upwardly Mobile Materialist Family Focused Pragmatic Functional Patriotic Youthful Technological Energetic Conservative Institutional Self-Controlled Inner Metro 23% Outer Metro 41% Regional 36%

34. www.regionaltvmarketing.com.au According to David Chalke social researcher….

35. Spending and economics

36. Savings are at an all time high in both regional and metro markets Saving per discretionary $1000 Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey

37. The need to pay debt continues to decline in regional but is growing in metro markets Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey Loan Repayment per discretionary $1000

38. Regional consumers’ willingness to spend grew this year by 9% – against national trend Source: foreseechange 2005 – 2010: annual average, 2011: June 2011 survey Spending per discretionary $1000

39. New car sales grew in regional by 7% YOY – off back off better 2009 than metro YOY change in new car sales Source: VFACTS (excluding trucks and buses, including utes)

40. Home price to income ratio is significantly lower in regional TV markets House price vs. income multiple Source: Residex median house *(includes apartment price) Jan – Jun 2011 & Roy Morgan Single Source 12 mths to March 2011

41. Average household incomes in regional TV markets are within 10% of national average Source: Roy Morgan Single Source (12mths to Mar 2011 ) P25-54: Average household Income

42. 20% of regional consumers are willing and able to spend

43. 20% +13% YOY of regional consumers are willing and able to spend

44. Incomes in regional and rural Australia are growing well above the national average Average household income growth since 2004 (P25-54) Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 )

45. Rapid growth in the number of affluent consumers in regional Australia Source: Roy Morgan Single Source (12mths to Mar 2011 – 2004 ) People 18-64 with HHI $130k+ or Investments $500K+

46. Regional consumers are more optimistic about their current financial outlook… …and are more likely to spend on discretionary items over the coming year.

47. MEDIA

48. Media landscape in regional markets is broadly similar to capital cities Source: Roy Morgan Single Source 12 months to March 2011, *AGB NMR Panorama 12 mths to May 2011

49. News & current affairs Local TV ads Promotions Community sponsorships Lifestyle shows TV plays a greater role in regional life…it’s part of the community

50. Reg. TV CPM (cost per thousand) is 40% below national TV average – proportional investment 23% of national TV budget to reach 36% of audience Index TV market CPM indices National average CPM P18+ = 100 Source: Regional TV Agency Survey 2010

51. Share of national population Share of national TV budget Higher cost efficiency of regional TV is opportunity to push growth harder than in metro

52. Audience share of the new commercial “digital” channels has more than tripled since June 2010 Source: Mediaweek, Metro data from OzTAM and Regional data from Regoional TAM. All People 18:00 - 23:59 June 2010 Sept 2010 Dec 2010March 2011

53. Subscription TV audiences are down in all key dayparts for the Survey Year to Date FTA viewing is up & commercial TV even more Source: Regional TAM; Survey 1-2, 2011 vs. 2010; Consolidated Data New commercial channels driving Free to air TV audiences up in 2011 Audience Year on Year % Change; Combined Agg Markets (QLD, NNSW, SNSW, VIC & TAS) Total People; Sun-Sat; Survey 1-2, 2011 vs. 2010

54. Proving effectiveness & “ROI” of Regional TV

55. Vaseline Market Mix Modelling Analysis Case Study July 2011

56. Key findings summary The study found a re-alignment of TV market investment using the same 2010 TV budget could increase annual TV generated sales by 38%. And improve ROI by 43% The model recommends 40% share of total TV budget should be allocated to regional markets to achieve this outcome TV flighting patterns in regional to be continuous lower weights

57. Current Adstock investment in regional areas could be increased to maximise total advertising generated sales. = Average Weekly Adstocks

58. Current Adstock investment in regional areas could be increased to maximise total advertising generated sales. = Average Weekly Adstocks

59. Over the period of the study regional areas deliver 38% of advertising generate sales for only 16% of budget and hence better ROI compared to metro areas. Melbourne and Sydney have a greater capacity to generate high volume sales but require large levels of spend

60. Optimum allocation to Regional TV is 41% of total TV budget

61. Due to higher decay in regional areas, a continuous flighting pattern may be more appropriate. Whereas in Sydney where advertising decay is lower, a large burst followed by shorter ones is most efficient. Investment Sales Week Number Investment Sales Week Number Investment Sales Week Number Investment Sales Week Number

62. 40 % of potential national growth is in regional markets…

63. 40 % …for no more than 25% of national TV budget

64. Regional TV offers your clients growth, accountability and engagement Discretionary spending outlook very positive Regional media consumption favours FTA TV Opportunities for localised messaging in support of national brand strategy RTM can provide effectiveness measures and opportunity analysis

65. Regional Quiz

66. Thank you