1. The Local Media & Advertising Experts Local Commerce Monitor Wave 18: Use of Newspaper Advertising: Local Media Association Mark R. Fratrik Ph. D., Sr. VP, Chief Economist January 20, 2015

2. © 2015 BIA/Kelsey. All Rights Reserved. 2 Mark Fratrik VP & Chief Economist, BIA/Kelsey Introduction & Agenda  Online Activities by Advertisers  Newspaper Advertisers vs. Non-Newspaper Advertisers  Other Media Used by Newspaper Advertisers  Move Towards Digital Advertising  Local Businesses Spending  Automotive  Health Care  Retail  Online Spending Patterns  Questions

3. © 2015 BIA/Kelsey. All Rights Reserved. 3 BIA/Kelsey Knows Local  Local media advertising revenues will climb to $159.0 billion in 2019, according to our U.S. Local Media Forecast (2014-2019).  Our goal is to help local media companies leverage the real business opportunities inherent in this growth to solidify your leadership position.  BIA/Kelsey is the leading research and advisory company focused on the local advertising marketplace.  Our research-driven data, strategic analysis and competitive intelligence can help you make the right decisions, every day.

4. © 2015 BIA/Kelsey. All Rights Reserved. 4 General Themes of Presentation  Businesses are looking for other avenues both in advertising and in marketing to attract new and retain existing customers  Advertising marketplace still moving toward more spending on digital/interactive/ online opportunities with Newspaper advertisers catching up  Those shifts in advertising spending varies by market and by type of business  Local newspapers still have a prominent role and can play in this new marketplace and prosper

5. © 2015 BIA/Kelsey. All Rights Reserved. 5 © 2014 BIA/Kelsey. All Rights Reserved. ™ Small to Medium-Sized Businesses (SMBs) 5

6. © 2015 BIA/Kelsey. All Rights Reserved. 6 Local Commerce Monitor™ (LCM)  BIA/Kelsey’s Local Commerce Monitor™ is an online survey of SMBs about media usage, performance assessments, and the use of mobile, social and loyalty programs by SMBs.  Unique, fresh, trusted – since 1999.  About 542 respondents.  Recent survey: Wave 18, Q3 - 2014 Survey details in Appendix. Results based on 542 responses have a confidence interval of +/- 4.0% at the 95% confidence level. The confidence interval is larger for those questions that were asked of just a subset of the full sample.

7. © 2015 BIA/Kelsey. All Rights Reserved. 7 Key Insights  Digital media continues to gain traction, but SMBs are becoming more selective in their channel choices based on ROI  “Newspaper SMBs” are heavy digital media users and plan to increase their ad budget for digital by over 11% in the next year  Digital fragmentation presents challenges that must be addressed  Newspapers and other traditional media are still well-positioned to serve this marketplace

8. © 2015 BIA/Kelsey. All Rights Reserved. 8 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. Media Used For Advertising and Promotion S11 Check all media used for advertising and promotion of your business Sample Size = 546

9. © 2015 BIA/Kelsey. All Rights Reserved. 9 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. Media Used For Advertising and Promotion S11 Check all media used for advertising and promotion of your business Sample Size = 142

10. © 2015 BIA/Kelsey. All Rights Reserved. 10 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. ROI Assessments of Selected Ad Media – Newspaper Advertisers Q107 How would you rate the ROI of ad media you use? Sample Size = Variable

11. © 2015 BIA/Kelsey. All Rights Reserved. 11 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. ROI Assessments of Selected Ad Media – Newspaper Advertisers Q107 How would you rate the ROI of ad media you use? Sample Size = Variable

12. © 2015 BIA/Kelsey. All Rights Reserved. 12 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. ROI Assessments of Other Ad Media Used by Newspaper Advertisers Q107 How would you rate the ROI of ad media you use? Sample Size = Variable

13. © 2015 BIA/Kelsey. All Rights Reserved. 13 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. Engage Paid Assistance for Updating Online Properties Q322 Paid Assistance for updating online properties (landing pages, profile pages, social pages, blog, eto.) Sample Size = 142

14. © 2015 BIA/Kelsey. All Rights Reserved. 14 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. Spending Intentions for Next 12 Months Q104- Ad and Promotional spending intentions for next 12 months Sample Size = 142

15. © 2015 BIA/Kelsey. All Rights Reserved. 15 Source: BIA/Kelsey Local Commerce Monitor™ (LCM) Wave 18, Q3/2014 (and prior waves, if relevant). Methodology: Online panels. Percentage of Budget for Digital/Online: Last 12 Months and Next 12 Months Q301 Percentage of budget for digital/online: last 12 months Sample Size = 120

16. © 2015 BIA/Kelsey. All Rights Reserved. 16 Tracking All the Data  Data can be hard to digest! We’ve created a series of infographics to make CCM and LCM data easier to absorb.  See them here: www.biakelsey.com/infographics

17. © 2015 BIA/Kelsey. All Rights Reserved. 17 © 2014 BIA/Kelsey. All Rights Reserved. Local Advertising Marketplace 17

18. © 2015 BIA/Kelsey. All Rights Reserved. 18 The Big Picture – Local Media Advertising  BIA/Kelsey defines the local media advertising marketplace as those media that provide local audiences to all types of advertisers  We expect the total local media advertising in 2015 to be $139.3 billion, only a slight increase from the 2014 level of $137.0 billion (+1.6%)  The total local media advertising revenue growth is not keeping pace with the overall economy  The overall local media market will grow moderately through 2017 (at a 3.0% compound annual growth rate)  By 2019, the total will be $158.5 billion  Growth in online/interactive/digital advertising revenues will remain strong, CAGR of 12.2% and CAGR of -0.5% for traditional advertising revenues  By 2019 local online/interactive/digital advertising revenues will be $55.0 billion

19. © 2015 BIA/Kelsey. All Rights Reserved. 19 Local Ad Market Still Dominated by Traditional Media Source: BIA/Kelsey U.S. Local Media Forecast 2015

20. © 2015 BIA/Kelsey. All Rights Reserved. 20 Steady Shift Toward Digital Media Traditional Media includes in this total Over-the-Air Radio and Television, Local Cable, Billboards, Newspaper Print, Direct Mail, and Print Yellow Pages advertising revenue. Note: Numbers are rounded. Source: BIA/Kelsey U.S. Local Media Forecast 2015

21. © 2015 BIA/Kelsey. All Rights Reserved. 21 Local Ad Market Less Dominated by Traditional Media in 2017 *Note: Radio online revenues include online revenue from terrestrial and online streaming services. Source: BIA/Kelsey U.S. Local Media Forecast 2015

22. © 2015 BIA/Kelsey. All Rights Reserved. 22 © 2014 BIA/Kelsey. All Rights Reserved. 22 Our Media Ad View data provides more dimension into what is happening in local markets for specific advertiser verticals showing their use of mobile advertising Traditional Media Advertising Estimates for Verticals

23. © 2015 BIA/Kelsey. All Rights Reserved. 23  Media Ad View offers comprehensive forecasts for local media advertising included estimates of local advertising for 12 media sectors (radio, TV, newspaper, cable TV, direct mail, magazines, print yellow pages, interactive yellow pages, internet, out-of-home, mobile, and E-mail, Reputation and Presence Management (ERPM).  These estimates and forecasts are also published as nationwide estimates.  The forecast breaks local media advertising for TV markets and CBSAs into 94 advertising categories.  This process included examination of nationwide media advertising categories from a variety of sources. This included published data from the various media trade associations, such as the Television Advertising Bureau, Direct Marketing Association, Outdoor Advertising Bureau, Yellow Pages Association, Internet Advertising Bureau, and other published data from other research firms.  This forecast provides a general view of what is going on in local advertising markets and how the advertising pie may shift in the future. Media Ad View Forecast Overview

24. © 2015 BIA/Kelsey. All Rights Reserved. 24  Traditional Media still garners 61.4% of automotive advertising in 2019  Important in brand imaging to the widest population in combination with more targeted digital advertising Automotive Ad Spending on Traditional Media Source: BIA/Kelsey Media Ad View Forecast 2015

25. © 2015 BIA/Kelsey. All Rights Reserved. 25 Automotive 2015 Ad Spending by Media Source: BIA/Kelsey Media Ad View Forecast 2015

26. © 2015 BIA/Kelsey. All Rights Reserved. 26 Health Care on Traditional Media  Traditional media share remains robust by 2019 – 28.8% share of total advertising  With health care legislation, overall market is expected to grow substantially Source: BIA/Kelsey Media Ad View Forecast 2015

27. © 2015 BIA/Kelsey. All Rights Reserved. 27 Health Care 2015 Ad Spending by Media Source: BIA/Kelsey Media Ad View Forecast 2015

28. © 2015 BIA/Kelsey. All Rights Reserved. 28 Furniture Stores Spending on Traditional Media  Traditional media see slight decrease in total amount spent, though combined share is still 31.0% of all spending in 2019  Can provide a considerable amount of information (e.g., styles) through print media Source: BIA/Kelsey Media Ad View Forecast 2015

29. © 2015 BIA/Kelsey. All Rights Reserved. 29 Furniture Stores 2015 Ad Spending by Media Source: BIA/Kelsey Media Ad View Forecast 2015

30. © 2015 BIA/Kelsey. All Rights Reserved. 30 94 Categories Covered in Media Ad View Automobile Dealers & Automotive Mnftrs. Other Motor Vehicle Dealers Automotive Parts and Accessories Stores Tire Dealers Gasoline Stations & Automotive Repair Business Schools and Computer Technical and Trade Schools Other Schools and Instruction Educational Support Services Commercial banking Savings institutions Credit unions, federally chartered Securities brokerage Portfolio management Investment advice Direct life insurance carriers Direct health and medical insurance Auto Insurance Direct property and casualty insurance Insurance agencies and brokerages Legal Services Accounting, Tax Preparation, Bookkeeping Architectural, Engineering Services Specialized Design Services Computer Systems Design and Related Management, Scientific, and Technical Scientific Research and Development Advertising, Public Relations Services Other Professional, Scientific Technical Temporary Help Services Furniture Stores Home Furnishings Stores Floor Covering Stores Other Home Furnishings Stores Household Appliance Stores Radio, Television, and Other Electronics Computer and Software Stores Home Centers Paint and Wallpaper Stores Hardware Stores Lawn and Garden Equipment Stores Men's Clothing Stores Women's Clothing Stores Children's and Infants' Clothing Stores Family Clothing Stores Clothing Accessories Stores Other Clothing Stores Shoe Stores Jewelry, Luggage, and Leather Stores Sporting Goods Stores Hobby, Toy, and Game Stores Book Stores Department Stores Discount Department Stores Warehouse Clubs and Supercenters All Other General Merchandise Stores Office Supplies and Stationery Stores Gift, Novelty, and Souvenir Stores Wired Telecommunications Carriers Wireless Telecommunications Carriers Cable & Satellite Service Providers Other Telecommunications Janitorial Services Landscaping Services Offices of Physicians Offices of Dentists Offices of Chiropractors Offices of Optometrists Hospitals Nursing and Residential Care Veterinary Services Pharmacies and Drug Stores Hotels-Motels Airline Transportation RV (Recreational Vehicle) Parks Performing Arts Companies Spectator Sports Museums, Historical Sites Amusement Parks and Arcades Gambling Industries Other Amusement and Recreation Motion Picture and Video Newspaper Publishers Periodical Publishers Radio Stations Television Broadcasting Cable and Other Subscription Programming Full-Service Restaurants QSR/Fast Foods Special Food Services Bars Supermarkets and Other Grocery Convenience Stores Beer and Wine, and Liquor Stores

31. © 2015 BIA/Kelsey. All Rights Reserved. 31 Clients have told us that our estimates are the most reliable in the business. We are proud of this position and are committed to maintaining it. Brief Recap of Methodology  BIA/Kelsey has been tracking media for over 30 years  We have a “bottom up” and “top down” approach  Significant feedback from major players in all of these local media industries  Local demographic and economic data to allocate across markets  Utilize national and local information revenue and economic/demographic to estimate across general and detailed categories  Utilize actual local online activity data by advertiser category to generate online distribution for each category

32. © 2015 BIA/Kelsey. All Rights Reserved. 32 Moving Forward Successfully  Disruption in the consumer, business, and the resulting advertising marketplace in recent years DRAMATIC  Major shifts in advertising shares and movement to other marketing options  BIA/Kelsey can help you NAVIGATE these changes with insights, analytics:  LCM – Advertiser trends  CCM – Consumer usage trends  Media Ad View – Advertising trends Dramatic change is always challenging

33. © 2015 BIA/Kelsey. All Rights Reserved. 33 Register Now to Save on BIA/Kelsey 2015 Events The Original Interactive Local Media & Marketing Conference December 8–10, 2015 Los Angeles, CA National Brands. Local Marketing. March 25–27, 2015 Dallas, TX Big Ideas in Local Marketing for Small Business September 28–30, 2015 Denver, CO “BIA/Kelsey has done a great job bringing in new players and making this the place for them to learn and grow as a company. The amount of new people I meet at these shows keeps me coming back and finding new partners to work with. Here’s to a great 2015!” – Tom Maguire, VP, Business Development, Market Authority www.biakelsey.com/2015events “I have attended BIA/Kelsey conferences for nearly a decade and they continue to amaze with timely topics, quality speakers and networking opportunities that are unmatched in the local SMB advertising industry.” - Craig Hagopian, Founder, Chalk Digital

34. © 2015 BIA/Kelsey. All Rights Reserved. 34 © 2014 BIA/Kelsey. All Rights Reserved. Questions? ? ! 34

35. © 2015 BIA/Kelsey. All Rights Reserved. This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information. Questions & Comments: The Local Media & Advertising Experts Mark R. Fratrik Ph. D., Sr. VP, Chief Economist BIA/Kelsey mfratrik@biakelsey.com mfratrik@biakelsey.com

36. © 2015 BIA/Kelsey. All Rights Reserved. 36 Appendix: LCM Sample Starting with the results for LCM Wave 18, we will be weighting the composite findings for the full sample to more closely reflect the actual distribution of SMBs nationwide. Specifically, we are using the distribution of SMBs by number of employees, as provided by the U.S. Bureau of the Census. We define SMBs as being firms with 99 or fewer employees. Therefore, we utilized the distribution of companies with 99 or fewer employees from the Census Bureau data. As of the most recent data available (2011), there were 5.6 million of these businesses. The distribution of these businesses, by number of employees was: # of Employees% of All SMBs 0-463.2% 5-917.5% 10-1910.6% 20-998.6% We have divided the LCM findings into these employee-size brackets, and weighted the results for each bracket accordingly. For example, the LCM results for SMBs with 5-9 employees received a weighting of 17.5%, etc. The employee size data was the only factor used in the weighting. We continue to report findings for “Core” and “Plus Spender” SMBs, because we feel this data provides a useful profile of these two often-targeted groups. The profile data for “Core” and “Plus Spender” SMBs will supplement the composite data which is now based on the number of SMBs by size bracket, as explained above.

37. © 2015 BIA/Kelsey. All Rights Reserved. 37 Appendix: LCM Sample Sample Segment Sample Size Minimum Annual Spend* Average Annual Spend** Core 300No Minimum$2,506.40 Plus Spenders 246$25,000$78,776 *Minimum annual spend on media for advertising and promotion (i.e. not including spend on website or other permanent web assets). **Average annual spend on media for advertising and promotion, excluding outliers. For Core sample, outliers are SMBs spending over $40,000 annually. For Plus Spenders sample, outliers are SMBs spending over $500,000 annually. Results based on 300 responses have a confidence interval of +/- 5.7% at the 95% confidence level. The confidence interval is larger for those questions that were asked of just a subset of the full sample. The data in this document is still subject to quality assurance finalization. The material in this deck was prepared using findings from the Local Commerce Monitor (LCM) Wave 18 Survey, Full sample - conducted in Q3/2014. The full sample is a meld of two sub- samples, Core and Plus Spenders. Sample characteristics: