1. Synergy: The Benefits of Moving Money Into Radio

2. In 2004, LOCAL newspaper revenue increased + 6.7% to $24.6 billion

3. 19902004 Newspaper: Decreasing Market Penetration Daily Circulation Source: Editor and Publisher Daily Circulation Source: Editor and Publisher Daily Circulation Source: Editor and Publisher Daily Circulation Source: Editor and Publisher

4. State of News Source: Pew Trust 72% 49% 0% 60% 42% 24% Over the last 10 years traditional media has been loosing ground …

5. State of News Source: Pew Trust 59% 42% 40% 38% 34% 29% Regular news sources include … 22% 13%

6. State of News Source: Newspaper Association 25-34 38.8% 67.4% 2004 – Read a Daily Newspaper … 55+

7. Stemming the Tide Free papers aimed at young non-readers Editor and Publisher -- Newspapers aimed at youth are popping up in all kinds of markets, most affluent neighborhoods where those aged 25 to 44 live and work.

8. Synergy: The Benefits of Moving Money Into Radio

9. What’s Inside: RAEL Overview Synergy Study & Findings Key Implications RAEL Future Study

10. RAEL Overview

11. The Mission To work with advertisers, agencies and Radio broadcasters to further the industry’s understanding of how Radio works and to measure its effectiveness

12. RAEL Overview The Goal To better understand issues concerning Radio and consumers including: –Maximizing Radio effectiveness –Synergy –ROI

13. RAEL Overview Wirthlin Study Inaugural RAEL study exploring the relationship consumers have with Radio and Radio Ads Key findings include: –Consumers connect emotionally with the medium and the advertising –Radio ads are seen as more personally relevant than television or newspapers –Effectiveness in Radio advertising is enhanced when built on a personal and emotional connection

14. Synergy Study

15. Background Numerous studies showcase Radio’s strength in comparison to television on recall and persuasion Most recent comparative studies have occurred outside the U.S. Few have examined the direct effect of moving some (but not all) ad investment into Radio Synergy Study

16. An Introduction Introducing the second major consumer research study funded and designed by the Radio Ad Effectiveness Lab (RAEL) - conducted by the PreTesting Company Synergy Study

17. The Rationale Based on a synergy mandate, the research committee designed a study for quantifying media mix effects including: –Television with and without Radio – Newspaper with and without Radio Synergy Study

18. The Objective Determine the impact on key effectiveness metrics when Radio is used to replace some, but not all, of investment placed in a television or newspaper campaign Synergy Study

19. Key Metrics Brand Recall Persuasion (Brand Choice) Competitive Imagery Association Main Message Playback Synergy Study

20. Core Learnings Substituting two Radio ads for one of two TV ads increased unaided brand recall by 34% Substituting two Radio ads for one of two newspaper ads almost tripled unaided brand recall Synergy Study

21. Core Learnings The media mix … –Resulted in more people choosing the advertised brand as their first choice product –Consumer playback of main message was as good if not better than stand alone television or newspaper Synergy Study

22. Methodology Pre-work: Selecting test campaigns –Fast food chain, OTC allergy medicine, auto, cell phone service and credit card –Real, recent campaigns utilizing all three media –Wide mixture of product categories –High quality executions Phase One: Ensuring good ad executions –Comparisons to PreTesting norms Synergy Study

23. S Methodology Phase Two: Evaluation of media mixes –396 respondents –Four matching samples of respondents: –Television and newspaper only participants also exposed to radio session with no test ads TV Only (Two TV)* TV & Radio (One TV, Two Radio)* Newspaper Only (Two Newspaper)* Newspaper & Radio (One Newspaper, Two Radio)* * Represents ad exposures Synergy Study

24. S Methodology Utilization of central- facility distraction methods One-on-one interaction in private setting Administered by trained interviewer Synergy Study

25. S Methodology Synergy Study Invited to attend programming screening Three programming choices provided (current primetime shows) Requested to review current newspaper copies Asked to read through entire paper in order to comment on content Asked to view video taken during auto “test drive” Requested to look for road signs Given choice of three simulated “radio stations * Test and other ads inserted in all three media * Effectiveness measures taken before and after * Visit RadioAdLab.org/reports.htm for more information

26. Synergy Findings

27. Recall The question (unaided, then aided): “Please tell me all the names of the brands or products that you can remember being advertised either during the television programming or during the drive.”

28. Synergy Findings Unaided Recall – The Results

29. Synergy Findings Aided Recall – The Results

30. Synergy Findings Persuasion The question (asked before & after the exposure): “If, today, you were going to purchase a product or utilize a service in each of the categories, which would be your first choice?

31. Synergy Findings Persuasion – The Results +5 pts +8 +6

32. Synergy Findings Competitive Imagery The question: “Please tell me how you would rate TEST compared to COMPETITOR on each of the following statements. ‘9’ means TEST is better…”

33. Synergy Findings Competitive Imagery – The Results

34. Synergy Findings Main Message Playback The question: After the advertising exposures, the respondent was asked to state the main idea of the test ads to which they were exposed.

35. Synergy Findings Main Message Playback – The Results

36. In Summary Synergy Findings +34% unaided brand recall vs. television only +3 point first-choice brand selection shift vs. television only Equal main message playback vs. television only +280% unaided brand recall vs. newspaper only +7 point first-choice brand selection shift vs. newspaper only +62% main message playback vs. newspaper only Replacing one television or newspaper exposure with two Radio exposures resulted in equal or better effectiveness

37. Key Implications

38. What it means for Advertisers Integrating Radio increases consumer impact, without increasing costs, against effectiveness measures including: –Brand Recall –Message Playback –Persuasion

39. Key Implications What it means for Advertisers The impact on persuasion metric is extremely noteworthy as it’s a precursor to purchase intent

40. Key Implications What it means for Advertisers Radio may be undervalued: –Redeploying a portion of the budget into Radio appears to make marketing sense –A synergy mix with Radio was shown to work across five product categories providing validation for increased usage within current/pending campaigns

41. Key Implications What it means for Advertisers Radio may be undervalued: –Effectively communicates a message that can be received, remembered and played back by consumers –Already known to be powerful in isolation but also significantly potent in media mix settings

42. Key Implications What it means for Advertisers Radio is multifaceted: –Research demonstrates Radio’s ability to extend reach –However, Radio is an important way to communicate with consumers already reached by television and newspapers –Radio is more than a “supplement”

43. Key Implications In the End It’s not about spending more. It’s about more wisely investing what you have.

44. RAEL – The Future

45. The Third Study Millward Brown/IRI –Is the “Holy Grail” of accountability research –Conducted by Millward Brown and IRI –Measures in-market Radio sales effect with and without TV –Uses 4 IRI BehaviorScan Markets to control TV exposures –Key advertisers being solicited for participation –Fieldwork now underway for first 5 advertisers –Second phase with different advertisers planned for 2005

46. Contact RadioAdLab (800) 364-3239 www.RadioAdLab.org Radio Advertising Bureau (800) 252-RADIO marketing@rab.com

47. Synergy: The Benefits of Moving Money Into Radio