AD SPENDING FORECAST LOWERED AGAINBy STUART ELLIOTT | July 9, 2008

Leland Westerfield, a senior analyst at BMO Capital Markets in New York, sliced in half

his forecast for growth in ad spending this year. In a report on Monday, Mr. Westerfield

revised his prediction to a gain of 1.8 percent, compared with his previous forecast for

an increase of 3.6 percent citing …

CONSUMER SPENDING SLIDE KILLING MADISON AVENUE By HOLLY M. SANDERS | July 9, 2008

Coen predicts US ad spending will rise just 2 percent in 2008, down from his earlier estimate of 3.7 percent, despite the double boost of political spending and the Olympics. In a report released yesterday, Coen didn't mince words:

"The advertising industry is presently in a severe slump."

“… slowdowns in ad spending by major marketers in large categories like automobiles and financial services.”

MAGNA CUTS AD GROWTH FORECAST TO 2%By SUZANNE VRANICA | July 9th, 2008According to TNS Media Intelligence, which tracks media spending, among the marketers cutting ad spending are those whose businesses are being hit hard by higher gas prices or the housing-market downturn, such as …

“… automotive, retail and financial-services companies.”

“Advertising growth is

closely correlated with the

economy.”- Bob Coen’s Insider’s Report, July

2008 

2008 ForecastsBob Coen – Magna

December 2007 July 2008

All advertising 3.7% $294.3 2% $285.1

Radio 0.2% $18.6 -2.6% $18.7

“… Because consumers’ disposable income has failed to improve … we have lowered the 2008 forecast…”

– Bob Coen’s Insider’s Report, July 2008

Lee Westerfield BMO Cap

January 2008 July 2008

All advertising 3.6% $294.3 1.8% $297.0

Radio -2.3% $18.6 --5.5% $18.4

“U.S. advertising cycle recovery unlikely before 2010.”” – Lee Westerfield Broadcasting Report, July 2008

• General Motors (US Sales) | -10%

• The Home Depot | -3.4%

• Lowe’s Cos | -1.3%

• Macy’s | -2.6%

• Sears | -5.8%

• JC Penney | -5.1%

• Target | -.7%

• Circuit City | -7.4%

Sales Results: Q1 ’08 vs. ‘07

“Advertising growth is

closely correlated with the

economy.”- Bob Coen’s Insider’s Report, July

2008 

• Represents $1B opportunity for Radio• Key categories of importance for the

industry due to declining or disproportionate

share/spend levels• Spent $3.5MM less in Radio in 1st half

‘07 vs. 1st half ’06• Spent $11.6MM more in Radio

FY ‘07 vs. FY ’06• 2% key account total increase as

compared to a 2% industry decline

36 Key AccountsAT&T Ford T-MobileAllstate GM TargetAmerican Express HP Time Warner CableAnheuser-Busch J&J ToyotaBest Buy Kraft UnileverBMW Lowe’s VisaCampbells Mercedes WachoviaCapital One Miller Brewing Wal-MartCircuit City Nestlé Washington MutualCoca Cola P&G Wendy’sDirecTV Pepsi Wrigley’sFederated Sprint/Nextel Yum Brands

Key Accounts

• Since 2006, media spending by Key Advertiser Focus clients has decreased $773 million for the January through April time period.

• During that same 4 month time period between 2007 and 2008, AT&T's total media spend dropped by $88 million and Johnson & Johnson's by $61 million.

2006

20072008

Our Goals• Elevate the dialogue on behalf of the Radio industry among

client marketing and brand management teams and their agencies– Shift perceptions of Radio– Demonstrate the power that Radio can offer their brands– Partner to create innovative, industry-wide, creative solutions

• Business-need driven focus• Radio marketing vs. media• Industry-wide objectivity

• Successfully partner with our industry• Drive revenue

Revenue Progress17 Key Accounts With GrowthAnheuser-Busch +$309,300 +101%

Best Buy +$853,400 +45%

Campbells +$5,271,400 +82%

Capital One +$196,500 +5%

DirecTV +$1,891,900 +76%

Ford +$16,383,200 +39%

GM +$2,799,500 +3%

Miller Brewing +$254,600 +22%

Sprint +$34,227,700 +320%

T-Mobile +$6,999,400 +2780%

Visa +$1,063,900 +31%

Wachovia +$5,385,300 +53%

Wal-Mart +$20,965,400 +139%

Washington Mutual +$7,564,400 +225%

Wendy’s +$745,800 +21%

Wrigley’s +$321,600 +100%

Yum Brands +$32,792 +27%

TOTAL +$108,512,500 +51%

18 Key Accounts With Decline

Allstate -$319,000 -1%

American Express -$2,543,200 -60%

AT&T -$30,472,100 -21%

BMW -$5,728,100 -30%

Coca-Cola -$1,630,900 -54%

Circuit City -$627,300 -95%

Federated -$5,488,800 -14%

HP -$8,075,300 -87%

J & J -$6,194,900 -19%

Kraft -$2,523,100 -69%

Lowe’s -$4,800,200 -50%

Nestle -$2,914,100 -31%

PepsiCo -$8,138,500 -58%

P&G -$2,588,900 -12%

Target -$1,003,100 -12%

TW Cable -$3,638,300 -54%

Toyota -$8,056,700 -25%

Unilever -$2,130,000 -30%

TOTAL -$96,872,500 -24%

Engagement Progress

• Katz, Interep, RAB joint venture kicked off– Hyundai/Kia– McDonald’s– Wal-Mart

Hyundai/Kia• Objectives:

– Increase Radio share of budget for both brands (currently X%)

– Elevate the dialogue among client and agency teams to further engage them with the power Radio can provide to meet their business objectives

• Strategies:– Partner with Hyundai/Kia teams at all touch points –

corporate marketing, dealer groups, media agency and creative agencies

– Develop strong relationships to help drive ideas through the infrastructure

• Progress to date:– Borrego “Drive-In Movie” idea well-received, not

activating due to budget– Opportunity to expand a local Interep “win” on Hyundai

to national efforts– Currently exploring opportunities for 2009 model

launches (4Q 2008 support)

McDonald’s• Objectives:

– Generate incremental national and local revenue activity for Radio

– Bring nationally focused ideas to the forefront to drive cooperative efforts across all regional franchise groups

• Strategies:– Partner with key brand, franchisee and media teams to

unearth select 2008/2009 opportunities– Demonstrate the joint venture’s abilities to deliver out-of-

the-box ideas – Integrate McDonald’s suite of offerings into the culture

and content of local Radio• Progress to date:

– McCafe Customer Network concept well-received by client teams

– Client is engaged and intrigued with the Nationally focused possibilities

– Working towards solidifying “National” relationship with OMD

McCafe• Objective :

– Introduce the NEW McDonald’s McCafe Premium Coffees– Drive trial of Premium Coffees and extend sales throughout

the day– Brand McCafe Premium Coffees as the quality/value leader

• Target:– Everyone

• Idea: – “The McCafe Customer Network”• A “customer to customer” integrated Radio and Video

Endorsement program• Local opinion shaper, unscripted, endorsements weaved into

the fabric of radio programming• Video “Man in the box” interviews• Custom created McCafe microsite• Online contesting, text messaging and alerts• Live broadcasts from McDonald’s McCafes and commercial

inventory takeovers• In market street teams at high traffic locations will give away

coffee sleeves printed with MCN invitations for free coffee• Status:

– Client very interested in the idea to support a 2009 National launch

– Chicago test market roll-out will be supported locally

Wal-Mart• Objectives:

– Fortify Wal-Mart’s increased spending trends with radio– Elevate the dialogue among client and agency teams to further

engage them with the power Radio can provide to meet their business objectives

• Strategies:– Immerse the Wal-Mart culture with Radio– Partner with key category and media teams to amplify select

2008/2009 marketing plans through the creation of innovative ideas

– Develop strong relationships within Wal-Mart at every level of decision making

• Progress to date:– Significant increase in radio spend:

• +139% (full year ’06 vs. ’07)• +135% (1Q ’07 vs. 1Q ’08)

– Increase in incremental assignments– Positive client feedback received by RAB lead

• “Radio is performing very well for us and as long as we continue to see strong ideas on activation our investment will continue to increase.” Stephen Quinn, CMO

Wal-Mart Programs in ProgressAfrican American Initiatives• VOICES My Voice. My Story. My Wal-Mart

– Wal-Mart and Radio partner to celebrate African-American life through a unique, multi-dimensional program that brings “voice” to passions, achievements, ambition and lives well-lived via a spectrum of quality audio content

– Supported by specific product messaging and promotion– End goal is to allow Radio to bring Wal-Mart suppliers and

customers together in a truly engaging way as never before– Value: $4MM-$6MM– Status: Remains under consideration and further

development for February 2009 activation• America I AM

– Amplification for Wal-Mart’s presenting sponsorship of Tavis Smiley exhibition and nationwide mobile tour

– Philanthropic sponsorship of the exhibition– Value: $2MM-$3MM– Status: Presented local media activation plan to drive traffic

and awareness for the mobile tour and exhibition. Local media allocation planning recommendations in progress between client/agency

Wal-Mart Programs in ProgressGeneral Market Initiatives• Game Time

– Creation of ideas to support Wal-Mart’s cross-category “Game Time” platform (NFL, NBA, NCAA)

– Ideas range from original content series (Cooking show), mobile display showcases (Party in a Box) and DJ engagement (DJ ultimate party places)

– Status: Client and agency presentations scheduled for weeks of July 14 and 21

• Home– Programs to support the launch of a Wal-Mart exclusive Better Homes &

Gardens line of merchandise– Ideas: Radio Goes Wild for Wal-Mart BH&G; Wal-Mart Home & Garden;

Save Money & Help Others Live Better– Elements involve Radio station takeovers, DJ home makeovers,

programming inspired by and including BH&G editorial and a community involvement campaign

– Status: Client and agency presentations scheduled for weeks of July 14 and 21

• Holiday– Help Wal-Mart prepare to stand apart from the competition in the

upcoming Holiday retail climate– Ideas: Random Acts of Holiday; Deck the Home; Holiday Music Network– Elements involve significant DJ involvement, charitable community giving,

strong drive to retail and in market, on air and online takeovers to support Black Friday & Cyber Monday

– Status: Client and agency presentations scheduled for weeks of July 14 and 21