Bobbi Loy-Luster

VP – Client Services, BIA/Kelsey

January 25, 2011

2011 UBL User Conference: Interactive Local Media Industry

Overview

2

BIA/Kelsey’s Suite of Services

Continuous Advisory Services

Valuation and

Litigation

Strategic Consulting

Due Diligence

Sales Training

Data and Research

Conference and Events

Our Clients

3

Publish Key Research and Forecasts

Research

• SMB Research• Small SMBs • Large SMBs

• Mobile Research

• Consumer Research

• Industry Research

• FCC Research

Forecasts

• Global Advertising

• Europe• North America

• United States• Markets

• Mobile Phone• Usage• Advertising

• SMB Advertising

4

Local Media and Advertising Spending

Total 2009 U.S. Ad Spending$235.6 Billion

Local Adver-tising

National Advertising

• About 55% of all ad spending is “local.”

• Local ad spend includes spending by SMBs, national advertisers, and regional advertisers making local buys.

Source: National figures based on consensus of estimates from research groups including Myers, Wilkofsky, eMarketer, Barclays, Bernstein, Oppenheimer, UBS, VSS, Citi, Cowen, GroupM, MAGNA, ZenithOptimedia, Collins, Jefferies, BMO, Morgan Stanley and ThinkPanmure.

US$ Billions

5

Local Ad Market Currently Dominated by Traditional Media

Newspapers18.9%

Direct Mail28.7%

TV13.9%

Radio10.8%

Yellow Pages8.3%

OOH4.9%

Cable4.1%

Magazine2.4%

Online / Interactive 6.9%

ERPM*0.8%

Mobile0.3%

2010 U.S. Local Media Revenues — $133.3 Billion

Digital revenues associated with traditional media (e.g., Web sites associated with local TV stations, local radio stations, newspapers and magazines) are included in the revenues for the traditional media. Revenues for Internet Yellow Pages that are associated with print Yellow Pages are included in the overall Yellow Pages media category.

*ERPM = E-Mail, Reputation and Presence Management

6

Steady Shift Toward Digital Media

2008 2009 2010 2011 2012 2013 2014$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

$140.8

$115.1 $113.6 $110.2 $110.4 $109.3 $110.0

$15.5

$15.5 $19.6 $23.0 $26.8 $30.9 $35.2

Traditional Online/Interactive

US

$ B

illio

ns

2009-2014CAGRs:

Total MediaCAGR 2.1%

Traditional Media

CAGR -0.9%

Online/ Interactive

MediaCAGR 17.4%

$130.6 $133.3 $133.2$137.3 $140.2

$145.2$156.3

Note: Numbers are rounded. Source: BIA/Kelsey Estimates

7

2008 – SMB Relationships Built on Channels That Deliver Perceived Audience

Millions of SMB relationships

Source: BIA/Kelsey Estimates

8

2010: In 2 Years, SMB Relationships were Radically Transformed

Source: BIA/Kelsey Estimates

Millions of SMB relationships

There has never been a ramp this fast…ever

9

Last Year, 32% of SMBs Intended to Build a Page on a Social Network

SMBs That Intend to Use a Page on a Social Site in Next 12 Months

Overall average @ 32%

Note: Scale begins at 10%.

Source: Local Commerce Monitor Wave XIII August 2009 (Sample: 302). Methodology: Online. Cosponsor: ConStat.

10

2010 - Use of Social Media is Intense

Facebook Other Social Net'k Twitter0%

10%

20%

30%

40%

50%

60%

48.5%

25.1%

18.9%

Pe

rce

nt

of

SM

Bs

Us

ing

T

his

Me

diu

m

Usage of various “social media” by SMBs is already intense. Nearly half of SMBs report having a Facebook page for their business – even more than use Email marketing.

Sources: Local Commerce Monitor Wave 14. November 2010.

Use of Social Media

11

Membership in Social Networks is Exploding

Q1/2008 Q1/2009 Q1/20100%

20%

40%

60%

80%

100%

120%

140%

16%

44%

67%34%

32%

30%

4%

7%

14%

6%

20%

TwitterLinkedInMySpaceFacebook

Multiple mentions allowed.

Source: User View. Wave VII: February 2010 sample 1,002Methodology: Online. Cosponsor: ConStat.

Membership in Social Networks Continues to Explode

Per

cen

t o

f R

esp

on

den

ts

12

Presence, Performance, Permanence

Presence•Listings•Print•Banners•Search•DOOH•Door hangers•Radio•Cable TV•Mobile TV

Performance

•Clicks•Calls•Forms•Store Visits•Inquiries•Ratings•Reviews

Permanence

•Online booking•Customer reminders•Customer updates•Retention strategies•Telephone training

13

“Named after the aviation slang term for the Himalayas, this exotic Japanese eatery at the Santa Monica Airport offers luscious sushi and beautifully presented innovative fare.”

~ The Hump Restaurant Santa Monica, CA

Why? Consider the Implications of the Social Net

14

Case Study :~15 Years in Business; High reviews & Consistent Volume

The Hump

15

Case Study : On-line Conversations Spike on March 10th

16

Case Study: 10 Days Later…

17Courtesy 15 Mile & comScore

Everyone launches Local Check-in

April 2010

Twitter Launches Places

June 2010

Launch of FoursquareMarch 2009

Facebook Launches

PlacesAugust 2010

Search and Social Get Local & Mobile

Local tags

Service Areas

QR Codes

18

Mobile Internet Access Has Increased

Wave I Wave II Wave III0%

5%

10%

15%

20%

25%

0

5

10

15

20

25

10.2%

14.8%

21.0%

7

10

20

Heavy Users Mean Number per Month%

Use

rs M

aki

ng

>1

0 I

nte

rne

t A

cce

sse

s p

er

We

ek

The percentage of heavy Internet users continues to increase significantly. The overall mean number of Internet accesses per month, for all users, doubled to 20.

Mea

n N

umbe

r of

Inte

rnet

A

cces

ses

per

Mon

th, b

y al

l Use

rs

Source: Mobile Market View Wave III, October 2009, sample = 504; Wave II, October 2008, sample = 512; Wave I, September 2007; sample = 500. Methodology: Online. Cosponsor: ConStat.

19

Mobile Commercial Searches in Past Six Months

Searches for local products or services now exceed out-of-market searches by a wide margin.

Searched Internet for local products or services

Got information about restaurants or bars

Searched Internet for products or services outside my local area

0% 10% 20%

18.5%

13.3%

11.1%

15.6%

11.7%

14.3%

9.8%

9.0%

6.4%

Wave IWave IIWave III

Out-of-market searches

Local searches

Source: Mobile Market View Wave III, October 2009, sample = 504; Wave II, October 2008, sample = 512; Wave I, September 2007; sample = 500. Methodology: Online. Cosponsor: ConStat.

Contact:

Bobbi Loy-Luster

VP – Client Services, BIA/Kelsey

bloy@kelseygroup.com

(704) 892-0296