Local Broadcast TV Advertising OutlookSteve Lanzano, TVB President & CEOsteve@tvb.org

Goldman Sachs 23rd Annual Communacopia Conference September 11, 2014

Fundamentals are extremely strong Consumers credit TV as the primary media purchase influencer Advertising categories key to local TV growth are healthy Performance on all platforms are showing year-over-year gains

2014 for Local Television Advertising

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Nielsen: More People Are Watching TV Than Ever Before

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2012 2013 2014

155:46

157:32

159:07Monthly Hours: Minutes Watched Per Viewer 2+

Source: Nielsen Cross-Platform Report Q1 Each Year

Watching TV at Home Captures the Lion’s Share of Viewing

4Source: Nielsen Cross-Platform Report

Traditional TV 33:59 86.4%

Time-Shifted TV 3:41 9.4%

Watching Video on Internet 1:31 3.8%

Watching Video on Smartphone 0:09 0.4%

Total A18+ Video Consumption 39:20 100.0%

Q1 2014: Weekly Time Spent A18+ (Hrs:Min)

A Week in the Life for the Total U.S. Population

5Source: Nielsen Cross-Platform Report

Q1 2014: Weekly Time Spent (Hrs:Min)A18-24 A25-34 A35-49 A50-64 A65+

On Traditional TV 19:55 23:58 30:10 41:01 48:41

Watching Time-shifted TV 1:54 3:37 4:13 4:17 3:22

Using DVD/Blu Ray Device 0:57 1:34 1:18 1:04 0:39

Using a Game Console 3:48 2:49 1:14 0:25 0:08

Using the Internet on a Computer 5:29 6:12 7:30 5:59 2:55

Watching Video on Internet 2:28 2:11 1:45 1:12 0:23

Watching Video on a Mobile Phone 0:25 0:16 0:08 0:04 -

TV Remains The #1 Influencer Across All Segments of the Purchase Funnel

6Source: TVB/The Futures Company; “Purchase Funnel 2012”

IAB Study on Consumer Influence:Auto Intenders’ Vehicle Purchases are Influenced by All Media and Ads

7Source: IAB Digital Influence on Auto Intenders, January 2014

Broadcast TV Read Prod. Article Newspaper Cable TV Internet Ads Magazines Radio Outdoor Billboards All Other

31%

27%

24% 23%21% 21% 21%

17%

14%

22%20%

14% 14%12% 12% 13%

11%

8%

Auto Intenders Adults 18+

Q. Which of the following media influences your CAR/TRUCK purchases?

Local TV Advertising 2014 Key Category Performance (Jan-Jun 2014)

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Automotive Tier 1 +4.7%

Automotive Tier 2, 3 +5.9%

Retail +3.7%

Hospitals/Med Centers +17.8%

National Political +371.3%

State/Local Political +206.6%

Misc. Services/Amusements +7.3%

Medical Insurance +111.9%

All Categories +3.9%Source: Kantar Media

Double Digit Growth of Station Website and Mobile Ad Revenue

9Source: Borrell Associates, Inc.

Local TV Stations’ Digital Ad Revenue grew +15% in 2013

Larger station groups are now selling digital services including

Search Engine Optimization Reputation Management Website Design Ad Placement (Outside The TV Station’s Site) Email List Management

Many stations have branched out beyond their “owned” media and are selling other media properties’ inventory

Reseller and audience-extension programs now account for 5% of digital revenues, a percentage that’s on the rise

Local TV Stations Expected to Generate$3 Billion in Digital Ad Revenue in 2014

Websites Mobile

Local +16.4% NA

National +34.1% NA

Total +18.2% +21.6%

Digital Ad Revenue Growth(Jan-Jul 2014 vs. Jan-Jul 2013)

Strong Political Spending for National and Local Elections

10Source: TVB, Kantar Media CMAG, Magna Global, Nielsen Q4’13 Cross-Platform Report, U.S. Census Bureau: Voter Statistics, 2008 and 2010

Local Broadcast Television gets 85% of TV ad dollars and the lion’s share of all media spending on Political Campaigns

Adults 35+, who comprise the majority of voters in America (76%), spend only 3% of their monthly video consumption time with internet and mobile platforms

Kantar Media CMAG and Magna Global forecast 2014 political spot spending to reach $2.4 Billion and $2.3 Billion, respectively

2014 political ad spending from Jan-July is up +259.6% versus the same period in the prior year David Axelrod, Obama Political Consultant —

Broadcast is the nuclear bomb.

Moving into the Fall Local TV Commercial Pricing is Solid

11Source: SQAD Media Market Guide

Year-Over-Year(Q3 2014 vs. Q3 2013)

Quarter-Over-Quarter(Q3 2014 vs. Q2 2014)

Early Morning +2.0% +4.0%

Early News +4.0% +2.0%

Prime Time -2.0% -1.0%

Late Night +3.0% +3.0%

Change (%) in CPM A25-54

An Agency Perspective

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2014 Korn Ferry Marketing Pulse Survey “connect marketing efforts to tangible business outcomes…” “while customer engagement is critical and…a key focus…the overarching

purpose of… this engagement is to drive business results…”

Strata Media Buying Agency Survey, Q2 2014 “55% of clients say they are most interested in Spot TV…The largest

percentage in 22 Quarters of the Survey”

More people are watching TV than ever before and consumer usage remains strong Average person A2+ spending nearly 160 hours per month with television Traditional Television represents over 86% of the weekly time spent watching video

Local broadcast television is the most effective video platform in influencing and driving consumer behavior

Advertising category strength is deep and diversified Return of political spending cycle, solid automotive performance, and increases in healthcare and retail

categories

Local Spot pricing remains positive in 2H 2014

Growth of local broadcast stations’ online and mobile offerings is driving rapid advertiser adoption resulting in double digit digital advertising sales growth

Broadcasters traditional television and digital media platforms offer the mass reach and targeting to advertisers Local TV stations expected to generate $3 billion in digital ad revenue in 2014

2014 Full Year Outlook

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Local Broadcast TV Advertising OutlookSteve Lanzano, TVB President & CEOsteve@tvb.org

Goldman Sachs 23rd Annual Communacopia Conference September 11, 2014

Thank you!