Local Television Advertising Effectiveness Study. Kathleen Keefe Vice President, Sales March 21, 2008

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1 Local Television Advertising Effectiveness Study Kathleen Keefe Vice President, Sales March 21,

2 Table Of Contents Objectives And Methodology 2 Executive Summary 6 Viewership And Preferred Media 9 Local News Vs. All Genres 12 Local News Vs. Cable News And Broadcast Network News 22 Weather Information 25 Online News 28 Demographic And Technographic Profile Of Local News Viewers 33 Appendix I Additional Findings 36 Appendix II - Demographics 40 1

3 Objectives And Methodology 2

4 Objectives Determine key attributes to be used for television advertising sales based on the performance of local television news relative to cable and network news; and by genre for local TV station programming relative to cable channel and network programming Understand how local news Web sites perform relative to other Web site genres on attributes relevant to advertisers Evaluate local television news weather and local television news Web site weather and determine the distinct advantages local news offers relative to competitors 3

5 4 Methodology Online survey of 2,719 local news viewers (watch local news twice a week or more) in the Hearst-Argyle local news footprint as seen on the next slide All respondents are age Field period: November 16-December 4, 2007 Survey hosted by Frank N. Magid Associates online research division SurveysOnline.com In addition to evaluating local news, respondents evaluated a maximum of two of the genres listed below relative to local news. To rate a genre, respondents were required to watch the genre twice a week or more Sample Size Prime time dramas/situation comedies 652 Broadcast network news 644 Cable news 638 Reality TV 532 Cable prime time dramas/movies 437 Entertainment news 410 Sitcom reruns 392 Game shows 392 Information talk shows 307 Court shows 207 Entertainment talk shows 79

6 Methodology Number Of Completes By Market 5 Market Boston, MA 310 Sacramento/Stockton/Modesto, CA 238 Orlando/Daytona/Melbourne, FL 206 Baltimore, MD 197 Cincinnati, OH 157 Pittsburgh, PA 153 Kansas City, MO 153 Greenville/Spartanburg/Asheville, GA, NC, SC Greensboro/High Point/Winston, NC, VA Louisville, KY 104 Harrisburg/Lancaster/Lebanon, PA 102 Oklahoma City 102 Completes Market Milwaukee, WI 101 New Orleans, LA 99 Albuquerque, NM 98 West Palm Beach/Ft. Pierce, FL 94 Omaha, NE 51 Jackson, MS 51 Ft. Smith/Fayetteville, AR, OK 51 Honolulu, HI 50 Burlington/Plattsburgh, NH, NY, VT 50 Des Moines/Ames, IA 49 Portland/Auburn, ME 49 Monterrey/Salinas, CA 46 Completes

7 Executive Summary 6

8 Executive Summary Overall, local news is an important and influential part of viewers lives Local News Vs. Cable News and Network News Viewers are more engaged in local television news than cable news and network news Advertisements during the local news do a better job than advertisements in cable and network news in terms of: Trustworthiness Keeping viewers in the know regarding products and services Advertising products that appeal to the viewer Driving purchase of products Advertisements during the local television news do a better job than advertisements in 8 other entertainment genres when looking at these same attributes Online video viewing of local news is higher than cable news, network news and any entertainment genre Prime time programs that air on Local Broadcast TV Stations Vs. Prime time Programs that air on Cable: Viewers are more engaged in Prime time Programs that air on Local Broadcast TV Stations Vs. Prime time Programs that air on Cable in terms of: Being a Major Part of my Daily Routine Being Essential that I Watch This Programming Paying More Attention When Watching This Type of Programming Than Watching Other Types Local news is more DVR-proof Fewer viewers record local news and are less likely to fast forward through local news than other genres 7

9 Executive Summary Local News Vs. Cable And Broadcast Network News Local news is considered a more important source for news than cable and broadcast network news genres and viewers feel a stronger attachment to local news anchors Weather Information Local television is a much more important source of weather information than cable and broadcast network news Among weather sources on the Web, local television Web sites are the most important source for weather information Online News After search engines, local television news Web sites are the most frequently used Web sites for local news Demographics And Technographics Local news viewers are more affluent and more educated than the general population Local news viewers are more likely to own/subscribe to advanced video viewing devices and services 8

10 Viewership And Preferred Media 9

11 Most Watch Local News During Non-Business Hours And Most Watch At Least Three Hours of TV Per Day Day part for local news viewing Total hours of television watched in a typical day Between 6 a.m. and 9 a.m. 50 5% 9% 25% Between 11 a.m. and 1 p.m. 7 These three day parts present an excellent opportunity to reach viewers 17% Between 5 p.m. and 7 p.m. 58 Between 10 p.m. and 11:35 p.m % 2 hours or less 3-4 hours 5-6 hours 7-8 hours 9 or more hours 0% 25% 50% 75% 100% 10 Q. 2 At what time(s) of day do you typically watch the local news? Please select all that apply. Q. 3 In a typical 24-hour day, Monday through Sunday, how many hours per day do you watch any type of programming on TV?

12 Most Prefer Television As Their Source For News Information, Followed By Web Sites 55% 4% 1% 14% 26% Newspapers in print Web sites/the Internet Television Radio Magazines in print 11 Q. J Which of the following do you most prefer for news?

13 Local News Vs. All Genres 12

14 Local News Wins As Part Of Viewers Daily Routines And Viewers Are More Engaged In Local News Than Most Other Genres Local news Prime time dramas/ situation comedies Reality TV Cable prime time dramas/movies Court shows Sitcom reruns Information talk shows Game shows Entertainment news Entertainment talk shows Watching this type of program is a major part of my daily routine % 20% 40% 60% 80% 100% Prime time dramas/ situation comedies 13 Reality TV Local news Cable prime time dramas/movies Information talk shows Court shows Entertainment talk shows Sitcom reruns Game shows Entertainment news It is essential that I watch this program Prime time dramas/ situation comedies Cable prime time dramas/movies Reality TV Local news Information talk shows Court shows Game shows Sitcom reruns Entertainment talk shows Entertainment news I pay more attention when watching this type of programming than when watching other types 66 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Please indicate the extent to which the statement below describes you with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Describes me completely )

15 Local News Wins As Part Of Viewers Daily Routines And Viewers Are More Engaged In Local News Than Cable News and Network News Watching this type of program is a major part of my daily routine Local news 50 Cable news 32 Broadcast network news 30 0% 20% 40% 60% 80% 100% I pay more attention when watching this type of It is essential that I watch this program programming than when watching other types Local news 34 Local news 45 Cable news 22 Cable news 38 Broadcast network news 19 Broadcast network news % 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Please indicate the extent to which the statement below describes you with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Describes me completely )

16 Advertising During Local News Creates Awareness And Drives Purchase Of Products And Services More Than Most Other Genres Ads on this type of program keep me in the know with regard to products/services I have purchased a product/service as a result of an ad on this type of program Local news 29 Information talk shows 23 Information talk shows 20 Local news 15 Entertainment talk shows 18 Entertainment talk shows 11 Cable news Prime time dramas/ situation comedies Cable prime time dramas/movies Reality TV Broadcast network news Cable news Cable prime time dramas/movies Reality TV Prime time dramas/ situation comedies Broadcast network news Entertainment news Sitcom reruns Game shows Court shows % 10% 20% 30% 40% 50% Sitcom reruns Game shows Entertainment news Court shows Please indicate the extent to which you agree with the statement below with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Strongly agree ) % 10% 20% 30% 40% 50%

17 Relative To Other Genres, Products/Services Advertised During Local News Are Among The More Trustworthy And Represent Viewers Interests I can trust products or services that are advertised during this type of program Products or services advertised during this type of program are meant for people like me Information talk shows 24 Information talk shows 21 Local news 18 Local news 19 Entertainment talk shows Broadcast network news Prime time dramas/ situation comedies Cable news Cable news 15 Reality TV 16 Game shows 15 Sitcom reruns 16 Reality TV Cable prime time dramas/movies Cable prime time dramas/movies Broadcast network news Prime time dramas/ situation comedies 9 Entertainment talk shows 13 Entertainment news 9 Game shows 11 Sitcom reruns 9 Entertainment news 10 Court shows 8 Court shows 7 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% 16 Please indicate the extent to which you agree with the statement below with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Strongly agree )

18 Few Viewers Have A Negative Impression Of Companies That Advertise During The Local News Local news Broadcast network news Game shows Prime time dramas/ situation comedies Cable prime time dramas/movies Reality TV Information talk shows Sitcom reruns Entertainment news Cable news Court shows Entertainment talk shows I would think less of a company that advertised during this type of program % 5% 10% 15% 20% 25% 30% Please indicate the extent to which you agree with the statement below with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Strongly agree )

19 Online Video Viewing Of Local News Is Higher Than Any Other Genre Watched video on Web site in the past 30 days Local news 37 Cable news Prime time dramas/ situation comedies Reality TV Broadcast network news Cable prime time dramas/movies Entertainment news Sitcom reruns Information talk shows Game shows Entertainment talk shows Court shows 8 8 0% 20% 40% 18 Q. 71(A-L) In the past 30 days, how many times have you watched each of the following using online video?

20 Almost Half Of Local News Viewers Have A DVR A digital video recorder such as TiVo, Replay TV, or Ultimate TV 9 A digital video recorder provided by my cable company 25 A digital video recorder provided by my satellite company 13 None of these % 20% 40% 60% 80% 100% Q. 72 Now, please think about a device called a Digital Video Recorder, or DVR. TiVo, for instance, is a DVR. Other DVRs often come from local cable or satellite TV companies. A digital video recorder allows viewers to record programs and movies from TV without the use of videotapes. A DVR also lets viewers pause and rewind programs and movies while they are being shown on TV. Which of the following digital video recording devices/services, if any, do you currently own or subscribe to?

21 Local News Falls In Towards The Bottom Of The Pack When It Comes To Recording-To-View At Another Time Recorded-to-view at another time in the past 30 days Prime time dramas/ situation comedies Reality TV Cable prime time dramas/movies Information talk shows Entertainment talk shows Court shows Sitcom reruns Local news Entertainment news Cable news Broadcast network news Game shows Despite the high incidence of DVR ownership, recording of local news is low 0% 20% 40% 60% 80% 100% 20 Q. I(A-L) In the past 30 days, how many times have you recorded each of the following types programming for viewing at another time using a TiVo, DVR, or VCR?

22 Among Viewers Who Record Local News, Few Fast Forward Fast forward when watching each of the genres listed below Always Most of the time Sometimes Rarely Never 21 *Court shows Cable prime time dramas/movies Information talk shows Reality TV Prime time dramas/ situation comedies *Entertainment news Cable news *Entertainment talk shows *Game shows Sitcom reruns Local news Broadcast network news % 20% 40% 60% 80% 100% *Indicates sample size less than 100 BASE: Respondents who have recorded each genre in the past 30 days Q. 10(A-F) When you are watching, how often do you also do each of the following?

23 Local News Vs. Cable News And Broadcast Network News 22

24 Local News Is More Important Than Cable Or Broadcast Network News And Viewers Are More Likely To Watch Local News From Start To Finish Most important news source 8% When watching this type of programming, I watch from start to finish 14% Local news 32 Broadcast network news 29 78% Local news 23 Cable news Broadcast network news Cable news Q. 43 From the news sources listed below, please select the source that is most important to you. Q. 17(A-C) Please indicate the extent to which the statement below describes you with regard to each of the genres listed below. (slide shows top-two box on a 5-point scale where a 5 means Describes me completely ) 17 0% 25% 50%

25 Viewers Feel A Stronger Emotional Attachment To Their Local News Anchors Than Cable Or Broadcast Network News Anchors *Is essential to keeping me informed *Is my most important source of info in my community **Has anchors/news personalities who I trust Local news Cable news **Has anchors/news personalities that make me want to spend more time watching news Broadcast network news *Is like a good friend *Good source of info on products/service Note that respondents also feel local news is the best source for product/service information 24 0% 20% 40% 60% 80% 100% *Q40 Please indicate the extent to which you agree with the statement below with regard local television news such as. (slide shows top-two box on a 5-point scale where a 5 means strongly agree ) **Q. 50,51(A-C) Please indicate the extent to which the statements below describe anchors or news personalities. (slide shows top-two box on a 5-point scale where a 5 means Describes completely )

26 Weather Information 25

27 Local News Is By Far The Most Important Source Of Weather Information And Also Has Meteorologists That Viewers Tune In To Watch 76 *Is my most important source for weather Local news Cable news *Has meteorologists/ weathercasters that I tune in specifically to watch Broadcast network news 0% 20% 40% 60% 80% 100% 26 *Q40 Please indicate the extent to which you agree with the statement below with regard local television news such as. (slide shows top-two box on a 5-point scale where a 5 means strongly agree ) **Q. 50,51(A-C) Please indicate the extent to which the statements below describe anchors or news personalities. (slide shows top-two box on a 5-point scale where a 5 means Describes completely )

28 Local Television News Web Sites Are The Most Important Source For Weather Information 3 times a week or more One or two times per week A few times a month Once a month or less Local television news sites Weather sites News on search engines Local information sites Newspaper sites Broadcast television news sites Cable news sites % 20% 40% 60% 80% 100% Q. 60.1(A-G) How often do you visit each of the following for weather information?

29 Online News 28

30 After Search Engines, Local Television News Web Sites Are The Most Frequently Used For Local News 3 times a week or more Twice a week Once a week A few times a month Once a month or less News on search engines Local television news Weather sites Local information sites Newspaper sites Cable news sites Broadcast television news Q. 60(A-G) How often do you visit each of the following for news? 0% 20% 40% 60% 80% 100%

31 Half Of Whom Are Employed Use The Internet For News At Work Describe me completely Does not describe me at all I frequently use the Internet for news at work* When I miss something on the local news, I go to the local station Web site A recommendation on the local news often makes me go to the local station Web site *Respondents who are employed Q. 69(A-C) Please indicate the extent to which each of the statements below describe you. 0% 20% 40% 60% 80% 100%

32 Advertising On Local Television News Web Sites Has A Strong Impact On Products And Services Relative To Other Web Sites Local television news sites Newspaper sites Broadcast network news sites I can trust products/ services advertised on this type of site The ads on this type of site keep me in the know with regard to products/services in the local marketplace Local television news sites Local information sites Newspaper sites Local information sites 12 Broadcast network news sites 9 Weather sites 11 News on search engines 7 Cable news sites 11 Cable news sites 6 News on search engines 8 0% 5% 10% 15% 20% 25% 30% I have purchased a product/service as a result of an ad on this site Local television news sites 12 Weather sites Local television news sites 5 0% 5% 10% 15% 20% 25% 30% Products/services advertised on this type of site are meant for people like me 15 Local information sites 12 Local information sites 15 Newspaper sites 10 Cable news sites 11 Broadcast network news sites 9 Broadcast network news sites 11 News on search engines 8 Newspaper sites 11 Cable news sites 8 News on search engines 9 31 Weather sites 5 0% 5% 10% 15% 20% 25% 30% Q. 67(A-H) Please indicate the extent to which you agree with the statements listed below with regard to. (slide shows top-two box on a 5-point scale where a 5 means strongly agree ) Weather sites 6 0% 5% 10% 15% 20% 25% 30%

33 Local Television News Web Sites Are The Most Important For Community Information This type of site is my most important source of info in my community Local television news sites 26 Newspaper sites 23 Local information sites 17 Weather sites 12 Broadcast network news sites 9 News on search engines 7 Cable news sites 6 0% 20% 40% 32 Q. 67(A-H) Please indicate the extent to which you agree with the statements listed below with regard to. (slide shows top-two box on a 5-point scale where a 5 means strongly agree )

34 Demographic And Technographic Profile Of Local News Viewers 33

35 Local News Viewers Are More Affluent And More Educated Than The General Online Population* Education Completed bachelors degree Graduate degree or higher Note that 50% of local news viewers are college graduates vs. 39% for the general population Local news viewers General online population* Income $100,000 or more % 10% 20% 30% 40% 50% 34 *General online population data source: Magid Media Futures survey of 1,149 adults age conducted in March 2007.

36 Local News Viewers Are More Likely To Own/Subscribe To The Latest In Video Technology Products DVR ownership HDTV ownership Local news viewers General online population* Higher incidence of highspeed Internet allows for the option to watch video online at local news Web sites High-speed Internet % 20% 40% 60% 80% 100% 35 *General online population data source: Magid Media Futures survey of 1,149 adults age conducted in March 2007.

37 Appendix I Additional Findings 36

38 Almost All Have Some Type Of Pay Television Service Digital cable 47 Basic cable 29 Satellite television 26 None of the above 8 0% 20% 40% 60% 80% 100% 37 Q. 73 To which of the following television services does your household currently subscribe?

39 Most Have High-Speed Internet Access Cable modem 46 DSL (digital subscriber line) 42 Standard telephone line (dial-up) 9 Other 4 Do not have an Internet connection at home 3 Not sure 1 0% 20% 40% 60% 80% 100% 38 Q. 74 What type of Internet service do you have at home?

40 32% Have HDTV; An HDTV Set-Top Box From The Cable Company Is The Most Common Way To Receive HDTV Familiarity with HDTV Ways HDTV is received* 18% 1% I/We own an HDTV set in my/our home 32% Very familiar HDTV set-top box from cable Built-in digital turner % 14% Somewht familiar Not very familiar DK/NA HDTV set-top box from satellite Digital receiver box and antenna Cable card No steps taken to order HDTV programs Other 1 DK/NA 4 39 *Base: HDTV owners Q. 76 How familiar are you with high-definition television, or HDTV? Q. 77 In which of the following ways do you receive and watch high-definition programs on your highdefinition television set(s)? 0% 25% 50% 75% 100%

41 Appendix II - Demographics 40

42 Gender And Age Gender Age 28% 51% 49% 72% Male Female

43 Education And Income Education Income High school or less 8 Less than $35,000 7 Trade/technical school/associates degree 8 $35,000-$49,999 $50,000-$74, Some college 23 $75,000-$99, Bachelor s degree 36 $100,000-$149, $150,000 or more 8 Graduate degree or higher 24 Prefer not to answer % 25% 50% 75% 100% 0% 25% 50% 75% 100%

44 Marital Status And Children Marital Status Children 1% 8% Married 16% Committed relationship Single Widowed 43% 9% 65% Divorced/ separated 57% No children Children 43

USA WESTBOUND LCL SAILING SCHEDULES

USA WESTBOUND LCL SAILING SCHEDULES RECEIVING CUT A WESTBOUND LCL ROUTING / FREQUENCY SAILS SAILING ALBUQUERQUE NM Via New York / Weekly Saturday London Gateway 25 days New York ATLANTA GA Via New York / Weekly Saturday London Gateway 20