Local Television Advertising Effectiveness Study

1. Local Television AdvertisingEffectiveness Study Kathleen KeefeVice President, Sales March 21, 2008

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

3. Objectives And Methodology

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

5. 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 25-54 • 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

6. Methodology – Number Of Completes By Market

7. Executive Summary

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

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

10. Viewership And Preferred Media

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. These three day parts present an excellent opportunity to reach viewers Between 11 a.m. and 1 p.m. Between 5 p.m. and 7 p.m. Between 10 p.m. and 11:35 p.m. 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 Q. J Which of the following do you most prefer for news?

13. Local News Vs. All Genres

14. Local News Wins As Part Of Viewers’ Daily Routines And Viewers Are More Engaged In Local News Than Most Other Genres Watching this type of program is a major part of my daily routine 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 I pay more attention when watching this type of programming than when watching other types It is essential that I watch this program Prime time dramas/ situation comedies Prime time dramas/ situation comedies Cable prime time dramas/movies Reality TV Local news Reality TV Cable prime time dramas/movies Local news Information talk shows Information talk shows Court shows Court shows Entertainment talk shows Game shows Sitcom reruns Sitcom reruns Game shows Entertainment talk shows Entertainment news Entertainment news 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 Cable news Broadcast network news I pay more attention when watching this type of programming than when watching other types It is essential that I watch this program Local news Local news Cable news Cable news Broadcast network news Broadcast network news 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 Information talk shows Local news Information talk shows Local news Entertainment talk shows Entertainment talk shows Cable news Cable news Prime time dramas/ situation comedies Cable prime time dramas/movies Cable prime time dramas/movies Reality TV Prime time dramas/ situation comedies Reality TV Broadcast network news Broadcast network news Sitcom reruns Entertainment news Sitcom reruns Game shows Entertainment news Game shows Court shows 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” )

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 Information talk shows Local news Local news Prime time dramas/ situation comedies Entertainment talk shows Cable news Broadcast network news Cable news Reality TV Sitcom reruns Game shows Cable prime time dramas/movies Reality TV Cable prime time dramas/movies Broadcast network news Prime time dramas/ situation comedies Entertainment talk shows Game shows Entertainment news Sitcom reruns Entertainment news Court shows 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” )

18. Few Viewers Have A Negative Impression Of Companies That Advertise During The Local News I would think less of a company that advertised during this type of program 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 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 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 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 A digital video recorder provided by my cable company A digital video recorder provided by my satellite company None of these 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 Despite the high incidence of DVR ownership, recording of local news is low Local news Entertainment news Cable news Broadcast network news Game shows 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 *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 *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

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 When watching this type of programming, I watch from start to finish Local 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” )

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 **Has anchors/news personalities that make me want to spend more time watching news *Is like a good friend Note that respondents also feel local news is the best source for product/service information *Good source of info on products/service *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

27. Local News Is By Far The Most Important Source Of Weather Information And Also Has Meteorologists That Viewers Tune In To Watch *Is my most important source for weather *Has meteorologists/ weathercasters that I tune in specifically to watch *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 Local television news sites Weather sites News on search engines Local information sites Newspaper sites Broadcast television news sites Cable news sites Q. 60.1(A-G) How often do you visit each of the following for weather information?

29. Online News

30. After Search Engines, Local Television News Web Sites Are The Most Frequently Used For Local News 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?

31. Half Of Whom Are Employed Use The Internet For News At Work 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.

32. Local television news sites Newspaper sites Broadcast network news sites Local information sites Weather sites Cable news sites News on search engines Local television news sites Local information sites Cable news sites Broadcast network news sites Newspaper sites News on search engines Weather sites Advertising On Local Television News Web Sites Has A Strong Impact On Products And Services Relative To Other Web 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 Broadcast network news sites News on search engines Cable news sites Weather sites I have purchased a product/service as a result of an ad on this site Products/services advertised on this type of site are meant for people like me Local television news sites Local information sites Newspaper sites Broadcast network news sites News on search engines Cable news sites Weather sites 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”)

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 Newspaper sites Local information sites Weather sites Broadcast network news sites News on search engines Cable news sites 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

35. Local News Viewers Are More Affluent And More Educated Than The General Online Population* Completed bachelors degree Note that 50% of local news viewers are college graduates vs. 39% for the general population Education Graduate degree or higher $100,000 or more Income *General online population data source: Magid Media Futures survey of 1,149 adults age 25-54 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 Higher incidence of high-speed Internet allows for the option to watch video online at local news Web sites High-speed Internet *General online population data source: Magid Media Futures survey of 1,149 adults age 25-54 conducted in March 2007.

37. Appendix I – Additional Findings

38. Almost All Have Some Type Of Pay Television Service Digital cable Basic cable Satellite television None of the above Q. 73 To which of the following television services does your household currently subscribe?

39. Most Have High-Speed Internet Access Cable modem DSL (digital subscriber line) Standard telephone line (dial-up) Other Do not have an Internet connection at home Not sure 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* HDTV set-top box from cable Built-in digital turner HDTV set-top box from satellite Digital receiver box and antenna Cable card No steps taken to order HDTV programs Other DK/NA *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 high-definition television set(s)?

41. Appendix II - Demographics

42. Gender And Age Gender Age

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

44. Marital Status And Children Marital Status Children