Annalect 2013 Media Trends!

2013 Media Trends & Insights!

Executive Summary!

2!

•  As the Hispanic population continues to grow, the U.S. will become a true melting pot!

•  Millennials are changing and ruling our world!

•  Baby boomers are outgrowing the key TV demo of 18-49!

Changing Population!

3!

Hispanics: Changing the Face of the USA!The Hispanic population is projected to continue its rapid growth, reaching 18% by 2015, when their buying power will reach $1.5T. If it were a standalone country, the U.S. Hispanic market buying power would make it one of the top twenty economies in the world.!Hispanics are disproportionately likely to use cell phones and "other" devices to connect to the internet, compared to the general population. They are much less likely to connect via desktop or laptop.!

4!

Hispanic Population Expected to Reach 30% by 2050!

Hispanic Buying Power Will Reach $1.5T by 2015!

By 2050 the Hispanics will represent nearly one-third of the US population. The proportion of White Alone will decrease from two-thirds to less than one-half, as the population grows more diverse.!

By 2015 Hispanic spending power will be $1.5 Trillion, making up 10.5% of total buying power.!

0%!

10%!

20%!

30%!

40%!

50%!

60%!

70%!

2010! 2015! 2025! 2035! 2045! 2050!

White Alone! Hispanic!Black! Asian!All Other Races! Two or more Races!

2010!

2015!

Of $11.12T Total!

Of $14.12T Total!

$1.02T!$1.48T!

Source: eMarketer!Source: US Census Bureau,!

Desktop! Laptop! Cell/wireless! Television! Digital tablet! Other!Hispanic! 32.9%! 40.1%! 37.6%! 7.3%! 11.2%! 12.1%!Total Pop.! 43.6%! 44.7%! 35.8%! 7.5%! 11.7%! 10.2%!

Hispanics are using their cell phones and "other" devices to access the internet more than the general population. !

Computers and mobile are top internet devices for Hispanics!

Source: Experian Simmons NHCS and NCS. Note: At home 18+ !

Millenials: The Impact of the Newbies!There are over 77 million Millennials living in the US (born between 1977 and 1994). Hispanics are the largest ethnic minority amongst Millennials, followed by African-Americans. The 46% of Millennials still living at home are likely receiving financial support and have a significant influence on household purchase decisions. When compared with total adults, Millennials are much more likely to use their phones to watch movies, video clips, and live television.!

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There are as many Millenials as there are Baby Boomers!!

Millenials are a driving economic force!

There are over 77 million Millennials living in the US (born between 1977 and 1994). !Falling between the ages of 19 and 36, this generation encompasses a range of life stages.!

Although Millennial incomes are among the lowest of all generations, they are more inclined to spend discretionary income on items and services that promote status.!

Sources: National Chamber Foundation,; Mintel “Marketing to Millennials” Aug 2012!Source: U.S. Census Bureau, 2013 Mid-year Population by Single Year Age Groups!

Heavy consumers of media overall, 89% of Millennial TV viewers also watch online video.!

Over half of Millennial TV viewers watch digital video at least once a week!

Generation Z, 25%!

Generation X, 16%!

Millennials, 25%!

Baby Boomers, 24%!

Greatest Generation, 1%!

Silent Generation,

10%!

Generation Z! Generation X!Millennials! Baby Boomers!Greatest Generation! Silent Generation!

$200B !Direct

Purchasing Power!

$500B!Indirect

Spending!

21%!

[VALUE]!

21%!

14%!

32%!

[VALUE]!26%!

11%!

35-49!18-34!

At least once a day! At least once a week! Less than once a week! Never!Source: eMarketer Frequency with which US TV viewers watch digital video or stream digital content by age, May 2013 (% of respondents)!

9%!

30%!27%!

24%!

9%!

35-49! 50-54! 55-59! 60-64! 65-69!

The Youngest Baby Boomers are Turning 50 this year!We’ve heard much about Millennials recently and very little about Baby Boomers. However, Baby Boomers are the wealthiest generation in U.S. history and represent 70% of the total net worth of American households. Next year the youngest of the Baby Boomers are turning 50 and aging out of the key TV buying target of Adults 18-49. How is this going to impact TV ratings?!

6!

Boomers by age group!

Boomers, who watch more TV than any other age group, are aging out of the key TV buying target this year.! Source: 2013 GfK MRI Spring!

•  In the US, there are 76 million Baby Boomers (born between 1946 and 1964)!•  More discretionary income (wealth) than any other age group!

-  Control 70% of the total net worth of American households, i.e.. $7 trillion of wealth!

-  Own 80% of all money in savings and loan associations!-  Spend money disproportionately to their numbers!

•  Are not fanatically loyal to brands!•  Watch television more than any other age group!•  Read newspapers more than any other age group!•  Account for a dramatic 40% of total consumer demand!

Boomer Facts:!

2013 Media Trends & Insights:Technology!

Adoption crosses all demos & all media!Changing the way we buy, sell, view all media – print, TV, OOH, digital!

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Technology: The Robots are Taking Over!As the adoption of tablets and e-readers rises, the number of magazine downloads continues its increase - up 170% vs. last year. Traditional OOH spending is growing steadily but not as quickly as digital, projected to grow by 55% in the next 4 years. Grocery stores, gas stations, and shopping malls were the top places consumers saw digital or video ads. More and more people are using online radio. VEVO reaches twice as many listeners than other top music/radio sites.!

8!

Magazine app usage continues its dramatic increase!

Digital/Video Ads continue to pop up in all walks of consumers’ lives!

The number of U.S. magazine-branded apps increased 559% since Q1 2011. !

Grocery stores and convenience stores, were the locations where video ads captivated consumers interest the most.!

Sources: National Chamber Foundation,; Mintel “Marketing to Millennials” Aug 2012!Source: Magazine Publishers of America, The Magazine Handbook 2013-2014!

Pandora leads time spent, with users logging on at an average of 14 days in an average month!

VEVO tops list of music sites but Pandora dominates time spent!

Source: eMarketer Frequency with which US TV viewers watch digital video or stream digital content by age, May 2013 (% of respondents)!

0!200!400!600!800!

1,000!1,200!1,400!1,600!1,800!2,000!

Q2 ’11!

Q3 ’11!

Q4 ’11!

Q1 ’12!

Q2 ’12!

Q3 ’12!

Q4 ’12!

Q1 ’13!

Number of magazine apps !

Locations Saw Digital/Video Ads

Saw Digital/Video Ads !

& Express Interest

Grocery stores! 19.5%! 13.6%!

Gas stations! 15.2%! 9.1%!

Shopping malls! 14.9%! 8.2%!

Disc./dept. stores! 14.5%! 10.6%!

Restaurants! 12.7%! 8.4%!

Drug stores! 12.4%! 7.6%!

Convenience stores! 12.0%! 11.5%!

Medical offices! 11.9%! 6.4%!

Movie theater! 10.8%! 9.6%!

Other stores! 10.5%! 6.8%!

RANK! WEBSITE! UNIQUE VISITORS (000)! % REACH! AVG. USAGE DAYS PER VISITOR! AVG. MIN. PER VISITOR!1! Vevo! 39,931 18 3 17 2! Pandora! 22,558 10 14 51 3! Clear Channel Online! 20,267 9 3 15 4! ToneMedia! 19,331 9 2 6 5! Spotify! 5,529 2 2 8

2013 Media Trends & Insights:TV Viewing – Different not less!

We’re not watching less television, we’ve just changed the way we view!Multi-screen viewing!

Binge viewing!Time-shifting!

TV Viewing: Different NOT Less!Traditional television continues to be the most common way to watch video, however, time-shifted TV grew faster than other video viewing platforms in 2012, surpassing DVD/Blu Ray viewership for the first time. With technologies like DVR and VOD, consumers can watch when they want and “binge-view” TV content. 63% did so via web-based streaming service like Hulu. 44% used a recording device like DVR, and 51% watched physical DVDs. !

10!

Television continues to reach the masses – in new ways!

Digital/Video Ads continue to pop up in all walks of consumers’ lives!

Although online and mobile video are growing rapidly, traditional television continued to have the largest reach and time spent in Q4 2012.!

Women 18+ spent more time watching TV during the 2012/13 broadcast season compared to any other age groups.!

Source: Nielsen Media Research, 2008-2013 Broadcast Seasons (Sept-May) !Source: Nielsen Cross Platform Report, Q4’12!

Cable TV and digital video streaming have made it increasingly easy for consumers to watch TV content on their own schedules.!

Thanks to DVR and Streaming Services, ‘Binge’ TV Viewers Abound!

Audience (000)! Hours:Mins!

Q4 !2012!

Q4 !2011! Q4 2012!Q4 2011!

On Traditional TV! 283,930! 284,455! 156:24! 153:19!

Watching Timeshifted TV ! 159,685! 143,881! 12:38! 11:44!

Using a DVD/!Blu Ray Device ! 152,831! 157,561! 5:39! 6:00 !

Watching Video !on Internet ! 162,213! 165,712! 7:43! 5:15!

Watching Video on a Mobile Phone!

40,887! 33,526! 5:23! 4:54!

19:12:00!21:36:00!24:00:00!26:24:00!28:48:00!31:12:00!33:36:00!36:00:00!38:24:00!40:48:00!43:12:00!

2008/09! 2009/10! 2010/11! 2011/12! 2012/13!

Total Persons! W18+!M18+! Teens 12-17!Children 2-11!

41%!63%!

15%!53%!

15%!44%!

14%!51%!

Primary way I binge!Have used to binge!

Online subscription service! Network/cable website! DVR! DVD/Blu-ray box set!Source: eMarketer!

2013 Media Trends & Insights:Social Media!

Shopping!Nielsen TV Twitter Ratings!

Social Media: #SayGoodBye2TMI!With 160 MM active users in 2012, social media should be considered a mainstream activity. By 2017, 7 out of every 10 internet users will be logging onto a social network site every month. Social gaming is expected to increase between 4% and 5% annually until 2017, adding nearly 17 million new social gamers from 2013 through 2017.!While some social media sites have seen declines, newbies such as Pinterest have grown significantly compared to 2012.!

12!

Social media still growing, but at a slower pace!

Digital/Video Ads continue to pop up in all walks of consumers’ lives!

Social media is officially a mainstream activity, with over 160 MM users every month. !

Women 18+ spent more time watching TV during the 2012/13 broadcast season compared to any other age groups.!

Sources: National Chamber Foundation,; Mintel “Marketing to Millennials” Aug 2012!US Social Network Users and Penetration, 2012-2017 (millions and % of population)!

LinkedIn, the second most visited site, experienced significant growth (+38%) compared to last year.!

Facebook is still the top social site, but others are gaining ground!

Source: comScore: Social Networking Sites US Unique Visitors (000)!

2013! 2014! 2015! 2016! 2017!

Social network users (millions)! 163.5! 169.5! 174.9! 179.4! 183.8!

—% change! 4.0%! 3.6%! 3.2%! 2.6%! 2.5%!

—% of internet !users! 67.2%! 68.1%! 68.8%! 69.4%! 70.1%!

—% of population! 51.7%! 53.1%! 54.4%! 55.4%! 56.3%!

76!

80!

85!

89!

93!

97!

2012! 2013! 2014! 2015! 2016! 2017!

Social Gamers (millions)!

Rank! Website! May-10! May-11! May-12! May-13!1! Facebook! 130,308! 157,219! 158,014! 144,575!2! Linkedin! 21,190! 33,383! 37,586! 52,055!3! Twitter! 23,841! 26,997! 41,642! 38,491!4! Tumblr! 4,027! 10,705! 25,298! 36,537!5! Pinterest! N/A ! 418! 20,320! 27,922!

2013 Media Trends & Insights:Life goes MOBILE!

An explosion of mobile phones & tablets!Changing the way we communicate, view media, listen to music,

read books, watch TV, shop, and spend time!

Cordless Consumers: Life goes Mobile!Mobile ad spend, especially supporting national campaigns, is chasing the explosion in mobile ownership and is forecast to triple by 2016.!Mobile ownership has soared over the past few years, with more than half of Americans using smartphones and this trend is expected to continue into 2017. The number of individuals who use a tablet at least once a month rose dramatically in 2012. Boosted by falling tablet prices, this adoption is expected to remain steady into 2017.!

14!

Mobile ads are going increasingly national!

Smartphone growth anticipated for foreseeable future!

Although local mobile spending will increase in the coming years, it will not keep pace with the rapid expansion of national mobile spend.!

Smartphones have crossed the 50% threshold and are expected to grow consistently through 2017, when they are expected to penetrate 80% of the market.!

Source: eMarketer: US Smartphone Users (millions) and Penetration, 2011-2017!Source: eMarketer: US Mobile Ad Spending, Local vs. National, 2012-2017 ($ billions)!

After an initial period of rapid growth, tablet ownership is projected to grow at a more steady, consistent pace through 2017. !

More than half the population will have tablets by 2016!

Source: eMarketer: US Tablet Users and Penetration, 2011-2017!

$2.0

!

$3.1

$4.8

$5.8

$6.9

$7.7

$1.2

!

$2.3

! $3.9

! $5.7

! $7.2

! $9.1

!

2012! 2013! 2014! 2015! 2016! 2017!

Local! National!

92.8

121.

4

[VA

LUE]

.0

159.

9

[VA

LUE]

.0

193.

7

207.

4

2011   2012   2013   2014   2015   2016   2017  

Smartphone  users  

2011! 2012! 2013! 2014! 2015! 2016! 2017!

Tablet Users! 33.5%! 93.9%! 123.1%! 143.2%! 157.1%! 168.1%! 178.0%!

Penetration! 10.8%! 29.9%! 38.9%! 44.9%! 48.9%! 51.9%! 54.6%!