2016 media presentation

2016 MASN MEDIA

2015 Ratings Analysis. Challenges and Choices for 2016.

Glossary of Pertinent Terms

Household (HH) Ratings: A percentage of total households or population owning a television(s) who are tuned to a particular program or station at a specific time.

In Baltimore (Nielsen market ranking 26), a HH rating equals 11,000 households.

In Washington, DC, (Nielsen market ranking 7), a HH rating equals 24,000 households.

Households: In the Baltimore DMA there are 1.1 million television households. In the Washington DMA there are 2.4 million television households.

Demo Ratings: Audience measurement based on various characteristics such as age, sex, etc. A 1 demo rating equals 1% of the specific audience in question. Examples of demo rating segments: Men 25+, Men 25-34, Persons 18-34.

GRPs: Gross (total) ratings points for a media schedule. Impressions: Total number of ad views over the length of a media buy.

Impressions/Series (Imps/Series): Average number of ad views over the length of a three (or four) game baseball series.

Noting factor (aka remembering seeing/hearing a specific ad): Noting is impacted by a many factors, including ad placement, size/length of ad and ad clutter.

SOV (Share of Voice): A way of measuring an amount of advertising presence or strength for a brand or product.

Reach (R): Refers to the total number of different people exposed, at least once, to a MASN commercial during a given period.

Frequency (F): Is the number of times that a person is exposed to a MASN commercial during a specific period of time.

R&F example: A R&F of 87.9/15.5 means that 87.5% of the audience target (in our case Men 25+) saw a MASN commercial 15.5 times over the life of the media buy.

Recency: For MASN, this is advertising placed “en force” as proximate to game’s broadcast time as possible.

CPP (Cost Per Point): This term refers to unit costs for media.

A note on market CPPs and cost per spot: The Washington, DC market (4.7 million Adults 18+) is significantly more expensive than the Baltimore market (1.9 million Adults 18+), as much as 66% to 100% more costly.

Tracking MASN’s Media Buys

Since 2007, MASN has actively tracked network media spending and media mixes against Orioles and Nationals broadcast audience ratings. Over nine baseball seasons, we have applied and tested a variety of media strategies and spending levels to determine which spend-point and which media provides the best return on investment (ROI) for MASN’s advertising dollars.

These include:

Varying secondary demographic targets

Focusing advertising on series involving the O’s and Nats most “popular” opponents

Frontloading advertising impressions on the first game of individual series

Geo & Demo-targeting young audience/sports fans on the Internet

Buying alternative media to reach younger audiences

Social media to reach younger audiences

Marketing to “casual” baseball fans

This we know.

Baseball broadcasts on MASN achieve higher household and demo ratings, when they are supported by an advertising buy.

For Baltimore (2015):

+30% higher Household Ratings for games with advertising support versus games without ad support

+30% higher Men 25-34 Demo Ratings for games with advertising support versus games without ad support

+33% higher Men 25+ Demo Ratings for games with advertising support versus games without ad support

For Washington, DC (2015):

+28% higher Household Ratings for games with advertising support versus games without ad support

+75% higher Men 25-34 Demo Ratings for games with advertising support versus games without ad support

+19% higher Men 25+ Demo Ratings for games with advertising support versus games without ad support

These audience measurements/success stories do not just apply to 2015, but to every MASN/baseball season since 2007.

2013

Baltimore Reach/

Frequency Net

TV/Cable 93.1%/22.2 $326,600

Radio 91.1%/35.1 $432,825

Online 30.4 million impressions $184,000

Print 43 ads

(plus bonus) $156,000

TOTAL $1,099,425

Washington Reach/

Frequency Net

TV/Cable 91.1%/22.8 $679,320

Radio 92.7%/38.0 $679,718


Print 54 ads

(plus bonus) $174,568

TOTAL $1,767,606 GRAND TOTAL $2,867,031

A Three Year Track of MASN Media Spending

In 2013, MASN’s media spend was approximately $2.9 million, with 38% of those dollars ($1.1 million) going to the smaller and less-CPP expensive Baltimore market (promoting Orioles games) and 62% of those dollars ($1.8 million) going to the larger and more-CPP expensive Washington, DC market (promoting Nationals games).

In 2014, MASN’s media spend was reduced to just under $2.4 million, with 39% of those dollars ($900k) spent in the Baltimore market and 61% ($1.4 million) spent in the Washington, DC market. The impact of this budget reduction was to reduce MASN’s advertising Frequency from 22.2 (games) to 13.0 (games).

In 2015, MASN’s media spend was just over $2.4 million, with 40% of those dollars (just under $1 million) spent in Baltimore and 60% ($1.45 million) spent in Washington, DC.

This 40% Baltimore/60% Washington formula has been consistently applied to MASN’s media buys since 2008. This formula properly reflects the higher CPPs/spot costs of Washington, DC television, radio and print.

2014 2015

Baltimore Reach/

Frequency Net Reach/

Frequency Net

TV/Cable 87.9%/15.5 $211,433

85.5%/13.0 $190,000

Radio 85.8%/29.9 $354,920

89.2%/31.4 $385,000


72.8 million impressions $299,488

Print 41x + 162x bonus ads $134,500

29x + 162x Bonus ads $87,000

TOTAL $909,853 TOTAL $961,488

Washington Reach/

Frequency Net Reach/

Frequency Net

TV/Cable 78.2%/10.7 $482,991

70.0%/10.3 $435,000

Radio 75.7%/35.9 $557,603 77.6%/36.2 $595,000


72.5 million impressions $244,996

Print 25x + 108x bonus ads $141,961

27x + 89x (x2) Bonus ads $181,356

TOTAL $1,426,555

$1,456,352

GRAND TOTAL $2,336,408

$2,417,840

A Three Year Track of Ratings: Baltimore

For 2013, with a media budget of $2.9 million, MASN’s media buy focused on:

Primary audience was M25+ (secondary demographic M18-34)

Promoting every game, every series (exception West Coast series) via TV, Radio, Print and Online

To improve our secondary demo objective, we added spots on youth-oriented networks, and adjusted traffic radio from M25-34 to M18-34

For 2014, MASN’s media spend was $2.4 million, $500k less than the previous five years

Primary audience was M25+ (secondary demo M18-34)

Fewer series promoted, but with a focus on key series o Example: NYY & BOS vs Orioles o Example: PHI and ATL vs Nationals

For budgetary reasons, 13 fewer Orioles games promoted (versus 2013)

For budgetary reasons, 19 fewer Nationals games promoted (versus 2013)

$2.4M budget 81-81

Record (44-44 at All-

Star break) 3rd in AL

East

$2.4M budget 96-66


Star break) AL East Champs

$2.9M budget 85-77

Record (53-43 at All-Star break) 3rd in AL

East

2013 Ratings (7PM starts only)

HH Ratings M25+ M25-34

6.1 6.1 4.3



5.7 (-7% vs ‘13)

5.5 (-10% vs ‘13)

3.2 (-26% vs ‘13)



5.5 (-4% vs ‘14)

5.0 (-9% vs ‘14)

2.4 (-25% vs ‘14)

A Three Year Track of Ratings: Washington, DC

Which resulted in lower reach & frequency thresholds In Baltimore:

TV -2% reach/ -1.3x frequency

Radio -2% reach / -6.2x frequency In Washington, DC:

TV -6% reach / -1.7x frequency

Radio -4% / -7.5x frequency For 2015, MASN’s media spend was $2.4 million

Audience = M25+ (secondary Adults 18+/casual fans)

More series promoted, however fewer games, as we “frontloaded” promotion to focus on the first game of every Orioles and Nationals series

Radio only ad support for games 2-3 of series

Pandora Internet Radio tested over 6 weeks to reach younger audience demos

There are reasons for MASN’s decline in key demo ratings. Among them:

Reduction in media dollars available

Reduction in media dollars available for tv/radio buys

Decreasing availability of young audiences via traditional media

$2.4M budget 83-79


Star break) 2nd in NL

East

$2.4M budget 96-66

Record (51-42 at All-Star break) NL East Champs

$2.9M budget 86-76


Star break) 2nd in NL

East



2.8 2.1 1.8



2.o (-29% vs ‘13)

2.1 (No change)

1.5 (-17% vs ‘13)



2.2 (+10% vs ‘14)

1.8 (-14% vs ‘14)

0.7 (-53% vs ‘14)

v

2016: Media Challenges and Choices

Two significant challenges face MASN’s ability to maximize the network’s media buying/marketing efforts for 2016: 1. The continuing erosion of traditional media audiences 2. The impact of the 2016 Primaries and Summer Olympics on advertising inventory and pricing

Dilemma: The Changing Media Landscape

Traditional media – television/cable, radio and print have experienced audience/readership declines for many years now.

Problem: Television and Younger Demos

Article From LA Times (October 2015): “New TV season ratings show fewer young viewers watching the traditional way.

There's been an 11.8% decline in TV viewing of any kind among men in the 18- to 34-year-old age group. Viewers between 18 and 24 had an even steeper 16% drop…” The graph on the following page documents how traditional television viewing has declined across the board, with the greatest audience loss among younger viewers.

Solution: Online Delivery Compliments TV Buy

To reach these younger audiences MASN now repurposes topical television spots as pre-roll videos on targeted and general Internet sites. In 2015, Orioles and Nationals tune-in promos placed online generated 6 million impressions in just 29 days.

Persons Using Television (total day) Year-Over-Year Percent Change

Year P 2-11 P 12-17 P 18-34 P 35-49 P 50-64

2014 vs 2013

Feb 2015 vs Feb 2014

-8% -10% -10% -5% -3%

-11% -18% -15% -6% -5%

Daily Time Spent with Media (age 12-24)

2010

Year Radio Television Internet

2 hours 43 minutes 2 hours 37 minutes 59 minutes

1 hour 24 minutes 2 hours 47 minutes 2 hours 53 minutes

2000

Problem: Radio and Younger Demos

While 91% of all Americans 12 or older (Nielsen) listen to AM/FM radio on a weekly basis, terrestrial (AM/FM) radio is losing younger listeners.

Recent research reports document this loss:

Among the 12-24 demo, time spent with AM/FM radio is down from 2 hours and 43 minutes a day to 1 hour and 23 minutes (-49%)

Asked what type of media they consume in the morning, 41% of those age 12-24 said radio. That’s down from 74% ten years earlier.

A survey among 13-35 year olds found that music listening on AM/FM has nearly been eclipsed by Internet Radio listenership (24% to 23%)

Solution: Online Radio Complements Terrestrial Radio

In 2015 MASN tested the impact of Pandora Radio on game broadcast ratings

In Baltimore, Pandora supported games delivered higher than average ratings 64% of the time

In Washington, DC Pandora supported games deliver high than average ratings 80% of the time

Pandora and other Inet steaming services will be on MASN’s ad buys going forward.

Newspapers: Even Greater Decline

A decade ago, 41% of Americans said they read a newspaper daily. Today that number is 23%. Decline among young readers is even more dramatic. In 2014, newspaper readership among adults 18-24 was 17%.

Over the last four years, the Baltimore Sun’s daily circulation has declined nearly 70,000 (-38%)

Over the past four years, the Washington Post’s daily circulation has declined by 154,000 (-31%)

The Sun now delivers less than 10% of the Baltimore DMA

The Post now delivers less than 15% the Washington DMA

Newspapers contend that print readership losses are offset by online readers. We have found this claim to not be true.

While MASN’s Baltimore online ad buy overdelivered by 25 million impressions, BaltimoreSun.com underdelivered by 650,000 impressions

While MASN’s Washington online buy overdelivered by 14 million impressions, WashingtonPost.com underdelivered by several million impressions

Newspaper readership may now be below the threshold required to be an effective advertising investment for MASN.

Baltimore Sun Washington Post

2012 2012

Daily Circ. Pen % Sunday Circ. Pen % Daily Circ. Pen % Sunday Circ. Pen %

179,692 15.9% 315,659 28% 498,340 20.5%

2013

154,062

2014

152,923

2015

132,898

-68,477

13.8% 288,543 25.8%

11.7% 244,021 21.4%

-40% -91,638 -41 %

757,844 31.2%

2013

432,219 18% 629,291 25.8%

2014

397,101 16% 586,731 23.6%

2015

371,323 14.8% 541,697 21.5%

-154,323 -34% -256,448 - 37%

2016 (based on 4th quarter 2015 circ)

111,215 9.7% 224,530 19.6%

Sun Readership Loss Since 2012

2016 (based on 4th quarter 2015 circ)

344,150

13.5% 282,203 25%

13.5% 501,396 19.7%

Post Readership Loss Since 2012

2016 Election Primaries

In spring 2016, various national and local primary elections will be held across the MASN viewing area – all within the MASN media buy window.

Primaries:

Maryland – April 26, 2016

Virginia – June 14, 2016 (local races, not Presidential)

Washington, DC – June 14, 2016

In addition to Presidential primaries, there are these local primary elections:

Maryland: US Senate, House, Circuit Court Judge, Mayoral, City Council, Board of Education

Virginia: House, Mayoral, City Council, Board of Education

Washington, DC: House, City Council

Though TV and radio stations are required to offer the lowest unit rates to candidates, the plethora of political ads/ ad spending inevitably leads higher spot/ad costs.

In addition, many advertisers choose to avoid political windows, moving their advertising buys to other months. This reduces available inventory and drives up ad costs for those weeks adjacent to the political window.

Where do politicians spend? The same time periods MASN purchases.

• News: 50% • Primetime: 20%-30% • Prime Access and Late Fringe: 10%-15% • Daytime and Early Fringe: 10%

How much do political campaigns buy?

• 350-500 GRPs (gross rating points) per week before the political window opens

• 500 GRPs per week at the beginning of the window • During the middle weeks GRPs are in the 750 range • For the final two weeks, candidates are buying over

1,000 GRPs per week This level of advertising spending and ad saturation will dwarf MASN’s media buy during these political ad active weeks.

MASN will have less access to key advertising inventory (requiring an earlier-than-usual media buy commitment date)

MASN’s share-of-voice (SOV) will significantly decline

Political ad “clutter” will reduce the impact (noting factor) of MASN ads

THREE MEDIA STRATEGIES: Options for 2016

The Three Strategies

Strategy 1: “Business as Usual”

Revert to MASN’s 2014 strategy. Focus the media buy on series where the Orioles and Nationals play their most popular opponents. Maximize ratings for these games, and then use these broadcasts as an on-air platform for promoting other series. Strategy 2: “Politically Incorrect”

Avoid the ad clutter and increased spot costs associated with spring primaries. Condense the MASN media buy for increased audience impressions per series. Strategy 3: “No Print”

Move print dollars to TV and Radio, dramatically increasing Reach and Frequency (R&F) for TV/Radio media. As you review the media plans to come, remember to consider and compare:

Reach

Frequency

Impressions (ad views) per series

Strategy 1: “Business as Usual”

This media strategy, utilized in 2012, 2013 and 2014, concentrates MASN’s media spend on the Orioles and Nationals most popular (based on past television ratings and stadium attendance performance) opponents. The goal of this “low hanging fruit” approach is to:

Capitalize on the “popularity” of these opponents (for the Orioles – Yankees, Boston, etc.)

Maximize audience ratings for these games

Use these broadcasts as an on-air “springboard” for promoting other series

While this approach worked well in 2012 and 2013, in 2014 we began to see a widening ratings gap between ad supported and non-ad supported broadcasts.

In 2013, ad supported Orioles broadcasts averaged 5.5 HH rating, while non-supported broadcasts achieved a 5.3 HH (a -.3 rating point difference).

In 2014, ad supported Orioles broadcasts averaged 5.4 HH rating, while non-supported broadcasts achieved a 4.4 HH (a full 1 rating point difference).

2015 Buy 2016 – “Business as Usual”

Baltimore R/F Net Spend R/F Net Spend

TV 85.5%/13.0 $190,000 87.9%/15.5 $222,000

Radio/Traffic 89.2%/31.4 $385,000 85.8%/29.9 $373,000

Online 72.8 million $299,488 65 million $260,000

Print 29x + 162x $87,000 21x + 162x $63,000

Market total $961,488 $918,000

Washington R/F Net R/F Net

TV 70.0%/10.3 $435,000 78.2%/10.7 $507,000

Radio/Traffic 77.6%/36.2 $595,000 75.7%/35.9 $585,000


Print 27x + 89x (x2) $181,356 22x + 89x (x2) $148,300

Market total $1,456,352 $1,485,300 GRAND TOTAL $2,417,840 $2,403,300

Baltimore “Business as Usual”

21 series promoted

1,750,593 Impressions/Series delivered

Washington “Business as Usual”

22 series promoted


2016

2016

Strategy 2: “Politically Incorrect”

We’ve documented the negative impact of political primary advertising on:

Advertising inventory in the Baltimore and Washington, DC markets

Advertising clutter (more spots in local news, program time periods, programming essential to reaching MASN’s sports-centric audience)

CPP/spot costs (+10% dollar increases over 2015)

The “Politically Incorrect” strategy bypasses the ad clutter and increased spot costs associated with the 2016 spring primaries.

Baltimore media buy:

Last week in March thru first week in April

May thru All-Star break

Washington, DC media buy:

Last week in March until June 1

End of June thru All-Star break

While this strategy results in fewer series/games promoted, it delivers greater audiences impressions/viewing frequency for the series/games promoted.

2015 Buy 2016 – “Politically Incorrect”


TV 85.5%/13.0 $190,000 87.9%/15.5 $222,000

Radio/Traffic 89.2%/31.4 $385,000 85.8%/29.9 $373,000


Print 29x + 162x $87,000 16x + 89x $48,000

Market total $961,488 $903,000


TV 70.0%/10.3 $435,000 78.2%/10.7 $507,000

Radio/Traffic 77.6%/36.2 $595,000 75.7%/35.9 $585,000


Print 27x + 89x (x2) $181,356 17x + 89x $114,600


Baltimore “Politically Incorrect”

16 series promoted


Washington “Politically Incorrect”

17 series promoted


2016

2016

Strategy 3: “No Print”

Going back to the 2008, 2009 and 2010 baseball seasons, we were able to track print advertising’s positive impact on MASN ratings (exception Washington Post tile ads).

This is no longer the case. We’ve documented the dramatic dip in daily newspaper circulation over the last 4 years:

-40% for the Baltimore Sun

-34% for the Washington Post

We can also connect this loss of newspaper readership to a drop in ratings ROI when MASN uses print to promote game broadcasts.

Orioles Game M25+ Ratings with Print Support 2013: 5.7 2014: 5.3 (-7%) 2015: 4.7 (-11%)

Nationals Game M25+ Ratings with Print Support 2013: 2.4 2014: 1.9 (-21%) 2015: 1.6 (-16%)

The argument can now be made that ineffective print media dollars would be better spent on improving the Reach/ Frequency of MASN’s television and radio advertising.

2015 Buy 2016 – “No Print”


TV 85.5%/13.0 $190,000 88.4%/20.1 $305,200

Radio/Traffic 89.2%/31.4 $385,000 86.5%/32.9 $404,500


Print 29x + 162x $87,000

Market total $961,488 $969,700


TV 70.0%/10.3 $435,000 86.5/21.4 $634,800

Radio/Traffic 77.6%/36.2 $595,000 88.1%/35.6 $635,200


Print 27x + 89x (x2) $181,356


Baltimore “No Print”

25 series promoted


Washington “No Print”

26 series promoted


2016

2016

Comparing The Three Strategies

“Business as Usual”:

Supports 20+ series for both the Orioles and Nationals

Delivers the fewest impressions of all three media options

“Politically Incorrect”:

Promotes the fewest series, concentrating ad support on games outside the primary election window

Most effective frequency-to-series promoted ratio

Achieves more impressions, overall and per series “No Print”:

Promotes the most series (25 O’s/26 Nats)

Achieves the greatest Reach (R) in both markets

Achieves the highest/best Frequency (F) for television in both markets

Achieves the highest/best Frequency (F) for radio in Baltimore (equal to other strategies in DC)

Achieves nearly as many impressions as “Politically Incorrect” strategy in Washington DC

“Business as Usual” “Politically Incorrect” “No Print” Baltimore 21 Series 16 Series 25 Series* Market Spend $918,000 $903,000 $969,700 Washington 22 Series 17 Series 26 Series* Market spend $1,485,300 $1,451,600 $1,515,000 GRAND TOTAL $2,403,300 $2,354,600 $2,484,700 Baltimore R/F Imps/Series R/F Imps/Series R/F Imps/Series TV 87.9%/15.5 585,205 87.9%/15.5 768,081 88.4%/20.1* 796,024 Radio/Traffic 85.8%/29.9 1,094,579 85.8%/29.9 1,436,635 86.5%/32.9* 1,188,427 Print 21x+162x 70,808 16x+89x 70,808 TOTAL 1,750,592 2,275,524* 1,984,451 Washington R/F Imps/Series R/F Imps/Series R/F Imps/Series TV 78.2%/10.7 792,241 78.2%/10.7 1,025,253 86.5/21.4* 1,804,823 Radio/Traffic 75.7%/35.9 2,267,986 75.7%/35.9 2,935,040 88.1%/35.6* 2,680,382 Print 22x+89x (x2) 568,467 17x+89x 568,467 TOTAL 3,628,694 4,528,760* 4,485,205*

Three Strategies Legend: Bold type/* denotes best return on investment (ROI) for media spend

Recommendation

The “Business as Usual” strategy served MASN well, when the network’s media spend was budgeted at $2.8 million. Game ratings responded to MASN’s advertising. However, at the $2.4 million media spend level, game audiences have declined in key demos – particularly young demos – during MASN’s media buy period. Given the additional challenges we face in 2016, “Business as Usual” no longer makes sense. Our recommendation? Implement the “No Print” strategy. Why?

Print circulations and market penetration are now below critical thresholds required to be effective for MASN advertising

Dollars spent on ineffective print advertising diverts dollars from reaching Orioles and Nationals fans via television, radio and alternate media (Pandora, social media, etc. targeting young adult audiences)

There are, however, business-related (Camden Yards signage revenue) implications for implementing this strategy. If Orioles sales/business considerations trump MASN marketing priorities, then our back-up recommendation would be the “Politically Incorrect” strategy.

The Business Impact of “No Print”

Since 2009, the Baltimore Sun and MASN/Orioles have been involved in an advertising-driven cash “swap.”

The Sun pays the Orioles $400,000 for Sun logo signage atop the videoboard at Camden Yards.

In exchange, the Orioles and MASN are obligated to pay the Baltimore Sun $400k for print advertising in the Sun and Internet ads on BaltimoreSun.com.

Over the past several years, this cash-for-cash deal has become increasingly one-sided in favor of the Sun as:

Attendance (audience exposure for the Sun) at Camden Yards has increased from 1.9 million in 2009 to nearly 2.5 million in 2014 (+32%)

While the Sun’s daily newspaper circulation (advertising exposure for the Orioles/MASN) has fallen from 180,000 to barely more than 110,000 (-39%)

Eliminating MASN’s print ad spend would effectively end this Sun/MASN-Orioles cash “swap”. True, there are ad opportunities on BaltimoreSun.com. However, a $400k spend for the Orioles/MASN cannot be justified as:

BaltimoreSun.com’s market share does not warrant a large investment (MASN’s Inet market spend is $300k)

BaltimoreSun.com has undelivered audience estimates in 2014 and 2015

2016 media presentation

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