itn networks board meeting june 10, 2009. sales status 2009: first half review & outlook ...

ITN Networks

Board MeetingJune 10, 2009

Sales Status

2009: First Half Review & Outlook

Digital Development

Technology Development

Profit Projections

Inventory Expansion & Management

New Venture Opportunities

Minimized 08-09 Upfront Cancellations:

Various Agencies/Clients Rejected CPM Rollbacks - Required Full Cancellations

• 2nd Quarter: 37% of Optional Dollars Were Cancelled / Projected ~60%2nd Quarter Dollars Cancelled: $12.3 million

• ITN Offered 10% CPM Rollbacks on All 2Q & 3Q Upfront Activity, on the Condition Advertisers Firm Up Optional Dollars

• 3rd Quarter: 39% of Optional Dollars Were Cancelled / Projected ~60%

3rd Quarter Dollars Cancelled: $10.7 million

SalesDifficult Economy:Calculated Responses

Added New Scatter / Upfront Billing:

•ITN was Rewarded for “Goodwill” / Strategic Value / Pricing Initiatives

•Existing Clients Expanded Into New ITN Networks for Scatter

•Developed Dialogue with Agencies for New, First Time Clients

•Existing Clients Expanded Into New Networks for Upfront Commitment

1Q 2009 2Q 2009 3Q 2009New $$ Billed As of 6/8/09: $9.9 million$20.9 million

4Q 2009$242 thousand$2.5 million

Sales

2009-10 Upfront Outlook:

Sales

• Budgets Remain Unclear for Most Clients- Likely to be Less Overall Money Committed Upfront

- Agencies Seek Upgrades & Added Incentives: Network Advantage

• Leverage All ITN-Agency-Client Relationships- Reaffirm ITN’s Strategic Value Proposition 1. Better Targeted Alternatives 2. More Cost Effective Approach

ChallengingTypically 90% is completed late-May through mid-July

• ITN Faces Greater Pricing Pressures- Follow the Networks’ Lead…at a Discount

- Heavily Publicized Local Market Softness

- 2009 CPM Rollbacks Reset Upfront Bases

- Agencies Pushing to Eliminate ITN :15 Second Premiums

ProfitDeclining Ratings:Calculated Responses

• Executing Individual Station & Group Deals for New Efficiencies

• Hedge Individual Market Conditions - Close in Buying of Opportunistic Inventory• Increase Flow & Speed of Data to Improve Reaction Time - Electronic Verification Data Fused with LPM Data

• Re-Buy Schedules: Narrow Rotations to Optimum Days & Times

Leverage ITN – Television Station Relationships

Projected Results Through 2Q 2009:• 102% Delivery Across All Upfront & Scatter Activity

• 38% Profit Margin Over Station Costs: Highest Since 2001

Profit2009-10 Upfront Outlook: Potential Decline in Profitability

Challenge:

:15s Cost ITN 60%-65% the Cost of a :30 Second Commercial• Resulting 20%-30% CPM Increase is Passed on to Sell :15s• Economy: Advertisers Seek to Use More :15s / Can’t Pay Premiums

Discussions with Stations to Eliminate :15 Premiums:

Some Yes / Some Reduce Premium to 55% / Some No – Still 65%

ITN Would Be Required to Absorb Costs

Difficult to Secure in Current EconomyDemand More $$$:

• Local Ratings Erosion Continues to Offset the Declines in Local Pricing

• Local Market Projected Up in 2010: Political/Olympics/Auto/Financial

• Upfront Pricing Expected to Be Negative versus 2008-09

• May Require Eliminating Sale Premiums on :15 Second Commercials

• Local Market Pricing Seems to Have Bottomed in Pricing

Inventory

• Continue Expansion Beyond Broadcast, Across Cable and Satellite

• Securing Station Commitments of More Premium Inventory in the Top Rated Programs at Rates ITN Requires

Continue to Narrow Rotations: Days and Times

Challenge:

• Exploring Live Sports InventoryProposal to Pfizer for 3Q 2009 Local Baseball Network: High Rated…High Priced

Local Cable Inventory Cannot Be Rated By Nielsen’s National People Meter to be Included in ITN’s Networks: Advertisers Demand Metrics & AccountabilityExploring with Nielsen Unconventional Methods to Utilize their A/P Meter, Now in 100% of Nielsen’s National Sample, to Measure ITN’s Encoded Commercials Result Would Produce ITN Commercial Ratings Across Any Television Input Source

PLANNINGSystems

T V S T A T I O N S

A G E N C I E S

Technology DevelopmentFully Integrated Network of Custom SystemsKey ITN Value:

NIELSEN

SALESSystems

TRAFFICSystems

BUYINGSystems

Sustained Effort to Re-Design All SystemsLegacy Technology to New SQL Base

PLANNINGSystems

T V S T A T I O N S

A G E N C I E S


NIELSEN

SALESSystems

TRAFFICSystems

BUYINGSystems

New EV Tracking SystemsNew EV Tracking SystemsBuilt in 2007: 100% SQL Based

T V S T A T I O N S

A G E N C I E S


NIELSEN

New EV Tracking SystemsNew EV Tracking SystemsBuilt in 2007: 100% SQL Based

PLANNINGPLANNINGSystemsSystems

BUYINGSystems

75% SQL Based

95% SQL Based

SALESSystems

TRAFFICSystems

20% SQL Based

100% SQL Based May 2009

May 2009

T V S T A T I O N S

A G E N C I E S

Technology Development

NIELSEN

New EV Tracking SystemsNew EV Tracking Systems

PLANNINGPLANNINGSystemsSystems

BUYINGSystems

SALESSystems

TRAFFICSystems

December 2009: All Core Systems SQL Based

Digital Development

Multi-Platform TV & Digital Sales

Stand-Alone Digital Sales Geo-Targeting

Dual Approach

Digital Development

Geo-Targeting Network: WHY?

There is a Need in the Market & It Compliments Our Core Business

$80-$100 Million Marketplace

Advertisers Want the Flexibility to Target Specific DMA’s

Geo-Targeting Marketplace:

Association with Trusted Local Media Brands

Digital Development

ITN Geo-Targeting Advantage:

• 2,000 plus sites across the country • 62 sites within the New York DMA

Scale & Depth of Sites Across & Within Local DMA’s

Ease of Use

Better Pricing• Leverage TV Dollars• Historical Relationships• Operational Structure

Digital Development

ITN Centro Cox Media QuadrantOne IB WorldNow

Overall Size50mm+ Uniques

DMA Penetration10+ Sites Per Market

Core Media LeveragePricing Leverage: $$ on Sites Core Media

Geo-TargetingBy DMAs & Custom Regions

Behavioral TargetingTracking-Defining-Delivering Ads

Multi-Platform PackagesCore Media Promotion of Online Campaign

√√√√√√

√√√ Limit

ed

√

Limited

√

Limited

√

Limited

√

Local Media Online Competitors

Digital Development








√√√√√√

√√√ Limit

ed

√

Limited

√

Limited

√

Limited

√


IB & WorldNow: The 1-2 stations per market they represent do not provide DMA scale online. WorldNow has disbanded ad sales / IB is rumored to be doing same

Digital Development








√√√√√√

√√√ Limit

ed

√

Limited

√

Limited

√

Limited

√


Cox Media: Average 5-6 Sites Per Market – Still Little DMA Penetration for Real Scale Only 1 or 2 TV Stations Per Market – Limited for Multi-Platform Campaigns Jan 09: Added ABC O&Os Online Sales / Installing Desktop Software at Agencies

Digital Development








√√√√√√

√√√ Limit

ed

√

Limited

√

Limited

√

Limited

√


QuadrantOne: Average 5-6 Sites Per Market – Still Little DMA Penetration for Real Scale Primarily Print + 1 or 2 TV Station Sites Per Market – No Multi-Platform Sell Premium/Targeted Inventory, Expensively – No Pricing Leverage

Digital Development

ITN Centro







√√√√√√

√√√

Local Media Online Competitors•Centro is Well Established with Agencies

Service / Desk Top Tools / Ease-of-Use

•Like ITN, Centro Offers:Size / DMA Penetration / Geo-Targeting May Acquire Behavioral Targeting Capabilities

•ITN has Significant Advantages:Better Pricing: ITN can leverage TV $$$ tosecure & sell inventory below Centro

Multi-Platform: ITN can drive traffic from TVto online campaigns – Centro can not

Client Relationships: ITN is Network Brand,With Strong National Client RelationshipsOperations: ITN maintains staff & expertisein local targeting, negotiating, delivering

Favorable Market Dynamics: Agencies: Want to Support Two Key Full-Scale Players – Not One

Digital Development

• Broadcast Drives Online Awareness Online Awareness Leads to Increased Consumer Activation Online• Natural Extension for ITN – Core Business• On-Air Billboards & Vignettes: Promote Online Campaigns on Station Sites• Currently Airing a Sprint Campaign for Small Business Owners

Challenges:• Multi-Platform Efforts Are and Will Remain Slow to Develop• Agencies are Not Well Structured to Evaluate or to Pull-the-Trigger• Television and Online Goals & Budgets Are Not Synchronized

Multi-Platform TV & Digital SalesBuild Reach and Drive Consumers from Awareness to Activation

Digital Development

• Staff Expansion: New York & Chicago

• Behavioral Targeting: Collective Media Tagging, Tracking, Segmentation

• Inventory Expansion: Using Current Billing to Expand Local Relationships

• Cross Platform Promotion: Developing & Airing TV Billboards & Vignettes

Building Forward:

• Research: Testing Comscore Ad Tagging to Determine R&F by Demographic

• Desk Top Tools: Expansion of ITN’s Website: Custom SQL Based Software

Steps Under Consideration:

• Research: Campaign Effects on Sight Visitation, Purchases, Brand Awareness

• Geo-Targeting by Zip Code: Exploring Demand, Methodologies & Execution

Environmental Action Through Media

Eco-Only

Venture Development

Municipal Climate Action Plans

• Exclusive agreements with municipalities to fund environmental projects

• Contracts signed, pending or under negotiation with 33 municipalities in 20 Top 50 DMAs

• Relationships with top energy service & resource companies, i.e. Chevron, NextEra

• Enable municipalities to earn carbon credits and renewable energy credits

• Municipalities seek funding from sponsors to complete projects beyond their budgets

• Sponsors offered presence at ribbon cutting events and municipal sign inventory

Venture Development

ITN Opportunities

• Environmental sustainability is a hot topic - bring “Green” initiatives to client advertisers

• ITN + EcoMedia: clients achieve both media & sustainability objectives cost effectively

• Advertising with ITN directly funds local U.S markets’ “Go Green” projects

• On-air vignettes, billboards and online content developed to feature client involvement

• Opens door to new clients, as well as new corporate & marketing budgets

• Elevate ITN’s exposure & relationships with client CEOs, CMOs, and brand managers

Your Ad Dollars Make A Measurable Difference

ITN EcoZone MediaProject Climate Action

itn networks board meeting june 10, 2009. sales status 2009: first half review & outlook ...

Documents

new itn networks

new networks

sql based20

sql basedmay

sql based95

sql based100

sql based75

upfront cancellations