Online Strategy Strategic Marketing Roundtable Vail, August 28, 2006 Leon Levitt Cox Newspapers

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Online StrategyStrategic Marketing
RoundtableVail, August 28, 2006Leon
LevittCox Newspapers
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Changing Media Landscape

• Up against HUGE lifestyle headwinds
• Discretionary time is precious and we compete
  with everything from expanding entertainment
  options to longer commute times. It is a zero sum
  game.
• Expectation that news/information is free
• Way people get news and information- graze many
  different sources (and seek out a point of view)
• Technology changes the game (iron and carrier
  force no longer provide a safety net)
• Barriers to entry/local market protection
  diminished
• Broadband has a big impact on newspapers
  wireless BB will soon be ubiquities and
  thinner/cheaper laptops means tuning our sites
  for content on demand

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Changing Media Landscape

• 50 Million Americans turn to the Internet FOR
  NEWS on a typical day
• Adult Internet penetration is 70
• Home broadband penetration now 40
• Not a zero sum game, broadband drives usage of
  more news sites
• Unlimited options create a very different
  business model

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Changing Media LandscapeHOW WE WIN!

• Alignment print online business models
  strategy
• Aggregation of audience, driving past 7-day
  market share and extending incremental reach (25
  34/39)
• We can offer advertisers a suite of solutions
• Its all about the engagement of local audience
  (differentiator)
• And dont forget frequency! (how do we better
  measure?)
• Managing supply and demand
• Sales and business plans drive technology

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CNI Online - Three Goals

• Grow past seven-day local market share (25 goal)
  30day Austin 27, Atlanta 26, Dayton 22, PB
  22
• Drive incremental audience by focusing on the 25
  to 34 year old demographic
• Develop ad programs which will leverage audience
  and better transition revenue

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CNI Philosophy

• More than a newspaper site (different medium)
• Credibility is not the same as news judgment
• Reengage youth (not all eyeballs are equal)
• Own breaking news!
• Content that drives revenue (not all journalism)
• Produce for broadband (video and interactivity)
• Determine and own franchise topics
• Produce play into trends / pockets of passion
• Daypart content plans (broadcast model)
• Conversation is critical but (blogs, Pod Casts)
• Aggregate before being aggregated, RSS feeds work
  both ways

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CNI Online Financial Performance
2006
(Millions of Dollars)
2004
2003
2005
CNI Revenue 31.1 39.4 54.0 65.7 CNI
Expenses 36.9 39.4 46.4 50.9 Profit (5.8) --
7.6 14.8 IBDA NA NA 14 23
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AJC.com Consolidated Sites

• Numbers that are important to us
• 481,718 ACTIVE registered user profiles (67 in
  DMA)
• 80 do not subscribe to print newspaper and 67
  read occasionally, rarely or never
• AJC print only past 7-day reach is 39
• AJC print and online adds 10 to 49
• AJC online adds 5 to 54
• 224,484 online only readers
• 16.3 past 7-day / 26.2 past 30-day reach
• 80M page-views, up 24, BUT !!!

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CNI Online 5 Areas of Focus

• Creating a greater sense of urgency We simply
  must move much faster.
• Developing consistent and timely competitive
  business intelligence, both from a national and
  local market perspective. Barriers to entry are
  gone, newspapers no longer have the protection of
  the local marketplace.
• Revenue momentum is at a critical stage. Online
  revenue has increased 125 the past 3 years. Must
  reduce dependency on classified.

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CNI Online 5 Areas of Focus

• Drive market share by vertical. In most markets
  CNI is the clear online market share leader with
  respect to overall audience, but this masks a
  critical problem.
• We cannot afford to dismiss collaborative effort.
  As the Internet evolves and Craigs List type
  sites multiply, job aggregator sites gain
  footing, and Google and Yahoo shift their focus.

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Changing Media Landscape

• Online is a form of distribution, not a product
• Think in terms of what we need NOT what we have
• Utility is as important as content (ZEST)
• Search means many things
• Home page bypass and driving the impulse click
• Free classifieds should be used as a Trojan Horse

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Changing Media Landscape

• Winning online means fighting many different wars
  all with a different competitive sets
• Transition of display revenue must be a priority
• We must develop spectacular creative
• We are a hybrid newspaper/broadcast model and
  Yield management is critical!
• All about local PAGE VIEWS
• Craigs list is overrated
• Web order entry is key (classified and display)

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Changing Media LandscapeQuestions we continue to
ask

• How can we create strategic and business
  alignment across all of our products (print and
  online)?
• How do we transition audience and revenue across
  verticals each with different business plans/set
  of competitors?
• Do we manage or push print erosion? (eyeballs
  versus )
• Need better analysis tools on a more timely
  basis!
• Are we being aggressive in using nontraditional
  content?
• How can we attract more women to our sites?
• How will peoples info needs change in a world of
  wireless broadband cheap/thin laptops?
• How do we better control distribution?
• How can we be more aggressive developing
  partnerships?
• Do we understand that we must prioritize and
  reconcile what is cool with a sustainable
  business model

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Changing Media Landscape

• Tougher times online is a big part of the
  revenue answer and can help drive the overall
  enterprise
• In 2006 online will represent over 7 total NP
  revenue
• Much of NP YOY revenue growth driven by online
  (76 in 2005)
• CNI online is profitable- 14.1 2005, estimated
  23 2006
• Credibility is a differentiator
• Building a new asset!