Television: Still the First Choice of Advertisers

New technologies often inspire predictions about the demise of older, more established ones. Sometimes the predictions are accurate, such as with new types of software. However, in the media, these predictions often fall flat. The introduction of radio led many to believe that print’s days were numbered. Later, radio was going to disappear when TV was introduced. People have been predicting the end of television, particularly television ads, since the first website went up. The facts, however, show that television and television advertising are not only surviving in the new media age, they are thriving.

1

WHERE THE AD MONEY IS GOING

Finding the right media mix can be challenging for advertisers. Aside from traditional outlets such as print, radio, outdoor and TV, today’s advertiser must also balance the many Internet-based choices. Online advertising and the proliferation of mobile devices and smartphones present more opportunities than ever to reach consumers where they live, work and shop. Social media builds online communities. Viral marketing promotes word-of-mouth brand awareness. Mobile apps put the right ad in front of the right audience at the right time.

The advertising mix, previously dominated by traditional media like print and broadcast, has seen Internet ad spending in the U.S. grow in share from 15.4% in 2009 to an estimated 25.6% in 2015, reports eMarketer.1 In 2012, online ad spending exceeded the total amount spent on print magazines and newspapers.2 However, unlike print, television isn’t suffering while Internet advertising grows. In fact, television continues to see the greatest share of all advertising dollars in the U.S. and still accounts for more than one of every three advertising dollars spent in the world.3 According to Nielsen, global ad spending rose 3.3% from January to September in 2012, with TV advertising up 4.3% during the period. In North America alone, there was high double-digit growth in TV advertising, up 13.6% in the third quarter of 2012 from Olympic and political advertising.4

Television will continue to grab the lion’s share of advertising dollars, estimated to capture $68 billion in total U.S. spending and 39% of total share through 2015.5 According to eMarketer CEO and co-founder Geoff Ramsey, “While the growth of online advertising has been robust it hasn’t stopped brand advertisers from keeping the bulk of their budgets flowing through TV sets.”6

TELEVISION CONTINUES TO SEE THE GREATEST SHARE OF ALL ADVERTISING DOLLARS IN THE U.S. AND STILL ACCOUNTS FOR MORE THAN ONE OF EVERY THREE ADVERTISING DOLLARS SPENT IN THE WORLD.3

2

Source: Pamela Parker, “EMarketer: U.S. Online Ad Spend To Approach $40B This Year,” MarketingLand, January 19, 2012, accessed December 4, 2012, http://marketingland.com/emarketer-u-s-online-ad-spend-to-approach-40b-this-year-3801. Source: “TV Ad Spending Largely Unaffected by Growth Online,” eMarketer, March 29, 2011, accessed December 4, 2012, http://www.emarketer.com/(S(2kdxtfrvjky24nqlifcs4z2y))/Article.aspx?R=1008304.

2009 2010 2011 2012 2013 2014 2015

TV 36.5% 38.6% 39.1% 39.9% 39.6% 39.5% 39.2%

Internet 15.4% 16.9% 18.4% 20.2% 21.9% 23.9% 25.6%

Newspapers* 16.9% 14.9% 13.9% 12.8% 12.3% 11.8% 11.4%

Radio** 9.7% 10.0% 10.1% 10.1% 10.2% 10.1% 9.9%

Magazines* 10.5% 9.6% 9.0% 8.2% 7.7% 7.1% 6.7%

Directories* 7.0% 6.1% 5.3% 4.5% 4.0% 3.4% 2.9%

Outdoor 4.0% 4.0% 4.1% 4.2% 4.3% 4.3% 4.4%

U.S. MAJOR MEDIA AD SPENDING SHARE, BY MEDIA,2009-2015% of total

Note: *print only; **excludes off-air radio & digitalSource: eMarketer, March 2011

2009 2010 2011 2012 2013 2014 2015

TV $53.8 $59.0 $60.5 $64.5 $65.0 $67.0 $68.0

Internet $22.7 $25.8 $28.5 $32.6 $36.0 $40.5 $44.5

Newspapers* $24.8 $22.8 $21.4 $20.7 $20.2 $20.0 $19.8

Radio** $14.3 $15.3 $15.7 $16.4 $16.7 $17.1 $17.2

Directories* $10.3 $9.3 $8.2 $7.3 $6.5 $5.7 $5.0

Magazines* $15.5 $14.7 $13.9 $13.2 $12.6 $12.1 $11.6

Outdoor $5.9 $6.1 $6.4 $6.8 $7.1 $7.4 $7.6

Total $147.2 $153.0 $154.6 $161.5 $164.2 $169.8 $173.6

U.S. MAJOR MEDIA AD SPENDING, BY MEDIA, 2009-2015Billions

Note: *print only; **excludes off-air radio & digitalSource: eMarketer, March 2011

U.S. TV VS. ONLINE AD SPENDING, 2011-2016Billions

Note: eMarketer benchmarks its U.S. online ad spending projections against the IAB/PwC data, for which the last full year measured was 2010Source: eMarketer, Jan 2012

$60.7$64.8

2011 2012 2013 2014 2015 2016

$32.0$39.5

$65.6

$46.5

$67.8 $68.9$72.0

$52.8$57.5

$62.0

TV ad spending Online ad spending

3

TV GOES SOCIAL

Many predicted that online video viewing, made possible through services like Hulu, Youtube and Netflix, would take viewers from traditional TV. As reported by Nielsen Company media product leader Matt O’Grady, the steady trend of increased TV viewership confirms we have an insatiable appetite for media, with online and mobile programming only adding to it.7 While Americans still spend most of their leisure time in front of the TV, 40% are now on the Internet at the same time, holding a second screen like a smartphone or tablet.8 They are connected to social networks, such as Twitter and Facebook, and posting thousands of messages about everyday programming like sitcoms and dramas. Online and mobile programming are elevating TV as a social medium. Conversations once confined to the living room or water cooler are now taking place on Internet chat rooms, connecting viewers everywhere. Fans of shows discuss episodes, predict future plots and share opinions as the show is broadcast. The Social TV phenomenon is providing entertainment and advertising professionals with an immediate feedback loop and a new way to understand viewers’ preferences. Today’s advertisers are realizing the advantages of both television and online advertising and are incorporating both into the media mix.

THE SOCIAL TV PHENOMENON IS PROVIDING ENTERTAINMENT AND ADVERTISING PROFESSIONALS WITH AN IMMEDIATE FEEDBACK LOOP AND A NEW WAY TO UNDERSTAND VIEWERS’ PREFERENCES.

4

THE ADVANTAGES OF TELEVISION ADVERTISING

REACH The staying power of television advertising is its ability to reach the masses. According to Nielsen, 96.7% of U.S. households own television sets.9 This translates to 290 million Americans who have access to television. Compared to 234 million cell phone owners, 211 million who are online and 115 million who surf the mobile web, it is easy to see why television advertising is the medium of choice for delivering a mass message.10 In a 2011 survey conducted by the U.S. Department of Labor, Bureau of Labor Statistics, individuals age 15 and over spent more than half of their leisure time watching TV. Seniors, who on average have more disposable income, spent even more time.11

Source: “American Time Use Survey,” U.S. Department of Labor, Bureau of Labor Statistics, November 16, 2012, accessed December 13, 2012, http://www.bls.gov/tus/charts/leisure.htm.

AVERAGE HOURS SPENT PER DAY IN LEISURE AND SPORTS ACTIVITIES, BY YOUNGEST AND OLDEST POPULATIONS

NOTE: Data include all days of the week and are annual averages for 2011.SOURCE: Bureau of Labor Statistics, American Time Use Survey

5.0

4.0

3.0

2.0

1.0

0.0

4.4

2.2

0.2 0.2 0.2

0.90.8 0.80.6 0.6

Ages 15-19 Ages 75 and over

1.1

Watching TV

0.4

Reading Relaxing Socializing Games,ComputerLeisure Use

Sports,Exercise &Recreation

LEISURE TIME ON AN AVERAGE DAY

NOTE: Data include all persons age 15 and over. Data include all days of the week and are annual averages for 2011.SOURCE: Bureau of Labor Statistics, American Time Use Survey

Relaxing and thinking(17 minutes)

Playing games; using computer for leisure (26 minutes)

Participating in sports, exercise, recreation(18 minutes)

Reading(18 minutes)

Other leisure activities(18 minutes)

Watching TV(2.8 hours)

Socializing and communicating(37 minutes)

Total leisure and sports time = 5.0 hours

5

THE ADVANTAGES OF TELEVISION ADVERTISING

Television is unique in its ability to reach large numbers of people on a national or regional level in a short period of time. According to Stefan Tornquist, Vice President, Research (U.S.) for Econsultancy, “If the job is to move inventory at a national or international level, there’s still no tool that’s as predictably effective as TV.”12

TV ads are the most helpful in making a purchase decision. According to ExactTarget’s 2012 Channel Preference Survey, 53% of online consumers reported that a commercial on television influenced them to purchase a product or service in the past 12 months.13 A far smaller percentage could say the same about website banner ads (18%) or YouTube video advertisements (8%).14

The TV stations’ advertising marketing group, TVB, confirms that in 2012 local TV advertising drove 43% of automobile purchases, with Internet advertising at 12% and newspapers at 6%.15

“IF THE JOB IS TO MOVE INVENTORY AT A NATIONAL OR INTERNATIONAL LEVEL, THERE’S STILL NO TOOL THAT’S AS PREDICTABLY EFFECTIVE AS TV.”12

OVERALL 15-17 18-24 25-34 35-44 45-54 55-64 65 Plus

A commercial on television 53% 59 51 59 57 59 40 45

An advertisement in a newspaper 32% 28 15 23 31 43 46 47

An advertisement in a magazine 30% 37 24 26 28 38 31 32

An infomercial on television 18% 16 20 17 16 16 21 16

A banner or other advertisement on a website 18% 19 18 22 16 18 14 13

An advertisement on the radio 16% 12 12 18 15 22 14 11

An advertisement on a billboard 8% 9 11 12 5 7 5 3

A video advertisement on YouTube (commercial ad played prior to start of your video, etc.)

8% 22 16 8 5 6 5 1

WHICH OF THE FOLLOWING HAVE INFLUENCED YOU TO PURCHASE A PRODUCT OR SERVICE IN THE PAST 12 MONTHS?

Source: ExactTarget. 2012 Channel Preferences Survey, February 2012 • N = 1,481 U.S. Online Consumers, age 15 and older

6

THE ADVANTAGES OF TELEVISION ADVERTISING

MESSAGE RECEPTION Even when ads interrupt TV programs, data shows that people keep watching, especially when ads are entertaining. When watching TV, consumers are relaxed, lounging on the couch in the comfort of their own homes. TV is a passive, lean back medium where consumers want to be entertained and are open to absorbing content. In a presentation at the CAUSE 1998 Annual Conference, Steve Jobs said, “We think basically you watch television to turn your brain off, and you work on your computer when you want to turn your brain on.”16 Unlike watching TV, browsing the Web is a highly active, lean forward medium. When people are looking for something specific, they go to the Internet and introducing them to something they do not specifically want at that moment is disruptive. A study released from market-research firm Forrester shows that two-thirds of mobile users surveyed found automatically served in-app ads annoying.17 More than one-third of Americans (37%) say that TV ads are most helpful to them in making a purchase decision, while nearly half say they ignore Internet banner ads, according to a poll from AdWeekMedia and Harris Interactive.18

IMPACT Television combines video and audio to create instant excitement. Television can introduce and showcase a product, demonstrate how to use it, convey the benefits, and when the ad is well-executed, persuade consumers to make instant decisions. Television creates impact, and ads that have impact improve brand recall. In comparison, online and mobile ads have the advantage of being highly specific and relevant. And as the Internet continues to expand its video offerings, people are spending more time online, though not at the expense of television.

For viewing video content, no other medium – not a handheld device or even the best computer monitor – can match the experience of watching one’s favorite program on a large format, high definition television. According to a recent Forrester report, of those who stream video online, 92 percent also have regular cable packages, and 84 percent of those who stream video online actually watch as much or more “traditional” TV as they did before they began streaming.19 Fifty-three percent said they have discovered shows by viewing them via the Internet first and then sought them out on regularly scheduled TV.20

7

TV ADVERTISING STILL HAS ROOM TO GROW

HDTV provides a quality no computer screen can come close to matching. Yet its adoption has been slow. That has just recently begun to change, and the absorption of HD in the field of advertising is growing at a rapid pace.

When HD was first introduced in the 1990s, advertisers were excited about the crisp clear picture, larger format and the opportunity to show clients’ products in a beautiful light. Unfortunately, a few obstacles stood in the way of the adoption of HD advertising: HD sets were too expensive and not many people owned one. Few if any stations carried HD channels. The first commercially-marketed HD camera cost more than $100,000, editing software was prohibitively expensive and often the equipment filled a room. Also, getting a spot to stations required HD tapes and FEDEx. Even after the first digital delivery system was created, advertisers still had to pay top dollar per spot because those first digital systems bounced off satellite transponders and required that each station have a server box that had to be maintained. In short, going HD was more than anyone could afford. Then, one by one, the barriers fell.

> The drastic decrease in price among HDTVs is the number one factor driving recent HD adoption. The first high-definition sets, which came from manufacturers like Panasonic and Sony, hit the consumer market in 1998 and cost $7,000 or more.21 The hefty price tag meant the average consumer could not afford HD. In 2006, a study by Leitchman Research Group found HDTV growth still driven by higher income households, with 63% of those owning HD capable sets earning more than $75,000 to $100,000 or more a year.22 As new competitors gained a foothold, willing to accept lower margins in exchange for higher volume, prices for HD sets dropped. Sony, one of the originators of HD, seethed at the declining profits as they saw prices plummet 25 to 30 percent in one year (2006). Today, manufacturers continue to slash prices of larger and larger screens, sparking a wave of HD purchases. Now more than three fourths of the U.S. households have at least one HDTV set — up from 17% in 2006.23 Picture quality and contrast is improving, too, with new “full HD” sets displaying more detail with greater depth and dimension. The market for HD continues to grow as consumers are spending half as much on an HDTV set than five years ago.24

8

> Today, 80% of local TV affiliates have made the transition to HD, up from 15% in 2010. Purchasing the equipment necessary to process and transmit HD was a high barrier to overcome. Because equipment costs have become more reasonable, HD isn’t the challenge it was three years ago. HD programming is also on the rise. Most prime-time shows on the major broadcast networks and many cable/satellite stations are now offered in HD.

> Production and post production costs have also dropped. Just a few short years ago, most production was shot on film or very low quality video. To shoot in HD required expensive film, film transfers and cameras. Then came HD digital cameras, which could shoot without film. The first digital cameras sold for hundreds of thousands of dollars. But cameras were only part of the costs. Post production in HD required powerful computers and large servers to handle the massive data. Now HD production and post-production costs are the same as shooting on standard video. CPUs are faster, bandwidth has increased and HD cameras and software for editing are so inexpensive and accessible, that high school kids are shooting and editing in HD.

9

THE LAST BARRIER TO HD HAS FALLEN

More people have HD sets and more HD spots are being produced. Stations have now adopted HD and nearly 80% carry HD channels. Yet only 30% to 40% of advertisers take advantage of the full potential of HD with its outstanding resolution and larger aspect ratio. Why? The answer: ad distribution.

Ad distribution is the process of getting the spot from the agency or post house to the station. This is a multi-step process and includes transcoding or converting the spot to file formats stations can run. Distributing a Standard Definition spot has become almost routine and the costs for doing so are reasonable. An advertiser can expect to pay as much as $15 or as little as $2 per spot depending on volume and how many different ads an advertiser sends all at once. However, until recently the costs to distribute a High Definition ad ranged from $100 to $250 per spot. As a result, only a few advertisers distributed their ads in HD. The rest sent a Standard Definition ad to stations’ High Definition channels. Most HD viewers have seen a commercial that looks cut off at the sides or has black bars at the sides and above and below the picture. This is a standard definition ad running on a High Definition channel. The problem is the simple act of ad distribution and it was keeping the HD advertising market from growing for many years. The lower quality also diminished media buys and the perception of many brands.

MOST HD VIEWERS HAVE SEEN A COMMERCIAL THAT LOOKS CUT OFF AT THE SIDES OR HAS BLACK BARS AT THE SIDES AND ABOVE AND BELOW THE PICTURE. THIS IS A STANDARD DEFINITION AD RUNNING ON A HIGH DEFINITION CHANNEL.

10

11

HIGH DEFINITION AD QUALITY

Ads distributed in High Definition use 100% of the screen. The last barrier to HD advertising has fallen. Today, the cost of airing an HD spot is almost the same as an SD commercial. Advertisers are ready for something better. HD ads deliver better audience retention, brand image and more value for the buy.

A Standard Definition ad running on a High Definition channel looks shrunken down and cut off at the sides, like the sample below.

THE NEW HD REVOLUTION: FROM HARDWARE TO SOFTWARE

In the early days of digital delivery systems, advertisers paid an exorbitant amount per spot because the first digital systems bounced off satellite transponders housed at the stations. The cost to deliver the spot and the cost to maintain the server box made HD advertising cost prohibitive. Only in recent years has high-speed Internet been so widely available and inexpensive. Today, added bandwidth only costs pennies, so the multi-million dollar satellite system is obsolete. Now the majority of the cost of delivering an HD spot is in the transcoding and quality control process—creating the proper files with the proper metadata, with the correct formats and filetypes for each station, then checking to make sure every variable is correct and ready for air. Now even these processes have been streamlined, thus reducing the costs involved and improving the quality of the video.

It all starts with conversion.

Once a TV ad has been shot and edited, it exists in its highest possible output as a master file. To distribute that TV commercial, a distribution company must transcode and quality check each file to each station. HD files are more complex, so in the past this process was cumbersome, costly and time consuming. First a digital duplicate of the master file was created. Then a team of people reviewed each file in several areas to ensure it was correct. Once the file was sent, the station often had to pull another duplicate from the duplicate because odds were the file did not match the station’s standards. Each television station has its own requirements for receiving TV commercials and these requirements vary by file type and formatting. This was time consuming and created a second-generation video, which lowered the quality. Today, new software can automatically transcode any master file to the specific requirements of each station, so it arrives in the file type each station requires. Not only has the entire transcoding process been automated, much of the quality control process has as well. The automation is more thorough, has virtually eliminated human error and sped up the process dramatically, thus improving quality while lowering costs. These systems do in seconds what it took a whole team much longer to do. Best of all, spot distribution can now be managed online. Users can check to see when spots were delivered, pull up an old traffic report, or find a spot that aired last year — right from their computer or laptop.

12

Although HD has been around for about 15 years, the cost of ad distribution has caused advertisers to turn to HD only on rare occasions —a holiday sale, grand opening or new product launch. Finally, advertising agencies and advertisers who typically distribute in SD can now manage their broadcast spot distribution, and traffic HD for the cost of SD spots online. Larger clients who distribute network spots in HD but local spots in SD can realize the same savings. HD is no longer like your “Sunday china,” but can be utilized every day.

13

TECHNOLOGY HAS MADE THE PROCESS FASTER, COST EFFECTIVE AND YIELDS A HIGHER QUALITY FILE – AT A SIGNIFICANTLY LOWER PRICE. TECHNOLOGY IS LEVELING THE PLAYING FIELD AND MAKING IT POSSIBLE FOR ADVERTISERS EVERYWHERE TO TAKE ADVANTAGE OF THE IMPACT OF HD ADVERTISING.

THE UPCOMING SURGE IN HD ADVERTISING

The time has finally come when HD spot transcoding and distribution are nearly as automated and easy as SD. Therefore, the cost of distribution for HD should not vary too much from SD. Technology has enabled the advertiser to air HD spots for about the cost of SD and at a higher video quality. This is where the technology is right now. However, many distribution companies are resistant to this change. There are two situations where an advertiser must beware 1) a company that has an extremely disparate price between SD and HD distribution and 2) distribution companies which say they can deliver HD but cannot. Like any emerging industry, there are newer companies who may not be able to deliver what they promise. When searching for an Internet-based Ad Distribution Provider, users should consider the following services to ensure optimum performance, reliability and quality:

Automated file transcodingAutomated transcoding creates a file for TV stations from the original master in the format and filetype required by each station. Because the process is automated, it’s quicker and results in fewer manhours. It also results in higher quality video and audio.

Automated quality protocolAutomated quality protocol checks files for any errors or inconsistencies, and checks the audio and the video for any glitches. Automated quality protocols also flag and correct all spots exceeding FCC CALM Act loudness specifications, ensuring commercials aren’t kicked back as non-compliant spots.

14

Archival capabilityAsset management capabilities also come standard with many ad distribution management technologies. These features allow you access to previously aired spots, traffic instructions and talent reports all from a simple browser. Many offer advanced search parameters, such as when and where your ad ran, as well as client, spot title and ISCI code.

Order entry and managementAdvanced order entry systems make is easy to upload or revise traffic instructions. Many offer immediate alert features, notifying users when stations receive the spot and when it’s been downloaded to the station’s play server.

CONCLUSION

Television is an important part of the advertising media mix. Increases in online ad spending—set to grow from 15.4% of the total in 2009 to 25.6% by 2015—will not come at the expense of television. In fact, TV is the one medium that compliments social media. New outlets are increasing TV viewership. Television’s staying power is the sheer supremacy of the viewing experience. TV impresses and motivates its audience and ensures brand recall. With its mass reach and now the emergence of high definition to further enhance and entertain, television remains the medium-of-choice to influence consumers and drive purchasing decisions.

15

NOTES

1. “TV Ad Spending Largely Unaffected by Growth Online,” eMarketer, March 29, 2011, accessed December 4, 2012, http://www.emarketer.com/(S(2kdxtfrvjky24nqlifcs4z2y))/Article.aspx?R=1008304.

2. Pamela Parker, “EMarketer: U.S. Online Ad Spend To Approach $40B This Year,” MarketingLand, January 19, 2012, accessed December 4, 2012, http://marketingland.com/emarketer-u-s-online-ad-spend-to-approach-40b-this-year-3801.

3. Louis E. Boone and David L. Kurtz, Contemporary Marketing, 2013 Edition (Mason, Ohio: South-Western Cengage Learning), 539.

4. Wayne Friedman, “Global Ad Spend Remains Strong, TV Dominates,” Media Daily News, January 23, 2013, accessed January 24, 2013, http://www.mediapost.com/publications/article/191784/global-ad-spend-remains-strong-tv-dominates.html#ixzz2Iv5CzGFL.

5. “TV Ad Spending Largely Unaffected by Growth Online.”6. eMarketer, “Television Ad Spending Bounces Back, Virtually Unaffected by Online Growth,”

news release, March 29, 2011, http://www.emarketer.com/newsroom/index.php/television-ad-spending-bounces-virtually-unaffected-online-growth/.

7. “Americans Using TV and Internet Together 35% More Than A Year Ago,” NielsenWire, March 22, 2010, accessed January 4, 2013, http://blog.nielsen.com/nielsenwire/online_mobile/three-screen-report-q409/.

8. Sarah Perez, “Nielsen: 85 Percent of Tablet and Smartphone Owners Use Devices As ‘Second Screen’ Monthly, 40 Percent Do So Daily,” Tech Crunch, December 5, 2012, accessed January 9, 2013, http://techcrunch.com/2012/12/05/nielsen-85-percent-of-tablet-and-smartphone-owners-use-devices-as-second-screen-monthly-40-percent-do-so-daily/.

9. “Nielsen estimates number of U.S. Television Homes to be 114.7 million,” NielsenWire, May 3, 2011, accessed December 14, 2012, http://blog.nielsen.com/nielsenwire/media_entertainment/nielsen-estimates-number-of-u-s-television-homes-to-be-114-7-million/.

10. Zoe Fox, “Even in 2012, More Americans Own TVs Than Cellphones,” Mashable, January 6, 2012, accessed December 14, 2012, http://mashable.com/2012/01/06/cellphones-tv-ownership/.

11. “American Time Use Survey,” U.S. Department of Labor, Bureau of Labor Statistics, November 16, 2012, accessed December 13, 2012, http://www.bls.gov/tus/charts/leisure.htm.

16

12. Stefan Tornquist, “Agree to Disagree: TV vs Digital for reaching a large audience,” Econsultancy Blog, August 2, 2011 (12:27 p.m.), accessed December 14, 2012, http://econsultancy.com/us/blog/7845-agree-to-disagree-tv-vs-digital-for-reaching-a-large-audience.

13. ExactTarget, The 2012 Channel Preference Survey, accessed December 17, 2012, http://www.social4retail.com/uploads/1/0/9/8/10981970/sff14_the2012channelpreferencesurvey_web.pdf.

14. Ibid.15. Wayne Friedman, “Auto Ads Drive Local TV Ad Sales,” Media Daily News, December 7, 2012,

accessed December 17, 2012, http://www.mediapost.com/publications/article/188758/auto-ads-drive-local-tv-ad-sales.html#ixzz2F2Sw7WLE.

16. Jay Yarow, “This Is Still The Best Thing To Watch If You Want To Know How Tech Companies Should Try To Fix TV,” Business Insider, December 26, 2012, accessed January 3, 2013, http://www.businessinsider.com/steve-jobs-tv-2012-12.

17. John McDermott, “Mobile Ads More Disruptive Than TV Spots,” Ad Age, December 12, 2012, accessed December 17, 2012, http://adage.com/article/digital/mobile-ads-disruptive-television-spots/238730/.

18. “TV Ads Most Helpful; Web Banners Most Ignored,” Marketing Charts, July 1, 2009, accessed December 13, 2012, http://www.marketingcharts.com/television/tv-ads-most-helpful-web-banners-most-ignored-9645/.

19. David Rowe and Ashley Young, “From TV on the Web to the Web on TV: Convergence, Continued,” The Richards Group Blog, January, 2011, accessed January 3, 2012, http://blog.richards.com/categories/new-media.

20. Ibid.21. Jonathan Strickland, “What were the first HDTVs?” How Stuff Words, accessed January 2, 2013,

http://electronics.howstuffworks.com/first-hdtv2.htm.22. Leichtman Research Group, “HDTV Growth Still Driven by Higher Income Households,” news

release, October 25, 2006, http://www.leichtmanresearch.com/press/102506release.html.23. Leichtman Research Group, The Phenomenon That Still Isn’t, research notes, 4Q 2011,

accessed December 17, 2012, http://www.leichtmanresearch.com/research/notes12_2011.pdf.24. Ryan Lawler, “The incredible shrinking TV replacement cycle,” Gigacom, January 5, 2012,

accessed December 13, 2012, http://gigaom.com/2012/01/05/tv-replacement-cycle/.

17

About SpotGenie Partners, LLC

Founded in Atlanta, GA in 2002, SpotGenie Partners, LLC, a privately-held technology and service company, has revolutionized the digital distribution of high-quality HD television and radio spots, trafficking, tracking, asset management and other postproduction services. SpotGenie’s proprietary technology digitally delivers TV and radio commercials across the country at an approximately 80% reduction in cost over older technologies, making it affordable for everyone. With SpotGenie advertisers and ad agencies manage and monitor every aspect of their broadcast spot distribution using just an Internet browser.

In addition to trafficking, tracking and delivering spots, SpotGenie helps clients prepare their spots for air with services that include closed captioning, tagging, slating and video transcoding.

SpotGenie is headquartered at 345 Peachtree Hills Ave, Suite 400, Atlanta GA 30305. For further information about SpotGenie, visit our website at www.seespotgenie.com or call toll free 888-202-1631.