2013 is already off to a fast start, with the industry intensely focused on key acquisitions and major technology investments, rich content distribution, advancements in native advertising and sales channel innovation. In this slide deck, BIA/Kelsey analysts outline the events and activities that will have the biggest effect on the local media industry this year.

1. BIA/Kelsey’s Annual
Analyst Picks & Predictions
January 23, 2013

2. Agenda
 Looking Back at 2012 and Setting the Context for 2013
 Rick Ducey
 Charles Laughlin
 Analyst Roundtable Discussion
 Moderator, Rick Ducey
 Online Media
 Mobile Media
 Social Media
 Transactions and Loyalty
 Video Media
 Directional Media
 Upcoming BIA/Kelsey Conference:
 LEADING IN LOCAL: The National Impact
 Subscribing to BIA/Kelsey Advisory Services
 Q&A
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© 2013 BIA/Kelsey. All Rights Reserved.

3. Executive Summary
 At the beginning of every year, BIA/Kelsey issues
its “Picks and Predictions” for the year ahead,
offering our best guess of what the year will bring
in local, social, mobile, directional, vertical and
video advertising.
 In previous years, the individual advisory services
issued their own predictions, focused on each
program’s core coverage area.
 We took a different approach for 2013.
 This year’s predictions cover a wide range of
subjects, from mobile ad revenue to loyalty to
cloud based SMB services to sales channel
innovation.
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4. BIA/Kelsey Analyst & Thought-Leadership Team
Rick Matt Charles Mark Geoff Peter
Ducey Booth Laughlin Fratrik Price Krasilovsky
Managing Director Chief Strategy Officer SVP, Managing Editor VP/Chief VP, Valuations & VP, Conferences
Economist Financial Consulting Senior Analyst
Celine Jed Suzanne Steve Michael Jeanne
Matthiessen Williams Ackley Marshall Boland Datillo
Senior Analyst Senior Analyst Senior Research Director of Research Senior Analyst Manager,
Competitive Intelligence Analyst Media Valuations
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5. BIA/Kelsey Local Media Index 2011–2012
Online Local BIA/Kelsey Local Media Index S&P 500
Radio Broadcast TV Yellow Pages
Newspaper Diversified Media Cable
Outdoor Onine Advertising & Search
500
450
400
350
300
250
200
150
100
50
0
1/3/2011
6/7/2012
12/14/2011
11/29/2012
3/30/2011
6/24/2011
9/20/2011
3/13/2012
8/31/2012
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6. Getting Ready for 2013
2013 Trend The Lowdown
Nationalizing the Local National retailers will enter the local mix, driven in
Opportunity large part by social media.
Social Delivers Money will flow into social advertising as its reputation
for ineffectiveness fades.
Mobile on the March Long-lagging mobile revenues will take off this year
as new ad formats take better advantage of strong
mobile usage.
The Cloud as Great Cloud-based computing will chip away at the
Equalizer advantages big businesses have over SMBs.
Focus on Selling Figuring out continuous contact and long tail selling
will challenge traditional media companies.
BIA/Kelsey 2013 The National Impact March 18-20, Boston, MA
Leading in Local SMB Digital Marketing Sept. 11-13, Austin, TX
conferences Interactive Local Media, Dec. 10-12, San Francisco,
CA
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7. Quick Take: Our 2013 Predictions
No. 1
No. 2 No. 5
U.S. Mobile Ad Amazon + Apple +
SMB Services
Revenues Top Facebook + Google
Occupy the
$4 Billion = Acquisition Frenzy
Cloud
Reputation
Big Banks Bet No. 7
Management
on Offers & No. 8
Meets Content
Loyalty Double-Digit
Distribution Native Ads
Bump for Online
No. 4 Come into
No. 3 Video Spend
Focus
No. 6 Finally, Props
Local Sellers
for Social
National Innovate Around
Advertising
Retailers Go the Long Tail
Local
No. 9
No. 10
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8. No. 1: U.S. Mobile Ad Revenues Top $4B
“U.S. mobile ad revenues will reach $4.2 billion, a 36 percent
increase over 2012. The portion of this attributed to localized
campaigns will be about $2.1 billion (50 percent).
Growth in mobile local ad spending will be driven by continued
momentum in advertiser evolution to localize campaigns, due to
users’ mobile local intent (i.e., 50 percent of mobile searches are
local). Premiums on higher-performing mobile ads will also drive
this local share shift.”
Michael Boland
Senior Analyst,
Mobile
Source: BIA/Kelsey, 2012
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9. No. 2: SMB Services Occupy the Cloud
“IT infrastructure has long been the predictor of
which software solutions were available to
businesses. Newer and smaller businesses lacked
the required infrastructure for the more robust
software packages typically available to enterprise
clients.
Now that the IT market is moving towards cloud
based computing, robust infrastructure is no
longer required for enterprise-type solutions. This Matt Booth
will dramatically change the local ad market. Chief Strategy Officer,
Sr. Analyst, Online
Watch for SaaS (software as a service) Media
workflow solutions to make their way into the
local market this year and define SMB
products and services for the next decade.”
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10. No. 3: Rep Mgmt. Meets Content Distribution
“Listings syndication, reviews monitoring,
reputation scoring and social management
have been converging toward a single
dashboard. In 2013, the focus shifts to rich
content distribution across publisher
networks. Solutions must ingest, manage
and syndicate coupons/offers/deals, social
feeds, menus, photos, video and more.
Content distribution networks (e.g.,
Jed Williams
SinglePlatform) gained traction – and funding
Senior Analyst,
– by focusing on specific SMB content and Social Media
building a publisher network for broad
distribution. This trend will continue, with
additional rich SMB content ripe for this
distributed model.”
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11. No. 3: SMB Content Distribution Networks
Type of SMB
Company Funding Publisher Network
Content
Yext Real-Time Listings $65.8M 50+
Sold to Constant
SinglePlatform Menus 100+
Contact for $100M
Signpost Offers $5M 1200+
NYC-based
Local Vox Advertorial/Events $7.4M publisher network;
Tribune Media
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12. No. 4: Big Banks Bet on Offers and Loyalty
“Banks and other financial institutions
have been testing the waters of the
deals, offers and loyalty space for the
past couple of years. In 2013, they will
dive in feet first as they look to boost
SMB retention, earn commissions and
cut rewards spending.
We expect major acquisitions and
Peter Krasilovsky
investment in the offers space, VP & Senior Analyst,
building on 2012 investments. The Transactions &
big question is whether the deals Loyalty
space will implode before it
completely transitions to a broader
offers and loyalty platform.”
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13. No. 4: Banks ‘Buy’ Vs. ‘Build’
Financial institutions made at least four acquisitions of transaction
marketing related firms in 2012. That’s just the “buy” versus “build”
component. Overall activity last year with vendors, etc. was intense.
Date of
Financial Institution Transaction Marketing Co.
Acquisition
JP Morgan Chase Bloomspot December 20
Capitol One Bundle.com November 30
MasterCard TruAxis September 6
BarclayCard Analog Analytics June 4
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14. No. 5: AMZN + AAPL + FB+ GOOG = Acquisition Frenzy
“Together, these four dominant Plenty of Cash & Cap
online brands represent roughly Apple Google Facebook AMZN
$900 billion of market capitalization Market Cap
$472B $238B $68B $124B
(mid-Jan.)
and $90 billion of ready cash. As
Available
their respective services Cash $29B $45B $10B $5B
increasingly overlap, we see a fluid (mid-Jan.)
acquisition market developing in Sources: BIA/Kelsey, company reports, 2013
2013-14. This frenzy will be driven
primarily by pressure to grow.
Matt Booth
However, we also expect to see Chief Strategy
Officer, Sr. Analyst,
these companies acquire for Online Media
external talent and expertise. The
year 2013 will be kind to owners of
fast-growing Internet services,
mobile or SaaS businesses.”
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15. No. 6: National Retailers Go Local
“Retailers will increasingly look beyond their own
inventory and customer base this year to become
buyer hubs that also incorporate local sellers.
Amazon has been telegraphing this trend in recent
years, with online stores, comparison shopping,
product inventory and product listing ads adding new
revenue streams to the mix. The rise of social media
is rapidly accelerating this sea change. QVC’s
December acquisition of social classifieds Oodle is Peter Krasilovsky
an example of this trend.” VP & Senior Analyst,
Transactions &
Loyalty
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16. No. 7: Double Digit Bump for Online Video Spend
“Online video ad spend will continue
to increase by double digits, driven
by more advertisers seeing it as a
complement to TV advertising with
new incremental spending but also
drawing spend share away from
display, print and TV.”
Rick Ducey
Managing Director &
Senior Analyst, Video
Source: BIA/Kelsey, 2012 16
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17. No. 8: Native Ads Come into Focus
“This year we expect to see native
advertising gain clearer definition and
scalable solutions. Social networks
continue to drive innovation in native, with
formats combining social context and in-
stream integration.
These formats will begin to be bought and
sold programmatically, enabling larger,
optimized buys and more precise Jed Williams
targeting. As programmatic buying Senior Analyst,
accelerates, it will encourage more Social Media
local publishers to participate by
opening up native inventory to
contextually-targeted placement.”
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18. No. 8: Native Advertising in Social Media
Facebook Mobile App
Install Ads Twitter Promoted Tweets
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19. No. 9: Finally, Props for Social Advertising
“We expect 2013 to be the year that social advertising gains more
respect as new research reveals stronger links to purchase decisions.”
Rick Ducey
Managing Director &
Senior Analyst, Video
New ARF study released Jan 16, 2013 (“Digital & Social
Media in the Purchase Decision Process”) indicates that,
“digital and social media have empowered consumers and
that brands have an important role in facilitating
conversations amongst consumers and themselves.”
Sources: comScore, ARF, 2012
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20. No. 10: Innovation Around the Long Tail
“Directory publishers and others with large
deployed sales forces face a dilemma.
Acquiring and retaining new customers with
a sales force built on high margins just isn’t
economically viable. The average spend is
too low and the churn is too high.
This year we expect to see publishers
invest and innovate around the challenge Charles Laughlin
of profitably acquiring long-tail SVP & Senior
Analyst,
advertisers. This will involve greater use Directional Media
of resellers, low-cost telesales, direct
marketing and self-service.”
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21. JOIN US AT
March 18-20, 2013
Boston, MA
Westin Copley Place
LEADING IN LOCAL: The National Impact will zero in on Attend LEADING IN LOCAL for
how local has evolved as an important channel not only for
actionable insights from today's
small businesses, but for national players who are targeting
interactive local leaders.
locally. The conference will focus on how to leverage local
and win your share of the $134 billion local media market. VIKRAM SHARMA
CEO, Gannett
SESSIONS INCLUDE: Digital Marketing
Services
 SuperForum: Applying Five Local Channels to
National
DOM MOREA
 The Mobile/Social SuperForum: From National to SVP, First Data
Local
 Local Services Marketing: Adding in Social, Mobile
and Content BRIAN HALLIGAN
CEO, HubSpot; Senior
 The Deals/Loyalty + Rewards Landscape: Big Shifts
Lecturer, MIT
in Local Commerce
 Geolocal: New Targeting, New Search, New Maps
 Local Deals and Sales: The New Online and Mobile DAVID KIDDER
Models Author, The Startup
Playbook
 Media Leaders: Applying The Lessons of Leading in
Local
Special Code: PREDICTIONS (Save $200 on registration)
www.biakelsey.com/LeadinginLocalBoston Reserved.
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22. What It Takes To Lead In Local
& How BIA/Kelsey Can Help
 Information on the Market
 Forecasts, SMB Research, Market Data
 Information on the Competition
 Competitive Intelligence
 Innovation & Best Practices
 Reports, Advisory, Conferences
 Top Executive Buy-in
 Concierge Service, Advisory & Custom Research
 Strategic Consulting
 Expert strategy and planning, actionable recommendations
 Funding
 Investment Banking & Mezzanine Funding
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23. Driving Success with Insights,
Analysis and Consulting
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Drive value
Building Success with expert services
for Clients from the Financial / Strategic
Consulting
Ground Up
Make decisions with reliable,
actionable market insights
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Identify, analyze and manage
the competition
Competitive Intelligence
Track local marketplace dynamics
Media Ad View
Networking, deal-making, informative
Conferences
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24. Questions and Comments:
Rick Ducey
rducey@biakelsey.com
703.802.2995
© 2013 BIA/Kelsey. All Rights Reserved.
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