roundtable 2006 levitt

Online Strategy

Strategic Marketing Roundtable

Vail, August 28, 2006

Leon Levitt

Cox Newspapers

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

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

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

It’s all about the engagement of local audience (differentiator)

And don’t forget frequency! (how do we better measure?)

Managing supply and demand

Sales and business plans drive technology

Changing Media Landscape HOW WE WIN!

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

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

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%

2003 2005

2004

2006

CNI Online Financial Performance (Millions of Dollars)

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 !!!

CNI Online 5 Areas of Focus

1. Creating a greater sense of urgency… We simply must move much faster.

2. 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.

3. Revenue momentum is at a critical stage. Online revenue has increased 125% the past 3 years. Must reduce dependency on classified.

CNI Online 5 Areas of Focus

4. 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.

5. We cannot afford to dismiss collaborative effort.

As the Internet evolves and Craig’s List type

sites multiply, job aggregator sites gain footing,

and Google and Yahoo shift their focus.


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


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

Craig’s list is overrated

Web order entry is key (classified and display)

Changing Media Landscape Questions 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 people’s 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


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!