The Top Ten Trends of 2011

1. The Top Ten Trends of 2011 Presenters: Matt Kinsman, Executive Editor, Folio: Michael Hughes, Managing Director Research & Consulting, R7M November 2, 2011

2. Objectives • Provide an overview of the top trends impacting publishers and media companies. • Key research findings, statistics and insights from Folio: reporting and surveys, Red 7 Media Research studies, min and other key sources. • Goal: Provide analysis of where the industry is headed focused on revenue models with important information publishers need to know.

3. 1.) Digital

4. Percentage of Publishers with Digital Revenues & Top Digital Initiatives Source: Folio & CDS Global

5. Digital Revenues as Percentage of Total Gross Revenue – 2010 & 2016 Forecast 2016 Forecast 2010 Actual Source: Folio & CDS Global

6. 2010 Actual & 2011 Forecasted Digital Revenue Growth Rates Source: Folio & CDS Global

7. 2010 Actual & 2011 Forecasted Digital Revenue Growth Rates Source: Folio & CDS Global

8. Survey Question: “Do you feel your organization has your digital strategy fully-developed?” Source: Folio & CDS Global

9. 2.)Mobile

10. Publishers Launching a Mobile or Tablet App in 2011 Source: Folio

11. Biggest Digital Opportunities There is lack of agreement on the biggest digital opportunities. In fact, we have categorized 37 different opportunities for publishers. The top ten are presented here. Source: Folio & CDS Global

12. 3.) Social Media

13. Percentage of Publishers Using Social Media Platforms & Services Source: Folio & CDS Global

14. Marketers/Advertisers Increasing Their Social Media Spending & Usage Source: R7M Research & Consulting

16. 4.) Marketers & Advertisers

17. “Best of Times, Worst of Times” for Marketers & Advertisers • Corporate marketing teams have never been more important to their organizations. But they have also never faced as many pressures, challenges and rapid changes either. • Technology is driving these trends. • Most all media and marketing is currently overshadowed by digital and social media. • Consider all the challenges and number of task and initiatives taken on by your clients.

18. What Corporate Marketing Staff Do Source: R7M

19. Online Ads Drive the Most Digital Revenue, Percentage of Publishers Although online ads, e-newsletters and selling subs are the most common, there is no consensus on the mediums and services to focus on to drive revenue. Source: Folio & CDS Global

20. B2B Media Revenues 2010 & 2011 Source: Folio B2B Media CEO Survey

21. B2B Media Fastest Growing Revenue Streams Source: Folio B2B Media CEO Survey

22. Consumer Magazine Revenues Source: Folio Consumer Magazine CEO Survey

23. Consumer Magazine Fastest Growing Revenue Streams Source: Folio Consumer Magazine CEO Survey

24. 5.) Marketing Services

25. Marketing & Information Services • Going beyond custom publishing and targeting budgets besides advertising with: • Direct marketing and lead generation • Events • Search engine marketing and search engine optimization • Video production • Social media • Data • Market intelligence and research • “Providing whatever the client needs.”

26. Marketers/Advertisers that Increased Spending on Media Company Provided Services Source: R7M Research & Consulting

27. Marketers/Advertisers that Increased Spending on In-House Media, Marketing & Initiatives Source: R7M Research & Consulting

28. 6.) Data & Analytics

29. Data, Analytics & Customer Management Areas Considered Extremely & Very Important Database analysis and robust reporting tools 76% of publishers Subscriber and advertiser reporting 72% Subscriber touch points for successful print/Web connection(s) 63% Ability for single customer views 58% Demographic data storage 58% Real-time access to subscriber data 58% Intelligent up-sell and cross-sell systems 53% Source: Folio & CDS Global

30. 7.) Events

31. Exhibition Industry Growth • Slow but steady rebound. Attendance rebounded first in 2010. Now corporations are spending more, while event producers are concerned about attendance size and quality. Very few major new events are being launched. • Convention & Exhibition Industry Growth Q2 2011 • Net square feet of exhibit space: 2.8% • Exhibiting companies: 0.5% • Attendance: 1% • Large corporations are often the largest exhibitors at major shows, and these groups are doing well. Smaller companies can make up a bulk of the attendee base, and these firms are weaker, bringing up concerns about attendance outlook. • Attendance is a leading indicator, while exhibitor participation and spending is a lagging indicator. Source: R7M Research & Consulting; CEIR

32. Why Companies Exhibit at Trade Shows Why Attendees Attend • 57% of attendees say they go to trade shows to see products “in-person” that were first reviewed online. Source: R7M Research & Consulting

33. How to Keep Shows Fresh & Relevant How Show Producers Changed How They Present Value to Attendees Source: R7M Research & Consulting

34. 8.) M&A & Strategy

35. Media M&A Activity – First Half 2011 Source: JEGI

36. Common Strategic Issues & Questions • Paring down portfolios, “shrinking to grow”. • Debate about the value of the diversified, “multi-market/industry” approach. • Digital and e-media; free vs. paid ; print enhanced/replaced with multimedia. • Marketing and information services – going beyond custom publishing. • Focus on commerce, memberships, micro payments. • Comprehensive package offers, paid communities, site-licenses. • Products, services and data for client “workflow”. • Events and trade shows rebounding; most new event launches are small. • People: Editorial over-stretched – “do this webinar or create a new e-newsletter…”; Sales people – selling many products; still learning digital.

37. Expectations for “Reasonable Multiples” Business to Business Media: 6x Consumer Media: 6x Online Media: 7.5x Exhibitions/Trade Shows: 5x Information/Data Publishing: 6x Custom Content: 6x Marketing Services: 6x Social Marketing: 7x (and rising) Source: AdMedia Partners

38. 9.) Content Strategy

39. Reader & Editorial-Focused Digital Services Source: Folio & CDS Global

40. Is There a Place for Original Content in an Aggregated World? Huffington Post proves free digital content works, as long as you don’t pay a large number of the people generating that content Two-pronged approach: Free, daily aggregated content (Cynopsis Media) paired with paid products (CableFAX) Premier Guitar: Launches aggregator but invests in core. Turned first profit (in 30 years) last fall, expects 30% jump In revenue for 2011.

41. Paid Content: 7 Myths 1. “Information wants to be free” 2. “Monetize new through old” 3. “Protect existing products” 4. “Sell via microsales” 5. “Settle for good enough” 6. “Hard paywalls convert best” 7. “Apple charges too much” Source: Kevin McKean, Editorial Director, Consumer Reports

42. 10.)Revenue Shift to Consumers & Readers

43. Revenue Shift to Readers, Driven by Digital • 27% of publishers say a combination of the following drive the most digital revenue: digital edition sales/subs, e-content sales, print subs via website, and e-commerce. • 54% of publishers provide an e-commerce, online shopping environment. • Increasing online, digital circulation and subscriptions is publishers’ second most common overall goal for digital initiatives. Source: Folio & CDS Global

44. Organizations Driving the Most Change Today, According to Publishers The top three groups driving industry change are related to the reader/end user – tech devices, social media sites and readers. Source: Folio & CDS Global

45. Q & A