[PPT] - Brad Seitter EVP , Local & National 1 Average Close % For PowerPoint Presentation

SLIDE 1

Brad Seitter

EVP , Local & National

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SLIDE 2

Average Close % For Local Dealers

Lead Generation:

7-10% (12-15% for good dealer)

Showroom Floor:

30-35% (40% for good dealer)

LG leads close at lower % and at lower profit margin

because LG leads focus on pricing

Showroom customers close at higher % and at higher

profit margin because the leads are higher quality and the focus is on the brand and the dealership

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SLIDE 3

It’s Just Math!

Lead Generation:

7-10%

Showroom Floor:

30-35%

50 more LG leads= 3-5 new customers
50 more customers on showroom floor = 15-18 new customers

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SLIDE 4

How to get more showroom floor leads

Marketing Dollars should MATCH or EXCEED Consumer Time Spent and Consumer I nfluence

SLIDE 5

Time Spent

SLIDE 6

Live TV Continues To Dominate All Video Viewing Across All Age Segments

Hours: Minutes/ Week A18+ A18-34 A35-49 A50-64 A65+ A18-49 A25-54 Live TV 27:13 11:43 22:05 35:30 45:14 16:24 20:44

Time-Shifted TV 3:58 1:41 3:59 5:20 5:34 2:43 3:29 DVD/Blu-ray Device 0:34 0:30 0:37 0:39 0:32 0:33 0:36 Game Console 1:39 3:44 1:37 0:27 0:09 2:47 2:06 Internet Connected Device 4:05 5:20 4:57 3:24 2:10 5:10 5:09 Video on a Computer 0:35 0:52 0:38 0:30 0:14 0:46 0:44 Video Focused App/Web (Smartphone) 1:30 2:30 1:37 0:59 0:35 2:06 1:43 Video Focused App/Web (Tablet) 0:48 1:03 0:55 0:35 0:36 0:59 0:53

6 Source: Nielsen Total Audience Report Q1 2019; Based on Total U.S. Population (Note: Internet Connected Device is inclusive of Smart TV app usage.)

SLIDE 7

Car Buyers Spend the Most Time with Television

f All Ad Supported Platforms

7 Source: GfK TVB Media Comparisons Study 2019. M-S 5A-1A. Persons 18+ Plan to buy/lease auto in next year: Yes. Online/internet platforms such as email, social media, internet radio and websites, are totaled for any online device-PC, Smartphone and Tablets. Broadcast TV News Websites/Apps includes local TV station & network websites/apps for news/weather/sports.

5:48 3:45 2:04 1:21 1:13 1:10 0:48 0:36 0:36 0:33 0:24 0:23 0:16 0:13 0:11 0:10 Television (Broadcast/Cable) Broadcast TV Cable TV Radio Email Social Media Streaming TV Streaming Video Other Than TV Programs or Movies TV Program or Movie Using Streaming Video Search Internet-Radio Broadcast TV News Websites/Apps Newspapers Cable News Channel’s Websites/Apps Magazines Internet-Print (Newspapers/Magazines)

Daily Time Spent Yesterday A18+ Plan to buy/ lease auto in the next year (I n Hours:Minutes)

SLIDE 8

Most Time Spent with TV Programs is On Linear TV

Source: GfK TVB Media Comparisons Study 2019. M-S 5A-1A. Persons 18+ .

5:24 0:51 0:28

TV (Broadcast/Cable) Streaming on TV Set Streaming TV Programs or Movies on any online device (PC, Smartphone, Tablets)

Daily Time Spent Yesterday A18+ (I n Hours:Minutes)

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SLIDE 9

Influence

SLIDE 10

What Influenced Automotive Consumers Most

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60% 55% 49% 50% 47%

4% 4% 5% 5% 5% 4%

3% 3% 3%

4% 4% 4% 4% 4%

3%

4% 4%

3% 3% 3%

4% 4%

3% 3% 3% 3% 3% 3% 3% 3%

4%

3% 3%

Awareness Interest Visit Store/Website for Info Consideration Purchase

Television Social Media Outdoor Broadcast TV Web/Apps Newspaper (Print Only) Radio Streaming TV Direct Mail Internet Video Ad Magazine (Print Only) E-mail Watching On Demand Ad on a Website

Source: GfK TVB Purchase Funnel 2019 Automotive Category A18+ , N = 1265 QA4/QA5/QA6/QA7/QA8 Most important for media that registered 2% or higher.

SLIDE 11

Television Ads Are Motivation To Do Further Research Online

11 Source: GfK TVB Media Comparisons Study 2019. Persons 18+ Plan to buy/lease auto in next year: Yes. Includes only those who answered. Q3 - Has an advertisement on television motivated you to go the Internet to find out more information about that product or service?

Has an advertisement on television motivated you to go the I nternet to find out more information about that product or service?

54% 65%

Adults 18+ Car Buyers

Percent Yes

SLIDE 12

Automotive Tier 1 Media Spend

Source: Kantar Media, 10/1/17-9/30/18, Tier 1 Automotive spending; TV = Network, Spot, Cable Network, Syndication and Spanish-Language Network; * % of Total Ad Dollars 17-Media (includes Digital Media: Online Video, Mobile, Internet Search and Display).

Oct 2017 – Sept 2018

TV TOTAL PARENT DOLS (000) % *

General Motors

$ 1,295,161.4 81.8%

Ford

973,772.5 87.9%

Toyota

807,859.5 80.5%

Fiat/Chrysler

640,123.5 73.1%

Nissan

554,956.4 87.9%

Volkswagen

545,454.1 93.7%

Honda

477,871.7 83.3%

Hyundai-Incl Kia

247,899.0 79.2%

Subaru

246,356.8 85.7%

Daimler

184,302.3 83.8%

Mazda

114,741.3 85.6%

BMW

110,154.2 92.5%

Mitsubishi

99,416.6 88.4%

Jaguar-land Rover/Tata Motors

84,949.8 72.9%

Volvo

51,597.0 74.7%

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SLIDE 13

MYTH

All television is created equal

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SLIDE 14

Broadcast Reaches 100% of TV Homes

14 Source: The Nielsen ComScore, May ‘19

Broadcast 100%

SLIDE 15

The Local Programming of Choice is on Local TV Stations… 92 of the Top 100 Shows in the 2018-’19 Season Were Broadcast

15 Source: Nielsen, NPOWER, 9/24/18-5/22/19; Ranked by A25-54 L+ 1 US AA % (ties broken by 000’s)

S/ O-S/ O Programs Ranked by Adults 25-54 Live+ 1 Ratings

Program Rank Broadcast Stations Ad-Supported Cable Total

1-25 24 1 25 26-50 24 1 25 51-75 20 5 25 76-100 24 1 25

Total 92 8 100 % 92% 8% 100%

SLIDE 16

Only 8 Cable Programs in the Top 100 in the 2018-’19 season

16 Source: Nielsen, NPOWER, 9/24/18-5/22/19; Ranked by A25-54 L+ 1 US AA % (ties broken by 000’s)

Rank Program Network

22 CFP CHAMPIONSHIP ESPN 45 CFP CHAMPIONSHIP SUST ESPN 51 ORANGE BOWL ESPN 55 CFP SEMI-FINAL ESPN 64 ROSE BOWL ESPN 69 COTTON BOWL ESPN 75 NFL REGULAR SEASON ESPN 76 SUGAR BOWL ESPN

SLIDE 17

Auto Intenders’ Vehicle Purchases are Influenced by All Media and Ads

Source: IAB Digital Influence on Auto Intenders

31% 27% 24% 23% 21% 21% 21% 17% 14% 22% 20% 14% 14% 12% 12% 13% 11% 8%

Broadcast TV Read Prod. Article Newspaper Cable TV Internet Ads Magazines Radio Outdoor Billboards All Other Auto Intenders Adults 18+

Please tell us which of the following media influences your CAR/ TRUCK purchases:

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SLIDE 18

What Happens When an Auto Dealer Stops Advertising on Television?

14%

11%

14%

13%

20%

28%

17%

11%

Added Back Traditional TV Advertising

Source: Spots ‘N’ Dots-March 14, 2018; Strong Automotive.

Organic Search Website Traffic Direct Traffic Brand Name Searches Sales Organic Search Website Traffic Direct Traffic Brand Name Searches Sales

Stopped Traditional TV Advertising

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SLIDE 19

Summary

Broadcast TV remains KING! Digital media does not REPLACE a base

broadcast TV buy. Digital media COMPLIMENTS a base broadcast TV buy

Time Spent + Consumer Influence = Media Allocation
A base Broadcast TV buy makes all other media work better…Your social

media, radio, print, billboards, search…all work better with broadcast TV as the base to your buy

A broadcast station is your partner providing one stop shopping for your
n-air message, the right digital platforms, placement strategy and to

create a commercial for your business

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SLIDE 20

Executive Auto I ndustry Overview

SLIDE 21

6 Months 2019 I ndustry Overview

21 Source: Ward’s Auto Data

Sales 8,438,518

2.0% vs 2018

SAAR 17.0 vs 17.2

1.4% vs 2018-DSR

Company 6 Months Sales % Change 2019 vs. 2018

GM 1,409,321 (-3.7%) Ford/Lincoln 1,231,454 (-2.5%) Toyota/Lexus 1,152,108 (-2.5%) Fiat/Chrysler 1,081,970 (-0.5%) Honda/Acura 776,995 (-0.7%) Nissan/Infiniti 717,036 (-7.6%) Hyundai/Genesis 343,335 + 3.1% Kia 304,844 + 4.5% Subaru 339,525 + 5.8% VW 184,608 + 7.5% BMW 156,440 + 2.7% Mercedes Benz 163,421 (-6.4%)

Car 2,496,917 (-8.7% ) Truck/ SUV 5,941,601 + 2.7%

SLIDE 22

1st Half 2019 - I ndustry Highlights

Vehicle sales were down 2% in the first half of 2019. I t was

the third time in the past decade monthly sales did not increase versus the previous year. Overall car share was 32%,

down 8.7% from last year. SUV sales were up 1.7%. Pickup trucks gained 4.6%.

Pluses – Strong Consumer Confidence / Growing Economy / Continued

Job Growth / Increasing Housing Sales / Low Gasoline Prices

Negatives – High Vehicle Prices ($33,655) / Lower Vehicle Incentives

($3,747) / High Dealer Inventory Levels (75) / High Monthly Payments (6%) / Continuing threat of vehicle tariffs from China, Europe and Japan

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SLIDE 23

Car Demand: Declining Market

23

2014 2015 2016 2017 2018

Car % of Retail Sales (YTD)

48% 32% 40% 37% 43%

SLIDE 24

Reflections on 1st Half ‘19

Six month decline

– Pacing below 17MM (2014 levels)

Transaction prices reach $33,655 (+ 3.1% )

– Truck & SUV’s

Fleet to 24% of sales (+ 23% )
6% interest rate

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SLIDE 25

Prices Up Due to Low End Collapse

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Under $20K 20-30 30-40 $40K & Up

19%

4% 0% 2%

Sales by Price Point ‘18 vs ‘17

SLIDE 26

Regional Sales: Large Variations

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‘18 vs ‘17 Retail Sales By Region

North West

2.9%

North Central

2.4%

North East

0.6%

South West

4.1%

South Central + 0.1% South East + 0.1%

SLIDE 27

Ad Spending including Digital

April 2018-March 2019

27 Source: Kantar Media 2019 (All Tiers for Top 15 Auto Manufacturers). * Digital Includes: Online Video, Mobile, Internet Search and Display.

Top 15 Auto Manufacturer Advertising* Total Spot TV Overall Ad $ April 2018-Mar 2019 $9,554,403,890 April 2018-Mar 2019 $3,410,646,916

(35.7% Share)

Overall Ad $ April 2017-Mar 2018 $11,068,227,000 (-13.7%) April 2017-Mar 2018 $3,698,921,900 (-7.8%)

SLIDE 28

28

Forecast for 2019 Weakening Sales

SLIDE 29

Forecast for 2019 16.7- 16.9 Million

Continue Softening Sales

Very Competitive
85 New vehicle launches (+ 31)
Lower Demand – Car Side
Higher Financing Costs
Threat Vehicle Tariffs – Disrupt Total Market

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SLIDE 30

2019 Key Factors

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RETAIL SALES: 13.6M Units (-1.2%) PRICES: Flat to Marginal Growth (0% to + 2%) REVENUE: Flat to Down (0% to -1%) PRODUCTION: More Cuts, Cars trend to 25% of Sales INCENTIVES: Flat to Down, Escalation Risk On Trucks/SUV’s USED MARKET: Continued Growth, Supply & Demand Driven

SLIDE 31

Used Sales: Supply and Sales Rising

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Used Sales @ Franchised Dealers & Off Lease Supply (Millions)

10.4 10.9 11.4 11.8 12.2 2.2 2.3 3.1 3.4 3.7