A digital year in review - Comscore

1© comScore, Inc. Proprietary.


A Digital Year in Review

What You Need to Know Moving Ahead

Graham Mudd

VP Search & Media


Topics for Discussion

State of the Internet

– How users spend their time online

– Social networks & user generated content

– Online video trends

– The world of search

– The rise of mobile

U.S. E-commerce Trends

State of U.S. Online Advertising Market

Measuring Online Advertising Effectiveness


State of the Internet


66%

14%

34%

86%

1996 2010

0

200

400

600

800

1,000

Mil

lio

ns

Online Population

by Geography

Source: comScore Media Metrix July 2010

Online Population

Growth Over Time

Rest of the

World

US

Online Population: U.S. still growing but losing share of users as the

rest of the world grows faster

Total

U.S.

There are approximately 1.3 billion people online today. 86% are located outside the U.S.


comScore Leverages Rich Panel Data to Deliver Unique and Broad

Digital Business Analytics

The Only Global Measurement

of Audience and E-commerce

170+ Countries Under Measurement

43 Markets Reported

2 Million Person Panel

360°View of Person Behavior

V0910


Topline view of U.S. Internet activity in August 2010

213MM Americans used the Internet

Online an average of 25 days in the month

Spent an average of 32 hours online in the month

Viewed an average of 2,739 pages

Spent an average of 5.0 hours with email alone

90% of users searched, conducting 119 searches per searcher

181MM viewers watched an average of 198 videos per viewer

Source: comScore Media Metrix August 2010


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Services (email, IM etc.)

PortalsConversational

Media

Entertainment

Aug-2009

Aug-2010

Total Minutes (000) Spent and % Change vs. YASource: comScore Media Metrix

Internet use in the U.S. is changing. Time spent online shifts from Portals and E-mail to Social Networking, Community and

Entertainment

+21%

Tota

l M

inute

s (

000)

+56%

-1%0%


What Online Categories are Driving Web Usage?

The 31+ hours the average user spends online is divided among several key content

categories such as e-mail, Entertainment and Social Networking.

Top Categories Reach Top Categories Engagement

Source: comScore Media Metrix April 2010

0

100

200

300

400

Ave

rag

e M

inu

tes

/UV

-22%

-8% +4%

+14%+6%

+3%

80%

85%

90%

95%

100%

Re

ac

h

+7pt.

+17pt.

+19pt.

+16pt.

Y/Y % point

changeY/Y % change

+0pt.

+17pt.


What Properties are Driving Web Growth?

Blogging sites

including

Federated

Media

Publishing,

Gawker Media,

and Technorati

Media continue

to grow rapidly.

In addition,

News sites

such as

Examiner.com

Sites and The

Washington

Post Company

have grown

significantly

year over year.0

10,000

20,000

30,000

40,000

50,000

60,000

UV

s (

000)

April 2009 April 2010

+791%

+365%

+235%

+205%

+190%

+160%

+155%

+140%

+137%

+132%

+120%

+100%

+100%

+96%



Sources for Fastest Growing Sites

18,386

2,790

2,266

1,145

YouTube.com

Google

Facebook.com

MySpace

UVs (000)

Warner Music Sources

4,777

1,836

1,340

581

Google

Yahoo!

Facebook.com

Windows Live

UVs (000)

LinkedIn.com Sources

4,402

2,023

2,691

2,164

Google

YouTube.com

Facebook.com

Yahoo!

UVs (000)

Hulu Sources

4,016

1,931

2,711

1,375

Google

MSN

Yahoo!

Facebook.com

UVs (000)

The Washington Post Sources

The majority of traffic to the fastest growing sites comes from Google, Yahoo!,

and Facebook.com.



Profile: Tumblr Users

Tumblr has revolutionized blogging

by allowing users to share

anything—text, photos, quotes,

links, music, and videos—in a

customizable and easy-to-use

interface.

During the month of April, the 3.2

million people who visited Tumblr

consumed 85 pages per visitor.

Age

228Females:

18-24

composition index UV

Income

133$100K+

13

169

Tumblr.com

Jun-09 Apr-10

+1,247%

Total Min (MM)


0

50

100

150

200

250

300

Total Pages Viewed (MM)*

*The first month of data available in Media Metrix for Tumblr.com* is June 2009.



Income

128$75K-100K

Profile: Groupon Visitors

Groupon offers daily local deals that

are made possible through the

power of collective buying. As

opposed to other daily deal websites

where consumers must compete to

get the deals, Groupon‘s community

works together.

The average Groupon visitor spent

only 2 minutes on the site viewing 5

pages throughout the month of April.

Age

173Females:

45-54

composition index UV composition index UV % composition UV

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Unique Visitors (000)*

+1,918%

Gender

41

59 Males

Females

*The first month of data available in Media Metrix for Groupon.com is July 2009.



Profile: ChatRoulette Visitors

Gender

74

26

Age

411Males: 18-24


Income

144$100K+

composition index UV % composition UV

109

1,564

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jan-10 Apr-10


+1,330%

*The first month of data available in Media Metrix for ChatRoulette.com is January 2010.

Males

Females

The average ChatRoulette visitor

consumed 12 pages in April 2010 and

spent 1.7 minutes on each page.



Profile: Foursquare Visitors

Foursquare‘s location-based social networking

service allows users to post their current

location and find their friends. As such, it is

primarily an on-the-go mobile device service.

In April 2010, the average visitor spent only 3.8

minutes on the site viewing 5 pages on a PC.

Income

129$75K-100K

composition index UV composition index UV % composition UV

0

50

100

150

200

250

300

350

400

Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10


Gender

6040

Age

250Males: 21-34

Males

Females

+1,906%

*The first month of data available in Media Metrix for Foursquare.com is November 2009.



Social Networking in the U.S.


50,000

70,000

90,000

110,000

130,000

150,000

Facebook monthly UVs now over 148 million in the U.S. while MySpace still

reaches 60 million – more people than any single multi-channel retailer siteU

niq

ue V

isito

rs (

000

)

Number of Unique U.S. Visitors (000) to Facebook.com and MySpace.com Source: comScore Media Metrix

+61% in Aug. 2010 vs. YA

-7% in Aug. 2010 vs. YA

In May 2009, Facebook surpassed MySpace for the first time in terms of total U.S. UVs, and the site is

continuing to experience explosive growth, now with more than 2X the monthly UVs of MySpace.


46.5 45.9

22.3 21.5

22.5 22.1

8.8 10.5

Aug-09 Aug-10

MySpace

Facebook visitors equally split between under and over 35 yrs of age,

whereas two thirds of MySpace visitors are under 35

Percent Composition of Visitors by Age DemographicSource: comScore Media Metrix

28.8 30.7

22.5 20.9

31.5 28.4

17.2 20.0

Aug-09 Aug-10

Facebook.com

Ages 50+

Ages 35-49

Ages 25-34

Ages 24 &

Under


0

5,000

10,000

15,000

20,000

25,000

30,000

Total Unique Visitors (000) to Twitter.comSource: comScore Media Metrix

Twitter experienced explosive growth in early 2009, which has since leveled off at

about 20+ million monthly UVs.

Un

iqu

e V

isito

rs (

000

)

23.8 million UVs

+14% vs. Aug „09 &

+2043% vs. Aug „08

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akXzD_6YNHCk

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akXzD_6YNHCk


Heavy Social Network Users* Have Distinct Usage Patterns

They spend nearly twice as much time online as the average Internet

user.

They represent 18% of all Internet users but account for over 35% of

the page views consumed online

They visit a social network site an average of 2.7 times a day and

spend 31 minutes per day on social networks sites

They spend three times as much time on social networks as they do

on email or IM

* Defined as the heaviest 20% of social network users

Source: comScore Media Metrix August 2010


Online Video in the U.S.


Online Video Viewing Growing Strongly with Significant Growth

Potential

April 2010

US Video Viewers 178MM

% Of Internet Users Who Viewed

At Least One Video83%

Total # of Viewed Videos 30.3B

YoY Growth in Video Views 81%

Videos per Viewer 170

Viewing Time per Viewer 12 hr, 24 min

Reach of elusive audiences

Better engagement

However, monetization is still a big

challenge:

User experience

Rights for UGC (User

Generated Content)

Value Drivers of Online Video

Advertising

Source: comScore Video Metrix April 2010


Time Spent Streaming Jumps as Long-Form Content Floods the Web

0

30,000

60,000

90,000

120,000

150,000

Total Minutes (MM) Videos (MM)

Total US Streaming Minutes and Video ViewsSites heavy with

long-form content

have burst onto the

scene over the

past year.

Specifically, Hulu is

now the ninth most

popular video

property.

Over the past year,

this new content

type has

contributed to the

hours spent

streaming per

viewer increasing

by 93%.

+81%

April 2009 April 2010

Hours per Viewer 6.4 12.4

Videos per Viewer 110.7 170.5

Minutes per Video 3.5 4.4

+127%



Who Are Video Viewers at YouTube and Hulu?

YouTube and Hulu‘s audiences have recently begun to differentiate themselves from each other.

Hulu‘s audience is now more skewed toward an 18-34 age group with an income of more than $75K.

Age Distribution

17%

18% 19% 19%

15%

13%12%

22%21%

18%16%

11%

<18 18-24 25-34 35-44 45-54 55+

YouTube

Hulu

Income Distribution

53%

10%

16%

21%

50%

10%

17%

23%

<$60K $60-75K $75-100k $100K+

YouTube

Hulu

86 116 106 104 98 92 98 100 103 102YouTube:

60 137 120 98 107 83 92 101 110 113Hulu:

Index to Total Internet Viewers



U.S. Search Market


Global Search Market Growth of 21 Percent since April 2009 More Than 2.9 Million Searches per Minute

0

5,000

10,000

15,000

20,000

25,000

United States

China Japan United Kingdom

Germany France Russia Brazil Korea Canada

Top 10 Countries by Number of Searches (MM) Conducted*

Apr-09

Apr-10+37%

+42%

-2%+5%+32%+69%+19%+27%

+26%

+7%

0

15,000

30,000

45,000

60,000

75,000

90,000

Google Sites Yahoo! Sites Baidu.com Inc.Microsoft Sites Facebook Yandex eBay NHN Corporation

Ask Network Conduit.com

Top 10 Search Properties by Searches (MM) ConductedApr-09

Apr-10

+10% +33%**+20%-14%+34%+77%+337%

+32%

+17%

*Searches based on “expanded search” definition, which includes searches at the top properties where search activity is observed, not only

the core search engines.

**Conduit.com did not have any search activity in April 2009. The first month of activity in qSearch was December 2009.

Google sites

account for

nearly two-

thirds of the

129.5 billion

searches

conducted

worldwide in

April.

Microsoft sites

saw the

greatest gains

among the top

five search

properties,

growing 32% to

4.3 billion

searches, on

the strength of

its successful

introduction of

Bing.

Source: comScore Press Release April 2010: comScore qSearch


203.6 201.6 201.7 202.5 204.1 201.6 206.7 207.9 211.7 214.4 216.0 219.0 217.7

108.4 108.2 108.6 106.4 106.8 105.8 106.6 107.2 107.4 108.0 103.1

109.0 108.7

-

20.0

40.0

60.0

80.0

100.0

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

Apr-2009 Jul-2009 Oct-2009 Jan-2010 Apr-2010

Search growth was driven the increasing base of unique searchers (214MM in

April 2010), while search intensity remained flat versus April 2009.

qSearch: Trends in the Search Market, cont‘d

Total U.S. Unique Searchers (Millions) vs. Search Intensity

+0%

Change vs.

Apr-09

+7%

Source: comScore qSearch

Unique Searchers

(Millions)

Searches Per Searcher


qSearch : Trends in the Search Market, cont‘d

62.5%

27.6%

9.9% 22.7 21.4

100.2 100.0

335.0 339.9

0

50

100

150

200

250

300

350

400

Apr-09 Jul-09 Oct-09 Jan-10 Apr-10

Searches per Searcher

Heavy Searchers (Upper 20%) Moderate Searchers (Middle 30%) Light Searchers (Bottom 50%)

+1%

+0%

-6%

Change vs.

Apr-09

Search IntensityContribution of each segment

to total searches

While all searcher segments‟ search intensity remained relatively flat or decreased since

April 2009, heavy searchers‟ search intensity grew the most Y/Y with 340 searches per

searcher in April 2010.

Source: comScore qSearch


The Rise of Mobile


Mobile On Track to Eclipse the Desktop

Source: Morgan Stanley Research

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Desktop

Mobile

Number of Global Users (Millions)


Mobile Media—It‘s Not Just ―The Kids‖ Who Are Doing It

Average mobile media user is 32 and 46% are female.

Younger demographics create their own ringtones, use social networking services and listen to music

(web 2.0 type services).

Mobile internet services (browsing, apps and e-mail) skew 55-60% male.

Source: comScore MobiLens, 3 month average

ending March 2010

Browser

Used App

Mobile Media

Purchased Game

Purchased Ringtone

Made Own Ringtone

Unlimited Data Plan

Listened to Music

Played Games

Ringback

Social Networking

Email

40

42

44

46

48

50

52

54

24.0 26.0 28.0 30.0 32.0 34.0 36.0

% F

em

ale

Median Age

Demographics of Mobile Media Activities

Higher on chart = more female

Further to right = older

Size of bubbles = # of users


Samsung, Motorola and LG Lead in Mobile Market Share

Although the iPhone gains a large amount of hype, it still only represents 4% of

total mobile owners in the United States and 11% of all mobile media users.

But RIM and Apple have outsized share of mobile media users

22%

22% 22%

8% 8%

5%

2%

19%

13%

17%

19%

4%

13%

1%0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0%

5%

10%

15%

20%

25%

Samsung Motorola LG RIM Nokia Apple Sony Ericsson

% M

ob

ile

Me

dia

Us

ers

% M

ark

et

OEM Market Share for Total Market and Mobile Media Users

Total Market (All Device Owners) Mobile Media


ending March 2010


Mobile Video Remain a Niche

4.7% watched some form of video

“Broadcast TV” (linear video) grew 32% YoY increase in the number of users but still only

represents 1.3% of the market.

* Change of methodology for video measures in April 09

1.0%

1.3%

1.9%

2.1%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

% M

ark

et

TV / On Demand Video Trend, US

Broadcast TV On-Demand Video


ending March 2010


30% of Mobile Owners Now Browse the Mobile Internet

More than 1 million mobile users began browsing the Internet each month (Q1‟09-Q1‟10)

Social networking users are showing the highest gains with 80% YoY growth.

0%

5%

10%

15%

20%

25%

30%

35%


% M

ark

et

Mobile Internet Trends

Apps (except native games) Mobile Browsing Email Social Networking IM


ending March 2010


Mobile Users Access a Wide Range of Content

49%

44%

36%

34%

31%

29%

24%

22%

21%

21%

20%

18%

18%

17%

15%

13%

13%

12%

12%

12%

weather

search

news

maps

sports information

entertainment news

movie information

stock quotes or financial news

bank accounts

tech news

restaurant information

traffic reports

business directories

general reference

classifieds

television guides

gaming information

electronic payments

auction sites

online retail

Top 20 Mobile Content CategoriesReach Among Active Users

(Browsing, Apps, SMS), April 2010, US


ending April 2010


Browsing Audience Larger than App Audience . . . Mostly

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Top 10 Mobile Content CategoriesBrowser v. AppUS, April 2010

Browser

App


ending April 2010


1 in 5 Mobile Phone Owners in the US Now Have a Smartphone

Driving this increase are phones that provide a strong foundation for media

consumption

Apple, RIM, and Android-based phones show the most growth. All three phones

now market to consumers who want to mix business use with a personal phone

0

2

4

6

8

10

12

14

16

18

20

Pe

rce

nt

of

Mo

bil

e U

se

rs

Growth in Smartphone Ownership(as a percentage of total market)

Google

Apple

RIM

Palm

Symbian

Microsoft


ending March 2010


Android Share Has Grown 5X in 12 Months

85% YoY increase in overall smartphone ownership

Apple and RIM have grown share

Android has surged—will soon eclipse Microsoft

21%

25%

2%

10%

27%

14%

38%42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%


% S

ma

rtp

ho

ne

Ow

ne

rs

Smartphone Share Trend

Apple Android Microsoft RIM


ending March 2010


E-Commerce in the U.S.


$42 $53 $67 $82$102

$123 $130 $130

$67

$30$40

$51$61

$69

$77 $84 $80

$44

2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD

$72

$93$117

$143

Non-

Travel

Travel

+29%

+26%

+22%

+19%

+26%

+33%

+26%

+28%

+20%

+24%+24%

+13%

$171

$200

+17%

+20%

+12%

+6%

+9%

+7%

Following a soft 2009, total e-commerce sales through Q2 2010 were up

7% versus year ago. Travel and non-travel up 5% and 9%, respectively.

$214

0%

-5%

$209

-2%

e-Commerce Dollar Sales Growth ($ Billions)Source: comScore e-Commerce Measurement

+9%

+5%

+7%

$111


-15%

-10%

-5%

0%

5%

10%

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

-5%

0%

5%

10%

15%

20%

25%

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10

After two quarters of accelerating sales, e-commerce growth

plateaued in Q2

Quarterly e-Commerce Sales Growth vs. YASource: comScore e-Commerce Measurement

Quarterly Retail & Food Services Sales Growth* vs. YASource: U.S. Department of Commerce (DOC)

17%

23%

19%

11% 13%

6%

-3% 0% -1% -2%

4%4% 5%4%3%

-8%

1%2%

-9%-10%

-7%

2%

23%

3%

7%

6%

10% 9%

When excluding autos, gas

and food/beverage, Q2 retail

sales growth was marginally

softer at +6%

*Note: The U.S. Department of Commerce calculation includes total retail and food

service sales, which also includes motor vehicles and parts dealers.


e-Commerce continues to gain share of retail spending on an apples-

to-apples basis

*Note: e-Commerce share is shown as a percent of DOC‘s Total

Retail Sales excluding Food Service & Drinking, Food & Bev.

Stores, Motor Vehicles & Parts, Gasoline Stations and Health &

Personal Care Stores.

e-Commerce Share of Corresponding Retail Spending*Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail

e-C

om

merc

eS

ha

re

e-Commerce share peaks in

colder seasons (Q4 & Q1)

4.3%

3.7%4.0%

4.6%

5.1%

4.3%4.5%

5.3%

5.9%

5.0%

5.3%

6.4%

6.7%

5.9%

6.3%

7.4% 7.3%

6.5% 6.6%

7.6% 7.7%

6.8%6.9%

7.7%8.1%

7.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%


Monthly e-Commerce Sales Growth vs. YASource: comScore e-Commerce Measurement

Positive growth returned in 2010, with notably strong growth rates in

March & April, a possible result of heavier promotion activity in

Spring of 2010

Month Growth Rate vs. YA

January 2010 +7%

February 2010 +4%

March 2010* +17%

April 2010 +12%

May 2010 +8%

June 2010 +7%

July 2010 +9%

*March saw an additional bump in activity due to timing of Easter

in 2010

For January through July 2010, non-US residents accounted for 6.6% of ecommerce

sales at U.S. sites

Note: International contribution is defined as the percent of e-

commerce sales made on U.S. sites by consumers residing

outside of the U.S. It excludes U.S. sites with non-U.S.

addresses (e.g. amazon.co.uk).

150

200

250

300

350

400

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31

Week

2009 2010

ShopLocal Index of Weekly Offers Per StoreSource: ShopLocal


Lower-and-upper income segments are drivers of online growth in Q2 2010, but

the large mid-income segment shows no growth and is down versus pre-

recession periods two years ago

Income SegmentOnline Retail

Online Retail

Spending

Under $50,000

Total

+14%

+8%

+22%

Income Segment Online Retail Spending Online Retail Spending

Growth in Q2 „10 vs. Q2 „08 Growth in Q2 „10 vs. YA

$50,000 - $99,999 -8% -2%

$100,000 or more +28% +17%

e-Commerce Sales vs. YA by Income SegmentSource: comScore e-Commerce Measurement

Contribution of Total

e-Commerce Growth

for Q2 „10

+5%

-1%

+6%

Bracket

Share of

Spending

in Q2 „10

22%

41%

37%


The State of the U.S. Online Advertising Industry


While online advertising is only 14% of total ad spending, it fared best

out of all declining media spends in 2009

Source: IAB Internet Advertising Revenue Full Year Report, 2009

% of 2009 Ad Spending in the US

Online14%

TV39%

Print22%

Radio9%

Out of Home

4%Other12%

% Change in Advertising Dollars Spent

Newspapers

Trade Advertising

Magazines

Radio

Out of Home

Total Ad Supported

Broadcast TV

Directory

TV Distribution

Cable TV

Internet

Media 2008 to 2009

-3%

-5%

-9%

-12%

-14%

-15%

-17%

-19%

-21%

-25%

-28%


Growth in online advertising slowed and went negative for the

majority of 2009 before increasing in Q4

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-Year Results, April

2010, IAB & PricewaterhouseCoopers

Online Ad Spending $ Billions and % Chg vs. YA

$4.9 $5.1 $5.2

$5.9 $5.8 $5.7 $5.8 $6.1

$5.5 $5.4 $5.5

$6.3

% Chg

vs. YA

+23% +24% +18%+24% +23% +12% +11% -5%+3% -5% +3%-5%


Search Accounts for 47% of Q4 2009 Revenue Followed by Display

Related (Banners+Rich Media+Video+Sponsorships) at 37%

Search47%

Banners23%

Rich Media7%

Video5%

Sponsorships2%

Classifieds9%

Lead Gen6%

E-mail1%

Q4 2009 Revenue

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-

Year Results, April 2010, IAB & PricewaterhouseCoopers


CPMs are lower in Q1, while display ads per total pages remain steady

Source: comScore Ad Metrix, April 2010; Adify‘s Q1 2010

CPM Trend

Display Ads per Total Page

0.6 0.7

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

eCPM Trends Across All Verticals

$4.54 $4.28

$6.04

$5.24

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q2 2009 Q3 2009 Q4 2009 Q1 2010

Median CPMs


Social Networking sites account for 28 percent of all display ad

impressions

Selected Top Display Advertising CategoriesSource: comScore Ad Metrix, July 2010 U.S.

Publisher

Total Display

Ad

Impressions

(MM)

Total Internet : Total Audience 435,685

Social Networking 122,832

Portals 85,583

Entertainment 53,494

E-mail 41,322

Community 23,484

Games 16,830

General News 16,273

Sports 14,401

Photos 13,518

Newspapers 12,330

Social Networking 28.2%

Portals 19.6%

Entertainment 12.3%

E-mail 9.5%

Community 5.4%

Games 3.9%

General News 3.7%

Sports 3.3%

Photos 3.1%

Newspapers 2.8%

All others 8.2%


Social Networking Ads Account for a High Proportion of all Display Ad

Impressions but Because of Low Prices Represent a Far Lower Share of

Display Ad Dollars

Source: comScore Ad Metrix, July 2010

Share of Total

Display Ad

Impressions

Share of Total

Estimated Display

Ad Spending ($)

Social Networking 28.2% 6.1%

Facebook.com 22.3% 3.3%

MySpace 3.8% 1.6%

Facebook.com alone delivers 1 out of 5 display ad impressions online.


Digital, Technology, and Telecom/Mobile Brands Dominate the List of

Top Advertisers on Social Networking Sites Weak

Advertiser Total Display Ad Impressions

AT&T Inc. 1.3B

IAC - InterActiveCorp 1.0B

Google, Inc. 661M

Make-My-Baby.com 590M

Verizon Communications

Inc. 555M

Walt Disney Company 461M

AOL LLC 430M

Experian Interactive 371M

Progressive Corporation 343M

Universal Technical

Institute, Inc. 335M

Top Advertisers on Social Networking Sites in Total Display Ad Impressions (000) Time August 2010Source: comScore Ad Metrix

Advertiser Total Display Ad Impressions

Netflix, Inc. 321M

Microsoft Corporation 302M

Apollo Group, Inc. 279M

Time Warner Inc. 251M

Toyota Motor

Corporation 250M

Sony Corporation 241M

eBay Inc. 238M

Hewlett-Packard

Company 220M

Zoosk, Inc. 212M

Avis Budget Group, Inc. 198M


Mobile Advertising Small but Set to Grow? Search to Dominate?


Online Advertising Effectiveness:

What We‘ve Learned in 2010


Click Rates on Individual Campaign Ads are Minimal

Source: DoubleClick for Advertisers, U.S. Advertisers, Jan- Dec ‗09

DoubleClick Rich Media Formats Only

A Cross-Section of Major U.S. Verticals

0.15%

0.08%

0.09%

0.06%

0.10%

0.09%

0.10%

0.07%

0.08%

0.09%

Auto

B2B

CPG

Financial Services

Media/Entertainment

Retail

Tech

Telecom

Travel

Wellness

Click-Through Rate on Individual Ad Campaigns by Industry Vertical for DoubleClick Rich-

Media Format


Clickers represent a small, rapidly declining segment of Internet

users. Optimizing against clicks means ignoring 84% of Internet

users

July 2007 March 2009

Note: clickers are defined as anyone who clicked on at least one display ad for any campaign in month

Non-Clickers

68%

Clickers 32%

Non-Clickers

84%

Clickers16%

Source: comScore, Inc. custom analysis, Total US Online

Population, persons, July 2007 and March 2009 data periods


2009 U.S. Measured Media Spend

$147 BillionD

ire

ct

Re

sp

on

se

Bra

ndin

g

$91B

$55B

2009 U.S. Online Media Spend

$24 Billion

$6B

$18B

63%

37%

6% of

branding

dollars

30% of direct

response

dollars

With a continued reliance on the click, digital is leaving value

branding dollars on the table

Source: Barclays, ThinkEquity Partners, Brand.net


Measuring the Retail Impact of Online Ad Campaigns

200+ comScore studies conducted to assess impact of paid search and online ads

on online and offline sales

Real world analysis: comScore panelists divided into two matched groups

(exposed and non-exposed to advertising)

– Search only

– Display ads only

– Search and display ads together

– Neither

Passively measured behavior, no surveys involved:

• Online activity through comScore behavioral panel

– Linked to in-store buying through CRM databases, retailer loyalty cards (e.g. Kroger),

credit card data, IRI scanner panel

Analytical design compares behavioral changes in test and control groups from

pre- to post-campaign time periods

58


82% of Online CPG Brand Campaigns Measured by comScore have

Generated an Average Lift of 22% in Brand Sales in Retail Stores

Campaigns we have analyzed

– Cookie Mixes, Cereal, Frozen Snacks, Pizza, Tea, Toothpaste, Juice Drinks, Deodorants,

Snack Bars, Pasta, Meals and more

Online advertising (banners, rich media and video) increased (i.e. lifted) offline sales

in 80% of all campaigns

-20%

0%

20%

40%

60%

80%

100%

Average $ lift was 22%82% of campaigns

showed a positive

sales lift

Percent Lift in

Dollar Sales

Source: comScore CPG Ad Effectiveness Study


Case study: comparison of short-term offline sales lift for CPG brands

resulting from online advertising vs. TV advertising

* BehaviorScan tests conducted over one-year period. comScore studies conducted over a three-month period;

assumes 40% household Internet reach against target.

Source: comScore AdEffx Offline Sales Lift for Internet; IRI

BehaviorScan for TV


The cost of various display advertising strategies can vary

dramatically

Cost Index

Source: “When Money Moves to Digital, Where Should it

Go?”, comScore & ValueClick, September 2010


Not surprisingly, as targeting becomes more focused, reach declines

Reach Index




Retargeting proved to be the most successful strategy for increasing

site visitation




Likewise, retargeting was also very successful in driving search




Creative matters in digital, just as it has in TV advertising for years. Over 50%

of the impact of advertising is driven by the strength of creative.

Ad Quality 52%

Media Weight

13%

Other35%

*Quality of creative is based on ARS Persuasion Score which measures

changes in consumer preference through a simulated purchase exercise with

and without exposure to the creative .

comScore ARS Global Validation Summary includes an evaluation of 396 TV ad

campaigns, utilizing sales data from R. L. Polk New Vehicle Registration, IMS

HEALTH, IRI InfoScan, Markettrack, Nielsen SCANTRACK or Nielsen Retail

Index.

Media Weight = Ad planning elements, such as GRPs, wearout & continuity/flighting of airing

Ad Quality = quality of the creative based on ARS Persuasion Score*.

% Influence on Market Share ShiftsSource: Source: comScore ARS Global Validation Summary

Creative is 4x More

Impactful in Influencing

Sales Than

Planning Variables

Numbers represent the percent variance in market share shifts explained by the corresponding

factors.


Conclusions

Online advertising is gaining share of traditional ad spend

E-commerce is gaining share of consumer spending

Both will emerge in stronger positions when the economy improves

Social Networks have become popular destinations online and their momentum

continues

Social Networks have added an almost ―infinite‖ supply of display ad inventory, and

along with Ad Networks have helped drive down CPMs

The click is not the appropriate metric to use to evaluate the effectiveness of online

ad campaigns. One needs to measure consumers‘ attitudinal and behavioral

response to ads, incorporating latency and offline impact

Even with minimal click rates, display advertising can have a significant impact on

site visitation, trademark search queries, and both online and offline sales

Data driven targeting of online display ads will be a key driver of spend shifting

online in 2011

News & Politics

A digital year in review - Comscore