© comScore, Inc. Proprietary.

1
A Digital Year in Review

What You Need to Know Moving Ahead

Graham Mudd
VP Search & Media

© comScore, Inc. Proprietary. 2

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

© comScore, Inc. Proprietary. 3

State of the Internet

© comScore, Inc. Proprietary. 4

Online Population: U.S. still growing but losing share of users as the
rest of the world grows faster

Online Population Online Population

Growth Over Time by Geography
Total
1,000
34%
800 Rest of the
World
Millions

600
86%

400

66%
200 US
U.S.
0
14%

1996 2010

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

Source: comScore Media Metrix July 2010

© comScore, Inc. Proprietary. 5
comScore Leverages Rich Panel Data to Deliver Unique and Broad
Digital Business Analytics

2 Million Person Panel The Only Global Measurement

360°View of Person Behavior of Audience and E-commerce

170+ Countries Under Measurement

43 Markets Reported

V0910

© comScore, Inc. Proprietary. 6

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

comScore, Inc. Proprietary. 7
Internet use in the U.S. is changing.
Time spent online shifts from Portals and E-mail to Social Networking, Community and
Entertainment

Total Minutes (000) Spent and % Change vs. YA

Source: comScore Media Metrix

100,000
0% -1%
90,000
Total Minutes (000)

80,000
70,000 +56%
60,000 +21%
50,000
40,000
30,000 Aug-2009
20,000 Aug-2010
10,000
0
Services Portals Entertainment
(email, IM etc.) Conversational
Media

© comScore, Inc. Proprietary. 8

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

+17pt.
100% +7pt. Y/Y % point
-22% Y/Y % change
change
400

Average Minutes/UV
95% +17pt. -8% +4%
300 +14%
+19pt. +6%
Reach

+0pt. +16pt. +3%

90%
200
85% 100

80% 0

Source: comScore Media Metrix April 2010

© comScore, Inc. Proprietary. 9
 What Properties are Driving Web Growth?
 Blogging sites
60,000
+96% including
Federated
April 2009 April 2010
Media
50,000
Publishing,
Gawker Media,
and Technorati
40,000
+235% Media continue
UVs (000)

+120%
to grow rapidly.
30,000  In addition,
+100%
+791% +190% News sites
+140% such as
20,000 +205% +155% Examiner.com
+132% +100%
+365% +160% Sites and The
+137%
Washington
10,000 Post Company
have grown
significantly
0 year over year.

© comScore, Inc. Proprietary.

Source: comScore Media Metrix April 2010 10
Sources for Fastest Growing Sites
The majority of traffic to the fastest growing sites comes from Google, Yahoo!,
and Facebook.com.

Warner Music Sources LinkedIn.com Sources

MySpace 1,145 Windows Live 581

Facebook.com 2,266 Facebook.com 1,340
Google 2,790 Yahoo! 1,836
YouTube.com 18,386 Google 4,777
UVs (000) UVs (000)

Hulu Sources The Washington Post Sources

Yahoo! 2,164 Facebook.com 1,375
Facebook.com 2,691 Yahoo! 2,711

YouTube.com 2,023 MSN 1,931

Google 4,402 Google 4,016

UVs (000) UVs (000)

© comScore, Inc. Proprietary.

Source: comScore Media Metrix April 2010 11
Profile: Tumblr Users

Age Income Total Min (MM)

169

Females: +1,247%
18-24 228 $100K+ 133
13

Tumblr.com
composition index UV composition index UV Jun-09 Apr-10

Total Pages Viewed (MM)*

300
250
Tumblr has revolutionized blogging
200
by allowing users to share
150 anything—text, photos, quotes,
100 links, music, and videos—in a
customizable and easy-to-use
50
interface.
0
During the month of April, the 3.2
million people who visited Tumblr
consumed 85 pages per visitor.
*The first month of data available in Media Metrix for Tumblr.com* is June 2009.

© comScore, Inc. Proprietary.

Source: comScore Media Metrix April 2010 12
Profile: Groupon Visitors

Age Income Gender

Females 41
Females: $75K-100K 128
45-54 173
59 Males

composition index UV composition index UV % composition UV

Unique Visitors (000)*

3,500 +1,918% Groupon offers daily local deals that
3,000 are made possible through the
2,500 power of collective buying. As
2,000 opposed to other daily deal websites
1,500 where consumers must compete to
1,000
get the deals, Groupon‘s community
works together.
500
0 The average Groupon visitor spent
only 2 minutes on the site viewing 5
pages throughout the month of April.
*The first month of data available in Media Metrix for Groupon.com is July 2009.

© comScore, Inc. Proprietary.

Source: comScore Media Metrix April 2010 13
Profile: ChatRoulette Visitors

Age Income Gender

Females
26
Males: 18-24 411 $100K+ 144
74
Males
composition index UV composition index UV % composition UV

The average ChatRoulette visitor

Unique Visitors (000)*
consumed 12 pages in April 2010 and
1,800
spent 1.7 minutes on each page. 1,564
1,600
1,400
1,200
1,000 +1,330%
800
600
400
200 109
0
Jan-10 Apr-10

*The first month of data available in Media Metrix for ChatRoulette.com is January 2010.
© comScore, Inc. Proprietary. 14
Source: comScore Media Metrix April 2010
 Profile: Foursquare Visitors

Age Income Gender

Females

40
Males: 21-34 250 $75K-100K 129 60
Males

composition index UV composition index UV % composition UV

Unique Visitors (000)*

+1,906%
400
350
300
250
200
Foursquare‘s location-based social networking
150
service allows users to post their current
100 location and find their friends. As such, it is
50 primarily an on-the-go mobile device service.
0
Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10
In April 2010, the average visitor spent only 3.8
minutes on the site viewing 5 pages on a PC.
*The first month of data available in Media Metrix for Foursquare.com is November 2009.

© comScore, Inc. Proprietary.

Source: comScore Media Metrix April 2010 15
Social Networking in the U.S.

© comScore, Inc. Proprietary. 16

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 site

Number of Unique U.S. Visitors (000) to Facebook.com and MySpace.com

Source: comScore Media Metrix

150,000 +61% in Aug. 2010 vs. YA

130,000
Unique Visitors (000)

110,000

90,000

70,000

-7% in Aug. 2010 vs. YA

50,000

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
© comScore, growth, now 17
Inc. Proprietary. with more than 2X the monthly UVs of 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 Demographic

Source: comScore Media Metrix

Facebook.com MySpace

8.8 10.5
17.2 20.0 Ages 50+

22.5 22.1

31.5 28.4 Ages 35-49

22.3 21.5

22.5 20.9
Ages 25-34

46.5 45.9
28.8 30.7 Ages 24 &
Under

Aug-09 Aug-10 Aug-09 Aug-10

© comScore, Inc. Proprietary. 18

Twitter experienced explosive growth in early 2009, which has since leveled off at
about 20+ million monthly UVs.

Total Unique Visitors (000) to Twitter.com

Source: comScore Media Metrix
30,000 23.8 million UVs
+14% vs. Aug „09 &
+2043% vs. Aug „08
25,000
Unique Visitors (000)

20,000

15,000

10,000

5,000

© comScore, Inc. Proprietary. 19

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

© comScore, Inc. Proprietary.

Source: comScore Media Metrix August 2010 20
Online Video in the U.S.

© comScore, Inc. Proprietary. 21

 Online Video Viewing Growing Strongly with Significant Growth
Potential

April 2010

US Video Viewers 178MM Value Drivers of Online Video

Advertising

% Of Internet Users Who Viewed

83%  Reach of elusive audiences
At Least One Video
 Better engagement
Total # of Viewed Videos 30.3B  However, monetization is still a big
challenge:
YoY Growth in Video Views 81%  User experience
 Rights for UGC (User
Generated Content)
Videos per Viewer 170

Viewing Time per Viewer 12 hr, 24 min

© comScore, Inc. Proprietary.

Source: comScore Video Metrix April 2010 22
 Time Spent Streaming Jumps as Long-Form Content Floods the Web

Total US Streaming Minutes and Video Views

 Sites heavy with
150,000 +127% long-form content
have burst onto the
120,000
scene over the
90,000 past year.

60,000  Specifically, Hulu is

+81%
now the ninth most
30,000
popular video
0 property.

 Over the past year,

this new content
Total Minutes (MM) Videos (MM)
type has
contributed to the
April 2009 April 2010
hours spent
Hours per Viewer 6.4 12.4 streaming per
viewer increasing
Videos per Viewer 110.7 170.5
by 93%.
Minutes per Video 3.5 4.4
© comScore, Inc. Proprietary.
Source: comScore Video Metrix April 2010 23
 Who Are Video Viewers at YouTube and Hulu?

Age Distribution Income Distribution

22% YouTube 53% YouTube

21% 50%
Hulu Hulu
18% 19% 19%
18%
17% 16%
15%

13%
12% 11%
23%
21%
16% 17%

10% 10%

<18 18-24 25-34 35-44 45-54 55+ <$60K $60-75K $75-100k $100K+

Index to Total Internet Viewers

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

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

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.

© comScore, Inc. Proprietary.

Source: comScore Video Metrix April 2010 24
U.S. Search Market

© comScore, Inc. Proprietary. 25

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

+7%
25,000 Top 10 Countries by Number of Searches (MM) Conducted*
 Google sites
20,000 Apr-09
+37%
account for
Apr-10 nearly two-
15,000
+42% thirds of the
10,000 +26% 129.5 billion
+27% +19% +69% +32% +5% -2% searches
5,000
conducted
0 worldwide in
United China Japan United Germany France Russia Brazil Korea Canada
States Kingdom
April.

 Microsoft sites
90,000 +17% saw the
greatest gains
75,000 Top 10 Search Properties by Searches (MM) Conducted Apr-09 among the top
60,000 Apr-10 five search
properties,
45,000 growing 32% to
30,000 4.3 billion
+10% +33% searches, on
15,000 +32% +337% +77% +34% -14% +20% ** the strength of
0 its successful
Google Sites Yahoo! Sites Baidu.com Inc.Microsoft Sites Facebook Yandex eBay NHN Ask Network Conduit.com
Corporation introduction of
*Searches based on “expanded search” definition, which includes searches at the top properties where search activity is observed, not only
the core search engines. Bing.
**Conduit.com did not have any search activity in April 2009. The first month of activity in qSearch was December 2009.

Source: comScore Press Release April Inc.

© comScore, 2010: comScore qSearch
Proprietary. 26
qSearch: Trends in the Search Market, cont‘d

Search growth was driven the increasing base of unique searchers (214MM in
April 2010), while search intensity remained flat versus April 2009.

Total U.S. Unique Searchers (Millions) vs. Search Intensity Change vs.
Apr-09

108.4 108.2 108.6 106.4 106.8 105.8 106.6 107.2 107.4 108.0 109.0 108.7
400.0 103.1
+0%
100.0
350.0

300.0 Searches
80.0 Per Searcher
250.0 214.4 216.0 219.0 217.7
203.6 201.6 201.7 202.5 204.1 201.6 206.7 207.9 211.7
60.0
200.0 +7%
150.0 40.0
100.0 Unique Searchers
20.0
50.0 (Millions)
- -
Apr-2009 Jul-2009 Oct-2009 Jan-2010 Apr-2010

Source: comScore qSearch © comScore, Inc. Proprietary. 27

 qSearch : Trends in the Search Market, cont‘d
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.
Contribution of each segment
Search Intensity
to total searches

400
Searches per Searcher Change vs.
335.0 339.9 Apr-09
350

300

+1%
62.5% 250

200

150
27.6% 100.2 100.0
100

+0%
9.9% 50
22.7 21.4
0

Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 -6%

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

Source: comScore qSearch © comScore, Inc. Proprietary. 28

The Rise of Mobile

© comScore, Inc. Proprietary. 29

Mobile On Track to Eclipse the Desktop

Number of Global Users (Millions)

2,000
1,800
1,600
1,400
1,200
1,000 Desktop
800 Mobile
600
400
200
0
2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Morgan Stanley Research

© comScore, Inc. Proprietary. 30
 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.

Demographics of Mobile Media Activities

54
Purchased Ringtone Higher on chart = more female
52 Further to right = older
Size of bubbles = # of users

50 Ringback
Made Own Ringtone Social Networking
48
% Female

Unlimited Data Plan

Played Games
Mobile
46
Media
Purchased Game
Browser
44
Used App
Listened to Music
42
Email

40
24.0 26.0 28.0 30.0 32.0 34.0 36.0

Median Age

Source: comScore MobiLens, 3 month average

ending March 2010 © comScore, Inc. Proprietary. 31
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
OEM Market Share for Total Market and Mobile Media Users
25% 20%
19% 22% 22% 19% 18%
17%

% Mobile Media Users

20% 22% 16%

14%
13% 13%
% Market

15% 12%

10%

10% 8% 8% 8%

6%
5%
5% 4% 4%
2% 2%
1%
0% 0%
Samsung Motorola LG RIM Nokia Apple Sony
Ericsson
Total Market (All Device Owners) Mobile Media

Source: comScore MobiLens, 3 month average

ending March 2010 © comScore, Inc. Proprietary. 32
 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.

TV / On Demand Video Trend, US

2.5%

2.0% 2.1%
1.9%
1.5%
% Market

1.3%
1.0%
1.0%
0.5%

0.0%
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

Broadcast TV On-Demand Video

* Change of methodology for video measures in April 09

Source: comScore MobiLens, 3©month average

comScore, Inc. Proprietary. 33
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.

Mobile Internet Trends

35%

30%

25%
% Market

20%

15%

10%

5%

0%
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

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

Source: comScore MobiLens, 3 month average

ending March 2010 © comScore, Inc. Proprietary. 34
Mobile Users Access a Wide Range of Content

Top 20 Mobile Content Categories

Reach Among Active Users
(Browsing, Apps, SMS), April 2010, US
online retail 12%
auction sites 12%
electronic payments 12%
gaming information 13%
television guides 13%
classifieds 15%
general reference 17%
business directories 18%
traffic reports 18%
restaurant information 20%
tech news 21%
bank accounts 21%
stock quotes or financial news 22%
movie information 24%
entertainment news 29%
sports information 31%
maps 34%
news 36%
search 44%
weather 49%

Source: comScore MobiLens, 3 month average

ending April 2010 © comScore, Inc. Proprietary. 35
Browsing Audience Larger than App Audience . . . Mostly

Top 10 Mobile Content Categories

Browser v. App
US, April 2010
40,000
35,000
Browser
30,000
25,000
20,000 App
15,000
10,000
5,000
0

Source: comScore MobiLens, 3 month average

ending April 2010 © comScore, Inc. Proprietary. 36
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

Growth in Smartphone Ownership

(as a percentage of total market)
20
18
Percent of Mobile Users

16
Google
14
12 Apple
10
RIM
8
6 Palm
4
Symbian
2
0 Microsoft

Source: comScore MobiLens, 3 month average

ending March 2010 © comScore, Inc. Proprietary. 37
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

Smartphone Share Trend

45%

40% 38% 42%

% Smartphone Owners

35%

30% 27%
25% 25%
20%
21%
15% 14%
10% 10%
5%

0%
2%
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

Apple Android Microsoft RIM

Source: comScore MobiLens, 3 month average

ending March 2010 © comScore, Inc. Proprietary. 38
E-Commerce in the U.S.

© comScore, Inc. Proprietary. 39

 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.

e-Commerce Dollar Sales Growth ($ Billions)

Source: comScore e-Commerce Measurement

+7% +7%
+17% -2%

+19% $214 $209

$200
+22%
$171
+26%
$143 $84 +9% $80 -5%
+29% $77 +12%

$117 $69 +13% $111

$93
$61 +20%
$72 $51 +28%
+6%
$44 +5%
Travel $40 +33% 0%
$30 +24% $123+20% $130 $130
+24% $102
Non- +26% $82 $67 +9%
Travel
$42 $53 +26% $67

2002 2003 2004 2005 2006 2007 2008 2009 2010

YTD

© comScore, Inc. Proprietary. 40

 After two quarters of accelerating sales, e-commerce growth
plateaued in Q2

Quarterly e-Commerce Sales Growth vs. YA

Source: comScore e-Commerce Measurement

23% 23%
25%
17% 19%
20%
15% 11% 13%
10% 9%
10% 6%
3%
5%
-3% 0% -1% -2%
0%
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%

Quarterly Retail & Food Services Sales Growth* vs. YA

Source: U.S. Department of Commerce (DOC)

When excluding autos, gas

7%
10% and food/beverage, Q2 retail
6%
4% 4% 5% 4% sales growth was marginally
5% 3%
2% 1% softer at +6% 2%

0%
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%

-10% -8% -7%

-9%
-15% -10%

*Note: The U.S. Department of Commerce calculation

© comScore, 41
includes total retail and food
Inc. Proprietary.
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

e-Commerce Share of Corresponding Retail Spending*

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

9.0%
8.1%
8.0%
7.4% 7.3% 7.6% 7.7% 7.7%
7.1%
7.0% 6.7%
e-Commerce Share

6.9%
5.9% 6.8%
6.0% 6.4% 6.3% 6.5% 6.6%
5.1% 5.9%
5.0% 5.3% 5.3%
4.3% 5.0%
4.6% 4.5%
4.0% 4.3%
4.0%
3.0%
3.7% e-Commerce share peaks in
colder seasons (Q4 & Q1)
2.0%

1.0%

0.0%

*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. © comScore, Inc. Proprietary. 42
 Positive growth returned in 2010, with notably strong growth rates in
March & April, a possible result of heavier promotion activity in
Spring of 2010

Monthly e-Commerce Sales Growth vs. YA ShopLocal Index of Weekly Offers Per Store
Source: comScore e-Commerce Measurement Source: ShopLocal
Month Growth Rate vs. YA 400
2009 2010
January 2010 +7% 350
February 2010 +4%
300
March 2010* +17%
April 2010 +12% 250
May 2010 +8%
200
June 2010 +7%
July 2010 +9% 150
*March saw an additional bump in activity due to timing of Easter 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31
in 2010 Week

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.
© comScore, Inc. Proprietary. 43
addresses (e.g. amazon.co.uk).
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
e-Commerce Sales vs. YA by Income Segment
Source: comScore e-Commerce Measurement
Bracket Contribution of Total
Income Segment Online Retail Spending Online Retail Spending Share of
e-Commerce Growth
Growth in Q2 „10 vs. Q2 „08 Growth in Q2 „10 vs. YA Spending
for Q2 „10
in Q2 „10

Online Retail
Income Segment
Under $50,000 +14% +22%
Online Retail 22% +5%
Spending
$50,000 - $99,999 -8% -2% 41% -1%

$100,000 or more +28% +17% 37% +6%

Total +8%

© comScore, Inc. Proprietary. 44

The State of the U.S. Online Advertising Industry

© comScore, Inc. Proprietary. 45

While online advertising is only 14% of total ad spending, it fared best
out of all declining media spends in 2009

% of 2009 Ad Spending in the US % Change in Advertising Dollars Spent

Media 2008 to 2009

Out of Newspapers -28%

Online
Home Other 14% Trade Advertising -25%
4% 12%
Magazines -21%

Radio Radio -19%

9%
Out of Home -17%

Total Ad Supported -15%

Broadcast TV -14%
TV Directory -12%
Print
39%
22%
TV Distribution -9%

Cable TV -5%

Internet -3%

Source: IAB Internet Advertising Revenue

© comScore, Inc. Full Year Report, 2009
Proprietary. 46
 Growth in online advertising slowed and went negative for the
majority of 2009 before increasing in Q4

Online Ad Spending $ Billions and % Chg vs. YA

+23% +24% +24% +23% +18% +12% +11% +3% -5% -5% -5% +3%
% Chg
vs. YA
$6.3
$6.1
$5.9 $5.8 $5.8
$5.7
$5.5 $5.4 $5.5
$5.1 $5.2
$4.9

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-Year Results, April
© comScore, Inc. Proprietary. 47 2010, IAB & PricewaterhouseCoopers
Search Accounts for 47% of Q4 2009 Revenue Followed by Display
Related (Banners+Rich Media+Video+Sponsorships) at 37%

Q4 2009 Revenue
Classifieds Lead Gen E-mail
9% 6% 1%

Sponsorships
2%
Video
5% Search
Rich Media 47%
7%

Banners
23%

SOURCE: IAB Internet Advertising Revenue Report, 2009 Full-

Year Results, April 2010, IAB &©PricewaterhouseCoopers
comScore, Inc. Proprietary. 48
 CPMs are lower in Q1, while display ads per total pages remain steady

Display Ads per Total Page eCPM Trends Across All Verticals

0.80
0.70
Median CPMs
0.6 0.7
$7.00 $6.04
0.60
$6.00 $5.24
0.50 $4.54
$5.00 $4.28
0.40 $4.00
0.30 $3.00
0.20 $2.00
0.10 $1.00
$0.00
0.00
Q2 2009 Q3 2009 Q4 2009 Q1 2010

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

CPM Trend
© comScore, Inc. Proprietary. 49
 Social Networking sites account for 28 percent of all display ad
impressions
Selected Top Display Advertising Categories
Source: comScore Ad Metrix, July 2010 U.S.

Total Display
Ad
Publisher
Impressions Newspapers 2.8%
(MM)
Photos 3.1%
Total Internet : Total Audience 435,685
All others
Sports 3.3% 8.2%
Social Networking 122,832 General News 3.7% Social Networking
Portals 85,583
28.2%
Games 3.9%
Entertainment 53,494 Community 5.4%
E-mail 41,322
E-mail 9.5%
Community 23,484 Portals 19.6%
Games 16,830
Entertainment 12.3%
General News 16,273
Sports 14,401
Photos 13,518
Newspapers 12,330

© comScore, Inc. Proprietary. 50

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

Share of Total Share of Total

Display Ad Estimated Display
Impressions 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.

Source: comScore Ad Metrix, July 2010 Inc.

© comScore, Proprietary. 51
Digital, Technology, and Telecom/Mobile Brands Dominate the List of
Top Advertisers on Social Networking Sites Weak

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

Advertiser Total Display Ad Impressions Advertiser Total Display Ad Impressions

AT&T Inc. 1.3B Netflix, Inc. 321M

IAC - InterActiveCorp 1.0B Microsoft Corporation 302M
Google, Inc. 661M Apollo Group, Inc. 279M
Make-My-Baby.com 590M Time Warner Inc. 251M
Verizon Communications Toyota Motor
555M
Inc. Corporation 250M
Walt Disney Company 461M Sony Corporation 241M
AOL LLC 430M eBay Inc. 238M
Experian Interactive 371M Hewlett-Packard
Company 220M
Progressive Corporation 343M
Zoosk, Inc. 212M
Universal Technical
335M
Institute, Inc. Avis Budget Group, Inc. 198M

© comScore, Inc. Proprietary. 52

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

© comScore, Inc. Proprietary. 53

Online Advertising Effectiveness:
What We‘ve Learned in 2010

© comScore, Inc. Proprietary. 54

Click Rates on Individual Campaign Ads are Minimal

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

Media Format

Auto 0.15%

B2B 0.08%

CPG 0.09%

Financial Services 0.06%

Media/Entertainment 0.10%

Retail 0.09%

Tech 0.10%

Telecom 0.07%

Travel 0.08%

Wellness 0.09%

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

DoubleClick Rich Media Formats Only
A Cross-Section of Major U.S. Verticals
© comScore, Inc. Proprietary. 55
 Clickers represent a small, rapidly declining segment of Internet
users. Optimizing against clicks means ignoring 84% of Internet
users

July 2007 March 2009

Clickers
Clickers 16%
32%

Non-
Clickers Non-
68% Clickers
84%

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

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

Population, persons, July 2007 and March 2009 data periods
© comScore, Inc. Proprietary. 56
 With a continued reliance on the click, digital is leaving value
branding dollars on the table

2009 U.S. Measured Media Spend

$147 Billion
Branding

$91B
63%
2009 U.S. Online Media Spend
$24 Billion

6% of
$6B branding
dollars
$18B
Response
Direct

37% $55B
30% of direct
response
dollars

© comScore, Inc.
Source: Barclays, ThinkEquity Partners, Proprietary.
Brand.net 57
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

© comScore, Inc. Proprietary. 58

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

100%
80%
60% Average $ lift was 22%
Percent Lift in 82% of campaigns
Dollar Sales 40% showed a positive
20% sales lift

0%
-20%

Source: comScore CPG Ad Effectiveness

© comScore, Inc. Study
Proprietary. 59
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 Inc.

© comScore, LiftProprietary.
for Internet; IRI 60
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
© comScore, Inc. Proprietary. 61
Not surprisingly, as targeting becomes more focused, reach declines

Reach Index

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

Go?”, comScore & ValueClick, September 2010
© comScore, Inc. Proprietary. 62
Retargeting proved to be the most successful strategy for increasing
site visitation

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

Go?”, comScore & ValueClick, September 2010
© comScore, Inc. Proprietary. 63
Likewise, retargeting was also very successful in driving search

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

Go?”, comScore & ValueClick, September 2010
© comScore, Inc. Proprietary. 64
 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.

% Influence on Market Share Shifts

Source: Source: comScore ARS Global Validation Summary

Creative is 4x More
Other
35% Ad Quality Impactful in Influencing
52%
Sales Than
Planning Variables
Media
Weight
13%
Numbers represent the percent variance in market share shifts explained by the corresponding
factors.

Media Weight = Ad planning elements, such as GRPs, wearout & continuity/flighting of airing
Ad Quality = quality of the creative based on ARS Persuasion Score*.
*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. © comScore, Inc. Proprietary. 65
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

© comScore, Inc. Proprietary. 66