Key Trends in Mobile Content Usage & Mobile Advertising. February 12, Kevin Muoio

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1 Key Trends in Mobile Content Usage & Mobile Advertising February 12, 2009 Kevin Muoio

2 Agenda About comscore M:Metrics Mobile Handset Landscape Mobile Content Consumption State of Mobile Advertising Mobile Advertising Case Study

3 M:Metrics Syndicated Services Comprehensive market intelligence to help companies profit from mobile convergence. Direct behavioral measurement of the most active mobile media consumers. The who, what, where and when of advertising on the mobile web

4 A Riddle Capabilities: 1) Initiate phone calls 2) Receive phone calls Capabilities: 1) Too Many to Name

5 Ubiquitous Computing Always on always connected Mobile consumers carry most / all of the time Ability to view (Web, Photos, Videos, etc.) Ability to create (Web, Photos, Videos, etc.) Ability to share with other phones, web, etc. Ability to interact with Advertising Desktop document access Etc. (oh yeah talk is still available)

6 So if this is about ubiquitous computing and our mobile handsets are so super powerful Why isn t mobile media a bigger market? Why isn t mobile advertising generating more revenue?

7 Universe of Active Handsets in the US Classics Still in use TODAY, 10 years later Cutting Edge Devices Mobile Media Capabilities: Mobile Media Capabilities: 1) SMS 2) Game* *Snake - available on Nokia phones only 1) SMS 2) Games 3) Ringtones 4) Mobile Web 5) Applications 6) 7) Picture Messaging 8) Instant Messaging 9) Video 10) GPS 11) Music Playback 12) Camera 13) Video Camera

8 Universe of Active Handsets in the US Feature Phones Smartphones Feature Phones make up 89% of the market, many of them are current devices, but plenty are also older, less capable handsets Smartphones are 11% of the US Market

9 Smartphone Owners Doubled Last Year % YoY Growth * Mobile phone owners whose primary mobile phone runs Symbian, Windows, Android, Palm, RIM or Apple operating systems 9

10 Smartphones Move from Geek to Chic Stubby antennas fashion objects Expensive corporate tools $ consumer gadgets January models November models

11 ... and Smartphones Drive the Mobile Audience 11

12 iphone Has Raised the Bar for Consumers 12

13 Consumption is Showing Signs of Evolving As We Move From Mobile 1.0 to 2.0 Increase: Text Messaging (+26% YOY) ( +21% YOY) Sent Photos (+49.2% YOY) Sent Videos (+ 51.5% YOY) News & Info Via Download (+13.2% YOY) Watched TV (+ 19% YOY) Ringbacks ( +40.1% YOY) Steady, or Slight Decline: Ringtones (-5% YOY) News & info via browser, text alerts (-10% YOY) IM ( +5.5% YOY) Fixture Evolutionary Nascent

14 Applications growing quickly, but still lag Web consumption by a large margin YoY News & Info Audience Browsing + 52% Applications +98% 14

15 Top 10 mobile web news brands Top 10 Mobile Web News Brands, by Gender, US comscore MobiLens, October 2008 Male Female 1. CNN 1. CNN 2. ESPN 2. Yahoo! 3. Yahoo! 3. The Weather Channel 4. The Weather Channel 4. Google 5. FOX 5. FOX 6. Google 6. ABC News 7. CBS 7. AOL 8. MSNBC 8. MSNBC 9. ABC News 9. CBS 10. NFL.com 10. ESPN 15

16 16

17 US Mobile Market Snapshot Overall growth of mobile subscribers slowing (+5% YoY) Market is approaching saturation Carrier growth dependent on winning customers from competitors Data services driving revenue growth Continued increases in key drivers of mobile media Smartphones (100% growth in last year) Greater penetration of 3G / Mobile Broadband handsets (120% growth in last year) Widespread use of mobile media More capable devices setting the pace for the market Smartphone owners are mobile media Power Users 33% of news and information consumers access mobile content daily 17

18 So What s Going On in Mobile Advertising? 18

19 Mobile Advertising: Where are we on the Hype Curve?

20 Advertising Being Embraced in Mobile Text advertising & marketing Ad-supported Downloadable Applications Ad-supported mobile video 112MM Text Users 48MM Mobile gamers 14MM Mobile video viewers [iloop Mobile] [Greystripe] [Mywaves]

21 Overall Mobile Marketing A Market Place Still Largely Defined By Its Inhibitors Usage: No consensus on what key device features needed for mobile to be a dependable advertising platform User Interface: Proliferation of different designs of handheld Interface, buttons, & keypads complicate Advertising These variables multiply complexity & cost when it comes to advertising on mobile devices No clear consensus on what consumers will/ will not tolerate No definitive studies in the space around consumer acceptance of ads, nor of the effectiveness of mobile as a platform relative to other mediums Concerns around long term decreasing effectiveness of mobile advertising Various camps seeing the handset ad model very differently, specifically As A Branding Tool: Perceived value in aggregating a quality audience for advertisers, model/ value proposition similar to magazines As A Direct Response Tool: Perceived value as a tool to drive contextual, often location based activities Platform Issues Consumer Response Issues Deal Structures NOT standard Impact /effectiveness of campaigns NOT measurable enough Time to market NOT quick enough NOT enough Standards As a Marketing Tool: Perceived value is the phone as an extension of other mediums, place to finish conversations started elsewhere Ad Model Issues Marketplace Issues On-Deck vs.. Off-Deck Carrier Lack of Flexibility (perceived)

22 SMS Ads Consumer Interaction is Substantial SMS Campaign Interaction 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 Number of Mobile Subscribers who received at least 1 SMS advertisement 10,000,000 0 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Number of respondents Apr-08 May-08 Jun-08 For November 2008, 16% of mobile subscribers who received an SMS advertisement responded to at least one ad Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 S1 S2

23 Mobile Subscriber interaction with Short Codes Short Code Interaction 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 Number of mobile subscribers w ho responded to Poll or Contest via Short Code Number of respondents to Advertisement via Short Code May- 08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 In November 2008, over 13MM responded to a poll or contest (6% of mobile market) while over 6 million responded to an advertisement via short code (3%)

24 Mobile Web Drawing Diverse Advertisers Advertiser by Sector, Oct. '07 IT Equipment 1.4% Consumer Electronics 1.6% Specialized Consumer Services 2.2% Automobile Manufacturers 2.3% Diversified Banks 2.4% Systems Software 2.8% Communications Equipment 5.3% Broadcasting & Cable TV 6.2% Application Software Wireless Telecommunication Services Internet Retail 10.8% 11.5% 13.5% Content Provider 29.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Share of 67,021 Ad Instances

25 Proctor and Gamble December Display Ads Over 300 different creatives Product Advertised: Covergirl Wetslicks, Always Infinity, Dayquil, and Nyquil English and Spanish language campaigns Ads ran on over 70 of the 400 mobile websites MMetrics monitors 25

26 CASE STUDY: Greystripe Background and Objectives Greystripe operates the world's first in-game mobile ad network and the world's first ad-supported mobile game distribution platform. Greystripe gives brands the ability to target the iphone audience for the first time through rich media ads. The objective of this study is to measure the impact of the Axe Dirty Night Determinator campaign running on the iphone. 26

27 Interacting with the Flash ad significantly increases purchase intent % who would consider purchasing Axe By Gender Lift +15 % Lift: +25% Lift +13 % Lift: +21% 52% 48% 59% 48% Lift +2 % Lift: +3% The campaign was most successful at increasing purchase intent among males Q4. Which of these men s shower brands, if any, would you consider purchasing? % selecting Axe Base: Test N=2447. Control N=943. Exposed No interaction N=2321. Exposed Interacted N=126 Indicates significant difference at 95% confidence Male Female Male Female Control 27 Test

28 Questions? Thank you! Kevin Muoio

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