The State of the Internet

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1 The State of the Internet 2 nd Quarter 2012 #SOI12

2 Agenda 1. The State of the Internet Overview 2. Competition in Online Music 3. Traffic Patterns in Online Video 4. The Changing Face of Social Media Presidential Election Coverage 2

3 The internet continues to grow globally with significant Y-o-Y growth in India and Russia South Korea +2% China +6% UK +2% France +2% Brazil +6% Germany +3% Russian Federation +21% India +38% US +3% Japan 0% Top 10 Countries by UVs Source: comscore Key Measures, June

4 UVs in Millions News/Information, Retail, and Community categories show strong growth Y-o-Y 1,600 1,400 1,200 +7% +12% +11% +11% +17% +7% +15% +16% 1, US Non-US World Wide Top Categories Worldwide by UV Source: comscore Media Metrix, June

5 The number of internet visitors is continuing to increase year-over-year in the United States 250,000 Unique Visitors (000) 200, , ,000 +3% 214, ,155 50,000 - June 2011 June Unique Visitors in the US (000) Source: comscore Media Metrix, June 2012

6 Additionally, more people are visiting the internet daily compared to one year ago 250,000 Average Daily Visitors (000) 200, , ,000 +5% 174, ,849 50,000 - June 2011 June Average Daily Visitors in the US (000) Source: comscore Media Metrix, June 2012

7 The Entertainment and Social Media categories were the most popular in Q2 217, , ,520 Unique Viewers by Category (000) 216, , , , , , , , ,000 Entertainment Social Media Portals Community News/ Information 7 Source: comscore Media Metrix, June 2012

8 ONLINE MUSIC 8

9 Online music is a competitive space but offers opportunities for growth through different platforms. 9

10 The Music and Radio categories are competitive, however VEVO claims the most visitors. VEVO MTV Music Group Yahoo! Music Pandora ToneMedia Clear Channel Online CBS Interactive Music MOGMusicNetwork MySpace Music ARTISTdirect AOL Music Spotify 24,730 19,939 16,798 16,316 13,579 13,008 12,571 12,069 10,757 9,869 49,037 56,966 Unique Visitors (000) 10 Source: comscore Media Metrix, June 2012

11 VEVO has utilized Online music sharing to its advantage. Other 35% YouTube 65% Over half of all of VEVO s traffic comes from YouTube. 11 Source: comscore Media Metrix - Source/Loss Report, June 2012

12 Pandora dominates in online radio. 19,939 16,316 3,102 2,832 1,372 Pandora.com Clear Channel Online Radio.com Player Emmis Communications Corporation Radio One 12 Unique Visitors (000) Source: comscore Media Metrix, June 2012

13 And even more in mobile apps. With the 39 million visitors. And a 38% reach among Smartphone users. 13 Source: comscore Mobile Metrix, June 2012

14 Despite Pandora s dominance, Spotify continues to grow rapidly through its downloadable software. 9,868,948 June ,845% 38,038 June 2011 Unique Visitors 14 Source: comscore Media Metrix, June 2012

15 ONLINE MUSIC SUMMARY VEVO has the most visitors in music through its partnership with YouTube. Pandora dominates online radio and Smartphone music apps. Spotify is growing rapidly, and could represent a challenge to Pandora. 15

16 ONLINE VIDEO 16

17 Online video is still testing multiple pricing models and is greatly affected by seasonality. 17

18 Netflix traffic has been volatile over the past year Unique Visitors (000) 36,000 34,000 32,000 Pricing change for new customers Increase in traffic during holiday season 30,000 28,000 26,000 24,000 22,000 Pricing change for existing customers Traffic picks up into the summer season 20,000 May-2011 Aug-2011 Nov-2011 Feb-2012 May Source: comscore Media Metrix, June 2012

19 Hulu visits are greatly affected by the seasonality of television programs Visits (000) 180, ,000 Visits drop off as shows conclude their seasons 140, , ,000 80,000 60,000 40,000 Visits increase as fall shows premiere Visits continue to fall into the summer 20,000 May-2011 Aug-2011 Nov-2011 Feb-2012 May Source: comscore Media Metrix, June 2012

20 SOCIAL MEDIA 20

21 While Facebook s recent IPO has some concerned that its popularity is decreasing, it still offers targeting opportunities to advertisers. 21

22 Unique Visitors (MM) Average Daily Visitors (MM) Visitation to Facebook has grown since 2009 but in recent months it has leveled out Jun-2009 Nov-2009 Apr-2010 Sep-2010 Feb-2011 Jul-2011 Dec-2011 May-2012 Total Unique Visitors (MM) Average Daily Visitors (MM) Source: comscore Media Metrix, June 2012

23 Share of Total Time Spent Online Users are spending more time on other social networks in addition to Facebook 20% 16% 12% 1.5% 2.5% 8% Other Social Networks 4% Facebook 0% Jun-2008 Jun-2009 Jun-2010 Jun-2011 Jun Source: comscore Media Metrix, , U.S

24 Social Media Sites are Intertwined 12% 36% 21% 24% 159,821,745 UVs 31% 15% 24 Source: comscore Media Metrix - Cross-Visitation report, June 2012, U.S..

25 These referrals are a result of social media sites offering different capabilities to the same audience 25

26 UV Composition Index Males on Social Networks: Young males over-index on Twitter, Tumblr and Facebook Source: comscore Media Metrix, June 2012, U.S.

27 UV Composition Index Females on Social Networks: Twitter and Tumblr are more popular among women 18-24, while all ages visit Pinterest Source: comscore Media Metrix, June 2012, U.S.

28 Social Media sites hit different age groups when segmented by gender UV Composition Index Twitter is more popular among M25-34 than F25-34 Tumblr is popular among F18-24 and M25-34 Pinterest is more popular with females than males Males Females Source: comscore Media Metrix, June 2012, U.S.

29 UV Composition Index Pinterest users continue to have the highest BPI behind LinkedIn users LinkedIn Pinterest Twitter Facebook Tumblr 29 Source: comscore Media Metrix, June 2012, U.S.

30 Pinterest users spend fewer dollars on travel than the average internet user % of Total Internet Spending 70% 60% 59% 64% 50% 40% 41% 36% 30% 20% 10% 0% Travel Total Internet Pinterest Non-Travel 30 Source: comscore Cat. Spending Report, June 2012

31 Pinterest users spending is more concentrated in the Home and Apparel categories % of Total Non-Travel Spending 30% 25% 25% 24% 25% 20% 15% 10% 20% 15% 17% 11% 9% Total Internet Pinterest 6% 6% 5% 0% Electronics & Computing Home & Living Apparel, Accessories, & Jewelry General Services Books, Music, & Video 31 Source: comscore Cat. Spending Report, June 2012

32 Retailers take advantage of this concentrated spending by creating pinboards 32

33 Retailers take advantage of this concentrated spending by creating pinboards But on Pinterest, brands must wait for consumers to come to them. This reduces opportunities to extend a brand s reach. 33

34 The Power of Like 2 examines how Facebook provides this increased reach to brands through organic and paid exposure and determines that it can lead to higher brand purchase behavior among those exposed

35 Fans and friends of fans over-index in total spending for leading retail brands Amazon Best Buy Target WalMart Fans Friends of Fans Index of 100 = Segment spent as much, on average, as the general population 35 Source: The Power of Like 2 comscore Social Essentials Nov-Dec 2011

36 Is this higher propensity to spend simply correlation as opposed to causation? 36 The Power of Like 2 comscore whitepaper, June 2012

37 Lift in Online/Offline Buyer Penetration Social Lift: Effect on In-Store and Online Purchasing 4.5% 4.0% 4.0% 3.8% 3.9% 3.5% 3.0% 3.3% 3.0% 3.3% 2.5% 2.0% +19% +27% +21% 1.5% 1.0% 0.5% 0.0% Fans Friends of Fans Combined Control Exposed 37 Source: comscore Social Lift, U.S., Feb-Mar 2012

38 Purchase Incidence Nominal lift in Purchase Incidence Overall, the test group had a higher purchase incidence than the control group 2.4% 2.0% 1.6% 1.2% 0.8% 0.4% 0.66% 0.83% % 1.00% % 1.30% % 1.54% % Week 1 Week 1-2 Week 1-3 Week 1-4 Nominal Lift Test Group Control Group For more information please see The Power of Like Source: comscore Social Lift, U.S., Feb-Mar 2012

39 SOCIAL MEDIA SUMMARY Facebook has transitioned from the growth stage to the maturity stage. Traffic to social networks is highly intertwined. Despite competition, Facebook still provides reach extension opportunities for brands. 39

40 2012 Presidential Election Coverage: How Digital Media is Changing the Way Presidential Campaigns are Strategized. 40

41 DISPLAY ADVERTISING 41

42 Obama s strategy places heavy focus on display advertising 13% MittRomney.com BarackObama.com Display Ad Share of Impressions 87% 42 Display Ad Estimated Spending Source: comscore Ad Metrix, June 2012, U.S.

43 Candidates carefully select publishers to reach target audiences Share of Display Ad Impressions Facebook AOL, Inc. Yahoo! Sites Facebook Google Sites AOL, Inc Q BarackObama.com 43 MittRomney.com Top 3 Publishers by Display Ad Impressions Source: comscore Ad Metrix, Jan March 2012, U.S.

44 Facebook AOL, Inc. Yahoo! Sites Facebook Google Sites AOL, Inc. Share of Display Ad Impressions Strategies shift as target focuses change % -6% +50% +19% Q % -77% BarackObama.com 44 MittRomney.com Top 3 Publishers by Display Ad Impressions Source: comscore Ad Metrix, Jan June 2012, U.S.

45 SOCIAL MEDIA 45

46 Facebook a large source to Mitt Romney s and Barack Obama s campaign site 244,000 26% of Entries MittRomney.com 792,000 12% of Entries BarackObama.com 46 Top Social Media Referrer to Campaign Source: comscore Media Metrix - Source/Loss, June 2012, U.S.

47 3.6 Frequency of Impressions/ Friends of Fans 80.5M Earned Media Impressions Fans & Friends of Fans 5.6 Frequency of Impressions/ Friends of Fans 41.6M Earned Media Impressions Fans & Friends of Fans 27.9M ans Barack Obama 4.7M ans Mitt Romney 47 Source: comscore, Social Essentials, June 2012, U.S.

48 Facebook audience vary between fan pages Obama has the most Facebook fans and leads in reaching Romney leads in reaching 45+ Barack Obama Mitt Romney 48 Facebook Page Composition Index Source: comscore Social Essentials, June 2012, U.S.

49 SEARCH VISIBILITY 49

50 Impressions in Thousands Candidates defend turf and increase brand exposure with PPC. 12,000 10,000 BarackObama.com 8,000 6,000 4,000 MittRomney.com 2,000 - Jan Feb Mar Apr May Jun 50 Trend in Sponsored Link Exposures Source: comscore Search Planner, Jan June 2012, U.S.

51 Romney s PPC campaigns get creative and get clicked Jan Feb Mar Apr May Jun 51 Trend in Paid Search Clicks (000) Source: comscore Search Planner, Jan June 2012, U.S.

52 MOBILE ACCESSIBILITY 52

53 Barack Obama draws more people to his site via Smartphones than Mitt Romney 1.08M BarackObama.com 171K MittRomney.com 53 Total Visitors to Site via Smartphones Source: comscore Mobile Metrix 2.0, May 2012, U.S.

54 POLITICAL NEWS & BLOGS 54

55 Video Metrix UVs in Thousands Media Metrix UVs in Thousands Viewers are increasingly turning to videos for political news and information 7,000 50,000 6,000 5,000 45,000 40,000 35,000 4,000 30,000 25,000 3,000 20,000 2,000 15,000 10,000 1,000 5,000 0 Apr-2011 May-2011 Jun-2011 Jul-2011 Aug-2011 Sep-2011 Oct-2011 Nov-2011 Dec-2011 Jan-2012 Feb-2012 Mar-2012 Apr-2012 May-2012 Jun UVs of News/Information Politics Category Source: comscore Video and Media Metrix, April June 2012, U.S.

56 Audiences consume content across sites with different political ideologies DailyKos.com TalkingPointsMemo.com HuffPost Politics Politico.com NewsMax.com Sites DailyCaller.com Breitbart.com DrudgeReport.com 0% 25% 50% 75% 100% Democrat Independent Republican 56 Unique Visitors by Affiliation Source: comscore Segment Metrix, i360 Segments, June 2012

57 Identified democrats spend significant time on conservative sites DailyKos.com TalkingPointsMemo.com HuffPost Politics Politico.com NewsMax.com Sites DailyCaller.com Breitbart.com DrudgeReport.com 0% 25% 50% 75% 100% Democrat Independent Republican 57 Share of Minutes Consumed by Affiliation Source: comscore Segment Metrix, i360 Segments, June 2012

58 WEB STRATEGY 58

59 Barack Obama currently leads in web audience reach with 3.4M visitors 4,000 3,500 3,000 2,500 2,000 Romney Announces Official Running State of the Union Health Reform 3.4M BarackObama.com Dream Act 1,500 1, M MittRomney.com 0 59 UVs to Candidate Sites (000) Source: comscore Media Metrix, March 2011 June 2012, U.S.

60 Persons 45+ visitors over index on both campaign sites, compared to total internet 0% 5% 10% 15% 20% 25% BarackObama.com MittRomney.com Total Internet % Composition Demographic Breakdown of Site Visitors Source: comscore Media Metrix, April - June 2012, U.S.

61 Mitt Romney leads in high income visitors 0% 5% 10% 15% 20% 25% 30% 35% 15,000-24,999 25,000-39,999 40,000-59,999 60,000-74,999 BarackObama.com MittRomney.com Total Internet % Composition 75,000-99, ,000 or more 61 Household Income Breakdown of Visitors Source: comscore Media Metrix, April - June 2012, U.S.

62 In 2008 the candidate with the strongest web presence became the next US President brings new challenges with a dynamic digital environment. 8,515 Who will be the next US President? 5,534 3,773 2,203 1, Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov Presidential Candidate Sites UVs (000) Source: comscore Media Metrix, Jan Nov 2008, U.S.

63 Barack Obama had the most visitors to his campaign site in Q2 and also showed dominance in display advertising, and search strategy. Mitt Romney has a heavy focus on Facebook as a campaign strategy, and has had much success with his engaging search campaigns. US Internet audiences seem to be preparing for the upcoming election by gathering political news across the web without discriminating against sites with differing ideologies. With such a dynamic online ecosystem, which candidate will come out on top? For more information and analysis on the 2012 Presidential Election please see Digital Politico. 63

64 Key Takeaways The Internet continues to grow Online music is competitive, but with opportunities Video viewership affected by seasonality and promos Social Media shares audiences and is interconnected Digital media continues to change the face of political campaigns 64

65 Thank You! For more information contact

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