internet and mobile have the greatest growth potential in terms of time spent with media

© 2012 Crain Communications Inc.

TREND REPORTOctober 29, 2012

INTERNET AND MOBILE HAVE THE GREATEST GROWTH POTENTIAL IN TERMS OF TIME SPENT WITH MEDIA

Internet advertising reached $30B in the U.S., while mobile advertising reached $1.6B, according to the IAB

NOTE: INTERNET EXCLUDES MOBILE. PRINT INCLUDES NEWSPAPER AND MAGAZINE. $20B OPPORTUNITY CALCULATED ASSUMING INTERNET AND MOBILE AS SPEND SHARE EQUAL RESPECTIVE TIME-SPENT SHARE.

SOURCE: ANALYSIS BY MARY MEEKER, KLEINER PERKINS. TIME SPENT AND AD SPEND SHARE DATA EMARKETER, 12/11 INTERNET AND MOBILE AD SPENT AMOUNT PER IAB.

7%

15%

43%

26%

10%

25%

11%

42%

22%

1%

PRINT RADIO TV INTERNET MOBILE

% o

f ti

me

spen

t in

med

ia v

s. a

d s

pen

d,

US

A 2

011

TIME SPENT AD SPEND

$20B+opportunity

in USA



DISPLAY AND RICH MEDIA/VIDEO ARE NOT GROWING AMONG IAB-REPORTING PUBLISHERS

Advertising format share* (percent of total revenue)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

SEARCH DISPLAY BANNERS CLASSIFIEDS RICH MEDIA ANDDIGITAL VIDEO

LEAD GENERATION SPONSORSHIP MOBILE**

2006 2007 2008 2009 2010 2011NOTES: *FORMAT DEFINITIONS MAY HAVE CHANGED OVER THE TIME PERIOD DEPICTED, BOTH WITHIN THE

SURVEY PROCESS AS INTERPRETED BY SURVEY RESPONDENTS. **IN 2011, MOBILE REVENUE IS PRESENTED IN THE FORMATS SECTION OF THE REPORT AS A SEPARATE

CATEGORY FOR THE FIRST TIME.IN ORDER TO PROVIDE A COMPARISON TO THE PRIOR YEAR, WE HAVE REVISED 2010 REVENUES FOR AD FORMATS TO BE ON A CONSISTENT BASIS

SOURCE: IAB FULL-YEAR AD-SPENDING REPORT 2011



INTERNET-DELIVERED MEDIA WILL BEGIN TO CATCH UP TO TV

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TV $61.2 $60.6 $53.8 $59.0 $60.7 $64.8 $65.6 $67.8 $68.9 $72.0

Internet $21.2 $23.4 $22.7 $26.0 $32.0 $39.5 $46.5 $52.8 $57.5 $62.0

Mobile (search and display) $0.1 $0.1 $0.2 $0.5 $1.2 $2.3 $4.0 $6.1 $8.2 $10.3

Newspapers* $42.2 $34.7 $24.8 $22.8 $20.7 $19.4 $18.4 $17.9 $17.4 $17.0

Radio** $19.6 $17.7 $14.3 $15.3 $15.4 $15.8 $16.1 $16.4 $16.5 $16.5

Magazine* $22.4 $20.7 $15.5 $15.2 $15.3 $15.4 $15.3 $15.3 $15.2 $15.3

Directories* $13.2 $12.0 $10.3 $9.0 $8.2 $7.5 $6.9 $6.4 $5.9 $5.5

Outdoor $7.3 $7.0 $5.9 $6.1 $6.4 $6.8 $7.1 $7.4 $7.6 $7.8

Mobile (SMS/MMS/P2P messaging) $0.1 $0.2 $0.2 $0.3 $0.3 $0.3 $0.4 $0.4 $0.4 $0.5

Total $187.2 $176.3 $147.5 $153.7 $158.9 $169.5 $176.3 $184.2 $189.5 $196.7

*PRINT ONLY; **EXCLUDES OFF-AIR RADIO AND DIGITAL NOTE: DIRECTORIES SPENDING INCLUDES YELLOW PAGES AND OTHER. MAGAZINE SPENDING INCLUDES B2B, CONSUMER, LOCAL AND SUNDAY. EMARKETER BENCHMARKS ITS U.S. NEWSPAPER AD SPENDING PROJECTIONS AGAINST THE NEWSPAPER ASSOCIATION OF AMERICA (NAA) DATA, FOR WHICH THE LAST FULL YEAR

MEASURED WAS 2010. MOBILE AD SPENDING INCLUDES DISPLAY (BANNER, RICH MEDIA AND VIDEO), SEARCH AND MESSAGING-BASED ADVERTISING. NEWSPAPER SPENDING INCLUDES CLASSIFIED, NATIONAL AND RETAIL. EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST INTERACTIVE ADVERTISING BUREAU (IAB)/PRICEWATERHOUSECOOPERS (PWC) DATA, FOR

WHICH THE LAST PERIOD MEASURED WAS Q3 2010. ONLINE SPENDING INCLUDES BANNER ADS (STATIC DISPLAY), SEARCH ADS (PAID LISTINGS, CONTEXTUAL TEXT LINKS AND PAID INCLUSION), RICH MEDIA, VIDEO (IN-STREAM, IN-BANNER, IN-TEXT), CLASSIFIED ADS, SPONSORSHIPS, LEAD GENERATION (REFERRALS) AND EMAIL (EMBEDDED ADS ONLY); . EMARKETER BENCHMARKS ITS U.S.

OUTDOOR AD SPENDING PROJECTIONS AGAINST OUTDOOR ADVERTISING ASSOCIATION OF AMERICA (OAAA) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010. OUTDOOR SPENDING INCLUDES ALTERNATIVE, BILLBOARDS, CINEMA, STREET FURNITURE AND TRANSIT. EMARKETER BENCHMARKS ITS U.S. RADIO AD SPENDING PROJECTIONS AGAINST RADIO ADVERTISING BUREAU

(RAB) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010. TV SPENDING INCLUDES BROADCAST TV (NETWORK, SYNDICATION AND SPOT) AND CABLE TV.

SOURCE: EMARKETER, JAN 2012

U.S. total media spending, by media, 2007-2006 (billions)



EVEN TOP PUBLISHERS REPORT AN ONGOING SHIFT TO “PAY BY THE CLICK” ADVERTISING

Internet ad revenues by pricing model*

CPM

0%

10%

20%

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2011

PERFORMANCE

0%

10%

20%

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2011

HYBRID

0%

10%

20%

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2011

32%

64%

4%

* PRICING MODEL DEFINITIONS MAY HAVE CHANGED OVER TIME PERIOD DEPICTED, BOTH WITHIN THE SURVEY PROCESS AS INTERPRETED BY SURVEY RESPONDENTS.

SOURCE: IAB FULL-YEAR SPENDING REPORT 2011



VIDEO IS THE PREMIUM GROWTH FORMAT FOR ONLINE SPEND

2008 2009 2010 2011 2012 2013 2014 2015 2016

Video 126.5% 38.6% 39.6% 42.1% 54.7% 46.0% 40.2% 22.4% 18.9%

Sponsorships -39.2% -1.0% 87.5% 51.7% 27.0% 24.4% 22.8% 11.6% 10.5%

Banner ads 9.4% 3.8% 23.1% 23.9% 19.8% 13.7% 9.5% 5.4% 4.8%

Search 19.8% 1.4% 12.2% 27.9% 27.0% 17.2% 11.2% 7.7% 6.3%

Classifieds and directories -4.4% -29.0% 15.2% -3.8% 1.2% 4.8% 5.6% 6.8% 7.8%

Rich media -0.8% -8.3% 2.2% 2.7% 4.1% 8.4% 6.4% 4.0% 3.7%

Lead generation 6.3% -13.8% -7.7% 22.0% 18.5% 17.7% 11.2% 6.6% 5.5%

Email -4.5% -27.9% -33.2% -31.0% 3.1% 3.3% 3.6% 3.1% 3.8%

Total 10.6% -3.4% 14.9% 23.0% 23.3% 17.7% 13.5% 8.9% 7.8%

NOTE: EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST THE INTERACTIVE ADVERTISING BUREAU (IAB)/PRICEWATERHOUSECOOPERS (PWC) DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010; ONLINE AD DATA INCLUDES CATEGORIES AS

DEFINED BY IAB/PWC BENCHMARK—BANNER ADS (STATIC DISPLAY), CLASSIFIED ADS, EMAIL (EMBEDDED ADS ONLY), RICH MEDIA, SEARCH ADS (INCLUDING CONTEXTUAL TEXT LINKS, PAID INCLUSION, PAID LISTINGS AND SEO), SPONSORSHIPS, LEAD GENERATION (REFERRALS) AND VIDEO (INCLUDING IN-BANNER,

IN-STREAM, IN-TEXT); INCLUDES MOBILE AD SPENDING WITHIN EXISTING FORMATS, MAINLY SEARCH AND BANNERS.

SOURCE: EMARKETER, JAN 2012(

U.S. online ad spending growth, by format, 2008-2016 (percent change)



FACEBOOK TOPS ONLINE DISPLAY PUBLISHERS FOR TIME SPENT AND IMPRESSIONS

0%

5%

10%

15%

20%

8-Jun-12

8-Oct-

12

9-Feb

-12

9-Jun-12

9-Oct-

12

10-Feb

-12

10-Ju

n-12

10-O

ct-12

11-Feb

-12

11-Ju

n-12

11-O

ct-12

12-Feb

-12

12-Ju

n-12

GOOGLE SITES MICROSOFT SITES YAHOO SITES FACEBOOK AOL

Social and Google (which includes YouTube) take off for time spent–at the expense of portals

SOURCES: COMSCORE MEDIA METRIX; *COMSCORE AD METRIX

FACEBOOK: 13.9%

1,343,170* impressions



TOP 11-25 DISPLAY ADVERTISERS BY IMPRESSIONSPercent change from 2010

PROCTER & GAMBLE 2,721,503 +19%

SAMSUNG GROUP 224,696 + 964%

WALT DISNEY CO. 2,344,853 + 2%

COMCAST 312,881 + 578%

AMERICAN EXPRESS 1,279,017 + 60%

TOYOTA MOTOR 2,101,076 -3%

AMAZON.COM 865,889 +116%

IAC INTERACTIVE 2,583,910 -30%

DEVRY 1,167,655 + 43%

BLIZZARD ENTERTAINMENT 1,062,521 + 57%

CITIGROUP 452,246 + 250%

ELECTRONIC ARTS 828,223 + 75%

GUTHY-RENKER 123,090 + 1,045%

FIAT AUTOMOBILES 15,350 + 8,895%

NBC UNIVERSAL 909,075 + 51%

FORD MOTOR CO. 1,108,061 + 23%

SOURCE: COMSCORE JUNE 2012 DATA

Top display advertisers by impressions–June 2012

VOLUME OF DISPLAY DRIVEN



INTERNET DISPLAY AD SPENDING TOP 10 ADVERTISERS

2010

1 TD Ameritrade Holding Corp $248,778

2 Sprint Nextel $238,744

3 Experian Group $229,300

4 General Motors $226,073

5 FMR $225,862

6 E-Trade Financial $182,174

7 Scottrade $171,022

8 Netflix $165,133

9 Verizon Communications $160,987

10 Walt Disney Co. $158,062

JANUARY THROUGH JUNE 2012

1 Experian Group $172,831

2 Comcast $160,164

3 Procter & Gamble $101,792

4 Verizon Communications $98,311

5 General Motors $93,189

6 Walt Disney Co. $78,700

7 Toyota Motor $71,656

8 Sprint Nextel $70,154

9 E-Trade Financial $65,788

10 TD Ameritrade Holding $60,865

Top spenders list over past two years tends to be response-driven

SOURCE: KANTAR MEDIA



THE LUMASCAPE MAP OF DISPLAYHow the display ad players feed into each other to get your ad online

SOURCE: LUMA PARTNERS



SIMPLIFIED LUMA DISPLAY ECOSYSTEM CHARTDisplay marketing is consolidating around a handful of technology “stacks” with Google in everything

MARKETPLACEMARKETPLACE

+

AD

VERT

ISER

/ AG

ENCY

ADVE

RTIS

ER /

AGEN

CY

PUBLISHER PUBLISHER

DEMAND ENABLEMENT

DEMAND ENABLEMENT

ADV

ERTI

SER

AD S

ERVE

R

A

DVER

TISE

R AD

SER

VER

SUPPLY ENABLEMENT

SUPPLY ENABLEMENT

SERVICESSERVICES

DATA MGMT.DATA MGMT.

PUBLISHER AD SERVER PUBLISHER AD SERVER

SERVICESSERVICES

DATA MGMT.LDATA

MGMT.L

SOURCE: LUMA PARTNERS



BRAND SPEND PREDICTED TO GROWU.S. online ad spending by objective, 2011-2016, in billions

NOTE: EMARKETER BENCHMARKS ITS U.S. ONLINE AD SPENDING PROJECTIONS AGAINST THE IAB/PWC DATA, FOR WHICH THE LAST FULL YEAR MEASURED WAS 2010; NUMBERS MAY NOT ADD UP TO TOTAL DUE TO ROUNDING.

SOURCE: EMARKETER, JAN 2012

BRANDING

DIRECT RESPONSE

$0

$10

$20

$30

$40

$50

$60

$70

2011 2012 2013 2014 2015 2016

$62.00

$32.03



MEASUREMENT IS THE KEY TO BOTTLENECK FOR MARKETERSCross-channel efforts are also a challenge

SOURCE: THE STATE OF MARKETING 2011: UNICA’S ANNUAL SURVEY OF MARKETERS

57%53%

47%43%

32% 31% 31%

Measurement,

analysis & learning

Integrating cross-

channel efforts

IT support of

marketing

technology needs

Marketing planning &

objectives

Creative

development &

strategy

Program planning &

targeting

Channel execution &

delivery



WHO SEES MY ADS?AdSafe numbers for viewability vary by creative size and method sold

% OF ADS IN VIEW BY TIME FRAME

TIME FRAME

DIRECT NETWORK EXCHANGE

1-5 SECONDS 49.9% 41.2% 40.3%

15+ SECONDS 21.1% 16.3% 16.4%

% OF ADS IN VIEW BY CREATIVE SIZE AND CHANNEL

AD SIZE DIRECT NETWORK EXCHANGE

728 x 90OVERALL: 36.1%

44.1% 36.2% 35.4%

300 x 250OVERALL: 38.4%

51.7% 37.7% 37.8%

160 x 600OVERALL: 53.1%

68.1% 54% 51.9%

SOURCE: ADSAFE SEMIANNUAL REVIEW 2012



TRADITIONAL BRAND MEASURES

BRAND METRICS:

SOURCE: DYNAMIC LOGIC 2012

Guide to building engagement with display

BRAND AWARENESSMeasures the level of familiarity respondents have with a brand

AD BREAKTHROUGHMeasures the level of “breakthrough” of online advertising by gauging online ad awareness

MESSAGE ASSOCIATIONMeasures the extent to which respondents can match the messages and/or concepts in the creative to the brand

BRAND FAVORABILITYMeasures the extent to which respondents have a positive or favorable opinion of the brand

PURCHASE CONSIDERATIONMeasures the likelihood of respondents to consider the brand in their future purchase

DO YOUR KEY AUDIENCE SEGMENTS:

RECOGNIZE YOUR BRAND WHEN PRESENTED WITH ITS NAME?

RECOGNIZE THAT YOU’VE ADVERTISED ONLINE RECENTLY?

ASSOCIATE YOUR BRAND WITH ITS VALUE PERCEPTION?

APPRECIATE, RESPECT OR OTHERWISE CARRY FAVORABLE OPINIONS ABOUT YOUR BRAND?

INTEND TO PURCHASE OR TAKE ACTION RELATING TO YOUR BRAND?



4.7%

9.3%

25.6%

46.5%

4.7%7.0%2.3%

No/Negative Growth Less Than 5% 5% to 10% 10% to 20% 20% to 35% 35% to 50% 50% or More

BRAND SAFETY: THE $2B PROBLEMQ: How much would you expect display ad spending to grow if brand-safety issues were successfully addressed?

SOURCE: “BEYOND THE GREY AREAS: TRANSPARENCY, BRAND SAFETY AND THE FUTURE OF ONLINE ADVERTISING,” APRIL 2010



NOT SAFE FOR WORK72% of campaign-delivered ads appear next to dicey content

SOURCE: COMSCORE, “THE ECONOMICS OF ONLINE ADVERTISING: HOW VIEWABLE AND VALIDATED IMPRESSIONS CREATE DIGITAL SCARCITY AND AFFECT PUBLISHER ECONOMICS,” AUGUST 2012



RISK COMPOSITION OF PUBLISHERSAd networks tended to have the highest safety-risk levels

SOURCE: ADSAFE SEMIANNUAL REVIEW: Q2 2012 INDUSTRY ANALYSIS AND FINDINGS

0% 2% 4% 6% 8% 10%

PUBLISHERS

EXCHANGE

NETWORKS

MODERATE HIGHVERY HIGH



THE FIVE DEGREES OF DANGERDisplay advertising and the risks to brand safety

TYPE OF RISK CHARACTERIZED BY CONTENT THAT… EXAMPLESPOTENTIAL THREATTO BRAND

DANGEROUSDefies baseline societal norms with respect to taste, respect and basic courtesy; is patently offensive to some audiences

Hate speech, adult content, gratuitous violence, vitriolic commentary on virtually any issue SEVERE

CONTRADICTORYUndermines, challenges or otherwise contradicts the value proposition or general message of an ad or its parent brand

Issue advocacy (or news reporting of such advocacy) directed against a brand or product; aggressive user-generated criticism of brand

MODERATE TO SEVERE

VERTICALLYMISALIGNED

Defies regulatory guidelines or established norms pertaining to marketing of specific products (to specific audience)

Inappropriate/off-label marketing of pharmaceuticals, foods or other consumer goods to sensitive consumer cohorts (e.g., patients, children, etc.)

VARIOUS, BUT TYPICALLY MODERATE TO SEVERE

CONTEXTUALLY INAPPROPRIATE

Unwittingly casts a negative light on the product or parent brand, usually through ironic juxtapostion

Brand diminished by surrounding content that may promote ridicule; often blamed on “poor timing” MODERATE

MESSAGE-MISALIGNED

Does not align with the likely interests of the ad’s target consumer(s); appears starkly out of place

Messages targeted to niche audiences that appear on sites catering to others

MINOR TO MODERATE

SOURCE: “BEYOND THE GREY AREAS: TRANSPARENCY, BRAND SAFETY AND THE FUTURE OF ONLINE ADVERTISING,” APRIL 2010



KELLOGG’S KEY INDICATOR’S FRAMEWORKEstablishing a model for advertising effectiveness–applied initially to online media

SOURCE: KELLOGG’S

PREMARKET QUALITY Does my creative have the right to succeed?

AUDIENCE DELIVERYDid we efficiently reach our target?

IN-MARKET EFFECTIVENESSAre we moving the needle?

• Branded Recognition

• Brand to Buy Next

• % Impressions to Target/Targeting Index

• Frequency of Exposure

• % Impressions in View

• CPM

• Brand Awareness

• Purchase Interest

• Message Association

• Direct Response



SOCIAL NETWORKS/SOCIAL MEDIA MOBILE PLATFORMSCentral to marketing mix: 90% and 74% of marketers are suing social and mobile, respectively

SOURCE: ANA “DIGITAL/SOCIAL MEDIA SURVEY,” 2012

SOCIAL NETWORKS/SOCIAL MEDIA

14%

33%

49%

89%

96%

OTHER

PINTEREST

LINKEDIN

TWITTER

FACEBOOK

MOBILE PLATFORMS

25%

41%

53%

67%

70%

VIDEO ADS

NONVIDEO ADS

TEXT ADS

QR CODES

BRANDED MOBILE

APPS



GROWTH IN DISPLAY ADVERTISING: AUDIENCE BUYINGTwice the rate of search, driven by audience buying

SOURCE: EMARKETER 2012 PROJECTIONS

$18.8

$33.3

$12.8

$28.2

$12.8

$1.4

$0

$10

$20

$30

$40

$50

SEARCH DISPLAY SEARCH DISPLAY

U.S

. DIG

ITA

L A

D S

PE

ND

, IN

BIL

LIO

NS

2011 2016

COMPOUND ANNUAL GROWTH RATES:

55% DISPLAY: AUDIENCE

17% DISPLAY: SITE SPECIFIC

10% SEARCH

AUDIENCE

SITE-SPECIFIC



THE DISCONNECT BETWEEN HOW PUBLISHERS AND AGENCIES VIEW AD INVENTORY

These two sides are focusing on different priorities

Top publishers want to focus here

While agencies put their efforts here

INTEGRATED SPONSORSHIPSMake an impact with site-specific sponsorship

and custom solutions

CONTEXT AND PLACEMENTEducate and influence with site-based placements

AUDIENCE TARGETINGIdentify and inspire key audience with advanced targeting

SCALECapture large audiences efficiently and at scale

SOURCE: PUBMATIC



INVENTORY’S VARIABLE VALUE IN REAL TIMEPubmatics view of how publishers should strategically tier and sell their inventory

Remnant $0.50

$14

$9

$6

CP

M

Impression Volume

Revenue Recaptured by a Secondary Premium Channel: Based on level of targeting and transparency

$20

Pre

miu

m s

ales

SOURCE: PUBMATIC



38%

15%

RISING STARS AD STANDARD AD

RISING STARS GET MORE INTERACTION THAN STANDARD ADSUsers are 2.5 times more likely to interact with Rising Star ads

UNIVERSAL REACTION RATE REFERS TO THE NUMBER OF TIMES A USER’S MOUSE ENTERS FRAME OF AD AND IS ACTIVE (NOT PARKED) FOR 0.5 SECONDS OR LONGER (MAX. OF ONE INTERACTION PER LOAD) DIVIDED BY THE NUMBER OF TIMES AD FULLY LOADS ON PAGE (MAX. ONE LOAD PER PAGE).

SOURCE: IAB RISING STARS RESEARCH WITH IPG MEDIA LAB, FEB. 2012



AD LOADS FOR ONLINE VIDEO INCH UPDespite an increase in number of ads within online video, users aren’t tuning out

SOURCE: FREEWHEEL PROFESSIONAL VIDEO MONETIZATION REPORT, Q2 2012

LONG-FORM CONTENT(20+ MINUTES)

0

2

4

6

8

Q12011

Q2 Q3 Q4 Q1 Q22012

7.96 MIDFORM CONTENT(5-20 MINUTES)

0

2

4

6

8

Q12011

Q2 Q3 Q4 Q1 Q22012

1.32

SHORT-FORM CONTENT(LESS THAN 5 MINUTES)

0

2

4

6

8

Q12011

Q2 Q3 Q4 Q1 Q22012

0.56



IAB’S NEW PORFOLIO OF AD UNITSEntertain, enlighten and engage–at scale



BEYOND THE CLICKKey metrics redefined, IAB working definitions

KEY METRIC: IAB’S RISING STARS WORKING DEFINITION:

UNIVERSAL INTERACTION RATE: The percent of users who purposely enter the

frame of an ad continuously for at least 0.5

seconds or more.

Refers to the number of times a user’s mouse enters the frame of an ad

and is active (not parked) for 0.5 seconds or longer (maximum of

one interaction per load) divided by the number of times an ad fully

loads on the page (maximum one ad load per page).

UNIVERSAL INTERACTION TIME: The average amount of time users spent

on the ad.

The average length of time that a user’s mouse enters the frame of an

ad and is active (not parked) for 0.5 seconds or longer and ends

when the mouse leaves the ad frame, or at least 60 seconds,

whichever happens first.

internet and mobile have the greatest growth potential in terms of time spent with media

Documents

mobile ad spending

newspaper spending

tv spending

outdoor spending

radio ad spending projections

online spending

magazine spending

year adspending report