U.S. Mobile Advertising Industry Outlook

The State of the U.S. Mobile Advertising Industry
and What Lies Ahead

Hans Fredericks, VP, Marketing Solutions, comScore, Inc.
Michael Becker, Managing Director, N.A., Mobile Marketing Association
Scott Hendrickson, VP, Advertising Sales, Where, Inc.
* Note: A copy of this presentation will be sent to all attendees within 48 hours of today’s webinar

Our Presenters

Hans Fredericks Michael Becker Scott Hendrickson
VP, Marketing Solutions Managing Director, North America VP, Advertising Sales
comScore, Inc. Mobile Marketing Association Where, Inc.

© comScore, Inc. Proprietary.

Agenda

 Current Understanding of Mobile Marketing
 Mobile media data and insights into the mobile advertising
opportunity
 Big Brands in Action: Hyper Local Use Cases and Best Practices


About the Mobile Marketing Association

 Seven hundred (700) members strong, the MMA‟ primary focus is to establish
mobile as an indispensable part or the marketing mix.
 The MMA works to promote, educate, measure, guide and protect the
mobile marketing industry worldwide.

STIMULATE GROWTH REDUCE FRICTION

PROMOTE EDUCATE MEASURE GUIDE PROTECT

COLLABORATE

www.mmaglobal.com


comScore Digital Business Analytics

Audience Measurement
Site Analytics
User Analytics Vertical Market Solutions
Unified Digital Measurement™

Social Analytics

Copy Testing
Campaign Verification
Advertising Analytics Ad Effectiveness
Cross Media

Mobile Audience Measurement
Network Analytics & Optimization
Mobile Analytics Customer Experience
& Retention Management

© comScore, Inc. Proprietary. V0910

WHERE Ads™ Reaches 51MM Consumers
The Largest Hyper-local Mobile Ad Network

• Focused on “pre-checkin” and driving local
commerce
• 100% of inventory is location targeted
• 3.5B impressions/mo. via 275+ publisher
partners
• 120,000+ hyper-local ad campaigns daily
• Proprietary Relevancy Ad Serving Technology
• Recently acquired by eBay / PayPal

Hyper-local Reach Publisher Portal


Mobile

It‟s a Big Deal

Really Big Deal!

Grabbing Everyone‟s Attention

Rich Media
Advertising
Whole World
of Apps


Mobile Web & HTML 5

Tablets


“If your plans don‟t include mobile,
then your plans are not finished.”
Wendy Clark, Senior Vice President, Integrated Marketing,
Coca-Cola (IAB Annual Leadership Meeting 2011)


Mobile Marketing Defined

“Mobile Marketing is a set of
practices that enable organizations
to communicate and engage with
their audience in an interactive and
relevant manner through any
mobile device or network.”
(Mobile Marketing
Association, 2009)


MISR image of the Central Amazon


Convergence of Mobile Context in Marketing

Digital Traditional
marketing marketing

Mobile is pulling these forces of marketing together


Available Mobile Paths

Content Proximity


Feature Phones


Smartphones


Connected Devices


Two Inter-dependent
approaches to Mobile Marketing

 Direct (“through”) Outdoor

Through
– Marketer Push Mobile
Media
Events

– Consumer Pull
Email SMS

On
 Indirect (“with”) Package Prox
.
MMS
TV
Mobile

– “Mobile Enabled Traditional Engagement

Inte
Media” Cont
ent
r-
net
App
– Mobile Advertising Print
s
Online

Point of
Radio
Sale


Mobile Tactics Used U.S.

Source: MMA 2nd ANNUAL VIEW FROM MADISON AVENUE (2010)


Mobile Advertising Delivery Mediums

Mobile Web SMS/MMS Mobile Video Apps

Different Ad Executions
• Static/Animated/Rich • Text Ads in SMS • Pre-roll video • Static/Animated
Media Banners or MMS • Post-roll video Banners
• Text Ads •
• Picture Banner (Idle Screen) • Text
• Expandable Ad Units • Rich Media Ad Units
for iPhone and
messaging in
(In App)
• Interstitials
Android MMS • Wallpapers
• Interstitials for • Interactive Ad
iPhone and Android
Units

Other Ad channels: Voice, Bluetooth, Search


U.S vs. Worldwide Mobile Ad. Rev.


Global Ad Revenue Share By Type „10 vs. „15


mobile is about…culture
Is mobile all about Technology?

It’s also about Culture.


Consumer Behavior Depends on the Category

Source: Bringing Life to the Mobile Segment. Carlson Marketing (2010)

Source: North American Technographics Benchmark Survey,
Q2 2010 (US, Canada)
Note: Examples of advanced activities include: downloading applications, checking
news/weather/sports, using mobile banking, checking flight/train/bus status,
researching or purchasing products, using navigation or GPS services, using
coupons, etc.


comScore Mobile Measurement Methodologies

 Complexity and fragmentation of mobile market requires an array of data sources
and methodologies for a 360° view

MobiLens Network Census Site & App Census
Market Tracking via Network Log Analysis Mobile Web, App &
Intelligent Online Survey AdNet Tagging

Mobile Metrix GSMA MMM Ad Metrix Mobile
Smartphone Meter Panel Behavioral media Mobile Ad Tracking
measurement Tools


Mobile Media Users are Nearing a Majority in the US

Mobile Market Segments - Mobile Market Segments - March
March 2010 2011

Mobile
Just Voice, Mobile Media,
Just Voice, Media,
27.1% 45.7%
32.0% 37.8%

88.3 Million
106.8 Million

SMS (and not
mobile
media), 27.2%
SMS (and
not mobile
media),
30.2%

Product: MobiLens
Data: Three month average ending March 2011
Mobile Media User = Used browser, application, native email, stream or download music Country: US, N= 30,817
and broadcast or on demand video (does not include SMS)


Mobile Users Differ Dramatically by Mobile Activity and Content
Accessed

Demographics of Mobile Media Activities
53% Higher on chart = more female
Social Networking Further to right = older
Made Own Ringtone Size of bubbles = # of users
52%

51%

50%
Ringback
Purchased Ringtone Unlimited Data Plan
% Female

49%
Mobile Media
48% Played Games
Used Browser
47% Used App
46% Listened to Music

45% Purchased Game Email

44%
25 27 29 31 33 35 37 39
Median Age

Product: MobiLens
Country: US, N= 30,817


Browser and Application Usage Showing Continuous Growth

Browser and Application Usage Browser, App, SMS Usage
Growth
45.0% 35.0%
50% 48%
40.0% 38.6%
37.3% 45%
35.0% 33.0% 40% 39%
30.1% 37%
30.0% 28.6%

% YoY-Growth
31.0% 30%
% Market

25.0% 26%
30.6%
20.0% 20%
29.0%
15.0%
28.4% 10%
10.0% 27.0%
5.0% 0%
0.0% 25.0%
Used Application Used Browser
(except native games)
App Browser
Mar-2010 Mar-2011 Year-on-Year Growth
SMS* App OR Browser
App OR Browser OR SMS*
*Excludes Mobile to Mobile
Product: MobiLens


Facebook and Google Search Lead Market on Both Mobile and PC

Brand Market Share - PC vs Mobile
80% 73% 72%
70%

60%
52% 53%
50% 46%
% Group

42%
40% 37%
34%
29% 28% 29%
30% 28% 25%
24% 20% 20% 22%
18%
20% 15% 16% 15%
12% 12% 14% 10%
11% 8%
10%
0.4%
0%

PC Mobile

Product: MobiLens / Media Metrix
Data: March 2011
Country: US


Time Spent on Mobile Skews to Social Media Sites

347 Average Minutes per Visitor – Mobile vs. PC Internet
269 (Top Mobile Properties)
215 203
144 130
82
59 79 56 52 42 22 22 32 21 11 17
Mobile
6 13
PC

Average Minutes per Visitor – Mobile vs. PC Internet
652
(Top Mobile Minutes per Visitor Properties)

315 347
269
215
154 155 Mobile
107 97 95 82 80 74 64 61 30 59 79
3 2 PC

Product: Mobile Metrix / Media Metrix
Data: March 2011
Country: US


Double-Digit Growth in All Major Categories – Led by Social Media

Top 10 Mobile Categories - Year-on-Year Growth
80,000 45.7% 50.0%
43.3%
70,000 40.2% 45.0%
38.1%
30.7% 40.0%
60,000 33.4%
Unique User (000)

32.1% 31.5% 35.0%

%YoY-Growth
50,000 30.0%
24.8%
40,000 16.9% 25.0%
30,000 20.0%
15.0%
20,000
10.0%
10,000 5.0%
0 0.0%


Product: MobiLens


Mobile Delivering Incremental Reach; Mobile Only is Over 40% of
Pandora‟s Audience

Incremental Reach from Leading U.S. News Brands' Mobile Websites
Pandora – Total Universe
Source: comScore Total Universe Report, U.S., April 2011 (beta data)
Audience (000)

35,000 8.0%

6.7% 7.0%
13,381 42%
30,000
Total Universe Audience (000)

5.5% 6.0%
25,000 5.2%

Incremental Reach
4.9%
5.0% 7,135 23%
20,000
4.0%
15,000 35%
11,126
3.0%
2.3%
10,000
2.0%
Visitors
5,000 1.0% Home/Work PC
Home/Work PC and Mobile
0 0.0% Mobile
NY Times LA Times Wash Post WSJ Chicago Trib

Total Universe Audience Incremental Reach Product: comScore Total Universe Report.
Data: April 2011
Country: US
Beta Data


Mobile Social Media Booming in US

 Almost daily users of mobile US Social Media Unique Mobile Users
social media +70% - growing 70,000
faster than category 60,000

 Conversational Media in Mobile 50,000
Almost every
Metrix (smartphone panel) has 40,000 day
71% reach 30,000 At least once
a week
– 36% minutes, 44% PVs 20,000 One to three
– Nearly all is Facebook with 87% 10,000
times in the
month
of category minutes and 83% of
0
PVs

Product: MobiLens, Mobile Metrix
Country: US


Top Apps Largely Free – Ads Key to Monetization

 Among top 50 apps with widest reach, „Angry Birds‟ is the only paid app
 During March 2011, 12.7% of downloaded apps were paid – including five of the top 20 (Angry Birds, Cut
the Rope, Fruit Ninja, iSlash, Angry Birds Seasons) and ten of the top 50

Top 10 iTunes Apps
% Reach of all Apps
Rank Title Developer Genre Free / Paid
Downloaders
1 Facebook Facebook Social Networking Free 59.6%

2 Pandora Radio Pandora Media, Inc. Music Free 38.0%

3 Paper Toss Backflip Studios Games Free 28.6%

4 Google Search Google Reference Free 22.9%

5 Backgrounds Stylem Media Entertainment Free 22.7%

6 Google Earth Google Travel Free 22.2%

7 Touch Hockey: FS5 (FREE) FlipSide5, Inc. Games Free 21.7%

8 Skype Skype Software S.a.r.l Social Networking Free 21.4%

9 Myspace MySpace.com Social Networking Free 21.2%
Movies by Flixster, with Rotten
10 Flixster Entertainment Free 20.8%
Tomatoes - Free
Product: iTunes App Tracker
Data: Downloads Ever – March 2011
Country: US


More Advertisers are Turning to Mobile – With Growing Diversity of
Categories and Advertisers

Number of Display Advertisers March 2011 – Advertised Categories
800
1%
700
5%
Consumer Discretionary
600
26% Consumer Staples
Financials
500
Industrials

50% Information Technology
400
Mobile Content and Publishing
6% Telecommunication Services
300
Other
7%
200 2% 3%

100

0

Product: Ad Metrix Mobile
Data: April 2009 - April 2011
Country: US


Mobile subscribers receiving – and responding to SMS ads

 28% of mobile subscribers in the US received one or more SMS Ads in March 2011; of those, 17%
responded to at least one SMS ad

SMS Ad Type – Received vs. Responded
60%
50% Received SMS Ad: 66.1 million
50% Responded to SMS Ad: 11.3 million

40% 36%
32% 30%
30%
20% 16% 18%
12%
10% 8%

0%
SMS Ads Received Responded to SMS Ads
Info about product/service/brand Coupon or discount Contest Donation to charity/non-profit
Product: MobiLens


Smartphones Critical to Mobile Advertising Opportunity

Service Penetration

82%
Used Browser
19%

85%
Used App*
16%
Smartphone
Feature Phone
28%
Saw Ad on Web/In App
5%

8%
Responded to SMS ad
4%

0% 20% 40% 60% 80% 100%

*Except native games
Product: MobiLens


Popularity of Smartphones is Increasing – Bodes Well for Advertising

Penetration – Embedded Base 80% New Devices Acquired
90%
70.7%
80% 80.0% 70%

70% 60%
69.0%
52.3%
60% 50%
47.7%
50%
40%
40%
31.0% 30%
30% 29.3%
20%
20%
20.0%
10%
10%

0% 0%
Mar-2010 Jun-2010 Sep-2010 Dec-2010 Mar-2011 Mar-2010 Jun-2010 Sep-2010 Dec-2010 Mar-2011

Smartphone Feature Phone Smartphone Feature Phone

Product: MobiLens


Google‟s Android Now In the Lead on Smartphones

Smartphone OS Growth Smartphone OS Share
Symbian,
30,000 450%
Palm , 3% 2%
422%
400%
25,000
350%
Microsoft,
7%

% Year-on-Year Growth
300%
Mobile Owners (000)

20,000
250% Google,
35%
15,000 200%
Apple, 25%
150%
10,000
100%
56%
19% 50% RIM, 27%
5,000 1%
0%

0 -20% -19% -50%
Google RIM Apple Microsoft Palm Symbian

Mar-2010 Mar-2011 YoY Growth
Product: MobiLens


Ecosystem Competition Extends Beyond Smartphones

Platform – Installed Base (M),
March 2011  With iPad and iPod Touch, iOS
Smartphone Other Device holds significant lead in
50 addressable audience for
developers
40
– Installed base of 44M devices
30 (65% more than Android)

20

10

0
iOS Android
Product: MobiLens


Tablets and other connected devices redefine “mobile” for advertisers

Share of Page Views by Device Type and Platform

All Connected Devices Excluding Smartphones

23% Smartphone -Android
7% Smartphone -Other
8% Smartphone -Blackbberry
30% 20% Smartphone -iOS
15%
2% iPad -iOS
iPod Touch -iOS
25% Connected Device -Other

Product: Connected Device Reporting
Data: March 2011
Country: US


Growth in check-in and location-aware devices and services creating
new opportunities

Location Based Services
30.0% 50.0%
27.8%
45.0%
43.3%
25.0% 23.3%
40.2% 40.4% 40.0%

19.3% 35.0%
20.0%
32.1%

% YoY-Growth
29.2% 30.0%
% Market

27.5% 28.4%
15.0% 25.0%
12.0%
11.0% 20.0%
10.0% 8.9%
15.0%
5.0% 10.0%
5.0%
5.0%

0.0% 0.0%
Weather Search Maps Movie Restaurant Traffic Reports Travel Service
Information Information


Product: MobiLens


To Sum

 The mobile audience is growing rapidly
 Multiple high reach advertising opportunities available – web, app, SMS
 Major PC publishers building large mobile audiences, often incremental
 Engagement increasing as mobile media usage becomes daily activity
 Mobile social is the standout category
 Mobile advertising is broadening, and also key to app monetization
 Smartphones are key driver of audience, usage, advertising
 Tablets and other connected devices redefining “mobile” for advertisers
 Growth in check-in and location-aware devices and services creating more
localized advertising opportunities


Hyper-Local Use Cases and Best Practices

Scottie Pippen Michael Jordan

Location Mobile Advertising

Wile E. Coyote Road Runner



 Hyper-Local Formula
 Reach + Relevancy  Redemption/Engagement



 What WHERE is Seeing…

 Location Dynamic Ads are outperforming static creative by 30%

 Location Dynamic Ads are driving strong secondary engagement metrics:
 40% of consumers are showing purchase intent
 30% of consumers are “clicking to social”
 20% of consumers are redeeming mobile offers

 Dynamic Targeting of ads is driving a 60% increase in performance



 Hyper-Local Precision Targeting: Geo-Fencing
– Store fronts
– Competitor Locations
– POI (Airports, Schools, Theme Parks, etc.)
– CPG‟s: Targeting Key Shopper Marketing Partners

.02 mi.



 Hyper-Local Dynamic Targeting: “Roaming Geo-Fences”
– Weather
– Flu Index
– Store Performance Data
– Inventory Data



 Event Based Marketing:
– Retail Events
– New Product Announcements
– Grand Openings
– Local Events and Sponsorship Activation



 Hyper Local Content and Engagement: How can you align your
brand with what is happening around the consumer?

 Weather
 Local Sports Scores
– Local News or Traffic
 Inventory (Popular local items, etc…)
 Local Places…Aid in Local Discovery



 What to expect in the future…

 The evolution of hyper-local advertising into commerce
 Big Data and Relevancy will be king
 A Multitude of Location Dynamic Offers
 Inventory based offers
 Store Performance based offers
 Smarter Tools for Marketers to manage margins and drive sales
via real-time offers


Remember

 Mobile isn‟t about mobile…it is about engagement and the value
consumers and you generate for each other

 Mobile is both a standalone media and a enabler for traditional media and
will help you with:
– Branding, Awareness, Loyalty/Retention, Care
and Social Media Enablement

 You can embrace mobile today, there are many resources.


Questions & Answers


Want More? Don‟t miss: MMA Forum New York
http://forum.mmaglobal.com

• 3 Days
MMA Forum NY • Workshops
June 15, 16, 17 • Roundtables
• Over 100 speakers

@Waldorf=Astoria

56

 June 27, comScore‟s
Bryan Segal, Vice
President, Sales,
comScore, Inc. to
present the comScore
Canadian Lens.

Register today:
http://mmacanadajune2011.eventbrite.com/


Thank you!

Hans Fredericks
hfredericks@comscore.com

Michael Becker
michael.becker@mmaglobal.com

Scott Hendrickson
scott@where.com


U.S. Mobile Advertising Industry Outlook

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