Key Trends In Mobile Advertising Comscore Feb09

Key Trends in Mobile Content Usage & Mobile Advertising

February 12, 2009 Kevin Muoio

Agenda

■ About comScore M:Metrics ■ Mobile Handset Landscape ■ Mobile Content Consumption ■ State of Mobile Advertising ■ Mobile Advertising Case Study

Proprietary and Confidential Do not distribute without written permission from comScore

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

Proprietary and Confidential Do not distribute without written permission from comScore

A Riddle

Capabilities:

Capabilities:

1) Initiate phone calls 2) Receive phone calls

1) Too Many to Name

Proprietary and Confidential Do not distribute without written permission from comScore

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)

Proprietary and Confidential Do not distribute without written permission from comScore

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?

Proprietary and Confidential Do not distribute without written permission from comScore

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

Proprietary and Confidential Do not distribute without written permission from comScore

1) SMS 2) Games 3) Ringtones 4) Mobile Web 5) Applications 6) Email 7) Picture Messaging 8) Instant Messaging 9) Video 10) GPS 11) Music Playback 12) Camera 13) Video Camera

Universe of Active Handsets in the US

Feature Phones

Feature Phones make up 89% of the market, many of them are current devices, but plenty are also older, less capable handsets

Proprietary and Confidential Do not distribute without written permission from comScore

Smartphones

Smartphones are 11% of the US Market

Smartphone Owners Doubled Last Year . . .

103% YoY Growth

* Mobile phone owners whose primary mobile phone runs Symbian, Windows, Android, Palm, RIM or Apple operating systems

Proprietary and Confidential Do not distribute without written permission from comScore

9

Smartphones Move from Geek to Chic ■ Stubby antennas
fashion objects ■ Expensive corporate tools
$99-199 consumer gadgets

January 2005

45 models

Proprietary and Confidential Do not distribute without written permission from comScore

November 2008

166 models

. . . and Smartphones Drive the Mobile Audience

Proprietary and Confidential Do not distribute without written permission from comScore

11

iPhone Has Raised the Bar for Consumers

Proprietary and Confidential Do not distribute without written permission from comScore

12

Consumption is Showing Signs of Evolving As We Move From Mobile 1.0 to 2.0 ■ Increase: – – – – – – –

Text Messaging (+26% YOY) Email ( +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

Proprietary and Confidential Do not distribute without written permission from comScore

Evolutionary

Nascent

Applications growing quickly, but still lag Web consumption by a large margin…

YoY News & Info Audience Browsing + 52% Applications +98%

Proprietary and Confidential Do not distribute without written permission from comScore

14

Top 10 mobile web news brands

Top 10 Mobile Web News Brands, by Gender, US comScore MobiLens, October 2008

Male 1. CNN 2. ESPN 3. Yahoo! 4. The Weather Channel 5. FOX 6. Google 7. CBS 8. MSNBC 9. ABC News 10. NFL.com

Proprietary and Confidential Do not distribute without written permission from comScore

Female 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

CNN Yahoo! The Weather Channel Google FOX ABC News AOL MSNBC CBS ESPN

15

Proprietary and Confidential Do not distribute without written permission from comScore

16

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

Proprietary and Confidential Do not distribute without written permission from comScore

17

So What’s Going On in Mobile Advertising?

Proprietary and Confidential Do not distribute without written permission from comScore

18

Mobile Advertising: Where are we on the Hype Curve?

Proprietary and Confidential Do not distribute without written permission from comScore

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]

Proprietary and Confidential Do not distribute without written permission from comScore

Overall Mobile Marketing A Market Place Still Largely Defined By Its Inhibitors No clear consensus on what consumers will/ will not tolerate

Usage: No consensus on what key device features needed for mobile to be a dependable advertising platform

No definitive studies in the space around consumer acceptance of ads, nor of the effectiveness of mobile as a platform relative to other mediums

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

Platform Issues

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

Deal Structures NOT standard

Consumer Response Issues

As A Direct Response Tool: Perceived value as a tool to drive contextual, often location based activities As a Marketing Tool: Perceived value is the phone as an extension of other mediums, place to finish conversations started elsewhere

Concerns around long term decreasing effectiveness of mobile advertising

Impact /effectiveness of campaigns NOT measurable enough Time to market NOT quick enough NOT enough Standards On-Deck vs.. Off-Deck

Ad Model Issues

Proprietary and Confidential Do not distribute without written permission from comScore

Marketplace Issues

Carrier Lack of Flexibility (perceived)

SMS Ads – Consumer Interaction is Substantial SMS Campaign Interaction

60,000,000

50,000,000

40,000,000

30,000,000

Number of Mobile Subscribers who received at least 1 SMS advertisement

20,000,000

10,000,000

0 Nov-07

Dec-07

Number of respondents Jan-08

Feb-08

Mar-08

Apr-08

May-08

S2 Jun-08

Jul-08

Aug-08

For November 2008, 16% of mobile subscribers who received an SMS advertisement responded to at least one ad Proprietary and Confidential Do not distribute without written permission from comScore

S1 Sep-08

Oct-08

Nov-08

Mobile Subscriber interaction with Short Codes

Short Code Interaction 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000

Number of mobile subscribers w ho responded to Poll or Contest via Short Code

4,000,000 2,000,000

Number of respondents to Advertisement via Short Code

0 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May- Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 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%)

Proprietary and Confidential Do not distribute without written permission from comScore

Mobile Web Drawing Diverse Advertisers Advertiser by Sector, Oct. '07

IT Equipment Consumer Electronics

1.4% 1.6%

Specialized Consumer Services

2.2%

Automobile Manufacturers

2.3%

Diversified Banks

2.4%

Systems Software Communications Equipment

2.8% 5.3%

Broadcasting & Cable TV

6.2% 10.8%

Application Software Wireless Telecommunication Services

11.5% 13.5%

Internet Retail Content Provider 0.0%

29.4% 5.0%

10.0%

15.0%

20.0%

Share of 67,021 Ad Instances

Proprietary and Confidential Do not distribute without written permission from comScore

25.0%

30.0%

35.0%

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

Proprietary and Confidential Do not distribute without written permission from comScore

25

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.

Proprietary and Confidential Do not distribute without written permission from comScore

26

Interacting with the Flash ad significantly increases purchase intent % who would consider purchasing Axe By Gender ∆ Lift +15 % Lift: +25%

59% 52%

∆ Lift +13 % Lift: +21%

48%

∆ Lift +2 % Lift: +3%

48%

The campaign was most successful at increasing purchase intent among males Male

Female

Control

Male

Female

Test

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 Proprietary and Confidential Do not distribute without written permission from comScore

27

Questions?

Thank you!

Kevin Muoio [email protected]

Proprietary and Confidential Do not distribute without written permission from comScore