state of digital advertising in 2014 : 3 ways how this might affect your brand

© comScore, Inc. Proprietary. © comScore, Inc. Proprietary.

comScore Q1 2014

State of Digital Advertising Report

April 24, 2014

Presented By:

Andrea Vollman, Sr. Director of Product Marketing & Ad Effectiveness

Andrew Lipsman, VP of Marketing & Insights

© comScore, Inc. Proprietary. 2

Today’s Agenda

Digital Ad Industry Overview

Campaign Measurement

Video/Cross-Platform

Mobile Advertising

Native Advertising

Q&A


Digital Ad Industry Overview


Online ad revenues totaled $12.1 billion in Q4 2013, the highest quarter

on record

Online Ad Revenue $ Billions and % Chg vs. YA

%

Chg

vs.

YA

$5.8 $5.7 $5.8 $6.1

$5.5 $5.4 $5.5

$6.3 $5.9 $6.2

$6.5

$7.4 $7.3 $7.7 $7.8

$9.0

$8.3 $8.7

$9.2

$10.3 $9.8

$10.3 $10.7

$12.1

+18% +13% +11% +2% -5% -5% -6% +3% +9% +14% +18% +19% +22% +24% +21% +20% +14% +14% +18% +15% +18% +18% +15% +17%

SOURCE: IAB Internet Advertising Revenue Report, Full Year 2013, IAB &

PricewaterhouseCoopers


Growth is driven by Mobile (+110% Y/Y) and Video (+22% Y/Y)

46%

21%

9%

6%

7%

5% 3%

2%

Ad formats – full year 2012 Total - $36.6 billion

Search

Display / Banner

Mobile

Digital Video

Classifieds

Lead Generation

Rich Media

Sponsorship

43%

19%

17%

7%

6%

4% 3%

2%

Ad formats – full year 2013 Total – 42.8 billion



* Amounts may not equal 100% due to rounding and omission of minor categories


Internet is larger than newspaper, radio, and magazine ad spend

individually, but still huge opportunity to close the gap on TV

† The total U.S. advertising market includes other segments not charted here.

* Broadcast Television includes Network and Syndicated and Spot television advertising revenue.

** Cable Television includes National Cable Networks and Local Cable television advertising

revenue.

*** Magazine includes Consumer magazines only.

$40.1

$42.8

$18.0

$16.7

$13.4

$7.9

$0.9

$0.8

$34.4 Television*

Internet

Newspaper

Radio

Magazine**

Out of Home

Video Games

Cinema

2013 Ad Revenue Market Share by Media ($ Billions)

Broadcast TV Cable TV



$74.5


Facebook delivered more than 1/4th of desktop display ad impressions

in Q1 — nearly 4x that of the next leading property

27.3%

7.5%

5.9%

2.6%

2.2%

1.3%

0.8%

0.8%

0.8%

0.6%

Facebook

Yahoo Sites

Google Sites

Microsoft Sites

AOL, Inc.

Turner Digital

Answers.com Sites

Amazon Sites

eBay

Glam Media

Top 10 Publishers by Share of Display Ad Impressions Source: comScore Ad Metrix, U.S., Q1 2014


AT&T led all advertisers in Q1 with more than 21 billion display ad

impressions on desktop

21.2

9.6

9.2

8.8

6.2

6.0

5.9

5.8

5.5

5.4

AT&T Inc.

Core Digital Media

Microsoft Corporation

Intuit Inc.

Nissan Motor Co., Ltd.

Verizon Communications Inc.

Amazon.com, Inc.

SoftBank Corp.

Fiat Automobiles SpA

Toyota Motor Corporation

Top 10 Advertisers by Display Ad Impressions (Billions) Source: comScore Ad Metrix, U.S., Q1 2014

Auto ads were popular in Q1

Seasonal advertising

from Intuit


Campaign Measurement


audience

age

gender

ethnicity

unique users

R/F

AUDIENCE MODULE

in-view

geography

brand safety

non-human

traffic

vCE measures a variety of ad delivery dimensions – including

viewability and audience delivery

AD VALIDATION MODULE

*Target audiences that include ethnicity will require a greater number of impressions

for reportability than a target using basic age and gender.


vCE Benchmarks

Multitude of U.S. campaigns

200 billion impressions

Rolling 12-month period

Display and video campaigns

Diverse set of advertisers as well as publishers and ad

networks

Range of brand-building and direct-response objectives

Industry benchmarks are an important guidepost BUT they

shouldn’t be used as the only indicator of delivery performance.


In-Target: 100% isn’t Realistic

Demographic

data becomes

outdated

Not all

registration

data is accurate

More than 60%

of computers are

shared, so cookies

can show ads to the

wrong person

Some targeting

infers demography

based on content

consumption


*The Overall Norm comprises data from more than 200 billion impressions over the course of a 12-month rolling period. This includes campaigns that go beyond the select Advertiser / Product categories listed

above to also include additional Advertiser / Product categories as well as studies run directly by publishers and ad networks.

**Target audience is categorized based on the primary target selection in vCE, which is self-designated during campaign set-up.

***The Health / Wellness category includes campaigns for brands, products and/or services in the following sectors: health associations, health insurance, hospitals, over-the-counter, pharmaceutical, public health

and wellness.

Overall average in-target rate is 44%, with significant variance seen

across product categories

% In-Target: Overall* and by Select Advertiser / Product Category** Source: comScore vCE Benchmarks, Q1 2014, U.S.


As the target narrows, so does the chance of hitting it

% In-Target by Age* Source: comScore vCE Benchmarks, Q1 2014, U.S.

*Target audience is categorized based on the primary target selection in vCE, which is self-designated during campaign set-up.


This is true with age and gender as well – as the target narrows, so

does the chance of hitting the target

% In-Target by Age/Gender* Source: comScore vCE Benchmarks, Q1 2014, U.S.

*Target audience is categorized based on the primary target selection in vCE, which is self-designated during campaign set-up.


A Targeting Efficiency Index can also help you set expectations

It compares in-target delivery to the prevalence of that target on a site,

based on data from comScore Media Metrix®

Females 18- 49

35% in-target

28% composition PVs

Targeting

Efficiency

Index

X 100 = 125


The MRC has lifted its advisory on viewable impressions, freeing the

market to transact on viewability


Overall average in-view rate is 46%, with variance seen across

product categories, though spanning a smaller range than in-target

% In-View: Overall* and by Select Advertiser / Product Category** Source: comScore vCE Benchmarks, Q1 2014, U.S.

*The Overall Norm comprises data from more than 200 billion impressions over the course of a 12-month rolling period. This includes campaigns that go beyond the select Advertiser / Product categories listed

above to also include additional Advertiser / Product categories as well as studies run directly by publishers and ad networks.

**Viewability benchmarks include display campaigns only; viewability is defined as 50% of the ad’s pixels in-view for at least one second.

***The Health / Wellness category includes campaigns for brands, products and/or services in the following sectors: health associations, health insurance, hospitals, over-the-counter, pharmaceutical, public health

and wellness.


Video/Cross-Platform


From TV to Total Video: a new approach to video measurement


Cross-Platform measurement requires a new approach

Single-Source Panel Multi-Source Attribution

Census data informs

platform audience

de-duplication

algorithm

PC

TV

Radio

Phone Tablet


A few significant applications of comScore’s Cross-Platform

measurement


Almost all ESPN media consumers are multi-platform, with 4 platforms

being the most common number for most demographic segments

4%

32% 25% 24%

40%

28%

24% 27%

31%

37% 48%

48%

23%

3% 3% 0% 2%

P18+ P18-34 P35-49 P50+

Total Media Platform Exposure (Avg Week) Source: Project Blueprint, May 2013

5 Platforms*

4 Platforms

3 Platforms

2 Platforms

1 Platform

* Five platforms were TV, PC, Smartphone, Tablet, Radio


4hr 19min 4hr 28min 5hr 6hr 7min

50 min

59 min

55 min 51 min

40 min

47 min

TV Only TV + PC/LaptopOnly

TV + PC/Laptop +Mobile Only

TV + PC/Laptop +Mobile + Tablet

More screens = more time spent on every device.

Multi-platform users are often your most valuable.

Average Time Spent Per Day Following Olympics Source: NBC Billion Dollar Research Lab, 2012 Olympics

4hr 19min

5hr 18min

6hr 50min

8hr 29min

TV

Only TV +

Desktop

TV +

Desktop +

Mobile

TV +

Desktop +

Mobile +

Tablet

Tablet

Phone Desktop

TV


Mu

lti-

Pla

tfo

rm

Total Digital

Desktop

Total Mobile

SmartPhone

iOS

Android

Tablet

iOS

Android

Living Room Devices

Console

Playstation

PS3

PS4

Xbox

Xbox 360

Xbox One

Connected TV

SmartTV

LG/Samsung

Y! Widgets

Toshiba

Vizio

Dlink Bravia TV Roku

Measuring Sony Crackle

Measuring Sony Crackle across multiple platforms

requires many layers of video audience de-duplication

Audience de-duplication must

occur at multiple levels to

produce a single unduplicated

audience metric


Crackle’s incremental reach from platforms beyond

desktop video translated to 50% increase in audience size

12.1

2.8

2.0

1.2

Desktop OnlineVideo

Plus Mobile Video Plus Living RoomVideo

Plus Co-Viewing Total VideoAudience

Total Video Measurement of Unique Viewers (MM) for Sony Crackle Source: comScore Custom Research, U.S., December 2013

Desktop Incremental from Mobile

Incremental from Living Room Devices Incremental from Co-Viewing

18.0


Cross-platform campaign measurement can helps brands

reach incremental audiences more efficiently

0

10

20

30

40

50

60

70

Total

TV

Web

Video

Frozen Vegetable Brand: Cumulative Audience Reach (%) for a Multi-Platform Campaign

Source: comScore vCE Custom Study for CPG Brand

+12 pts


Mobile Advertising


Over the next 5 years, Mobile is expected to steal ad spending share

from every other medium

36% 28%

39% 36%

19%

12% 6%

25%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2012 2013 2014 2015 2016 2017 2018

US Total Media Ad Spending Share, by Media 2012-2018 (% of total)

Print*/Radio**/Outdoor/Directories TV Web Mobile

Note: eMarketer benchmarks its US newspaper ad spending projections against the NAA and its US outdoor ad spending

projections against the OAAA, for both of which the last full year measured was 2012; numbers may not add up to 100% due to

rounding; *newspaper and magazine print only; **excludes off-air radio & digital

Source: eMarketer, March 2014


Total digital media time spent has nearly doubled in the past three

years due to the explosion of tablet and smartphone usage

401 429

131

442 11

124

Dec-10 Dec-13

Total U.S. Time Spent by Digital Platform (Billion Minutes) comScore Media Metrix Multi-Platform, U.S., Dec 2013

Desktop Smartphone Tablet

+83% +1040%

+237%

+7%


If Mobile is becoming such an important part of the media landscape,

then why is it experiencing such a lag in monetization?

8%

18%

52%

11% 11%

24%

10%

44%

20%

2%

0%

10%

20%

30%

40%

50%

60%

Print Radio TV Desktop Mobile% o

f To

tal

Med

ia C

on

su

mp

tio

n T

ime

or

Bra

nd

Ad

vert

isin

g S

pen

din

g

Allocation of U.S. Advertising Spend vs. Time Spent by Medium

Time Spent Ad Spend

Sources: eMarketer, IAB, comScore

Potential

$20 Billion

Gap


Audiences have gone mobile,

but $$$ have been slow to follow

What is still needed to improve

mobile monetization?

MEASUREMENT


Mobile brand lift metrics show that mobile advertising can be effective,

especially in driving lower funnel metrics

20%

4%

22%

28%

Aided Awareness

Favorability

Likelihood to Recommend

Purchase Intent

Mobile Ad Effectiveness: Percentage Lift in Brand Metrics (Test vs. Control) Source: comScore BSL Mobile Benchmarks, U.S., 2012-2013


comScore partnered with IAB and Vibrant Media to measure branding

impacts of “Mobile Rising Star” ad formats

Interaction

Brand Impact

vs.

Interaction

Standard Mobile Banner Rising Star


Interaction Defined As Users Who:

SLIDE

SWIPE or

TAPPED

The mobile ad.

3x

Interaction with Mobile Rising Star ads inspired significantly more lift

in key branding metrics

Interaction Rates

3X

Standard Mobile Banner ads

+74%

+22%

+83%

Brand Recall Message Recall ImprovedImpression of

Brand

Interaction with IAB Mobile Rising Star Ad Formats vs. Viewed Banner

Ads


Native Advertising


As digital media usage goes mobile, native advertising will play an

increasingly important role


Leading native advertising platforms deliver audiences at scale, but

the majority of activity happens on mobile banners not sufficient

55.4

61.8

64.0

69.6

80.3

186.3

Pinterest

BuzzFeed

Yelp

Twitter

Pandora

Facebook

Total Digital Unique Visitors (MM) comScore Media Metrix Multi-Platform, U.S., January 2014

7%

47%

39%

12%

4%

32%

93%

53%

61%

88%

96%

68%

Share of Time Spent Desktop Mobile


The Rise of the Visual Web


‘Visual Web’ companies have grown dramatically in past several years

and will have significant impact on future of digital marketing

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Tumblr

Pinterest

Instagram

Vine

Snapchat

Multi-Platform

‘Visual Web’ Social Networks: U.S. Unique Visitor (000) Trend Source: Media Metrix & Media Metrix Multi-Platform, U.S., Mar 2011 - Feb 2014

Desktop Only


Is Pinterest ready to take a big slice of the digital advertising pie?

Rumored ad commitments suggest hopes are high for the platform.


Why should advertisers care about Pinterest? Ability to generate very

high reach among strategic demo segments like Females 18-49

11.9%

21.1% 22.1% 19.8%

36.9%

43.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Desktop Mobile Total Digital Population

Total Audience Females Age 18-49

Pinterest: % Reach Among Total and F18-49 Populations by Platform Source: Media Metrix Multi-Platform, U.S., Feb 2014


Youth-oriented networks are attracting attention from marketers, but

will need to expand beyond Millennials if upside is to be realized

Demographic Index for Tumblr, Snapchat, Instagram and Vine Source: Media Metrix Multi-Platform, U.S., Age 18+, Feb 2014

0

50

100

150

200

250

300

350

Age 18-24 Age 25-34 Age 35+

Tumblr Snapchat Instagram Vine


Summary


5 Key Takeaways for Marketers & Publishers

1. Use industry benchmarks to guide campaign planning and

performance evaluation, keeping in mind the context of the

campaign objectives and targets

2. Set proper expectations between buyers and sellers during the

upfront planning process to avoid painful reconciliations

3. Adopt a Total Video approach to quantifying video audiences

across platforms to account for mobile and OTT viewing

4. Measure mobile audiences & campaign effectiveness to begin

attracting dollars to a medium that accounts for a rapidly

increasing amount of consumer attention

5. Evaluate native advertising to generate incremental marketing &

monetization opportunities, reach audiences with high impact

advertising, and make better use of mobile


Effectiveness Measurement Will

Be Driven by 3 Primary Factors:

1. Mobile Usage Shift

2. Native Advertising

3. Big Data Enablement

Check out our latest article on social media effectiveness

measurement in the Journal of Advertising Research

Numbers, Please: Digital Game Changers: How Social Media Will Help Usher in the Era of Mobile and Multi-Platform

Campaign-Effectiveness Measurement By Gian Fulgoni & Andrew Lipsman

Read the full article here:

http://www.comscore.com/Insights/Blog/comScore_in_Journal_of_Advertising_Research_on_Topic_of_Social_Media_Effectiveness_M

easurement

http://www.comscore.com/Insights/Blog/comScore_in_Journal_of_Advertising_Research_on_Topic_of_Social_Media_Effectiveness_Measurement



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