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

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 M:Metrics Syndicated Services

Comprehensive market intelligence to Direct behavioral measurement of the

help companies profit from mobile most active mobile media consumers.
convergence.

The who, what, where and when of

advertising on the mobile web

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A Riddle

Capabilities: Capabilities:

1) Initiate phone calls 1) Too Many to Name

2) Receive phone calls

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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)

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 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?

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Universe of Active Handsets in the US

“Classics” Still in use Cutting Edge Devices

TODAY, 10 years later

Mobile Media Capabilities:

Mobile Media Capabilities: 1) SMS

2) Games
1) SMS 3) Ringtones
2) Game* 4) Mobile Web
5) Applications
6) Email
7) Picture Messaging
8) Instant Messaging
9) Video
10) GPS
*Snake - available on Nokia phones only
11) Music Playback
12) Camera
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13) Video Camera
Universe of Active Handsets in the US

Feature Phones Smartphones

Feature Phones make up 89% of the market, Smartphones are

many of them are current devices, but plenty 11% of the US Market
are also older, less capable handsets

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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

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Smartphones Move from Geek to Chic

■ Stubby antennas
fashion objects

■ Expensive corporate tools
$99-199 consumer gadgets

January 2005 November 2008

45 models 166 models

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. . . and Smartphones Drive the Mobile Audience

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iPhone Has Raised the Bar for Consumers

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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 Evolutionary Nascent

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

YoY News & Info

Audience
Browsing + 52%
Applications +98%

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Top 10 mobile web news brands

Top 10 Mobile Web News Brands, by Gender, US

comScore MobiLens, October 2008

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

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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

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So What’s Going On in Mobile Advertising?

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Mobile Advertising: Where are we on the Hype Curve?

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Advertising Being Embraced in Mobile

Text advertising Ad-supported Ad-supported

& marketing Downloadable mobile video
Applications

112MM 48MM 14MM

Text Users Mobile gamers Mobile video viewers

[iLoop Mobile] [Greystripe] [Mywaves]

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 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
User Interface: Proliferation of different designs of
effectiveness of mobile as a platform relative to
handheld Interface, buttons, & keypads complicate Advertising
other mediums

These variables multiply complexity & cost when it

Concerns around long term decreasing effectiveness
comes to advertising on mobile devices of mobile advertising

Platform
Various camps seeing the handset ad
model very differently, specifically
Issues
As A Branding Tool: Perceived value in Deal Structures NOT standard
aggregating a quality audience for
advertisers, model/ value proposition similar Impact /effectiveness of campaigns
to magazines Consumer NOT measurable enough

As A Direct Response Tool: Perceived value as a Response Issues Time to market NOT quick enough
tool to drive contextual, often location based
activities NOT enough Standards

As a Marketing Tool: Perceived value is the phone On-Deck vs.. Off-Deck

as an extension of other mediums, place to
finish conversations started elsewhere Ad Model Marketplace Carrier Lack of Flexibility (perceived)
Issues Issues

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SMS Ads – Consumer Interaction is Substantial

SMS Campaign Interaction

60,000,000

50,000,000

40,000,000

30,000,000

Number of Mobile
20,000,000 Subscribers who received at
least 1 SMS advertisement

10,000,000

0
Nov-07
Dec-07
Number of respondents
Jan-08
Feb-08
Mar-08
Apr-08 S2
May-08
Jun-08
Jul-08 S1
Aug-08
Sep-08
Oct-08
Nov-08

For November 2008, 16% of mobile subscribers who received

an SMS advertisement responded to at least one ad

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Mobile Subscriber interaction with Short Codes

Short Code Interaction

14,000,000
12,000,000
10,000,000
Number of mobile
8,000,000 subscribers w ho
6,000,000 responded to Poll or
Contest via Short Code
4,000,000
Number of respondents to
2,000,000 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%)

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 Mobile Web Drawing Diverse Advertisers

Advertiser by Sector, Oct. '07

IT Equipment 1.4%

Consumer Electronics 1.6%

Specialized Consumer Services 2.2%

Automobile Manufacturers 2.3%

Diversified Banks 2.4%

Systems Software 2.8%

Communications Equipment 5.3%

Broadcasting & Cable TV 6.2%

Application Software 10.8%

Wireless Telecommunication
11.5%
Services

Internet Retail 13.5%

Content Provider 29.4%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Share of 67,021 Ad Instances

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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

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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.

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 Interacting with the Flash ad significantly
increases purchase intent

% who would consider purchasing Axe

By Gender

∆ Lift +15
% Lift: +25%

59%
52%
∆ Lift +13 48% 48%
% Lift: +21%

∆ Lift +2
The campaign was
% Lift: +3%
most successful at
increasing purchase
intent among males

Male Female Male Female

Control 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

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Questions?

Thank you!

Kevin Muoio
kmuoio@comscore.com

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