quarterly report

Q3 2011

Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.)

Mobile Vertical Spending in Q3

Q3 2011

Top 10 U.S. Advertising Verticals

Q3 2011 Ranked by Spend CHART A

Top 10 International Advertising Verticals

Q3 2011 Ranked by Spend CHART B

RANK 1 2 3 4 5 6 7 8 9 10

CATEGORIES FINANCE ENTERTAINMENT RETAIL & RESTAURANTS TELECOMMUNICATIONS CPG EDUCATION AUTOMOTIVE TRAVEL DATING PORTALS & DIRECTORIES
Source: Millennial Media, Q3 2011.

RANK 1 2 3 4 5 6 7 8 9 10

CATEGORIES ENTERTAINMENT TELECOMMUNICATIONS RETAIL & RESTAURANTS FINANCE CPG AUTOMOTIVE TRAVEL EDUCATION PHARMACEUTICALS DATING
Source: Millennial Media, Q3 2011.

Q3 Insights:
Six verticals experienced triple digit growth or greater year-over-year. Four out of the six verticals featured in the Vertical Explosion have previously been on the Top 10 Advertising Vertical Ranking. The Technology vertical experienced explosive growth of 687% year-over-year (Chart C), demonstrating strong vertical growth outside the Top 10 Advertising Vertical Rankings. This is an indication that more advertisers are growing their investment in mobile advertising. The Finance vertical took over the number one position and the number four position on the Top 10 U.S. and International Advertising Vertical Rankings respectively (Charts A & B). Finance grew 356% year-over-year (Chart C). In Q3, banking advertisers ran campaigns to raise the awareness of their products and services while insurance and credit card brands heavily utilized mobile for generating leads. Entertainment experienced a 145% growth year-over-year (Chart C) and ranked in the number two (U.S.) and number one (International) spots on the Top 10 Advertising Vertical Rankings (Charts A & B). In Q3, advertisers in the Entertainment vertical leveraged mobile to create awareness of summer blockbuster movies and DVD releases as well as promoting upcoming TV series premieres. CPG ranked in the number ve spot on both Top 10 Advertising Vertical Rankings in Q3 (Charts A & B). Year-over-year, CPG increased 378% (Chart C). CPG advertisers leveraged mobile to drive product use by providing recipes and product usage tips. CPG brands also used mobile to engage customers through gaming or social media campaigns.

Vertical Explosion
VERTICALS

Year-Over-Year Spend Q3 2011/Q3 2010 CHART C

GROWTH 687% 378% 356% 184% 163% 145%

Source: Millennial Media, Q3 2011.

TECHNOLOGY CPG FINANCE RETAIL & RESTAURANTS PHARMACEUTICALS ENTERTAINMENT

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Q3 Mobile Advertiser Trends Mobile Usage & Campaign Goals

Q3 2011

Advertisers Campaign Goals

Q3 2011 CHART A

6% 10% 11% 18%

TOP 3 ADVERTISER TRENDS OF Q3

34%
advertisers increasing interactive mobile 1 Brandadvertising aredrive brandtheir investment inQ2 2011 to Q3 2011, video to awareness. From the number of campaigns utilizing Watch Video as a Post-Click Campaign Action increased 78%, from 18% to 32% (see Chart B on page 6). driving consumers to 2 Advertisers bought on a national scale, whileutilizing Smart Targetinglocal retail outlets to complete their purchase, by strategies on mobile. When in stores, consumers used mobile sites and apps that enabled them to conduct on-the-spot research, like comparing item prices and reading product reviews, a trend we expect to continue during the holiday shopping season (see Chart B).

21%

SUSTAINED IN MARKET PRESENCE LEAD GEN/REGISTRATIONS PRODUCT LAUNCH/RELEASE BRAND AWARENESS INCREASED FOOT TRAFFIC SITE TRAFFIC
Source: Millennial Media, Q3 2011. Data is based on the Top 750 Campaigns on Millennial Medias Network in Q2 2011.

mobile 3 During the summertime months, brands further utilizedability to as a mass media solution. Mobile enabled these brands the reach audiences at scale, while also delivering timely and relevant advertisements for popular seasonal destinations (see Campaign Highlight on page 5).

Q3 Insights:
The Top Campaign Goal in Q3 was Sustained-In-Market Presence, representing 34% of the Advertisers Campaign Goal Mix, up 21% quarter-over-quarter (Chart A). Brands with the goal of Sustained-In-Market Presence drove consumers to social media sites to download applications and to play branded games as a strategy to engage customers and increase brand loyalty. InsightExpress Q3 2011 Digital Consumer Portrait identied how Smartphone owners plan to utilize their mobile phones during the holiday shopping season while inside of retail outlets including: price comparison shopping, searching for item reviews, scanning barcodes, looking for coupons, using coupons, using a store application, signing up for a loyalty program, and paying for a purchase (Chart B). This study revealed 32% of consumers plan to use their mobile devices to help research products by comparison shopping and 27% are using mobile devices to read reviews while in the store. Primarily, holiday shoppers are planning to use their mobile device as a research tool, but 11% are also planning to leverage their mobile device as a payment method (Chart B).

Smartphone Usage Trends

SEARCH FOR AN ITEM TO FIND BETTER PRICES SEARCH FOR AN ITEM TO FIND REVIEWS SCAN A BARCODE USE A COUPON LOOK FOR A COUPON USE THE STORE APPLICATION SIGN UP FOR A LOYALTY PROGRAM PAY FOR A PURCHASE AT THE REGISTER 0
Source: InsightExpress Digital Consumer Portrait, Q3 2011.

Mobile Usage Activities while Shopping Q3 2011 CHART B

32% 27% 26% 23% 23% 20% 15% 11%

5 10 15 20 25 30 35

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Q3 Mobile Advertiser Trends Campaign Targeting Methods

Q3 2011
Q3 2011 CHART A

Campaign Targeting Mix

Q3 2011 CHART B

Targeted Audience Mix

BROAD REACH

55%

TARGETED AUDIENCE REACH

45%

34% 66%
LOCAL MARKET BEHAVIORAL & DEMOGRAPHIC

Source: Millennial Media, Q3 2011.

Source: Millennial Media, Q3 2011. Local Market is dened as a campaign targeting method which includes geographic location, DMA, state, international country, etc.

Q3 Insights:
Advertisers using Targeted Audience campaign methods (Behavioral & Demographic, and Local Market) represented 45% of the Campaign Targeting Mix in Q3 (Chart A). Broad Reach targeting methods (Run of Network, Custom Subnet and Channel) represented 55% of the Campaign Targeting Mix in Q3 (Chart A). Entertainment and Telecommunications brands created broad reach awareness campaigns to promote summer blockbuster movie releases and new mobile device releases. Local Market targeting experienced a 50% increase quarter-over-quarter and represented 66% of the Campaign Targeting Mix in Q3 (Chart B). Advertisers in the Finance and Travel verticals leveraged Local Market targeting to increase awareness of local bank branches and summer travel destinations. Behavioral & Demographic targeting represented 34% of the Targeted Audience Mix in Q3 (Chart B). Alcoholic beverage brands used Demographic targeting to reach customers who are over 21, while automotive advertisers utilized Behavioral targeting to reach customers who have previously engagement with their brand.

CAMPAIGN HIGHLIGHT: BENJAMIN MOORE

GOAL: Create a campaign that would build brand awareness and drive foot trac to retail locations in select metropolitan cities. STRATEGY: The campaign oered consumers a choice between receiving a coupon for $5 o a Benjamin Moore purchase or a free pint color sample. The coupon was sent to the user via SMS text message and consumers could view a map that would identify all nearby locations where they could redeem their oer. RESULTS: The campaign drove a consumer engagement rate that is more than double the networks average for home furnishings and produced unique analytics for Benjamin Moore on consumer behavior around couponing. To download the full campaign summary, visit www.millennialmedia.com/campaign-summaries

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Q3 Mobile Advertiser Trends Spotlight on Mobile Targeting

Q3 2011

DEFINITION:
Mobile Targeting A strategy used by advertisers to achieve their campaign goals by delivering relevant messaging to specic target audiences. Advertisers have a variety of targeting strategies available to them, including Audience Targeting, Local Market Targeting and Tactical Targeting. Targeting strategies vary according to campaign objectives.

BEST PRACTICES:
Audience Targeting Audience Targeting can be leveraged when advertisers need to reach specic audience segments at scale. Local Market Targeting Local Market Targeting enables advertisers to deliver locally customized messages while retaining multi-market reach. Tactical Targeting Tactical Targeting is ideal for advertisers who have objectives that are distinctly mobile, like app download.

CAMPAIGN HIGHLIGHT: CEDAR FAIR LOCAL MARKET CAMPAIGN

a lifeline for young Mobile devices have becomedevices like the Sonyadults, and reaching consumers on PSP and Nintendo DS was a unique, and eective, way for my client Cedar Fair to engage this audience.
~ Pete Baird, Senior Digital Strategist, Yellow Submarine

GOAL:

Reach young adults and generate brand awareness around various Cedar Fair amusement parks.

STRATEGY:

Cedar Fair created a campaign that was specically targeted to their core demographic of teens and young adults. As part of the targeting eorts, ads were placed on connected devices that appeal to this age group, such as the Sony PSP, iPod Touch and Nintendo DS. The campaign advertised 10 dierent amusement parks across the country, and the creative was customized for each individual location. The ads leveraged Local Market Targeting at the DMA level, so each amusement park was only advertised in each parks trade area.

DOWNLOAD THE FULL CAMPAIGN SUMMARY NOW!

www.millennialmedia.com/research/campaign-summaries

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Q3 Mobile Advertiser Trends Campaign Engagement Methods

Q3 2011

Campaign Destination Mix

Q3 2011 CHART A

Q3 2011 CHART B

Post-Click Campaign Action Mix

18% 54% 28%

35% 30% 25% 20%

34% 29% 22% 22% 19% 14% 15%

32%

15% 10% 5% 0%

21%

19%

MOBILE SITE APPLICATION DOWNLOAD LANDING PAGE

Source: Millennial Media, Q3 2011. Campaign destinations represent the immediate click-through from creative to site, landing page, or rich media. Data is based on the Top 750 Campaigns on Millennial Medias Network in Q3 2011.

APPLICATION DOWNLOAD

ENROLL/ JOIN/ SUBSCRIBE

mCOMMERCE

MOCIAL PLACE MOBILE SOCIAL CALL MEDIA

RETAIL PROMOTION

SITE SEARCH

STORE LOCATOR

VIEW MAP

WATCH VIDEO

Source: Millennial Media, Q3 2011. Data is based on the Top 750 Campaigns on Millennial Medias Network in Q3 2011.

Q3 Insights:
Application Download grew 22% quarter-over-quarter and represented 28% of the Campaign Destination Mix in Q3 (Chart A). As Smartphone adoption continues to increase and Tablets gain popularity, advertisers are creating applications that have all the functionality available on their website with a simple, easy-to-use navigation. Watch Video experienced a 78% increase quarter-over-quarter, with 32% of the Post-Click Campaign Action Mix in Q3 (Chart B). Entertainment, Telecommunications, and CPG advertisers utilized Watch Video as a post-click campaign action to engage customers and create awareness of new movie releases and new product launches. In Q3, View Map grew 27% quarter-over-quarter as a Post-Click Campaign Action (Chart B). Retail and Telecom brands leveraged mobile in Q3 to promote seasonal sales and drive customers to retail outlets to complete their purchase. mCommerce grew 17% quarter-over-quarter and represented 14% of the Campaign Destination Mix in Q3 (Chart B). In Q3, Entertainment and Retail brands used mobile campaigns to drive mobile purchases of movie tickets, DVD purchases, clothing, shoes, and accessories.

CAMPAIGN HIGHLIGHT: BUICK

GOAL: Create an eye-catching mobile video campaign to build brand awareness around the new Buick LaCrosse. STRATEGY: The campaign featured videos showcasing the new Buick LaCrosse. As the videos played, interactive buttons were displayed on the screen that would allow the consumer to instantly replay the video, go to the Buick Facebook page or learn more, and visit the mobile-specic Buick site. Mobile has become a critical channel for Buick, and trac to our mobile site is exploding. The interactive mobile video campaign was a chance to show o the Buick LaCrosse in motion, while still giving users the opportunity to engage with the ad.
~ Craig Bierley, Director, Advertising & Promotions Buick/GMC at General Motors

To download the full campaign summary, visit www.millennialmedia.com/campaign-summaries

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Q3 Developer & Publisher Trends

Q3 2011

Top 10 Global Application Categories

Ranked by Impressions Q3 2011 CHART A

TOP 3 DEVELOPER / PUBLISHER TRENDS OF Q3

grow 1 Developers saw their impressionscapableinternationally and turned to an advertising partner of monetizing their applications around the globe. distribution remained an important focus 2 Applicationas the opportunity to leverage incentivizedfor developers

RANK
1 2 3 4 5 6 7 8 9 10

CATEGORIES
GAMES MUSIC & ENTERTAINMENT MOCIAL MOBILE SOCIAL NETWORKING COMMUNICATIONS NEWS WEATHER SPORTS HEALTH & FITNESS PRODUCTIVITY & TOOLS TRAVEL & LOCAL
Source: Millennial Media, Q3 2011.

downloads diminished. As a result, they utilized new channels, such as advertising platforms and independent app stores, to reach new customers.

3 Growth strategies became more sophisticated. In addition to monetizing through in-app advertising, developers strategically
used their own impressions to serve house ad campaigns to drive application downloads and generate more revenue.

Highlights of Q3 Device & Developer Trends:

Gaming applications have been the number one Application Category on our platform for over a year. They continue to grow, representing 34% of the application impressions, a 26% increase quarter-over-quarter (Chart A). News application impressions grew 36% quarter-over-quarter (Chart B). Within the News category, global news applications accounted for over a quarter of the impressions in Q3 (Chart A). In Q3, Smartphones grew 7% quarter-over-quarter and led the Smartphone, Feature Phone & Connected Device Impression Share mix with with 72% of impressions (Chart A on page 8). Connected Devices and Feature Phones were tied with 14% of the impressions of the Smartphone, Feature Phone and Connected Device Impression Share mix (Chart A on page 8). Connected Device impressions have demonstrated strong growth quarter-over-quarter, but Smartphone growth has rapidly outpaced the growth of Connected Devices. In Q3, Android led the Connected Device & Smartphone OS Mix on our platform with 56% of the impressions (Chart B on page 8). In the past year, Android was able to take over as the leading Connected Device & Smartphone OS due in part to their contrasting strategy to iOS, allowing multiple device manufacturers to have access to their platform. Device manufacturers have created an Android device at every price point, resulting in rapid consumer adoption.

THE HOLIDAY OPPORTUNITY FOR DEVELOPERS

As brands turn to mobile advertising to reach holiday shoppers, developers can capitalize on the demand to increase their earnings. Millennial Media oers everything developers need to grow their business through advertising this Holiday Season & beyond: Complete suite of premium in-app advertising solutions to meet a wide array of monetization and marketing goals. New iOS and Android 4.5 SDKs give developers access to the latest ad formats and capabilities. Best source of premium advertiser demand delivers competitive eCPMs and ll rates. Cross-platform approach supports every major platform, including iOS, Android, Windows Phone 7, BlackBerry and more. Expert support and resources to help developers make the most of the holiday opportunity. Developers can visit mmDev.com now to learn how to monetize their applications this Holiday Season.

Source: Fierce Mobile Content 8/11.

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Q3 Developer & Publisher Trends

Q3 2011

Smartphone, Feature Phone & Connected Device Impression Share

CHART A Q3 2011

Connected Device & Smartphone OS Mix

By Impressions CHART B Q3 2011

1% 1% 1%

FEATURE PHONES

14%

13% 56% 28%

ANDROID iOS RIM SYMBIAN WINDOWS OTHER

CONNECTED DEVICES

14%

SMARTPHONES

72%

Source: Millennial Media, Q3 2011.

Source: Millennial Media, Q3 2011. Other includes webOS, Danger, Nokia OS, Palm OS.

Top 3 Tablets in Q3
By Impressions

Apple iPad

Samsung Galaxy Tab

DID YOU KNOW?

iPad impressions grew 456% year-over-year on Millennial Medias platform. To learn more about the latest trends with top mobile devices and operating systems, download Millennial Medias Q3 2011 Mobile MixTM Report, featuring a special iOS Spotlight. Visit www.millennialmedia.com/research to download now!

3
Source: Millennial Media, Q3 2011.

Motorola XOOM

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S.M.A.R.T. Glossary of Terms

Q3 2011

Audience Takeover A targeting technique that allows an advertiser to achieve dominant share-of-voice with a target audience. Behavioral Audience A targeting technique that categorizes customers by their interests. Campaign Destination Used to dene where advertisers are sending consumers from their ads to view more content. Based upon thousands of campaigns, we nd that campaigns drive to three primary destinations: Trac to Site (the clients persistent mobile site), Custom Landing Page (a special mobile landing page created for the campaign), or Application Download. Connected Device A non-phone, Wi-Fi mobile device. This includes tablets. Cross-Platform Pertaining to multiple devices (Smartphones, tablets, feature phones, connected devices), carriers (AT&T, Verizon, Vodafone, etc.), or platforms (iOS, Android, RIM, Windows Phone 7, Symbian, etc). Millennial Media is cross-platform or platform-agnostic because we do not focus on one single OS or device type. This enables advertisers to reach as many mobile users as possible, regardless of their mobile device or carrier of choice. Deal Size The size of a clients mobile advertising contract. Developer Provider/creator of mobile applications. Developers range from large entities (brands, portals, news sites, etc.) to individuals who focus on just a handful of applications. Along with publishers, developers inventory is where advertisers ads run. Developers are to App as publishers are to WAP. eCPM Also Eective CPM or Eective cost per thousand impressions. Used as a performance measure to estimate earnings for every thousand impressions received. eCPM is derived by dividing total earnings over total number of impressions in thousands. Feature Phone Any web-enabled mobile phone that is not a Smartphone. Impression A count of the number of times an ad unit appears on a mobile device. Interactive Mobile Video A high impact HD video ad layered with interactive features that deliver a uniquely mobile, actionable experience to customers. Inventory The ad space available on mobile websites and applications. Local Market A targeting technique that allows advertisers to customize their message to local markets i.e. DMA to more precise levels of granularity. (Previously classied as GEO in earlier SMART reports). Mobile Targeting A strategy used by advertisers to achieve their campaign goals by delivering relevant messaging to specic target audiences. Advertisers have a variety of targeting strategies available to them including, Audience Targeting, Local Market Targeting and Tactical Targeting. Targeting strategies vary according to campaign objectives. Mocial Mobile Social Media networking sites and applications. Post-Click Campaign Action The action a marketing campaign is driving the customer to take once an ad is viewed (i.e., Place Call, Download Application, View Map, etc.). Publisher Provider of mobile sites of well-known brands, perhaps newspapers, broadcasters or portals. Publishers also frequently have their own applications. Along with developers, publishers inventory is where advertisers ads run. Publishers are to WAP as Developers are to App. SDK Software Development Kit. A tool that enables developers to seamlessly integrate mobile advertising into their applications, thus monetizing their app. Developer partners on Millennial Medias platform download and integrate our SDKs (available for a variety of operating systems iOS, Android, Windows Phone 7, etc.) to gain access to the ads run by our advertising partners. Smartphone Any web-enabled and application-enabled mobile phone that runs on an operating system and oers the user more advanced capabilities beyond just voice and mobile web access. Vertical The classication of advertisers by industry.

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Summary & Reporting Methodology

Q3 2011

About Millennial Media Millennial Media is the leading independent mobile advertising and data platform. As an independent company, Millennial Media commands an impressive share of the mobile display advertising market. The companys technology, tools and services also power some of the largest companies in the media business today. Millennial Media is committed to growing the mobile advertising marketplace by becoming the preferred partner to all advertisers seeking to reach mobile consumers, all application and media developers seeking to maximize ad revenue, and all mobile operators seeking to further monetize their networks. Millennial Media was named one of the top 75 fastest growing private companies in America by the Inc 500. Join our Facebook community, follow us on Twitter at @millennialmedia or subscribe to our YouTube page for exclusive videos. Mobile developers can visit http://developer.millennialmedia.com/ to learn more about monetizing their apps. About S.M.A.R.T. The Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.) delivers monthly insights on key trends in mobile advertising based on actual campaign and network data from Millennial Media, Inc. Millennial Media partners with major carriers, media networks and top-tier publishers to deliver the largest data set of any third-party U.S. mobile advertising network. As such, we are uniquely capable of reporting and analyzing the richest sets of carrier, device and campaign data collected over billions of monthly ad requests. Elevating and driving the whole mobile ecosystem forward is central to our company mission. Visit www.millennialmedia.com/research to sign up to receive Millennial Media-related news including the Mobile Mix report, the Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.) report, and the Mobile Intel Series. For questions about the data in this report, or for recommendations for future reports, please contact us at research@millennialmedia.com.

2011 Millennial Media, Inc. All rights reserved. All product names and images are trademarks or registered trademarks of their respective owners.

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