State of The Internet: 1 Quarter 2012

State of the Internet
1st Quarter 2012
Agenda
Worldwide Context
US Vital Signs
Video Search Mobile eCommerce
Monetization
comScore, Inc. Proprietary and Confidential.
The US Is No Longer the Center of the Online Universe

US Internet Population vs. Rest of the World Distribution of Worldwide Internet Audience
Rest of the World
34%
Europe
North America
26.6%
87%
14.6% 8.9% 8.8%
Latin America
US
66%
Asia Pacific
Middle East - Africa
41.0%
13%
1996 2012
In 1996, 2/3 of the worlds Internet population was in the US, yet today Asia Pacific is the largest
region with over 41% of the population. Many emerging regions are likely to bypass old modes, skipping dial-up to go straight to broadband, making multimedia, video, and collaborative content immediately accessible. Early adoption of mobile web in addition to PC web will likely be popular in many of these highgrowth areas.
comScore, Inc. Proprietary and Confidential. 3
Source: comScore World Metrix, March 2012
9% Worldwide Growth Fueled by Country Growth

Internet Users Age 15+ (MM)
China United States
333.3 190.7 73.5
Japan
India Russian Federation Germany Brazil France United Kingdom South Korea Italy Canada Turkey Mexico Spain
56.3
56.0 51.5 45.5 43.2 37.6
31.0
28.6 24.0 23.6 22.8 21.6
While US user growth was just 5.3% over the past year, India, Italy, Mexico, and the Russian Federation have experienced impressive growth rates of 32%, 24%, 22%, and 18% respectively.
Online Engagement by Country

Average Hours Per Visitor Per Month
Canada United States United Kingdom Netherlands Turkey Israel Thailand Poland Vietnam Norway Brazil Russian Federation Finland Argentina Hong Kong
44.3 38.8
35.1
33.8 33.0 31.8 30.4 30.2 28.7 28.6 28.4 28.2 28.1 26.5
Canada is consistently the most engaged country. The average visitor spent more than 44 hours online in March 2012.
26.5
More Worldwide Unique Visitors Are Spending More Minutes on Social Networking Sites than Email Sites
Global Total Unique Visitors (000)
Unique Visitors (000)
1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Mar-2011 May-2011 Jul-2011 Email Sep-2011 Social Networking Nov-2011 Jan-2012 Mar-2012
+13% +17%
500,000
Global Total Minutes (MM)
+37%
Minutes (MM)
400,000 300,000 200,000 100,000

+3%
0 Mar-2011 May-2011 Jul-2011 Email Sep-2011 Social Networking Nov-2011 Jan-2012 Mar-2012
Agenda
Worldwide Context
US Vital Signs
Monetization
Is the US Internet Really Still Growing?
Total US Internet Users

250,000 200,000 150,000 100,000 50,000 0
+5% +6%
Yes, the US Internet is still growing, albeit not as quickly as it had been. The Average Minutes per Visitor grew 9% over the past year.
Total Unique Visitors (000)
Average Daily Visitors (000)
Total US Internet Engagement

2,500 2,000 1,500 1,000 500 0
+9%
+7%
The average internet user made 4 more visits to the internet in March 2012 than in March 2011.
Average Minutes per Visitor
Average Visits per Visitor

8
Source: comScore US Media Metrix Panel Only Data, March 2012
What Online Categories are Driving Web Usage?

The 31+ hours the average user spends online is divided among several key content categories such as Social Media, Entertainment, and Portals. Top Categories Reach
100%
0% +1% Y/Y % change
Top Categories Engagement

Y/Y % change
+3%
-3%
-1%
Reach
95%
Average Minutes/UV
400
-7%
+16%
300
+24%
90%
-1%
200
+10% +11% +2%
85%
100
Which Categories are Driving Web Growth?
100,000 90,000
+29%
As expected in
an election year, Political sites saw terrific growth year over year at 132%.
80,000
UVs (000)
70,000 60,000 50,000 40,000 30,000 20,000 10,000

+93% +132% +52% +47% +54% +46% +30% +28%
The
Gay/Lesbian category continued to see impressive growth, growing 93% between March 2011 and March 2012.
March 2011 UV's

March 2012 UV's
Source: comScore US Media Metrix Panel Only Data March 2012
Unique Visitors to social networking sites have increased 6% year over year
Since reporting began in May 2011, the idea sharing website Pinterest has seen exponential growth in Unique Visitors.
170,000 155,000 140,000 125,000 110,000
+4%
UVs (000)
95,000 80,000 65,000 50,000 35,000
+58% +67% +168% +4377%
20,000
5,000 -10,000
Facebook
Twitter
Tumblr
11
LinkedIn
Pinterest
Pinterest is the fastest growing social media site in both Unique Visitors and Clicks on search engines
Pinterest is a content sharing website in which users pin images and videos to share in an online community. Since reporting began in May, it is the fastest growing social media site of the past year.
20,000 18,000 16,000 Unique Visitors (000)
4,000 3,500 Search Engine Clicks (000) 3,000
14,000
12,000 10,000 8,000 6,000 1,000 4,000 500 0 2,500 2,000 1,500
2,000
0
Unique Visitors (000)
Search Engine Clicks (000)
12
Source: comScore US Media Metrix Data
Pinterest buyers spend more, buy more items, and conduct more transactions than other social media buyers
Buying Power Index

300 250 200 150 100 50 0 LinkedIn Pinterest Twitter Facebook Tumblr
Bubble size = Dollars per Buyer

5.60
5.40
5.20
Items per Buyer
5.00
Facebook Pinterest Twitter
4.80
Pinterest users are second only to LinkedIn users in the Buying Power Index of the top 5 social media sites. However, Pinterest buyers spend more money, more often, and on more items than any of the other top 5 social media sites.
LinkedIn
4.60
Tumblr
4.40
4.20 2.70
2.80
2.90
3.00
3.10
Transactions per Buyer
13
Source: comScore US Media Metrix Data
Agenda
Worldwide Context
US Vital Signs
Monetization
14
The average internet user viewed 243 videos with a viewing time of 21 hours, 22 minutes
March 2012
US Video Viewers 187MM Value Drivers of Online Video Advertising
% Of Internet Users Who Viewed At Least One Video
83%
Reach of elusive audiences Better engagement
Total # of Viewed Videos YoY Growth in Video Views
45.4B 33%
However, monetization is still a big

challenge:
User experience Rights for UGC (User

Generated Content)
Videos per Viewer Viewing Time per Viewer
243 21 hr 22 min
15
Source: comScore Video Metrix, March 2012
Males Are More Engaged Online Video Viewers than Females
Video Activity By Gender

1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0
Females
Males
1,807
755
313 172 93 94
+116%
+66%
+82%
Videos per Viewer
+120%
+139%
Minutes per Viewer
UVs (MM)
16
Duration Jumps as Long-Form Content Floods the Web
Total US Streaming Minutes and Video Views

300
Total US Duration and Video Views

Total Minutes Total Videos
250
+53%
200
Billions
150
100
50
+47%
0 Mar '11 Apr '11 May '11 June July '11 August Sept '11 Oct '11 Nov ' 11 Dec '11 Jan '12 Feb '12 Mar '12 '11 '11
Sites heavy with long-form content have continued to grow over the past year, contributing to the increase in time spent streaming.
March 2011
Hours per Viewer Videos per Viewer Minutes per Video 14.7 192.1 4.6
March 2012
21.4 242.6 5.3
Agenda
Worldwide Context
US Vital Signs
Monetization
18
Global Search Market Growth of 22% Y/YMore Than 4.1 Million Searches per Minute
30,000 25,000 20,000 15,000 10,000 5,000 0 United States China Japan United Kingdom Germany Brazil Russian Federation France Turkey India
+8%
Top 10 Countries by Number of Searches (MM) Conducted*

Apr-2011
Google sites
account for over twothirds of the 177 billion searches conducted worldwide in April.
+56% +45% +21% 11% +23% +39% +4%

Apr-2012
+35%
+54%
140,000
120,000 100,000 80,000 60,000 40,000 20,000 0
+21%
Chinese
Top 10 Search Properties by Searches (MM) Conducted
Apr-2011 Apr-2012
+53%
+6%
-16%
+44%
+38%
+97%
-7%
-40%
11%
based Baidu (13.8 billion searches) was second in front of Yahoo! (9.9 billion searches).
*Searches based on expanded search definition, which includes searches at the top properties where search activity is observed, not only the core search engines.
Source: comScore qSearch 2.0, April 2012
qSearch 2.0: Trends in the U.S. Search Market

27.7 billion searches were performed in April 2012, which marked an
8% growth rate over April 2011.
Total U.S. Searches for all qSearch properties (Billions)
Change vs. April-11
29.5 28.3 27.2 26.6 25.6 27.4 27.3 27.1 28.3 28.5 28.0
29.5 +8% 27.7
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
20
qSearch 2.0: Trends in the U.S. Search Market

Increases in search intensity by Heavy Searchers and Medium Searchers helped drive search growth.
Segment Contribution to Total Searches
Searches per Searcher
450
Search Intensity
Change vs. April-11
Percentage of Searches
400
370.9
389.0 +5%
350
300
63.8%
250
200
27.2%
150
108.6
110.5
+2%
100
9.0%
50
22.5 Jul-11 Oct-11 Jan-12
21.9 Apr-12
-3%
Apr-11
Heavy Searchers (Upper 20%)
Moderate Searchers (Middle 30%)
Light Searchers (Bottom 50%)
21
qSearch 2.0: Leading U.S. Search Properties

Microsoft, Yahoo!, and AOL show intensity growth versus a year ago.
Leading Search Properties: Searches per Searcher
Change vs. April-11
90
83.4
80
70 60
0%
Google Sites
50
40 30 20 10 0
+19% Microsoft Sites
30.4 27.8 9.3 7.8 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
+2% Yahoo! Sites +9% AOL, Inc. -2% Ask Network
22
Agenda
Worldwide Context
US Vital Signs
Monetization
23
Mobile On Track to Eclipse the Desktop
Number of Global Users (Millions)

2,000 1,800 1,600 1,400 1,200
1,000
800 600 400 200 0
2007 2008 2009 2010 2011 2012 2013
Desktop Mobile
2014
2015
24
Source: Morgan Stanley Research
How the U.S. Mobile Market Has Changed Highlights of Q1 2012

The number of Smartphone owners grew by 47% year-over-year in March 2012 In March 2012 there were 106.7 million Smartphone owners.
Growth of U.S. Smartphone Installed Base

100,000 # Phone Owners (000)
U.S. Smartphone Penetration
80,000
Smartphone 45.6% Not Smartphone 54.4% 106.7 million
60,000
40,000
+47%
Year on Year Growth
20,000
Product: MobiLens Data: Three month average ending March 2012

Country: US, N= 30,963
Continuous Decline of Feature Phones as Newly Acquired Devices

In March 2012 62.9% of new phone acquisitions were Smartphones. Google and Apple accounted for the majority of new device acquisitions in Q1 Google had a share of 58%, while iPhones made up just over 26% of new Smartphones.
New Devices Acquired by Type

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % Acquired Device in Month
New Smartphones Acquired by OS

Microsoft 4.6%
Other OS 1.3%
52.5%
52.0%
47.5%
40.5%
37.1%
RIM 9.5%
47.5%
48.0%
52.5%
59.5%
62.9%
Apple 26.3%
Google 58.3%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Smartphone Not Smartphone

Product: MobiLens Data: Three month average ending March 2012 Country: US, N= 30,963
Android And Apple Devices Dominate U.S. Smartphone Market

Smartphone Operating System Share
100% 90%
Googles Android platform share

grew rapidly over the past year, increasing its market share to 51.0%.
Google
Apples share increased from

25.0% to over 30%. Android and Apple combined now account for over 80% of the Smartphone market.
80%
% Smartphone Installed Base 70% 60% 50% 40%
34.8% 51.0% Apple
RIM has taken 3rd position in the

25.5% RIM
Smartphone market. In March 2012, RIM handsets accounted for only 12.3% of all Smartphones
30.7%
30%
27.1%
20% 10% 0%
Microsoft
Microsoft based devices also lost

market share and represented 3.9% in March 2012.
7.5% 5.1% March 2011
12.3% 3.9% 2.1% March 2012
Other OS

15.0% of all U.S. Smartphone Owners Accessed Digital Books or Magazines on their phones in March 2012
16.8% of these 16 million Smartphone owners accessed digital books or
magazines on their devices almost every day.
Amazons app had the highest reach among all Smartphone owners
using eReader apps.
Frequency of Accessing Digital Books or Magazines

60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Almost every day At least once each week Once to three times throughout the month 16.8% 54.0%
Reach of apps among Smartphone owners with eReader apps
11% 29.2% 16% 16% 38%
Amazon.com Google Barnes & Noble iBook
19%
eReader.com

Multi-Device Ownership: The Rise of the Digital Omnivore

Tablets have led to the rise of the Digital Omnivore consumers who
engage seamlessly with multiple online touch points daily.
24.9% of all U.S. Smartphone owners also owned a tablet, up 308% from the
previous year.
Percentage of Smartphone Audience Also Owning a Tablet
24.9%
8.9%
March 2011
March 2012
Product: MobiLens Data: One month snapshot, March 2011 / March 2012
29
Agenda
Worldwide Context
US Vital Signs
Monetization
30
Overall e-Commerce dollar sales have posted double-digit gains in every quarter since Q4 2010 and are now well ahead of pre-recession levels e-Commerce Dollar Sales ($ Billions)
Source: comScore e-Commerce Measurement
% Chg vs. YA
+13% +6% -3% 0% -1% -2% +3% +10% +9% +9% +11% +12% +14% +13% +14%
$49.7 $44.3 $38.0
+17%
$38.1
Compared to pre-recession levels (Q1 2008), total retail in Q1 2012 is$43.4 up 10%... $39.0
$31.0
$30.2 $29.6 $32.1 e-Commerce is up +42% $33.9 $32.9
$37.5
$36.3
Billions ($)
$30.6
$30.3
Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
31
Led by Amazons +29% growth, many retail sites posted double-digit gains in unique visitors in Q1 vs. a year ago
Avg. Monthly UVs (MM) on Select Retail Sites in Q1 2012
Source: comScore Media Metrix, U.S.
Y/Y Change 107.4

+29% +25% +18% +9% +8% +12% +42% +23% -21% +26%
Amazon Sites Apple.com Wal-Mart Netflix.com Target Corporation Best Buy Sites Ticketmaster Sears.com Hewlett Packard Macy's Inc. 28.2 24.7 19.9 15.7 39.7
48.3
13.4
12.9 12.9
32
About 1 in 10 consumers had aided awareness of the term showrooming

Showrooming verb.
Visiting a brick-and-mortar store to see a product but instead purchasing the product online. Shoppers may intend from the start to purchase the product online, or may decide to purchase online, rather than in-person, after viewing the item at the store.
16% 12%
All respondents
8%
Men Women
% who have heard of 'showrooming'
33
35% of respondents have engaged in showrooming. Most intended to buy at brick-and-mortar but changed their mind at the store
Consumer Usage of Showrooming
Q. Based on this definition, have you ever done this activity? (showrooming)
Source: comScore Survey April 2012
Whos engaging in showrooming?

35% of all respondents 50% of respondents ages 25-34,
the highest of any age group
and did they plan it?

6 in 10 showroomers say they
originally planned to purchase at the store, but changed their mind while
48% of tablet owners and 43% of

smartphone owners
there & instead bought online
43% of Millenials*
32% said they went to the store always

intending to buy online
34
* - defined as ages 18-29
Price was the biggest driver of showrooming, while some wanted to see item in person before deciding to purchase
Why Consumers Are Engaging in Showrooming
Q. Which of the following describe why you utilized showrooming? (Please select all that apply)
Price was better online
72%
Planned to buy online but wanted to see item(s) in person before ordering
45%
Item was out of stock at store
24%
Would rather have item(s) shipped to home than take home with me
18%
Location, Location, Location

Respondents living in urban areas were nearly twice as likely (26%) to choose this option than those living in suburban or rural areas (15% for both)
Was not convenient to buy in-person at the time
17%
Other
5%
% among those who engaged in 'showrooming'

Consumer Electronics and Apparel were the most popular categories among consumers who bought via showrooming
Product Categories Most Likely to be Purchased via Showrooming
Q. Which of the following types of item have you bought online after using showrooming? (Please select all that apply)
Consumer electronics
63% 43% 29% 22% 22% 16% 10%
Apparel, clothing & accessories
Books
Appliances
Toys
Jewelry / watches
Other
% among those who engaged in 'showrooming'

Agenda
Worldwide Context
US Vital Signs
Monetization
37
US Online Ad Spend Poised to Grow 18% in 2012

US Online Ad Spending 2010-2015
$ Billions and % Change $50 $45
$40
$35 $30 $25 $20
$15
$10 $5 $0
14.9%
20.2%
17.6% 12.0% 10.4% 8.8%
2010
2011
2012
38
2013
2014
2015
Source: eMarketer: US Online AdSpend Poised to Grow 20% in 2011
Who are the top advertisers in the online market in March 2012?
Total Display Ad Impressions (000) 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0
Top 10 Online Advertisers
Telecommunications company AT&T has a large online advertising presences. Top advertisers also include Microsoft and business/finance companies, Experian and Scottrade.
Source: comScore US Ad Metrix, March 2012
Are consumers actually seeing the ads?
US
69%
AVERAGE
CA
65%
AVERAGE
EU
67%
AVERAGE
Campaign In-view ad rates ranged from: US 55% to 93% EU 64% to 72% CA 56% to 74%
Source: comScore vCE Charter Studies
Large sites within a content category do a better job than smaller sites at ensuring the ads are actually viewable
Percentage of Ads Served In-View within a Given Site Category
The difference in in-view rates between Top 50 sites versus the long tail sites in their category was a full 16-percentage points
Digital Ad Economics: The good guys arent necessarily winning
Correlation of In-View Rates & CPM
An equally as weak correlation was also observed between CPM and ability to hit a primary demographic target
Thank You!
43

State of The Internet: 1 Quarter 2012

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State of the Internet

1st Quarter 2012

comScore, Inc. Proprietary and Confidential.

The US Is No Longer the Center of the Online Universe

Rest of the World

14.6% 8.9% 8.8%

Middle East - Africa

Source: comScore World Metrix, March 2012

9% Worldwide Growth Fueled by Country Growth

333.3 190.7 73.5

comScore, Inc. Proprietary and Confidential.

Source: comScore World Metrix, March 2012

Online Engagement by Country

comScore, Inc. Proprietary and Confidential.

Global Total Minutes (MM)

400,000 300,000 200,000 100,000

comScore, Inc. Proprietary and Confidential.

Source: comScore World Metrix, March 2012

comScore, Inc. Proprietary and Confidential.

Is the US Internet Really Still Growing?

Total US Internet Users

Total Unique Visitors (000)

Average Daily Visitors (000)

Total US Internet Engagement

Average Minutes per Visitor

Average Visits per Visitor

comScore, Inc. Proprietary and Confidential.

Source: comScore US Media Metrix Panel Only Data, March 2012

What Online Categories are Driving Web Usage?

Top Categories Engagement

comScore, Inc. Proprietary and Confidential.

Source: comScore US Media Metrix Panel Only Data, March 2012

Which Categories are Driving Web Growth?

70,000 60,000 50,000 40,000 30,000 20,000 10,000

March 2011 UV's

March 2012 UV's

Source: comScore US Media Metrix Panel Only Data March 2012

170,000 155,000 140,000 125,000 110,000

95,000 80,000 65,000 50,000 35,000

+58% +67% +168% +4377%

comScore, Inc. Proprietary and Confidential.

Source: comScore US Media Metrix Panel Only Data, March 2012

20,000 18,000 16,000 Unique Visitors (000)

4,000 3,500 Search Engine Clicks (000) 3,000

Unique Visitors (000)

Search Engine Clicks (000)

comScore, Inc. Proprietary and Confidential.

Source: comScore US Media Metrix Data

Buying Power Index

Bubble size = Dollars per Buyer

Items per Buyer

Facebook Pinterest Twitter

Transactions per Buyer

comScore, Inc. Proprietary and Confidential.

Source: comScore US Media Metrix Data

comScore, Inc. Proprietary and Confidential.

% Of Internet Users Who Viewed At Least One Video

Reach of elusive audiences Better engagement

Total # of Viewed Videos YoY Growth in Video Views

However, monetization is still a big

User experience Rights for UGC (User

Videos per Viewer Viewing Time per Viewer