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September 2011 State of the Internet Bryan Goski Director, comScore Marketing Solutions

State of the Internet - Analytics for a Digital World - comScore, Inc

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Page 1: State of the Internet - Analytics for a Digital World - comScore, Inc

September 2011

State of the Internet

Bryan Goski

Director, comScore Marketing Solutions

Page 2: State of the Internet - Analytics for a Digital World - comScore, Inc

2 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 3: State of the Internet - Analytics for a Digital World - comScore, Inc

3 © comScore, Inc. Proprietary and Confidential.

In 1996, 2/3 of the world’s 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 high-

growth areas.

14.8%

8.7%

8.7%

41.2%

26.6%

July 2011

Middle East

- Africa

Europe

North

America

Asia Pacific

Latin

America

Distribution of Worldwide Internet Audience

66%

13%

34%

87%

1996 2011

US Internet Population vs. Rest of the World

Rest of the

World

US

The US Is No Longer the Center of the Online Universe

Source: comScore World Metrix, July 2011

Page 4: State of the Internet - Analytics for a Digital World - comScore, Inc

4 © comScore, Inc. Proprietary and Confidential.

Internet Users Age 15+ (MM)

11% Worldwide Growth Fueled by Country Growth

322.0

183.4

73.5

50.3

49.2

44.6

43.6

42.4

37.1

30.6

23.5

23.4

23.0

21.6

20.0

China

United States

Japan

Germany

Russian Federation

India

Brazil

France

United Kingdom

South Korea

Italy

Canada

Turkey

Spain

Mexico

While US user growth was just 0.8%

over the past year, Mexico, China,

Brazil, and Russian Federation have

experienced impressive growth rates

of 22%, 19%, 18%, and 14%

respectively.

Source: comScore World Metrix, July 2011

Page 5: State of the Internet - Analytics for a Digital World - comScore, Inc

5 © comScore, Inc. Proprietary and Confidential.

The Majority of Top Properties’ Audiences are Coming

from Outside the US

Google Sites

Microsoft Sites

Facebook.com

Yahoo! Sites

Wikimedia Foundation Sites

Amazon Sites

Apple Inc.

VEVO

Tencent Inc.

AOL, Inc.

238

228 56%

257

241 74%

99%

73%

674

394

289

82%

68%

1032

899

736

83%

79%

76%

US Audience Non-US Audience Total Worldwide

Unique Visitors (MM)

Source: comScore World Metrix, July 2011

The top 10 Global Properties

attract a majority of Unique

Visitors from outside the US;

Google Sites and Microsoft Sites

attain 84% and 83% of their

audience from countries outside

the US, respectively.

Tencent, a Chinese portal, has

managed to enter the top 10 most

trafficked sites, despite receiving

only 1% of its traffic from the US.

84%

Page 6: State of the Internet - Analytics for a Digital World - comScore, Inc

6 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 7: State of the Internet - Analytics for a Digital World - comScore, Inc

7 © comScore, Inc. Proprietary and Confidential.

A Snapshot of US Internet Activity

In July 2011:

215.1 million Americans used the Internet.

– Average user was online 25.3 days in the month, for a total of 34.8 hours, and

viewed 3,029 pages

86.0% of Internet visitors viewed an online video in the US, for an average

of 18.2 hours each.

93% of Internet visitors conducted at least one search.

– Average searcher conducted 124 searches

Total online spending in July 2011 at US sites was $21.0 billion, up 13%

since July 2010. Travel accounted for $9.2 billion, or 44% of total online

spending in July.

Source: comScore US Media Metrix, July 2011

comScore US qSearch, July 2011

US e-Commerce Reports, July 2011

Page 8: State of the Internet - Analytics for a Digital World - comScore, Inc

8 © comScore, Inc. Proprietary and Confidential.

Is the US Internet Really Still Growing?

Total US Internet Users

0

50,000

100,000

150,000

200,000

250,000

Total Unique Visitors (000) Average Daily Visitors (000)

+1%

+1% Yes, the US

Internet is still

growing, albeit not

as quickly as it

had been.

The Average

Minutes per Visitor

grew 3% over the

past year.

The average

internet user made

1 more visit to the

internet in July

2011 than in July

2010.

Total US Internet Engagement

0

500

1,000

1,500

2,000

Average Minutes per Visitor Average Visits per Visitor

+1%

+3%

Source: comScore US Media Metrix Panel Only Data, July 2011

Page 9: State of the Internet - Analytics for a Digital World - comScore, Inc

9 © comScore, Inc. Proprietary and Confidential.

Which Categories are Driving Web Growth?

Couponing sites

saw terrific

growth year

over year at

28%.

Retail-Movies

continued to

see impressive

growth, growing

17% between

July 2010 and

July 2011.

Source: comScore US Media Metrix Panel Only Data July 2011

0

10,000

20,000

30,000

40,000

50,000

60,000

UV

s (

000)

July 2010 UV's July 2011 UV's

+28%

+17%

+16%

+14%

+13%

+13%

+10%

+12%

+8%

Page 10: State of the Internet - Analytics for a Digital World - comScore, Inc

10 © comScore, Inc. Proprietary and Confidential.

What Properties are Driving Web Growth?

Conversational

Media sites

Tumblr and

LinkedIn saw

large growth

with 223%, and

52% increases

between July

2010 and July

2011.

VEVO had 18.6

million more

visitors in July

2011 than in

July 2010, 38%

year over year

growth.

Source: comScore US Media Metrix Panel Only Data, July 2011

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

UV

s (

000)

Jul-2010 Jul-2011

+223%

+104% +71%

+52%

+49%

+48% +46%

+43%

+38%

+38%

Page 11: State of the Internet - Analytics for a Digital World - comScore, Inc

11 © comScore, Inc. Proprietary and Confidential.

Sources for Fastest Growing Sites

Source: comScore US Media Metrix, July 2011

2,421

3,766

6,301

6,906

Yahoo!

YouTube

Google

Facebook

UVs (000)

Tumblr.com Sources

857

1,637

3,204

4,422

Bing

Facebook

Yahoo!

Google

UVs (000)

Liberty Media Holding Corporation Sources

1,788

2,060

3,795

4,352

YouTube

Yahoo!

Google

Facebook

UVs (000)

Skype Sources

1,206

2,829

4,103

6,745

Bing

Facebook

Yahoo!

Google

UVs (000)

LinkedIn.com Sources

The majority of traffic to the fastest growing sites comes from Google, Yahoo!,

Facebook.com, and YouTube.com.

Page 12: State of the Internet - Analytics for a Digital World - comScore, Inc

12 © comScore, Inc. Proprietary and Confidential.

Unique Visitors to social networking sites have increased 5% year

over year

0

15,000

30,000

45,000

60,000

75,000

90,000

105,000

120,000

135,000

150,000

165,000

Facebook Tumblr Twitter LinkedIn

Source: comScore US Media Metrix Panel Only Data, July 2011

UV

s (

000)

+11%

+223%

+32%

+52%

Since July 2010, the microblogging site Tumblr has seen an increase

in Unique Visitors of 223%.

Page 13: State of the Internet - Analytics for a Digital World - comScore, Inc

13 © comScore, Inc. Proprietary and Confidential.

Google+: The Future of Social Networking?

Source: comScore Voices: Google+ Off to a Fast Start with 20 Million Visitors

in 21 Days

In the first 21 days of its existence,

Google+ visitation grew 561%.

As of July 19, Google+ saw just under 20

million visitors worldwide.

Growth between week 1 and week 2 was

82%.

Just over a quarter (27%) of visitors were

from the US.

Page 14: State of the Internet - Analytics for a Digital World - comScore, Inc

14 © comScore, Inc. Proprietary and Confidential.

Where do Google+ US Visitors come from?

The US is responsible for more

traffic to Google+ than any other

country.

More tech savvy markets Austin

and San Francisco-Oakland-San

Jose were more than three times

as likely to be represented.

Other markets with higher

indices include Minneapolis-St.

Paul, Pittsburgh, and Washington

D.C.

Google+: The Future of Social Networking?

Source: comScore Voices: Google+ Off to a Fast Start with 20 Million Visitors

in 21 Days

Page 15: State of the Internet - Analytics for a Digital World - comScore, Inc

15 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 16: State of the Internet - Analytics for a Digital World - comScore, Inc

16 © comScore, Inc. Proprietary and Confidential.

Online Video Viewing Is Growing Strongly with Significant Growth

Potential

Reach of elusive audiences

Better engagement

However, monetization is still a big

challenge:

User experience

Rights for UGC (User

Generated Content)

Value Drivers of Online Video

Advertising

Source: comScore Video Metrix, July 2011

July 2011

US Video Viewers 184.9MM

% Of Internet Users Who Viewed

At Least One Video 86%

Total # of Viewed Videos 43B

YoY Growth in Video Views 17.8%

Videos per Viewer 233

Viewing Time per Viewer 18 hr 12 min

Page 17: State of the Internet - Analytics for a Digital World - comScore, Inc

17 © comScore, Inc. Proprietary and Confidential.

Time Spent Streaming Jumps as Long-Form Content Floods the Web

Total US Streaming Minutes and Video Views

Sites heavy with

long-form content

have continued to

grow over the

past year,

contributing to

the increase in

time spent

streaming.

July 2010 July 2011

Hours per Viewer 14.6 18.2

Videos per Viewer 201.2 232.6

Minutes per Video 4.3 4.7

Source: comScore Video Metrix, July 2011

0

20

40

60

80

100

120

140

160

180

200

220

Jul '10 Aug '10 Sep '10 Oct '10 Nov '10 Dec '10 Jan '11 Feb '11 Mar '11 Apr '11 May '11 Jun '11 July '11

Total Videos Total Minutes +27%

+18%

Page 18: State of the Internet - Analytics for a Digital World - comScore, Inc

18 © comScore, Inc. Proprietary and Confidential.

Males Are More Engaged Online Video Viewers than Females

Source: comScore Video Metrix, July 2011

Video Activity By Gender

+120% +66%

+116% 92.0

172.9

659.7

92.9

291.7

1521.8

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

UVs (MM) Videos per Viewer Minutes per Viewer

Females Males

+69% +131%

Page 19: State of the Internet - Analytics for a Digital World - comScore, Inc

19 © comScore, Inc. Proprietary and Confidential.

Where Are People Watching Videos Online?

Google continues to

dominate in terms

of audience size,

fueled by YouTube’s

158 MM UVs.

In addition, 99.8% of

Google video

viewers are

watching content,

dwarfing the

percentage of

viewers watching

their ads (21%)

UVs (MM)

158

69 68 63 62 59

52 52 51 50

158

0 0

62

0 0 0

51 49 46

0

20

40

60

80

100

120

140

160

180 Total UVs (MM)

Content UV's (MM)

Source: comScore Video Metrix, July 2011

Page 20: State of the Internet - Analytics for a Digital World - comScore, Inc

20 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 21: State of the Internet - Analytics for a Digital World - comScore, Inc

21 © comScore, Inc. Proprietary and Confidential. Source: comScore qSearch State of Search, July 2011

The Search Market Overview: Key Highlights & Trends

In July 2011:

Today’s Search Landscape by qSearch

Leading Search Properties

Alternative Search Properties

At 27.4 billion searches in July 2011, the search landscape has grown 8% in the

past year. Search growth is driven by increased intensity (+3%).

Microsoft, Yahoo!, and Google see search growth versus one year ago. Microsoft

leads in unique searcher growth (+9%) and Google leads in intensity growth (+14%).

Apple had the most searcher growth over the past year with 10% growth in

searchers over the past year. eBay leads with 687MM searches in July 2011 while

Facebook.com has the largest number of searchers (58.3MM).

Page 22: State of the Internet - Analytics for a Digital World - comScore, Inc

22 © comScore, Inc. Proprietary and Confidential.

Global Search Market Growth of 13% Y/Y–More Than 3.5 Million

Searches per Minute

0

5,000

10,000

15,000

20,000

25,000

30,000

United States

China Japan Germany United Kingdom

Brazil France India Turkey Canada

Top 10 Countries by Number of Searches (MM) Conducted*

Jul-10

Jul-11 +15%

+16%

+6% +30% +19% +4% +21% 0%

+18%

+8%

0

20,000

40,000

60,000

80,000

100,000

120,000

Top 10 Search Properties by Searches (MM) Conducted Jul-10

Jul-11

+12% -3%

+11%

-15% +13% -2% +17% -12% +12%

+20%

*Searches based on “expanded search” definition, which includes searches at the top properties where search activity is observed, not only

the core search engines.

Google sites

account for

over two-

thirds of the

158 billion

searches

conducted

worldwide in

July.

Chinese

based Baidu

(11.5 billion

searches) was

second in

front of

Yahoo! (10.5

billion

searches).

Source: comScore qSearch 2.0 July 2011

Page 23: State of the Internet - Analytics for a Digital World - comScore, Inc

23 © comScore, Inc. Proprietary and Confidential.

27.4 billion searches were performed in July 2011, which marked an

8% growth rate over July 2010.

qSearch 2.0: Trends in the U.S. Search Market

Source: comScore qSearch 2.0, July 2011

25.4 25.8 26.0

27.0

26.1 26.6 26.7

24.3

26.7

25.6

27.2

26.6

27.4

Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11

+8%

Change vs.

July 2010

Total U.S. Searches for all qSearch properties (Billions)

Page 24: State of the Internet - Analytics for a Digital World - comScore, Inc

24 © comScore, Inc. Proprietary and Confidential. Source: comScore qSearch 2.0, July 2011

17,043

3,526

2,633

409 588

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

Leading Search Properties: Searches (MM)

Change vs.

July-10

Google Sites +16%

Yahoo! Sites +2%

Microsoft Sites +20%

AOL, Inc. -33%

Ask Network -15%

Microsoft showed a 20% increase in searches while

AOL’s search volume fell by 33%

qSearch 2.0: Leading U.S. Search Properties

Page 25: State of the Internet - Analytics for a Digital World - comScore, Inc

25 © comScore, Inc. Proprietary and Confidential.

Search Engines Continue to be the Major Players as Non-Search

Engine Search Slows in Growth

Non-search engine search growth decreases (-6%), but still represents a sizeable

percentage of overall searches.

+8%

Source: comScore qSearch 2.0; “Search Engines” defined as properties falling

under the Search/Navigation category in qSearch , July 2011

Change vs.

July 2010

-6%

+17%

Searches (Billions)

15.2 17.8

10.2 9.6

25.4 27.4

July 2010 July 2011

Search Engines Non-Search Engines Total

Page 26: State of the Internet - Analytics for a Digital World - comScore, Inc

26 © comScore, Inc. Proprietary and Confidential. Source: comScore qSearch 2.0, July 2011

145.7

687.1

239.6

409.1

662.8

0

100

200

300

400

500

600

700

800

900

Jul-10 Oct-10 Jan-11 Apr-11 Jul-11

Alternative Search Properties: Searches (MM)

Change vs.

July-10

Apple Inc. +9%

eBay +2%

craigslist, inc. -9%

Amazon Sites -26%

Facebook.com -39%

Among the top alternative search properties, eBay leads the pack with 687MM

searches

qSearch 2.0: Alternative U.S. Search Properties

Page 27: State of the Internet - Analytics for a Digital World - comScore, Inc

27 © comScore, Inc. Proprietary and Confidential.

The Great East Coast Earthquake of 2011

An animated look at U.S. Internet usage by minute between the hours of

1:40pm and 3:00pm

comScore Voices: Internet Seismometer Off the Charts from Yesterday’s Quake

http://blog.comscore.com/2011/08/internet_seismometer_virgina_earthquake.html

Page 28: State of the Internet - Analytics for a Digital World - comScore, Inc

28 © comScore, Inc. Proprietary and Confidential.

The Great East Coast Earthquake of 2011

• 1:51pm: There is a sudden drop in computer traffic

in the two regions closest to the epicenter at the

time of the quake likely from individuals in office

buildings being evacuated.

• 2:00 – 2:10pm: Computer traffic spikes back up as

employees in local regions flock back into buildings.

As expected, computer traffic increases slower in

regions further from the quake. Peak traffic rates are

observed for all devices: PC traffic is up to 22%

higher than expected weekday mid afternoon

volumes.

• 2:30 – 3:00pm: Computer and mobile traffic both

decrease in all regions, with regions closer to the

quake experiencing faster drops as they fall back

towards being in-line with other regions. Traffic, on

the whole, still remains significantly higher than pre-

quake volumes.

comScore Voices: Internet Seismometer Off the Charts from Yesterday’s Quake

http://blog.comscore.com/2011/08/internet_seismometer_virgina_earthquake.html

Page 29: State of the Internet - Analytics for a Digital World - comScore, Inc

29 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 30: State of the Internet - Analytics for a Digital World - comScore, Inc

30 © comScore, Inc. Proprietary and Confidential.

Mobile On Track to Eclipse the Desktop

Source: Morgan Stanley Research

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Desktop

Mobile

Number of Global Users (Millions)

Page 31: State of the Internet - Analytics for a Digital World - comScore, Inc

31 © comScore, Inc. Proprietary and Confidential.

Google’s Android Has Rapidly Grown its Smartphone Market Share

and Has Taken the Lead in the Race with Apple and RIM

While the number of Smartphone owners has increased 54% year over year, there have been significant

changes in the share by operating system.

Android has rapidly grown to represent 41.8% of Smartphone owners in the US, overtaking Apple and

RIM. With 27% Smartphone share, Apple takes 2nd position before RIM with 21.7%.

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

278%

75%

-15% -25%

-11%

-46%

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

% Y

ear

Ov

er

Year

Gro

wth

Mo

bile O

wn

ers

(000)

Smartphone OS Growth

Jul-2010 Jul-2011 Year on Year Growth

Google , 41.8%

Apple, 27.0%

RIM , 21.7%

Microsoft, 5.7%

Palm, 1.7%

Other Smartphone ,

2.1%

Smartphone OS Share

Page 32: State of the Internet - Analytics for a Digital World - comScore, Inc

32 © comScore, Inc. Proprietary and Confidential.

48.7% of US Mobile Phone Owners Browse the Mobile Internet, Use

Applications or Download Content (Mobile Media Users)

The number of people who are just using voice has declined 14% year over year.

Mobile Media usage has grown 20% year over year with July 2011 seeing 18.8 million additional mobile

media users

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

Mobile Media User = Used browser, application, native email, stream or download music

and broadcast or on demand video (does not include SMS)

Mobile Media, 40.7%

SMS (and not mobile

media), 29.7%

Just Voice, 29.6%

Mobile Market Segments July 2010

Mobile Media, 48.7%

SMS (and not mobile

media), 25.9%

Just Voice, 25.4%

Mobile Market Segments July 2011

114.0 million 95.2 million

Page 33: State of the Internet - Analytics for a Digital World - comScore, Inc

33 © comScore, Inc. Proprietary and Confidential.

Growth in All Major Categories

Personal Email, which is now used by 34% of all mobile phone owners in the US is still growing its user

base – 27% year over year.

Mobile usage of Social Networking services has increased by 38%

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

27%

34%

38%

28%

38%

32%

6%

14%

20%

24%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

%Y

oY

-Gro

wth

Un

iqu

e U

ser

(000)

Top 10 Mobile Categories – Year Over Year Growth

Jul-2010 Jul-2011 Year-on-Year Growth

Page 34: State of the Internet - Analytics for a Digital World - comScore, Inc

34 © comScore, Inc. Proprietary and Confidential.

Social Networking Services With Check-In Functions on the Rise

Facebook Places is by far the most popular service, followed by Foursquare, which

shows strong growth (138% since Aug 2010).

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

94.0%

11.9%

2.5% 1.9% 0.6% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Facebook Places Foursquare Yelp Gowalla Loopt

% U

sed

SN

wit

h C

heck

-In

Fu

ncti

on

Social Networking Services with Check-In Function

+138%

Page 35: State of the Internet - Analytics for a Digital World - comScore, Inc

35 © comScore, Inc. Proprietary and Confidential.

Location is Key

76% of devices in the US market have GPS - perfect conditions for location

based services.

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

30%

26%

22%

14% 12%

9%

6%

34.2%

28.0%

37.9%

27.3%

35.6%

14.6%

20.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0%

5%

10%

15%

20%

25%

30%

35%

Weather Search Maps Movie Information Restaurant Information

Traffic Reports Travel Service

% Y

oY

-Gro

wth

% M

ark

et

Location Based Services

Jul-10 Jul-11 Year-on-Year Growth

Page 36: State of the Internet - Analytics for a Digital World - comScore, Inc

36 © comScore, Inc. Proprietary and Confidential.

The Mobile Phone as Constant Everyday Companion

The mobile phone is a key communications device, with over half of consumers who use SMS or email

doing so almost every day.

More than 60% of consumers participating in the most popular seven mobile activities – communication,

listening to music, news and weather - do so at least once a week.

Product: MobiLens

Data: Three month average ending July 2011

Country: US, N= 31,100

30%

31%

32%

38%

49%

55%

63%

66%

34%

33%

32%

34%

28%

25%

22%

21%

36%

35%

35%

28%

23%

19%

15%

12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Accessed financial news / stock quotes

Accessed news

Listened to music on mobile phone

Accessed weather

Used major instant messaging service

Accessed Social Networking Site or Blog

Used email (work or personal)

Sent text message to another phone

% Mobile Activity

Frequency of Top Mobile Activities

Almost every day At least once each week Once to three times throughout the month

Page 37: State of the Internet - Analytics for a Digital World - comScore, Inc

37 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 38: State of the Internet - Analytics for a Digital World - comScore, Inc

38 © comScore, Inc. Proprietary and Confidential.

U.S. e-Commerce Dollar Sales Growth ($Billions) Source: comScore e-Commerce Measurement

Source: comScore State of the U.S. Online Retail Economy in Q2 2011

Total e-commerce spending continues to recover strongly from the recession,

posting a +12% gain Y/Y

$42 $53 $67 $82

$102 $123 $130 $130 $142

$75

$30 $40

$51

$61

$69

$77 $84 $80

$85

$50

2002 2003 2004 2005 2006 2007 2008 2009 2010 Q1-Q2 2011

$72

$143 $171

$200

+26%

+19%

+17%

+7% -2%

+9% +12%

Retail

Travel

$93 $117

$214 $209 $228

$125 +29%

+22%

+26%

+33%

+26%

+28%

+20%

+24%

+24%

+13%

+20%

+12%

+6%

+9%

0%

-5%

+10%

+6%

+13%

+11%

Page 39: State of the Internet - Analytics for a Digital World - comScore, Inc

39 © comScore, Inc. Proprietary and Confidential.

Source: comScore State of the U.S. Online Retail Economy in Q2 2011

Beginning with Q4 2009, e-Commerce dollar sales have seen positive

gains Y/Y for seven straight quarters

Bil

lio

ns

($

)

e-Commerce Dollar Sales ($ Billions) Source: comScore e-Commerce Measurement

% Change Year over Year

Q4 '07 Q1 '08 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

$31.2 $30.6 $30.3

$38.1

$30.2 $29.6 $31.0

$39.0

$33.9 $32.9 $32.1

$43.4

$39.1 $37.5 $38.0

+19% +11% +13% +6% -3% 0% -1% -2% +3% +10% +9% +9% +11% +12% +14%

Page 40: State of the Internet - Analytics for a Digital World - comScore, Inc

40 © comScore, Inc. Proprietary and Confidential.

*Note: The U.S. Department of Commerce calculation includes total retail and

food service sales, which also includes motor vehicles and parts dealers.

Source: comScore State of the U.S. Online Retail Economy in Q2 2011

E-Commerce growth significantly exceeds the growth of total retail,

indicating that consumers continue to shift from retail to online

Quarterly e-Commerce Sales Growth vs. YA Source: comScore e-Commerce Measurement

Quarterly Retail & Food Services Sales Growth* vs. YA Source: U.S. Department of Commerce (DOC)

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 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

17%

23%

19%

11% 13%

6% -3% 0% -1% -2%

23%

3%

10%

9%

12%

9%

11%

14%

4% 4% 3% 5%

4% 2%

1%

-8% -10% -9%

-7%

2%

6% 7%

5%

8%

7% 7%

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 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

When excluding autos, gas and

food/beverage, Q2 retail sales growth

was +4% (down from +6% in Q1)

Page 41: State of the Internet - Analytics for a Digital World - comScore, Inc

41 © comScore, Inc. Proprietary and Confidential. Source: comScore e-Commerce Measurement, Q2 2011

Most categories show strong growth in Q2 2011 versus Q2 2010

Q2 2011 e-Commerce Sales Growth vs. YA by Retail Category

Source: comScore e-Commerce Measurement

Q2 growth rates of 15% or

higher

Q2 growth rates of 5-9%

Q2 growth rates of 10-14%

Product Category Relative Chg

Growth Rate Q2

2011 vs. Q1 2011

Q2 2011

Growth

vs. YA

Event Tickets Very Strong

Computers/Peripherals/PDAs Very Strong

Consumer Electronics (x PC Peripherals) Very Strong

Books & Magazines Strong

Flowers, Greetings & Misc. Gifts Strong

Jewelry & Watches Strong

Apparel & Accessories Strong

Consumer Packaged Goods Strong

Video Games, Consoles & Accessories Strong

Furniture, Appliances & Equipment Moderate

Home & Garden Moderate

Office Supplies Moderate

Sport & Fitness Moderate

Page 42: State of the Internet - Analytics for a Digital World - comScore, Inc

42 © comScore, Inc. Proprietary and Confidential.

Despite opportunities, retailers remain behind the curve in

advertising on Social Media

Share of Advertiser

Display Ads on Social

Networking Sites

What will it take to get Retailers more comfortable

with Social Media???

367,500

287,627

264,883

236,863

137,156

87,938

86,870

77,848

74,576

72,061

eBay

RadioShack

Netflix, Inc.

Home Depot

J. C. Penney

ShoeDazzle.com

QuiBid

Gilt Groupe

Bidcactus

ideeli Inc.

Top Retail Display Advertisers on Social Networking Sites in Q2 2011

Ranked by Number of Display Ad Impressions (000) Source: comScore Ad Metrix, U.S., Q2 2011

14.4%

27.0%

11.1%

31.1%

19.9%

13.9%

10.2%

26.9%

52.3%

20.6%

Retail

15.4% Total

Internet

34.4%

Page 43: State of the Internet - Analytics for a Digital World - comScore, Inc

43 © comScore, Inc. Proprietary and Confidential.

Agenda

Worldwide Context

US Vital Signs

State of the Internet

– Video

– Search

– Mobile

– eCommerce

Monetization

Page 44: State of the Internet - Analytics for a Digital World - comScore, Inc

44 © comScore, Inc. Proprietary and Confidential.

US Online Ad Spend Poised to Grow 20% in 2011

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

2010 2011 2012 2013 2014 2015

US Online Ad Spending 2010-2015

$ Billions and % Change

8.8% 14.9%

20.2% 17.6%

12.0% 10.4%

Source: eMarketer: US Online AdSpend Poised to Grow 20% in 2011

Page 45: State of the Internet - Analytics for a Digital World - comScore, Inc

45 © comScore, Inc. Proprietary and Confidential.

Who are the top advertisers in the online market in July 2011?

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

To

tal D

isp

lay A

d I

mp

res

sio

ns

(00

0)

Top 10 Online Advertisers

Source: comScore US Ad Metrix, July 2011

Telecommunications companies AT&T , Verizon, and Sprint Nextel have large online advertising

presences.

Top advertisers also include business/finance companies, Experian, Scottrade, and Trans Union.

Page 46: State of the Internet - Analytics for a Digital World - comScore, Inc

46 © comScore, Inc. Proprietary and Confidential.

Is Ad Clutter Seasonal?

Since mid-February 2011, Average Display Ad Frequency has closely

mirrored Average Minutes per Visitor.

Year over year, Average Display Ad Frequency has decreased 10%,

however, Average Minutes per Visitor has increased by 3%.

0

500

1,000

1,500

2,000

2,500

Average Display Ad Frequency Average Minutes per Visitor

-10%

+3%

Source: comScore US AdMetrix, US MediaMetrix Panel Only Data July 2011

Page 47: State of the Internet - Analytics for a Digital World - comScore, Inc

47 © comScore, Inc. Proprietary and Confidential.

0

20,000

40,000

60,000

80,000

100,000

18%

32%

0%

5%

10%

15%

20%

25%

30%

35%

Portals Social Networking

Social networks have caused users to spend more time online and

advertisers to shift dollars towards online advertising

Source: comScore US Media Metrix Panel Only Data, July 2011 comScore US Ad

Metrix, July 2011

Total Minutes Spent (MM)

-7%

YoY

+47%

YoY

-9%

YoY

+14%

YoY

Share of Display Ads (%)

For the first time, Social Networking

overtook Portals in terms of Total

Minutes spent.

Social networks have also brought

huge quantities of inventory

online

Portals

Social Networking Sites

Page 48: State of the Internet - Analytics for a Digital World - comScore, Inc

48 © comScore, Inc. Proprietary and Confidential.

Socially Enabled Display Ads Encourage Brand Interaction

* Ad Metrix (July 2011) US data

Many advertisers employ social networking sites and incorporate social media

elements into their online advertising strategies.

Advertiser (US) Total Impressions

Socially Enabled

Impressions

% Socially Enabled

Impressions

Agro-Farma, Inc. 115,756,192 65,720,561 57%

Kraft Foods Inc. 539,927,424 194,084,538 36%

Mars Incorporated 956,001,280 296,246,614 31%

Page 49: State of the Internet - Analytics for a Digital World - comScore, Inc

Thank you!

Bryan Goski

Director, comScore Marketing Solutions

[email protected]