The State of The U.S. Mobile Market September 20, 2016...Source: comScore Media Metrix Multi -Platform & Mobile Metrix, U.S. Mobile now represents 2 out of 3 digital media minutes,

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The State of The U.S. Mobile Market


Gian Fulgoni CEO and Co-Founder comScore, Inc.

© comScore, Inc. Proprietary. © comScore, Inc. Proprietary. 2

Agenda The Mobile Media Revolution Social & Other Fast Rising Apps The Upside in Mobile Advertising The Accelerating Channel Shift in Digital Commerce Key Takeaways


The Mobile Media Revolution

© comScore, Inc. Proprietary. 4 Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S.

Digital media usage time, driven by mobile apps, has surged 54% since 2013 and tripled in five years, but growth across all platforms is beginning to slow

Growth in Digital Media Time Spent in Minutes (Billions)

477 481 551 492

410 621

779 864 77

97

118 125

Jan-13 Jan-14 Jan-15 Jan-16 Jun-2013 Jun-2014 Jun-2015 Jun-2016

964

1,199

1,448 1,481

+62%

+111%

+3%

+54%

% Change vs. Jun 20113

Mobile Web

Mobile App

Desktop

© comScore, Inc. Proprietary. 5

49%

33%

42%

58%

51%

67%

33%

49%

25%

35%

45%

55%

65%

75%

Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S.

Mobile now represents 2 out of 3 digital media minutes, and mobile apps are approaching 60% of total digital time spent

Share of U.S. Digital Media Time Spent Shifts by Platform

Mobile App

Desktop

Smartphone App

Mobile


45%

18%

10% 7%

4% 3% 2% 2% 1% 1%

5%

1 2 3 4 5 6 7 8 9 10 11+

Sha

re o

f Tim

e S

pent

on

App

s

Individuals’ Top Ranked App by Usage

Smartphone

Mobile users spend a really high percentage of their time on their #1 most used app, and about 9 out of 10 minutes within their Top 5

Share of Time Spent on Apps Across Ranks

Source: comScore Custom Analytics, U.S., Age 18+, June 2016

© comScore, Inc. Proprietary. 7 Source: comScore MobiLens, U.S., Age 13+, 3 Month Average Ending June 2016

Have we reached ‘peak app’? Nearly half of smartphone users don’t download any apps in a month, and the average user downloads two

Smartphone Users’ Number of App Downloads Per Month

49%

13%

11%

8% 6% 7% 6%

51% 0 Apps 1+ Apps

1 App

2 Apps

8+ Apps

4 Apps

5-7 Apps

3 Apps

Heavy downloaders of 5+ apps per month:

13% of the population,

54% of all app downloads


Monthly digital media audiences continue to climb with the help of mobile, which has now far surpassed desktop in audience size

Growth in Top 1000 Digital Media Property Audiences

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16

TOTAL DIGITAL

MOBILE

DESKTOP

6.7

12.3

6.9 6.4

16.7

12.4

+36%

+81%

-4%

Source: comScore Media Metrix Multi-Platform, U.S.

Aver

age

# of

Uni

que

Visi

tors

by

Pla

tform

(MM

)

% Change vs. Jun14


Share of Mobile App Time Spent

The top five mobile app categories are all social and entertainment-focused, and drive 60% of total time spent on apps

20%

16%

12% 7%

5% 4%

3% 3%

2% 2%

26% Other

* As of January 2016, the Pandora Radio media property reclassified itself from the Radio category to the Music category. This had a significant and inorganic impact on both categories’ time spent figures.

Indicates entertainment and communication

categories

Source: comScore Mobile Metrix, U.S., Total Audience, June 2016

Social Networking

Music*

Games

Multimedia Instant Messengers

Retail

Photos

Search/ Navigation Portals

News/Information


76%

8% 4% 4% 2% 1% 1% 1% 1% 0% 0%

10%20%30%40%50%60%70%80%

1 2 3 4 5 6 7 8 9 10

34%

8% 7% 7% 3% 2% 2% 2% 2% 2%

0%5%

10%15%20%25%30%35%40%45%50%

1 2 3 4 5 6 7 8 9 10

App usage by category tends to follow a power law distribution, featuring one strong leader, a few secondary players, and a long tail

Concentration of Time Spent in Top Apps by Category

68%

21%

4% 1% 1% 1% 1% 0% 0% 0%

1 2 3 4 5 6 7 8 9 10

Retail

Social Networking

45%

26%

13% 8%

3% 1% 1% 1% 1% 0%

1 2 3 4 5 6 7 8 9 10

Multimedia

Newspapers

Source: comScore Mobile Metrix, U.S., Age 18+, June 2016

Shar

e of

App

Tim

e Sp

ent

Top Properties in Category


Social & Other Fast Rising Apps


0

50

100

150

200

250

300

350

400

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

Source: comScore Media Metrix Multi-Platform, U.S., July 2016

Millennials use a variety of social networks regularly…

Age 18-34 Digital Audience Penetration vs. Engagement of Leading Social Networks

% Reach Among Age 18-34

Aver

age

Mon

thly

Min

utes

per

Vis

itor


0

200

400

600

800

1,000

1,200

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


Millennials use a variety of social networks regularly… but Facebook has a wide lead in both audience size and engagement

Age 18-34 Digital Audience Penetration vs. Engagement of Leading Social Networks

% Reach Among Age 18-34

Aver

age

Mon

thly

Min

utes

per

Vis

itor


0

200

400

600

800

1,000

1,200

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


The 35+ age segment represents heavy Facebook users, but they don’t spread their attention quite as heavily across other networks

Age 35+ Digital Audience Penetration vs. Engagement of Leading Social Networks

% Reach Among Age 35+

Aver

age

Mon

thly

Min

utes

per

Vis

itor


Snapchat continues its impressive run as it grows its audience across all age groups; even the “older” 35+ users are catching on

Snapchat Smartphone App Penetration by Age

0%

10%

20%

30%

40%

50%

60%

70%

80%

Jun-2013 Jun-2014 Jun-2015 Jun-2016

% R

each

Age 25-34

14%

41%

6%

29%

3%

Age 35+

Age 18-24 70%

Source: comScore Mobile Metrix, U.S., Age 18+


Facebook

YouTube FB Messenger

Google Search Google Maps

Instagram

Apple Maps

Pandora Amazon

Twitter

Snapchat

Spotify

Shazam Yelp

ESPN 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50%

% R

each

of S

mar

tpho

ne A

pp U

sers

% of Home Screens on Which App Appears

Location, location, location: apps occupying valuable home screen real estate tend to have the most visitors

Selected Smartphone Apps: Visitor Penetration vs. % Home Screen Incidence

Source: comScore Custom Survey, U.S., Age 18+, August 2016; comScore Mobile Metrix, U.S., Age 18+, June 2016


0

2

4

6

8

10

12

14

16

18

20

Jun-2014 Sep-2014 Dec-2014 Mar-2015 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016

Uni

que

Visi

tors

(MM

) Many of the fastest growing apps are services that improve existing real-world behaviors, such as hailing cabs, exercising, and dating

Fast Rising Apps Growth in Unique Visitors

* Bitmoji’s percent change figure represents its app audience growth from February 2015 to June 2016.

+828%

+492%

+1,524%

+195%

+220%

+2,371%*

% Change vs. Jun14

Source: comScore Mobile Metrix, U.S., Age 18+


0

5

10

15

20

25

30

35

7/1 7/7 7/11 7/15 7/19 7/23 7/27 7/31

Dai

ly U

niqu

e Vi

sito

rs (M

illio

ns)

Pokémon GO – a location-based augmented reality game – is the latest mobile app phenomenon, exploding onto the scene in July

Pokémon GO: Daily Unique Visitor Trend

60% of Pokémon

Go’s users are

18-34 year-old Millennials

28.5 MM

Source: comScore Custom Analytics, U.S., Age 18+, July 2016


The Upside in Mobile Advertising


Mobile ad growth is exploding right now, accounting for a third of all digital ad spending and driving acceleration in the topline digital advertising growth trend

$12.5 $16.9 $21.2 $23.4 $22.7 $25.4 $30.1 $33.2 $35.7 $37.0 $38.9

$0.6

$1.6 $3.4

$7.1 $12.5

$20.7

$0

$10

$20

$30

$40

$50

$60

$70

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

IAB Digital Ad Spend Growth by Sector

16% CAGR

18% CAGR

Source: IAB Internet Advertising Revenue Report, FY 2015

Mobile

Non-Mobile


Advertising and marketing is becoming a more important driver of app installs, while the app store’s influence may have peaked

Smartphone App Discovery Method as a % of Users

21%

14% 16%

9% 8% 9%

8% 6%

21%

14% 16%

11%

8%

11% 9% 9%

Searchedapp store

Featured/Top List inapp store

via friend/family

via comment/review/ social

site

via news/print review/

TV show

via a website via Ad ondevice

browser/ app

via Ad on TV/print/ billboard

% o

f Sm

artp

hone

Use

rs

App Store Word-of-Mouth/Opinion Advertising/Marketing

Source: comScore MobiLens, U.S., Age 13+, 3 Month Average Ending June 2016 vs. June 2015

Jun15 | Jun16


Digital ads work: both desktop and mobile ads drive brand lift, but mobile performs better, particularly in the lower funnel

Percentage Point Lift in Brand Metrics for Desktop and Mobile Ads

Aided Awareness

Favorability

Likelihood to Recommend

Purchase Intent

1.4 2.3

1.3 2.7

1.5 3.3

1.4 3.7

Desktop Mobile

1.6x

2.3x

2.1x

2.6x

Source: comScore BSL and mBSL Benchmarks, U.S., Full Year 2015


Mobile campaigns often deliver comparable reach/frequency to desktop campaigns, and drive significant incremental reach

Analysis of 14 CPG Brands’ Campaigns: Incremental Reach by Platform*

6.5

8.0 8.0

0

5

10

15

20

25

Desktop Reach Mobile Reach Total Digital Audience

Rea

ch in

Uni

que

View

ers

(Mill

ions

) 23.4 MM

+34% incremental mobile reach

14.6 MM mobile unique viewers

* Based on a sample of campaigns for 14 CPG brands in Q2 2016. Not all values in chart will sum due to rounding error.

Source: comScore validated Campaign Essentials, U.S.

3.7 3.5 4.2 Avg. Frequency


Mobile ads perform significantly better than desktop in reaching their target audience and delivering ads to humans

Benefits of Mobile Ads vs. Desktop Ads

Avg. % Unique Viewer Reach In-Target*

Avg. % of Impressions NOT Delivered to Human**

3.6%

0.7%

Desktop Mobile

* Based on a sample of 254 desktop campaigns and 167 mobile campaigns between April 1 – June 22, 2016. ** Based on a sample of 254 desktop campaigns and 127 mobile campaigns between April 1 – June 22, 2016.

39.4%

48.8%

Desktop Mobile

+9.4 point

difference

+2.9 point

difference

Source: comScore validated Campaign Essentials, U.S.


The Accelerating Channel Shift in Digital Commerce


0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Digital Commerce Share (desktop+mobile)

e-Commerce Share (desktop)

*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores.

Desktop & Mobile Digital Commerce Share of Corresponding Consumer Spending*

13.3% (Q2 ‘15)

12.5% Q2 ‘16

15.5% Q2 ‘16 Digital’s share of consumer spending peaks in Q1 and Q4

due to colder weather keeping people indoors and buying online. Q1 2016 saw a 16.5% share, the highest ever quarterly share.

11.2% (Q2 ‘15)

Source: comScore e-Commerce / m-Commerce & U.S. Department of Commerce (DOC) for Retail

By Q2 2016, Total Digital Commerce had grown to account for nearly 1 in every 6 discretionary dollars spent by consumers

© comScore, Inc. Proprietary. 27 Source: comScore m-Commerce Measurement

M-Commerce has grown as a percentage of total digital commerce, with a significant acceleration beginning in Q4 2014 and culminating in an all-time high of 19.8% in Q2 2016

m-Commerce Share of Total Digital Commerce Dollars

1.8% 2.4% 3.6%

5.8% 6.6%

8.8% 9.0% 9.3% 8.1%

9.8% 11.3%

10.5%

8.6%

10.8% 11.7% 11.5% 11.1% 11.1%

13.0%

15.4% 15.6% 16.4% 16.9%

18.6% 19.8%

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

All-Time High


In terms of discretionary spending, m-Commerce growth is still far outpacing e-Commerce & bricks-and-mortar

+5%

+17%

+59%

Total Discretionary Retail e-Commerce m-Commerce

Q2 2016 Y/Y Retail Spending Growth by Channel

Source: Dept. of Commerce, comScore e-Commerce & m-Commerce Measurement


The M-Commerce Monetization Gap: dollars are significantly lagging digital media time spent on mobile, highlighting the mobile conversion challenge

Q2 2016 Share of Retail Time Spent vs. Spending by Platform

70%

20%

30%

80%

Time Spent Dollars Spent

DesktopMobile

50% Gap

Source: comScore Media Metrix Multi-Platform and e-Commerce / m-Commerce Measurement


20.2 19.6 19.3 19.2 18.6 18.4 18.4

Do not feel secureproviding payment

information over mobiledevices

Cannot see the productdetail

Navigating betweenscreens is toodifficult/slow

Cannot browse betweenmultiple screens easily to

comparison shop

Too difficult to input myname, address, and

payment information

Connectionspeeds/spotty service

slows down the browsingprocess

Cannot navigate tocoupons/discounts easily

Smartphone

M-commerce conversion lags due to several friction points on mobile, with security concerns and screen size topping the list.

Barriers to Mobile Purchasing: Friction Score – Combines Frequency x Severity of Issues Scores were computed by multiplying ratings for “frequency” and “severity” of each issue, for each device (on a 7-pt scale, see question text below)

Thinking about purchases you make on your smartphone, on a scale of 1 to 7 where 1 is “Never Happens” and 7 is “Happens Very Often,” how often do the following happen while making a purchase on your smartphone?

Source: comScore Custom Survey


57% 46%

44% 41%

38% 33% 32%

26% 25%

21% 20% 20% 20%

13% 10% 8%

6%

43% 54%

56% 59%

62% 67% 68%

74% 75%

79% 80% 80% 80%

87% 90%

92% 94%

Video Games, Consoles & AccessoriesJewelry & Watches

Toys & HobbiesFlowers, Greetings & Misc. Gifts

Music, Movies & VideosSports & Fitness

Event TicketsFurniture, Appliances & Equipment

Home & GardenBooks & Magazines

Apparel & AccessoriesComputer Software

Total Digital CommerceConsumer Electronics

Office SuppliesConsumer Packaged Goods

Computers / Peripherals / PDAsMobile Desktop

Source: comScore e-Commerce & m-Commerce Measurement, U.S., Q2 2016

Mobile share of dollars spent tends to be lower when price and / or basket total is higher; Video Games currently attracts highest m-Commerce share

Share of Digital Commerce Spending by Platform


$8.4 $8.4 $7.1

$12.3

$9.9 $10.0 $8.4

$15.0 $12.4 $11.8

$10.1

$17.2

$14.0 $14.7

$9.2 $9.1 $9.9

$13.5

$10.2 $10.0 $11.3

$15.9

$11.1 $11.0

$11.8 $16.0

$12.5 $13.0

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Overtaking Computer Hardware, Apparel & Accessories has established itself as the #1 category, driven in part by growing consumer comfort and easier returns

Digital Commerce Sales by Category: Apparel & Accessories vs. Computer Hardware

Apparel & Accessories

Computer Hardware

Source: comScore e-Commerce & m-Commerce Measurement


Amazon Sites

eBay

Wal-Mart

Apple.com WorldwideSites

Target Corporation

The Home Depot, Inc.

ETSY.COM

Best Buy Sites

Kohls Corporation

LOWES.COM

Desktop Only Desktop + Mobile Mobile Only

Beginning in August 2015, eBay no longer included traffic from PayPal’s media property. This change resulted in a significant decline in eBay’s unique visitors, which does not reflect the performance of eBay’s branded sites/apps.

A significant percentage of top retailers’ audiences have gone mobile, with the majority of mobile time spent using retailers’ apps

Selected Leading Retailers: Total U.S. Digital Population Unique Visitors by Platform

183M

107M 101M

84M 61M

41M 36M 34M 33M

26M

22%

25%

47%

99%

31%

71%

27%

82%

26%

80%

78%

75%

53%

<1%

69%

29%

73%

18%

74%

20%

Browser App

% of Time Spent Browser vs. App

Apple Sites

Source: comScore Media Metrix Multi-Platform, U.S., July 2016; Mobile Metrix, U.S., July 2016


During the 2015 holiday season, online retail visits on mobile exploded, with mobile web exceeding app visits but app growing at 2x the rate

MULTI-PLATFORM

28.3B

+32% Y/Y DESKTOP

10.3B

+2% Y/Y

MOBILE

17.9B

+60% Y/Y

MOBILE BROWSER

9.8B

+44% Y/Y

MOBILE APP

8.1B

+85% Y/Y

Source: comScore Custom Solutions

2015 Holiday Season Retail Category Visits & Growth by Platform


2015 Holiday Season Sales for Total Commerce “The Year That Mobile Ate Bricks and Mortar”

85.0%

15.0%

12.6%

2.4%

2.3%*

12.7%**

5.9%**

49.0%**

+2.0%

+1.9 %

+0.7%

+1.2%

Brick & Mortar

Total Digital

Desktop

Mobile

% of Total Consumer Discretionary

Percent Growth

Growth Points

+3.9%

NRF: reported 3.0%

BCG: forecast 4.5%

MasterCard: reported 4.6%

* ShopperTrak ** comScore


Key Takeaways #1 Mobile has transformed digital consumer behavior, but monetization of mobile ads and commerce still lags potential. #2 Social media has been one of the main beneficiaries of mobile to date, but in the future economics should improve for more publishers. #3 Digital and mobile advertising continues to grow strongly despite issues of viewability, fraud and transparency, and still has considerable upside as these issues are addressed.


Thank You!


Documents

The State of The U.S. Mobile Market September 20, 2016...Source: comScore Media Metrix Multi -Platform & Mobile Metrix, U.S. Mobile now represents 2 out of 3 digital media minutes,