Ad Revenue 2009 Future Of Online Advertising

The Future of Online Advertising & The Second Channel Ad Revenue 2009 Conference October 8, 2009 New York City

Industry Snapshot © comScore, Inc. Proprietary and Confidential. 2

The Opportunity   33% of total time spent is online   Yet only 14% of all ad dollars are online © comScore, Inc. Proprietary and Confidential. 3 3

Online Advertising is Leaving Branding Dollars on the Table 2008 U.S. Measured Media Spend: $186 Billion Only 5% of total branding dollars are going to Online! Branding $118 B Online as 2008 U.S. Online Media Percent of Total Spend: $26 Billion 5% $6 B 30% $20 B Response Direct $68 B Source: Lehman Brothers, ThinkEquity Partners © comScore, Inc. Proprietary and Confidential. 4

Click Rates on Ads are Minimal but Forrester Study Says 35% of Marketers Still Use Click for Evaluating Branding Campaigns Rich Media Click-Through Rates by Industry Source: DoubleClick DART for Advertisers: 2008 Industry-wide click thru rate only 0.1%! Media/ Retail Tech CPG B2B Wellness Auto Telecom Travel Financial Entertainment Services © comScore, Inc. Proprietary and Confidential. 5

Half as Many Clickers in 2009 vs. 2007   Only 16% of internet users clicked on at least one display ad in March 2009   50% decline year over year July 2007 March 2009 Source: comScore, Inc. custom analysis, Total US Online Population, persons, July 2007 and March 2009 data periods © comScore, Inc. Proprietary and Confidential. 6

Heavy Clickers Account for an Even Larger Proportion of Total Clicks in 2009   Heavy and Moderate clickers are only 8% of the internet population but account for 85% of all clicks July 2007 March 2009 Heavy Moderate Light Non Source: comScore, Inc. custom analysis, Total US Online Population, persons, July 2007 and March 2009 data periods © comScore, Inc. Proprietary and Confidential. 7

Where the Clicks Come From Percent of Clicks by Percent of Clicks by Age Household Income Segment Segment March 2009 March 2009 Index Index Upper $100K or more 116 Income 45 + 96 Clickers Represent $60K – $99.9K 102 Only 4 % 35 - 44 123 of Internet Users under $60K 90 18 - 34 89 Source: comScore, Inc. custom analysis, Clicks distributions by household income segment (persons), March 2009 data period. Indices are vs. Total US Internet Population. © comScore, Inc. Proprietary and Confidential. 8

View Thru Impact of Display Advertising © comScore, Inc. Proprietary and Confidential. 9

OPA & comScore: “The Silent Click” Exposure to Display Ads Correlates with Significant Consumer Activity Base: 86.2MM Exposed to at least one of top 20 advertisers •  About one in five consumers searched on the advertised brand •  Separately, about one-third visited the advertiser’s site in February UVs Exposed to Advertising Search Advertised Brands 18% Visit Advertisers' Sites 29% 0% 10% 20% 30% © comScore, Inc. Proprietary and Confidential. 10

These Advertiser Site Visitors are More Engaged than the Sites’ Usual Visitors •  Consumers exposed to the display advertising spent over 50% more time than the average visitors to these sites the next month •  This rise in time spent is matched by a similar increase in page views Advertiser Site Engagement All UVs to Advertiser Sites UVs Exposed to Advertising 62 41 34 22 Minutes/UV Pages/UV Sources: All UVs comScore MediaMetrix, 02/09 Exposed UVs comScore Marketing Solutions, 02/09 © comScore, Inc. Proprietary and Confidential. 11

Greater Spending for Advertiser Site Visitors Exposed to Biggest Campaigns   These figures represent the average e-commerce spending in February for visitors to the 53 brands’ sites – comparing visitors exposed to these brands’ January online ad campaigns with those not exposed E-commerce $/Advertiser Site Visitor Feb ‘09 Unexposed to Top $227 Campaigns +7% Exposed to Top Campaigns $242 Bases: Unexposed 99.2MM; 86.2MM Exposed $200 $225 $250 Source: comScore Marketing Solutions, 02/09 © comScore, Inc. Proprietary and Confidential. 12

More E-Commerce Spending by Those Exposed to Related Online Advertising Travel $/Advertiser Visitor Feb ‘09 Consumer Electronics $/Advertiser Visitor Feb ‘09 Unexposed $569 +9% Unexposed $171 +22% Exposed $623 Exposed $209 $500 $550 $600 $650 $100 $150 $200 $250 CPG $/Advertiser Visitor Feb ‘09 Unexposed $74 +14% Exposed $84 $65 $70 © comScore, Inc. Proprietary and Confidential. Source: comScore Marketing Solutions, 02/09 $75 13 $80 $85

Ad Networks Friend or Foe? © comScore, Inc. Proprietary and Confidential. 14

The rise of the Ad Network   An estimated 80% of a publisher’s inventory goes unsold   Today, more than 300 ad networks –  Seven years ago, only fifteen   But why? –  Analogy to stock market –  As stock market grew, many flocked to become brokers to sell stocks –  Similar trend with online advertising –  As the market grew and as number of buyers & sellers increased, so did the number of ad networks to serve them   The result … –  A fragmented market of ad networks to try and help publishers to sell up to 80% of their remnant inventory © comScore, Inc. Proprietary and Confidential. 15 15

The Press Coverage on Ad Nets is Active and Varied ''We must not trade our advertising inventory like pork bellies.'‘ - Wenda Harris Millard, former CEO at Martha Stewart Living Omnimedia “What (publishers) should not do is allow some sort of invisible hand (or should I say hands) to price their inventory against a backdrop of objectives that can and often does change at a moment’s notice. – Jim Spanfeller, CEO Forbes.com © comScore, Inc. Proprietary and Confidential. 16 16

The popularity of Ad Networks has skyrocketed over the past 5 years # of Ad Networks Reported by comScore 70 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 © comScore, Inc. Proprietary and Confidential. 17 17

Why are so many joining the ranks?   Estimated 80% of publisher inventory goes unsold   Ability to translate core expertise with content and sales   The rise of the vertical ad networks –  Attempting to gain higher CPM rates for like, quality content –  Capitalize on core expertise   Ease of monetizing inventory   Advertisers benefit from scale, cost efficiencies   It can be very profitable –  Very strong margins © comScore, Inc. Proprietary and Confidential. 19 19

Summary   Huge advertising opportunities exist for online   We have to get away from the Click –  Dependency on clickers simply holding us back   Focus on View Thru and Sales Impact –  Display advertising has been proven to work –  Branded search, site visitation, online/offline sales lift   Educate advertisers on what’s important   Choose your partners wisely © comScore, Inc. Proprietary and Confidential. 20

Ad Revenue 2009 Future Of Online Advertising

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