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Tuning in the rise of online video in latin america

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Date: October 2, 2012 …

Date: October 2, 2012
Tuning In: The Rise of Online Video in Latin America
Speaker: Gian Fulgoni, Executive Chairman & Co-Founder, comScore, Inc.
Event: comScore Presentation

Published in: Investor Relations

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  • 1. Tuning In: The Rise of Online Video in Latin America Festival of Media LatAm | 24 September 2012 Gian Fulgoni Executive Chairman and Co-founder, comScor
  • 2. 1 Online Video Viewing in Latin America2 What Can We Learn from the U.S.?3 Some Thoughts for the Future
  • 3. The U.S. is No Longer the Center of the Online Universe U.S. Internet Population vs. Rest of the World Distribution of Worldwide Internet Audience Middle East -Rest of the World 34% Latin Africa, America, 8,8% 9,0% Asia 87% North Pacific, America, 41,3% U.S. 14,6% 66% Asia Pacific Europe, 13% 26,4% 1996 2011  In 1996, 2/3 of world’s Internet population was in the US, yet today Asia Pacific is the largest region with over 40% of online population.  Many emerging regions 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. Source: comScore Media Metrix, Visitors Age 15+ Home/Work Location, Dec-2011
  • 4. Latin America is World’s Fastest-Growing Region  Growth expected to continue as Worldwide Online Population home broadband penetration (Millions) increases in Asia and Latin +8% America 1.491  Growth in developing regions 1.383 likely to continue as people move from shared-access to home & 2011 Jun 2012 Jun work use Jun-11 Jun-12 +8% 568 613 +8% 369 398 +3% +11% +12% 206 213 120 133 119 134 Asia Pacific Europe North America Middle East - Latin America Africa Source: comScore Media Metrix, Visitors Age 15+ Home/Work Location, June 2011 vs. June 2012
  • 5. Focus: Latin America Latin America Argentina Brazil Chile Mexico July 2010 Penetration Data V0910
  • 6. Online Video’s Blockbuster YearVideos Viewed Grew by Double Digits Across LatAm RegionGrowth in Video Viewing in 2011 Total Videos Viewed Percent Growth (000) Dec-2011 vs. Dec. 2010 BRAZIL 4.7 Billion +74% MEXICO 3.0 Billion +80% ARGENTINA 1.5 Billion +75% CHILE 1.0 Billion +91%
  • 7. Driven by YouTube, Google Sites Account forMore than 60% of Videos Viewed in LatAm MEXICO CHILE Videos Share of Videos Share of (Millions) Videos (Millions) Videos1Google SitesVEVOViacom Digital 2,164 219 54 BRAZIL Videos 62% 6% 2% Share of Google Sites VEVO Viacom Digital ARGENTINA 927 58 17 80% 5% 2% Videos Share of (Millions) Videos (Millions) VideosGoogle Sites 4,435 75% Google Sites 988 63%Globo 359 6% VEVO 65 3%VEVO 193 3% Facebook.com 22 1% Source: comScore Video Metrix, July-2012
  • 8. Video Consumption in LatAm skews younger … with under 34age segment accounting for almost 60% of videos viewed % Composition of Video Time Spent 30% 28% 21% 14% 8% 15-24 25-34 35-44 45-54 55+ Source: comScore Video Metrix, July-2012
  • 9. Reach of online video is slightly greater in the LatAmregion than Worldwide Monthly Online Video Reach / Web Population Worldwide 84% USA 85% Argentina 96% Brazil 81% Chile 92% Mexico 82% Source: comScore Video Metrix, July-2012
  • 10. Room for growth in video consumption in LatAm Videos per Viewer Worldwide 169,5 USA 245,9 Argentina 120,0 Brazil 139,2 Chile 168,6 Mexico 151,2 Source: comScore Video Metrix, July-2012
  • 11. Room for growth in video engagement in LatAm Monthly Hours per Viewer Worldwide 19,40 USA 22,05 Argentina 11,32 Brazil 11,61 Chile 12,45 Mexico 13,63 Source: comScore Video Metrix, July-2012
  • 12. While growing rapidly in LatAm, time spent watching online videoequivalent to only a percentage pointor two of the time spent watching TV
  • 13. What Can We Learn from the U.S.?
  • 14. IAB says U.S. online ad spend is now larger than newspapers,magazines and radio, and equivalent to 46% of TV 10X Faster +22% Growth vs. year ago Than All Media $31.7 Billion U.S. Online Ad Spending in 2011 SOURCE: IAB for Internet Advertising Revenue and KANTAR for Total Mediaedia Measurement
  • 15. In the U.S, time spent watching traditional TV is essentially flat whileonline video is growing strongly US Monthly Total Hours (millions) Spent Watching TV vs. Online Video -0.6% 44.581 44.334 Video now equals 5% of total time spent watching TV Monthly Total Hours (millions) in Q4 2010 +74% Monthly Total Hours (millions) in Q4 2011 1.338 2.321 TV Online Video SOURCE: TV: Nielsen Cross Platform Report – Q4 2011. Online Video: comScore Video Metrix
  • 16. IAB says U.S. online video ad spending is surging +40% Equivalent to 6% of all vs. year ago online ad spending $1.8 Billion U.S. Online Video Ad Spending in 2011
  • 17. Online ad spend in Latin America* is growing twice asfast as in the U.S. 3.5X Faster +42% Growth vs. year ago Than All Media Latin America $2.5 Billion Online Ad Spending in 2011 *Argentina, Brazil, Chile, Colombia, Mexico, Peru SOURCE: IAB for Online and Various for Total Media dia Measurement 2011
  • 18. Online video allows convenient viewing of TV content andis an incremental audience – it’s not about avoiding ads Recent comScore study sought to answer: why do viewers choose to watch TV content online? – NOT out of ad-avoidance – Main factor is convenience and time-shifting Missed episode on TV 71% Convenience 57% Less ads 38% Like to see past episodes 25% Prefer the online experience 13% Don’t subscribe to cable/dont have a TV 7%
  • 19. Online viewers of TV programs are open to more ads – at least 6.5 minutesper TV hour Optimal length of commercials for an hour of TV viewed online 100,0 80,0 60,0 40,0 20,0 0,0 1 min 2 min 3 min 4 min 5 min 6 min 7 min 8 min 9 min 10 min 11 min 12 min 13 min 14 min 15 min Negligible Minimal Long Enough Too Long *Respondents were asked questions on a sliding scale from ‘how much advertising is so negligible that it would not interfere at all’, through to ‘how much advertising is too long and Base sizes: would interfere completely with the viewing experience’? Total=640
  • 20. A CBS Perspective on TV and Video Advertising from 2009
  • 21. CBS: Online video ads can demand a premium price becauseof heightened consumer attention and more precise targeting
  • 22. CBS: Even with lower ad loads than TV but a premium price, videoads can have same value as TV ads
  • 23. The Limitation of TV: Brands Trying to Reach their Target withTV Alone Hit A Plateau of Diminishing Returns Total Reach and Effective Reach for a TV 100 Campaign as a Function of Cost 90 85,1 87,9 80 Total Reach 70 74,1 67,8 60 50 Effective Reach 40 30 20 10 0 0 2.500 5.000 7.500 10.000 12.500 15.000 Cost ($000) Typically 30%+ of Target Audience is not Effectively reached
  • 24. Adding Branding Advertising to TV With Online Video BuildsReach and Effective Reach Impact of a 90/10 Allocation Effective Media Plan GRPs Total Reach Reach TV Only 1,000 85% 68% TV + Video Combination TV (90%) 900 84% 66% Online Video (10%) 500 64% 44% TV + Online Video 1,400 90% 84% TV Only vs. 400 5% 16% 90% TV + 10% Online Video Source: comScore simulation using single source TV and Internet data
  • 25. Summary Thoughts1 Online video viewing in LatAm is surging2 Lessons from U.S. Online video viewing of TV content incremental to TV Consumers will accept online video ad loads of 10%+ Premium pricing possible for video ads3 Online video advertising can add effective reach to a TV campaign –especially among younger age segments