Digital 101 2012 slides

DIGITAL 101 The Digital Space –Always on the Edge of Glory Holly Bowyer Yahoo! June 2012

AgendaONLINE UNIVERSE  Why Digital?  Trends & Usage  Online Behavior  Ad SpendingMEDIA PROPERTIES  Search  Video  Mobile  Social  Rich MediaQ&A2

Why Digital? 2 KNOW the AUDIENCE Activities & Preferences 1 FIND & ENGAGE 3 CAPTUREthe AUDIENCEContent: Community: the OFFERSearch: Personalization Multi-channel: Rich Media: Creative Assembly: Offer transformation 4 Match & Present 5 UNDERSTAND the OFFER MEASURE and PROVIDE Audience targeting: Optimizing relevance & value INSIGHTS… Executing3

The number of internet users is expected to continue toincrease US Internet Users and Penetration, 2009-2012 Reach % of Population (millions and % of population) 225 70.0% 220 68.0% (millions of unique visitors) % of population 215 66.0% 210 64.0% 205 62.0% 200 195 60.0% 2009 2010 2011 2012 Through May Year4 Source: ComScore MediaMetrix Dec. 2009- May 2012; Total Uniques Home & Work

The Online Universe Growing ExponentiallyTotal Monthly Internet Audience Total Unique Visitors Total Minutes Total Minutes Per ComScore (000) (MM) Unique 2011 220,439 469,397 2,129 2010 213,584 390,435 1,8285 Source: ComScore MediaMetrix Dec. 2011, Nielsen NetView Dec. 2011 Total Internet: Total Audience

Unique Visitors Is GrowingTotal Unique Visitors (000) Up230,000 4.5%225,000 221,621220,000215,000 221,163210,000205,000200,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2011 20126 Source: ComScore MediaMetrix Jan 2011 – May 2012 NTotal Uniques Home & Work

7 0.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 500.0 Jan Feb-2009 Feb Mar-2009 2,417 1,677.0 Mar Apr-2009 Apr May-2009 May Jun-2009 Jun Jul-2009 2009 Jul So Is Usage Aug-2009 Aug Sep-2009 (red = Avg. Pages per visitor) Sep Oct-2009 Oct (blue = Avg. Minutes per visitor) Nov-2009 Nov Dec-2009 DecSource: ComScore MediaMetrix Feb 2009-May2012 Jan-2010 Jan Feb-2010 Feb Mar-2010 Mar Apr-2010 Apr May-2010 May Jun-2010 Jun Jul-2010 Jul 2010 Aug-2010 Aug Sep-2010 Minutes Spent Online & Pages Viewed per Visitor Sep Oct-2010 Oct Nov-2010 Nov Dec-2010 Dec Jan-2011 Jan Feb-2011 Feb Mar-2011 Mar Apr-2011 Apr May-2011 May Jun-2011 Jun Jul-2011 2011 Jul Aug-2011 Aug Sep-2011 Sep Oct-2011 Oct Nov-2011 Nov Dec-2011 Dec Jan-2012 Jan Feb-2012 Feb Mar-2012 Mar 2012 Apr Apr-2012 Average Pages per Visitor 3,213 2,105.4 May May-2012 Average Minutes per Visitor Up Up 33% 26%

Top 10 Online Properties as of Dec 2011 ComScore Total Unique Visitors (000) TOTAL UNIQUES 220,439 Google Sites 187,138 Microsoft Sites 177,296 Yahoo! Sites 176,485 FACEBOOK.COM 162,486 Amazon Sites 114,732 AOL, Inc. 107,076 Ask Network** 89,168 Glam Media*** 86,616 Turner Digital*** 84,215 Wikimedia Sites 83,0108 Source: ComScore MediaMetrix Nov. , Dec. 2011, *ComScore ranks Apple at #11 and eBay at #15.

What Do Consumers Do Online? GATHER INFORMATION Search COMMUNICATE Email Messenger Social Media & Communities CONSUMER CONTENT News, Sports, Finance, Entertainment, and more PERFORM TASKS Online Banking Paying Bills Shopping PERSONALIZE THEIR EXPERIENCES Social Customized Sites Groups9

2011 Top Categories By Time Spent OnlineUS Internet Users and Penetration, 2011-2012(millions and % of population) Portals E-mail Community Share of Total Time Spent on Social Networking News/Information Games Internet at Top Web Properties Entertainment Retail 20% Portals 15% Social Entertainment 10% Email 5% 0% Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2011 201210 Source: ComScore MediaMetrix Dec. 2010-Dec.2011 from ComScore 2012 U.S. Digital Future in Focus

Top Trending Online Behaviors Which of the following online 2010 2007 activities do you do at least monthly? Millions of adults (2010) 92% Use email 92% 163 60% Purchase products 37% 107 49% Send or receive photos by email 44% 86 35% Visit social networking sites 15% 62 33% Watch Internet video/streaming video 18% 58 33% Use instant messaging 31% 58 24% Listen to Internet radio/streaming audio 17% 42 18% Read blogs 13% 3111 Base: 29,295 US online adults / *Base: 28,771 US online adults (Multiple responses accepted) Source: Forrester, December 2010

Trended Online Activities Show Continued Growth2008-2015In a typical week, how many hours do you 2015 2014 2013 2012spend doing each of the following? 2011 2010 2009 2008 Percent change (2008-2015) Watching TV 0% Using the Internet* 117% Listening to the radio (not online) -18% Reading newspapers (not online) -17% Reading magazines (not online) -6% July 2009 “Consumer Behavior Online: A 2009 Deep Dive”12 Source: North American Technographics® Benchmark Surveys, 2008 to 2015 *Since 2007, Internet usage was split into “Internet for personal purposes” and “ Internet for work purposes.” The number shown here represents the sum. In prior years, we asked about Internet usage in a single item.

Speaking of other media…Multitasking is the LatestTrend. 3 out of 4 online Americans use the Internet andTV at the same time This happens frequently: over half of Frequency of simultaneous use Simultaneous users multi-task daily 4% 7% 8% Less often 31% 90%: Weekly Once or twice per month Don’t Multitask Once per week 25% 75% Several times per week Half: Daily Daily 51% American Media Multitasking Study, 201113 Q: Do you ever do the following at the same time? Q: On average, how often do you watch TV at the same time as using the internet?

When using the TV & Internet at the same time, ATTENTION is usually focused ONLINE 54% Focus on the 30% Internet Divide Attention 16% TV14

But, there are several mismatches between the averageshare of time people spend with a medium and the shareof ad dollars that medium receives Share of Average Time Spent per Day with Select Time spent share Ad spending share Media by Us Adults vs. US Ad Spending Share, 2011 (% of total) Tv 42.5% 42.0% Internet* 25.9% 22.2% Radio 14.6% 10.7% Mobile 10.1% 1.0% Newspapers 4.0% 14.3% Magazines 2.8% 10.6% Note: *time spent with the internet excludes internet access via mobile, but online ad spending includes mobile ad spending; due to this, the total of the ad spending shares15 for all the media adds up to more than 100% Source: eMarketer, Dec 2011 & Jan 2012

Social network ad spending will grow 54% between 2012and 2014 US Social Network Ad Revenues, 2011-2014 Social network and revenues % change (billions and % change)100.00% $6.00 $5.59 90.00% 80.00% $4.73 $5.00 70.00% $3.63 $4.00 60.00% 50.00% $3.00 $2.54 40.00% 43.0% $2.00 30.00% 20.00% 28.9% 30.4% $1.00 10.00% 18.0% 0.00% $0.00 2011 2012 2013 2014 Note: Includes paid advertising appearing within social network sites, social network games and social network applications; excludes spending by marketers that goes toward16 developing or maintaining a social network presence Source: eMarketer, Feb 2012

Let thecompetitionbegin!17

Large Online Ad Buys Grew in 2011Number of Advertisers Delivering at Least 1 1-3 Billion 3-5 Billion 5-10 Billion 10+ BillionBillion Display Ad Impressions per Quarter 160 140 9 7 13 17 120 15 20 100 4 5 12 4 10 80 10 12 15 14 60 104 99 40 79 74 65 20 0 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 201118 Source: ComScore Ad Metrix, US Q4 2010 – Q4 2011, ComScore 2012 Digital Future in Focus

Top Digital Advertisers of 2011 Top Ten U.S. Online Display Advertisers by Numbers of Impressions in Millions AT&T Inc 105,792 Experian Interactive 67,565 Verizon Communications 49,481 Scotttrade, Inc 44,031 Google, Inc 40,454 Microsoft Corporation 38,662 Netflex, Inc 36,991 Ebay, Inc 32,302 Progressive Corporation 30,042 IAC - Interactivecorp 29,40319 Source: ComScore Ad Metrix, Jan. 2011-Dec. 2011, ComScore 2012 Digital Future in Focus

So you’re sold on digital but which are the best formats? I remember seeing this ad format (Among those who remember seeing advertising) Banner ads 35% Overlay ads 20% Sponsorship 18% Pop-up ads 11% Expandable banner ads 9% Pre, mid, post rolls 53% Video banner ads 13% Pop-up video ads 8% Expandable video banner ads 6%20 Interpret Study, 2011 C21a. Please take a look at the explanations below and tell us what type of ads you remember seeing during this video experience. N=6280

SEARCH21

Search will remain the largest ad format US Online Ad Spending Share, by Format, 2012 (% of total) Search 49.4% Banners 23.4% Video 7.9% Classifieds and directories 6.4% Lead generation 4.9% Rich media 4.2% Sponsorships 3.5% Email 0.4%22 Note: eMarketer benchmarks its US online and spending projections against the IAB/PwC data, for which the last full year measured was 2010 Source: eMarketer, Jan 2012

Marketing Objectives Met by Search DRIVE AWARENESS OBTAIN LEADS DRIVE PURCHASES Traffic Registrations ROI Reach and frequency Conversions PAID SEARCH HELPS ACHIEVE MARKETING GOALS23

Organic (SEO) vs. Paid Listings (SEM)24

Display Advertising is a Powerful Driver of Search After being exposed to a display ad, consumers were:  136% more likely to search the brand’s keywords  86% more likely to click on a sponsored text ad25 Google/ComScore panel.

Rich Ads in Search (RAIS)NEW AD FORMATS Include ADDITIONAL LINKS, IMAGES, FAVICONS, VIDEOS AND MORE MAINLINE EXCLUSIVE POSITION for brand terms on Yahoo! Search and Bing Help IMPROVE CTR AND INCREASE BRAND AWARENESS Average a 30-35% CTR: 40-50% HIGHER compared to a standard text ad.* MORE ENGAGING EXPERIENCE for prospective customers26 Internal Yahoo! and Microsoft Data, December 2011

Search Needs to be Part of the Marketing Mix/BuyingCycle Offline Lower AWARENESS Non-Targeted Display Converting Contextual Text Ads CONSIDERATION Targeted Display INTEREST Email Higher Converting ACTION/ Rich Ads in Search PURCHASE Search27

Continued innovation in Search AIMING TO DELIVERING ANSWERS, NOT LINKS making it easier to access the information, services and answers people are looking for. Today’s Yesterday’s Search Experience + Personal Context: • Find the Best Answers • Search and • Get Things DoneQuery Query Search Results PageDiscovery & Entertainment Behavioral History • • Social • Make Smarter Choices • Location • Wherever the User Goes 28

Navigating a NewCourse In Search –Yahoo! Axis….re-imagining thesearch and browseprocess.  Smarter, Faster Search with Rich Design  Connected Experience across multiple devices  Personalized Home Page  Standalone Mobile Browser, Desktop Plug-In29

DIGITAL VIDEO30

VIDEO PREMIUM PREMIUM UGCNETWORKS OFFLINE VIDEO ONLINE VIDEO Video Marketplace Originals

December 2011 Total Video Audience Videos Total Unique Viewers Minutes VIDEO (000)* (000) (per Viewer) All time high! 43,472,412 181,669 1,389.8 Video Ads Frequency Total Ad Minutes VIDEO ADS (000) (Ads per Viewer) (000) 7,115,272 45.6 3,009 December 2011 Highlights  85.3 percent of the U.S. Internet audience viewed online video.  The duration of the average online content video was 5.8 minutes, while the average online video ad was 15 seconds.  Video ads accounted for 14.1 percent of all videos viewed and 1.2 percent of all minutes spent viewing video online. *A video is defined as any streamed segment of audiovisual content, (both progressive downloads and live streams). For long-form, segmented content, (e.g. TV episodes with32 ad pods in the middle) each segment of the content is counted as a distinct videostream. Source: ComScore Video Metrix Dec. 2011 Total U.S. – Home/Work/University Locations. Content Videos Only (not ads), Press Release

More and More People Are Viewing Videos Online Growth in Total Online Video Content Market Dec-2010 Dec-11 +37% 239.00 175.00 +43% 105.10 73.70 +44% 43.50 30.10 Average daily unique Videos viewed Videos per viewer viewers (billions) (millions)33 Source: ComScore Video Metrix Dec. 2011, Dec. 2010. 2012 Digital Future in Focus

Top Online Video Sites Total Unique Visitors (000) Google/YouTube 157,663 Yahoo! Sites 53,604 VEVO 49,479 Facebook.com 44,298 Microsoft Sites 42,833 Viacom Digital 41,247 AOL, Inc. 38,925 Amazon Sites 30,168 Hulu 28,23334 Source: comScore Video Metrix, April 2012

Online video watching has increased significantly I watched in the past 24 hours... 2009 2011 +33% 57% +26% 48% 43% +72% 38% 31% +50% 21% 18% 14% Watch online videos Watch short clips Watch full-length TV Watch full-length shows movies S9. When would you say was the last time you watched the following types of streaming online video?35 N=24163 Arrows indicate significant difference at 90% level of confidence

High Quality, Short Form Videos Are Most Popular The vast majority of online video consumption is short-form and consumers are saying they want more! 8% Full-Length Movies I expect to watch more… 18% Full-Length TV Shows 74% 60% 60% Short-form video ...professionally ...original video -produced short content that can online video only be found clips online Type of video watched Q: How much do you agree or disagree with each of the online in past 24 hours* following statements about online video? (Top 2 Box Agreement Reported) N= 114236 Interpret Study, 2011

When are they watching? I watched in the past 24 hours... 2009 201150% Netflix in the past 24hrs +200%45% Hulu in past 24hrs +67%40%35%30%25%20%15%10% 5% ? 0% 5AM - 8:59AM 9AM - 11:59AM 12:00PM - 2:59PM 3PM - 5:59PM 6PM - 8:59PM 9PM - 12:59AM 1AM - 4:59AM37 Interpret Study, 2011 C1. At what time or times in the past 24 hours did you begin watching a video or series of videos? N=4089

Video ad spending will jump more than twice as muchas any other format or the overall market US Online Ad Spending Growth, by Format, 2012 (% change) Video 54.7% Search 27.0% Sponsorships 27.0% Total 23.3% Banners 19.8% Lead generation 18.5% Rich media 4.1% Email 3.1% Classifieds and directories 1.2%38 Note: eMarketer benchmarks its US online ad spending projections against the IAB/PwC data, for which the last full year measured was 2010 Source: eMarketer, Jan 2012

TV is great for reach but when it comes to effectiveness,digital video works harder Online Video Ads Outperform TV TV Premium Online Video Ad Performance 65% 50% 46% 39% 26% 26% 21% 14% General Recall Brand Recall Message Recall Likeability39 Source: Nielsen IAG, A18-49, Jan 2011

#1Online Videois the newprimetime40

#2Shortform isstill mostpopular41

#3GoProfessional!42

#4Multi-taskingis commonand frequent43

MOBILE44

Mobile TrendsRising smart device and mobile web adoption signal new imperativesfor marketers.Marketers need to look toward the day when the mobile web is no longer asideshow but a main event.Mobile marketing is no longer a question of “if” but of “when.”Expect to see mobile continue to emerge as less of an afterthought and more ofa permanent fixture in marketers’ digital strategies.Mobile advertising is following a similar evolution as the desktop.Search and display are emerging as the dominant mobile ad formats. Theoutlook for mobile ad spending overall is trending sharply upward.The future of mobile is all about sophistication.More capable devices, faster networks, savvier mobile consumers and richerexperiences lie ahead. Marketers’ strategies must evolve in line with thegrowing sophistication of mobile devices and consumers’ usage patterns.45

Mobile Ad Dollars Are on the Rise US Mobile Ad Spending Sept 2010 forecast Sep 2011 forecast (millions and % change) 2015 2011 2013 $1,102 $1,226 $2,036 $2,523 $4,396 +48% +65% +36% +40% +30% 2012 2014 $1,501 $1,802 $2,549 $3,381 +36% +47% +25% +34%46 Emarketer, 2011

Smartphone Users Engage with Web &Media Content 92% Send/receive text messages 59% Access a social network 84% Access the internet 54% Watch a video 76% Send/receive 76% email Access Twitter 69% Download an app47 Source: Pew Internet & American Life Project, *Americans and Their Cell Phones,,” Aug 15, 2011 www.eMarketer.com

So Do Tablet users 77% 66% General Gaming web browsing 66% 73% Social networking Email 61% Shopping/ purchasing 71% Reading news 57% Movies 69% 56% Streaming video Work48 Source: InsightExpress, June 2011

Search and display are emerging as the dominantmobile ad formats US Mobile Ad Spending, by Format, 2010-2015 (millions and CAGR) 2010 2011 2012 2013 2014 2015 CAGR Messaging $327.3 $442.6 508.3 560.2 612.0 633.0 14% Banners and rich media $202.5 376.4 594.8 883.2 1,207.1 1,600.0 51% Search $185.0 349.4 594.8 908.4 1,291.6 1,767.1 57% Video $28.3 57.6 104.5 171.6 270.5 395.6 69% Total $743.1 $1,226.1 $1,802.4 $2,523.3 $3,381.3 $4,395.7 43% Note: Numbers may not add up to total due to rounding49 Source: eMarketer, Sep 2011 Twitter: #eMwebinar @noahelkin

Mobile: Bottom line: Mobile can play a key role at every stage of the purchase funnel  Tag traditional media with barcodes  Mobile display media  Mobile search engagement AWARENESS  SMS alerts  Mobile websites/apps ENGAGEMENT  2-D barcodes  Display media  Mobile websites/apps CONSIDERATION  Mobile coupons  IVR/Click-to-call CONVERSION  Mobile shopping/m-commerce  2-d barcodes  Mobile websites/apps LOYALTY  SMS alerts  Mobile apps50

SOCIAL51

Social TrendsUS social network ad revenues will reach $2.74 billion in 2011.By 2013, revenues are expected to grow to $4.81 billion.More ad dollars are funneling to social sites.In 2013, 11.7% of US online ad spending will go toward social networks.Ad spending is growing because more consumers are usingsocial networks.65% of online adults use them, according to the Pew Internet & American LifeProject.52

Social networks will receive 11.7% of US online adspending in 2013 US Social Network Ad Revenues, 2009-2013 (billions and % of total US online ad spending) 2009 2010 2011 2012 2013 Social network and revenues $1.44 $2.00 $2.74 $3.90 $4.81 Total US online ad spending $22.70 $26.00 $31.30 $36.80 $41.20 Social network % of total 6.3% 7.7% 8.8% 10.6% 11.7% Note: includes paid advertising appearing within social network sites, social network games and social network applications; excludes spending by marketers that goes toward53 developing or maintaing a social network presence Source: eMarketer, Sep 2011

This year, nearly half of the US population will be socialnetwork users US Social Network Users and Penetration, Social network users % of population 2011-2014 (millions and % of population)180.0% 170.7% 100.0% 164.2% 157.8% 90.0%160.0% 147.8%140.0% 80.0% 70.0%120.0% 60.0%100.0% 50.0% 80.0% 49.9% 51.4% 52.9% 47.2% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 0.0% 0.0% 2011 2012 2013 2014 Note: Ages 12+; use several times per day54 Source: Arbitron and Edison Research, “ The Infinite Dial 2012: Navigating Digital Platforms, “ April 10, 2012 www.eMarketer.com

This year, nearly half of the US population will be socialnetwork usersWays that US Social Network Users Use Social Media, Jan 2012 4% 15% Dating Staying in touch 36% Entertainment 20% Information Self-expression 25% Note: Ages 18+55 Source: Netpop Research, “Social Media in the U.S.” as cited in MediaPost, Aprila 16, 2012 www.eMarketer.com

Social : Bottom line PROS  1 on 1 conversation with consumers  Ability for viral pass along and recommendation  Relationship/CRM marketing  Extends conversation/reach from other media and ads  High engagement and time spent CONS  Unauthentic messages being delivered  Knowing what to measure  Privacy and privacy controls pertaining to location56 eMarketer: Social Media Marketing by the Numbers: Key Stats, Trends and Indicators Feb 2010

RICH MEDIA57

What is Rich Media? Creative TechnologyRich Media is online advertising enhanced by motion, sound, video, or someinteractive elementWith rich media, online ads approach television in terms of dynamism: they floatabove content, animate, integrate video and audio. They also go beyond television toinclude interactive elements like:  Pull-downs for more information, micro-site in-the-banner  Branded games and immersive activities  Polls and Quizzes  Downloadable Icons, Screensavers, Ring Tones, Documents, and more  E-commerce functionality inside the ad unit  Data Collection/Email Registration  Viral Marketing – Send to a Friend58

Anatomy of a Rich Media Ad 1. Banner automatically displays on GAMING STANDARD VIDEO publisher site (1 impression) 2. Upon rollover, panel expands (1 interaction) 3. Panels can contain any combination of PRICE COMPARISON rich media features 4. User can click-through to site to continue experience (1 click-through) INTERACTIVE VIDEO PHOTO GALLERY WEBSITEBANNER PANELClick on image in slide show mode to view demo59

The ‘Smack Talk’ Smart Ad61

In summary…the digital space is always on the edge of glory …connects marketers with their most valuable audience wherever they may be. …understands users passions with accuracy and detail never before achieved in traditional media.…offers creative products that enable marketers to find consumers in hard to reach places with unique and engaging messages.…continues to experiment with new formats and devices to continue connecting marketers and consumers in mutually beneficial ways.62

Holly Bowyer hbowyer@yahoo-inc.com63

Digital 101 2012 slides

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