What You Need To Know

Thanks to the folks from
the OPS conference for inviting me to speak yesterday. We focused on how screens are changing digital advertising. Here are the background slides I shared to kick off the discussion. Our BI Intelligence analysts prepared these slides. (Thanks, team!)

3 Business Intelligence For The
Digital Age News, insights, data, analysis and forecasts with a focus on digital Prepared by:

SCREENS

Screens are proliferating. The mobile
market is booming but that is just the beginning.

Samsung Apple Huawei LG Lenovo
Sony Ericsson ZTE Nokia Windows Phone BlackBerry HTC Motorola Other 0 25,000,000 50,000,000 75,000,000 100,000,000 125,000,000 150,000,000 175,000,000 200,000,000 225,000,000 250,000,000 275,000,000 300,000,000 325,000,000 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 UnitsShipped Global Smartphone Shipments By Manufacturer Source: BI Intelligence Es mates MOBILE: Almost 1 billion smartphones shipped in 2013.

PCs Tablets 0 20,000 40,000
60,000 80,000 100,000 120,000 140,000 160,000 180,000 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 (Thousands) Source: Gartner, IDC, Strategy Analy cs company releases Global Computer Shipments Tablets are cannibalizing PCs.

~225 million tablets were shipped
in 2013. Apple Amazon (Kindle Fire) Windows - 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000 100,000,000 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Global Tablet Shipments By Pla orm Source: BI Intelligence Es mates Android

~80% of smartphones run Android.
Android Apple iOS Microso BlackBerry Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 ShareofGlobalUnitSales Source: IDC, Strategy Analy cs Global Smartphone Market Share By Pla orm

~60% of tablets run Android.
Android Apple Amazon (Kindle Fire) BlackBerry Nook Windows 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates Global Tablet Market Share By Pla orm

Mobile is enabling new forms
of entertainment, communication, media, and commerce.

Mobile is driving all of
Facebook’s revenue growth, Total Ad Revenue Mobile Ad Revenue $ 0 $ 500 $ 1,000 $ 1,500 $ 2,000 $ 2,500 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Millions Source: Facebook Facebook Ad Revenues

Mobile drives 13% of ecommerce
sales Desktop E-Commerce Sales Mobile $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13E ($millions) Source: BI Intelligence, comScore, Federal Reserve Economic Data--St. Louis Fed U.S. E-Commerce Retail Sales

Starbucks did $1B in mobile
transactions last year in the U.S. $145 $207 $244 $272 $340 $0 $50 $100 $150 $200 $250 $300 $350 $400 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2014 MillionsOfU.S.Dollars Source: Starbucks's Statements, BI Intelligence Es mates Starbucks's Mobile Payments Volume (United States)

Apple did $10B in revenue
last year from apps. $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2008 2009 2010 2011 2012 2013 (millions) Source: news reports, company releases Apple App Store Revenues By Year

But, as we know …

Habits and technology keep changing.

What’s Next?

Multiple devices and screens.

Everything’s Connected! PCs Smartphones Tablets
Internet Of Things Connected TVs Wearables Connected Cars 0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E NumberOfDevicesInUseGlobally(InThousands) Source: BI Intelligence Es mates The Internet Of Everything

Tech execs think wearables are
the next big thing.

Analysts have wildly different views.
We are mildly bullish. 0 100 200 300 400 500 600 2010 2011 2012 2013 2014 2015 2016 2017 2018 AnnualUnitShipmentsByYear Sources: Various, *Includes all wearables Forecasts For Annual Wearable Device Shipments Vary Wildly ABI IMS-Mid Juniper IMS-Low IMS-High BII

Connected cars will be a
huge opportunity. $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E Source: SBD, GSMA Connected Car Revenue Forecast $50B by 2018

It’s huge because we spend
so much ‘dead’ time in cars. Sleeping 7.6 hours Leisure And Sports 2.5 hours In The Car 1.2 hours Ea ng/Drinking 1.1 hours Household Work 1.1 hours Other 1.7 others 0 12 24 Source: Bureau Of Labor Sta s cs Average Daily Time Spent Per Person U.S. Employed Ci zens ages 25 to 54 Working 8.8 hours

And in media, eyeballs are
moving to digital, especially mobile. 45%$ 25%$ 17%$ 9%$ 7%$ 4%$ 44%$ 26%$ 16%$ 8%$ 8%$ 6%$ 43%$ 26%$ 15%$ 7%$ 7%$ 9%$ 42%$ 26%$ 14%$ 6%$ 5%$ 12%$ 38%$ 20%$ 12%$ 4%$ 5%$ 20%$ 0%$ 5%$ 10%$ 15%$ 20%$ 25%$ 30%$ 35%$ 40%$ 45%$ 50%$ TV$ Online$ Radio$ Print$ Other$ Mobile$ Source:(eMarketer,(August(2013( U.S.$Consumer$Media$Consump2on$Share$ 2009$ 2010$ 2011$ 2012$ 2013$

People use phones while watching
TV. 62% 39% 67% 46% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Mul ple Times A Week Daily %OfRespondents Source: Nielsen, BI Intelligence Nearly Half Of U.S. Popula on Uses Their Smartphones While Watching TV Every Day How o en do you use these devices while you watch TV? (U.S. data) 2Q 2012 1Q 2013

Digital now accounts for more
than ¼ of total ad spend. Offline All Other Online Mobile $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E (billions) U.S. Adver sing Source: IAB, U.S. Census Bureau, Stategy Analy cs. BI Intelligence es mates

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