The Mobile Opportunity Gap - Kenshoo and Yahoo Webinar

2. 2 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Webinar Information Audio Instructions • Listen via computer speakers or use phone numbers listed in email from gotowebinar@citrixonline.com • Still can’t hear the webinar? Tell us please!

4. 4 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Agenda • Consumer Shopping Trends – Yahoo Findings • State of Mobile Advertising • Advertiser Three-Screen Perceptions – Kenshoo Findings • Key Imperatives for Marketers • Q&A

6. 6 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Column1 2012 2013 2014 2015 2016 2017 2018 Growth of mobile & tablet ownership will continue trending up… Smartphone & Tablet Ownership | eMarketer Source: Yahoo/Ipsos MediaCT Mobile & Tablet Consumption Survey, June 2014, 18-64 2012 2013 2014 2015 2016 2017 2017 100% 50%

7. 7 © 2014 Kenshoo, Inc. Confidential and Proprietary Information … which have increased digital mobile time spent by 5X Source: comScore US Media Metrix Multi Platform data MAY 2010 APRIL 2014 Time spent online, billion minutes PC Smartphone Tablet 127% more time spent online than in 2010 Minutes Spent Online by Device

10. 10 © 2014 Kenshoo, Inc. Confidential and Proprietary Information 61% 51% 37% 30% 25% 21% 20% 13% 13% 12% 12% 12% 11% 11% Check/Send Email Text/IM Use Search Engines Weather Online Video Content Online Games Read News (i.e. local/national/world) Listen to streaming radio/music Post/Share/View Photos Shop/Browse shopping sites/ Apps Entertainment Content Sports Content Lifestyle Content (i.e. Food, Beauty) Finance Content In fact, mobile daily habits have formed around communication and content Top Mobile Activities (% Daily, Smartphone Users) 46% of mobile users access content at least daily

12. 12 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Previously, usage spiked at specific points in time, leaving gaps for “Life” An ebb and flow of usage, leaving both small and wide gaps throughout the day TIME Television Laptop Desktop Smartphone

13. 13 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Now, convenience of multiple devices allows consumers to fill in the gaps Consumers no longer access single devices at specific points in time for specific activities or occasions. TIME

14. 14 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Creating continuous usage, allowing for greater accessibility, connectivity, & efficiency Technology is used continuously throughout the day – leaving no gaps in time TIME

15. 15 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Shoppers are behaving in new ways Instant information at their fingertips, improved Mobile and Tablet site usability, shopping apps and improving technology enable the shopper to behave in completely new ways. Dynamic and Evolving Shopping Experience Rapidly improving technology Increasing consumer confidence and demand

16. 16 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Explosive growth in leveraging our mobile devices for shopping information… Number of Mobile Shoppers Growth from 2011 Finance 76M +145% Entertainment Items 69M +103% Home Improvement 56M +180% Restaurant & Dining 54M +62% Personal Travel 54M +108% Consumer Electronics 51M +93% Clothing & Accessories 51M +104% Beauty & Personal Care 47M +135% Package Goods & Beverage 40M +100%

17. 17 © 2014 Kenshoo, Inc. Confidential and Proprietary Information …and we aren’t the only ones talking about this growth ~25% of Thanksgiving & Black Friday sales driven by mobile, a +43% increase Estimates that mobile transactions will top $114 Billion in 2014, a 1/3 of all digital transactions Projecting mobile retails sales will be $626 Billion by 2018

18. 18 © 2014 Kenshoo, Inc. Confidential and Proprietary Information 43% of tablet owners believe their tablet is critical to my daily life More than 50% say their mobile devices makes them browse the internet more 67% of mobile owners believe their mobile is critical to my daily life

20. 20 © 2014 Kenshoo, Inc. Confidential and Proprietary Information 84% 36% 51% 46% 92% 30% 46% 42% Mobile Tablet IN STOREGETTING SOMEWHEREAT HOME WHILE WAITING IN LINE While mobile shopping is on-the-go, it really starts at HOME I use my Mobile/Tablet to access <category> shopping related information in this location

22. 22 © 2014 Kenshoo, Inc. Confidential and Proprietary Information MOBILE TABLET Disappointed companies don't have optimized site 44% 50% Disappointed companies don't have application 38% 47% I am less likely to re-visit a brand’s site if it wasn't optimized for my mobile device the first time I visited it 38% 44% MOBILE TABLET Filling out forms on my mobile phone is difficult 61% 46% Brands-Manufacturers-Retailers have not made it easy to redeem coupons on my mobile device while in-store 36% 37% I am sometimes unsuccessful at making payments using my mobile device 27% 26% There is ample opportunity to improve the consumer brand experience on mobile devices BUYING STUFF SITE EXPERIENCE

23. 23 © 2014 Kenshoo, Inc. Confidential and Proprietary Information MOBILE TABLET Used a map to navigate 52% 50% Took/sent product picture 34% 29% Scanned Something 30% 32% Looked for/downloaded apps 23% 30% “Checked in” at a location 22% 24% OTHER Search Reviews Sites Deal Sites or Apps Product & Price Comparison Communication about Product Noticed/Clicked on Advertising 75% 72% 54% 49% 45% 34% 75% 63% 59% 61% 43% 43% 81% 59% 54% 70% 21% 43% It’s about the basics: search, review sites, & community are important during buy cycle I used my device to do the following…

25. 25 © 2014 Kenshoo, Inc. Confidential and Proprietary Information ENTERTAINMENT CASUAL DINING BEAUTY & PERSONAL CARE FOOD & BEVERAGE TRAVEL APPAREL CONSUMER ELECTRONICS 79% 80% 76% 78% 53% 66% 53% 59% 66% 76% 61% 77% 55% 60% Mobile & tablet shopping research results in purchase behavior offline or via PC Actions After Mobile/Tablet Research: I made a purchase/enrollment via any method Mobile Tablet

26. 26 © 2014 Kenshoo, Inc. Confidential and Proprietary Information HOME IMPROVEMENT INVESTMENT INSURANCE CREDIT CARD HEALTH BANKING AUTO 24% 28% 28% 46% 38% 46% 39% 50% 40% 51% 42% 55% 53% 60% Actions After Mobile/Tablet Research: I made a purchase/enrollment via any method Mobile Tablet And it’s also a driver of purchase for lower incidence categories

27. 27 © 2014 Kenshoo, Inc. Confidential and Proprietary Information ENTERTAINING BOLD UP TO DATE VALUE INTERACTIVE FUNCTIONS 43% 41% 39% 32% 35% 39% WOULD CAPTURE MY ATTENTION Bold & interactive ads that take full advantage of the device are most appealing to consumers Mobile/Tablet Advertising Preferences – Ad Copy

28. 28 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Auto Apparel/Fashion Beauty/Personal Care Consumer Electronics Food & Bev Home Improvement Banking Entertainment Credit Cards Health Insurance Travel Investment Dining Mobile/Tablet Advertising Preferences – Category Relevant to current location/local area Offers/Coupons/ Promotions/Incentives Relevant to interests/background For most categories, top 3 ad tactics revolve around location, relevancy and promotions

31. 31 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Mobile Ad Spend Accelerating • Marketing budgets continue to shift from offline to digital • Digital to reach $50B by 2015 • Mobile to be +50% of total digital by 2017 $70 Bn. $0 Bn. $10 Bn. $20 Bn. $30 Bn. $40 Bn. $50 Bn. $60 Bn. 2013 2014 2015 2016 2017 Digital Ad Spend Mobile Ad Spend 22.55% of digital 39.81% of digital 56.69% of digital Source: eMarketer, Dec 2013

32. 32 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Global marketers prioritize desktops Advertisers are still significantly prioritizing budgets to computers, with most applying roughly an 80-20 split: 80% to desktops, 20% to mobile devices.

33. 33 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Kenshoo Clients Increasing Mobile Spend Share Spend Clicks Q2 2013 Q2 2014 Q2 2013 Q2 2014 Global 21% 29% 24% 32% U.S. 20% 28% 24% 33% U.K. 25% 36% 28% 38% A.U. 28% 35% 31% 44% Source: Kenshoo Search Advertising Trends – Q2 2014

34. 34 © 2014 Kenshoo, Inc. Confidential and Proprietary Information $0.40 $0.45 $0.50 $0.55 $0.60 $0.65 $0.70 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Global CPC by Device Desktop Phone Tablet Desktop Still Carries Price Premium Source: Kenshoo Search Advertising Trends – Q1 2014 $0.65 $0.61 $0.55

35. 35 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Mobile Performance Trails Desktop 2% 20% 14% 27% 37% How would you rate the performance of your mobile paid search efforts when compared to desktop? Mobile performs much better than desktop Mobile performs slightly better than desktop Mobile performs about the same as desktop Mobile performs slightly worse than desktop Mobile performs much worse than desktop Source: Kenshoo Marketer Survey: Enhanced Campaigns One Year Later

37. 37 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Consumers increasingly using all 3 screens as part of purchase journey 99% of respondents agree that the interplay of paid search across devices carries at least some impact on consumer conversion

38. 38 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Mobile is at the forefront for shopping research 92% of marketers recognize that mobile search is becoming an increasingly prominent activity for consumer shopping research

39. 39 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Advertisers view paid search as a mid-funnel driver 55% of marketers find paid search ads on smartphones are most effective at driving research and browsing activity

40. 40 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Price comparison is the main in-store activity of shoppers on smartphones 73% of marketers feel that consumers are likely to use their mobile device to do price comparisons while in a store or place of business

41. 41 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Smartphones lag when it comes to consumer purchasing actions 53% of marketers feel that consumers are “very comfortable” making a purchase on a tablet as opposed to the 20% who believe they are on a smartphone

42. 42 © 2014 Kenshoo, Inc. Confidential and Proprietary Information “ “ We asked marketers how consumers would react to the following statements… 62% thought consumers would be unlikely to return to a non-optimized site I’m less likely to revisit a brand’s site if it wasn’t optimized for my mobile device on the 1st visit… I’m disappointed when brands don’t have mobile-optimized sites 82% felt consumers are disappointed when reaching a non-optimized site

45. 45 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Advertisers missing the mark on customized device strategies 77% of advertisers either take the same approach or only slightly vary ad copy by device

46. 46 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Optimization is key to unlocking improved mobile performance 9% 34% 11% 46% Mobile-specific ad copy Mobile bid adjustment Mobile ad extensions Mobile-optimized landing pages Many factors influence the performance of mobile search; however, 46% of marketers believe that mobile- optimized landing pages have the greatest impact on overall performance. Which aspect of mobile paid search do you feel has the greatest impact on overall performance?

48. 48 © 2014 Kenshoo, Inc. Confidential and Proprietary Information Approximately half of marketers feel they are already providing rich mobile experiences, but when it comes to deeper, more sophisticated tactics, there is room for growth. Marketers have an opportunity to grow!

50. 50 © 2014 Kenshoo, Inc. Confidential and Proprietary Information 1. Establish Concrete, Device-Specific Goals 33% 4% 33% 2% 9% 19% Online Traffic In-store Traffic Direct Sales App installs Phone Calls Other conversion activity Source: Kenshoo Marketer Survey: Enhanced Campaigns One Year Later What is your mobile paid search goal?