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

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 America
2 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 Year
Videos Viewed Grew by Double Digits Across LatAm Region
Growth 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 for
More than 60% of Videos Viewed in LatAm
MEXICO CHILE
Videos Share of Videos Share of
(Millions) Videos (Millions) Videos
1
Google Sites
VEVO
Viacom 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) Videos
Google 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 34
age 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 LatAm
region 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 video
equivalent to only a percentage point
or 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 while
online 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 as
fast 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 and
is 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/don't have a TV 7%

19. Online viewers of TV programs are open to more ads – at least 6.5 minutes
per 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 because
of heightened consumer attention and more precise targeting

22. CBS: Even with lower ad loads than TV but a premium price, video
ads can have same value as TV ads

23. The Limitation of TV: Brands Trying to Reach their Target with
TV 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 Builds
Reach 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 Thoughts
1 Online video viewing in LatAm is surging
2 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 ads
3 Online video advertising can add effective reach to a TV
campaign –especially among younger age segments