The Future of Internet Advertising

 Mike Read, comScore Europe
Agenda
comScore Introduction


The Shape of the Internet


The Future of Online Advertising
comScore Leverages Rich Panel Data to Deliver
  Unique and Broad Digital Business Analytics
     2 Million Person Panel      The Only Global Measurement
  360°View of Person Behaviour   of Audience and E-commerce




                                 200+ Countries Under Measurement
                                       43 Markets Reported
A Comprehensive Suite of Products and Services


         Media Planning & Analysis
             Web Analytics
             Video & Distributed Media Measurement
             Social Analytics
             Search Marketing
             Marketing on the Internet
             Technology Tracking
             Industry Solutions
             Copy Testing
         Advertising Effectiveness
             Cross Media Measurement
         Mobile Solutions
         International Solutions
         Custom Research
                                                     V0411
Agenda
comScore Introduction


The Shape of the Internet


The Future of Online Advertising
Russia will Become the Biggest European
             Online Population

                                                                + 3% yoy
                                                                + 14% yoy




                   Source: comScore Media Metrix, August 2011
Central Region (including Moscow) represents
      31% of Russia’s online population
Russians don’t consume News or Buy online quite to
    the same degree yet as the Rest of Europe




                         Source: comScore Media Metrix, August 2011
Social Networking – Disproportionately Popular in Russia…?

                      Social Networking Share of Total Pages and Time Spent




  Social Networks account for 42% of Total Page Views and 32% of Total Time Online in Russia


                           © comScore, Inc. Proprietary and Confidential .   9   Source: comScore World Metrix, August 2009
Russians Love Social Networking!!!!

        Time Spent per person on Social Networking
800.0
700.0
600.0
500.0
400.0                                                           Russian Federation
300.0                                                           United States
200.0                                                           United Kingdom
100.0
                                                                Germany
  0.0




          Jul-2011
         Jan-2011




         Jun-2011
         Aug-2010




         Dec-2010
         Sep-2010




         Aug-2011
         Oct-2010




         Apr-2011
         Mar-2011
         Feb-2011



         May-2011
         Nov-2010




                             Source: comScore Media Metrix, Russia August 2011
Has Facebook’s Growth Stopped?




UV Trend                              Time Spent Trend




                 Source: comScore Media Metrix, Russia August 2011
53% of Time Spent Online is Spent on 5 Properties




                        Source: comScore Media Metrix, August 2011
Agenda
comScore Introduction


The Shape of the Internet


The Future of Online Advertising
The Future of Online Advertising

                     Branding
                           But ……..

   If we are not careful we will miss an opportunity to grow
                 Online as a Branding Medium

• Average Click thro rates are pitifully low and declining
… Limiting The Branding Potential Of Online




              Does this guy’s click effectively measure the
            branding impact of exposing the other 999 users
                            to the same ad?




                     © comScore, Inc. Proprietary and Confidential .   15
How Do Russians React to Advertising?




Only 10% of the Russian online population click on Display ads!

                               Source: comScore Marketing Solutions, Russia, August 2010
Heavy Clickers: Not Representative


          Internet Usage Skew




                       Source: comScore Marketing Solutions, Russian Federaion August 2010
What’s happening in the US ?




              Source: comScore Marketing Solutions, Russia, August 2010
Digital has historically lagged in capturing branding dollars ….
But that is changing with display now growing 2X faster than search

                     2010 U.S. Measured Media Spend
                               $149 Billion
          Branding




                                 $91B
  61%
                                                              2010 U.S. Online
                                                                 Media Spend
                                                                $26 Billion                                       6% of
                                                                                                                 branding
                                                                          $6B                                     dollars

                                                                         $20B
        Response




                                                                                                               34% of direct
         Direct




  39%                            $58B
                                                                                                                 response
                                                                                                                   dollars




                                                Source: Brand.net analysis based on Barclays Capital and DMA
In US Display Advertising reached $10 billion
                dollars in 2010.

                                  But…

  Up to 80% of all online ads are delivered
    through third parties, which means
advertisers are often unaware of how, where
  and to whom the ads are actually being
                   served.



          © comScore, Inc.   Proprietary.   20
To Solve the Problem, IAB, ANA and AAAAs Joined Forces…




  The 3MS Mission:
   Aim to reduce costs of doing business resulting from complexity of
    digital advertising ecosystem
   ‘Single Tag’ solution needed to reduce complexity
   Improve reporting of ad exposure
   Bolster confidence that ads delivered are actually seen



                 © comScore, Inc.   Proprietary.   21
The Future of Online Measurement
Making Measurement Make Sense: Five Guiding Principles of
Digital Measurement

  • Principle #1 – Move to a “viewable impressions” standard and
  count real exposures online.
  • Principle #2 – Online advertising must migrate to a currency
  based on audience impressions, not gross ad impressions.
  • Principle #3 – Because all ad units are not created equal, we
  must create a transparent classification system.
  • Principle #4 – Determine interactivity “metrics that matter” for
  brand marketers, so that marketers can better evaluate
  online’s contribution to brand building.
  • Principle #5 – Digital media measurement must become
  increasingly comparable and integrated with other media.
comScore Realized That in Order to Help the
        Industry Achieve its True Potential….
 …it needs measurement tools to help control these situations and take
                 corrective actions when necessary.




                                         +


  Truly comprehensive verification of ad delivery that addresses these industry
challenges will ultimately result in the migration of more ad $ to digital, helping the
                digital advertising industry to reach its true potential.
Questions?

mread@comscore.com

Com score

  • 1.
    The Future ofInternet Advertising Mike Read, comScore Europe
  • 2.
    Agenda comScore Introduction The Shapeof the Internet The Future of Online Advertising
  • 3.
    comScore Leverages RichPanel Data to Deliver Unique and Broad Digital Business Analytics 2 Million Person Panel The Only Global Measurement 360°View of Person Behaviour of Audience and E-commerce 200+ Countries Under Measurement 43 Markets Reported
  • 4.
    A Comprehensive Suiteof Products and Services Media Planning & Analysis Web Analytics Video & Distributed Media Measurement Social Analytics Search Marketing Marketing on the Internet Technology Tracking Industry Solutions Copy Testing Advertising Effectiveness Cross Media Measurement Mobile Solutions International Solutions Custom Research V0411
  • 5.
    Agenda comScore Introduction The Shapeof the Internet The Future of Online Advertising
  • 6.
    Russia will Becomethe Biggest European Online Population + 3% yoy + 14% yoy Source: comScore Media Metrix, August 2011
  • 7.
    Central Region (includingMoscow) represents 31% of Russia’s online population
  • 8.
    Russians don’t consumeNews or Buy online quite to the same degree yet as the Rest of Europe Source: comScore Media Metrix, August 2011
  • 9.
    Social Networking –Disproportionately Popular in Russia…? Social Networking Share of Total Pages and Time Spent Social Networks account for 42% of Total Page Views and 32% of Total Time Online in Russia © comScore, Inc. Proprietary and Confidential . 9 Source: comScore World Metrix, August 2009
  • 10.
    Russians Love SocialNetworking!!!! Time Spent per person on Social Networking 800.0 700.0 600.0 500.0 400.0 Russian Federation 300.0 United States 200.0 United Kingdom 100.0 Germany 0.0 Jul-2011 Jan-2011 Jun-2011 Aug-2010 Dec-2010 Sep-2010 Aug-2011 Oct-2010 Apr-2011 Mar-2011 Feb-2011 May-2011 Nov-2010 Source: comScore Media Metrix, Russia August 2011
  • 11.
    Has Facebook’s GrowthStopped? UV Trend Time Spent Trend Source: comScore Media Metrix, Russia August 2011
  • 12.
    53% of TimeSpent Online is Spent on 5 Properties Source: comScore Media Metrix, August 2011
  • 13.
    Agenda comScore Introduction The Shapeof the Internet The Future of Online Advertising
  • 14.
    The Future ofOnline Advertising Branding But …….. If we are not careful we will miss an opportunity to grow Online as a Branding Medium • Average Click thro rates are pitifully low and declining
  • 15.
    … Limiting TheBranding Potential Of Online Does this guy’s click effectively measure the branding impact of exposing the other 999 users to the same ad? © comScore, Inc. Proprietary and Confidential . 15
  • 16.
    How Do RussiansReact to Advertising? Only 10% of the Russian online population click on Display ads! Source: comScore Marketing Solutions, Russia, August 2010
  • 17.
    Heavy Clickers: NotRepresentative Internet Usage Skew Source: comScore Marketing Solutions, Russian Federaion August 2010
  • 18.
    What’s happening inthe US ? Source: comScore Marketing Solutions, Russia, August 2010
  • 19.
    Digital has historicallylagged in capturing branding dollars …. But that is changing with display now growing 2X faster than search 2010 U.S. Measured Media Spend $149 Billion Branding $91B 61% 2010 U.S. Online Media Spend $26 Billion 6% of branding $6B dollars $20B Response 34% of direct Direct 39% $58B response dollars Source: Brand.net analysis based on Barclays Capital and DMA
  • 20.
    In US DisplayAdvertising reached $10 billion dollars in 2010. But… Up to 80% of all online ads are delivered through third parties, which means advertisers are often unaware of how, where and to whom the ads are actually being served. © comScore, Inc. Proprietary. 20
  • 21.
    To Solve theProblem, IAB, ANA and AAAAs Joined Forces… The 3MS Mission:  Aim to reduce costs of doing business resulting from complexity of digital advertising ecosystem  ‘Single Tag’ solution needed to reduce complexity  Improve reporting of ad exposure  Bolster confidence that ads delivered are actually seen © comScore, Inc. Proprietary. 21
  • 22.
    The Future ofOnline Measurement Making Measurement Make Sense: Five Guiding Principles of Digital Measurement • Principle #1 – Move to a “viewable impressions” standard and count real exposures online. • Principle #2 – Online advertising must migrate to a currency based on audience impressions, not gross ad impressions. • Principle #3 – Because all ad units are not created equal, we must create a transparent classification system. • Principle #4 – Determine interactivity “metrics that matter” for brand marketers, so that marketers can better evaluate online’s contribution to brand building. • Principle #5 – Digital media measurement must become increasingly comparable and integrated with other media.
  • 23.
    comScore Realized Thatin Order to Help the Industry Achieve its True Potential…. …it needs measurement tools to help control these situations and take corrective actions when necessary. + Truly comprehensive verification of ad delivery that addresses these industry challenges will ultimately result in the migration of more ad $ to digital, helping the digital advertising industry to reach its true potential.
  • 24.