State of the Internet. October 2010
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1 State of the Internet October 2010
2 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 2
3 The US Is No Longer the Center of the Online Universe US Internet Population vs. Rest of the World Distribution of Worldwide Internet Audience October 2010 Rest of the World 34% 86% Europe 27.5% North America 15.7% 8.3% Latin America US 66% Asia Pacific 40.1% 8.4% Middle East - Africa 14% In 1996, 2/3 of the world s Internet population was in the US, yet today Asia Pacific is the largest region. Many emerging regions are 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 highgrowth areas. 3 Source: comscore World Metrix, October 2010
4 China Surges Past the US Internet Users Age 15+ (MM) China United States Japan Germany Russian Federation France India Brazil United Kingdom South Korea Canada Italy Turkey Spain Poland While US user growth was 7% over the past year, Russia, China, Brazil and India have experienced impressive growth rates of 27%, 25%, 20% and 13%, respectively. 4 Source: comscore World Metrix, October 2010
5 Minutes (MM) Unique Visitors (000) More Worldwide Unique Visitors Are Spending More Minutes on Social Networking Sites than Sites 1,200,000 1,000, , , , ,000 0 Global Total Unique Visitors (000) +19% +4% Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Social Networking 300, , , , ,000 50,000 0 Global Total Minutes (MM) -5% Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct % Social Networking 5 Source: comscore World Metrix, October 2010
6 Global Searches Overall Grew 9 Percent YoY- Users Worldwide Entered 3.1 Million Searches per Minute 30,000 25,000 20,000 15,000 10,000 5, ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, % United States +2% +22% Top 10 Countries by Number of Searches (MM) Conducted* +5% +5% China Japan United Kingdom +5% -2% +17% +7% +40% France Germany Brazil Korea Russian Federation Top 10 Search Properties by Searches (MM) Conducted Oct-09 Oct-10-1% Canada Oct-09 Oct % +12% +25% +134% +27% +51% +23% +5% +100% *Searches based on expanded search definition, which includes searches at the top properties where search activity is observed, not only the core search engines. **Conduit.com did not have any search activity in October The first month of activity in qsearch was December Google sites account for nearly twothirds of the billion searches conducted worldwide in October. Baidu, a Chinese based search engine, bypassed Yahoo! Sites as the second most active search property, recording over 11 billion searches in October Source: comscore Press Release October 2010: comscore qsearch
7 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 7
8 What are People Doing Online in the US? In October 2010: million Americans used the Internet. Average user was online 24.8 days in the month, for a total of 31.7 hours, and viewed 2,620 pages 84% of Internet visitors viewed an online video in the US, for an average of 15.0 hours each. 94% of Internet visitors conducted at least one search. Average searcher conducted 123 searches Total online spending in October 2010 at US sites was $17.9 billion, up 9% since October Travel accounted for $7 billion, or 39% of total online spending in October. 8 Source: comscore Media Metrix, October 2010 comscore qsearch, October 2010 e-commerce Reports, October 2010
9 Is the US Internet Really Still Growing? 250, , , ,000 50,000 0 Total US Internet Users +7% Yes, the US Internet is still growing, albeit not as quickly as it once was. +33% 2,500 2,000 1,500 1, Total Unique Visitors (000) Average Daily Visitors (000) Total US Internet Engagement Average Minutes per Visitor Average Visits per Visitor +4% +15% The growth in Average Daily Visitors as well as the increase in Average Visits per Visitor demonstrates the continued importance of the internet in daily life. 9 Source: comscore Media Metrix, October 2010
10 Reach Average Minutes/UV What Online Categories are Driving Web Usage? The 31+ hours the average user spends online is divided among several key content categories such as Portals, Entertainment and Conversational Media. Top Categories Reach Top Categories Engagement 100% 95% 90% +10pt. +19pt. +6pt. +23pt. +13pt. Y/Y % point change -1pt % +36% -1% Y/Y % change 85% % -4% +14% 80% 0 10 Source: comscore Media Metrix, October 2010
11 UVs (000) Which Categories are Driving Web Growth? 180, , , , ,000 80,000 60,000 40,000 20, % +60% +56% +53% +48% +51% +51% +48% +44% +44% +43% +42% +42% +40% Oct 2009 UVs (000) Oct 2010 UVs (000) Online Gambling saw 174% growth year over year, ranking as the top-gaining category to 32 MM Unique Visitors, a significant spike from last October. The Community category grew less year over year compared to the other categories but is still one of the most highly visited with 211 MM Unique Visitors. 11 Source: comscore Media Metrix, October 2010
12 UVs (000) What Properties are Driving Web Growth? 40,000 35,000 30,000 25,000 20, % +82% +180% +137% +192% +120% +146% +119% +119% +80% +213% +184% +122% +92% Gaming site GSN Games Network and CPMStar and blogging site Gawker Media continue to show rapid growth. 15,000 10,000 5,000 0 Oct-2009 Oct-2010 The Directories/ Resources property YellowBook Network grew year over year by 170% to 36.6 MM Unique Visitors, outnumbering the other high growth properties. 12 Source: comscore Media Metrix, October 2010
13 Current Events: Healthcare Reform Efforts Visible Online The number of people clicking on top health insurance company links rose 56% year over year. Clicks (000) Organic and Paid 9,000 8,000 7,000 6,000 5,000 5,068 5,182 Number of Clicks (000) for Health Insurance Companies 5,033 6,397 6,062 7,089 6,694 6,381 7,249 7,422 8,053 7, % 7,918 4,000 3,000 2,000 1, Source: comscore Marketer October 2010
14 Online Health Insurance With the push from healthcare reform ehealthinsurance.com, a national insurance marketplace that lists sales quotes for various health insurance plans, saw more than double the total clicks and quadruple the paid clicks as competing sites year over year. Share (%) ehealthinsurance.com Receives nearly 30% of all Paid Clicks for searches including the term Health Insurance 14 Source: comscore Marketer October 2010
15 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 15
16 Online Video Viewing Is Growing Strongly with Significant Growth Potential October 2010 US Video Viewers % Of Internet Users Who Viewed At Least One Video % of Video Viewers Who Viewed At Least One Ad Video 179MM 84% 77% Value Drivers of Online Video Advertising Reach of elusive audiences Better engagement Total # of Viewed Videos 36.6B YoY Growth in Video Views 22% Videos per Viewer 204 However, monetization is still a big challenge: User experience Rights for UGC (User Generated Content) Viewing Time per Viewer 15 hrs 16 Source: comscore Video Metrix, October 2010
17 Males Are More Engaged Online Video Viewers than Females Video Activity By Gender 1,300 1,200 1,100 1, Females Males 1, % +116% +120% +66% UVs (MM) Videos per Viewer Minutes per Viewer 17 Source: comscore Video Metrix, October 2010
18 Time Spent Streaming Jumps as Long-Form Content Floods the Web Total US Streaming Minutes and Video Views 180, , ,000 90,000 60,000 30,000 0 Oct-10 Sep-10 Aug-10 Jul-10 Jun-10 May-10 Apr-10 Mar-10 Feb-10 Jan-10 Dec-09 Nov-09 Oct-09 Total Minutes (MM) Videos (MM) October 2009 October 2010 Hours per Viewer Videos per Viewer Minutes per Video % +31% Sites heavy with long-form content have burst onto the scene over the past year, contributing to the increase in time spent streaming. Specifically, Hulu is now the 10 th most popular content video property. 18 Source: comscore Video Metrix, October 2010
19 Where Are People Watching Videos Online? UVs (MM) Total UVs (MM) Content UV's (MM) Google continues to dominate in terms of audience size, fueled by YouTube s MM UVs. In addition, 99.7% of Google video viewers are watching content, dwarfing the percentage of viewers watching their ads (29%) 19 Source: comscore Video Metrix, October 2010
20 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 20
21 qsearch 2.0: Trends in the Search Market Search growth drove the increasing base of unique searchers (220MM in October 2010); search intensity also increased by 15% versus October The increased search intensity is also evidenced in a 9.8% increase in Searches per Usage Day to 9.4 in October Unique Searchers vs. Search Intensity Change vs. October % Searches Per Searcher +6% Unique Searchers - Oct-09 Jan-10 Apr-10 Jul-10 Oct Source: comscore qsearch 2.0, October 2010
22 qsearch 2.0: Leading Search Properties Microsoft, Yahoo!, and Google also show intensity growth versus year ago, which further contributed to their search increase. Leading Search Properties: Searches per Searcher Change vs. October % Google Sites % Yahoo! Sites % -5% Microsoft Sites AOL, Inc % Ask Network Oct-09 Jan-10 Apr-10 Jul-10 Oct Source: comscore qsearch 2.0, October 2010
23 Although Search Engines Are Still the Major Players, Search Isn t Confined to the Engines Anymore Site search (non-search engine search) continues to show higher year over year growth than search engines, but still represents a smaller percentage of overall searches. Searches (Billions) Share of Search Growth by Search Engines and Non-Search Engines Total Non-Search Engines Search Engines Change vs. October Billion % +26% 42% 10.1 Billion 58% % October 2009 October 2010 Search Engines Non-Search Engines 23 Source: comscore qsearch 2.0; Search Engines defined as properties falling under the Search/Navigation category in qsearch, October 2010
24 Blended Search Continues Growth Across Multiple Search Engines Blended Search, also known as Universal Search or Search 3.0, is incorporating results from non-web sources (like books, videos, and images) into regular web search results. Total Searches October % Blended Non-Blended 74% Over 1/4 of all searches displayed a blended search 24 comscore/rankabove Blended Search and the New Rules of Engagement, October 2010 Custom Reporting
25 Click-Through Rates Blended vs. Non Blended Pages with Blended Results Pages with Non- Blended Results 101% Click- Through Rate* 110% Click- Through Rate* *Searchers clicking on multiple results from their 1 search = 100% + CTR Q: Why do Pages with Blended Results have a lower Click- Through Rate? A: Blended search results often answer the initial question with no action (clicks) needed to be taken resulting in a lower clickthrough rate than non-blended results. 25 Source: comscore Custom Analytics, August 2010; comscore/rankabove Blended Search and the New Rules of Engagement
26 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 26
27 43.3% of Mobile Phone Owners Browse the Mobile Internet, Use Applications or Download Content (Mobile Media Users) The number of people who are just using voice has declined 17.7% year over year. In October of 2010, more than 70% of mobile phone owners used their phones for more than just making calls. Mobile Market Segments - October 2009 Mobile Market Segments - October 2010 Just Voice, 33.6% Mobile Media, 35.5% Just Voice, 27.6% Mobile Media, 43.3% SMS (and not Mobile Media), 30.9% SMS (and not Mobile Media), 29.1% Mobile Media = Connected Media (except SMS) in MobiLens 27 Product: MobiLens Data: Three month average ending October 2010 Country: US N=32,397
28 % Female The Mobile Media User is 33 and 48% are Female Younger demographics create their own ringtones, use social networking services, purchase ringtones and listen to music (web 2.0 type services). Mobile internet services (browsing, apps and ) skew 55-60% male. 60% Average Demographics of Mobile Media Activities Purchased Ringtone 55% Made Own Ringtone Played Games Mobile Media Unlimited Data Plan 50% Social Networking 45% Browser App Purchased Game 40% 35% Listened to Music Size of bubbles = % of the market Higher on chart = More female Further to right = Older 30% Median Age Product: MobiLens Data: Three month average ending October Country: US N=32,397
29 Mobile Browsing Genres The mobile Internet is as much about connecting with friends and family as it is about viewing news and info. 48.7% of Mobile Browsers search, compared to 89.7% of PC Internet browsers. Top Genres for Mobile Browsing Bank Accounts Movie Information Stock Quotes or Financial News Tech News Maps Work Photo or Video Sharing Service IM Entertainment News Sports Information News Weather Social Networking Personal Search 17.6% 18.6% 18.9% 19.5% 20.7% 21.1% 22.5% 27.6% 27.6% 29.2% 34.0% 35.8% News and Weather Genres Communicating and Sharing Other 43.0% 44.3% 48.7% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% % Used browser Product: MobiLens Data: Three month average ending October Country: US N=32,397
30 Mobile Advertising Best Suited for Brands with Targets under 44 Brands Can Choose a Number of Methods to Start a Dialogue with Consumers Using the Mobile Device. 68% of mobile owners use SMS; marketers can use 5-6 digit short codes on ads requesting consumers to send an SMS 36% of the market browse the mobile Internet. 34% use an app (other than a pre-loaded game). With over 50% of males between using the mobile browser, mobile banner advertisements are an ideal way to engage with this audience. % of Mobile Media Users by Age and Gender Male Female 3% 6% 16% 8% 18% % 4% 8% 10% 20% % 27% % 26% Mobile Media = Connected Media (except SMS) in MobiLens 30 Product: MobiLens Data: Three month average ending October 2010 Country: US N=32,397
31 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 31
32 Total e-commerce sales through Q were up 8% versus year ago. Travel and non-travel up 5% and 9%, respectively. Following a soft 2009, Travel and Non-Travel spending are up 5% and 9% respectively versus year ago. e-commerce Dollar Sales Growth ($ Billions) Source: comscore e-commerce Measurement Travel Non- Travel $72 $30 +29% $93 $40 +33% +26% $117 $51 $42 $53 +26% $67 +28% +26% +22% $143 $61 $82 +20% +24% +19% $171 $69 $ % +24% +7% +17% -2% $214 $200 $209 $77 +12% +9% $84 $80 +6% +20% $123 $130 $130-5% 0% +8% $165 $66 $99 +5% +9% *2010 YTD 32 * Through Q3 2010
33 Visitation to the overall retail category grew 15% Y/Y Total Unique Visitors (MM) and % Growth vs. YA on Selected Retail Sites in October 2010 Amazon Sites % ValueClick Sites % Apple.com Worldwide Sites % JCPenney Sites % Wal-Mart % SEARS.COM % Target Corporation % AVG.COM % Yahoo! Shopping % Ticketmaster % NETFLIX.COM % Macy's Inc % Shopzilla.com Sites % Dell % Google Product Search % Intuit % Hewlett Packard % Pronto Sites 9.9-2% Best Buy Sites % The Home Depot, Inc % 33 Source: comscore Media Metrix, October 2010
34 Both Groupon & LivingSocial have seen huge growth in UV s and Time Spent in the past year 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Trend in Unique Visitors (000) to Groupon.com and LivingSocial.com Groupon.com LivingSocial.com +657% vs. yr ago +812% vs. yr ago - Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct Trend in Minutes (MM) to Groupon.com and LivingSocial.com +341% vs. yr ago % vs. yr ago 2 0 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010 May-2010 Jun-2010 Jul-2010 Aug-2010 Sep-2010 Oct Source: comscore Media Metrix, Oct 2009 Oct 2010
35 Unique Visitors (000) Luxury retail sites are flourishing at least in visitation. Gilt Groupe and HauteLook show the highest income skews Unique Visitors and Growth vs. YA for October 2010 % Composition by HH Income for October 2010 Total Internet HauteLook Ideeli Gilt Groupe RueLaLa 1,100 1, % +75% Less than 25K 17% 14% 17% 12% 10% % +118% $25K-$39.9K 15% 13% 16% 18% 22% $40K-$59.9K 23% 20% 19% 11% 17% $60K-$74.9K 10% 12% 8% 6% 11% 0 $75K-$99.9K 14% 14% 17% 15% 17% $100K or more 21% 27% 22% 38% 23% 35 Source: comscore Media Metrix, October 2010
36 Coupon sites continue to attract visitors, however they still represent only 1% of all coupons distributed 120, ,000 Total Unique Visitors (000) and Total Visits (000) to Coupon Sites 83.4 million visits +13% vs. Oct 09 80,000 60,000 40, million UVs +13% vs. Oct 09 20,000 0 Total Unique Visitors (000) Total Visits (000) Despite rapid growth, Internet coupons still account for only 1% of distribution. The majority of overall growth in redemptions still come from free-standing print inserts. Advertising Age 36 Source: comscore Media Metrix, October 2010
37 Holiday Shopping 37
38 Last minute shopping is prevalent this year; 28% say they are waiting to shop until just before the holidays in order to find the best deals Timing of Holiday Shopping Q. When do you plan to start your winter holiday shopping? Source: comscore Survey October 2010 Before Thanksgiving 15% On Black Friday (Friday after Thanksgiving) On Cyber Monday (Monday After Thanksgiving) 5% 11% 60% are either unsure of when they plan to start shopping or intend to shop right before the holidays After Cyber Monday (Monday After Thanksgiving) 9% I am waiting until just before the holidays to get the best deals 28% Not sure 32% % of those who have not started shopping 38 Source: comscore Survey, October 2010
39 84% of consumers stated that coupons and discounts were important this holiday season Importance and Usage of Coupons/Discounts This Holiday Season Q. When making a purchase this holiday season, how important are discounts and coupons? Q. At what point in your holiday shopping do you search for discounts or coupons? 3% 12% I decide what gift to purchase and/or where to purchase it based on available discounts or coupons 31% I search for discounts/coupons when I am comparing possible gift options and stores 42% 84% I decide the gift I want to purchase and the store I want to purchase it from first, then search for discounts/coupons 18% Somewhat/very important I never search for discounts or coupons 9% Somewhat/very unimportant Neither important nor unimportant % of All Respondents 39 Source: comscore Survey, October 2010
40 Holiday Shopping 2010: Online Couponing sees growth during holiday season Retailmenot.com launched a Black Friday coupons portal and a Cyber Monday Coupons Portal increased site visitation during the holiday season. From the launch of the Black Friday coupons portal in early November, unique visitors to the site rose 35% while total visits rose 46%. 12,000 Total Visits (MM) 10,000 8,000 6,000 10,002 6,862 6,437 6,015 5,908 6,388 6,331 6,799 7,670 5,583 6,614 8,187 9,624 4,000 2,000 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec comscore Media Metrix December 2010
41 Holiday Shopping 2010: E-Commerce Record $32.6 Billion E-commerce spending for the entire November December 2010 holiday season reached $32.6 Billion, This marked a 12% increase versus last year and an all-time record for the season. Non-Travel Retail Spending by Date ($MM) Percent Change Total (11/1-12/31) $29,084 $32,589 12% Thanksgiving Day (11/25) $318 $407 28% Black Friday (11/26) $595 $648 9% Cyber Monday (11/29) $887 $1,028 16% Green Monday (12/13) $854 $954 12% Free Shipping Day (12/17) $586 $942 61% 41 Source: comscore Press Release: U.S. Online Holiday Shopping Season Reaches Record $32.6 Billion for November-December 2010 Period, Up 12 Percent vs. Year Ago
42 Sales grew each week during the holiday season 42 Source: comscore Press Release: U.S. Online Holiday Shopping Season Reaches Record $32.6 Billion for November-December 2010 Period, Up 12 Percent vs. Year Ago
43 Agenda Worldwide Context US Vital Signs State of the Internet Video Search Mobile ecommerce Monetization 43
44 Ad dollars are progressively shifting away from , Lead Generation, and Classifieds towards Search, Display Ads, and Online Video 8.1 Internet Advertising Revenues ($ Billions) +30% +32% % -12% +22% -15% % % ? Internet Advertising Revenues by Ad Format +10% $10.9B $12.1 B -3% 1% 1% 7% 5% 10% 2% 4% 7% 22% 10% 2% 5% 6% 23% Leads/ Referrals Classifieds Sponsorships Video Rich Media Display/ Banner Ads Q1,2 & 3: 2010 U.S. Internet advertising revenues hit $6.4 billion in the third quarter of 2010 totaling $18.5 billion for the first 3 quarters of 2010 representing the highest quarterly result ever for the online advertising industry and a 17% increase from the same period in 2009* 47% 47% 1H H 2010 Search 44 Source: IAB Internet Advertising Revenue First Half-Year Results Report 2010; *IAB Press Release, Nov. 17, 2010
45 Total Display Ad Views (000) Who are the top advertisers in the online market in October 2010? 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Top 10 Online Advertisers Top advertisers include telecom companies AT&T, Verizon and Sprint. The financial service companies Scottrade and Experian also continue to rank as strong online advertisers 45 Source: comscore Ad Metrix, October 2010
46 Social networks have caused users to spend more time online and advertisers to shift dollars to online advertising Compared with last year, people are spending more time on social networks and less time on portals Total Minutes Spent (MM) Social networks have also brought huge quantities of inventory online Share of Display Ads (%) 85,948 31,473 Portals Social Networking Sites 82,746 52,499-4% YoY +67% YoY 40% 35% 30% 25% 20% 15% 10% 5% 0% -28% YoY 18% +90% YoY 34% Oct-2009 Feb-2010 Jun-2010 Oct-2010 Portals Social Nets 46 Source: comscore Trend Report, October 2010; comscore Ad Metrix, October 2010
47 Thank you! Bryan Goski Director, comscore Marketing Solutions
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