Australia Digital Future in Focus 2014

Gian Fulgoni
Co-Founder & Chairman Emeritus comScore, Inc.

comScore, Inc.

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Topics
Australia Digital Highlights
Global Standing Demographics Top Properties Ad Expenditures

Evolution of Digital Advertising

Beyond the Click Campaign Optimization Viewability

Cross-Platform

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Data sourced from comScores global panel of 2 million Internet users

2 Million Person Panel 360View of Person Behavior

PERSON-Centric Panel with WEBSITE-Census Measurement

Online & Offline Buying Transactions Media & Video Consumption

Web Visiting & Search Behavior Online Advertising Exposure

PANEL

CENSUS

PANEL

Demographics, Lifestyles & Attitudes

Mobile Internet Usage & Behavior

Unified Digital Measurement (UDM)

Patent-Pending Methodology 1 Million Domains Participating
Adopted by 80% of Top 100 Global Media Properties

Plus 5 Million TV Set Top Boxes for 3-Screen Measurement

comScore, Inc. Proprietary.

V0411

Worldwide Desktop Internet Audience Reaches 1.63 Billion People The U.S. is no Longer the Centre of the Online Universe

34%
Outside US
MEA 9% Latin America 10% Asia Pacific 41%

86%
Outside US

North America 14%

66%
Europe 26%

14%
1996 2014

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

Time spent and user growth across regions Asia Pacific is largest and still growing, Lat Am has highest percent growth
Monthly Hours Per Visitor
35.8 31.2 23.4 19.5
Global Average: 24.9 Hours a Month

17.1

North America +4% 640

Europe

Latin America

Asia Pacific

Middle East - Africa

666
+4% 409 427

Monthly Unique Visitors (MM)

+2%
215 220 +27% 132 167 +13% 135 153 Jan-13 Jan-14

Asia Pacific

Europe

North America

Latin America

Middle East Africa

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

Desktop online audience across the globe grew by 6.5% vs YA. China comprises 22% of global audience aged 15+
354

Monthly Unique Visitors in January 2014 (Millions)

195

Brazil and India post highest growth Australia has worlds 18th largest Internet population
82 74 68 67 53 43 39

30

26

25

25

24

20

18

18

15

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

Australia ranks higher than India and China in terms of Average Time Spent per person
Monthly Average Hours Per User in January 2014
45 44 44

33

32

Global Average: 24.9 Hours a Month

Australia ranks 14th

30

29

28

27

26

25

24

22

22

21

20 17 12

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

Online Demographics across Asia Pacific: India, China and Singapore skew much younger. Australia, Japan and NZ skew older

Australia

19%

20%

20%

18%

23%

China

27%

32%

25%

10%

6%

India

37%

38%

16%

6% 3%

Japan

15%

18%

22%

18%

27%

New Zealand

20%

18%

19%

18%

24%

Singapore
0%
Persons: 15-24

28% 20%
Persons: 25-34

31% 40%
Persons: 35-44

21% 60% 80%

13%

7% 100%

Persons: 45-54

Persons: 55+

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, September 2013

Australian online demographic composition more in line with developed markets

Australia

19%

20%

20%

18%

23%

France

17%

18%

20%

18%

27%

Germany

16%

18%

19%

23%

24%

Japan

15%

19%

23%

18%

26%

United Kingdom

19%

20%

19%

19%

24%

0%
Persons: 15-24

20%
Persons: 25-34

40%
Persons: 35-44

60%

80%

100%
Persons: 55+

Persons: 45-54

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, September 2013

Relative to total country population, persons under 35 over-represented in Australian online user population. Online represents a powerful way to reach younger segments who are lighter TV viewers

Australia Online Population

19%

20%

20%

18%

23%

Total Australia Population

17%

17%

18%

17%

32%

Persons: 15-24

Persons: 25-34

Persons: 35-44

Persons: 45-54

Persons: 55+

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Internet Audience 15+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, September 2013

10

Top Selected Web Properties in Australia

Reach 88% 82% 56% 54% 35% 30% 29% 29% 22% 15% 10% 10% 9% 9% Unique Visitors (000) Google Sites Microsoft Sites Yahoo Sites Facebook Apple Inc. eBay Wikimedia Sites Glam Media (Lifestyle) Amazon Sites 9,395 9,033 5,868 4,970 4,773 4,763 3,636 2,463 1,668 1,629 1,509 1,426 4.2 35.1 11.1 12.8 19.3 10.0 9.8 6.4 17.1 8.4 14,725 13,669 103.4 78.2 344.1

Minutes per Visitor

187.2

Commonwealth Bank Seek(Jobs/Education) Abc (Media)

Realestate.com.au Vic.gov.au

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Internet Audience 6+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

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Are we Social, Australia?

Social Networking % reach of online population United States 94.0 Average Minutes per user per day 30.9

Canada

90.7

30.3

United Kingdom

88.2

32.9

Australia

87.9

34.7

Germany

86.7

25.1

France

86.3

26.5

Japan

84.1

8.8

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Internet Audience 6+ accessing Internet from a Home or Work PC Source: comScore Media Metrix, January 2014

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Total advertising spend by medium reveals the relative strength of Digital in the UK, which exceeds TV by a wide margin. Digital almost equal to TV in Australia but lags in U.S.
Percent of Ad Expenditures by Medium 100%
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Australia
comScore, Inc.

13%

12%

16%

Other

29%

39%

22% Internet

31% 26%

39%

TV

26%

23%
United Kingdom
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24% United States

Print

Source: ZenithOptimedia Advertising Expenditure Forecasts 2013

13

2012 online advertising percent spend by format: Branding advertising (i.e. Display) much more developed in U.S. while Australia and UK have room for improvement
18% Y/Y Growth 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 26% Australia
comScore, Inc.

12.5% Y/Y Growth

15% Y/Y Growth Percent of Ad Spend by Format

74%

63% 75%

Search and Others

37% 25% United Kingdom United States

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Display

0%

Source: IAB Australia, UK and US Data 2012

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The Evolution of Digital Advertising:

From Direct Response to Branding

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comScore Has Worked Hard to Establish More Value for Digital Ads

The irrelevancy of CTR

Ad Viewability

Cross-Platform Measurement

Audience Measurement

Audience Verification

Advertising Validation

2000 Media Metrix

2007 Whither the Click?

2010 Campaign Essentials

2011 AdXpose

2012 Validated Campaign Essentials

Future

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Journal Of Advertising Research June 2009 comScores Whither the Click?

200+ comScore studies conducted in the U.S. to assess behavioral impact of paid search and online display ads.

Analytical design: Exposed vs. Unexposed panelists

Findings: Even with Click Rates of Only 0.1%, Display Advertising can Lift: Site visitation Trademark search queries Online and offline sales

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17

A correlation analysis indicated no significant relationship between click-through rates and offline sales lift
A negative pattern emerged between Sales Lift per Household and Click Through Rate (i.e., as CTR increases, sales decrease)
$0.600

$0.500

The regression analysis indicates this relationship is not statistically significant, therefore there is no significant relationship between CTR and Sales

in $ Sales Lift/HH Sales Lift/HH in $

R2 = 0.039

$0.400

$0.300

$0.200

$0.100

$0.00% 0.20% 0.40% CTR 0.60% 0.80%

Click-through Rate
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Despite click rates of only 0.1%, display ads can successfully lift retailer sales both online and offline

Dollar Sales Lift Among Households Exposed to Online Advertising

Conclusions
% Lift: 17%
$11,550

$9,905

Exposure to display ads doesnt just impact online sales it lifts in-store sales as well The absolute dollar lift in offline sales is 5x higher than the lift in e-commerce sales The click is misleading as a measure of campaign effectiveness

% Lift: 27%

$994

$1,263

Online Unexposed

Offline Exposed
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Source: Whither the Click? 139 comScore studies in the June 19 2009 Journal of Advertising Research

Capturing Branding Ad Spending by Improving Campaign Delivery

A Leading Branding Advertisers Requirement

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Post Buy Analysis: Distribution of Impressions Delivered

What proportion of impressions landed on the media target with less than 5 frequency, the desired level?
100% 90% 80% 70% 60% 50% 40% 15% 65% 47% 77% 62% 13% Hit Target with Frequency >=5 Frequency >=5 53% 28% 59% 7% 5% 12% 4% 20% 16%

2%

10%

58%

Hit Target with <=4 Frequency In US But Not Target

30%
20% 10% 0%

50%
26% 4%

30% 14% 11% 5% 8% 10%

7% 24%

14%
26% 18%

Outside US

8 different brand campaigns Spending from $0.4MM to $2MM CPM Range from $5.70 to $13.00
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In-Target: 100% isnt Realistic In-Target Demographics: 100% isnt Realistic

Demographic data becomes outdated More than 60% of computers have multiple users, so cookies can show ads to the wrong person

Not all registration data is accurate

Some targeting infers demography based on content consumption

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However, overall average in-target rate today is ONLY 44%, with significant variance seen across verticals
% In-Target: Overall* and by Select Advertiser / Vertcal**
Source: comScore vCE Benchmarks, Q1 2014, U.S.

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As the age and gender target narrows, the chance of hitting it drops
% In-Target by Age/Gender*
Source: comScore vCE Benchmarks, Q1 2014, U.S.

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Cookie deletion is a global reality and causes frequency to be higher than planned since ad servers keep delivering impressions to browsers that have had cookies deleted Monthly Cookie Deletion Rates

Ad Server Cookies

Web Site Cookies

Country

Percent of computers deleting

Average # of cookies per Percent of computer for computers same deleting campaign

Average # of cookies per computer for same web site

Australia
Brazil U.K.

37%
40% 35% 35%
comScore, Inc. Proprietary.

5.7
6.6 5.9 5.4

28%
33% 27% 29%

2.7
2.5 2.7 3.5
25

U.S.

Campaign delivery can be monitored and optimized in-flight. Publisher 1 is delivering results superior to Publishers 2 & 3 and would receive a greater share of ad spend

In-Flight Campaign Optimization by Publisher Based on Cost and Effectiveness Using comScore Campaign Essentials

Brand X - Q3/Q4
Publisher Avg Frequency Impressions in Target Lift in Awareness CPM

1 2

3.5 3.0

24.5% 16.9%

5.74 0.55

$2.44 $9.08

8.4

23.5%

$8.62

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Real-Time: In-flight optimization of Reach, Frequency and Targeting has driven rapid gains in marketing ROI for Kelloggs

Increase in ROI from Improved In-Flight Targeting Brand 1 ROI Brand 2 ROI

5X
ROI
Year 1

6X 3X
ROI

2X

Year 2

1H Year 3

Year 1

Year 2

1H Year 3

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The Viewability of Digital Campaigns

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Arguably the Most Important Digital Advertising Initiative To Date:

Making Measurement Make Sense (3MS) Mission

Improve reporting of ad exposure

Bolster confidence that ads delivered are actually viewable:
50% of pixels in view for 1 second

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The four key aspects of all Digital Advertising that can be improved

Targeting Accuracy

Brand Safety

Fraud

Viewability

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In-View: 100% isntInRealistic View: 100% isnt Realistic

User leaves page before 1 second

Users browser isnt on full-screen setting

Non-human traffic drives up impression counts, when a person never actually saw the ad

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However, overall average in-view rate is ONLY46%, with variance seen across verticals, though spanning a smaller range than in-target
% In-View: Overall* and by Select Advertiser / Vertical**
Source: comScore vCE Benchmarks, Q1 2014, U.S.

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Premium Publishers Boast Higher Average In-View Rates than Ad Networks/Exchanges

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Advertisers get huge return from increasing viewability: A 40% increase in viewability drives a 75% increase in in-store sales lift for Kelloggs

Sales Lift Index

In-Store Sales Lift Indexed to 100 for Less Than 50% Viewability of Impressions

175

100

Less Than 50% Viewability

At Least 70% Viewability

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40% improvement in viewability generating 75% increase in sales impact

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Using comScore vCE, campaign delivery can be monitored and optimized in-flight. Publisher 1 is delivering results superior to Publishers 2 & 3 and would receive a greater share of ad spend

In-Flight Campaign Optimization by Publisher Based on Cost and Effectiveness

Brand X - Q3/Q4
Publisher Avg Frequency Impressions in Target Impressions in View Lift in Awareness CPM

1
2 3

3.5
3.0 8.4

24.5%
16.9% 23.5%

83%
91% 71%

5.74
0.55 0

$2.44
$9.08 $8.62

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comScore and Google partner to offer actionable audience metrics for brands: vCE to be imbedded in Doubleclick ad server

simplicity and actionability

tipping point greater scale and efficiency

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validated Media Essentials provides media sellers with the insights they need to evaluate ad inventory across their site or network of sites

Audience Viewability

Engagement

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The Future:
The Importance of Cross-Platform Measurement

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Total digital media consumption in U.S. has nearly doubled in the past three years, led by massive growth in smartphone engagement
Total U.S. Internet Usage in Minutes (Billions) by Platform
Desktop, Smartphone and Tablet

999
124

+99%
N/A

502
100 401

446

+344%

429

+7%

December 2010
comScore, Inc. Proprietary.

December 2013
Source: comScore Media Metrix Multi-Platform, December 2013 Note: Dec-2010 Mobile is estimated based on earliest observed comScore smartphone engagement data calibrated by number of smartphone users at that time

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Engagement for many content categories is Incremental to Desktop, but for a few its Cannibalizing
Total U.S. Internet Usage in Minutes (Billions) by Platform
Desktop, Smartphone and Tablet

Sports
1.0

Weather
Tablet Phone
0.8 2.6 0.4

Tablet

4.3

1.7

Phone

9.5 7.9

Desktop

3.2 2.1

Desktop

May 2012 U.S.

May 2013 U.S.

May 2010 U.S.

May 2013 U.S.

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Billion Dollar

Research Lab:

A Look into the Future

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More Screens = More Time Spent on Every Device

Average Time Spent Per Day Following Olympics 8hr 29min 6hr 50min
51 min 47 min 40 min 55 min

Tablet Mobile PC/Laptop

5hr 18min

4hr 19min

59 min

50 min

6hr 7min 4hr 19min 4hr 28min 5hr

TV

TVTV Only

Only

TV + PC/Laptop TV + PC/Laptop + TV + PC/Laptop + TV + TV + TV + Only Mobile Only+ Mobile + Tablet PC/Laptop PC/Laptop PC/Laptop +

Mobile

Mobile + Tablet
42

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comScore Multi-Platform Measurement

Completed Dec 2013 Five-Platform Measurement of Unduplicated Audiences & Ad Campaigns at Content / Device Level TV Radio Desk/Laptop, Smartphone, Tablet 31 combinations Hybrid Methodology Single-Source Calibration Census Digital & TV IP Address & Cookie Data Integration

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Platform Duplication is Far From Random

% A18-49 Exclusive Weekly Reach by Platform Combination based on: comScore Random Random Blueprint Actual Assumptions
41% 32% 22% 15% 10%

20%

12%
9%

TV-Radio

TV-PC-Radio

TV-Smartphone-Radio
Proprietary.

TV-PC-Smartphone-Radio
44

comScore, Inc.

Source: Project Blueprint May 2013 Based on total media usage

Key Takeaways
Moving from clicks to viewability has boosted the value of publishers digital advertising In-flight campaign optimization of viewability, targeting and frequency is being demanded by advertisers and promises to accelerate the shift of branding ad spending to digital It can be expected that Publishers CPMs will increase as advertisers realize the benefits of improved visibility and increased sales lift comScore vCE and vME provide viewability-based services to advertisers and publishers designed to deliver additional value to both parties The future of media planning and analysis requires crossplatform measurement
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Thank You!
For a copy of presentation please email:

Learnmore@comscore.com

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