Online Advertising

21
Internet Trends
2019
Media Time vs. Advertising Spending =
Mobile @ Equilibrium (2018)…Desktop (2015)
% Time Spent in Media vs. % Advertising Spending

2010 2018
50% 50%
% of Time Spent in Media / Advertising Spending, 2010, USA

% of Time Spent in Media / Advertising Spending, 2018, USA

43% 43%

33% 33%
34% 34%

27% 25%
25% 25%

19%
18% 18%

16%

12%
11%
8%
8% 8%
7%

0.5% 3%
0% 0%
Print
Print Radio
Radio TV
TV Desktop Mobile
Desktop Mobile Print
Print Radio
Radio TV
TV Desktop
Desktop Mobile
Mobile

Time Spent Ad Spend

Source: Internet & Mobile advertising spend based on IAB & PwC data for full year 2018 & 2010.
Print advertising spend based on Magna Global estimates for full year 2018 & 2010. Print includes newspaper & magazine. 22
Internet Trends Time spent share data based on eMarketer (10/18). Excludes out-of-home, video game & cinema advertising.
2019
Internet Ad Spending (Annual)=
Accelerated +22% vs. +21% Y/Y

Internet Advertising Spend

$120B 30%
Internet Advertising Spend, USA (Bars)

Y/Y Growth (Red Line)

$60B 15%

0 0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Desktop Advertising Mobile Advertising Y/Y Growth

Source: IAB / PWC Internet 2018 Advertising Report (5/19).

23
Internet Trends
2019
Internet Ad Revenue (Quarterly – Leading USA Platforms) =
Decelerating +20% vs. +29% (Y/Y – Q1 vs. Q4)

Leading USA-Based Online Ad Platform Revenue, Global

$60B 40%

Y/Y Growth (Red Line)

Revenue (Blue Bar)

$30B 20%

$0 0%
Q1:17 Q2:17 Q3:17 Q4:17 Q1:18 Q2:18 Q3:18 Q4:18 Q1:19

Source: Company public releases & Morgan Stanley estimates. Note: Includes Google / Facebook / Twitter / Amazon / Snapchat / Pinterest.
24
Internet Trends
2019
Internet Ad Buying = Programmatic Gains vs. Direct Continue…
Negatively Impacting Pricing

Programmatic Buying – % Digital Display Advertising, Global

80%
% Display Advertising Spend Programmatic, Global

62%

40%

10%

0%
2012 2013 2014 2015 2016 2017 2018

Source: Publicis / Zenith 2018 Programmatic Marketing Forecast. Note: Programmatic refers to ads bought both via real-time bidding
& non real-time algorithmically-driven ad purchases. Does not include non-display advertising (e.g., Search) 26
Internet Trends
2019
Customer Acquisition Cost (CAC) =
Rising in Highly Competitive / Capitalized Sectors

Cost Per User Activation – Mobile Finance Apps, Global per Liftoff
$60
Average Cost per User Activation, Global

$30

$0
1/17 4/17 7/17 10/17 1/18 4/18 7/18 10/18 1/19

Source: Liftoff’s 2019 / 2018 Mobile Finance App Report. Note: Report draws from internal Liftoff Data from 2/1/17 to 3/31/19, spanning 19B+ ad impressions
across 5MM+ App installs, 270MM+ clicks & 3MM activations / registrations. Data focused on North America, Europe, Middle East, Africa & Asia Pacific. 28
Internet Trends Note: Activation = Adding & depositing funds to an account, activating a spending card, opening an equities position or starting a paid subscription.
2019
 Reality =

CAC Can’t Exceed LTV for Very Long

CAC = Customer Acquisition Cost. LTV = Lifetime Value. 29

Internet Trends
2019
 Effective + Efficient Marketing =

One’s Own Product +

Happy Customers + Recommendations

30
Internet Trends
2019