ComScore Monetizing the Internet April2011

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    Monetizing the Internet Through Sales and Advertising

    Gian Fulgoni

    Executive Chairman and Co-Founder, comScore Inc.

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    2 comScore, Inc. Proprietary and Confidential.

    comScore is a Global Market Research Company and Leader inMeasuring the Digital World

    NASDAQ SCOR

    Founded August 1999

    Clients 1,750 worldwide

    Employees 1,000+

    Headquarters Reston, VA

    Global Coverage 170+ countries undermeasurement;43 markets reported

    Local Presence 30+ locations in 21 countries

    V0910

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    comScore Leverages Rich Panel Data to Deliver Unique and BroadDigital Business Analytics

    2 Million Person Panel with 360View of Person Behavior

    V0910

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    The Internet as a Sales Channel

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    In 2010, Consumers Spent $228 Billion Online. With the Advantages of Lower Pricesand Convenience, E-commerce Continued to Grow in Importance in Q1 2011 and toRebound from Recession

    $42 $53$67 $82 $102

    $123 $130$130

    $142

    $38

    $30$40

    $51

    $61

    $69

    $77 $84 $80$85

    $22

    2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

    $72$93

    $117$143

    Retail

    Travel

    +29%

    +26%

    +22%

    +19%

    +26%

    +33%

    +26%

    +28%

    +20%

    +24%+24%

    +13%

    $171

    $200

    +17%

    +20%

    +12%

    +6%

    +9%

    +7%

    $214

    0%

    -5%

    $209

    -2%

    U.S. E-commerce Dollar Sales Growth ($ Billions)Source: comScore e-Commerce Measurement

    +10%

    +6%

    +9%

    $228

    +12%

    +9%

    Q1

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    E-commerce continues to gain share of retail spending on an apples-to-apples basis and is approaching 10%

    *Note: e-Commerce share is shown as a percent of DOCs TotalRetail Sales excluding Food Service & Drinking, Food & Bev. Stores,

    Motor Vehicles & Parts, Gasoline Stations and Health & PersonalCare Stores.

    e-Commerce Share of Corresponding Retail Spending*

    Source: comScore for e-Commerce & U.S. Department of Commerce (DOC) for Retail

    e-CommerceS

    hare

    e-Commerce share peaks incolder seasons (Q4 & Q1)

    4.3%

    3.7%4.0%

    4.6%

    5.1%

    4.3%4.5%

    5.3%

    5.9%

    5.0%5.3%

    6.4%

    6.7%

    5.9%6.3%

    7.4% 7.3%

    6.5%6.6%

    7.6% 7.7%

    6.8%6.9%

    7.7%8.1%

    7.1% 7.1%

    8.0%

    8.6%

    0.0%

    1.0%

    2.0%

    3.0%

    4.0%

    5.0%

    6.0%

    7.0%

    8.0%

    9.0%

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    Rising gas prices have historically had a negative impact on e-commerce spending growth. Will that re-occur?

    -10%

    -5%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    Y/Y % Change in Retail E-Commerce SpendingSource: comScore E-Commerce Measurement, Jan-07 - Mar-11

    $2.96/gallon $4.14/gallon

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    In the Consumer Electronics category, e-commerce is having aprofound negative impact on offline sales

    Some key observations: E-commerce represents 30%+ of all sales of consumer electronics

    Spending on the consumer electronics category at retail during theholiday season was down 5%* while online saw growth of 20%**.

    Domestic same store sales of Best Buy declined by 5% and totalsales declined by 3% in Q4 2010

    Online sales of Best Buy increased by 13% in December

    comScore data show Amazon consumer electronics sales up 37%

    Source: *NPD & ** comScore

    Forecast for Best Buy: Worst Is Yet to Come

    Tuesday, March 8, 2011

    2010 f hi i bl d 2009 il l N b

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    2010 free shipping patterns resembled 2009 until late Novemberwhen free shipping surged to 55%. For the remainder of the season,2010 outpaced 2009 by 7-12 percentage points

    41% 41%

    47%

    50%

    46%44% 45%

    40%44%

    41%

    44% 45%45%

    50%

    55%

    51% 52%52%

    54%

    50%

    30%

    35%

    40%

    45%

    50%

    55%

    60%

    31-Oct

    -10

    2-Nov

    -10

    4-Nov

    -10

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    20-Nov

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    30-Nov

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    -10

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    20-Dec

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    26-Dec

    -10

    28-Dec

    -10

    30-Dec

    -10

    1-Jan

    -11

    2009 2010

    Percentage of e-Commerce Transactions with Free Shipping

    Source: comScore e-Commerce Measurement

    Average Order Value on free shipping purchases was $110 during holidayseason 2010. For non-free shipping purchases it was $95.

    2010 outpaced 2009 by12 percentage points the

    final Monday beforeChristmas

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    Is pricing power shifting to the consumer?

    Percent Change March 2011 vs. March 2010

    Total Visits VisitorsTotal VisitorsMar-11 (MM)

    Social Networking Site Category +21% +10% 204

    Retail Site Category -5% +9% 183

    Comparison Shopping Site Category +4% +8% 84

    Coupon Site Category +35% +30% 38

    Twitter +27% +15% 26

    Groupon +533% +468% 12

    LivingSocial +426% +304% 7

    96% of retailers have e-mail marketing programs Internet RetailerU.S. in-store sales influenced by online consumer research expected to account

    for 50% of all retail sales in 2012 Credit Suisse

    Source: comScore Media Metrix, March 2011 vs. March 2010

    Total Searches UniqueSearchers No. SearchersMar-11 (MM)

    Core Search Engines +22% +0% 216

    The Internet provides an ever increasing variety of ways for consumers toobtain information on prices, promotions and product features, contributing

    to a frenzy of online activity.

    A d th 31% f f f

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    And theres more: 31% of consumers now own or use some form of

    smartphone or Internet-capable digital media device. This issignificantly higher among higher-income consumers

    Smartphone Ownership and Usage

    Q. Do you own or use a smartphone or digital media device, such as an iPhone, iPad, Droid, Blackberry orsimilar device?

    Source: comScore Survey January 2011

    31%

    67%

    2%

    Yes No Not sure

    19%

    32%

    47%

    Under $50k

    $50k - $99k

    $100k+

    % who own or use a smartphone

    Smartphone Ownership/usage (by income)

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    72 Million People (31% of 234 Million U.S. Mobile Subscribers) NowUse a Smartphone to Access a Wide Variety of Content

    0

    10,000

    20,000

    30,000

    40,000

    50,000

    60,000

    70,000

    80,000

    SocialNetworking

    Classifieds OnlineRetail

    GeneralReference

    Maps ShoppingGuides

    RestaurantInfo

    Weather AuctionSites

    PersonalEmail

    UniqueUser(000)

    Fastest Growing Mobile Site Content Categories by Total Audience (000)Source: comScore MobiLens, 3 mo. avg. ending Dec-2010 versus Dec-2009

    Dec-09 Dec-10

    + 55% + 53%

    + 47%

    + 46%

    + 46%

    + 45%

    + 45%

    + 45%

    + 39%

    + 56%

    When it Comes to Mobile Content Consumption, Social Networking Ranks as Fastest Growing

    Category, Followed by Classifieds and Retail

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    Building Sales with Online Marketing:

    Lessons Learned

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    2010 U.S. Measured Media Spend

    $149 Billion

    Dire

    ct

    Respo

    nse

    Branding

    $91B

    $58B

    2010 U.S. Online Media Spend$26 Billion

    $6B

    $20B

    Internet is lagging in capturing branding dollars. Online spend in 2010accounted for 34% of all media direct response spend, while online spend forbranding remained unchanged at $6B, or only 6% of all media branding addollars.

    61%

    39%

    6% ofbrandingdollars

    34% of direct

    responsedollars

    Source: Brand.net analysis based on Barclays Capital and DMA

    $18Billionin 2009

    $6