comScore’s State of Digital

August 8, 2017

Dr. Gian Fulgoni

CEO & Co-Founder, comScore, Inc.

For info about the proprietary technology used in comScore products, refer to http://comscore.com/About_comScore/Patents
Topics
Digital Media
Social & Video Platforms
TV & OTT
Advertising
Digital Commerce
Key Takeaways
Q&A

© comScore, Inc. Proprietary. 2

Digital Media

© comScore, Inc. Proprietary. 3

Mobile (smartphone + tablet) makes up 2/3 of all time spent online and has
doubled time spent online over the past 3 years
Share of Digital Time

Tablet

9%
Desktop
34%

Smartphone
57%

Source: comScore Media Metrix Multi-Platform and Mobile Metrix, U.S., June 2017 © comScore, Inc. Proprietary. 4
Apps dominate usage time on smartphones, accounting for an astounding 7 out
of every 8 online minutes
Share of Smartphone Time

Mobile Web
12%

App
88%

Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S., Jun 2017 © comScore, Inc. Proprietary. 5
Smartphone users access an average of 27 apps per month but spend almost half
their time on their #1 most used app and 9 out of 10 minutes within their Top 5
49%
Share of Time Spent on Smartphone Apps Across Rank
Share of Time Spent on Apps

18%

10%
6%
4% 3% 4%
2% 2% 1% 1%

1 2 3 4 5 6 7 8 9 10 11+
Individuals’ Top Ranked App by Usage

Source: comScore Custom Analytics, U.S., Age 18+, June 2017 © comScore, Inc. Proprietary. 6
Google, Facebook, and Yahoo remain the top digital media properties
and the only ones with 200+ Million monthly visitors

Top Digital Properties: Monthly Unique Visitors by Platform

241M

204M

186M
184M

180M
155M

155M

148M
Apple Sites 141M

131M
Desktop Only Multi-Platform Mobile Only

Source: comScore Media Metrix Multi-Platform, U.S., June 2017 © comScore, Inc. Proprietary. 7
Facebook and Google own 8 of the 10 top mobile apps,
while Snapchat is the top app not owned by either company

Top 10 Mobile Apps by Monthly Unique Visitors (000)

Facebook 146,714

YouTube 129,117

Facebook Messenger 122,660

Google Search 110,862

Google Maps 102,296

Instagram 90,571

Snapchat 89,786

Google Play 85,210

Facebook

Gmail 79,281 Google

Everyone Else
Pandora 74,821
Source: comScore Mobile Metrix, U.S., Age 18+, June 2017
* “Apple Music,” as it appears in comScore’s monthly reporting, is referring to Apple’s native music app, which captures all music activity within that app,
including listening via the streaming service, radio service and users’ personally downloaded music libraries.. © comScore, Inc. Proprietary. 8
The top apps vary by age group; YouTube and Snapchat ranking higher on
the list among younger Millennials
Top Apps by Number of Unique Visitors
Age 18-24 Age 25-34 Age 35-54 Age 55+

1 1 1 1
2 2 2 2 Google Search

3 3 FB Messenger 3 FB Messenger 3 FB Messenger

4 FB Messenger 4 4 Google Search 4

5 5 Google Maps 5 Google Maps 5 Google Maps

6 Google Search 6 6 6
7 Google Maps 7 Google Search 7 7 Apple News

8 8 8 Gmail 8 Gmail

Source: comScore Mobile Metrix, U.S., Age 18+, June 2017 © comScore, Inc. Proprietary. 9
Many of the fastest growing apps are services that improve existing
real-world behaviors, such as hailing cabs and paying cash to friends
25 % Change vs. June 2015

Fast Rising Apps – Unique Visitor Trend Waze +127%

20 Uber +99%

Wish +171%
15
Letgo +1,224%

10
Bitmoji +2,078%
Unique Visitors (MM)

OfferUp +166%
5
Lyft +282%

Venmo +441%
0
Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

Source: comScore Mobile Metrix, U.S., Age 18+, June 2015 – June 2017 © comScore, Inc. Proprietary. 10
Social & Video Platforms

© comScore, Inc. Proprietary. 11

Social media and video viewing are the two most popular online
activities, together accounting for more than a third of all internet time
Share of Total Digital Time Spent by Content Category

All Other18% 20% Social Media

Sports 1%
Lifestyles 2%
Photos 2%
Instant Messengers 3%
Search / Navigation 3% 15% Multimedia
E-mail 3%
News / Information 4%
Directories / Resources 4%

Retail 4% 11% Entertainment - Music

5% 7%
Portals Games

Source: comScore Media Metrix Multi-Platform, U.S., Total Audience, June 2017 © comScore, Inc. Proprietary. 12
While Facebook’s users mirror the internet as a whole,
Snapchat, Instagram, and Tumblr have a younger audience profile
Age Demographic Composition % of Major Social Networks
100%
6% 7% 7% 6% 4% 6%
10% 7%
90% Age 65+
15% 13% 12%
20% 17% 16%
80% 17% 19%
16% 12% Age 55-64
70% 16%
18% 18%
17% 17% 16%
60% 15% Age 45-54
18%
19%
50%
17% 19% 20%
18% 21%
40% 23% Age 35-44
24%
30% 24%
22% 23% Age 25-34
20% 22% 23%
20%
27%
10% 24% Age 18-24
14% 18% 17% 15%
13% 12%
0%

Source: comScore Media Metrix Multi-Platform, U.S., Age 18+, June 2017 © comScore, Inc. Proprietary. 13
Snapchat has rapidly gained adoption among Millennials
and now attracts most 18-24 year-olds and nearly half of 25-34 year-olds

Smartphone App Penetration by Age

Age 18-24 75%
Age 25-34 70%

58%
53%
49%

41%

27%
20%

Jun-14 Jun-15 Jun-16 Jun-17

Source: comScore Mobile Metrix, U.S., Age 18+, June 2014 – June 2017 © comScore, Inc. Proprietary. 14
YouTube has also seen much success with mobile video, with over 7 out of 10
minutes of viewing now happening on smartphones & tablets
Share of Time Spent by Digital Platform

Desktop
27%

Mobile

73%

Source: comScore Video Metrix Multi-Platform, U.S., June 2017 © comScore, Inc. Proprietary. 15
TV & OTT

© comScore, Inc. Proprietary. 16

Millennials and Gen Xers spend more time on digital media than
watching live TV, a sign of shifting media consumption dynamics

Hours Spent on Platform by Demographics

Source: comScore Xmedia (Custom) and Media Metrix Multi-Platform, U.S., Q4 2016

Live TV Desktop Mobile

40.0 37.0
35.0
30.0
Total Hours (Billions)

30.0 26.6 27.4

25.0
19.1
20.0
23.1 18.5 37.0 16.3
15.0
26.6
10.0
9.6
19.1
5.0 8.9
6.9 6.8
0.0
Live TV Digital Live TV Digital Live TV Digital
Age 18-34 Age 35-54 Age 55+

* Time spent on desktop and mobile accounts for all content consumption on these devices (i.e. websites and apps),
not just digital video.
© comScore, Inc. Proprietary. 17
The modern living room features a multitude of connected devices,
including significant innovation and adoption in the OTT and IoT landscape

90%
Media Device Penetration Among U.S. Wi-Fi Households
89%

63%

41%
31% 29%
8% 8%
4%
1%

Smartphone Computer Tablet Streaming Smart TV Gaming Smart Wearables Home Audio
Box/Stick Console Speakers Energy Systems

DIGITAL OTT IoT

Source: comScore Connected Home, U.S., June 2017 © comScore, Inc. Proprietary. 18
Over 1/3rd of the OTT audience is ‘cordless’ and doesn’t subscribe to
pay-TV, with half of those being ‘streaming only’ households
Over-the-Top (OTT) Households by TV Service Type

Cordless Streaming Only

33% 17%

Streaming +
Cordless Antenna
Cable
45%
57%
of WiFi Households use
16%
OTT Devices

Satellite
23%

Source: comScore Total Home Custom Reporting, U.S., June 2017

* Households that use an antenna in addition to their cable or satellite services are included in those respective shares.
Note: Share may not sum to 100% due to rounding
© comScore, Inc. Proprietary. 19
The OTT market is steadily growing, with millions more OTT viewing
households over the past several months

Total OTT Household Penetration (Millions of Households)

54
52
51 51
49 49 48
46
44
Total Households (MM)

Oct-2016 Nov-2016 Dec-2016 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017

Source: comScore OTT Intelligence, U.S., October 2016 – June 2017 © comScore, Inc. Proprietary. 20
Roku is the most popular box or stick for streaming video,
but Amazon (especially), Google and Apple remain key players in this market

TV Streaming Boxes/Sticks: Penetration of U.S. Wi-Fi Households

17%
16%

8%
6%

Source: comScore Connected Home, U.S., June 2017

* Roku’s number includes Roku OS TVs, which account for a small percentage of its total penetration.
© comScore, Inc. Proprietary. 21
The four major OTT streaming services account for 80% of viewing time
for OTT households

Share (%) of Total OTT Viewing Hours

Other
20%

43%
7%

11%

20%

Source: comScore OTT Intelligence, U.S., June 2017

Note: Share may not sum to 100% due to rounding © comScore, Inc. Proprietary. 22
Skinny Bundles are beginning to gain traction in U.S. households but penetration
is still at a low level

Skinny Bundle HHs Watch

3.3M 5.1 Hours

U.S. Skinny Bundle HHs of Skinny Bundle Content
per Viewing Day

88%
is the Most Popular
Skinny Bundle in over

2M Homes
of Skinny Bundle
Homes Use a
Streaming Stick/Box

Source: comScore OTT Intelligence, U.S., June 2017

* Skinny Bundle HHs defined as viewing Sling, Playstation Vue or DirecTV Now. © comScore, Inc. Proprietary. 23
As replacements for traditional pay-TV, Sling, PlayStation Vue, and DirecTV
now boast extremely high engagement on a per household basis
Monthly OTT Hours Viewed per Household
73
71
68

26 27

18
11

Amazon Video YouTube Hulu Netflix Sling Playstation Vue DirecTV Now

Source: comScore OTT Intelligence, U.S., April - June 2017 average © comScore, Inc. Proprietary. 24
Advertising

© comScore, Inc. Proprietary. 25

Digital advertising became the #1 Media category in 2016, but TV not expected
to decline. Print has been decimated

© comScore, Inc. Proprietary. 26

Mobile (up 77% Y/Y) drove much of the digital ad revenue growth in 2016
and now accounts for more than half of all digital ad spend
Online Revenues in FY 2016
Dollars % Change
(Millions) % of Total vs. YA
Desktop $35,900 49% -8%
Mobile $36,600 51% +77%
Total Search $35,000 48% +19%
Total Display Related* $31,700 44% +29%
Banner Ads $22,600 31% +22%
Video $9,100 13% +54%
Other** $5,800 8% +8%
TOTAL ONLINE $72,500 100% +22%

* Display-related formats include: Banners (Banners, Rich Media, and Sponsorship) and Video
** Other includes: Classifieds, Lead Generation, Audio, and Unspecified Other
Source: IAB Internet Advertising Revenue Report, Full Year 2016, IAB & PricewaterhouseCoopers © comScore, Inc. Proprietary.
Marc Pritchard | Procter & Gamble | Chief Brand Officer

“We have a media supply chain that is

murky at best and fraudulent at worst.”

“Wasting way “Non-Transparent” “Bots & Fraud”

too much time
& money”
“Unreliable” “Players
“Poor grading their
Standards” own homework”
“Antiquated”

© comScore, Inc. Proprietary. 28

Nearly half of digital ad impressions can’t have an impact
because they’re not viewable or not delivered to a human (i.e. fraud)

Percentage of Viewable Desktop Ad Impressions in U.S.

Non-Viewable

90%
38%
Invalid
Traffic
6% (IVT) of invalid ad traffic is
Sophisticated IVT
Viewable
56%

Source: comScore vCE Benchmarks, U.S., May-July 2017 © comScore, Inc. Proprietary. 29
Invalid traffic levels have been stable for display ads, but
the problem is growing for higher-CPM video ads
U.S. Desktop Invalid Traffic Comparison: Display vs. Video Norms

Display Video
10.2%
9.3%
8.5% 8.5%

6.0% 6.2% 6.1%

5.8%
% of Invalid Traffic

Q1 2016 Q2 2016 Q3 2016 Q4 2016

Source: comScore vCE Benchmarks, U.S., 2016 © comScore, Inc. Proprietary. 30

Both desktop and mobile ads deliver branding effectiveness, but
mobile performs better – particularly at the bottom of the funnel

Percentage Point Lift in Brand Metrics for Desktop and Mobile Ads

Desktop Mobile

Aided awareness 2.0x

1.3 desktop
2.6

Favorability 2.2x
1.3 desktop
2.9

Likelihood to recommend 1.9x

1.5 desktop
2.8

Purchase Intent 3.1x

1.3 desktop
4.0

Source: comScore BSL and BSL Mobile Benchmarks, U.S., 2014 - 2016 © comScore, Inc. Proprietary. 31
Digital Commerce

© comScore, Inc. Proprietary. 32

 In Q2 2017, Total Digital Commerce has grown to account for over 1 in every 6
discretionary dollars spent by consumers

Desktop & Mobile Digital Commerce Share of Corresponding Consumer Spending*

20%
19% 17.5%
18% 15.5% Q2 ‘17
17% Digital’s share of consumer spending peaks in Q1 and Q4 due Q2 ‘16
16% to colder weather keeping people indoors and buying online.
15%
14% 13.5%
13% Q1 2017 saw a 19.0% share, the highest ever Q2 ‘17
12%
11%
10%
12.5%
9% Q2 ‘16
8%
7%
6%
5%
4%
3% Digital Commerce Share (desktop + mobile)
2%
1%
e-Commerce Share (desktop)
0%

Source: comScore e-Commerce / m-Commerce & U.S. Department of Commerce (DOC) for Retail
*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking,
© comScore, Inc. Proprietary. 33
Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores.
 Retail Digital Commerce (Desktop + Mobile) reached $103.1 billion in Q2 2017,
remaining over the $1 Billion threshold
Desktop + Mobile Retail Commerce Dollar Sales $109.3
$103.1
$100.1
$92.5 $22.7
$87.2 $23.2
Desktop $82.8 $83.5 $84.3 $22.3
$15.6
Mobile $71.4 $10.7 $72.2 $70.9 $69.7 $17.3
$15.6 $16.9
$64.0 $8.3 $63.4 $61.6 $60.6 $11.1 $11.1
$11.4
$7.2 $56.1 $54.5 $54.3 $7.3 $6.8
$48.8 $47.0 $45.4 $6.7
$5.9 $4.7
$5.8
$4.5 $3.8 $4.6 $86.6
$76.9 $77.8 $79.9
$72.1 $67.9 $69.9 $67.4
Billions ($)

$63.1 $61.1 $59.8 $58.3

$56.8 $56.1 $54.8 $53.9
$50.2 $49.8 $47.5
$44.3 $43.2 $41.9

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017

+21% +17% +17% +17% +15% +16% +14% +12% +13% +13% +14% +16% +14% +15% +15% +12% +16% +23% +21% +18% +20% +18%
Y/Y % Change
Source: comScore e-Commerce & m-Commerce Measurement © comScore, Inc. Proprietary. 34
m-Commerce has attained a much more meaningful share of Total Digital Commerce
dollars, with its Q2 2017 share reaching 22%

22% 22%
m-Commerce Share of
Total Digital Commerce Dollars 21%
20% 20%
19%
17%
16%
15% 16%

13%
11% 12% 11%
11% 11%
11% 11%
10%
9%
9% 9% 9%
8%
7%
6%

4%
2%
2%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017

Source: comScore m-Commerce Measurement © comScore, Inc. Proprietary. 35

Apparel and Computer Hardware were the largest digital commerce
categories by dollars spent in Q2 2017
Absolute
Dollar Rank Product Category
1 Apparel & Accessories
2 Computer Hardware
3 Consumer Packaged Goods
4 Consumer Electronics
5 Event Tickets
6 Office Supplies
7 Furniture, Appliances, & Equipment
8 Home & Garden
9 Books & Magazines
10 Computer Software
11 Jewelry & Watches
12 Toys & Hobbies
13 Sports & Fitness
14 Video Games, Consoles, & Accessories
15 Music, Movies, & Videos
16 Flowers, Greetings, & Gifts
Source: comScore e-Commerce and m-Commerce Measurement, U.S., Q2 2017 36
© comScore, Inc. Proprietary.
Key Takeaways

© comScore, Inc. Proprietary. 37

 Key Themes for 2017

1 The Maturation of
Mobile 2 A Cross-Platform
Ecosystem Emerges 3 Advertising Gets Back
to the Basics

• While mobile now dominates • Digital media has gone cross- • Trust in digital advertising
digital media usage, platform, as consumers has been shaken as a result of
consumption is beginning to access content via more fraud and brand safety
stabilize and the days of huge devices than ever before and problems, increasing the
growth are over. desktop and mobile media importance of third party
usage are converging with measurement.
• Consumer usage trends always traditional TV and OTT.
shift faster than dollars, but now • Ad measurement is finally
is the time for economics to • The cross-platform era will be getting back to basics with a
catch-up with behavior by defined by a media-agnostic return to the metrics that matter,
better measurement, improved view of the consumer and but they are also getting more
industry standards and less comparable metrics to advanced, with the ability to go
friction in running mobile ad facilitate efficient media deeper on audience descriptors
campaigns. planning, buying and selling. and tying to behavioral
outcomes.

© comScore, Inc. Proprietary. 38

 Questions?
Please contact:

Irena Simakova
VP of Investment Research, comScore Inc.
isimakova@comScore.com
703-438-2356

www.comscore.com @comScore www.linkedin.com/company/comscore www.facebook.com/comscoreinc

For info about the proprietary technology used in comScore products, refer to http://comscore.com/About_comScore/Patents