The State of The U.S. Mobile Market For info about the proprietary technology used in comScore products, refer to http://comscore.com/About_comScore/Patents Gian Fulgoni CEO and Co-Founder comScore, Inc.
For info about the proprietary technology used in comScore products, refer to http://comscore.com/About_comScore/Patents
The State of The U.S. Mobile Market
For info about the proprietary technology used in comScore products, refer to http://comscore.com/About_comScore/Patents
Gian Fulgoni CEO and Co-Founder comScore, Inc.
© comScore, Inc. Proprietary. © comScore, Inc. Proprietary. 2
Agenda The Mobile Media Revolution Social & Other Fast Rising Apps The Upside in Mobile Advertising The Accelerating Channel Shift in Digital Commerce Key Takeaways
© comScore, Inc. Proprietary. 4 Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S.
Digital media usage time, driven by mobile apps, has surged 54% since 2013 and tripled in five years, but growth across all platforms is beginning to slow
Growth in Digital Media Time Spent in Minutes (Billions)
477 481 551 492
410 621
779 864 77
97
118 125
Jan-13 Jan-14 Jan-15 Jan-16 Jun-2013 Jun-2014 Jun-2015 Jun-2016
964
1,199
1,448 1,481
+62%
+111%
+3%
+54%
% Change vs. Jun 20113
Mobile Web
Mobile App
Desktop
© comScore, Inc. Proprietary. 5
49%
33%
42%
58%
51%
67%
33%
49%
25%
35%
45%
55%
65%
75%
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16
Source: comScore Media Metrix Multi-Platform & Mobile Metrix, U.S.
Mobile now represents 2 out of 3 digital media minutes, and mobile apps are approaching 60% of total digital time spent
Share of U.S. Digital Media Time Spent Shifts by Platform
Mobile App
Desktop
Smartphone App
Mobile
© comScore, Inc. Proprietary. 6
45%
18%
10% 7%
4% 3% 2% 2% 1% 1%
5%
1 2 3 4 5 6 7 8 9 10 11+
Sha
re o
f Tim
e S
pent
on
App
s
Individuals’ Top Ranked App by Usage
Smartphone
Mobile users spend a really high percentage of their time on their #1 most used app, and about 9 out of 10 minutes within their Top 5
Share of Time Spent on Apps Across Ranks
Source: comScore Custom Analytics, U.S., Age 18+, June 2016
© comScore, Inc. Proprietary. 7 Source: comScore MobiLens, U.S., Age 13+, 3 Month Average Ending June 2016
Have we reached ‘peak app’? Nearly half of smartphone users don’t download any apps in a month, and the average user downloads two
Smartphone Users’ Number of App Downloads Per Month
49%
13%
11%
8% 6% 7% 6%
51% 0 Apps 1+ Apps
1 App
2 Apps
8+ Apps
4 Apps
5-7 Apps
3 Apps
Heavy downloaders of 5+ apps per month:
13% of the population,
54% of all app downloads
© comScore, Inc. Proprietary. 8
Monthly digital media audiences continue to climb with the help of mobile, which has now far surpassed desktop in audience size
Growth in Top 1000 Digital Media Property Audiences
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16
TOTAL DIGITAL
MOBILE
DESKTOP
6.7
12.3
6.9 6.4
16.7
12.4
+36%
+81%
-4%
Source: comScore Media Metrix Multi-Platform, U.S.
Aver
age
# of
Uni
que
Visi
tors
by
Pla
tform
(MM
)
% Change vs. Jun14
© comScore, Inc. Proprietary. 9
Share of Mobile App Time Spent
The top five mobile app categories are all social and entertainment-focused, and drive 60% of total time spent on apps
20%
16%
12% 7%
5% 4%
3% 3%
2% 2%
26% Other
* As of January 2016, the Pandora Radio media property reclassified itself from the Radio category to the Music category. This had a significant and inorganic impact on both categories’ time spent figures.
Indicates entertainment and communication
categories
Source: comScore Mobile Metrix, U.S., Total Audience, June 2016
Social Networking
Music*
Games
Multimedia Instant Messengers
Retail
Photos
Search/ Navigation Portals
News/Information
© comScore, Inc. Proprietary. 10
76%
8% 4% 4% 2% 1% 1% 1% 1% 0% 0%
10%20%30%40%50%60%70%80%
1 2 3 4 5 6 7 8 9 10
34%
8% 7% 7% 3% 2% 2% 2% 2% 2%
0%5%
10%15%20%25%30%35%40%45%50%
1 2 3 4 5 6 7 8 9 10
App usage by category tends to follow a power law distribution, featuring one strong leader, a few secondary players, and a long tail
Concentration of Time Spent in Top Apps by Category
68%
21%
4% 1% 1% 1% 1% 0% 0% 0%
1 2 3 4 5 6 7 8 9 10
Retail
Social Networking
45%
26%
13% 8%
3% 1% 1% 1% 1% 0%
1 2 3 4 5 6 7 8 9 10
Multimedia
Newspapers
Source: comScore Mobile Metrix, U.S., Age 18+, June 2016
Shar
e of
App
Tim
e Sp
ent
Top Properties in Category
© comScore, Inc. Proprietary. 12
0
50
100
150
200
250
300
350
400
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: comScore Media Metrix Multi-Platform, U.S., July 2016
Millennials use a variety of social networks regularly…
Age 18-34 Digital Audience Penetration vs. Engagement of Leading Social Networks
% Reach Among Age 18-34
Aver
age
Mon
thly
Min
utes
per
Vis
itor
© comScore, Inc. Proprietary. 13
0
200
400
600
800
1,000
1,200
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: comScore Media Metrix Multi-Platform, U.S., July 2016
Millennials use a variety of social networks regularly… but Facebook has a wide lead in both audience size and engagement
Age 18-34 Digital Audience Penetration vs. Engagement of Leading Social Networks
% Reach Among Age 18-34
Aver
age
Mon
thly
Min
utes
per
Vis
itor
© comScore, Inc. Proprietary. 14
0
200
400
600
800
1,000
1,200
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: comScore Media Metrix Multi-Platform, U.S., July 2016
The 35+ age segment represents heavy Facebook users, but they don’t spread their attention quite as heavily across other networks
Age 35+ Digital Audience Penetration vs. Engagement of Leading Social Networks
% Reach Among Age 35+
Aver
age
Mon
thly
Min
utes
per
Vis
itor
© comScore, Inc. Proprietary. 15
Snapchat continues its impressive run as it grows its audience across all age groups; even the “older” 35+ users are catching on
Snapchat Smartphone App Penetration by Age
0%
10%
20%
30%
40%
50%
60%
70%
80%
Jun-2013 Jun-2014 Jun-2015 Jun-2016
% R
each
Age 25-34
14%
41%
6%
29%
3%
Age 35+
Age 18-24 70%
Source: comScore Mobile Metrix, U.S., Age 18+
© comScore, Inc. Proprietary. 16
YouTube FB Messenger
Google Search Google Maps
Apple Maps
Pandora Amazon
Snapchat
Spotify
Shazam Yelp
ESPN 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 10% 20% 30% 40% 50%
% R
each
of S
mar
tpho
ne A
pp U
sers
% of Home Screens on Which App Appears
Location, location, location: apps occupying valuable home screen real estate tend to have the most visitors
Selected Smartphone Apps: Visitor Penetration vs. % Home Screen Incidence
Source: comScore Custom Survey, U.S., Age 18+, August 2016; comScore Mobile Metrix, U.S., Age 18+, June 2016
© comScore, Inc. Proprietary. 17
0
2
4
6
8
10
12
14
16
18
20
Jun-2014 Sep-2014 Dec-2014 Mar-2015 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016
Uni
que
Visi
tors
(MM
) Many of the fastest growing apps are services that improve existing real-world behaviors, such as hailing cabs, exercising, and dating
Fast Rising Apps Growth in Unique Visitors
* Bitmoji’s percent change figure represents its app audience growth from February 2015 to June 2016.
+828%
+492%
+1,524%
+195%
+220%
+2,371%*
% Change vs. Jun14
Source: comScore Mobile Metrix, U.S., Age 18+
© comScore, Inc. Proprietary. 18
0
5
10
15
20
25
30
35
7/1 7/7 7/11 7/15 7/19 7/23 7/27 7/31
Dai
ly U
niqu
e Vi
sito
rs (M
illio
ns)
Pokémon GO – a location-based augmented reality game – is the latest mobile app phenomenon, exploding onto the scene in July
Pokémon GO: Daily Unique Visitor Trend
60% of Pokémon
Go’s users are
18-34 year-old Millennials
28.5 MM
Source: comScore Custom Analytics, U.S., Age 18+, July 2016
© comScore, Inc. Proprietary. 20
Mobile ad growth is exploding right now, accounting for a third of all digital ad spending and driving acceleration in the topline digital advertising growth trend
$12.5 $16.9 $21.2 $23.4 $22.7 $25.4 $30.1 $33.2 $35.7 $37.0 $38.9
$0.6
$1.6 $3.4
$7.1 $12.5
$20.7
$0
$10
$20
$30
$40
$50
$60
$70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
IAB Digital Ad Spend Growth by Sector
16% CAGR
18% CAGR
Source: IAB Internet Advertising Revenue Report, FY 2015
Mobile
Non-Mobile
© comScore, Inc. Proprietary. 21
Advertising and marketing is becoming a more important driver of app installs, while the app store’s influence may have peaked
Smartphone App Discovery Method as a % of Users
21%
14% 16%
9% 8% 9%
8% 6%
21%
14% 16%
11%
8%
11% 9% 9%
Searchedapp store
Featured/Top List inapp store
via friend/family
via comment/review/ social
site
via news/print review/
TV show
via a website via Ad ondevice
browser/ app
via Ad on TV/print/ billboard
% o
f Sm
artp
hone
Use
rs
App Store Word-of-Mouth/Opinion Advertising/Marketing
Source: comScore MobiLens, U.S., Age 13+, 3 Month Average Ending June 2016 vs. June 2015
Jun15 | Jun16
© comScore, Inc. Proprietary. 22
Digital ads work: both desktop and mobile ads drive brand lift, but mobile performs better, particularly in the lower funnel
Percentage Point Lift in Brand Metrics for Desktop and Mobile Ads
Aided Awareness
Favorability
Likelihood to Recommend
Purchase Intent
1.4 2.3
1.3 2.7
1.5 3.3
1.4 3.7
Desktop Mobile
1.6x
2.3x
2.1x
2.6x
Source: comScore BSL and mBSL Benchmarks, U.S., Full Year 2015
© comScore, Inc. Proprietary. 23
Mobile campaigns often deliver comparable reach/frequency to desktop campaigns, and drive significant incremental reach
Analysis of 14 CPG Brands’ Campaigns: Incremental Reach by Platform*
6.5
8.0 8.0
0
5
10
15
20
25
Desktop Reach Mobile Reach Total Digital Audience
Rea
ch in
Uni
que
View
ers
(Mill
ions
) 23.4 MM
+34% incremental mobile reach
14.6 MM mobile unique viewers
* Based on a sample of campaigns for 14 CPG brands in Q2 2016. Not all values in chart will sum due to rounding error.
Source: comScore validated Campaign Essentials, U.S.
3.7 3.5 4.2 Avg. Frequency
© comScore, Inc. Proprietary. 24
Mobile ads perform significantly better than desktop in reaching their target audience and delivering ads to humans
Benefits of Mobile Ads vs. Desktop Ads
Avg. % Unique Viewer Reach In-Target*
Avg. % of Impressions NOT Delivered to Human**
3.6%
0.7%
Desktop Mobile
* Based on a sample of 254 desktop campaigns and 167 mobile campaigns between April 1 – June 22, 2016. ** Based on a sample of 254 desktop campaigns and 127 mobile campaigns between April 1 – June 22, 2016.
39.4%
48.8%
Desktop Mobile
+9.4 point
difference
+2.9 point
difference
Source: comScore validated Campaign Essentials, U.S.
© comScore, Inc. Proprietary. © comScore, Inc. Proprietary. 25
The Accelerating Channel Shift in Digital Commerce
© comScore, Inc. Proprietary. 26
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Digital Commerce Share (desktop+mobile)
e-Commerce Share (desktop)
*Note: e-Commerce share is shown as a percent of DOC’s Total Retail Sales excluding Food Service & Drinking, Food & Bev. Stores, Motor Vehicles & Parts, Gasoline Stations and Health & Personal Care Stores.
Desktop & Mobile Digital Commerce Share of Corresponding Consumer Spending*
13.3% (Q2 ‘15)
12.5% Q2 ‘16
15.5% Q2 ‘16 Digital’s share of consumer spending peaks in Q1 and Q4
due to colder weather keeping people indoors and buying online. Q1 2016 saw a 16.5% share, the highest ever quarterly share.
11.2% (Q2 ‘15)
Source: comScore e-Commerce / m-Commerce & U.S. Department of Commerce (DOC) for Retail
By Q2 2016, Total Digital Commerce had grown to account for nearly 1 in every 6 discretionary dollars spent by consumers
© comScore, Inc. Proprietary. 27 Source: comScore m-Commerce Measurement
M-Commerce has grown as a percentage of total digital commerce, with a significant acceleration beginning in Q4 2014 and culminating in an all-time high of 19.8% in Q2 2016
m-Commerce Share of Total Digital Commerce Dollars
1.8% 2.4% 3.6%
5.8% 6.6%
8.8% 9.0% 9.3% 8.1%
9.8% 11.3%
10.5%
8.6%
10.8% 11.7% 11.5% 11.1% 11.1%
13.0%
15.4% 15.6% 16.4% 16.9%
18.6% 19.8%
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
All-Time High
© comScore, Inc. Proprietary. 28
In terms of discretionary spending, m-Commerce growth is still far outpacing e-Commerce & bricks-and-mortar
+5%
+17%
+59%
Total Discretionary Retail e-Commerce m-Commerce
Q2 2016 Y/Y Retail Spending Growth by Channel
Source: Dept. of Commerce, comScore e-Commerce & m-Commerce Measurement
© comScore, Inc. Proprietary. 29
The M-Commerce Monetization Gap: dollars are significantly lagging digital media time spent on mobile, highlighting the mobile conversion challenge
Q2 2016 Share of Retail Time Spent vs. Spending by Platform
70%
20%
30%
80%
Time Spent Dollars Spent
DesktopMobile
50% Gap
Source: comScore Media Metrix Multi-Platform and e-Commerce / m-Commerce Measurement
© comScore, Inc. Proprietary. 30
20.2 19.6 19.3 19.2 18.6 18.4 18.4
Do not feel secureproviding payment
information over mobiledevices
Cannot see the productdetail
Navigating betweenscreens is toodifficult/slow
Cannot browse betweenmultiple screens easily to
comparison shop
Too difficult to input myname, address, and
payment information
Connectionspeeds/spotty service
slows down the browsingprocess
Cannot navigate tocoupons/discounts easily
Smartphone
M-commerce conversion lags due to several friction points on mobile, with security concerns and screen size topping the list.
Barriers to Mobile Purchasing: Friction Score – Combines Frequency x Severity of Issues Scores were computed by multiplying ratings for “frequency” and “severity” of each issue, for each device (on a 7-pt scale, see question text below)
Thinking about purchases you make on your smartphone, on a scale of 1 to 7 where 1 is “Never Happens” and 7 is “Happens Very Often,” how often do the following happen while making a purchase on your smartphone?
Source: comScore Custom Survey
© comScore, Inc. Proprietary. 31
57% 46%
44% 41%
38% 33% 32%
26% 25%
21% 20% 20% 20%
13% 10% 8%
6%
43% 54%
56% 59%
62% 67% 68%
74% 75%
79% 80% 80% 80%
87% 90%
92% 94%
Video Games, Consoles & AccessoriesJewelry & Watches
Toys & HobbiesFlowers, Greetings & Misc. Gifts
Music, Movies & VideosSports & Fitness
Event TicketsFurniture, Appliances & Equipment
Home & GardenBooks & Magazines
Apparel & AccessoriesComputer Software
Total Digital CommerceConsumer Electronics
Office SuppliesConsumer Packaged Goods
Computers / Peripherals / PDAsMobile Desktop
Source: comScore e-Commerce & m-Commerce Measurement, U.S., Q2 2016
Mobile share of dollars spent tends to be lower when price and / or basket total is higher; Video Games currently attracts highest m-Commerce share
Share of Digital Commerce Spending by Platform
© comScore, Inc. Proprietary. 32
$8.4 $8.4 $7.1
$12.3
$9.9 $10.0 $8.4
$15.0 $12.4 $11.8
$10.1
$17.2
$14.0 $14.7
$9.2 $9.1 $9.9
$13.5
$10.2 $10.0 $11.3
$15.9
$11.1 $11.0
$11.8 $16.0
$12.5 $13.0
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Overtaking Computer Hardware, Apparel & Accessories has established itself as the #1 category, driven in part by growing consumer comfort and easier returns
Digital Commerce Sales by Category: Apparel & Accessories vs. Computer Hardware
Apparel & Accessories
Computer Hardware
Source: comScore e-Commerce & m-Commerce Measurement
© comScore, Inc. Proprietary. 33
Amazon Sites
eBay
Wal-Mart
Apple.com WorldwideSites
Target Corporation
The Home Depot, Inc.
ETSY.COM
Best Buy Sites
Kohls Corporation
LOWES.COM
Desktop Only Desktop + Mobile Mobile Only
Beginning in August 2015, eBay no longer included traffic from PayPal’s media property. This change resulted in a significant decline in eBay’s unique visitors, which does not reflect the performance of eBay’s branded sites/apps.
A significant percentage of top retailers’ audiences have gone mobile, with the majority of mobile time spent using retailers’ apps
Selected Leading Retailers: Total U.S. Digital Population Unique Visitors by Platform
183M
107M 101M
84M 61M
41M 36M 34M 33M
26M
22%
25%
47%
99%
31%
71%
27%
82%
26%
80%
78%
75%
53%
<1%
69%
29%
73%
18%
74%
20%
Browser App
% of Time Spent Browser vs. App
Apple Sites
Source: comScore Media Metrix Multi-Platform, U.S., July 2016; Mobile Metrix, U.S., July 2016
© comScore, Inc. Proprietary. 34
During the 2015 holiday season, online retail visits on mobile exploded, with mobile web exceeding app visits but app growing at 2x the rate
MULTI-PLATFORM
28.3B
+32% Y/Y DESKTOP
10.3B
+2% Y/Y
MOBILE
17.9B
+60% Y/Y
MOBILE BROWSER
9.8B
+44% Y/Y
MOBILE APP
8.1B
+85% Y/Y
Source: comScore Custom Solutions
2015 Holiday Season Retail Category Visits & Growth by Platform
© comScore, Inc. Proprietary. 35
2015 Holiday Season Sales for Total Commerce “The Year That Mobile Ate Bricks and Mortar”
85.0%
15.0%
12.6%
2.4%
2.3%*
12.7%**
5.9%**
49.0%**
+2.0%
+1.9 %
+0.7%
+1.2%
Brick & Mortar
Total Digital
Desktop
Mobile
% of Total Consumer Discretionary
Percent Growth
Growth Points
+3.9%
NRF: reported 3.0%
BCG: forecast 4.5%
MasterCard: reported 4.6%
* ShopperTrak ** comScore
© comScore, Inc. Proprietary. © comScore, Inc. Proprietary. 36
Key Takeaways #1 Mobile has transformed digital consumer behavior, but monetization of mobile ads and commerce still lags potential. #2 Social media has been one of the main beneficiaries of mobile to date, but in the future economics should improve for more publishers. #3 Digital and mobile advertising continues to grow strongly despite issues of viewability, fraud and transparency, and still has considerable upside as these issues are addressed.