This document provides an overview of trends in digital media and online advertising. It discusses how the number of internet users and time spent online continues to grow significantly each year. It also summarizes key metrics on the largest online properties and how consumers use the internet. The document reviews top online advertising formats and finds that search advertising remains the largest segment due to its ability to drive awareness, leads, and purchases. It also highlights new rich media ad formats in search that are gaining popularity.

1. DIGITAL 101
The Digital Space –
Always on the Edge of Glory
Holly Bowyer
Yahoo!
June 2012

2. Agenda
ONLINE UNIVERSE
 Why Digital?
 Trends & Usage
 Online Behavior
 Ad Spending
MEDIA PROPERTIES
 Search
 Video
 Mobile
 Social
 Rich Media
Q&A
2

3. Why Digital?
2 KNOW
the AUDIENCE
Activities & Preferences
1 FIND & ENGAGE
3 CAPTURE
the AUDIENCE
Content: Community: the OFFER
Search: Personalization Multi-channel: Rich Media:
Creative Assembly: Offer transformation
4 Match & Present
5 UNDERSTAND
the OFFER
MEASURE and PROVIDE Audience targeting:
Optimizing relevance & value
INSIGHTS… Executing
3

4. The number of internet users is expected to continue to
increase
US Internet Users and Penetration, 2009-2012 Reach % of Population
(millions and % of population)
225 70.0%
220
68.0%
(millions of unique visitors)
% of population
215
66.0%
210
64.0%
205
62.0%
200
195 60.0%
2009 2010 2011 2012
Through May
Year
4 Source: ComScore MediaMetrix Dec. 2009- May 2012; Total Uniques Home & Work

5. The Online Universe Growing Exponentially
Total Monthly Internet Audience
Total Unique Visitors Total Minutes Total Minutes Per
ComScore (000) (MM) Unique
2011 220,439 469,397 2,129
2010 213,584 390,435 1,828
5 Source: ComScore MediaMetrix Dec. 2011, Nielsen NetView Dec. 2011 Total Internet: Total Audience

6. Unique Visitors Is Growing
Total Unique Visitors (000)
Up
230,000
4.5%
225,000
221,621
220,000
215,000
221,163
210,000
205,000
200,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
2011 2012
6 Source: ComScore MediaMetrix Jan 2011 – May 2012 NTotal Uniques Home & Work

7. 7
0.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
500.0
Jan
Feb-2009
Feb
Mar-2009
2,417
1,677.0
Mar
Apr-2009
Apr
May-2009
May
Jun-2009
Jun
Jul-2009
2009
Jul
So Is Usage
Aug-2009
Aug
Sep-2009
(red = Avg. Pages per visitor)
Sep
Oct-2009
Oct
(blue = Avg. Minutes per visitor)
Nov-2009
Nov
Dec-2009
Dec
Source: ComScore MediaMetrix Feb 2009-May2012
Jan-2010
Jan
Feb-2010
Feb
Mar-2010
Mar
Apr-2010
Apr
May-2010
May
Jun-2010
Jun
Jul-2010
Jul
2010
Aug-2010
Aug
Sep-2010
Minutes Spent Online & Pages Viewed per Visitor
Sep
Oct-2010
Oct
Nov-2010
Nov
Dec-2010
Dec
Jan-2011
Jan
Feb-2011
Feb
Mar-2011
Mar
Apr-2011
Apr
May-2011
May
Jun-2011
Jun
Jul-2011
2011
Jul
Aug-2011
Aug
Sep-2011
Sep
Oct-2011
Oct
Nov-2011
Nov
Dec-2011
Dec
Jan-2012
Jan
Feb-2012
Feb
Mar-2012
Mar
2012
Apr
Apr-2012
Average Pages per Visitor
3,213
2,105.4
May
May-2012
Average Minutes per Visitor
Up
Up
33%
26%

8. Top 10 Online Properties as of Dec 2011
ComScore Total Unique Visitors (000)
TOTAL UNIQUES 220,439
Google Sites 187,138
Microsoft Sites 177,296
Yahoo! Sites 176,485
FACEBOOK.COM 162,486
Amazon Sites 114,732
AOL, Inc. 107,076
Ask Network** 89,168
Glam Media*** 86,616
Turner Digital*** 84,215
Wikimedia Sites 83,010
8 Source: ComScore MediaMetrix Nov. , Dec. 2011,
*ComScore ranks Apple at #11 and eBay at #15.

9. What Do Consumers Do Online?
GATHER INFORMATION
Search
COMMUNICATE
Email Messenger Social Media & Communities
CONSUMER CONTENT
News, Sports, Finance, Entertainment, and more
PERFORM TASKS
Online Banking Paying Bills Shopping
PERSONALIZE THEIR EXPERIENCES
Social Customized Sites Groups
9

10. 2011 Top Categories By Time Spent Online
US Internet Users and Penetration, 2011-2012
(millions and % of population)
Portals E-mail Community
Share of Total Time Spent on
Social Networking News/Information Games
Internet at Top Web Properties
Entertainment Retail
20%
Portals
15% Social
Entertainment
10%
Email
5%
0%
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011 2012
10 Source: ComScore MediaMetrix Dec. 2010-Dec.2011 from ComScore 2012 U.S. Digital Future in Focus

11. Top Trending Online Behaviors
Which of the following online 2010 2007
activities do you do at least monthly? Millions of adults
(2010)
92%
Use email 92% 163
60%
Purchase products 37% 107
49%
Send or receive photos by email 44% 86
35%
Visit social networking sites 15% 62
33%
Watch Internet video/streaming video 18% 58
33%
Use instant messaging 31% 58
24%
Listen to Internet radio/streaming audio 17% 42
18%
Read blogs 13% 31
11 Base: 29,295 US online adults / *Base: 28,771 US online adults (Multiple responses accepted)
Source: Forrester, December 2010

12. Trended Online Activities Show Continued Growth
2008-2015
In a typical week, how many hours do you 2015 2014 2013 2012
spend doing each of the following? 2011 2010 2009 2008 Percent change
(2008-2015)
Watching TV 0%
Using the Internet* 117%
Listening to the radio (not online) -18%
Reading newspapers (not online) -17%
Reading magazines (not online) -6%
July 2009 “Consumer Behavior Online: A 2009 Deep Dive”
12 Source: North American Technographics® Benchmark Surveys, 2008 to 2015
*Since 2007, Internet usage was split into “Internet for personal purposes” and “ Internet for work purposes.”
The number shown here represents the sum. In prior years, we asked about Internet usage in a single item.

13. Speaking of other media…Multitasking is the Latest
Trend. 3 out of 4 online Americans use the Internet and
TV at the same time
This happens frequently: over half of Frequency of simultaneous use
Simultaneous users multi-task daily
4%
7%
8%
Less often 31%
90%: Weekly
Once or twice per month
Don’t Multitask Once per week
25% 75% Several times per week
Half: Daily
Daily
51%
American Media Multitasking Study, 2011
13 Q: Do you ever do the following at the same time?
Q: On average, how often do you watch TV at the same time as using the internet?

14. When using the TV &
Internet at the same time,
ATTENTION is usually
focused ONLINE
54%
Focus on the 30%
Internet Divide
Attention
16%
TV
14

15. But, there are several mismatches between the average
share of time people spend with a medium and the share
of ad dollars that medium receives
Share of Average Time Spent per Day with Select Time spent share Ad spending share
Media by Us Adults vs. US Ad Spending Share, 2011
(% of total)
Tv
42.5%
42.0%
Internet*
25.9%
22.2%
Radio
14.6%
10.7%
Mobile
10.1%
1.0%
Newspapers
4.0%
14.3%
Magazines
2.8%
10.6%
Note: *time spent with the internet excludes internet access via mobile, but online ad spending includes mobile ad spending; due to this, the total of the ad spending shares
15 for all the media adds up to more than 100%
Source: eMarketer, Dec 2011 & Jan 2012

16. Social network ad spending will grow 54% between 2012
and 2014
US Social Network Ad Revenues, 2011-2014 Social network and revenues % change
(billions and % change)
100.00% $6.00
$5.59
90.00%
80.00%
$4.73 $5.00
70.00%
$3.63 $4.00
60.00%
50.00% $3.00
$2.54
40.00%
43.0% $2.00
30.00%
20.00% 28.9% 30.4%
$1.00
10.00% 18.0%
0.00% $0.00
2011 2012 2013 2014
Note: Includes paid advertising appearing within social network sites, social network games and social network applications; excludes spending by marketers that goes toward
16 developing or maintaining a social network presence
Source: eMarketer, Feb 2012

17. Let the
competition
begin!
17

18. Large Online Ad Buys Grew in 2011
Number of Advertisers Delivering at Least 1 1-3 Billion 3-5 Billion 5-10 Billion 10+ Billion
Billion Display Ad Impressions per Quarter
160
140 9
7
13 17
120
15 20
100 4 5
12 4 10
80 10 12 15
14
60
104 99
40 79 74
65
20
0
Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
18 Source: ComScore Ad Metrix, US Q4 2010 – Q4 2011, ComScore 2012 Digital Future in Focus

19. Top Digital Advertisers of 2011
Top Ten U.S. Online Display Advertisers by Numbers of Impressions in Millions
AT&T Inc 105,792
Experian Interactive 67,565
Verizon Communications 49,481
Scotttrade, Inc 44,031
Google, Inc 40,454
Microsoft Corporation 38,662
Netflex, Inc 36,991
Ebay, Inc 32,302
Progressive Corporation 30,042
IAC - Interactivecorp 29,403
19 Source: ComScore Ad Metrix, Jan. 2011-Dec. 2011, ComScore 2012 Digital Future in Focus

20. So you’re sold on digital but which are the best formats?
I remember seeing this ad format
(Among those who remember seeing advertising)
Banner ads 35%
Overlay ads 20%
Sponsorship 18%
Pop-up ads 11%
Expandable banner ads 9%
Pre, mid, post rolls 53%
Video banner ads 13%
Pop-up video ads 8%
Expandable video banner ads 6%
20 Interpret Study, 2011
C21a. Please take a look at the explanations below and tell us what type of ads you remember seeing during this video experience. N=6280

21. SEARCH
21

22. Search will remain the largest ad format
US Online Ad Spending Share, by Format, 2012
(% of total)
Search 49.4%
Banners 23.4%
Video 7.9%
Classifieds and directories 6.4%
Lead generation 4.9%
Rich media 4.2%
Sponsorships 3.5%
Email 0.4%
22 Note: eMarketer benchmarks its US online and spending projections against the IAB/PwC data, for which the last full year measured was 2010
Source: eMarketer, Jan 2012

23. Marketing Objectives Met by Search
DRIVE AWARENESS OBTAIN LEADS DRIVE PURCHASES
Traffic Registrations ROI
Reach and frequency Conversions
PAID SEARCH HELPS ACHIEVE MARKETING GOALS
23

24. Organic (SEO) vs. Paid Listings (SEM)
24

25. Display Advertising is a Powerful Driver of Search
After being exposed to a display ad, consumers were:
 136% more likely to search the brand’s keywords
 86% more likely to click on a sponsored text ad
25 Google/ComScore panel.

26. Rich Ads in Search (RAIS)
NEW AD FORMATS
 Include ADDITIONAL LINKS, IMAGES,
FAVICONS, VIDEOS AND MORE
 MAINLINE EXCLUSIVE
POSITION for brand terms
on Yahoo! Search and Bing
 Help IMPROVE CTR AND INCREASE
BRAND AWARENESS
 Average a 30-35% CTR: 40-50% HIGHER
compared to a standard text ad.*
 MORE ENGAGING EXPERIENCE for
prospective customers
26 Internal Yahoo! and Microsoft Data, December 2011

27. Search Needs to be Part of the Marketing Mix/Buying
Cycle
Offline
Lower AWARENESS Non-Targeted Display
Converting
Contextual Text Ads
CONSIDERATION
Targeted Display
INTEREST Email
Higher
Converting ACTION/ Rich Ads in Search
PURCHASE Search
27

28. Continued innovation in Search
AIMING TO DELIVERING ANSWERS, NOT LINKS
making it easier to access the information, services and answers people are looking for.
Today’s
Yesterday’s
Search
Experience
+
Personal Context: • Find the Best Answers
• Search and • Get Things Done
Query Query Search Results PageDiscovery & Entertainment
Behavioral History •
• Social • Make Smarter Choices
• Location • Wherever the User Goes
28

29. Navigating a New
Course In Search –
Yahoo! Axis
….re-imagining the
search and browse
process.
 Smarter, Faster Search
with Rich Design
 Connected Experience
across multiple devices
 Personalized Home Page
 Standalone Mobile
Browser, Desktop Plug-In
29

30. DIGITAL VIDEO
30

31. VIDEO PREMIUM PREMIUM
UGC
NETWORKS OFFLINE VIDEO ONLINE VIDEO
Video Marketplace
Originals

32. December 2011 Total Video Audience
Videos Total Unique Viewers Minutes
VIDEO (000)* (000) (per Viewer)
All time high! 43,472,412 181,669 1,389.8
Video Ads Frequency Total Ad Minutes
VIDEO ADS (000) (Ads per Viewer) (000)
7,115,272 45.6 3,009
December 2011 Highlights
 85.3 percent of the U.S. Internet audience viewed online video.
 The duration of the average online content video was 5.8 minutes, while the average
online video ad was 15 seconds.
 Video ads accounted for 14.1 percent of all videos viewed and 1.2 percent of all
minutes spent viewing video online.
*A video is defined as any streamed segment of audiovisual content, (both progressive downloads and live streams). For long-form, segmented content, (e.g. TV episodes with
32 ad pods in the middle) each segment of the content is counted as a distinct videostream.
Source: ComScore Video Metrix Dec. 2011 Total U.S. – Home/Work/University Locations. Content Videos Only (not ads), Press Release

33. More and More People Are Viewing Videos Online
Growth in Total Online Video Content Market Dec-2010 Dec-11
+37%
239.00
175.00
+43%
105.10
73.70 +44%
43.50
30.10
Average daily unique Videos viewed Videos per viewer
viewers (billions)
(millions)
33 Source: ComScore Video Metrix Dec. 2011, Dec. 2010. 2012 Digital Future in Focus

34. Top Online Video Sites
Total Unique Visitors (000)
Google/YouTube 157,663
Yahoo! Sites 53,604
VEVO 49,479
Facebook.com 44,298
Microsoft Sites 42,833
Viacom Digital 41,247
AOL, Inc. 38,925
Amazon Sites 30,168
Hulu 28,233
34 Source: comScore Video Metrix, April 2012

35. Online video watching has increased significantly
I watched in the past 24 hours... 2009 2011
+33%
57% +26%
48%
43%
+72%
38%
31% +50%
21%
18%
14%
Watch online videos Watch short clips Watch full-length TV Watch full-length
shows movies
S9. When would you say was the last time you watched the following types of streaming online video?
35 N=24163
Arrows indicate significant difference at 90% level of confidence

36. High Quality, Short Form Videos Are Most Popular
The vast majority of online video consumption is short-form and consumers are saying they want more!
8% Full-Length Movies I expect to watch more…
18% Full-Length TV Shows
74%
60% 60%
Short-form video ...professionally ...original video
-produced short content that can
online video only be found
clips online
Type of video watched Q: How much do you agree or disagree with each of the
online in past 24 hours* following statements about online video? (Top 2 Box
Agreement Reported) N= 1142
36 Interpret Study, 2011

37. When are they watching?
I watched in the past 24 hours... 2009 2011
50%
Netflix in the past 24hrs +200%
45% Hulu in past 24hrs +67%
40%
35%
30%
25%
20%
15%
10%
5%
?
0%
5AM - 8:59AM 9AM - 11:59AM 12:00PM - 2:59PM 3PM - 5:59PM 6PM - 8:59PM 9PM - 12:59AM 1AM - 4:59AM
37 Interpret Study, 2011
C1. At what time or times in the past 24 hours did you begin watching a video or series of videos? N=4089

38. Video ad spending will jump more than twice as much
as any other format or the overall market
US Online Ad Spending Growth, by Format, 2012
(% change)
Video 54.7%
Search 27.0%
Sponsorships 27.0%
Total 23.3%
Banners 19.8%
Lead generation 18.5%
Rich media 4.1%
Email 3.1%
Classifieds and directories 1.2%
38 Note: eMarketer benchmarks its US online ad spending projections against the IAB/PwC data, for which the last full year measured was 2010
Source: eMarketer, Jan 2012

39. TV is great for reach but when it comes to effectiveness,
digital video works harder
Online Video Ads Outperform TV
TV Premium Online Video
Ad Performance
65%
50%
46%
39%
26% 26%
21%
14%
General Recall Brand Recall Message Recall Likeability
39 Source: Nielsen IAG, A18-49, Jan 2011

40. #1
Online Video
is the new
primetime
40

41. #2
Shortform is
still most
popular
41

42. #3
Go
Professional!
42

43. #4
Multi-tasking
is common
and frequent
43

44. MOBILE
44

45. Mobile Trends
Rising smart device and mobile web adoption signal new imperatives
for marketers.
Marketers need to look toward the day when the mobile web is no longer a
sideshow but a main event.
Mobile marketing is no longer a question of “if” but of “when.”
Expect to see mobile continue to emerge as less of an afterthought and more of
a permanent fixture in marketers’ digital strategies.
Mobile advertising is following a similar evolution as the desktop.
Search and display are emerging as the dominant mobile ad formats. The
outlook for mobile ad spending overall is trending sharply upward.
The future of mobile is all about sophistication.
More capable devices, faster networks, savvier mobile consumers and richer
experiences lie ahead. Marketers’ strategies must evolve in line with the
growing sophistication of mobile devices and consumers’ usage patterns.
45

46. Mobile Ad Dollars Are on the Rise
US Mobile Ad Spending
Sept 2010 forecast Sep 2011 forecast
(millions and % change)
2015
2011 2013
$1,102 $1,226 $2,036 $2,523 $4,396
+48% +65% +36% +40% +30%
2012 2014
$1,501 $1,802 $2,549 $3,381
+36% +47% +25% +34%
46 Emarketer, 2011

47. Smartphone Users Engage with Web &
Media Content
92%
Send/receive
text messages 59%
Access a social network
84%
Access the
internet 54%
Watch a video
76%
Send/receive 76%
email Access Twitter
69%
Download an
app
47 Source: Pew Internet & American Life Project, *Americans and Their Cell Phones,,” Aug 15, 2011
www.eMarketer.com

48. So Do Tablet users
77% 66%
General Gaming
web browsing
66%
73% Social networking
Email
61%
Shopping/ purchasing
71%
Reading news
57%
Movies
69% 56%
Streaming video Work
48 Source: InsightExpress, June 2011

49. Search and display are emerging as the dominant
mobile ad formats
US Mobile Ad Spending, by Format, 2010-2015
(millions and CAGR)
2010 2011 2012 2013 2014 2015 CAGR
Messaging $327.3 $442.6 508.3 560.2 612.0 633.0 14%
Banners and rich media $202.5 376.4 594.8 883.2 1,207.1 1,600.0 51%
Search $185.0 349.4 594.8 908.4 1,291.6 1,767.1 57%
Video $28.3 57.6 104.5 171.6 270.5 395.6 69%
Total $743.1 $1,226.1 $1,802.4 $2,523.3 $3,381.3 $4,395.7 43%
Note: Numbers may not add up to total due to rounding
49 Source: eMarketer, Sep 2011
Twitter: #eMwebinar @noahelkin

50. Mobile: Bottom line: Mobile can play a key role
at every stage of the purchase funnel
 Tag traditional media with barcodes
 Mobile display media
 Mobile search engagement
AWARENESS
 SMS alerts
 Mobile websites/apps
ENGAGEMENT  2-D barcodes
 Display media
 Mobile websites/apps
CONSIDERATION
 Mobile coupons
 IVR/Click-to-call
CONVERSION  Mobile shopping/m-commerce
 2-d barcodes
 Mobile websites/apps
LOYALTY  SMS alerts
 Mobile apps
50

51. SOCIAL
51

52. Social Trends
US social network ad revenues will reach $2.74 billion in 2011.
By 2013, revenues are expected to grow to $4.81 billion.
More ad dollars are funneling to social sites.
In 2013, 11.7% of US online ad spending will go toward social networks.
Ad spending is growing because more consumers are using
social networks.
65% of online adults use them, according to the Pew Internet & American Life
Project.
52

53. Social networks will receive 11.7% of US online ad
spending in 2013
US Social Network Ad Revenues, 2009-2013
(billions and % of total US online ad spending)
2009 2010 2011 2012 2013
Social network and revenues $1.44 $2.00 $2.74 $3.90 $4.81
Total US online ad spending $22.70 $26.00 $31.30 $36.80 $41.20
Social network % of total 6.3% 7.7% 8.8% 10.6% 11.7%
Note: includes paid advertising appearing within social network sites, social network games and social network applications; excludes spending by marketers that goes toward
53 developing or maintaing a social network presence
Source: eMarketer, Sep 2011

54. This year, nearly half of the US population will be social
network users
US Social Network Users and Penetration,
Social network users % of population
2011-2014 (millions and % of population)
180.0% 170.7% 100.0%
164.2%
157.8% 90.0%
160.0% 147.8%
140.0% 80.0%
70.0%
120.0%
60.0%
100.0%
50.0%
80.0% 49.9% 51.4% 52.9%
47.2% 40.0%
60.0%
30.0%
40.0% 20.0%
20.0% 10.0%
0.0% 0.0%
2011 2012 2013 2014
Note: Ages 12+; use several times per day
54 Source: Arbitron and Edison Research, “ The Infinite Dial 2012: Navigating Digital Platforms, “ April 10, 2012
www.eMarketer.com

55. This year, nearly half of the US population will be social
network users
Ways that US Social Network Users Use Social Media, Jan 2012
4%
15%
Dating
Staying in touch
36% Entertainment
20%
Information
Self-expression
25%
Note: Ages 18+
55 Source: Netpop Research, “Social Media in the U.S.” as cited in MediaPost, Aprila 16, 2012
www.eMarketer.com

56. Social : Bottom line
PROS
 1 on 1 conversation with consumers
 Ability for viral pass along and recommendation
 Relationship/CRM marketing
 Extends conversation/reach from other media and
ads
 High engagement and time spent
CONS
 Unauthentic messages being delivered
 Knowing what to measure
 Privacy and privacy controls pertaining to location
56 eMarketer: Social Media Marketing by the Numbers: Key Stats, Trends and Indicators Feb 2010

57. RICH MEDIA
57

58. What is Rich Media? Creative Technology
Rich Media is online advertising enhanced by motion, sound, video, or some
interactive element
With rich media, online ads approach television in terms of dynamism: they float
above content, animate, integrate video and audio. They also go beyond television to
include interactive elements like:
 Pull-downs for more information, micro-site in-the-banner
 Branded games and immersive activities
 Polls and Quizzes
 Downloadable Icons, Screensavers, Ring Tones, Documents, and more
 E-commerce functionality inside the ad unit
 Data Collection/Email Registration
 Viral Marketing – Send to a Friend
58

59. Anatomy of a Rich Media Ad
1. Banner automatically displays on GAMING STANDARD VIDEO
publisher site (1 impression)
2. Upon rollover, panel expands (1
interaction)
3. Panels can contain any combination of
PRICE COMPARISON
rich media features
4. User can click-through to site to continue
experience (1 click-through)
INTERACTIVE VIDEO PHOTO GALLERY
WEBSITE
BANNER
PANEL
Click on image in slide show mode to view demo
59

60. 60

61. The ‘Smack Talk’ Smart Ad
61

62. In summary…
the digital space is always on the edge of glory
…connects marketers with their most valuable audience wherever
they may be.
…understands users passions with accuracy and detail never
before achieved in traditional media.
…offers creative products that enable marketers to find consumers in hard to
reach places with unique and engaging messages.
…continues to experiment with new formats and devices to continue
connecting marketers and consumers in mutually beneficial ways.
62

63. Holly Bowyer
hbowyer@yahoo-inc.com
63