Com Score 2009 Us Digital Year In Review

The 2009 U.S. Digital Year in Review
A Recap of the Year in Digital Marketing

February 2010

FOR FURTHER INFORMATION, PLEASE CONTACT:

Sarah Radwanick
comScore, Inc.
312-775-6538
press@comscore.com

© 2010 comScore, Inc.

The comScore 2009 U.S. Digital Year in Review FEBRUARY 2010

The 2009 U.S. Digital Year in Review
2009 represented a critical year in the relatively brief history of digital media; a year that was marred by the overhang
of a global economic recession that had a particularly negative impact on the U.S. advertising and e-commerce
markets. But it was also a year in which digital consumer activity soared, new innovations grabbed hold in the
marketplace and businesses got more serious about navigating the digital landscape.

In order for digital marketers to position themselves for success in the year ahead, one must begin by reflecting on
what has happened in the past year and how the prevailing trends set the stage for 2010. Among the many questions
that will be addressed in this report include:
• Which consumer trends dominated the digital media landscape in 2009?
• How are people spending their digital media consumption time?
• Which new and emerging technologies and services are capturing the attention of the marketplace?
• What is the state of the digital advertising market?
• How are trends in the mobile market changing the digital media landscape?

The comScore 2009 U.S. Digital Year in Review offers an overview of the prevailing trends in digital media usage
during the year and considers their implications for the year ahead. This report will examine the trends in U.S.
Internet usage, search activity, e-commerce, online video consumption, online advertising, and mobile, and what
digital strategies will be most important for success in 2010.

PAGE 2


U.S. E-Commerce 2009
2009 Marks First Year on Record of Declining Growth Rates for U.S. E-Commerce
The U.S. e-commerce market in 2009 exhibited substantial softness in the face of the global economic recession,
which exerted downward pressure on consumer discretionary spending reflected in the e-commerce market. Total
U.S. e-commerce spending reached $209.6 billion in 2009, down 2 percent versus the previous year and the first
year on record with negative growth rates. Travel e-commerce spending dropped 5 percent to $79.8 billion, while
retail (non-travel) e-commerce spending remained virtually flat at $129.8 billion.

Throughout most of the decade, retail e-commerce spending saw growth rates in excess of 20 percent annually, but
2008 showed signs of softness as the economy first began to weaken. While that year still saw retail e-commerce
grow at a rate of 6 percent, it was the first time on record of single-digit growth rates. However, 2009 on the whole
fared significantly worse than the previous year with year-over-year growth rates remaining negative throughout most
of the year. The 2009 holiday season represented a bright spot in this predominantly negative year for e-commerce
as it marked a return to positive growth rates with both November and December showing gains of a few percentage
points. While some of this growth is attributable to more favorable year-over-year comparisons versus the disastrous
2008 holiday season, it does suggest that the tides of consumer sentiment are beginning to turn and that 2010 may
be a healthier year for retail e-commerce.

2009 U.S. E-Commerce Spending by Month
$18,000,000,000 6%
$16,000,000,000
4%
$14,000,000,000
2%
$12,000,000,000
$10,000,000,000 0%

$8,000,000,000 -2% Spending

$6,000,000,000 Y/Y Growth
-4%
$4,000,000,000
-6%
$2,000,000,000
$0 -8%

*November and December growth rates based on corresponding shopping days relative to Thanksgiving, not calendar days
Source: comScore, Inc. (U.S.)

PAGE 3


The heaviest individual spending day of the year was Tuesday, December 15 with $913 million in spending, the first
day on record to eclipse the $900 million spending threshold. Cyber Monday (Nov. 30, 2009) was the second
heaviest spending day with $887 million, followed by December 1 with $886 million and December 16 with $874
million.

Top 10 U.S. Online Retail Spending Days in 2009 (Spending in Millions)

Tuesday, Dec. 15 $913
Monday, Nov. 30 $887
Wednesday, Dec. 16 $874
Monday, Dec. 14 $854
Thursday, Dec. 10 $852
Wednesday, Dec. 2 $798

In this recessionary year, only a handful of retail e-commerce categories experienced growth. Books & Magazines
topped the list of gaining categories with 12 percent growth, bolstered by category-wide price-cutting and the release
of numerous high-profile best-sellers. Computer software (up 7 percent) ranked second, followed by Sport & Fitness
(up 6 percent) and Jewelry & Watches (up 4 percent), which rebounded from an especially weak 2008. Other positive
growth categories included Video Games, Consoles & Accessories (up 3 percent), Consumer Electronics (up 3
percent) and Computers, Peripherals & PDAs (up 1 percent).

Positive Growth U.S. Retail E-Commerce Categories in
2009

Books & Magazines 12%

Computer Software (excl. PC Games) 7%

Sport & Fitness 6%

Jewelry & Watches 4%

Video Games, Consoles & Accessories 3%

Consumer Electronics 3%

Computers, Peripherals, & PDAs 1%


PAGE 4


U.S. Core Search Market 2009
Google and Bing Gain Share
The search market in 2009 saw a bit of a shake-up with the June introduction of Bing, Microsoft’s new search engine,
which has allowed Microsoft to gain renewed traction in the search marketplace. During the course of the year,
Microsoft Sites grew from 8.3 percent to 10.7 percent share of all search queries with nearly all of that growth coming
in the second half of 2009 subsequent to Bing’s introduction. Despite the new engine’s initial gains, Google Sites
continued to hold a strong lead in the U.S. search market with 65.7 percent of all searches in December, up 2.2
percentage points versus year ago.

2009 U.S. Core Search Trend
70%

60%
% Share of Searches

50% Google Sites
Yahoo! Sites
40%
Microsoft Sites
30% Ask Network

20% AOL LLC

10%

0%
Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09

Source: comScore qSearch (U.S.)

The U.S. core search market grew 16 percent overall in 2009, driven by a 6-percent gain in unique searchers and a
10-percent gain in searchers per searcher. Google Sites’ search query volume grew 21 percent, driven both by gains
in searches per searcher (up 10 percent) and unique searchers (9 percent). Microsoft Sites had the largest growth in
search volume at 49 percent, propelled by sizeable gains in both unique searchers (15 percent) and searches per
searcher (30 percent). Ask Network increased its search query volume by 12 percent, driven mainly by attracting
more searchers (up 19 percent).

PAGE 5


Unique Searches per
% Change Searches
Searchers Searcher
Total U.S. Internet 6% 10% 16%
Google Sites 9% 10% 21%
Yahoo! Sites -5% 3% -2%
Microsoft Sites 15% 30% 49%
Ask Network 19% -6% 12%
AOL LLC -17% -4% -20%

Source: comScore qSearch (U.S.)

Social Networking Trends 2009
Social Networking Remains One of the Web’s Top Activities in 2009
Social networking continued to gain momentum in 2009 with nearly 4 out of 5 Internet users visiting a social
networking site in December 2009. The activity now accounts for 11 percent of all time spent online in the U.S.,
making it one of the most engaging activities across the Web.

Facebook and Twitter Surge, MySpace Refocuses on Entertainment
2009 proved to be a landmark year in the U.S. social networking market, as category leader Facebook and upstart
network Twitter both posted triple-digit growth. Facebook surged to the #1 position among social networks for the first
time in May and continued its strong growth trajectory throughout the year, finishing with 112 million visitors in
December 2009, up 105 percent during the year. Twitter finished the year with nearly 20 million visitors to its website,
up from just 2 million visitors from the previous year. Much of Twitter’s extraordinary audience growth occurred during
the first few months of 2009, at one point jumping from 4 million visitors to 17 million visitors between February and
April. Meanwhile, 2008 category leader MySpace has experienced some softening in its audience; however, a new
strategic focus on entertainment content is exhibiting signs of success with MySpace Music having grown 92 percent
in the past year.

PAGE 6


2009 Visitor Trend to Facebook.com, MySpace Sites,
120,000 Twitter.com

100,000
Total Unique Visitors (000)

80,000 Facebook.com

60,000 MySpace Sites

Twitter.com
40,000

20,000

0

Source: comScore Media Metrix (U.S.)

Facebook Shows Across-the-Board Usage Gains
In addition to its surging population of users, Facebook grew substantially across nearly every performance metric in
2009. Unique visitors, page views, and total time spent all increased by a factor of two or more. Frequency metrics
such as average minutes per usage day (up 6 percent) and average usage days per visitors (up 37 percent) also saw
gains. As more people use Facebook more frequently, the site has grown to account for three times as much total
time spent online as it did last year. The only metric by which Facebook decreased was the average minutes per visit
(down 11 percent), which can likely be attributed to the increasing frequency with which people are visiting the site.

Facebook.com Dec-2008 Dec-2009 % Change

Total Unique Visitors (000) 54,552 111,888 105%
Average Daily Visitors (000) 13,396 37,679 181%
Total Minutes (MM) 9,265 27,624 198%
Average Minutes per Usage Day 22.3 23.7 6%
Total Pages Viewed (MM) 17,868 44,891 151%
Average Usage Days per Visitor 7.6 10.4 37%
Average Minutes per Visitor 169.8 246.9 45%
Total Visits (000) 913,814 3,071,137 236%
Average Minutes per Visit 10.1 9.0 -11%
Average Visits per Visitor 16.8 27.4 64%


PAGE 7


2009 Social Networking Demographic Trends
An analysis of demographic composition of Facebook, MySpace and Twitter users revealed important differences
that reflect their appeal to various audiences. MySpace saw its user composition shift toward younger audience
segments in 2009, with people age 24 and younger now comprising 44.4 percent of the site’s audience, up more than
7 percentage points from the previous year. Facebook’s audience, by contrast, was evenly split between those
younger and older than 35 years of age. The most noticeable demographic shift on Facebook during the year
occurred with 25-34 year olds, who now account for 23 percent of the audience, up from 18.8 percent last year.

Percent Composition of Percent Composition of
Visitors to Facebook.com by Visitors to MySpace.com by
Demographic Segment Demographic Segment

18.8% 18.7% 16.2% 9.4%
Persons: 50+
Persons: 35-49
23.5%
30.2% 31.6% 27.8%
Persons: 25-34
Persons: 24 & under 22.7%
18.8% 18.9%
23.0%

37.0% 44.4%
32.3% 26.8%

Dec-08 Dec-09 Dec-08 Dec-09

As Twitter’s audience grew in 2009, the site experienced interesting shifts in its demographic composition. All
demographic segments achieved substantial gains in visitors, but certain segments grew more rapidly than others to
gain in terms of their share of audience. The initial success of Twitter was largely driven by users in the 25-54 year
old age segment, which made up 65 percent of all visitors to the site in December 2008, with 18-24 year olds
accounting for just 9 percent of visitors. This older age skew varied dramatically from the traditional social media early
adopter model, in which younger users tend to drive the lion’s share of usage. Despite Twitter’s initially older skew, as
it gained widespread popularity with the help of celebrity Tweeters and mainstream media coverage, younger users
flooded to the site in large numbers, with those under age 18 (up 6.2 percentage points) and 18-24 year olds (up 7.9
percentage points) representing the fastest growing demographic segments.

PAGE 8


Twitter Demographic Segment Trend
100%
Persons: 65+
90%
% Composition Unique Visitors

80% - 6.0 % pts Persons: 55-64

70%
Persons: 45-54
60% - 3.0 % pts

50% Persons: 35-44

40% - 1.3 % pts
Persons: 25-34
30%

20% + 7.9 % pts Persons: 18-24

10% Persons: 17 &
+ 6.2 % pts
0% under


U.S. Online Display Advertising 2009
Display Advertising Posts Gradual Gains Throughout the Year
U.S. Internet users viewed a total of 4.3 trillion display ads (standard and non-standard IAB ads, includes both static
and rich media, but not video) during the past twelve months, representing a growth rate of 21 percent versus year
ago. These gains were driven by an 8-percent increase in the number of people exposed to display ads online and a
12-percent increase in average frequency.

2009 U.S. Display Ad Impression Trend

400,000
Total Display Ad Impressions (MM)

350,000
300,000
250,000 + 21%
200,000
150,000
100,000
50,000
0
Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09

Source: comScore Ad Metrix (U.S.)
comScore Ad Metrix measures online display advertisements, including static and rich media ads, viewed by U.S. consumers. The estimates reflect
both IAB and non-IAB display ad sizes, but do not include text and video ads.

PAGE 9


Mobile phone network providers AT&T Inc. (84.3 billion ad impressions) and Verizon (56.8 billion impressions) ranked
as the top U.S. online display advertisers over the last 12 months, while Sprint also ranked in the top ten with 26.2
billion impressions. Experian Interactive, which includes ClassesUSA.com, LowerMyBills.com and
FreeCreditReport.com, ranked as the #3 advertiser with 54.1 billion views, followed by Scottrade (41.1 billion) and
eBay (32.3 billion). On the publisher side, Yahoo! Sites served the most display ads in the past 12 months at 521.2
billion, followed by Fox Interactive Media (which includes MySpace.com) with 367.6 billion and Facebook.com with
329.6 billion.

Top Ten U.S. Online Display Advertisers by Top Ten U.S. Online Display Publishers by
Number of Impressions in Millions Number of Impressions in Millions
(Dec-08 to Nov-09) (Dec-08 to Nov-09)
AT&T, Inc. 84,336 Yahoo! Sites 521,245
Verizon Communications Corp. 56,818 Fox Int. Media 367,551
Experian Interactive 54,106 Facebook.com 329,629
Scottrade 41,071 Microsoft Sites 218,114
eBay 32,339 AOL LLC 192,192
Ask Network 31,920 Google Sites 69,856
Microsoft 30,936 eBay 36,360
Netflix 27,997 Glam Media 24,793
Vertrue 27,555 Amazon Sites 21,710
Sprint Nextel Corp. 26,224 United Online, Inc 19,484

Source: comScore Ad Metrix (U.S.)
comScore Ad Metrix measures online display advertisements, including static and rich media ads, viewed by U.S.
consumers. The estimates reflect both IAB and non-IAB display ad sizes, but do not include text and video ads.

U.S. Online Video Market 2009
Online Video Soars to New Heights
Online video viewing accelerated in 2009, with 19 percent more people in the U.S. viewing more videos for longer
periods of time, according to comScore Video Metrix. In December 2009, 86 percent of the total U.S. online
population viewed video content. Americans also viewed a significantly higher number of videos in 2009 versus the
prior year, due to both increased content consumption and a growing number of video ads being delivered. The
average online viewer consumed 187 videos in December 2009 (up 95 percent vs. year ago), while the duration of
the average video viewed grew from 3.2 to 4.1 minutes.

PAGE 10


Total U.S. Online Video Market

Unique Viewers Videos per Viewer Minutes per Video
Videos Viewed 5
(Millions) (Billions) 4.1
200 186.9
200 178 4
40 3.2
33.2
150 160
160 3
30
120 120 95.7
20 14.3 2
80 80
10 40 1
40

0 0 0 0
Dec-08 Dec-09 Dec-08 Dec-09 Dec-08 Dec-09 Dec-08 Dec-09

Source: comScore Video Metrix (U.S.)

Hulu Viewership Jumps in 2009
The past year saw Hulu continue its rapid ascent as one of the top video content providers, reflecting a broader shift
towards consumption of more long-form, premium video content online and the increasing fragmentation of traditional
TV viewing. In December 2009, Hulu viewers watched more than 1 billion streams for a combined 5.8 billion minutes
(97 million hours), up 140 percent versus year ago. The average Hulu viewer watched more than 2 hours of online
video during the month.

2009 Hulu U.S. Total Minutes Trend
7,000

6,000

5,000
Total Minutes (MM)

4,000
+ 140%
3,000

2,000

1,000

0

PAGE 11


More Than Half of Time Spent Viewing Video Occurs on “Long Tail” Video Sites
An analysis of where Americans spend their time viewing online video content revealed that top-ranked video site
ranked
YouTube accounted for more than a quarter (26 percent) of total time spent viewing video, more than the combined
time spent of video content sites ranked between #2 and #25 (22 percent). Meanwhile, the majority of online video
#2
viewing (52 percent) occurred at video sites ranked outside of the top 25, suggesting the increased fragmentation of
online video and the emergence of sites in the “long tail
tail.”

2009 U.S. Video Viewing Trend by Total Duration

160,000

120,000
Total Minutes (MM)

52% share
80,000

40,000 22% share

26% share
0
Dec-08 Feb
Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09
Dec

YouTube.com Video Sites #2-25 Video Sites #26+ (long tail)


U.S. Mobile Market 2009
Market Enablers Fuel Mobile Media Usage
The growth in mobile media usage is largely attributable to the growth in smartphone and 3G device ownership and
the increasing ubiquity of unlimited data plans all of which facilitate the mobile Web experience. From December
plans, .
2008 to December 2009, the percentage of mobile phone subscribers with unlimited data plans increased from 16
age
percent to 21 percent, with several phones now requiring an unlimited data plan subscription at the time of purchase.
During the same period, smartphone ownership increased from 11 percent to 17 percent, while 3G phone ownership
increased from 32 percent to 43 percent.

PAGE 12


Growth of Mobile Market Enablers
50%
+11 % pts
40%
% of Market

30%
+5 % pts
20% +6 % pts
10%

0%

Smartphone Owners Unlimited Data Plan Subscribers 3G Device Owners

comScore MobiLens
Three month average December 2008 – December 2009 U.S.

Smartphone Penetration Rises in 2009
Smartphone penetration continued to climb in 2009 as consumers were presented with a growing number of
smartphone handset options. Among the high-profile smartphone introductions in 2009 were the Palm Pre, Motorola
Droid, Motorola Cliq and others. In December 2009, smartphones were owned by 17 percent of the mobile phone
subscribers, up nearly 6 percentage points versus year ago. Among smartphone operating system (OS) platforms,
RIM retained its lead with 41.6 percent market share, followed by Apple at 25.3 percent (up 8.5 percentage points
from the previous year) and Microsoft at 17.9 percent. Google’s OS share (5.2 percent) gained considerably in the
final months of 2009 and is poised for continued growth in 2010 with the introduction of new devices featuring the
Android platform.

Smartphone OS Marketshare

5.2%
Smartphone Penetration Microsoft

17.9% RIM

25.3% Symbian
17% Smartphone Palm
41.6% Apple
83% Non-
6.1% Google
Smartphone
3.8%

comScore MobiLens
Three month average ending December 2009, U.S.

PAGE 13


Verizon Tops Among U.S. Mobile Network Providers
The largest four mobile network providers, Verizon, AT&T, Sprint and T-Mobile, combined to account for 80 percent
of the entire U.S. mobile subscriber market in December 2009. Verizon led as the largest service provider in the U.S.
with a market share of 31.2 percent in December, followed by AT&T with 25.0 percent share. Sprint and T-Mobile
each captured 12.1 percent of the market

U.S. Network Operators
2.2% 5.0%
1.7%
AT&T (Cingular)
2.3% 4.8% Sprint
1.7% T-Mobile
2.1% 25.0% Verizon
Boost Mobile
Cricket
12.1% MetroPCS
31.2% Tracfone
12.1% US Cellular
Virgin Mobile
Other

comScore MobiLens, Three month average ending December 2009, U.S.

Motorola Continues to Lead OEM Market in 2009
Motorola led the OEM (original equipment manufacturer) market in December 2009 with 23.5 percent of devices
owned by mobile subscribers. While many of these handsets are legacy devices, Motorola has also made a more
recent splash in the market with the introduction of the Droid and the Cliq. LG captured the second largest share of
the handset market with 21.9 percent (up 2.0 percentage points versus the previous year), followed closely by
Samsung with 21.2 percent (up 2.7 percentage points). Apple captured 4.3 percent of the OEM market, up from just
1.9 percent share in December 2008, as the iPhone continued to gain traction.

OEM Installed Base Share
1.8% 1.3%
5.0% Motorola
7.0% Nokia
2.1%
Samsung
0.7% 23.5% Sony
4.3% LG
Apple
9.1% UTStarcom
21.9% Kyocera
Sanyo
21.2%
RIM
Palm
2.2%
Other

comScore MobiLens, Three month average ending December 2009, U.S.

PAGE 14


Looking Ahead to 2010
Emerging from Recession Offers New Opportunities for Digital Marketers
As we begin to emerge from the recession, 2010 is a year that the digital media industry should be greeting with
tempered optimism. 2009 compelled many businesses to streamline operations, focus on their core businesses and
seek opportunities in new markets, all of which can be very effective drivers of a company’s long term growth. The
critical question is whether or not the economy will see sustained increases in consumer demand, which is necessary
to drive continued growth in the digital advertising sector. Companies that are most efficient in scaling up their
operations and in developing new and innovative approaches to complex business issues are the ones who will
capture the largest share of the pie as the economy rebounds.

With that in mind, the following are some of the key digital media trends that businesses should consider as part of
their broader strategies if they want to position themselves for success in this arena in 2010:
• Despite a significant drop-off in growth rates, e-commerce remains a relative bright spot for retailers. New
buyers continue to enter the channel, and as average spending per buyer rebounds off its 2009 lows the e-
commerce channel should return to healthy growth rates. The online media channel also continues to be an
important driver of offline purchase behavior, so marketers in all industries need to retain a clear focus on
having an online presence, where their consumers frequently begin the purchase process.
• Social networking and social media continue to drive much of the innovation occurring around the Internet
today. A critical challenge remains the ability to effectively harness the marketing intelligence inherent in the
way people communicate and interact with one another through the digital medium and make it actionable.
Even as new capabilities emerge that leverage the “social” value of the medium, it is worth remembering
that this channel can already deliver substantial reach for ad campaigns and despite low click-through rates
there is measurable view-through value from these ads.
• The U.S. search market saw significant innovation from the core engines in 2009, with Bing’s growth
promising to make the market more competitive. The trends to watch in 2010 include increased integration
of real-time (i.e. Twitter) and vertical-specific search results as the engines seek to both improve the user
experience and move the consumer more efficiently down the decision funnel.
• Online video continues to capitalize on the continued increase in media fragmentation, consumer generated
content, and a rising generation of consumers very comfortable using their computers as primary or
secondary entertainment devices. As this market has emerged, higher quality video and more seamless
integration of video ads are emerging and adding value to the digital advertising market -- to the benefit of
both advertisers and publishers.
• The digital display advertising market is innovating on several fronts right now, including the emergence of
new ad units that promote higher engagement, cutting edge ad targeting techniques, the development of
niche audience ad networks, and the increasing popularity of online ad exchanges to buy and sell inventory.
Each of these developments is contributing to the improved allocation and effectiveness of digital ad
campaigns. Marketers must maintain a critical eye on the performance of their campaigns, in relation to how
both digital media and traditional media components are performing.

PAGE 15


• With so many new smartphone models reaching the market in 2009, the next year promises a rapid increase
in market penetration of these devices, which likely means a corresponding uptick in mobile web usage. As
more consumers turn to their mobile devices for consuming content and managing their digital lives, there is
significant opportunity for innovators to deliver new value to consumers in how they use these devices. The
development of mobile applications across new platforms also presents new business opportunity and
monetization potential for publishers and developers alike.

About comScore, Inc.
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital
marketing intelligence. In an independent survey of 800 of the most influential publishers, advertising agencies and
advertisers conducted by William Blair & Company in January 2009, comScore was rated the ' most preferred online
audience measurement service' by 50% of respondents, a full 25 points ahead of its nearest competitor. comScore's
capabilities are based on a massive, global cross-section of approximately 2 million Internet users who have given
comScore permission to confidentially capture their browsing and transaction behavior, including online and offline
purchasing. comScore panelists also participate in survey research that gathers and integrates their attitudes and
intentions. Using its proprietary technology, comScore measures what matters across a broad spectrum of digital
behavior and attitudes, helping clients design more powerful marketing strategies that deliver superior ROI. With its
recent acquisition of M:Metrics, comScore is also a leading source of data on mobile usage. comScore services are
used by more than 1,200 clients, including global leaders such as AOL, Microsoft, Yahoo!, BBC, Carat, Cyworld,
Deutsche Bank, France Telecom, Best Buy, The Newspaper Association of America, Financial Times, ESPN, Fox
Sports, Nestle, Starcom, Universal McCann, the United States Postal Service, the University of Chicago, Verizon
Services Group and ViaMichelin.

FOR MORE INFORMATION, PLEASE CONTACT:

Sarah Radwanick
comScore, Inc.
312-775-6538
press@comscore.com

PAGE 16

Com Score 2009 Us Digital Year In Review

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