1. Hot Trends: Social Networks, Mobile Marketing and Online Video October 3, 2008 Debra Aho Williamson Senior Analyst eMarketer Inc. October 3, 2008

3. October 3, 2008 Internet Ad Spending

4. Internet: Approaching 10% of Worldwide Ad Spending October 3, 2008

5. $25B in US Online Spending in ‘08 October 3, 2008 Source: eMarketer, August 2008 US Internet Ad Spending (billions)

6. Faltering Economy is Impacting US Ad Budgets October 3, 2008

8. Advertisers are Committed to Increasing Online Spending October 3, 2008

11. And of Course, the Ugly October 3, 2008

12. October 3, 2008 Social Networks

13. Social Networks: Only One of Many Types of Social Media October 3, 2008 Source: Universal McCann

14. Is This Your Image of Social Networking? October 3, 2008

15. Social Network Growth Markets: Mideast, Europe and Latin America October 3, 2008

16. 58% of Worldwide Internet Users Have Created a Profile October 3, 2008

17. US Usage Is Still Growing October 3, 2008 Unique Visitors to MySpace and Facebook August 2007-August 2008 (thousands) 75.5 million (up 10% from ‘07) 41 million (up 21% from ‘07) Source: comScore Media Metrix

18. But Is It a Fad That’s Losing Steam? October 3, 2008 US visits to social network sites are down 17% year-over-year vs. August 2007

19. SN Ad Spending Growth Slows in 2009 and Beyond October 3, 2008

20. US Spending Still in Flux October 3, 2008 Source: eMarketer, 2008 +55% +27% +15% +13% +11% 12/07: $1.6B 12/07: $2.7B

21. News Corp. Acknowledges This October 3, 2008 “ Social networking has gotten a disproportionately lower share of digital advertising budgets. If you compare the amount of traffic and the amount of users we have with the portals, most of those guys have been putting 50%, 60% of their budgets in portals, and 10% of their budgets against social network sites.” -- COO Peter Chernin at Merrill Lynch presentation, Sept. 2008

25. On the Other Hand, Too Much Targeting is Never a Good Thing October 3, 2008

26. October 3, 2008 Mobile Marketing

27. 2008: The First Year Ad Spending Tracks Ahead of Subscribers October 3, 2008 Worldwide Mobile Ad Spending and Subscribers 2006-2012 (millions)

30. Do Consumers Accept Mobile Phone Advertising? October 3, 2008 Source: Nielsen Co., September 2008

31. Where is the Money? October 3, 2008 Mobile Search Mobile Display Ads Text Messaging Or Here?

32. Or Here? October 3, 2008 Google Android

33. Messaging Dominates Ad Spending October 3, 2008

34. US: 36% of 2008 Mobile Spending October 3, 2008

36. Mobile Marketing: A Two-Way Street October 3, 2008 Take a photo, send it in a multimedia message Receive a picture of a customized Nike shoe Save as wallpaper, send to friends Order personalized shoes directly

37. The iPhone is Changing How Consumers Use the Internet October 3, 2008

39. October 3, 2008 Online Video

40. The Digital Landscape Confounds Many in the Media Biz October 3, 2008 “ We don’t know what’s gonna work. Predicting what the media world is gonna look like in eight years is incredibly daunting. I defy anybody to do that.” - Jeff Zucker, president-CEO, NBC Universal, September 2008

41. Consumers Love Online Video October 3, 2008

42. Half of US Population Watches Online October 3, 2008 Source: eMarketer, February 2008 US Online Video Users, 2006-2012 (% of population)

43. 71% of US Internet users watch online videos at least once a week October 3, 2008 Source: Universal McCann, April 2008 % respondents , Mar. 2008

44. Types of video content people watch monthly: short, short , short October 3, 2008 Source: eMarketer, February 2008 Full TV shows = 27% % total US video viewers, Feb. 2008

46. Video Ads: 2.6% of Online Spend in 2009 October 3, 2008 Source: eMarketer, September 2008 US Online Video Ad Spending (millions and % of Internet total) “ Video is the growth format on the Internet. ” -- David Hallerman, eMarketer 1.5% 2.0% 2.6% 3.4% 4.7% 6.8% 9.8%

47. But Video Won’t Challenge Search or Display -- Yet October 3, 2008 US Online Ad Spending, by Format (billions) 2008 & 2013 Source: eMarketer, August 2008

49. But There Are Significant Hurdles October 3, 2008 Can consumer- generated video be monetized? What ad formats work best? Will consumers skip over ads?

52. YouTube Experiments with Overlays October 3, 2008 New: Ad runs post-roll (after clip) if user doesn’t click on overlay

53. But Ads on User-Generated Video Trail Consumer Usage October 3, 2008 Source: The Diffusion Group, July 2008

54. Zappos Gets Clicks for Its Video Ad Campaign October 3, 2008 Ad appeared on 50 sites targeted to females Video plays only after user clicks on it Simplicity: Ad served by same company that serves rest of Zappos’ ads Result: 5% clickthrough rate (vs. just 0.3% for banner ads)

55. When It Comes to Video Ads, One Attitude Does Not Fit All October 3, 2008

56. 67% Will See an Online Video Ad At Least 1x a Month in 2008 October 3, 2008

58. Thank you ! Debra Aho Williamson Senior Analyst eMarketer Inc. October 3, 2008