1. Tablet Video Advertising
The Future of Tablets, CTIA
May 8, 2012
John Fletcher
Senior Analyst
1

2. Outline
 Perspective
 iPad video app trends
 Checking in with Social TV (Second Screen)
 Mobile video ad targeting, formats and metrics
 User experience
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 2

3. Perspective, U.S. Advertising Revenue
Total Advertising
Internet
Advertising
Mobile
Advertising
$2.4 bil.
$31.0 bil.
$218.1 bil.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 3

4. Perspective: Tablet Timeline
196 B.C. 1980s-1990s 2001
2010 2011
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 4

5. Perspective: U.S. Tablet Users
~ One in ten Americans owns a tablet
Early Adopters
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 5

6. Perspective: Mobile Video Subscriptions
Wha' Appened?
(000)
125,000
Smartphone users
100,000 Tablet users
Wireless operator
75,000 mobile video subs*
50,000
25,000
0
2007 2008 2009 2010 2011
Note: U.S. subs. *Includes only users paying additionally each month for a carrier-branded mobile video subscription service. Excludes
subscribers of bundled access data services that include access to mobile video but that users do not access.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 6

7. Perspective: Ironic
Wireless Data Traffic
Feb. 2012, Bytemobile
All Other Video
50% 50%
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 7

8. Perspective: Culprits
Leading Mobile Video Bandwidth Hogs:
 YouTube
 Netflix
 Hulu Plus
 Amazon Prime Inst. Vid.
 Crackle
 Vevo
 Slingbox
 DTC: HTML websites
 Other OTT
 Eventually TV Everywhere
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 8

9. App Trends
 Average app Prices
 iPad video app trends
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 9

10. App Trends: App Prices
Average iPhone App Prices Average iPad App Prices
$3.00 $4.60
$4.40
$2.50
$4.20
$2.00
$4.00
$1.50
$3.80
$1.00 $3.60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
2009 2010 2011
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 10

11. App Trends: Caution, Eye Charts Ahead
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 11

12. Top Grossing Hollywood iPad Apps, Q1 2012
Weekly
Rank Content Producer App(s) Instances Genre(s)
in Top 100
Walt Disney (Disney Publishing Where's My Water? (12) ($.99), Hidden Objects: Gardens of Entertainment,
1 17
Worldwide Applications) Time (5) (Free) Games
Capcom Interactive, Peyo,
2 Smurfs' Village (Free) 13 Games
Lafig Belgium
News Corp. (Fox Mobile, Rovio,
Angry Birds Rio HD (13) ($2.99) 13 Games
NYP Holdings)
Team Umizoomi Math: Zoom into Numbers HD (12) ($6.99), Education, Books,
Viacom (MTV Networks) 13
SpongeBob's Super Bouncy Fun Time HD ($3.99) Games
Peanuts Worldwide, CE Europe,
5 Snoopy’s Street Fair (Free) 12 Games
Beeline Interactive
Sling Media SlingPlayer for iPad ($29.99) 12 Entertainment
7 National Geographic Society National Geographic Magazine (Free) 11 Reference, Books
8 Pandora Media Pandora (Free) 6 Music
Major League Baseball
9 MLB.com At Bat (Free) 4 Sports
Advanced Media
Midway Arcade (2) ($.99), Batman Arkham City Lockdown
Warner Bros. Entertainment 4 Games
($2.99), LEGO Harry Potter: Years 1-4 ($2.99)
11 Sony Pictures Television Wheel of Fortune HD ($4.99) 3 Games
Turner Broadcasting System
12 NCAA® March Madness Live (Free) 2 Games
(Cartoon Network)
Dr. Seuss Enterprises
13 The Lorax - Dr. Seuss ($.99) 1 Books
(Oceanhouse Media)
Python (Monty) Pictures Ltd.
Monty Python: The Holy Book of Days ($4.99) 1 Entertainment
(Melcher Media)
Television Food Network Food Network In the Kitchen ($1.99) 1 Lifestyle
THQ, World Wrestling Entmnt. WrestleFest HD ($3.99) 1 Games
Source: SNL Kagan analysis of Apple iTunes data.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 12

13. Hollywood Paid iPad Leaders, Q1 2012
Weekly
Rank Content Producer App(s) Instances in Genre(s)
Top 100
Team Umizoomi Math: Zoom into Numbers HD (13), Dora’s Skywriting ABC’s (9), Monkey
Education,
1 Viacom (MTV Networks, Nickelodeon) Quest: Thunderbow HD (3), Dora's Enchanted Forest Adventures (HD) (2), SpongeBob's 28
Books, Games
Super Bouncy Fun Time HD
Scribblenauts Remix (13), Midway Arcade (3), LEGO Harry Potter: Years 1-4 (3), Batman
2 Warner Bros. Entertainment 21 Games
Arkham City Lockdown (2)
Public Broadcasting Service (Sesame Workshop Elmo Loves ABCs for iPad (10), SUPER WHY! for iPad (7), The Monster at the End of This
3 19 Games
Apps, PBS Kids) Book...starring Grover!, Another Monster at the End of This Book...Starring Grover & Elmo!
Walt Disney (Disney Publishing Worldwide Where's My Water? (13), The Lion King: Timon's Tale (2), Puffle Launch, Toy Story 3: Entertainment,
4 17
Applications) Operation Camouflage Games
DreamWorks Animation LLC (FrogDogMedia,
5 Fruit Ninja: Puss in Boots HD (13) 13 Games, Books
zuuka, Halfbrick Studios)
News Corp (Fox mobile, Rovio, NYP Holdings) Angry Birds Rio HD (13) 13 Games
Skyfire Labs Skyfire Web Browser for iPad 13 Utilities
TuneIn TuneIn Radio Pro 13 Music
The Lorax (3), Green Eggs and Ham - Dr. Seuss (2), The Cat in the Hat - Dr. Seuss, Oh, the
9 Dr. Seuss Enterprises (Oceanhouse Media) 7 Books
Places You'll Go! - Dr. Seuss
Food Network In the Kitchen (5), In the Kitchen: Food Network Recipes, Chefs, Cooking Tools
Television Food Network 7 Lifestyle
and Shopping Lists (2)
11 CBS (CBS Mobile, CBS Interactive) 60 Minutes for iPad (3) 3 News
National Geographic Society World Atlas HD (2), Weird But True 3 Reference, Bks.
Turner Broadcasting System (Cartoon Network) Regular Show - Nightmare-athon (2), Robot Unicorn Attack 3 Games
14 Lucasfilm Star Wars Pit Droids 2 Games
NBC Universal (Universal Studios, Chillingo,
Law & Order: Legacies, Woody Woodpecker 2 Games
Walter Lantz Productions)
Python (Monty) Pictures Limited (Melcher Media) Monty Python: The Holy Book of Days (2) 2 Entertainment
17 Alicia Rivoli FreeTV HD - Unlimited 1 News
Callaway Digital Arts Thomas & Friends: Engine Activities 1 Games
EPLAYWORKS AVPlayerHD 1 Entertainment
Marvel Entertainment (Gameloft) Iron Man 2 for iPad 1 Games
Paramount Pictures (Gameloft) The Adventures of Tintin™ - The Game 1 Games
Scripps Networks (The Travel Channel) Travel Channel Layover Guide with Anthony Bourdain 1 Travel
Sony Pictures Television Wheel of Fortune HD (13), JEOPARDY! HD 1 Games
THQ (THQ Wireless, Inc.) WrestleFest HD 1 Games
Source: SNL Kagan analysis of Apple iTunes data.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 13

14. Hollywood Free iPad Leaders, Q1 2012
Weekly
Rank Content Producer App(s) Instances in Genre(s)
Top 100
ABC Player (13), Where's My Water? Free (13), WatchESPN (6), Hidden Objects:
Walt Disney (ABC Digital, ESPN, Disney Publishing Entertainment,
1 Gardens of Time (5), ABC Family (4), Oscars (4), ScoreCenter XL (4), Disneyland 54
Worldwise Applications) Games, Travel
Explorer (2), Disney Mobile Magic, Cars 2 AppMATes, Motorcity: Drive
Time Warner (Warner Brothers Entertainment, Turner, News,
2 CNN App for iPad (12), HBO GO (8), Happy Feet Two: The Penguin App 21
CNN, HBO, Time Inc.) Entertainment
3 News Corp. (Fox News Digital, Rovio) Angry Birds Rio HD Free (13), FOX News for iPad (2) 15 Games, News
4 Hulu Hulu Plus 13 Entertainment
Netflix Netflix 13 Entertainment
Pandora Radio Pandora 13 Music
The Weather Channel Interactive The Weather Channel Max for iPad 13 Weather
8 Clear Channel Broadcasting iheartradio for iPad 12 Music
9 Comcast (Comcast Interactive Media) XFINITY TV 9 Entertainment
Entertainment,
10 NBC Universal (MSNBC Interactive News) NBC (7), Jaws™ Revenge 8
Games, News
National Geographic Magazine (4), National Geographic Traveler Magazine (2), News, Education,
11 National Geographic Society 7
National Geographic Explorer Travel
12 CBS (CBS Mobile, CBS Interactive, Showtime Networks) GRAMMY Live, Showtime Anytime, CBS Sports for iPad 3 Entmnt., Sports
Lafig Belgium / Capcom Smurfs' Village 3 Games
Public Broadcasting Service PBS for iPad 3 Entertainment
15 IMDb.com, IMDb Movies & TV 2 Entertainment
VEVO LLC VEVO HD 2 Music
Shazam Shazam for iPad 2 Music
Smithsonian Networks Smithsonian Channel for iPad 2 Entertainment
CBS / Time Warner The CW Network 2 Entertainment
20 Apple iTunes Movie Trailers 1 Entertainment
BBC Worldwide Top Gear: Where's Stig? HD 1 Games
Dr. Seuss Enterprises Dr. Seuss Band 1 Games
Lions Gate Films Hunger Games: Girl on Fire 1 Games
NPR NPR for iPad 1 News
Our Film Festival Fandor Movies 1 Lifestyle
Scripps Networks HGTV Color Guide 1 Lifestyle
Spotify Spotify 1 Music
Viacom (MTV Networks) Kids' Choice Awards 2012 1 Entertainment
Source: SNL Kagan analysis of Apple iTunes data.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 14

15. App Trends Pricing Summary
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 15

16. Checking in with Social TV Apps
What do tablets want to be when they grow up?
TV Screens or PCs?
Yes.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 16

17. Checking in with Social TV Apps
Second Screen Start ups
Launched Launched in
before 2011 past year
28%
72%
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 17

18. Checking in with Social TV Apps
GetGlue Active Users
as a % of Total U.S. Pop
1%
99%
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 18

19. Checking in with Social TV Apps
 Viggle app offers product discounts for “checking in”
to TV programs.
 Also for watching mobile video ads on the app.
 250K Monthly Active Users
 Average app session is 89 minutes.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 19

20. Checking in with Social TV Apps
Apps “hear” TV programming and allow users to dig deeper
into ads or programming via Tablet and Smartphone apps.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 20

21. Mobile Video Ad Formats, Targeting & Metrics
Long term Instant
Branding and/or Interactivity
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 21

22. Mobile Video Ad Formats, Targeting & Metrics
Mobile Video ad formats:
 Banners with embedded video
 Video ad mid-roll
 Video ad preceding content (Pre-roll / In-Stream)
 Video/banner hybrids
 Screen takeovers
 Banners
 Overlays
 Others TDB
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 22

23. Mobile Video Ad Formats, Targeting & Metrics
 Targeting is the No. 1 attribute of what advertisers are looking
for on mobile (September 2011 Jumptap/Digiday survey).
 While operators protect their subscriber privacy, five
targeting methods are possible without carrier consent.
1. Social-targeting: user logs into a service with Facebook UN
and PW, publisher can scrape demographic details right from
profile.
2. Content-based targeting matches an ad with a publisher's
particular audience.
3. Carrier-based targeting.
4. Device-targeting: campaigns that run only on iOS, for instance.
5. Location-targeting: ranging from within 100 yards of a user to
simply being within a certain zip code.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 23

24. Mobile Video Ad Formats, Targeting & Metrics
Cost per Engagement (CPE), Click Through Rates (CTR), Cost Per Click
(CPC), Cost per Thousand Impressions (CPM), Cost per Acquisition (CPA)
($)
Mobile CPMs, US
100
80
Mobile Video*
60 Premium Display^
40
20
0
2007 2008 2009 2010 2011
*Ranges from $10 to $50+ based on value of content, targeting criteria and audience. ^Many mobile ad networks average < $1 CPMs
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 24

25. Mobile Video Ad Formats, Targeting & Metrics
 No Standardized Measurement (Nielsen? Arbitron?)
 Post-campaign sales lift
 CTRs: On desktop a 1-2% banner CTR is fantastic
 What happens after the click through?
 CPE: normally under $.50 per engagement
 Mobile has lots of ACT
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 25

26. User Experience
“I hate all advertising!”
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 26

27. User Experience
 Apps are easier than WAP, but we can do better.
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 27

28. User Experience
 Context
 Does a bad user experience with an ad have the
reverse effect on that brand?
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 28

29. User Experience
 Lots of inventory, not many ads
 Opportunity to stick out at this early stage
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 29

30. Conclusion
 It’s early days
 Experiment
 Consumer experience
 Consumer experience
 Consumer experience
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 30

31. We’ve just scratched the surface
John Fletcher
Sr. Analyst
SNL Kagan
831 622 3814
jfletcher@snl.com
© 2012 SNL Kagan, a division of SNL Financial LC, estimates. All rights reserved. 31