quarterly report

Q1 2011

POWERING THE
MOBILE ECONOMY

Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.™)

The Global Mobile Landscape
Q1 2011

WE REACH OVER WE REACH OVER U.S. IMPRESSIONS INTERNATIONAL IMPRESSIONS

92 MILLION
MOBILE USERS IN THE U.S.
142 MILLION
MOBILE USERS GLOBALLY
GREW 94%
YEAROVERYEAR
GREW 161%
YEAROVERYEAR
Q1 2011/Q1 2010 Q1 2011/Q1 2010
Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.
Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.

Top 10 Countries in Q1
By Impressions

UNITED
KINGDOM
2 10 GERMANY
CANADA 3
1 UNITED 9 FRANCE 8 SOUTH 4 5 JAPAN
CHINA KOREA
STATES

7 INDONESIA

Source: Millennial Media, Q1 2011.

6 AUSTRALIA

The addressable audience for global mobile Smartphone Subscribers Worldwide

advertising continues to skyrocket. By Region, 2009-2015

According to eMarketer, in 2009 there were

1200
312 million global Smartphone users. By the
end of this year, this number is expected to 1000
grow to 571 million. From 2011 to 2015, WORLDWIDE
ASIAPACIFIC EXCLUDING JAPAN
800
global Smartphone users are forecasted to
MILLIONS

WESTERN EUROPE
more than double to nearly 1.2 billion. 600
NORTH AMERICA
JAPAN
MIDDLE EAST & AFRICA
400
EASTERN EUROPE
LATIN AMERICA
200

DID YOU KNOW?

0
Millennial Media’s Q1 network data was 2009 2010 2011 2012
accumulated across 67 billion mobile
impressions and 250 countries & territories. Source: eMarketer, July 2010.

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Mobile Vertical Spending in Q1
Q1 2011

Q1 Insights: Top 10 U.S. Advertising Verticals

Q1 2011 – Ranked by Spend
The Retail & Restaurants Vertical grew 1342% year-over-year CHART A
(Chart C) and led both the U.S. and International Top 10
Advertising Vertical Rankings (Charts A and B). In Q1, advertisers Q1 VERTICALS
in the Retail & Restaurants Vertical invested in mobile primarily to
drive foot traffic into retail locations. 1 RETAIL & RESTAURANTS
2 TELECOMMUNICATIONS
3 PORTALS & DIRECTORIES
Telecom ranked number two and three, respectively, in the Q1 4 FINANCE
Top 10 Advertising Verticals in the U.S. and Internationally (Charts 5 AUTOMOTIVE
A and B). Year-over-year, Telecom has grown 242% globally 6 ENTERTAINMENT
7 DATING
(Chart C). Telecom advertisers leveraged mobile advertising at all 8 EDUCATION
points in the product life cycle in Q1, demonstrated by the 9 TRAVEL
variety of campaigns they ran to drive brand awareness, product 10 CPG
launches, and consumer engagement.
Source: Millennial Media, Q1 2011.

The Finance Vertical placed in the number four position in the

U.S. Top 10 Advertising Verticals (Chart A), in the number seven
position internationally (Chart B), and grew 379% year-over-year Top 10 International Advertising Verticals
globally (Chart C). In Q1, seasonal financial service advertisers ran Q1 2011 – Ranked by Spend
campaigns focused on getting customers ready for tax CHART B
preparation season while banking and financial institutions
drove awareness of their mobile banking products and services. Q1 VERTICALS
Six Verticals experienced triple-digit growth or greater 1 RETAIL & RESTAURANTS
year-over-year. Five out of the six verticals featured in the Vertical 2 PORTALS & DIRECTORIES
Explosion were all consistently on the Top 10 Advertising Vertical 3 TELECOMMUNICATIONS
4 ENTERTAINMENT
Ranking since Q2 2010. Health: Fitness & Wellness has not been 5 DATING
on the Top 10 Advertising Vertical Ranking to date, yet 6 TRAVEL
7 FINANCE
experienced growth of 183% year-over-year (Chart C). This is an 8 AUTOMOTIVE
indication that advertisers in new verticals are starting to heavily 9 NEWS
invest in a creating a mobile presence. 10 ARMED FORCES

As the number of mobile campaigns have grown, we have seen Source: Millennial Media, Q1 2011.

increasing diversity among the types of advertisers within certain

verticals, particularly in Travel. Hotels made up 52% of the spend Global Vertical Explosion
in Q1, followed by Airlines (26%), Tourism (13%), Cruises (6%) and Year-Over-Year Revenue Growth – Q1 2011/Q1 2010
Trains (3%). In the next quarter, we anticipate this vertical will CHART C
continue to grow with the upcoming summer travel season. The
Travel vertical has consistently been on the Top 10 Advertising
VERTICALS GROWTH
Vertical Rankings in both the U.S. and Internationally.

RETAIL & RESTAURANTS 1342%

AUTOMOTIVE 723%
FINANCE 379%
DID YOU KNOW?
Big brands are leveraging mobile. Millennial Media works TELECOMMUNICATIONS 242%
with 20 of the Top 25 Ad Age Advertisers. HEALTH: FITNESS & WELLNESS 183%
EDUCATION 130%

Source: Millennial Media, Q1 2011.

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Q1 Mobile Advertiser Trends –
Mobile Usage & Campaign Goals
Q1 2011

Advertisers’ Campaign Goals PRODUCT RELEASES MADE UP

Q1 2011
CHART A
2% 78%
OF CAMPAIGNS WERE
75%
OF VIDEO CAMPAIGNS
CROSSPLATFORM IN Q1
THAT RAN IN Q1
9%
Source: Millennial Media, Q1 2011.
Source: Millennial Media, Q1 2011.

29%
9%
Mobile Usage: Top 5 Q1 Holidays
By Impressions
CHART B

24% 1 NEW YEAR'S WEEKEND

27%
2 ST. PATRICK'S DAY
3 SUPER BOWL
4 PRESIDENT'S DAY WEEKEND
SUSTAINED INMARKET PRESENCE
LEAD GEN/REGISTRATIONS 5 VALENTINE'S DAY
PRODUCT LAUNCH/RELEASE
BRAND AWARENESS Source: Millennial Media, Q1 2011.
INCREASED FOOT TRAFFIC
SITE TRAFFIC
Source: Millennial Media, Q1 2011.
Data is based on the Top 750 Campaigns on Millennial Media’s Network in Q1 2011.

TOP 3 ADVERTISER TRENDS OF Q1

Q1 Insights:
The Top 3 Campaign Goals in Q1 were Sustained 1 Advertisers turned to mobile for their local
advertising needs. We saw dollars shift from
In-Market Presence, Lead Gen/Registrations and Product traditional media, such as print and radio, to
Launch/Release, together representing 80% of the
mobile campaigns.
Advertiser Campaign Goal Mix (Chart A).

Mobile usage spiked around key events and holidays in

Q1 (Chart B). In particular, impressions were highest on
2 Ainmajority (78%) of campaigns on our network
Q1 leveraged cross-platform delivery (across
New Year’s Weekend, St. Patrick’s Day, the Super Bowl, a variety of platforms and devices) to
President’s Day Weekend, and Valentine’s Day. maximize reach.
Some verticals also saw increased interaction rates on
specific holidays. For instance, Dating advertisers saw an
interaction lift of 80% around Valentine’s Day in 2011.
3 Advertisers used mobile as a reach vehicle to
target their consumers at scale. (See Page 6 to
Advertisers in the retail vertical should plan to take learn how Buick leveraged Mobiblocks to raise
advantage of this trend in the upcoming Moms, Dads & awareness with a broad audience).
Grads, and Back to School time frames.
Source: Millennial Media, Q1 2011.

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Q1 Mobile Advertiser Trends –
Campaign Targeting Methods
Q1 2011

Campaign Targeting Mix Targeted Audience Mix

Q1 2011 Q1 2011
CHART A CHART B

12%

56% 44% DEMOGRAPHIC

BROAD REACH TARGETED 46% LOCAL MARKET
BEHAVIORAL AUDIENCE
AUDIENCE
REACH 42%

Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.

Local Market is defined as a campaign targeting method which includes geographic location, DMA, state,
international country, etc. Data is based on the Top 750 Campaigns on Millennial Media’s Network in Q1 2011.

Q1 Insights:
Advertisers using Targeted Audience Reach campaign
methods (Behavioral Audience, Demographic, and Local
Market) grew 3% quarter-over-quarter, with 44% of the NUMBER OF CAMPAIGNS

GREW 107%
Campaign Targeting Mix in Q1 (Chart A).

Broad Reach methods (Channel, Custom Subnet, and Run

of Network) represented 56% of the Campaign Targeting
Mix. Dating, Entertainment and Telecom were the three YEAROVERYEAR
highest verticals leveraging Broad Reach targeting Q1 2011/Q1 2010
methods throughout Q1 to increase awareness of new Source: Millennial Media, Q1 2011.
products and services during holidays and special events,
especially Valentine’s Day (Chart A).

Local Market targeting experienced the largest

quarter-over-quarter growth of 24% and represented
42% of the Targeted Audience Mix in Q1 (Chart B). Retail,
Insurance, and Restaurant brands leveraged Local Market CAMPAIGNS WITH DEAL SIZE > $250,000

GREW 213%
targeting to effectively customize their campaigns and
provide localized deals to their target customers.

Demographic as a targeting method grew 10%

quarter-over-quarter in Q1 (Chart B). Education and YEAROVERYEAR
Automotive advertisers used demographic targeting for Q1 2011/Q1 2010
their lead generation campaigns to target customers who Source: Millennial Media, Q1 2011.
would be interested in their products or services.

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Q1 Mobile Advertiser Trends –
Spotlight on Mobiblocks
Q1 2011

DEFINITION: BEST PRACTICES:

A Mobiblock is a mobile strategy used by advertisers
to achieve dominant share of voice with their target
audience in a short period of time. It can be applied
to run across an entire mobile network or with a
specific audience, demographic or channel (i.e., sites
and apps focused on sports, music, news, health &
fitness sites, etc.). Mobiblocks are particularly effective
for maximizing unique user reach and impressions.
Mobiblocks are particularly impactful for time-sensitive
marketing initiatives, like product launches or events;
they can also be used to maximize reach during mobile
usage spikes – around key holidays or special events.
Visually-arresting ads and strong calls to action generate
maximum return.
Pairing a mobiblock with a sustained mobile advertising
presence enhances campaign results.

CAMPAIGN HIGHLIGHT: BUICK ACHIEVERS SCHOLARSHIP PROGRAM

“ The goal of Buick Achievers

Scholarship program is to inspire,
celebrate and enable human
achievement. We’re using
innovative opportunities like this
to educate potential scholarship
applicants nationwide.
”
~ Craig Bierley, Director of Advertising and Promotions, Buick

GOAL:
Raise awareness of the newly-announced Buick Achievers
Scholarship program.

TIMING: DOWNLOAD THE FULL

February 10 – March 15, 2011
CAMPAIGN SUMMARY NOW!
www.millennialmedia.com/research/campaign-summaries
STRATEGY:
Take over Millennial Media’s Verizon Wireless-based iPhone ad
inventory on mobile websites and applications exclusively for five
weeks around the launch of the iPhone on the Verizon network.

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 Q1 Mobile Advertiser Trends –
Campaign Engagement Methods
Q1 2011

Campaign Destination Mix Post-Click Campaign Action Mix

Q1 2011 Q1 2011
CHART A CHART B

40%

21% 35% 39% 39%

47% 30%

25%
26% 25%
20%
32% 22% 22%
15% 18%

10% 13%
12% 12%
5%
2%

TRAFFIC TO SITE 0%
CUSTOM LANDING PAGE APPLICATION ENROLL/ MCOMMERCE PLACE RETAIL SITE MOCIAL STORE SUBSCRIBE VIEW WATCH
APPLICATION DOWNLOAD DOWNLOAD JOIN CALL PROMOTION SEARCH SOCIAL
MEDIA
LOCATOR MAP VIDEO

Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.

Campaign destinations represent the immediate click-through from creative to site, landing page, or Data is based on the Top 750 Campaigns on Millennial Media’s Network in Q1 2011.
application download. Data is based on the Top 750 Campaigns on Millennial Media’s Network in Q1 2011.

Q1 Insights:
Application Download grew 31% quarter-over-quarter and Mocial (Mobile Social Media) experienced growth of 29%
represented 21% of the Campaign Destination Mix in Q1 quarter-over-quarter, with 18% of the Post-Click Campaign Action
(Chart A). With increasing Smartphone penetration, Mix in Q1 (Chart B). Automotive, CPG, and Telecom brands utilized
advertisers created applications to engage their customers mobile social media as a Post-Click Campaign Action to engage
and reinforce their brands. customers and gather feedback on their new product launches in Q1.

The advertisers in the Travel vertical, similar to Finance

advertisers, used applications as a transaction channel for
their customers while the CPG and Automotive verticals
leveraged applications to engage and educate customers
before driving them to retail outlets. Additionally, publishers
and developers ran advertising campaigns in Q1 to drive
downloads of their applications. TIME SPENT ON MOBILE
In Q1, m-Commerce grew 30% quarter-over-quarter as a
Post-Click Campaign Action (Chart B). Advertisers in the
Retail, Entertainment and Travel verticals created a sustained
GREW 50%
FROM 2008 TO 2010
advertising presence in the mobile channel and leveraged
Source: eMarketer, 3/11.
their mobile campaigns to drive sales of products,
entertainment tickets and travel bookings.

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Q1 Publisher & Developer Trends
Q1 2011

Global Publisher & Developer Quick Stats Top 10 Global Applications Categories
Q1 2011 By Impressions

5500 DEVICES ON OUR NETWORK

RANK VERTICALS

1 GAMES
15 OPERATING SYSTEMS ON OUR NETWORK 2
3
SOCIAL NETWORKING
MUSIC & ENTERTAINMENT
34% GROWTH IN NUMBER OF APPS ON
MM’S NETWORK Q1 2011/Q4 2010
4
5
MAIL & MESSAGING
WEATHER
6 SPORTS
52% GROWTH IN NUMBER OF ANDROID APPS
ON MM’S NETWORK Q1 2011/Q4 2010 7
8
NEWS & CURRENT EVENTS
HEALTH & FITNESS

200% CONNECTED DEVICE IMPRESSION

GROWTH Q1 2011/Q4 2010
9
10
TRAVEL
BOOKS & REFERENCE

Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.

INTRODUCING THE
INDUSTRY’S FIRST 3IN1 SDK
The next evolution of inventory monetization has
TOP 3 PUBLISHER & DEVELOPER
arrived for mobile developers. Developers can TRENDS OF Q1
make more money with Millennial Media’s new
3-in-1 SDK for Android and iOS.
1 Publishers & developers took
advantage of all types of ad units, such
This powerful SDK allows mobile developers to: as interactive video and rich media, to
capture the highest eCPMs and
Integrate three revenue-generating ad formats including strongest brand demand.
Interactive Video, Rich Media and Banner Ads – all with one simple
SDK download

Maintain control of ad placement and frequency caps with flexible

2 Android penetration growth*
continued to drive a rapid increase in
code that's easy to execute and integrate Android applications on our network,
outpacing the growth rate of iOS apps.
Earn the best revenue available in the industry with Interactive
Video ads – in huge demand today from Millennial Media’s *There are over 150,000 applications in the Android Market –
premium brand advertisers three times more than there were nine months ago.

3 Some of the largest publishers on our

network launched applications,
MILLENNIAL MEDIA’S NEW 3IN1 expanding their reach beyond the
mobile web.
SDK CAN BE DOWNLOADED NOW!
www.developer.millennialmedia.com
Source: Millennial Media, Q1 2011.

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Q1 Publisher & Developer Trends
Q1 2011

Smartphone, Feature Phone & Smartphone OS Mix

Connected Device Impression Share By Impressions
Q1 2011
1% 1% 1%
Q1 2011

15%
CONNECTED
DEVICES 17%
ANDROID
iOS
62% 54% RIM
23% SMARTPHONES SYMBIAN
FEATURE
PHONES WINDOWS
26% OTHER

Source: Millennial Media, Q1 2011. Source: Millennial Media, Q1 2011.

Smartphone data does not include what could be considered Smartphones running proprietary Other includes webOS, Danger, Nokia OS, Palm OS.
Operating Systems, e.g. Samsung Instinct, LG Vu.
Millennial Media defines a Connected Device as a handheld device that can access the mobile web,
but is not a mobile phone. Examples include Apple iPod Touch, Sony PSP, Nintendo DS, iPad, etc.

Top 3 Tablets in Q1
By Impressions

1 Apple
iPad
2 Samsung
Galaxy Tab

DID YOU KNOW?

Connected devices grew 21% on Millennial
Media’s network in March. To learn more about
the latest trends with top mobile devices and
operating systems, download Millennial Media’s
March 2011 Mobile MixTM Report.

Click here to download now!

http://www.millennialmedia.com/research/

3 Smartbook AG
Surfer Tablet
Source: Millennial Media, Q1 2011.

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S.M.A.R.T.™ Glossary of Terms
Q1 2011

Audience Takeover – A targeting technique that allows an advertiser to achieve dominant share-of-voice with a target audience.

Behavioral Audience – A targeting technique that categorizes customers by their interests.

Campaign Destination – Used to define where advertisers are sending consumers from their ads to view more content. Based upon the
thousands of campaigns on our network, we find that campaigns drive to three primary destinations: Traffic to Site (the client’s persistent
mobile site), Custom Landing Page (a special mobile landing page created for the campaign), or Application Download.

Connected Device – A non-phone, Wi-Fi mobile device. This includes tablets.

Cross-Platform – Pertaining to multiple devices (Smartphones, tablets, feature phones, connected devices), carriers (AT&T, Verizon,
Vodafone, etc.), or platforms (iOS, Android, RIM, Windows Phone 7, Symbian, etc). Millennial Media’s mobile ad network is cross-platform –
or “platform-agnostic” – because we do not focus on one single OS or device type. This enables advertisers to reach as many mobile users
as possible, regardless of their mobile device or carrier of choice.

Deal Size – The size of a client’s mobile advertising contract.

Developer – Provider/creator of mobile applications. Developers range from large entities (brands, portals, news sites, etc.) to individuals
who focus on just a handful of applications. Along with publishers, developers’ inventory makes up the “supply” side of the mobile ad
network model and is where advertisers’ ads run. Developers are to App as publishers are to WAP.

eCPM – Also ‘Effective CPM’ or ‘Effective cost per thousand impressions’. Used as a performance measure to estimate earnings for every
thousand impressions received. eCPM is derived by dividing total earnings over total number of impressions in thousands.

Feature Phone – Any web-enabled mobile phone that is not a Smartphone.

Impression – A count of the number of times an ad unit appears on a mobile device.

Inventory – The ad space available on mobile websites and applications.

Local Market – A targeting technique that allows advertisers to customize their message to local markets – i.e. DMA to more precise levels
of granularity. (Previously classified as “GEO” in earlier SMART reports).

Mocial – Mobile Social Media networking sites and applications.

Post-Click Campaign Action – The action a marketing campaign is driving the customer to take once an ad is viewed (i.e., Place Call,
Download Application, View Map, etc.).

Publisher – Provider of mobile sites of well-known brands, perhaps newspapers, broadcasters or portals. Publishers also frequently have
their own applications. Along with developers, publishers’ inventory makes up the “supply” side of the mobile ad network model and is
where advertisers’ ads run. Publishers are to WAP as Developers are to App.

Reach – A measure of the mobile audience size, generated by the number of users accessing specific mobile websites and applications.

SDK – Software Development Kit. A tool that enables developers to seamlessly integrate mobile advertising into their applications, thus
monetizing their app. Developer partners on Millennial Media’s network download and integrate our SDKs (available for a variety of
operating systems – iOS, Android, Windows Phone 7, etc.) to gain access to the ads run by our advertising partners.

Smartphone – Any web-enabled and application-enabled mobile phone that runs on an operating system and offers the user more
advanced capabilities beyond just voice and mobile web access.

Vertical – The classification of advertisers by industry.

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Summary & Reporting Methodology
Q1 2011

About Millennial Media

Millennial Media is the proven leader in mobile advertising. With the largest mobile media audience in the U.S.,
Millennial Media uniquely offers brand advertisers the only set of specific, scalable audiences. Our ability to reach,
target and engage consumers is unparalleled. As an innovative technology leader, our mobile decisioning, serving
and mediation platforms are powering some of the largest companies in the media business today. The company is
committed to growing the mobile advertising marketplace by becoming the preferred partner to all advertisers
seeking to reach mobile consumers, all publishers and developers seeking to maximize ad revenue and all mobile
operators seeking to further monetize their networks. For more information, please visit
http://www.millennialmedia.com or follow us on Twitter @millennialmedia. Millennial Media was named the
2010 OnMedia Top Private Company in Digital Media and was awarded a 2010 Stevie Award (American Business
Awards) for Most Innovative Company of the Year.

About S.M.A.R.T.™

The Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.™) delivers monthly insights on key trends in
mobile advertising based on actual campaign and network data from Millennial Media, Inc. Millennial Media partners
with major carriers, media networks and top-tier publishers to deliver the largest data set of any third-party U.S.
mobile advertising network. As such, we are uniquely capable of reporting and analyzing the richest sets of carrier,
device and campaign data collected over billions of monthly ad requests. Elevating and driving the whole mobile
ecosystem forward is central to our company mission.

Visit www.millennialmedia.com/research to sign up to receive Millennial Media-related news, including

Millennial Media’s Mobile Mix™ and the Scorecard for Mobile Advertising Reach and Targeting (S.M.A.R.T.)™ report.

Millennial Media Methodology:

Network reach is calculated from the count of unique users across our entire network. Millennial Media uses
proprietary techniques to uniquely identify at least 75% of our user base persistently across our network and tracks
the unique reach over the course of the month-long period. For the remainder, the unique user data is used to
calculate the average frequency of views that a user consumes in a month. We apply that average frequency to the
remaining impressions to determine our network-wide reach. Data provided is derived from Millennial Media server
log activity for the time period indicated.

For questions about the data in this report, or for recommendations for future reports,
please contact us at research@millennialmedia.com.
©2011 Millennial Media, Inc. All rights reserved. All product names and images are trademarks or registered trademarks of their respective owners.

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