web 2.0

June 2007

User-Generated Content:
Will Web 2.0 Pay Its Way?
Paul Verna,
Senior Analyst
pverna@emarketer.com

Executive Summary: The explosion of user-generated content has reshaped the media landscape, shattering the
status quo of content ownership and distribution, and creating new opportunities for marketers to attach their brands
to a vibrant online world. Meanwhile, consumers enjoy an ever-expanding universe of content in which they are also
the publishing industry.

Led by the companies that started this revolution—YouTube,
US User-Generated Content Advertising Revenues,
2006-2011 (millions) MySpace, Facebook, Photobucket and others—US user-
generated content sites will earn $4.3 billion in ad revenues in
2006 $450
2011, up from $1 billion in 2007. Worldwide, user-generated
2007 $1,042 content ad revenues will rise to $8.2 billion in 2011 from $1.6
2008 $1,748 billion in 2007.
084515
084516
2009 $2,477

2010 $3,292 Issues & Questions
I How much will be spent this year on advertising on user-
2011 $4,303
generated content sites?
Note: includes ad revenues at user-generated video sites (eg YouTube),
I What role will marketers play in making the user-generated
photo-sharing sites (eg Photobucket) and social networking sites (eg
MySpace, Facebook)
Source: eMarketer, June 2007 content revolution a paying prospect?
084515 www.eMarketer.com
I Who is consuming all this user-generated content?

Worldwide User-Generated Content Advertising I How many Internet users are actually generating content?
Revenues, 2006-2011 (millions)
I Will any new business models emerge within this new media
2006 $630 landscape?
2007 $1,562

2008 $2,796 The eMarketer View 2
2009 $4,210 A New Media Landscape 3
2010 $5,925 Monetizing the Content Revolution 4
Online Advertising Trends 7
2011 $8,175
Types of User-Generated Content 10
Mobile User-Generated Content 20
MySpace, Facebook) The Audience for User-Generated Content 22
Source: eMarketer, June 2007
The Content Creators 28
Related Information 31
About eMarketer 31

The First Place to Look Copyright ©2007 eMarketer, Inc. All rights reserved.

The eMarketer View

Key eMarketer Numbers — User-Generated Content Even taking into account the power and ease of use of user-
$4.3 billion US user-generated content advertising revenues*
generated content tools like digital cameras and affordable
in 2011, up from $450 million in 2006 audio/video production software, there are more content
$8.2 billion Worldwide user-generated content advertising consumers than creators. In the US, an estimated 69 million
revenues* in 2011, up from $630 million in 2006
people consumed user-generated content in 2006, and that
101 million US users of user-generated content** in 2011, up
from 69 million in 2006 number will grow to 101.4 million by 2011. Worldwide, user-
254 million Worldwide users of user-generated content** in generated content users will nearly double in the next five years,
2011, up from 128 million in 2006
reaching 254 million in 2011, up from 128 million in 2006.
95 million US user-generated content*** creators in 2011,
up from 64 million in 2006
Driven by such massive numbers of active content generators and
238 million Worldwide user-generated content*** creators
in 2011, up from 118 million in 2006 users, advertisers will spend $4.3 billion on user-generated
Note: *includes ad revenues at user-generated video sites (eg YouTube), content sites in the US alone by 2011, up from $450 million in 2006.
photo-sharing sites (eg Photobucket) and social networking sites
(eg MySpace, Facebook); **includes video, audio, photo sharing, blogs, On a global basis, advertising revenues at user-generated content
wikis, podcasts and online bulletin boards; ***includes video, audio, sites will reach $8.2 billion in 2011, up from $630 million in 2006.
photo sharing, blogs, wikis, personal Web sites, podcasts and online
bulletin boards

084517

The explosion of user-generated content has
reshaped the media landscape. Gone forever are the days
in which giant media conglomerates control the creation,
distribution and monetization of content. The media companies are
still around and they still wield considerable clout as a result of
their content and distribution networks, but today much power has
shifted to the consumer. Not only are consumers able to choose
how and when they consume virtually any media, but they are also
increasingly in control of the actual creation of content thanks to
the popularity of sites like YouTube, MySpace and Wikipedia.

The Web has become a truly participatory culture. Web 2.0 is a
world in which traditional media companies recognize that they
need to “begin to let go,” as Procter & Gamble chairman and CEO
A.G. Lafley said during an October 6, 2006, keynote speech at the
Association of National Advertisers’ annual conference.

Of course, user-generated content in itself is not a new
phenomenon. For as long as “content” has existed, common folks
have used all manner of public forums to make their voices heard.
Witness America’s Funniest Home Videos, subway graffiti, folk
songs, Speaker’s Corner and cave paintings. The difference now is
that the Internet has truly democratized the creation and mass
distribution of any content. Anyone with the basic tools of a PC
and an Internet connection can reach literally millions of people
with a keystroke.

This capability has put enormous power in the hands of the
estimated 64 million Internet users in the US who created user-
generated content in 2006—and that number is expected to swell
to 95 million by 2011. And while the US dominates this space,
other geographies are expected to contribute increasing amounts
of user-generated content over the next several years, with 238
million user-generated content creators worldwide in 2011, up
from 118 million in 2006.

User-Generated Content 2

A New Media Landscape

“There’s little doubt YouTube and the next Additional research suggests that brand marketers are
generations of sites like it are going to assimilating these rapid changes and making adjustments in their
change the way Americans—and the future plans. When asked by JupiterResearch whether they
world—consume what we now call ‘video.’ planned to use social networking and user-generated content
marketing tactics in the coming year, 48% of respondents said yes
The days of passive ‘leaning back’ viewing
for 2007 (compared with 38% for 2006).
are over. We’re firmly in a ‘leaning forward’
era, where people are choosing what they US Brand Marketers Who Plan to Use Social Network*
want to see when, how, where and on what Marketing Tactics in the Next Year, 2006 & 2007 (% of
device. It’s really just started.” respondents)

—Josh Warner, President, Feed Company 2006 38%

2007 48%
The explosion of user-generated content across many disciplines
Note: *Web sites designed for members to create and post content,
has reshaped the media landscape for US advertisers. In a usually in the form of profile pages, primarily in order to communicate with
February 2007 poll by the US Advertising Federation, clear each other
Source: JupiterResearch, "Social Networking Sites: Defining Advertising
majorities of respondents said they were taken by surprise by such Opportunities in a Competitive Landscape" as cited in press release, March
2007
Web 2.0 phenomena as the rush to virtual network Second Life, the
popularization of “mash-up” applications and the rise of YouTube. 081779

TV networks also recognize the need to adapt to a Web 2.0
US Advertisers' Reactions to Select Innovations in the
Media Landscape, 2006 (% of respondents) environment in which users expect to be able to seamlessly
integrate their own media with professionally created content.
The rush to Second Life
23% 77%
Blogging, viral video sharing, MySpace functionality and YouTube
functionality, and video podcast capabilities are a few of the
The popularization of "mash-ups" or Web applications that have
more than one source implementations that US TV networks regard as important,
39% 61% according to a 360i study from March 2007.
The rise of YouTube
49% 51% Emerging Media Formats Implemented Most by Top
TV Networks in the US, Q1 2007 (% of top TV
The movement of traditional newspapers to the tabloid format
networks)
50% 50%
The advent of issue-specific print audience measurement systems E-Mail alerts 97%
52% 48% Blogs 83%
The introduction of a television commercial rating system
Mobile 80%
53% 47%
Podcast (audio) 80%
The growth of free daily newspapers in many markets
54% 46% Games 74%

The restructuring of traditional media RSS 74%
58% 42% Viral video (sharing functionality) 66%
The explosion of consumer-generated and consumer-distributed
content MySpace 37%

65% 35% Podcast (video) 31%
The emergence of podcasting YouTube 14%
75% 25%
Note: n=35
The importance of social media/networking Source: 360i, "Tuning into Emerging Media: How Broadcast and Cable TV
77% 23% Networks Use Blogs, the Mobile Web, Mashups and Other Media," March
2007
The mass adoption of text messaging in the US 081616 www.eMarketer.com
80% 20% 081616
Television programs on the Internet
86% 14%

Saw it coming Took them by surprise
Source: American Advertising Federation (AAF), "AAF Media Investment
Survey 2007," February 2007
080858


A New Media Landscape Monetizing the Content Revolution

By the same token, two-thirds of US private companies surveyed Few would dispute the continued and growing
by the Center for Marketing Research also regard social media as
“very important” or “somewhat important” to their business and
impact of user-generated content on the Internet
marketing strategies. These media types include online bulletin and the media world as a whole. What is less clear
boards, social networking functions, online video and blogging.
is how, if or when it will become a significant
Importance of Online Social Media* to the revenue-generating activity.
Business/Marketing Strategy of the Fastest-Growing
Private Companies in the US, November-December
2006 (% of respondents)
“That’s sort of the big project for the year.”
Very
No —Eric Schmidt, CEO, Google, referring to monetizing
response
unimportant YouTube
2%
13% Very
important
Somewhat 26% While there are various business models associated with user-
unimportant
19% generated content, the most prevalent, and promising, is advertising.
Somewhat important
Google’s headline-grabbing $1.6 billion acquisition of YouTube was
40% largely predicated on the video-sharing site’s vast audience and its
potential to attract even more eyeballs in the future.
Note: n=121 on the Inc. Magazine "2006 Inc. 500 List"; *includes
message/bulletin boards, social networking, online video, blogging, wikis
and podcasting
Source: Center for Marketing Research, "The Hype is Real: Social Media
“As yet, no one has found a way to make real
Invades the Inc. 500," January 2007 money from the huge audiences who
participate on these [user-generated online
video] sites. [Even] the major players have
Select Types of Online Social Media that Are Used by
the Fastest-Growing Private Companies in the US,
yet to find a way to generate significant
November-December 2006 (% of respondents) revenues.”—Arash Amel, Senior Analyst, Screen Digest
Message/bulletin boards 33%
eMarketer projects that US advertising revenues at user-
Social networking 27% generated video, photo-sharing and personal data sites will rise to
Online video 24% $4.3 billion in 2011, up from $450 million in 2006. These sites
Blogging 19% include the leaders in those respective content areas—YouTube
Wikis 17%
(video), Photobucket (photo-sharing), and MySpace and Facebook
(personal profiles and personal data). This estimate does not
Podcasting 11%
include retail-based photo-sharing services, blogs, wikis and other
Note: n=121 on the Inc. Magazine "2006 Inc. 500 List" forms of user-generated content that are too small and diffuse to
Source: Center for Marketing Research, "The Hype is Real: Social Media
Invades the Inc. 500," January 2007 track, like online auctions and classifieds.
081451
081449 US User-Generated Content Advertising Revenues,
2006-2011 (millions)

2006 $450

2007 $1,042

2008 $1,748

2009 $2,477

2010 $3,292

2011 $4,303

MySpace, Facebook)
084515


Monetizing the Content Revolution

The nearly tenfold increase in user-generated content advertising Screen Digest estimates that US online user-generated video ad
spending in the US reflects optimism in the ability of companies revenues will grow to $956 million in 2011, from $216 million in
like YouTube, MySpace and Facebook to continue to build—and 2006. During the same period, the number of annual user-
retain—vast audiences. generated video streams is projected to increase to 49 billion
from 12.4 billion.
On a worldwide basis, user-generated content ad revenues will
reach $8.2 billion in 2011, up from $630 million in 2006. US User-Generated Video Streams and Associated
Advertising Revenues*, 2006, 2007 & 2011
Worldwide User-Generated Content Advertising Streams Ad revenues
Revenues, 2006-2011 (millions) (billions) (millions)
2006 12.4 $216
2006 $630
2007 28.5 $515
2007 $1,562
2011 49.0 $956
2008 $2,796 Note: *includes all video viewership and associated advertising revenues
from online videos served by user-generated online video sites
2009 $4,210 Source: Screen Digest, provided to eMarketer, May 29, 2007
2010 $5,925 084518 www.eMarketer.com
084518
2011 $8,175
Taking a global view, In-Stat forecasts user-generated video content
Note: includes ad revenues at user-generated video sites (eg YouTube), revenues of $1.6 billion by 2011, up from $80 million in 2006.
MySpace, Facebook)
Source: eMarketer, June 2007 User-Generated Video Content Revenues Worldwide,
084516 www.eMarketer.com 2006 & 2011 (millions)
084516
2006 $80
Given the close interrelationship between social networking, online
video and user-generated content—with top networking sites like 2011 $1,600
MySpace and Facebook driven largely by the video content their Source: In-Stat, "User Generated Content - How About Just Content?" as
users post—it is worth looking at eMarketer’s most recent ad cited in press release, April 18, 2007
spending forecasts for online video and social networking.
083259

US online video advertising spending is expected to increase Other estimates of online video ad spending include a July 2006
tenfold in the next five years, reaching $4.1 billion in 2011, up from JupiterResearch study that estimated that US online video ad
$410 million in 2006. spending overall would reach $1.3 billion in 2011, up from $400
million in 2006. If one factors in Screen Digest’s figures for the
US Online Video Advertising Spending, 2001-2011 percentage of online video that user-generated content makes
(millions) up—47% in 2006 and 55% by 2010—Jupiter’s estimates are
2001 $40 somewhat lower than Screen Digest’s.

2002 $55
US Online Video Advertising Spending, 2006 & 2011
2003 $85 (billions)
2004 $135
2006 $0.4
2005 $225
2011 $1.3
2006 $410
Source: JupiterResearch as cited by Media Life, July 25, 2006
2007 $775 075474 www.eMarketer.com
075474
2008 $1,300

2009 $2,000

2010 $2,900

2011 $4,100

Source: eMarketer, February 2007
082081


Monetizing the Content Revolution

Social network advertising spending is also a bellwether of the On the other hand, banner ads on YouTube would be tolerated by
marketability of user-generated content. eMarketer expects 63% of US Internet users polled by Wired magazine in October 2006.
spending in this area to reach $3.6 billion in 2011, up from $445
million in 2006—and the ratio of social network ad spending to Type of YouTube Revenue Model that US Internet
Users Would Tolerate, October 2006 (% of
overall online ad spending is also expected to increase, to 6.9% in respondents)
2011 from 2.1% in 2006.
Banner ads on site 63%
Worldwide Online Social Network Advertising Short "pre-roll" ads before a video 14%
Spending, 2006-2011 (millions)
If there were ads, I'd go elsewhere 10%
2006 2007 2008 2009 2010 2011
US $350 $900 $1,380 $1,810 $2,170 $2,515 Long "post-roll" ads after a video 7%
Outside of US $95 $335 $530 $745 $970 $1,115 Subscriptions 6%
Worldwide $445 $1,235 $1,910 $2,555 $3,140 $3,630
Note: n=514 Wired readers
Note: Definition includes general social networking sites where social Source: Wired Magazine, December 2006
networking is the primary activity; social network offerings from portals 078914 www.eMarketer.com
such as Google, Yahoo! and MSN; niche social networks devoted to a
specific hobby or interest; and marketer-sponsored social networks that 078914
are either stand-alone sites or part of a larger marketer site; in all cases, So, while user-generated content sites have great potential to
figures include online advertising spending as well as site or profile page
development costs attract advertising dollars, there are obstacles that marketers and
Source: eMarketer, May 2007
content owners will have to overcome in order to reap profits from
083270 this area.

“User-generated video is going to have a lot of issues to resolve
“God knows what we’re going to do with before it becomes an effective advertising medium,” said Screen
MySpace.” —Rupert Murdoch, Chairman, News Corp. Digest senior analyst Arash Amel. “There’s how will people react to
(in Wired, July 2006) personal media with ads, and how will advertisers feel sitting
around rude or offensive content.”
The monetization of user-generated content will depend in part on
how successful user-generated content sites are at continuing to
attract large audiences. Furthermore, marketers will have to take
consumers’ ad-type preferences into account in order to avoid
alienating their audience. A January 2007 Harris Poll study showed
that up to 73% of consumers would visit YouTube less if the site’s
clips were preceded by short commercials.

Impact of Short Commercials before Every YouTube
Video Clip according to US Adult Frequent* YouTube
Watchers, December 2006 (% of respondents)

Not
sure
Would not 6% Would visit
change frequency YouTube
of YouTube visits a lot less
21% 31%

Would visit YouTube
a little less
42%

Note: n=363 ages 18+; *more than once or a few times
Source: Harris Poll, January 2007
080542


Online Advertising Trends

Users Take Charge Marketers are also enlisting consumers to create ads for them. For
More than half of media and entertainment executives surveyed some brands, these types of user-generated campaigns have
in Accenture’s “Global Content Survey 2007” cited user-generated delivered measurable results. For instance, the month after Geico
content as a leading threat to their bottom lines. launched a site that allowed visitors to explore the apartment of
the company’s caveman mascot, the site received 850,000 unique
Whatever their fears, two-thirds of the respondents of the
visitors. A similar campaign for M&M’s that encouraged users to
Accenture survey said that their businesses will be making money
create their own “inner M” yielded 1.5 million virtual M&M avatars,
on user-generated content within three years. A quarter of
according to a May 7, 2007, Washington Post article.
respondents said they did not know when they would begin
profiting from user-generated content. Other experiments have met with disastrous results. The most
infamous case was a Chevrolet campaign in which the company
One of the avenues marketers are pursuing is the creation of their
allowed consumers to edit existing images and text into a
own profiles on MySpace. A study conducted by eMarketer using
commercial for the automaker’s Tahoe SUV.
MySpace data shows that major automobile, fast food, movie,
sports and wireless communications brands have created their The resulting ads were largely negative—or at least the negative
own destinations on the popular social networking site. ones got the most attention on video-sharing sites like YouTube.
Environmental activists excoriated the vehicle’s low gas mileage
Select Marketers with Ad Profile Pages on MySpace, and its impact on the environment.
July 2006
Company URL “We anticipated that there would be critical submissions,”
Adidas soccer http://www.myspace.com/adidassoccer Chevrolet spokeswoman Melisa Tezanos told The New York Times.
Burger King http://www.myspace.com/burgerking “You do turn over your brand to the public, and we knew that we
Cingular http://www.myspace.com/cingularstudio were going to get some bad with the good. But it’s part of playing
Disney "Pirates of the http://www.myspace.com/deadmanschest in this space.”
Caribbean"
Fox "24" http://myspace.com/24onmyspace
Twentieth Century Fox http://www.myspace.com/xmenthelaststand “The old-media production and distribution
"X-Men: The Last Stand"
GE http://www.myspace.com/ellifont
hierarchies are crumbling. Everything is in
HBO "Entourage" http://www.myspace.com/entourage
flux, and nothing is a given anymore—except
Honda Element http://www.myspace.com/hondaelement for the fact that customers are in control.
Motorola MotoQ http://www.myspace.com/motoq Brands can and must start earning the
Nike soccer http://www.myspace.com/nikesoccer attention of these customers through the
Paramount "Failure to http://www.myspace.com/failuretolaunch creation of compelling and valuable digital
Launch"
content.” —Laura Lang, President, Digitas
Pepsi Aquafina http://www.myspace.com/aquafina
Procter & Gamble Secret http://www.myspace.com/secret
Sparkle/Rihanna
Toyota Yaris http://www.myspace.com/yaris
Verizon http://www.myspace.com/callingallbands
Wendy's http://www.myspace.com/wendysquare
Note: all links active as of June 26, 2006
Source: MySpace, July 2006; eMarketer research, July 2006

074395

“To succeed, we need to stop standing
between [consumers] and their content, and
actually be the content they want to see.”
—Greg Verdino, VP, Digitas



Another user-generated content campaign with questionable
results was a spot for Dove soap that first aired during the
“Viral sharing enables hyper-distribution,
Academy Awards telecast on February 25, 2007. The result of a and—with the right content—a geometric
contest that drew more than 1,000 submissions, the winning ad return on creative and promotional media
was viewed by some three million people on YouTube, but the dollars. Traditional advertising isn’t going to
comments were almost unanimously negative, according to go away, but making a brand hit on all
published reports. Interestingly, this flirtation with user-generated cylinders is going to be more complicated
content followed Dove’s far more successful “Evolution” spot, a and require a finely honed sensitivity to
professionally created TV ad that has since become a sensation what works online.” —Josh Warner, Founder and
online through thousands of homegrown imitators who have President, Feed Company
posted their versions on sharing sites.

Marketers and brands that have employed user-generated and While the ads in themselves were not particularly flattering to
viral video advertising include: either brand, the mere fact that a chemical reaction occurred when
the two were mixed together created a water-cooler effect and an
I Ban (deodorant) entire movement of amateur videographers who posted their own
I Blendtec Mentos–Diet Coke experiments online. The result? Sales of Mentos
I Cadillac rose 15% in the immediate aftermath of the online ads and
I Chevrolet Tahoe remained 5% ahead of earlier benchmarks even after the brouhaha
I Chrysler had died down, according to MediaPost. As for Coke, the company
I Converse was less specific but noted in the same MediaPost article that sales
I Coca-Cola rose in the 5%–10% range following the Mentos craze.
I Doritos
I Dove
I Geico “User-generated content is sort of the word
I Jet Blue of the day, and I think smart marketers will
I L’Oreal start harnessing that.” —Anne Zehren, President
I M&M’s of Sales and Marketing, Current TV
I MasterCard
I Mentos Companies that use “corporate” user-generated content
I Ray Ban campaigns are generally well perceived by US Internet users. More
I Smirnoff than half of the respondents in a November 2006 survey by the
I Sony American Marketing Association and Opinion Research Corporation
I Toyota said they thought companies that use customer-generated
I Volkswagen advertising are more customer friendly, creative and innovative.

Even Corporate Ads Aim to Look User-Generated US Adult Internet Users' Perceptions of Companies
that Use Customer-Generated Advertising vs.
While the practice of soliciting viewer-created content is widely Professionally Created Advertising, November 2006 (%
accepted in the advertising industry, some brands are taking the of respondents)
concept a step further by creating their own user-generated- More Same Less
content-like ads. As with “genuine” user-created spots, the results Customer friendly 68% 25% 8%
among corporate efforts to emulate the user-generated content Creative 56% 29% 15%
look and feel are mixed. Innovative 55% 32% 13%
Socially responsible 39% 49% 12%
In some cases, the viral distribution of the ad is spontaneous. The Trustworthy 37% 50% 13%
marketer does nothing to encourage or dissuade the Note: n=1,098 ages 18+; numbers may not add up to 100% due to
dissemination of the content and, because the content is usually rounding
Source: American Marketing Association (AMA) and Opinion Research
not copyrighted by the company in question, there is little it could Corporation (ORC), "Mplanet," December 2006
do to control it even if it wanted to. A classic example of this type 079107 www.eMarketer.com
079107
of viral promotion occurred when a series of home-made videos
featuring explosive chemical experiments with Mentos candies
and Diet Coke bottles began to circulate on the Internet.



Among the minority of respondents who said such companies are Companies like Feed avail themselves of any number of tactics to
less trustworthy, socially responsible and customer friendly than generate a buzz for their clients. A MarketingSherpa study from
companies that use only professionally generated ad content, March 2006 showed that simple, low-tech efforts like e-mail
most were in the 18-to-24 age bracket. forwarding are used by more than 90% of experienced B2C viral
marketers in the US.
US Adult Internet Users' Perceptions of Companies
that Use Customer-Generated Advertising vs. Viral Marketing Tactics that Are Used by Experienced
Professionally Created Advertising, by Age, November B2C Viral Marketers in the US, March 2006 (% of
2006 (% of respondents in each group) respondents)
Less trustworthy Encouraging e-mail forwarding
21% 91%
10%
Tell-a-friend boxes on site (eg sweeps, coupons, etc.)
Less socially responsible 80%
20%
Online games, quizzes and polls
10%
69%
Less customer friendly
Cool microsites (not your site URL or brand)
13%
54%
5%
Offering e-cards
18-24 25-64
47%
Source: American Marketing Association (AMA) and Opinion Research
Corporation (ORC), "Mplanet," December 2006 Video clips
079114 www.eMarketer.com 46%
079114 Audio clips
Whether the viral distribution is controlled by the marketer or the 29%
consumer, the success of these campaigns has created a cottage
Source: MarketingSherpa, "Viral Marketing 2006: Benchmark Data,
industry for companies that have learned how to maximize the Practical Tips and Biggest Change," March 2006
reach of a viral ad by guiding the creation of the content and 071694 www.eMarketer.com

seeding the final product on user-generated content sites and 071694

social networks. The viral marketing possibilities for user-generated video are not
lost on marketers. According to the American Advertising
One such firm, Feed Company of Los Angeles, calls itself a “video Federation, 19% of US advertisers had advertised on a user-
view optimization” company that exists on the premise that generated content site as of June 2006. And an additional 14%
“getting videos ranked, forwarded and featured is an art in itself.” planned such advertising in the coming year.
The company scored big viral video hits with two recent high-
US Advertising Executives Who Have Advertised on a
profile ads: The first was a General Motors ad featuring a quality- Blog or User-Generated Content Site, 2006 (% of
obsessed “robot” that has a nightmare about jumping off a bridge respondents)
after it makes a mistake on the assembly line. The ad debuted Blog
during this year’s Super Bowl but was quickly pulled off the air 24%
following a firestorm of criticism from suicide-prevention groups. 7%
As a result of the controversy, the video became an online User-generated content site
sensation thanks in part to the efforts of Feed Company. 19%
14%
Another success story for the firm was an edgy video for Ray-Ban
that was created (by Ray-Ban’s agency) exclusively for Web Have advertised Plan to advertise in the next year

distribution. The spot has received 2.27 million views on YouTube, Note: n=140 advertising industry leaders
Source: American Advertising Federation (AAF), "Survey on Digital Media
according to the company’s logs. Trends," June 2006
073911


Online Advertising Trends Types of User-Generated Content

As the 2008 presidential campaign heats up thanks to wide-open Video
fields on both sides of the political spectrum, it is almost certain User-generated content falls into various categories, including
that citizen journalists posting user-generated clips will have an video, audio, photos, information, personal data, reviews and
effect on the candidates’ fortunes. Already, YouTube has impacted recommendations and career services. Of these, video is by far the
political campaigns by magnifying the inevitable verbal miscues of largest, most visible and most potentially lucrative to marketers.
various candidates, and the rival Barack Obama and Hillary Clinton eMarketer expects the number of US online video viewers to
camps have sparred over a viral ad that ridiculed Mrs. Clinton by increase to 157 million in 2010, up from 108 million in 2006.
spoofing a Big Brother–themed Apple Computer spot from 1984.
While Mr. Obama disavowed the ad, the incident served as a US Online Video Viewers, 2003-2010 (millions)
warning shot to anyone who might downplay the potential effects 2003 52.3
of the viral video revolution on the political process. Those who are
2004 69.6
savvy about how to leverage this content will reap the rewards,
2005 89.4
while those who misstep will be left out in the cold.
2006 107.7

2007 123.4

2008 137.2

2009 149.0

2010 157.0

Note: ages 3+; online video viewer defined as an individual who downloads
or streams video (content or advertising) at least once a month
Source: eMarketer, November 2006
078698

These numbers correlate with an October 2006 comScore study
that found that there were approximately 110 million unique
online video streamers in the US in August 2006.

Top 10 Online Video Properties among US Internet
Users, Ranked by Unique Streamers, August 2006
(thousands and % reach)
1. Yahoo! sites 39,881 23.0%
2. Fox Interactive* 39,528 22.8%
3. YouTube 35,531 20.5%
4. Time Warner Network 23,770 13.7%
5. Microsoft sites 16,894 9.7%
6. Viacom Digital 13,697 7.9%
7. Google sites 11,654 6.7%
8. MLB 6,227 3.6%
9. eBaum's World 6,187 3.6%
10. Sony Online 4,746 2.7%
Total Internet 110,266 63.6%
Note: home, work and university locations; streams are attributed to the
property that provides the stream (for example, the YouTube data include
streams that occurred on their Web property and on other properties
where YouTube provided those streams); number of unique streamers at
top 10 sites is greater than total Internet figure because of overlap among
visitors; number of streams initiated at top 10 sites is less than total
Internet figure because of streams initiated at other sites"; *as of August
2006 data, MySpace.com is being included as part of the Fox Interactive
property
Source: comScore Networks Inc. as cited in press release, October 2006
077760


Types of User-Generated Content

In a March 30, 2007, blog posting, research firm Compete Inc. In a study conducted by the Associated Press and America Online
ranked the top 10 US online video sites by unique visitors, sessions with Ipsos Public Affairs in July and August 2006, 43% of
and market share for February 2007—and noted the sites’ respondents said they watched or downloaded “amateur videos
percentage gains or losses over the prior month. or home videos posted to Web sites.”

Top 10 US Online Video Sites, February 2007 (visitors Types of Online Videos Watched or Downloaded by
and sessions in millions, market share and % change US Online Video Viewers, July-August 2006 (% of
vs. prior month) respondents)
Visitors Sessions Market % change Yes No
share
News videos 72% 28%
1. YouTube 35.6 114.9 45% 2%
Short clips from movies or TV programs 59% 41%
2. MySpace 16.7 38.2 15% -1%
Music videos 48% 52%
3. Google Video 13.9 26.1 10% -1%
Clips or highlights of sporting events 44% 56%
4. AOL 6.1 16.4 6% -1%
Amatuer videos or home videos posted to Web sites 43% 57%
5. MSN 5.3 8.6 3% -1%
Clips or highlights of concerts 23% 77%
6. StupidVideos 3.0 7.7 3% 0%
Full-length movies or TV shows 22% 78%
7. Yahoo! Videos 3.8 6.9 3% 0%
Live sporting events 17% 83%
8. Break 2.2 5.0 2% 0%
Video podcasts* 17% 81%
9. eBaum's World 2.5 4.5 2% 0%
Live concerts 9% 91%
10. PureVideo 2.2 4.3 2% *
Note: n=1,347 ages 18+ who have ever watched or downloaded an online
Note: *new to top 10 video clip; *remaining 2% were "not sure"
Source: Compete, Inc. as cited on company blog, March 30, 2007 Source: Associated Press (AP) and America Online (AOL) with Ipsos Public
Affairs, September 2006
083229
076593
Added together, these sites accounted for 91 million unique visitors
While the AP/AOL/Ipsos study does not directly correlate with the
that month, and they represent a cumulative 91% of the US market
Screen Digest findings—one looks at relative percentages of
share, so by deduction, there are approximately 100 million unique
content types, the other at percentages of users who view certain
visitors to online video sites in the US, according to Compete.
types of content—they both paint a picture of a robust market for
In January 2007, Screen Digest estimated that 47% of all online online video viewership in the US.
video watched in the US consists of user-generated content, and
As a counterpoint to these studies, a Burst Media survey
that percentage is expected to increase to 55% by the end of
conducted in November 2006 shows that user-generated content
the decade.
makes a comparably low 19% of US online video viewing by 18-to-
User-Generated Online Video Content As a Percent of 34-year-olds, and even less among older demographics.
Total Online Video Content Watched in the US, 2006 &
2010 Types of Online Video Viewed by US Online Video
Viewers, by Age, November 2006 (% of respondents)
2006 47%
18-24 25-34 35-44 45-54 55+ Total
2010 55% News clip 29.4% 40.1% 49.3% 46.3% 55.4% 44.9%

Source: Screen Digest, "User-Generated Online Video: Competitive Review Movie trailers/attractions 49.4% 40.5% 41.1% 29.8% 23.8% 36.7%
and Market Outlook," January 2007 Comedy 47.0% 39.6% 35.5% 26.5% 26.6% 34.5%
080052 www.eMarketer.com Music 49.2% 42.2% 33.6% 23.5% 14.0% 32.1%
080052
TV shows/clips 46.4% 40.3% 30.9% 21.9% 18.5% 31.0%
Entertainment/reviews 33.2% 31.9% 30.9% 28.8% 23.7% 29.8%
Sports/sports news 25.1% 34.8% 31.4% 21.2% 23.6% 27.7%
Instructional/how-to 12.1% 13.6% 20.6% 21.5% 21.2% 18.3%
Home/user-generated 19.4% 19.5% 15.0% 11.5% 9.1% 14.8%
Political/advocacy group 8.4% 13.7% 17.5% 9.6% 16.9% 13.5%
Cooking 3.8% 6.6% 4.2% 6.7% 10.7% 6.2%
Note: n=1,815
Source: Burst Media, "Online Video Advertising," December 2006
079481



It should be noted that some of the categories in the Burst Media Considering the traction of the online video category overall, it is
study overlap with user-generated content. For instance, some hardly surprising that most media and entertainment executives
percentage of the “comedy,” “music” and “instructional/how-to” in North America and Europe regard short-form videos as the
clips are likely to be user-created, which would skew the user- media type with the highest growth potential, according to an April
generated content category higher. 2007 Accenture study.

While research firms might disagree on the ratio of user-generated Media Content with the Highest Growth Potential*
video to online video overall, most agree that YouTube is by far the according to Media and Entertainment Executives in
leading player in the online video space, as well as the prime North America and Europe, Q1 2007 (% of
respondents)
mover in the user-generated content revolution.
Short-form videos 53%
In a Piper & Jaffray study from January 2007, YouTube commanded
Video games 13%
a higher share than all TV network sites combined. YouTube also
led its competitors by large margins, including MSN, Yahoo!, Full-length feature films 11%
MySpace, AOL and Google Video (which, since November 2006, is Music 11%
actually affiliated with YouTube through Google’s acquisition of the Consumer publishing 9%
pioneering video site).
Business publishing 4%

Web Sites on which US Adult Internet Users Watch Note: n=105 at advertising, film, music, publishing, radio, Internet, video
Online Video Content, 2006 (% of respondents) game and TV companies in Austria, Canada, Belgium, France, Germany,
Italy, Spain, Switzerland, the UK and the US; numbers may not add up to
100% do to rounding; *over the next five years
YouTube 43.5% Source: Accenture, "Global Content Survey," April 2007
TV network sites 41.0% 083109 www.eMarketer.com
083109
Google Video 26.5%
As user-generated video continues to expand into a mass market
MSN video 24.5% medium, video sites and marketers will have to contend with
Yahoo! Video 22.0% ongoing resistance to embedded ads, prerolls and other forms of
MySpace 16.5% in-video advertising.

AOL 13.5% According to a fall 2006 report from Forrester Research, online
Other 17.5% users are not so eager to integrate commercials into their video-
viewing experience. Over 80% of the online video viewers polled
Source: Piper Jaffray & Co., "Silk Road: Online Video Usage Increasing as TV
Viewing Declines," January 2007 by Forrester said that in-stream ads—commercials appearing
080000 www.eMarketer.com before or after video clips—were “annoying,” and 75% claimed
080000
they ignore them.
Broken down by age, the Piper Jaffray study highlights the extent to
which YouTube is predominantly a youth-oriented play, with 60% of Less-intrusive advertising, such as placements alongside video,
respondents in the 25-to-34 age group saying they watch online scored somewhat better, with 50% of respondents saying they
video on the site, but only 11% of respondents 55 and older using it. were acceptable. Text links were most preferred, with only 19% of
By contrast, TV network sites draw a more even pool of viewers respondents finding them annoying.
among the different age brackets, ranging from 33% to 47%.
“Marketers need to think differently about how they’re
Web Sites on which US Adult Internet Users Watch communicating with their customers viewing online video,” Brian
Online Video Content, by Age, 2006 (% of respondents Haven of Forrester told AdWeek. “When you see what’s going on
in each group) with YouTube and short-form content, using the old mode of
25-34 35-44 45-54 55+ inserting ads into content when you’re looking at a 3-minute video
YouTube 60% 37% 22% 11% is not going to work.”
TV network sites 43% 40% 47% 33%
Google Video 32% 23% 25% -
MSN video - 37% 28% 22%
Yahoo! Video - 23% 26% 22%
Source: Piper Jaffray & Co., "Silk Road: Online Video Usage Increasing as TV
Viewing Declines," January 2007
079999



A February 2007 Synovate study commissioned by Clipblast! Blogs and Wikis
confirmed Forrester’s findings, with nearly a third of respondents Blogs and wikis, along with online bulletin boards, constitute
citing advertisements as the aspect of online video they like another broad area of user-generated content that presents
the least. opportunities for marketers, even if it has proven an inherently
challenging category to monetize.
Aspect of Online Video that US Adult Internet Users
Like Least, February 2007 (% of respondents) A PQ Media LLC and Marketing Vox study from April 2006
Too commercial (too many video ads) estimated that US blog advertising spending would rise to $300
31.8% million in 2010, up from $36 million in 2006.
Inconsistent (too tough to find quality video productions)
20.7% US Blog Advertising Spending, 2005, 2006 & 2010
(millions)
Frustrating (too difficult to find exactly what I am looking for)
19.3% 2005 $16.6

Chaotic (too many videos to wade through) 2006 $36.2
16.4%
2010 $300.4
Funky (too much user-generated content to wade through)
Source: PQ Media, LLC, April 2006; Marketing Vox, April 2006
11.8%
Note: n=1,000 ages 18+ 072221
Source: Synovate commissioned by Clipblast!, February 2007
Among emerging advertising tactics that US online marketers
planned to use, blogs and blog networks ranked highest in a
081452
January 2007 MarketingSherpa study. In addition, this category
Other aspects of online video that consumers object to include
also logged the highest increase from one year to the next, with
poor quality, problems with audio or video and long download
42% of respondents saying they planned to use it in 2007, up from
times, according to a September 2006 study by the Associated
30% in 2006.
Press and America Online with Ipsos Public Affairs.

Planned Spending in the Next Year on Emerging
Aspects of Watching Online Videos that US Online
Advertising Tactics according to US Online
Video Viewers Do Not Enjoy, July-August 2006 (% of
Marketers*, 2005 & 2006 (% of respondents)
respondents)
2005 2006
Poor quality 17% (predicted (budgeted
Problems with audio/video playback 14% 2006 use) for 2007)
Download time 12% Ads on third-party blogs and blog networks 30% 42%
Screen resolution is too small 6% Social networking - 40%
Slow 4% Adding RSS feeds 40% 37%
Ads/commercials 4% Video ads 27% 37%
Loading time 3% Sponsoring podcasts 14% 18%
Inappropriate content 2% Mobile/wireless 20% 16%
Lack of comfort or ability to sit 2% Ads in RSS feeds 21% 15%
Small 2% Product placement in video games 10% 9%
Don't have time 2% Note: *ad:tech attendees
Source: MarketingSherpa, Inc., January 2007
Viruses 1%
Too short 1%
080572
Cost 1%
Watching alone -
Other 13%
Nothing 24%
Not sure 4%
Note: n=1,347 ages 18+ who have ever watched or downloaded an online
video clip
Source: Associated Press (AP) and America Online (AOL) with Ipsos Public
Affairs, September 2006

076598



As corporations join average consumers in leveraging the potential By far, the leading site for user-created educational information is
of the blogosphere to get their messages out, the vast majority of Wikipedia, with a commanding 24% share of visits, according to a
corporate bloggers report increases in traffic to their Web sites from March 2007 study by Hitwise that was recently cited by the Pew
their blogs, according to a December 2005 Backbone Media study. Internet & American Life Project.

Corporate Bloggers Who Have Seen an Increase in Top 10 Educational and Reference Web Sites in the
Traffic to Their Web Site from Their Blog, 2005 (% of US, Ranked by Visits, March 11-17, 2007 (% market
respondents) share)
1. Wikipedia
24.33%
Have not seen
an increase 2. Yahoo! Answers
17%
4.23%

3. Dictionary.com
3.79%
Have seen
an increase 4. Answers.com
83%
3.53%

5. SparkNotes
Note: n=75 bloggers who run corporate blogs
Source: Backbone Media, December 2005 1.62%
072904 www.eMarketer.com 6. Google Scholar
072904 1.31%
The wiki phenomenon is another content area that has
7. Google Book Search
mushroomed in recent years, though its potential for marketers 1.09%
has been limited at best.
8. Find Articles
0.99%

9. US National Library of Medicine
0.99%

10. Merriam-Webster Online
0.85%

Source: Hitwise as cited by the Pew Internet & American Life Project, April
24, 2007

083390

To give additional perspective on the extent to which Wikipedia
dominates this category, a third of US adult Internet users have
used Wikipedia, and more Internet users visit Wikipedia on a
typical day than buy something online, visit dating sites, make
travel reservations, use chat rooms or participate in an online
auction, according to Pew. The research firm estimates that the
user-generated encyclopedia claims more than 5.3 million total
entries, with 1.6 million of them in English.



In the UK, Wikipedia was actually ranked the top user-generated If Wikia can succeed in building a commercial destination that
content destination in July 2006 by comScore Media Metrix, which leverages its brand equity, it should find a favorable climate for
conducted a study that ranked five popular sites by the number of advertising support. In a June 2006 survey by the American
unique UK visitors and percentage change over the same period in Advertising Federation, 91% of advertisers said they should exploit
the prior year. the viral potential of user-generated content sites, and 81%
responded the same way about blogs. On the flip side, more than
UK Visitors to Select Web Properties* Featuring half of respondents said such sites were too risky to advertise in
User-Generated Content (UGC), July 2005 & July 2006
given their unpredictable nature.
(thousands and % increase vs. prior year)
July 2005 July 2006 % change
Attitudes of US Advertising Executives toward
Wikipedia sites 1,852 6,545 253% Advertising on a Blog or User-Generated Content Site,
MySpace.com 913 5,173 467% 2006 (% of respondents)
Piczo.com 820 4,049 393% Blog User-generated
YouTube.com - 3,918 - content site

Bebo.com 912 3,902 328% Advertisers should exploit the viral marketing 81% 91%
opportunities
Note: home and work users; *eBay is excluded from the list of
user-generated content sites because it is primarily a retail site Concerned about the ability to control brand/ 76% 67%
Source: comScore Media Metrix as cited in press release, September 11, product image
2006
Useful for niche advertising, but will not have 70% 41%
076662 www.eMarketer.com an effect on major accounts
076662
Too risky to advertise with due to lack of 62% 53%
For all its impact on Internet culture, Wikipedia has not created predictability of the editorial environment
appreciable business opportunities. After all, the free-content site Note: n=140 advertising industry leaders
Source: American Advertising Federation (AAF), "Survey on Digital Media
is written by volunteers and run by a small, nonprofit foundation. Trends," June 2006
However, an advertising-supported, for-profit spin-off, Wikia, is 073912 www.eMarketer.com
poised to leverage the brand equity and technology infrastructure 073912

behind the original Wikipedia into a variety of possible venues, Photo Sharing
including Internet search. Wikia has received venture capital Photo-sharing sites make up another vibrant and growing sector
investments from such companies as Amazon. of the user-generated economy. To give some perspective on the
At a March 8, 2007, press conference at the Foreign growth of photo sharing as a consumer phenomenon, between
Correspondents’ Club of Japan, Wikipedia and Wikia founder 2003 and 2006 the number of US Internet users who posted
Jimmy Wales announced that Wikia plans to build a search engine photos online more than doubled, according to a November 2006
based on the kind of collaborative cooperation that underpins study by the USC Annenberg School Center for the Digital Future.
Wikipedia. Mr. Wales said the company plans to go head to head
US Internet Users Who Post Photos Online, 2003 &
with search leaders Google and Yahoo!, and that it can capture up
to 5% of the search market.
2003 11.0%

2006 23.6%

Source: USC Annenberg School Center for the Digital Future, "The 2007
Digital Future Project," November 2006
079006



An August 2006 Zoomerang study commissioned by Corel A newer crop of photo sites is geared toward allowing users to
Corporation found that 24% of US adult Internet users who take post, share, link and edit (or “remix”) their images and videos. Most
digital photos on a regular basis use online tools to post, print or of the sites in this category are advertiser-supported, and the
share their images—including sharing/printing services like Kodak market leader is Photobucket, which is said to be on track to earn
Easyshare, Shutterfly and Flickr, as well as online storage lockers $25 million in advertising revenues in 2007. According to a May
like Streamload and Glide Effortless. 2007 Hitwise study that ranked sites by share of visits,
Photobucket commanded a 40% share in April 2007, well ahead of
Digital Photo Storage Locations Used by US Adult Yahoo! Photos, which had a 5.7% share in the same period.
Internet Users Who Take Digital Photos Regularly,
Top Photo-Sharing Web Sites among US Internet
Home PC's My Documents/My Pictures folder Users, Ranked by Share of Visits, April 2006 & April
76% 2007
April April
CDs or DVDs
2006 2007
53%
Photobucket 25.0% 40.0%
Different folder on home PC's main hard drive Yahoo! Photos 14.4% 5.7%
30% Slide - 4.8%
Online services (eg Kodak Easyshare, Shutterfly, etc.) Webshots 11.7% -
16% Flickr 3.6% 4.5%
Work PC Kodak Gallery 4.6% 3.8%
11% ImageShack 3.6% 3.1%

External hard drive Source: Hitwise as cited by ZDNet IT Facts, May 4, 2007
8%
083676
Photo sharing site (eg Flickr)
Because of their potential to easily link user-created photos with
6%
other forms of content (e.g., MySpace profiles and music) these
Online storage site (eg Streamload, Glide Effortless, etc.)
advertiser-supported sites have made headlines in recent months.
2%
A public spat between Photobucket and MySpace actually
Other resulted in an alliance between the companies—which makes
7%
sense when you consider the upstream traffic that already flowed
Note: n=767 ages 18+ between them and the complementary nature of their customer
Source: Zoomerang commissioned by Corel Corporation, August 2006
bases and business models.
076431
This close relationship between social networking sites and
Some of the top user-generated photography sites—especially photo-sharing sites is evident in the data. Photobucket, Slide and
the first-generation ones—are retail-based “photo-finishing” Imageshack all receive the majority of their traffic from MySpace.
destinations that allow users to upload their images mostly for the “In September 2006, 57% of upstream traffic to Photobucket came
purpose of ordering high-quality prints. Typically, these prints are directly from MySpace,” reported Hitwise. “MySpace accounted
sold on an à la carte basis and mailed to the customer. for 51% of upstream traffic to Imageshack and 77% of upstream
traffic to Slide in September 2006.”

A smaller category of photo sites operates on a subscription
model, charging customers monthly or annual fees in exchange
for digital storage space and a tool set to upload, organize, tag and
exchange their content.



While the majority of photo uploading, sharing and storage takes Personal Data (Online Social Networks)
place online, the prevalence of camera phones has created an Social networking sites that serve as destinations for user-
environment in which substantial numbers of mobile customers generated content like music, videos and personal profiles—
are using photo-based applications. An M:Metrics Inc. study from such as MySpace and Facebook—define the Web 2.0 ethos
March 2007 found that 15% of US mobile customers engaged in and command a sizable portion of the online audience and
photo messaging, and a similar study of UK subscribers noted a revenue potential.
30% incidence of this service.
Pew ranks Facebook as the runaway favorite Web site for US
Mobile Content and Applications Used by Mobile males and females ages 17 to 25, and a March 2007 Hitwise study
Subscribers in the US, March 2007 (thousands and % found that MySpace holds a staggering 80% market share among
of mobile subscribers)
social networking sites (followed by Facebook, at 10%).
Mobile % of mobile
subscribers subscribers
Sent text message 82,028 39.6% Top 20 Social Networking Web Sites in the US, Ranked
by Market Share of Visits, February 2007
Used photo messaging 31,667 15.3%
1. MySpace 80.74%
Browsed news and information 19,967 9.6%
2. Facebook 10.32%
Purchased ringtone 19,316 9.3%
3. Bebo 1.18%
Used personal e-mail 16,970 8.2%
4. BlackPlanet.com 0.88%
Used mobile instant messaging 13,718 6.6%
5. Xanga 0.87%
Used work e-mail 9,836 4.8%
6. iMeem 0.73%
Downloaded mobile game 6,597 3.2%
7. Yahoo! 360 0.72%
Purchased wallpaper or screensaver 6,549 3.2%
8. Classmates 0.72%
Note: n=33,000; based on three-month moving average for the period
ending March 31, 2007 9. hi5 0.69%
Source: M:Metrics, Inc. as cited in press release, May 14, 2007 10. Tagged 0.67%
11. LiveJournal 0.49%
084000
12. Gaiaonline.com 0.48%
It is worth noting that in other European countries—notably Spain,
13. Friendster 0.34%
Italy, Germany and France—photo messaging rates are higher 14. orkut 0.26%
than in the US. This reflects general trends in the use of mobile 15. Windows Live Spaces 0.18%
applications in Europe vis-à-vis the US. 16. HoverSpot 0.18%
17. Buzznet 0.18%
18. Sconex 0.14%
19. MiGente 0.11%
20. myYearbook 0.11%
Source: Hitwise, March 2007
081928



Those two sites are also high on the list of an October 2006 Both MySpace and Facebook are expected to leverage their
comScore mediaMetrix study of US unique visitors to social respective successes into healthy growth in advertising revenues
networking sites. in the next two years, reaching annual totals of $820 million and
$215 million, respectively, in 2008. These figures represent annual
US Unique Visitors to Select Social Networking Sites, growth rates of 56% for MySpace and 72% for Facebook.
September 2005 & September 2006 (thousands and %
change)
US Online Social Network Advertising Spending, by
September September % change Type of Network, 2007 & 2008 (millions)
2005 2006
2007 2008
MySpace.com 21,640 55,849 158%
MySpace $525 $820
Classmates.com sites 16,190 14,926 -8%
Facebook $125 $215
Facebook.com 8,540 13,341 56%
Other general social network sites and portal-based social $180 $225
Bolt Media 5,285 10,934 107%
networks
Windows Live Spaces 4,564 9,844 116%
Niche social networks and marketer-sponsored social $70 $120
Xanga.com 7,947 6,956 -12% networks
Flickr.com 2,958 6,925 134% Total $900 $1,380
Yahoo! 360° - 5,697 - Note: General social networking sites are sites where social networking is
the primary activity; social network offerings from portals include orkut
MyYearbook.com - 3,949 - (Google),Yahoo! 360 (Yahoo!) and MSN Spaces (MSN); niche social
LiveJournal.com 5,932 3,546 -40% networks are social network sites devoted to a specific hobby or interest;
marketer-sponsored social networks are created by a marketer and are
Hi5.com 3,242 2,740 -15% either stand-alone sites or part of a larger marketer site; in all cases,
Bebo.com 797 2,394 200% figures include online advertising spending as well as site or profile page
development costs
Tagged.com 775 1,638 111% Source: eMarketer, May 2007
43Things.com 365 1,541 322% 083267 www.eMarketer.com

Friendster.com 1,201 1,043 -13% 083267

TagWorld.com 3,318 1,025 -69% These sites will also drive the bulk of the advertising spending on
Linkedin.com 305 786 157% social networks as a whole, both in the US and in the rest of the
Piczo.com 730 773 6% world, according to eMarketer estimates.
Sconex.com 46 590 1,177%
Orkut.com 57 294 420% Worldwide Online Social Network Advertising
Cyworld - 254 -
Spending, 2006-2011 (millions)
Total Internet audience (US) 169,232 173,428 2% 2006 2007 2008 2009 2010 2011
US $350 $900 $1,380 $1,810 $2,170 $2,515
Note: home, work and university locations
Source: comScore Media Metrix, October 2006 Outside of US $95 $335 $530 $745 $970 $1,115
077787 www.eMarketer.com Worldwide $445 $1,235 $1,910 $2,555 $3,140 $3,630
077787 Note: Definition includes general social networking sites where social
networking is the primary activity; social network offerings from portals
such as Google, Yahoo! and MSN; niche social networks devoted to a
specific hobby or interest; and marketer-sponsored social networks that
are either stand-alone sites or part of a larger marketer site; in all cases,
figures include online advertising spending as well as site or profile page
development costs
Source: eMarketer, May 2007
083270



Reviews, Recommendations, Tags In a similar fashion, Internet users who recommend or review
Another user-generated content arena that merits careful scrutiny products provide a vital link in the online retail chain, helping give
includes customer reviews, recommendations and tags. A recent shape and logic to the otherwise unwieldy morass of Web
article in Media Life summed up the importance of this category of content. Not surprisingly, the company that pioneered the practice
content by noting that the reason online video ad revenues are of user reviews and recommendations, Amazon, tops the list of
not growing faster is that “much of the video inventory online is Web sites that influence US purchasing decisions, according to an
haphazardly placed and users have not developed predictable April 2007 ranking by JupiterResearch for iProspect.
viewing habits.”
Influence of Select Web Sites on Purchases according
Enter tagging. Amateur videos, blogs and podcasts are to US Internet Users, January 2007 (% of respondents)
categorized not only by their creators, but also by anyone who Amazon
cares to save the content and tag it. This tagging is both a search 28.0%
and a social function, according to January 2007 report by the Pew Yahoo! Answers
Internet & American Life Project. 4.0%

“Millions and millions of people are saying, in public, what they Craigslist
think pages and images are about. That’s crucial information that 2.0%

we can use to pull together new ideas and information across the MySpace
endless sea we’ve created for ourselves,” said David Weinberger, 2.0%

the author of the Pew report. YouTube
2.0%
In percentage terms, more than a third of US adult Internet users
TripAdvisor
who responded to the Pew survey say they have categorized or
1.0%
tagged online content.
FaceBook
1.0%
US Adult Internet Users Who Have
Categorized/Tagged* Online Content**, iVillage
November-December 2006 (% of respondents) 0.5%

Categorized/tagged yesterday 7% del.icio.us
0.2%
Have categorized/tagged 28%
LinkedIn
Have not categorized/tagged 70%
0.1%
Don't know or refused 2%
None of the above
Note: n=2,373 ages 18+; *creating labels for online context; **eg photos, 48.0%
news stories or blog posts
Source: Pew Internet & American Life Project, January 2007 Have not visited any of the above sites
080629 www.eMarketer.com 18.0%
080629
Note: n=2,223; respondents were asked "Of the Web sites that you have
visited in the past 12 months, which influenced your decision(s) to either
purchase or not purchase a product/service?"
Source: JupiterResearch for iProspect, "Social Networking User Behavior
Study," April 2007

082927


Types of User-Generated Content Mobile User-Generated Content

Thanks to trailblazers like Amazon and Netflix, other online and While the user-generated content phenomenon
multichannel retailers—and even B2B providers—are opening
their Web sites to customer reviews. In some cases, the reviews
has played out mostly on the Internet, mobile
are negative, but the companies in question still reap benefits delivery is building steam as an increasingly
from the feedback loop, and from projecting an image of sincerity
important venue for this category of digital media.
to the outside world.
In the US, MySpace is now available to Helio and
The motivation for retailers is clear. According to a study
conducted by eVOC Insights and RelevantView, 47% of consumers
Cingular customers, according to a February 15,
need to consult reviews before making an online purchase and 2007, article in Digital Music News. In Europe, O2
63% of shoppers are more likely to purchase from a site if it has
has launched a YouTube-styled video-uploading
ratings and reviews. By the end of 2006, 43% of e-commerce sites
offered customer reviews and ratings, almost double the 23% service called LookAtMe, which shares revenue
figure at the end of 2005, according to New York research firm with its customers for any user-generated content
MarketingSherpa.
clips that are downloaded and purchased.
For user-generated videos, the lack of a clear business model
makes the benefits of customer feedback less tangible. As with services like photo messaging, user-generated content
Nevertheless, the statistics for user comments and and social networking applications are more widespread in
recommendations are impressive. According to a December 2006 Europe than they are in the US, according to an M:Metrics Inc.
study by Accustream iMedia Research, each clip streamed on study published in December 2006.
Metacafe receives an average of 29 comments.
Mobile Phone Subscribers in the US and Select
Average Number of User Countries in Western Europe Who Use User-Generated
Comments/Recommendations per Video among Content and Social Networking Applications* on Their
Select US User-Generated Video Web Sites, 2006 Phones, October 2006 (% of respondents)

Metacafe 29.0 Spain 44.6%

NBC Channel on YouTube 23.0 Italy 43.6%

YouTube 19.9 UK 41.0%

CBS Channel on YouTube 19.0 Germany 31.0%

LiveDigital 14.0 France 29.6%

MySpace 12.0 US 23.3%

Top user-generated sites average 19.5 Note: n=101,893; data based on three-month moving average for period
ending October 31, 2006; *includes IM, chat, dating, photo messaging,
Source: AccuStream iMedia Research, "User-Generated Video Advertising video messaging, creating own ringtone, watching video sent by friend
2007: Metadata Metrics and Viral CPM Valuations," December 2006 Source: M:Metrics, Inc. as cited in press release, December 14, 2006
079316 079533 www.eMarketer.com
www.eMarketer.com
079316 079533

YouTube’s average is 20, which would equate to roughly 1.3 billion
comments per day given the company’s July 2006 estimates of
65,000 clips uploaded daily.

Number of Videos Being Uploaded and Watched Daily
on YouTube, 2006
Uploaded 65,000
Watched 100 million
Source: YouTube, July 2006
077403


Mobile User-Generated Content

Not surprisingly, demographics play a huge role in the extent to According to a January 2007 Telephia report, MySpace is the clear
which mobile subscribers avail themselves of user-generated winner among Web sites where US mobile customers upload their
content applications on their phones, according to the same user-generated content. In the UK, MySpace also leads, with 21% of
M:Metrics research. When looking at the 13-to-17 and 18-to-24 respondents, but Windows Live Spaces is a close second, at 19%.
age groups both in the US and in select countries in Europe, the
percentages of customers who use user-generated content Top Five Web Sites Where US Mobile Phone Users
Upload User-Generated Content from Their Mobile
applications increases substantially. Phones, Q3 2006 (% of respondents*)

US Mobile Phone Subscribers Ages 13-24 Who Use 1. MySpace 32%
User-Generated Content and Social Networking
2. Facebook 13%
Applications* on Their Phones, October 2006 (% of
respondents) 3. Windows Live Spaces 11%

13-17 36.7% 4. YouTube 9%

18-24 45.0% 5. hi5 6%

Note: n=101,893; data based on three-month moving average for period Note: *mobile users who claim to have uploaded content from their
ending October 31, 2006; *includes IM, chat, dating, photo messaging, phones to Web sites
video messaging, creating own ringtone, watching video sent by friend Source: Telephia, "Telephia Audience Measurement Report US, Q3 2006,"
Source: M:Metrics, Inc. as cited in press release, December 14, 2006 January 2007
079515 www.eMarketer.com 080378 www.eMarketer.com
079515 080378

Mobile Phone Subscribers Ages 13-24 in Select Top Five Web Sites Where UK Mobile Phone Users
Countries in Western Europe Who Use User-Generated Upload User-Generated Content from Their Mobile
Content and Social Networking Applications* on Their Phones, Q3 2006 (% of respondents*)
Phones, October 2006 (% of respondents)
1. MySpace 21%
13-17 18-24
France 58.0% 48.9% 2. Windows Live Spaces 19%

Germany 44.0% 44.1% 3. YouTube 9%
Italy 69.7% 63.6%
4. Bebo 9%
Spain 63.2% 60.9%
5. hi5 7%
UK 63.5% 65.9%
Note: n=101,893; data based on three-month moving average for period Note: *mobile users who claim to have uploaded content from their
ending October 31, 2006; *includes IM, chat, dating, photo messaging, phones to Web sites
video messaging, creating own ringtone, watching video sent by friend Source: Telephia, "Telephia Audience Measurement Report UK, Q3 2006,"
Source: M:Metrics, Inc. as cited in press release, December 14, 2006 January 2007
079513 www.eMarketer.com 080377 www.eMarketer.com

079513 080377

As mobile networks and handheld devices evolve to Even as mobile customers increasingly use their handsets as a
accommodate greater bandwidth and more multimedia features, conduit to user-generated content sites, a paltry 3% of online
the amount of user-generated content created and exchanged via video is actually watched on mobile devices, and that percentage
mobile channels will increase accordingly, according to a February will rise to a still meager 16% by 2011, according to an August 2006
2007 study by Informa Telecoms & Media. ABI Research study. Clearly, people prefer to watch video on
bigger screens.
Select Mobile Community and User-Generated
Content Service Users Worldwide, 2006 & 2011 Online Video Viewed on Handheld Devices in the US,
(millions) 2006 & 2011 (% of total online video)
2006 2011
2006 3%
Chat 84.04 357.69
Album and photo communities 74.45 297.27 2011 16%
User-generated video communities 45.98 198.52 Source: ABI Research, "Future of Video-Sharing Sites, User-Generated and
Dating services 28.09 94.11 Copy-Protected Content," August 2006
Source: Informa Telecoms & Media, February 2007
076040
080984


The Audience for User-Generated
Content
An abundance of data debunks both the age and gender myths. A
Who Is Consuming User-Generated Content? June 2006 comScore MediaMetrix study shows that 52.6% of US
As marketers assimilate the worldwide explosion in user- YouTube users are 35 or older, and more than 53% are male.
generated content, demographic data provide valuable insights
into who is consuming—and creating—this genre of digital media. Demographic Profile of US YouTube Users, May 2006
(% of total unique visitors)
In the US, the number of users of user-generated content will hit
Gender
101 million by 2011, up from the 2006 estimate of 69 million.
Male 53.2%

US Users of User-Generated Content, 2006-2011 Female 46.8%
(millions) Age
2-11 4.3%
2006 69.1
12-17 11.5%
2007 75.2 18-24 14.2%
2008 81.4 25-34 17.4%

2009 88.0 35-64 47.9%
65+ 4.7%
2010 94.9
Income
2011 101.4
<$60,000 38.4%
Note: includes video, audio, photo sharing, blogs, wikis, podcasts and $60,000+ 61.6%
online bulletin boards
Source: eMarketer, June 2007 Race/ethnicity

084523 www.eMarketer.com White 92.1%
084523 Black 4.0%
Globally, the estimated number of user-generated content users Asian 2.0%
will hit 254 million by 2011, up from 128 million in 2006. Other 2.0%
Note: from home, work and university; numbers may not add up to 100%
due to rounding
Worldwide Users of User-Generated Content, Source: Hitwise as cited by the Pew Internet & American Life Project, June
2006-2011 (millions) 2006
2006 128.0
074321
2007 147.5

2008 169.7

2009 195.7

2010 225.8

2011 253.6

Note: includes video, audio, photo sharing, blogs, wikis, podcasts and
online bulletin boards
084524

As with other areas of the rapidly evolving media landscape, user-
generated content is subject to stereotypes and misperceptions.
For example, it is widely assumed that online video is a youth-
oriented play. Also, with women online outnumbering men by
more than three percentage points, according to eMarketer
estimates, one might also assume that women would consume at
least as much online and user-generated video as men.

“The trick is that you have to let go. We’re
used to dictating our messages and we’re
used to being in control.” —Mike Fasulo, Chief
Marketing Officer, Sony Electronics


The Audience for User-Generated Content

Looking more broadly at US online video viewers, a May 2006 In a February 2006 study by the Online Publishers Association, the
Arbitron/Edison Media Research study found that 44% of mean age of “heavy” viewers of online video was 33, while the
respondents were 35 or older, and 62% were male. mean age of “moderate” and “light” viewers was 37.

Demographic Profile of US Online Video Viewers*, Demographic Profile of US Online Video Viewers,
January 2006 (% of respondents) February 2006 (% of respondents)
Gender Heavy Mod- Light Non- Non-
viewers erate viewers viewers- viewers-
Male 62% viewers but will and won't
Female 38% this year this year
Age Gender
12-17 15% Male 65% 54% 44% 41% 40%
18-24 17% Female 35% 46% 56% 59% 60%
25-34 24% Age (mean) 33 years 37 years 37 years 38 years 39 years
35-44 21% Marital status
45-54 15% Married 40% 54% 46% 61% 50%
55-64 6% Single 41% 23% 25% 14% 18%
65+ 2% Committed 11% 11% 13% 11% 10%
Employment Divorced 6% 9% 13% 11% 17%
Employed part/full time 69% Household income 11% 7% 7% 4% 7%
$100,000+
Retired 3%
Socioeconomic status*
Student 20%
Homemaker 3% High 17% 17% 20% 8% 11%

Unemployed 4% Middle 50% 52% 44% 45% 49%

Household income of $75,000+ 45% Low 33% 32% 36% 47% 39%

Race/ethnicity High-speed Internet access location

White 72% Home 85% 79% 72% 59% 61%

African-American 11% Work 86% 83% 81% 73% 71%

Hispanic/Latino 10% Note: heavy=weekly+, moderate=monthly but less than weekly, light=less
than monthly; *combined measure based on income, education and
Type of access technology occupation
Source: Online Publishers Association (OPA), "From Early Adoption To
Broadband 81% Common Practice: A Primer On Online Video Viewing," February 2006
Dial-up 19% 071865 www.eMarketer.com
Plan to switch to broadband in next 12 months 47% 071865
Note: *in the last month
Source: Arbitron/Edison Media Research, "Internet and Multimedia 2006:
On-Demand Media Explodes, May 2006

073227



Hitwise studies of US YouTube and MySpace users from March Similarly, a February 2007 Quantcast study found that most
2007 found that 57% and 41%, respectively, were 35 or older. leading video Web sites, including Metacafe, YouTube, Revver and
others, were also male dominated. Only AOL and MySpace had
US YouTube Users, by Age, Four weeks ending March greater percentages of women visitors than men—a finding
10, 2007 (% traffic share)
echoed in February 2007 comScore MediaMetrix data that
18-24 29.71% included eMarketer calculations.
25-34 18.10%
US Visitors to Select Online Video Sites, by Gender,
35-44 27.76% January 2007 (indexed by visitors to all Web sites)
45-54 17.36% Metacafe.com
55+ 12.08% 134
66
Video.yahoo.com
082012 124
75
US MySpace Users, by Age, Four weeks ending March Vimeo.com
10, 2007 (% traffic share) 118
81
18-24 39.85%
Grouper.com
25-34 18.88%
118
35-44 20.32% 82
45-54 16.00% Revver.com
55+ 4.95% 114
85
082011 www.eMarketer.com Video.google.com
082011 114
On a gender basis, Nielsen//NetRatings found in February 2007 85
that online video sites including YouTube, Google Video, Metacafe YouTube.com
and Break.com leaned heavily male. 111
88
US Visitors to Select Online Video Sites, by Gender, Video.msn.com
December 2006 (thousands and % of total visitors) 107
Male Male % Female Female % 92
of total of total
YouTube 21,394 56.29% 16,613 43.71% eBaumsWorld.com

Google Video 11,788 57.81% 8,603 42.19% 103
96
vids.myspace.com 7,398 51.23% 7,041 48.77%
MSN Video 6,492 53.17% 5,718 46.83% Video.AOL.com
Yahoo! Video 3,948 64.96% 2,129 35.04% 97
Break.com 2,319 70.27% 981 29.73% 101

Metacafe 2,163 75.46% 703 24.54% Vids.MySpace.com
iFILM 1,634 69.67% 711 30.33% 88
Note: from home and work locations 110
Source: Nielsen//NetRatings, February 2007
Male Female
081356 Note: index of 100 is average
Source: Quantcast, February 2007

081372



These findings correlate closely with a Hitwise study from
US Unique Visitors to Select Online Video Sites, by
Gender, December 2006 (% of total Internet users in February 2007 that puts the male-female ratio at 52:48.
each group)
YouTube US Visitors to YouTube, by Gender, Four weeks ending
February 3, 2007 (% of total)
17.7%
16.2%

Google Video Search
10.0% Female
48%
7.4%

AOL Video
9.8% Male
10.9% 52%

MSN video
8.2%
8.1% Source: Hitwise, February 2007
MySpace Videos
081328
6.1%
An in-depth demographic profile of US MySpace and Facebook
7.3%
users conducted by Nielsen//NetRatings and Piper Jaffray in
Metacafe
February 2007 reveals that MySpace closely reflects the US online
2.0%
population overall with regard to gender, age, household income
1.4%
and ethnicity. For example, the relative percentages of males and
Male Female
females are identical between MySpace users and the US online
Note: from home, work and university locations; data measure visitors, not population, and the income levels and ethnic breakdowns are
the number of registered users, subscribers or videos streamed
Source: comScore Media Metrix, February 2007; eMarketer calculations, within a couple of percentage points in both sets of users. Age-
March 2007
wise, MySpace skews younger than the broader online population,
but not by a staggering amount.
081175

Interestingly, comScore reported the YouTube male-female gender
gap closing to within 3.2 percentage points in December 2006,
from 6.4 percentage points in May 2006. This suggests that user-
generated content is edging further toward the mainstream by
mirroring the total online population with regard to the gender split.

US Unique Visitors to YouTube, by Gender, May &
December 2006 (% of total)
May 2006
53.2% 46.8%

December 2006
51.6% 48.4%

Male Female
Source: comScore Media Metrix, June 2006 & February 2007
081584



On the other hand, there are some wide disparities between Usage Statistics
Facebook’s demographics and those of US Internet users as a Unique visitor statistics of the leading user-generated content site,
whole, particularly with regard to age and gender. Among YouTube, show dramatic growth over the company’s two-year life
Facebook users, 55% are younger than 18, compared with 20% for cycle. comScore data from February through December 2006
all Internet users. From a gender perspective, 57% of Facebook indicate an increase in unique visitors from 4.2 million to nearly 30
users are female, compared with 52% of the online population. million during that time span—a growth rate of 600%.
Nielsen//NetRatings data show US unique visitors to YouTube
Demographic Profile of US MySpace and Facebook
Users, November 2006 (millions and % of total) increasing from nine million in February 2006 to 38 million in
MySpace Facebook Online US December 2006. While Nielsen’s totals are higher than comScore’s,
users users population population the growth rate in the Nielsen data is 320%, compared with
2006
comScore’s 600%.
Population 49.5 8.7 157.1 281.4
Gender
Comparative Estimates: US Unique Visitors to
Male 48% 43% 48% 49% YouTube, February, July and December 2006
Female 52% 57% 52% 51% (thousands)
Age comScore Nielsen//NetRatings**
Media Metrix*
<18 23% 55% 20% 26%
February 2006 4,230 9,045
18+ 77% 45% 80% 74%
July 2006 16,080 30,541
21-34 22% 14% 17% 20%
December 2006 29,596 38,008
35-49 30% 12% 28% 23%
Note: *home, work and university users; **home and work users
50-64 14% 6% 23% 15% Source: comScore Media Metrix, 2006 & 2007; Nielsen//NetRatings, 2006 &
65+ 2% 1% 9% 12% 2007
Household income
084530
<$25,000 6% 4% 6% 28%
The discrepancies between the two companies’ unique visitor
$25,000-$49,999 22% 18% 23% 23%
data has been the subject of considerable debate in the industry,
$50,000-$74,999 30% 29% 27% 18%
and the Interactive Advertising Bureau (IAB) recently called on
$75,000-$99,999 20% 19% 19% 11%
both firms to clarify their respective methodologies in an effort to
$100,000-$149,999 15% 18% 16% 10%
$150,000 7% 11% 8% 9%
resolve the inconsistencies.
No response 1% 1% 3% - On April 20, 2007, IAB president and CEO Randall Rothenberg
Race/ethnicity
issued an open letter that read, in part: “All measurement
White 87% 89% 89% 80% companies that report audience metrics have a material impact
Black 9% 8% 8% 13% on interactive marketing and decision-making. Therefore,
Asian 3% 2% 2% 4%
transparency into these methodologies is critical to maintaining
Other 1% 0% 1% 3%
advertisers’ confidence in interactive—particularly now, as
Source: Nielsen//NetRatings as cited in "The User Revolution: The New
Advertising Ecosystem and the Rise of the Internet as a Mass Medium," marketers allocate more budget to the platform.”
Piper Jaffray & Co., February 2007
082445 www.eMarketer.com comScore and Nielsen//NetRatings both responded positively to
082445 the IAB’s call to action. A May 17, 2007, article in MediaPost noted
that comScore had opened its methodology to an evaluation by
the Advertising Research Foundation and that it planned to
release the results publicly in the near future. The article also
reported that Nielsen//NetRatings was in the process of securing
third-party certification of its methodologies, and that it had
already completed a pre-audit for the Media Rating Council.



The metrics debate notwithstanding, other usage statistics of The same study finds a similar pattern among US Internet users
user-generated content sites point to a pattern of consumption who watch YouTube, post comments on message boards and
that varies by age, according to a February 2007 Deloitte & Touche create personal content. Majorities of so-called “millennials” (i.e.,
study conducted by Harrison Group and provided to eMarketer. those ages 13 to 24) participate in these pursuits, while relatively
Comparing percentages of time spent online at user-generated vs. small percentages of “matures” (61-to-75-year-olds) engage in
company-generated content sites, the study finds that younger US these user-generated content activities.
Internet users spend more time at the former, whereas older
population segments gravitate toward company-generated Select Weekly Online Activities* of US Internet Users,
by Age, February-March 2007 (% of respondents in
content sites. On average, the split of user-generated content vs. each group)
“corporate” sites is 1:2, according to the study. Millen- Gener- Baby Matures Total
nials ation Boomers (61-75)
Percent of Time Spent Online at User-Generated Sites (13-24) X (42-60)
(25-41)
vs. Company-Generated Sites according to US
Internet Users, by Age, February-March 2007 Watching and reading personal 71% 56% 40% 36% 51%
content created by others
Millennials (13-24) Searching, downloading and 78% 57% 36% 17% 50%
51% 49% listening to music

Generation X (25-41) Visiting online gaming sites 66% 51% 39% 38% 49%
where you can actually play
35% 65% games
Baby Boomers (42-60) Maintaining and sharing 53% 52% 38% 43% 46%
photographs
27% 74%
Visiting TV show Web sites 48% 52% 43% 34% 46%
Matures (61-75)
Conducting job searches 31% 52% 43% 17% 39%
23% 77%
Participating in auction sites 30% 49% 37% 32% 38%
All respondents
Reading/posting on message 51% 43% 29% 22% 38%
34% 66% boards

User generated Company generated Seeking financial/investment 20% 42% 42% 41% 38%
information
Note: numbers may not add up to 100% due to rounding; *frequently or
Socializing 62% 41% 25% 18% 37%
occasionally participated in the activity
Source: Deloitte & Touche USA LLP, "State of the Media Democracy," Reading blogs 55% 42% 27% 16% 36%
conducted by Harrison Group, provided to eMarketer, April 16, 2007
Watching YouTube or other 62% 41% 24% 11% 36%
083879 www.eMarketer.com video streaming sites
083879
Creating personal content 58% 41% 19% 16% 34%
Participating in a discussion 34% 33% 24% 19% 28%
board or forum
Watching TV shows online 34% 28% 19% 9% 24%
Maintaining your own personal 36% 27% 14% 7% 22%
Web site
Keeping a Web log (blog) 35% 25% 7% 1% 18%
Using a computer video 20% 19% 14% 8% 16%
camera
Using computer's microphone 15% 15% 10% 6% 13%
to conduct audio chats or
Internet phone calls
Note: n=2,211; *frequent or occasional
Source: Deloitte & Touche USA LLP, "The Future of Media: Profiting from
Generational Differences" provided to eMarketer, April 16, 2007

083876


The Audience for User-Generated Content The Content Creators

Other user-generated content usage statistics indicate strong Not surprisingly, the number of people who
currents of upstream and downstream traffic among a clutch of
Web 2.0 sites with overlapping visitors and content types. These
create content—i.e., post videos, photos, music,
sites include Google, YouTube, MySpace, Yahoo!, MSN, Facebook, blogs, wikis, personal profiles and personal Web
Metacafe, Break.com, iFilm, Photobucket, Grouper and eBay,
sites—is expected to increase significantly as the
according to a series of site-specific downstream-traffic studies
from Hitwise. Below is Hitwise’s snapshot of downstream Web user-generated content movement gathers
sites from YouTube. The company also tracked downstream data steam, rising to 95 million in the US by 2011, up
from MySpace, Yahoo!, Metacafe and Google Video.
from 70 million in 2007.
Top 20 US Downstream* Web Sites for YouTube
Visitors, October 2006 (% of downstream total) US User-Generated Content Creators, 2006-2011
(millions)
URL Downstream
share
2006 63.7
1. Google www.google.com 9.58%
2. MySpace www.myspace.com 8.33% 2007 69.6

3. Yahoo! www.yahoo.com 5.35% 2008 75.6
4. Yahoo! Mail mail.yahoo.com 2.16% 2009 82.7
5. MSN www.msn.com 2.01%
2010 88.7
6. MSN Hotmail www.hotmail.com 1.70%
7. Adobe Systems www.adobe.com 1.64% 2011 95.1

8 .Yahoo! Search search.yahoo.com 1.57% Note: includes video, audio, photo sharing, blogs, wikis, personal Web sites,
9. eBay www.ebay.com 1.51% podcasts and online bulletin boards
10. Wikipedia www.wikipedia.org 0.91% 084526 www.eMarketer.com
11. MSN Search search.msn.com 0.65% 084526
12. MySpace-Mail mail.myspace.com 0.63% Globally, the number of user-generated content creators will reach
13. Facebook www.thefacebook.com 0.61% 238 million in 2011, up from 137 million in 2007.
14. FanFiction.Net www.fanfiction.net 0.61%
15. RuneScape www.runescape.com 0.51% Worldwide User-Generated Content Creators,
16. Google Video video.google.com 0.45% 2006-2011 (millions)
7. Photobucket.com www.photobucket.com 0.44%
2006 117.9
18. Ask.com www.askjeeves.com 0.42%
2007 136.5
19. AOL www.aol.com 0.40%
20. The Internet Movie Database www.imdb.com 0.36% 2008 157.5
Total of top 20 - 39.84% 2009 182.3
Note: *downstream refers to the URL the user visited immediately after 2010 211.1
leaving the primary URL (www.youtube.com)
Source: Hitwise, November 2006 2011 237.7
Note: includes video, audio, photo sharing, blogs, wikis, personal Web sites,
078708
podcasts and online bulletin boards
084528


The Content Creators

A May 2006 Pew Internet & American Life Project study estimated
US Internet Users Who Are Increasingly Creating Their
that, in 2005, 35% of US Internet users engaged in at least one of a Own User-Generated Content*, by Age,
number of content-generation activities, including sharing videos, February-March 2007 (% of respondents)
creating blogs or putting up their own Web sites.
Millennials (13-24) 56%

US Internet Users Who Create Their Own Online Generation X (25-41) 46%
Content, by Access Technology, 2005 Baby Boomers (42-60) 31%
All All Broad- Dial- Millions Millions
Internet home band up at with with Matures (61-75) 25%
users Internet at home home Internet
users home Internet access All respondents 40%
access only at
who do places Note: *creating own entertainment through editing own photos, movies
activity other and/or music
than Source: Deloitte & Touche USA LLP, "State of the Media Democracy,"
home or conducted by Harrison Group, provided to eMarketer, April 16, 2007
work 083880 www.eMarketer.com

Create or work 8% 8% 11% 4% 9 2 083880
on your own on- Similarly, a Pew Internet & American Life Project study published in
line journal or blog
2006 finds that the percentages of content creators range from
Create or work 14% 15% 17% 11% 18 2
on your own 43% in the 18-to-29 demographic to 18% in the over-65 group.
Web page
Create or work 13% 13% 16% 9% 16 2 Demographic Profile of US Internet Users Who Post
on Web pages or
blogs for others Online Content, 2005 (% of respondents in each
including friends, group)
groups you Gender
belong to or work
Male 37%
Share something 26% 28% 32% 20% 32 4
online that you Female 32%
created yourself,
Age
such as your own
artwork, photos, 18-29 43%
stories or videos
30-49 36%
Those who have 35% 36% 42% 27% 43 5
done at least one 50-64 29%
of the above 65+ 18%
"content" activities
Race/ethnicity
Source: Pew Internet & American Life Project, "Home Broadband Adoption
2006," May 2006 White (not Hispanic) 32%
073345 www.eMarketer.com Black (no Hispanic) 39%
073345 Hispanic (English speaking) 42%
Given that young people are generally more comfortable with new Education
technologies, it is well within the range of expectations that younger <High school 32%
demographics make up a much bigger percentage of content High school graduate 28%
creators than their older counterparts, and the available data bear Some college 37%
out this point of view.An April 2007 Deloitte & Touche study finds a College+ 38%
sliding scale of content-creation activity among different age groups, Household income
ranging from 56% in the 13-to-24 set to 25% in the 61-to-75 group. <$30,000 32%
$30,000-$50,000 32%
$50,000-$75,000 33%
$75,000+ 41%
Community type
Urban 39%
Suburban 34%
Rural 27%
Note: n=1,931
Source: Pew Internet & American Life Project, "Home Broadband Adoption
2006," May 2006

073346


The Content Creators

The pattern in the Pew study is the same as in the Deloitte & However, for certain types of content creation, like personal
Touche survey, and the slightly lower percentages that Pew finds profiles, females outnumber males, according to a Pew Internet &
could be the result of either differences in methodology or the American Life Project study published in January 2007.
time frame in question. Since the Deloitte & Touche study is more
current, it is not surprising that its findings are consistent with a Demographic Profile of US Teen Internet Users Who
Create Profiles Online*, October-November 2006 (% of
trend toward greater levels of user-generated content creation. respondents in each group)
Gender

“The most important new trend in marketing Male 51%
Female 58%
today is the easy advent of tools for making
Age
video, combining material, editing, posting
12-14 45%
and distributing consumer-based content
15-17 64%
across the Web—often for a marketing or Age and gender
publicity purpose or impact.”—Mike Vorhaus, Male 12-14 46%
Senior VP-Managing Director, New Media and Strategy, Female 12-14 44%
Frank N. Magid Associates Male 15-17 57%
Female 15-17 70%
“[The Web is] shifting now to user-generated content; it shows Household income
people engaging with the Internet in a number of different ways in <$50,000 55%
their lives,” John Horrigan of the Pew Internet & American Life $50,000+ 56%
Project told ClickZ. “It shows that people are pretty interested in Ethnicity
using the technology to put something of themselves on the White, non-Hispanic 53%
Internet, not just pull down information from the Internet.” Non-white 58%
Note: n=886 ages 12-17; *includes profiles on social networking, blogging,
On a gender basis, Pew finds that more males than females are gaming, chat and instant messaging sites
Source: Pew Internet & American Life Project, "Social Networking Web
posting content online. This is reflected in the findings of other Sites and Teens: An Overview," January 2007
research companies with regard to user-generated content 079768 www.eMarketer.com
consumption on big sites like YouTube, and with more specific 079768

research like an August 2006 study conducted by ICM for the UK This research is consistent with a February 2007 finding by Youth
Office of Communications, which found that 15% of males in the Trends that Facebook is the favorite Web site for US females ages
UK own blogs or Web sites, as opposed to 7% of females. 17 to 25, by a factor of nearly 2:1 over the No. 2 entry on the list,
MySpace.
Demographic Profile of Adult Internet Users in the UK
Who Own Blogs or Web Sites, June 2006 Top 10 Web Sites among US Females Ages 17-25, 2007
Gender (% of respondents)
Male 15%
1. Facebook 69%
Female 7%
Age 2. MySpace 38%

18-24 19% 3. YouTube 22%
25-34 15% 4. Google 13%
35-44 6%
5. CNN 10%
45-54 12%
55+ 6% 6. NY Times 8%

Total 11% 7. AOL 8%
Source: ICM for the Office of Communications (Ofcom) - UK, August 2006 8. MSN 8%
9. Pink Is the New Blog 7%
075934
10. WWTDD 7%

Note: Respondents named three favorite sites on an unaided basis
Source: Youth Trends, "Top Ten List," February 2007
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