comScore, Inc. (NASDAQ:SCOR)
Investor Day Conference
June 03, 2013 1:30 pm ET
Gian M. Fulgoni - Co-Founder and Executive Chairman
Magid M. Abraham - Co-Founder, Chief Executive Officer, President and Director
Cameron Meierhoefer - Chief Operating Officer
Anne Hunter - Vice President of Advertising Effectiveness Products
Serge Matta - President of Commercial Solutions
Tim Avila - Vice President of Product Marketing
Kenneth J. Tarpey - Chief Financial Officer and Principal Accounting Officer
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
Youssef H. Squali - Cantor Fitzgerald & Co., Research Division
Well, hello. We're going to get started. And my name's Mark Donovan. I'm Chief Marketing Officer here at comScore. And just a few housekeeping items before we really get rolling with the day.
First, I'll keep an eye and make sure the IT system works. We have tested this extensively.
We have Wi-Fi network here. The Wi-Fi network you'll see is marked as guest. The login and password is the same, lowercase xcorscore.
I'll also let you know that the presentation that you'll be seeing today will all be posted to ir.comscore.com today at 5:00, and you'll be able to get them at that point.
A couple of additional things to note. You have an agenda that's part of your packet. You'll also see a little USB drive that has some materials from comScore, some white papers that may be of interest. There's also a QR code on the back of your badge, which you can scan. It will take you to a page where there's some other material from comScore for you to digest.
Other things to note today. We will be going until, I think, about 3:00 and having a 10-minute break, at which time, we'll bring some clients up, who are going to share, after the break, their experience working with comScore. And then after we finish presentations and provide plenty of time for Q&A, we invite you to join us for cocktails. There is a master sommelier, who will be doing what I understand we're calling -- or is called a knowledge transfer on whiskey, so that's something hopefully of interest to you.
All right. There we go. I said all that, right?
You'll be hearing today from senior executives at comScore, some of whom you may know, others are new faces: Gian Fulgoni, our Executive Chairman and Cofounder; Magid Abraham, our Cofounder and CEO; Serge Matta, there in the back, our President of Commercial Solutions; Ken Tarpey, our CFO; Anne Hunter, my colleague who leads our Global Marketing Strategy; Jodi McDermott, who is the Vice President of Product Development for our digital enterprise, our products; and Cameron Meierhoefer, our Chief Operating Officer, sitting over there.
Each of us will speak to you about important aspects we think of the comScore story. And the plan is to talk to you about what we do at comScore and how we do it, then walk through our 3 basic product lines. We'll have a break, as I mentioned, client voices; Ken will discuss finances; Magid will close; we'll do the Q&A and then, as I mentioned, before whiskey.
You're probably familiar with this. I just like to draw your attention to forward-looking statements and Safe Harbor provisions. This will obviously be in the materials posted on our website at 5:00 p.m.
And then also, you'll see in the presentation, in the Financial Review section, the use of non-GAAP measures. I just wanted to call your attention to that detail.
Without further ado, let me hand it over to Gian Fulgoni, Executive Chairman and Cofounder of comScore, to welcome you to Investor Day 2013.
Gian M. Fulgoni
Thank you, Mark. So welcome to our Investor Day. This, as you can imagine, for any company is an important day, and I think especially so for comScore given the position that the company is in and the way that we are capitalizing on the opportunities that the digital revolution is creating. And in that sense, whether you are familiar with the company or whether you're new to the company, I think that today will be somewhat of an eye-opener for you as you see the products and the services that we are either -- either have introduced or are in the process of introducing.
So last week, I was invited to speak at Procter & Gamble's digital day down in Cincinnati. And if I ever needed confirmation of the importance of digital and the opportunities it's creating to attend a day, where we had something like 8 hours of presentations hosted by Marc Pritchard, who's the CMO of Procter & Gamble, where he was making the point that for any company, it's always been true that you have to have the consumer insights and understand the consumer, where the consumer is going. But one could argue that's probably never been as true as it is today given the change that are occurring in this digital world and the rate at which things are changing.
So I thought that it might be interesting to kick off the day with some key points that in a sense [indiscernible] some of the foundation planks of the comScore go-to-market strategy that kind of drives the products that we deliver and how we deliver them.
So here on the Internet, in the U.S., we now have 235 million people who are online. That's a large number, obviously. But I think the more important number here is the amount of time that they're spending on the Internet. They're spending 2 hours and 21 minutes per day. And importantly, put into context, that's equivalent to about 46% of the time that they spend watching television. So if you think of the Internet as a medium, and obviously it's a lot more net sales of a sales channel, it's really, really come of age.
The other thing that's happening that will form the basis of a lot of what you will hear about today is the growth of these mobile devices. And it's the stat that whenever I use this, I can't help but remember, if this device had been available in 1985, it would have been the most powerful computer in the world that you could've bought. And so when you think of that processing power in the hands of billions of people around the world, it really starts, to me, makes me realize the opportunities that exist for marketers to communicate with consumers in a better way.
Here's a stat that, again, I think you might find surprising. 46% of all the Internet time that people spend here in the United States are now spent on mobile devices, mobile being defined here as the smartphone and the tablet. And again, I think that, that's indicative of maybe the challenge and the opportunity for marketers as these devices proliferate.
Video. You'll see and hear about our video offerings, and here are the stats there. 180 million people now in the U.S. in a month will watch at least one video, and on average, they'll watch 200 videos per person. 75 million people in a day today will watch online videos, and they'll see 80 or more video ads.
Another important stat in conjunction with that, that I don't think is often well understood is if you think of long form versus short form video content, long form being originally scripted television shows, that content makes up probably no more than about 5% to 6% of all the videos that are viewed. So the majority of the videos are actually these shorter videos, which present some interesting opportunities for new entrants, and you'll hear about that today.
Search. Today, the Internet Advertising Bureau put out its numbers for online advertising for the first quarter. The number is $9.6 billion, growing at 15% a year, which is about 4x faster than all measured media is spending. And search represents somewhere around 40% of all of that spending.
So I just wanted to put some stats up here to show you how many people are using the Internet to obtain information, 200 million searches, conduct 50 billion combined searches per month. That's 100 searches per person.
And then if you think of the Internet as a sales channel, you've got major changes occurring there. So now we are measuring that if you think of discretionary spending, so take out food and beverage, you've got about $1 in every $10 that the consumer spends in the United States now spent on the Internet, growing also with 15% a year. And if you compare that to consumer discretionary spending in total, about 7x faster growth, again, just illustrating the magnitude of the shift in how fast it's occurring. So the Internet clearly is both a really powerful medium, it's being affected dramatically by mobile, but it's also a really important sales channel.
And this isn't just an issue obviously here in the United States; this is a global issue. And comScore is a global company, and we'll talk about that today. And so the opportunities that we have as the Internet grows and all of its manifestations is really a global opportunity.
So what does that mean? Is that there are 2.4 billion Internet users that's growing at 8% a year. And then the phones grow 1.5 billion smartphones around the world. And actually, the growth there is a staggering 31%. And internally and maybe in a lot of countries, mobile Internet connections allow people to get online way faster than they had to wait for a landline type connection.
The other change related to mobile is tablets, and in the fourth quarter of last year, tablets shipments exceeded desktop computers for the first time. And so, that's affecting everything and creating again opportunities for comScore that you'll hear about today.
And then finally, if you think of big data, which is a moniker that is being mentioned by the media, it seems, every hour, 92% of the world's data was created in just the past 2 years. That's how fast things are expanding. And it's being driven by the explosion in the number of computers, sensors and the drop in computing costs that's occurring.
McKinsey did an interesting study here that I think is relevant to some of the software products that you'll see that comScore introduced. Well, they said that this is, big data, the frontier for competitiveness, innovation and productivity. That's great. But they also pointed out that there is a dramatic shortage of people. We, in the U.S. alone, lack 1.5 billion people who could -- who are needed to handle all of this data. And in that sense, one of the comScore product lines that's very relevant, our Digital Analytix product line, really helps enterprises handle their data, process their data, analyze their data while minimizing the number of data savvy people that are required. And so I think in this particular area here, where maybe comScore, if you think of ComScore's legacy and reputation, if you will, we're probably not as well-known, we hope that will change by the end of the day. I think we're producing some really, really powerful and valuable capabilities for our clients.
So one more slide, and then I'm going to turn it over to Magid. Let me just illustrate to you with one set of numbers, you'll see a lot of numbers today, that's the comScore way, if you will. I want to show you what's happened over just a 3-year period from February of 2010 to February of 2013 in terms of the amount of time that's spent on the Internet by device. This is in total, and if I were to run through it by type of content, you'd see dramatic differences across the content, everything that we are measuring.
So these are comScore numbers. So in a 3-year period, total time spent on the desktop didn't drop despite the advent of mobile devices, although it's affecting certain types of content more than others. Here's the phone, up almost 400% in a 3-year period, and you can see that the total time spent compares very favorably now to the desktop. And then if you put tablets on top of it, and if you add it all up, we're sitting here today with a total time consumption that has doubled in just a 3-year period.
And so I hope with these few stats and my comments that you'll see a couple of things. First of all, the way in which consumers' lives are being transformed by the Internet and all of the ways in which you can tap into the Internet, the power of mobile and the way that the Internet is not just an advertising medium that allows marketers unprecedented efficiencies and effectiveness in terms of reaching their consumers, but the Internet is also importantly a sales channel that is offering marketers a lot of opportunities, but also posting some challenges for some of the retailers, especially the multi-channel retailers with the physical stores. Again, things that are happening that represent challenges for marketers, but for us almost inevitably, when that happens, it represents opportunities to provide services that drive value for the clients.
So those are my few opening comments. I hope that sets a good foundation for the day. And I hope that at the end of the day, you will have an enhanced appreciation for comScore as a company and where we are today and where we're headed.
So with that, let me turn it over to Magid Abraham, our CEO, and he'll take you through his comments.
Magid M. Abraham
Okay. Can you hear me? Thank you, Gian. And welcome, everyone. We really appreciate you joining us today to hear the comScore story and get an update on what we have been doing and the things we've been working on.
So everybody who's familiar with comScore and familiar with how ubiquitous the comScore data is used, whether in the media or by advertising agencies or by customers, by Wall Street, certainly get the idea that comScore is the leader in measuring the digital world. All kinds of stats about the digital world are sourced from comScore.
But in the last 2 years, what we have been doing is working on effecting a transformation, where not only do we do measurement, but we do measurement plus analytics. Not only do we deliver industry information, but we deliver industry information enhanced by client information, rather the other way around, client information and software to use it, enhanced by industry information.
And so we have been architecting a transformation in the company, and I'm happy to say today that the transformation is working, that we see traction and a lot of momentum in the marketplace.
So why is that? I think what Gian showed you earlier in terms of all the growth and all the trends that are happening in digital is one of the fundamental reasons. So businesses now are becoming entirely digital and -- are becoming not necessarily entirely digital, but they have all kinds of ways for consumers to interact with them digitally. And with all kinds of multiple devices, that creates a plethora of data that poses a challenge for people to analyze. And it opens the opportunity for companies like comScore that have the skill sets to provide value-add to be able to have offerings to help the clients leverage the data that they are collecting.
Now we're not just sitting on our laurels and being satisfied with being the leader in measurements. We are taking some of the skills and the strengths that have made us leaders in measurement, and we're applying them to also be leaders in analytics. And I'll explain how those skill sets and unique assets transfer into what we believe is a long-term sustainable advantage.
Everything that you will see that comScore is working on has a multi-platform dimension to it. Platform is a method of access or device or so, tablets, smartphones, a digital radio, a GPS device, anything that can be instrumented is a platform of access, and comScore is in the middle of measuring that. And so that multi-platform provides an unparalleled view of how consumers are interacting with you. And not only are we deploying our measurement expertise, but we are also coupling it and delivering it in a SaaS, software as a service, model that provides attractive characteristics like good revenue visibility, good operating leverage and some free cash flow.
So how do we get here? Back in 2010, as we looked at where we're going, we could have thought that yes, we have achieved a very strong market position in terms of measuring audiences, and the question is, what's next? And as we gazed into the crystal ball, we saw a few things that were good bets that's going to happen, things like where mobile is going to become very important and not only in the United States, but particularly outside the United States.
Another thing that we were hearing all the time is that while search is doing great, but display advertising is still lagging and a lot of companies that advertise for branding purposes are not using the Internet enough. And we, as well as a lot of people, thought that ultimately for digital advertising, to grow and capture its fair share, it needs to be more accountable and it needs to be more transparent. And therefore, we saw a lot of opportunity to not only put the spotlight on measuring audiences, but also on measuring advertising.
Third, we saw that the way we consume videos is changing very fast. So around 3 years ago, you couldn't walk into a Best Buy without seeing walls of TVs all over the place. But those TVs, despite the fact that there were LCDs and digital and all that, it was just the beginning of internet-enabled TVs. But today, if you want to watch a TV program, the majority of the TV programs or any kind of entertainment program, you can watch on your tablet, you can watch on your laptop, you can watch over-the-top, you don't really have to have a classic cable or set-top box set up to be able to watch it. That creates a lot of implications in terms of how you can relate to consumers, how you can reach them and, from our standpoint, how we can measure the audiences and deliver them.
And so because of all of this, any business that's interacting with consumers digitally would need new tools that go beyond the existing legacy systems to help them analyze all this rich behavior that they are collecting through digital instrumentation.
So those were the things that we basically said -- they're saying that are going to happen, and we better start getting prepared for them. And we worked hard on doing that. We developed products that address some of these. We made some acquisitions that address one of these. And I'm happy to say that those were bets that not only turned out to be right, but we were actually not aggressive enough in terms of thinking about how soon they will happen.
For example, if you ask me 2 years ago what the share of time that consumers would spend accessing the Internet via mobile devices, I would have never dreamt that it would be 46% or 48%. And this is still with smartphone penetration just over 50%. So imagine when all the future devices the people have kind of benefit out of the population.
As a result of that, you can see that had we stayed focused on measuring the web as being the PC web, we will actually see a very incomplete picture of what's going on in the marketplace. So one good example is Facebook. If you were to look at PC66 and you look at how Facebook is doing, the blue line illustrates the duration of time that people are spending on Facebook, and we see it's flattish to slightly down. Now if you complement that with what's going on in mobile, that's including tablets, you'd actually see that a lot of times, in fact, almost double the time that gets spent on the PC is now spent on some form of mobile device, and when you combine them, Facebook is actually growing on a multi-platform basis. And so for us, it's critical not to be just the company that measures the blue line; we want to be the company that measures every aspect of the consumer interaction.
And needless to say, it's not just Facebook. Virtually every business is really being affected by this mobile revolution, whether we are talking retail, whether we're talking about business and finance, travel, et cetera, et cetera. We're approaching in every single type of business about half of the time utilization is happening on some form of mobile device.
Now people argue, while a tablet might be similar -- more similar to a desktop, it's not really a mobile device. It doesn't really matter. Those are platforms that are new, that have their own characteristics, that need to be measured. They represent a challenge to the industry, and they represent an opportunity for us that we are capitalizing on.
The other thing that during shortly after we embarked on this transformation strategy, it became very clear that digital advertising really needs to be accountable in a bad way. And when we started measuring viewability statistics, meaning what percent of ads that are being counted as served to a consumer are actually viewed by a consumer instead of being down at the bottom of the page and the consumer doesn't scroll down far enough to be able to see them, or the ad is hidden, or the page unloads before the consumer gets to see the ad, what we have found is that on average, more than 50% of the ads that are served are not actually seen.
That this staggering statistics. That's basically saying that advertisers are cutting checks, buying a quantity of advertising, half of it is not reaching an actual consumer. Now at the end of the day, it doesn't necessarily mean that they're going to pay half of what they're paying today. But at least they should know what are they getting for every cent that they're paying for. And this is only one small aspect of adding accountability to and transparency to advertising measurement.
Digital TV. Now we all know who the dominant players are in TV, but before we start talking about video, here is the list of top 10 video content providers on the Internet. Does anyone see ABC, NBC, Fox in here? No. Digital is different. You -- the incumbent class in linear TV is not necessarily on the top of the ranks here. And as Gian said, even the form of video that is popular on this medium is different than what you see on normal TV.
So with all these changes, we believe that we are really well-positioned to win. Why is that? Well, in order for us to win, there are a combination of skills that we need to have to be able to deliver what is required of us.
First, we need to have a lot of measurement expertise. It used to be that we would just measure a browser on a Windows platform and boom, we measure the Internet. Now we're measuring many, many platforms, many operating systems, apps versus browsers, et cetera, et cetera. And if we don't have -- if you don't have the measurement expertise and the versatility to be able to measure all these different things, you're not going to be able to be successful in this endeavor. And not too many companies have the ability and the experience that spans all these different measurement challenges.
The second is, we're talking about huge amounts of data. We will show you later how comScore is probably one of the few companies in the world in terms of the size of data that we handle and we push on a daily basis.
The third is that we have to, again, recognize that the world is now a multi-platform world. And that means it's not just being able to measure the PC and the mobile device and the tablets and the TV; it's being able to trace the same person over all these different devices. Just a straightforward measurement of all of these things is actually providing you with a count of devices. And I could be visiting Citibank to look at my bank account on my smartphone or I could be doing it on my tablet or I could be doing it on my laptop, and guess what, for Citibank, without any additional information, I look like 3 different individual users. And so the trick in multi-platform is to be able to combine the view that's coming from all these different devices and unify them to attract the person rather than the devices.
And then finally, analytics. This data is enormous, and people need to make it actionable to make sense of it. And comScore is nothing if it's not about analytics.
So we are starting to see a lot of that translate into momentum. And in fact, multi-platform is actually the apex of all of our efforts because multi-platform is about collecting data on all these different devices, managing and activating huge data sets, applying a lot of analytical models to it to be able to essentially have a picture of the total usage and the total audience of different web entities or digital players.
And we launched Media Metrix Multi-Platform in beta form towards the end of last year. We just lifted the beta label about few months ago, and I'm happy to say that we've had really good adoption despite the fact that the product is really still pretty new. And one of the things that we're really excited about is that later in the year, we have the opportunity of making a multi-platform data the default data that agencies would use as they are ranking different websites and as they are choosing where to run their advertising campaigns. And so we expect that a lot of usage and a lot of adoption will happen at that time.
In terms of Advertising Analytics, we are also very pleased that we are enjoying. We do business with 22 out of the top 25 worldwide advertisers and very importantly, with all the top 10 CPG advertisers. CPG advertisers are important because they represent about 40% of the dollars that go on TV. Those are the advertisers that the Internet is chasing, and it is somehow in some fashion on some brand or some country, we are doing business with all of these top 10 TV advertisers.
And I highlighted P&G here. We announced a few weeks ago that P&G has elected comScore to evaluate all its campaigns in the U.S. where they are video display. And while P&G is a large customer and we're happy with the size of the contract and all of that, I think it means a lot more than that. If people remember the old ad, "When E.F. Hutton, people listen -- "When E.F. Hutton speaks, people listen." Well, when P&G speaks in this industry, people listen. And P&G is very well known to be very thorough, very methodical. They did about a 1-year evaluation through dozens and dozens of campaigns. And then they've made the choice. And so the significance goes beyond just the P&G name.
Now we also talked about providing customers with software to help them make sense of all this data and analyze it. And the biggest challenge that they're facing is that their view of the customer through traditional web analytics has been shattered. It used to be that you just instrument through what site, you collect the data, you put it in a system, and it's easy, you can basically measure navigation patterns and all of that. The view is now shattered because the customer is coming at you from all kinds of different places, and those customer interactions are not linked to the same person.
So as in every enterprise has the challenge now of how do I take this shattered vase of information and then glue it back together so I can look at it as a full and beautiful vase. And that's what Digital Analytix is fundamentally doing. It's a product that we acquired almost 3 years ago, and we focus on rebuilding and enhancing its functionality. It started picking up a lot of momentum last year. It's bookings grew by about 50% on a worldwide basis.
The challenge for us is that we didn't have a single customer in the United States. So for us to be able to succeed here, we needed to break through because, guess what, U.S. customers are always saying, "Well, that works for a European company, you have to prove that it works for a company at my scale." Well, what's really great is that in 2012, we have been able to get a number of very large marquis customers, set them to adopt Digital Analytix. And we were able to go bookings substantially, and we expect a lot of momentum that's continuing throughout this year.
And now, as I said, with everything that we're doing, Digital Analytix is turning multi-platform. We have been doing this for a few clients on an individual basis, where we have announced today is the availability -- the general availability of this capability to all customers.
So in terms of the nuts and bolts of how is this translating into results, these new products that I talked about that are the area of focus of this transformation are now contributing a significant portion of our bookings. They're not quite the same percentage in terms of revenue, but that will come. And we expect this year, in 2013, that 28% to 30% of our bookings will come from these product areas.
And what that does is it gives us a few more tools to help us take a customer that starts with us typically with an audience measurement subscription and to be able to add to them a lot of subscription options and a lot of different product functionality and giving us the typical ability to be able to increase the billings with a customer by a factor of 12. And we have had in fact customers where the ratio has been even bigger than 12.
So for 2013, and you will see that reflected in a lot of the presentations that you're going to see, we have 5 priorities. One is, we don't want to forget that we are the leaders in measurement, and we're not going to let that go away. So we are focused on maintaining our leadership in measurement, with a particular focus on mobile and multi-platform.
Number two, we have made a lot of strides in campaign management. We want to continue that progress. And we want to roll it out globally with global customers.
We want to capitalize on the early momentum that we have built in Digital Analytix, which we firmly believe that every single one of our customers is a candidate for a Digital Analytix solution at a price that's in some cases multiples of what they normally buy from us.
And then number four is, we are totally focused on execution. I think we've heard from a lot of investors that "You're working on too many products and you make a lot of acquisitions, et cetera, et cetera." We made them because we needed them. But we also have everything that we need now to succeed. We are -- we have paved the way for a future that is strategically going in the right direction.
And so our growth ambitions are to be achieved organically. We're not planning any major acquisitions for this year. We're head down, executing and leveraging what we have built. We're focused on improving margins. And we're focused on getting more free cash flow out of the business.
And in fact, I'm happy to say that we have been able to announce a share buyback program today to return money to shareholders. And we feel very comfortable about it because it is -- we have enough cash flow that well exceeds our organic investment needs. And with interest rates at less than 1%, our stock is a much, much better place to invest our money than actually putting our money in the bank.
So what we hope to be able to give you today is an understanding of what we do. So what is the value that we deliver to our clients? How are we winning in our markets, and why? How is our transformation going? And how is it affecting the industry, how it's affecting comScore? And then fundamentally, why is it good for you, if you are a comScore shareholder? Because ultimately, if our success does not translate into financial success, it is not really a full success.
So with that, I'm going to let Mark kickoff in talking about the value that we deliver to clients.
Thanks very much, Magid. So welcome. It's a pleasure to see you again and have a quicker work. My name is Mike Donovan. I'm Chief Marketing Officer at comScore. And I assumed this role in Q1. Prior to that, I led our Mobile Products group. I joined comScore in 2008 with the acquisition of M Metrix. And so I've seen from the inside, from the trenches of the hard work that we have done to build a sustainable advantage in a world that's dynamic, that's multi-platform. And I'd like to talk to you for a few minutes about how we think of -- but Magid talked, I think, about what the corporate vision has been. I think this is about talking about what our purpose is when we wake up every day and go to work at comScore.
You know about our rankings releases that you see and we put out on the wire, the top 50 video definitions on the web. That's because our data is used as a currency for people who try to understand what's happening out there on the web. But there's a much deeper thread that ties together the work we do across all our businesses, and it's very simply summed up. We help our clients understand and create value from digital consumer relationships. I'd like to take just a moment to unpack what that means to us.
When you talk about digital consumer relationships, we're essentially talking about the way that all consumer relationships are or are becoming. Magid alluded to this, when we talk about the transformation of the digital enterprise. Our clients, and they come from many different sectors, they're not just people that are content owners, which is a kind of a bread-and-butter part of our early business, they're not just marketers. They're companies that have consumers suit [ph] to them or viewers, their readers, their users of their services, their subscribers, their mobile phone service subscribers, their subscribers to some paid content service, their shoppers and also buyers. It's those digital consumer relationships that we're focused on understanding at comScore. And we understand that and help our clients understand that by providing data that shows them what's happening with consumer trends, what's happening with mobile technology and the device trends out there that are disrupting so much of the digital world, the demographics, a core question, who are these people, right? Who are these people I'm digitally connected to with my business?
We provide competitive benchmarking, understanding how am I doing relative to my competitive set, understanding advertising spend, and where is that dollar going and who's viewing my videos. But of course, understanding is just one step on the way to really trying to create value with these consumer relationships, a value that, of course, is about monetizing that relationship, sometimes very directly, other times in a more nuanced our indirect way.
We help our clients figure out how they can get purchase conversion, how they can turn digital experiences, digital exposure into brick-and-mortar action, people buying things in stores, for example.
We help understand not just who their ads are targeting but are their ads being seen. We help them understand through some of our products how they're taking care of their customers, how they can do so more efficiently, how they can make their customers more satisfied. Much of that rolls up to really understanding and providing a number and an answer for the return on investments they are getting from their digital spend.
So that's our purpose when we think about it. And you'll see this, I think, come through in the presentations that my colleagues are going to deliver today. It's also something that's structured, the way we think about our products because we have 3 business lines we'll be talking to you about: our Audience Analytics business, our Advertising Analytics business and our Digital Enterprise Analytics business. And each of these 3 businesses really map to a dimension of that client need around understanding their digital consumer relationships.
The multidimensionality to our product set is also what drives the upscale opportunity that Magid had mentioned just a moment ago. So in our Audience Analytics space -- and today, we'll talk to you more about the Media Metrix Multi-Platform -- it's really about getting our customers to understand what's happening in my market, all right? What is happening with that audience? What's happening market-wide? What's happening with my competitors? These products are today the currency for media planning, buying and selling across the globe.
For Advertising Analytics, it's about understanding if my ad investment is working. This is a core question that nearly every client would be spending money on digital advertising once they get to the bottom with, "I just spent a bunch of money, did it work?" There are some dimensions that didn't work. There's the performance of those ads, the effectiveness of those ads and in the returns on investment. Anne Hunter is going to speak to you a little later about that, the flagship product here we'll talk to you about today as our validated Campaign Essentials, or vCE products.
And both of those are really about comScore assets and comScore data. And Digital Analytix and Subscriber Analytix, this is about something a little different. It's about helping digital businesses understand how their business is doing and how they can optimize their business. Leveraging our infrastructure, our technology, our methodology and to provide them with a way to tune in their digital business, may or may not include comScore data, certainly includes comScore assets. Jodi McDermott is going to speak to you about that in a moment.
And this value that we deliver to clients often comes in the form of questions. You'll hear a little later today from 4 clients that represent sort of the different corners of the comScore client universe. They have their own questions, that clients are asking us, and we're providing answers to things like where do I spend my dollars if I'm investing in online video? How do I go after a specific advertising campaign opportunity? How do I make an advertiser -- excuse me, how do I make someone know that my audience is who they need to reach? Core, how do I make sure I'm driving sales, I'm driving commerce through my digital marketing spend? And a fundamental question -- you've heard us repeat it and we'll repeat it again because it's so, so important -- how do smartphones and tablets and these many different ways that consumers can connect with me, how does that impact how I need to think about marketing generally, digital marketing specifically? How do I need to change my behavior to cope and succeed in a world that's moving so fast? That's what we focused on at comScore.
Underlying all of this -- and this is a topic that my colleague, Cameron Meierhoefer, is going to get up in just a moment to speak to -- is the fact that we used to live in a world where we didn't have that much information, right? Scarce information, that was the problem. Today, we live in a world where there are mountains and mountains of data. And we're very good at collecting data, we collect a lot of it. But more than collect it, we make sense of it. We make sense of it for our clients, for the industry. And filtering the signal from the noise is one of the core things, I think, you're going to see that sets comScore apart.
So with that, I'd like to bring my colleague, Cameron Meierhoefer, our Chief Operating Officer, to the stage to talk about our -- the sustainable advantage that we've been building here at comScore.
Thanks, Mark. So what I'm going to cover here today is really how we do this and the assets that we have put together that give us the baseline for a sustainable advantage to solve these types of market problems in this digital data environment in a way that really no other company can.
So there are a few themes, theses, that we understand we have to deliver against to be successful. All media is going digital and measurement must follow. That means we have to move away from some analog techniques and embrace the flood of signal that digital provides. We have to translate that signal into people, and this is something that requires a combination of assets with legacy methodologies and legacy techniques in a way that takes advantage of that digital signal. We have to integrate census-level observations. When you have a point of truth, when I know how many times a server has delivered a program or a server has delivered an ad, we must use it.
We need to be able to report on behavior regardless of platform. And that means there must be consistency in measurement across platforms and there needs to be a synthesis of observations that allows us to deal with the native differences between platforms to render this data in a way that is in line with what people need to know about their customers.
Measurement must move realtime. Census data flows in realtime, and a lot of legacy methodologies are founded in the fact that it just takes a little while to gather enough data to make a statistical inference that you can use and treat as knowledge. That fact has fallen off to the side as the flood of digital signal provides us with a much richer baseline to understand what's going on.
And importantly, digital is global. Companies are interacting with their customers without borders. Digital just natively flows over lines. And clients, marketers who operate globally don't need a solution for the U.S., they need a solution for their business. So there needs to be a common global framework that can be localized as needed.
So with these principles, we've compiled the data assets, the methodology and the fundamental internal practices that we believe puts us in a position to deliver not just the results but healthy, expanding business with growing margins that will take advantage of all of these assets and bring higher-quality solutions to our client base.
So we have 2 core data assets. The first is our Census Network, and this is compiled from server-based measurements that are instrumented by content owners, ad servers, Ad Networks, anyone who wishes to have their digital measurements included in these measurement platforms, and that covers both currency applications and enterprise applications.
The second part is the person-centric, global opt-in panel. And this is a more traditional type of asset that comScore has used for many, many years that allows us to gather the digital signal directly from the consumer by instrumenting their devices and finding ways to localize, personalize all of this measurement and see everything regardless of if the content is tagged or not. And together, we're able to construct an asset that lets us look at people and not just web calls, not cookies, not some technical jargon, but it allows our customers to really understand -- allows our customers to understand their customers.
Okay. So what sits behind all of this is a world-class big data operation -- and I know that lots of people say they have big data -- ours is really, really big. So in the past year, we've seen the volume of inbound data that we have to carry everyday increase by 77%. It's a testament not just to the level of adoption in this measurement system by people who wish to be measured, it is just native in the growth of digital and the explosion of the digital signal that's come online.
Over the past 3 years, this is up 5x. Now our systems manage this, we handle it, we design for it. We take in 25 terabytes of data everyday. We keep 14 petabytes of data online, and we observe 15 billion distinct cookies per month. This is of very, very large scale. But everyday, we're taking in an average of 48.2 billion impressions into our service, and we actually had our highest day ever last Tuesday at 56.6 billion.
So this is an operation that we know we have to build this to scale. And we have to build this in a way that allows us to scale very efficiently and constantly drive efficiencies into the business that allow us to do this with minimal investment and the performance that is required to deliver on all of our promises.
So let's put 48.2 million in context. This is just under twice the number of total Internet page views that happen in the U.S. everyday. It's more than 3x the number of page views that Facebook serves up globally. This is a big data operation that is on par with the largest operations on the planet, and we do this everyday.
The network itself is natively global. Everything digital is natively global. Our tagged network, reflected here in a heatmap, roughly reflects the population of the online world. We receive measurements from everywhere that there's an Internet connection. And from this, we are able to combine this with our panel assets and draw up projectable samples from 44 countries across the world and deliver against that global requirement that's just native in digital.
So I'm going to go through the components of sustainable advantage. We built up assets that we believe give us a very durable, defensible position that, in combination, actually makes our business very, very distinct from anyone else who plays in this space and makes it very difficult for people to simply decide to come in and try to do what comScore does better. It happens in 3 areas. Technology, clearly, I'll go through some of the key points on signal collection, scale and leverage. Methodology is really critical, we've always been a measurement company. We've always been a research company. And research in combination with technology is critical to making sense of the massive digital signal that we're all working against today. And then there's marketplace. And this is somewhere where we enjoy a bit of a network effect where we have a service that serves as the standard, that standard is a baseline for making markets in advertising trading. It's a baseline for doing competitive benchmarking. And the definitions that go into this are the products of participation from the industry, rigor from comScore and sets a stage where the entire industry actually has an interest in having all of this work.
So let's hit the technology piece first. So the digital signal, it's exploding. We have to capture it. And anyone in this space needs to be constantly developing technology that keeps up with what is very much a moving target in digital.
We've been building digital meters to capture personal digital signals for 13 years. We have migrated with every major OS release and, today, we maintain active meters across 8 platforms. And these are 8 platforms that change at 8 different levels of pace, that do different things at different levels, and the organization that's been built around this is very much in tune with the nature of keeping up with digital platforms.
The second aspect is content tagging. So content tagging, these are the instructions that we distribute to people that wish to introduce server-based measurements into our system. This requires client-side scripting, it requires application, STK development, it requires integrations with different platforms, different plug-ins, different subsystems in a way that allows our clients to quickly and painlessly participate.
They need to be able to deploy this throughout their system and when it's live, it needs to beat performance. When our call is issued, it needs to not slow down the user experience. It needs to provide world-class response in as much as possible. It needs to be an asynchronous part of the event that does not disturb the consumer experience. We do this well enough that we are now deployed across more than 1.5 million domains and apps. And this is a native part of what we do with our client base.
Now the sustainable advantage here is both in terms of the cardinality but also in terms of developing technology across all of these dimensions. So we need to be able to do the person-centric metering. We need to be able to be deploying the content-centric tagging technology, and this needs to work across a wide variety of platforms. And while it may be possible for someone to come in and do one or the other and potentially be excellent in a single context or another, to do it all is a big challenge. And people better bring their check books because it's a big task.
Okay, scale. So as you saw on the chart before, scale is not a static challenge, scale is a way of life. Scale is expecting that your data will double in the next year and having the technology, the skill, the expertise to scale your operation without having to scale your investment at that same rate. Doing cost effective management of scale is the name of the game. You have to handle it, you have to catch it, you have to process it, you have to publish it. Those are the table stakes. You can do that by just spending more and more and more money, but truly scaling efficiently is what makes for a good business. And that is what we have achieved. So over last 3 years, as our data volume has increased 5x, our processing has actually accelerated and we've cut 90% of our processing time out of this system at the same time that we had it increased fivefold.
Now big data is a problem that everyone has. Our clients have it, our competitors have it, everyone struggles with big data, and how do I manage this. And the efficiencies that we've been able to build into our process and the technology that we've been able to develop are of distinct value to all of these clients. And we've deployed this scale-based management expertise through client-facing DAx applications, these are our Digital Analytix products that Jodi will talk to in a little bit. But this is a flexible SaaS-based data platform that allows us to extend all of these learnings, all of these efficiencies into the marketplace directly so our clients can benefit from these same learnings.
So the sustainable advantage here is -- these are hurdles, the data volumes that we're talking about are already at this scale. And we've been able to build in the efficiencies as the data has grown, and are prepared for further efficiencies as it continues to grow. And as people enter and try to handle this data in this way, they're going to have to learn all those lessons along the way.
The third aspect in technology is leverage. We have the benefit of being able to derive value in multiple businesses by investing in these improvements across technology, infrastructure, processing, scaling. All of these benefits can be monetized through different channels. And this allows us to make the investments with confidence, make them with strategic intent and to know that we're going to have multiple ways that we can deliver value to our clients.
Now in the core infrastructure, this is absolutely true. But this can also be true for an individual measure, where I can receive one call from one server and that can be deployed through our audience currency reporting, it can be deployed through our event-level Digital Analytix products and it could be deployed through realtime optimization tools, that that single can actually contribute to value generation through 3 different platforms.
Now the sustainable advantage here is that we are able to do this in multiple lines of business. And many people who may collect data in this way or maybe making investments that are somewhat similar on some of these dimensions are also faced with the challenge of just monetizing it through one channel. So we believe that that puts us in a much better position to gain efficiencies in our investments.
Okay, on to methodology. So the methodology that we've been able to develop to attack the multi-platform challenges is really built on top of legacy panel-based methods. And it's an extension that takes into account all of what the digital signal provides and is able to work that into a methodology that preserves legacy standards, can maintain a person-level view and ultimately deliver unparalleled precision in the measurement of digital media.
Now the interesting thing about this is in order to develop a methodology that is synthesizing data assets together into a common measurement is you have to have the data asset. So in order for someone to come along and say, "I've got a better multi-platform methodology," they first must acquire all these data assets so that they can work through the science of how you bring all this together and combine the data sources into a common measurement. Ultimately, synthesize the truth.
Now in the marketplace. Media Metrix is the currency for digital planning. Media who wish to trade with agencies will express themselves through Media Metrix, the precision that could be gained through integrating site-based tag measurements directly benefits their business. The way that they organize themselves, the taxonomies that they use to define their media properties are all maintained inside the comScore client-focused dictionary. And this is a taxonomy that the market uses to buy and trade. It's a taxonomy that people use to benchmark themselves against the competition and, ultimately, even evaluate the way that the market is evolving on the edges of their market.
The Census Network itself is something that we will support for anyone who wishes to integrate these measurements into their service, and 85% of top media properties are participating. So ultimately, the industry has a vested interest in the success of this product, in the precision of its measurement and the clarity of its definitions. And this puts us in a position where people are working with us in order to embed the standards and improve the measurements. And ultimately, they give us a baseline where people are working with us and not against us. Now as a sustainable advantage, someone would need to come in and unseat our currency standard, would need to redefine the entire web, would need to redeploy an entire site integration system that would take inside measurements into measurements, build up a methodology that has credibility and common challenges in the marketplace. We feel very strong about this.
Now at the end of the day, it's actually a virtuous cycle that we have compounding contributions from these factors. The services that we have inspire participation and definition in tagging, integration of measurements and the synthesis of data, so that their server logs are referential to the media measurement that's used to evaluate their properties. This expands our data footprint, which gives us more visibility into the digital signal, which allows us to deploy groundbreaking methodologies that do a better job of delivering precision and drives innovation across multiple product lines. It's not just about Media Metrix, we're able to derive benefits in precision and utility across all of our audience products, all of our advertising solutions and our enterprise analytics offerings.
So with that, we're going to get into some of the specifics of our product lines. And Mark Donovan is going to take the stage again to walk through our audience products.
Thanks, Cameron. So approaching and talking about our products, first, from the standpoint of our Audience Analytics products. Next, we'll turn to talk about our Advertising Analytics products and then what we have for digital enterprise.
Within Audience Analytics, there are several products. There's 3 core ones that I'm going to focus on today: Media Metrix, Video Metrix and Mobile Metrix. And taken together, they're a part of what we have been able to bring and deliver to the market already, which is the Media Metrix Multi-Platform product.
The Media Metrix product footprint truly does span the globe, and this is where we have customers today. We have teams on the ground in Latin America, in Asia Pacific, certainly in Europe and throughout North America, who are working with customers in every sector to make sure they get their hands in the best available data that describes what's happening in the digital world today. That's Media Metrix.
It is, as Cameron said, the currency for media buying and selling, it's a product that guides strategy and tactics, really helps people understand how they can package their audience for advertising. Certainly, it's trusted. And we have more that 1,800 clients for this product. And to give you some sense of client enthusiasm and usage of this, in May 2013 -- and this is an incomplete number because I got the number pulled at about 8 a.m. Eastern, so I'm sure it's more than this -- but in May, we had nearly 900,000 client-generated audience reports from the Media Metrix suite. So that's 900,000 times the clients access, via the cloud, our Media Metrix product and created their own proprietary view of that market data that we provide. That's a pretty stunning enthusiasm, I think, for a product like this.
Media Metrix has really paved -- pioneered, I think, what you can do in terms of digital measurement. But we know and we knew this, as Magid said a couple of years ago, is that today's market is not just about the PC browser. It's about so much more than that. And you see this show up in the data -- in our product itself. So Video Metrix, for example, has charted the rise of digital video. This is mapping the increase in the unique viewers in just the U.S. marketplace. But in the United States today, I think we're going to watch 1.6 billion digital videos. This month, on average, 265 videos will be watched online via PC, via tablet, via phone by 188 million consumers. This is changing the way people interact with video, the way they think about TV. And it's happening in ways that aren't evenly distributed, right? You can see clearly -- this is showing the reach of web users who watch video in a month. Those 18 to 24 year olds, 91% of them are consuming video online. Compared with 65 year olds, only 84% of them are consuming video online, right? You're seeing 2 things here, both the demographic differences but also the way that digital has so permeated every aspect of the population, in what they do and how they think about what they can do.
Probably the biggest fundamental change here, and it's something that I've been enthusiastic and excited about for more than a decade, is what we've seen happen with mobile technology. So this is comScore data that charts the rise in smartphones and also in tablets. Smartphones in blue, tablets in orange. This is for the U.S. And there's a couple of points I'd make here.
For the first time, just about 1 year ago, we saw in this country more than half of people with a phone have a smartphone. A real pivotal moment when the smartphone promise which, as you can see there, was chugging along for years and years with people with Trios put to their belts and Blackberries put to their belts and trading them in. But we really saw this hockey stick in 2007, 2008, and it's transformed the digital landscape certainly.
But then look at that orange line, right? It took 7 to 8 years from the introduction of the smartphone in the U.S. to get to the point we had 40 million people walking around with a smartphone. We hit that milestone with tablets in under 24 months, incredible velocity.
And we have been watching this at comScore and building technology, as Cameron indicated, and making sure that we could make sense of this for our clients. Because what's happened to the digital consumers, they become what we call the digital omnivore, right? If you want to, as a marketer, reach a consumer and you want to do so digitally, you have to understand the fact that they are moving across multiple devices in different ways at different times of the day, right? This chart which shows the share of traffic to those 3 platforms by time of day, that kind of illustrates this. It shows you, for example, why Google has started to sell day-parted tablet ads, right? Focus on prime-time hours, right, because guess what? What we see in our data is the fact that people wake up, they turn all their devices on, they use their phones very consistently throughout the day, peak usage for the PC is during the working hours, and then that tablet is what they're spending their time with when they're on the couch, when they're in bed at night. So same consumer moving across multiple digital devices in the course of the day. And if I'm an advertiser, if I'm a marketer, if I'm a content owner, what I care about is reaching you and building that digital relationship with you, not with your device.
So clients understand this new reality. They haven't -- and so we came along really knowing what to do with it. Many of them actually, I'd say -- and you'll hear this from Jodi when she talks of digital enterprise -- are just beginning to be aware that there's a problem out there because their current way of understanding the world is broken. But our clients want to understand who are these consumers and how many of them, what are their demographic attributes and how do they engage with content as they move across these different devices? And of course, how can I monetize that engagement? And how can I figure out how to take advantage of this big secular trend to make sure that I'm driving strategic growth and making smart, tactical decisions. The kind of the fundamental place that people met out here is really trying to understand that at the personal level, not the device level, but at the personal level was that overlap between computer, smartphone and tablet usage. And that's what we've been delivering in Media Metrix Multi-Platform, right? Initially, as a product, which you got in beta, the beta label is off, clients are delighted to see this because it brings together the insights we provide from Media Metrix, from Video Metrix and from Mobile Metrix. It's leveraging the data that we get from our Census Network and from panels of computer owners and iPad owners and smartphone owners and bringing that together to provide this person-centric view.
And from a commercial standpoint, what we've done with Media Metrix Multi-Platform is really kind of 2 things. So one is to make sure that we get this out there to clients and they see it. And as Magid mentioned, later this year, right, we will switch to the [indiscernible Media Metrix so the data of record will be the multi-platform data. And that'll be an important day in the industry as we make that shift. So today, clients can get Media Metrix Multi-Platform data, and they will see a total digital population number, so they'll know their deduplicated audience. That's fantastic, and that's something they haven't been able to do before.
But if you want to understand the texture and character of that audience, if you want to understand the video audience in detail, if you want to take that mobile audience and understand who in that mobile audience have Android devices or iPads or iPhones, well, then you have to also subscribe to Mobile Metrix and to Video Metrix, right? So it's provided us both an ability to give our clients the state-of-the-art in audience measurement but also phenomenal upsell opportunity that's introduced many clients to Video Metrix and Mobile Metrix who previously may not have been interested. I don't have a mobile business. I mean, now what they're realizing is that everybody who has a digital business has a mobile business. That's a big deal and a big shift for our clients, and I think you're seeing it pay off for us in our business.
We win in the audience space because we're accurate and comprehensive but also because the innovation that we've described that make sure that we stay well ahead of competitors are on pace with market trends. We deliver our data flexibly through a global footprint. And that currency status that we have, certainly, doesn't hurt.
One of the themes hopefully that's emerging here, though, is the way that we've been able to build leverage from our businesses. And so the audience products, the place that comScore started and has been a place where we have built such a big advantage in terms of assets and technology, has also given us a foundation for which we drive leverage into our other businesses.
So you'll hear in a moment about our Advertising Analytics business. And the demographic data that we are able to derive from our audience business, we could flow it through our advertising business and also connect it with our digital enterprise business. The multi-platform methodology you've heard us talk so much about because it's so important, is something that was developed with a big data set from our audience business where we're able to take that same methodology and apply it when we move into a client data set from the digital enterprise, or when we're talking about Advertising Analytics and understanding where those ads were seen.
And fundamentally, there's efficiencies here. Because as just that one example, that single tag we're able to use for data collection, means that a client can come to us, they can be tagging up their assets, participating in the audience marketplace data, but also really not have to do substantial extra work to also get data back to them on the performance through their advertising campaigns or take that same data set and turn it into an asset they can use to manage their digital enterprise.
So the leverage we've created across these businesses, enormous set, it's part of, I think, why you're seeing the team so excited today.
So with that, let me conclude our discussion of the audience space, and turn the stage over to my colleague Anne Hunter, our SVP of Global Marketing Strategy.
Great. Thank you, Mark. Well, thank you, all, for coming today. I am extremely excited to have the opportunity to talk to you about our Advertising Analytics business.
Today, I am working in our global marketing strategy. But prior to that, I ran product management for Advertising Analytics solutions. And we have been winning the ad market.
comScore's Advertising Analytics suite, also known as AdEffx, focuses on the 3 areas of the digital media buying process. When marketers want to understand how well their ads are performing online, they use our validated Campaign Essentials tool to measure basic metrics like reach, frequency, GRPs, whether the ads are actually valid and viewable, whether the ads are in brand safe environments and whether consumers are actually engaging with those ads. Once they understand that those ads have been delivered well, they can look then at the effectiveness of the dollars they've moved to digital. In our effectiveness area, we offer brand survey lists and brand survey list polls. And those products really feature metrics that help marketers understand if the brands are breaking through and creating awareness with consumers. Are the digital ads assets actually moving purchase intent and favorability?
And purchase is really the big metric. That's the big thing that all marketers want to know. If they do move dollars to match consumers' time spent to digital, are they going to get ROI? And we offer solutions with on and offline sales list that help them understand their list in sales, their list in unit volumes and whether they're getting ROI out of the money they moved to digital.
We're doing this in the U.S. But as you saw with the other products, we're also doing this around the globe. Global is particularly important for Advertising Analytics. It's not just that we can sell these products in all of these regions' market, but it's that global marketers want standard benchmark country-to-country and they want solutions where they know that they can get consistency to track how their brands are doing.
So one of the unique advantages that comScore brings is that we allow global marketers and global media companies to have consistent measurement in their ad business anywhere they're running advertising. Validated Campaign Essentials, I'm very excited to say, is delivering twice as many impressions under measurement as our nearest competitor here in the United States. And on a global basis, we are delivering 4x as many measured impressions as our nearest competitor. I want to take a minute and really talk about this slide because this is critical to understand the market share for our Advertising Analytics business.
In every market, there's a unit of volume that's used to determine share. In shampoo, it's ounces. In airlines, it's passenger miles flown. And in advertising, it's impressions. ComScore is delivering measurement on impressions at a significantly higher rate here in the U.S. and around the globe than our nearest competitor. And the reason that they're choosing us to do that is because we're able to measure their campaigns, whether they are display ads or video ads, whether the campaigns are across large ad networks or for small campaigns. On any given day, we'll have an ad network campaign running in Canada and a small video campaign running in Malaysia and comScore vCE is measuring them all on a consistent basis for global clients. This diversity of available measurement is what's making us win the ad market, and we're seeing such gigantic share differences versus our nearest competitor.
It's not just with marketers, though, that we are winning. It is, in fact, the agents that the marketers are working with. We're working with every single major holding company and the agencies therein and we're working with brands that sell to brand advertising goals and to brands who focus on more direct response goals. These agencies are bringing clients across the advertising spectrum.
We're really excited to see this article in the Wall Street Journal a few days ago that some of you may have seen, which announced that we have been chosen by Starcom MediaVest and Zenith Optimedia to be offered to their clients with validated Campaign Essentials measuring their ad campaigns. Later on this afternoon, you'll hear from Helen Katz from Starcom, who will talk more about their perspective on what comScore validated Campaign Essentials is doing.
It's the entire market that is invested in comScore's Advertising Analytics solution, the marketers and the agencies that we've talked about, but also agency trading desks. Agencies aren't always buying today when they're having a meeting with a publisher or sitting down to craft the deal. They're buying through programmatic means. And the trading desks are at the fore of that, we're working with those trading desks to supply metrics that help them understand value.
We're also working with the companies in the middle, the ones that activate online ads. These are the companies focused around programmatic. The DSPs or demand side platforms; the DMPs or data management platforms; the SSPs, the sell side platforms; the exchanges; the ad service, the whole alphabet soup of that middle group of companies that actually activate online advertising, are choosing comScore to help them understand value in a programmatic environment.
And then, finally, the inventory really comes from the publishers and from the Ad Net. They're the ones who are generating this inventory, and for them to know how to accurately price and understand how much good inventory they have, they are relying on comScore to help them answer those questions. You'll be hearing this afternoon as well from Tim Avila talking about the Ad Network perspective.
So the clients are coming to us because we have the data and the insights and the tool to answer their questions regarding the move from traditional advertising dollars into digital. They want to understand especially how to understand the value of the variety of formats that are available in digital advertising.
It's the entire market that is invested in comScore's Advertising Analytics solution. The marketers and the agencies that we've talked about. But also agency trading desks. Agencies aren't only buying today when they're having a meeting with the publisher or sitting down to craft the deal. They're buying through programmatic means. And the trading desks, they're at the core of that. We're working with those trading desks to supply metrics that help them understand value. We're also working with the companies in the middle, the ones that activate online ads. These are the companies focused around programmatics, the DSPs or demand side platforms, the DMPs or data management platforms, the SSPs, the sell side platforms, the exchanges, the ad service, the whole alphabet soup of that middle group of companies that actually activate online advertising are choosing comScore to help them understand value in a programmatic environment. And then finally, the inventory really comes from the publishers and from that ad net. They are the ones who are generating this inventory, and for them to know how to accurately price and understand how much good inventory they have, they are relying on comScore to help them answer those questions. You'll be hearing this afternoon as well from Tim Avila, talking about the Ad Network perspective.
So the clients are coming to us because we have the data and the insights and the tools to answer their questions regarding the move from traditional advertising dollars into digital. They want to understand especially how to understand the value of the variety of formats that are available in digital advertising. In traditional media, if you buy a page in a magazine or 30-second spot on the television commercial, you know what that is. That's been the same thing that's been purchased year after year. In digital, we have homepage takers, display ads, video ads, new formats all the time, and understanding the value of those formats and how much they can be sold for, and how much can be purchased for and how effective they really are is crucial to bringing that dollar into digital so that the money matches the consumers at times spent. ComScore helps our clients understand the variety of those different formats and help them value them appropriately. We also help them understand the value of different audiences. In traditional media, you buy an audience because you're buying the media platform that, that audience visits. You buy a television show because it attracts a certain audience. You buy a magazine because it attracts a certain audience. In digital, there would couple. You may buy a certain type of inventory, and you may buy a certain type of audience and they're not necessarily in the same spot. So understanding where you're running and who you're actually running to is critical to know if your money is well spent. ComScore is helping our clients understand the quality of that behavioral targeting that they're actually activating. Or helping them as well understand were they probably don't want to be running. As you heard earlier from Magid, about half of the ads that are run on the Internet today are not viewable to clients. That's money that's wasted, that's lost. And we're helping our clients understand how to prevent that loss from the ads that are not used, as well as from ads that are running in, well, rather unsavory location on the Internet where they don't want their brands to be associated. As publishers understanding then how much of the quality inventory they have is critical to understanding how to value it, especially as they look across their content being consumed on multiple platforms. We're also helping those buyers and sellers understand the true ROI of their digital investment, all the way back to purchase of an individual product whether it's an online purchase or an off-line purchase. And finally, making a decision how much money should be moved into digital is usually done through what's called a market mix model. Traditional brand advertisers have a traditional model that they use to determine media allocation. ComScore's enable to provide a metric of validated GRP that can be used in market mix models to put digital media alongside traditional media to determine appropriate allocation for big brand dollar spend.
Our innovation in delivering metric set is the VGRP or validated gross rating points. It's just one of the innovations that comScore's derive and why we've been leading in the ad market. In 2000, we launched Media Metrix, which helps publishers understand how many people and who is visiting their website. That allowed them to have a conversation with marketers about the value of this new digital spend. In 2007, the big metric theme used for digital advertising was quick, everyone wanted to talk about how many clicks they were getting per site. We publish groundbreaking research called with Whither the Click and natural born clickers that help marketers and publishers, buyers and sellers, understand that clicks actually were not well correlated with the value that they were trying to derive from online ads. The clicks weren't driving sales. That helped change the market from a voluminous metric to one that was actually important. In 2010, comScore launched Campaign Essentials, which helped our clients understand who was actually seeing not only the website they visited, but who is seeing specific campaigns with the rise of behavioral targeting, comScore's innovation in launching Campaign Essentials made that new technique for buying advertising actually possible to evaluate. In 2001, we purchased AdXpose, which gave us many of the verification metric, allowed us to help our clients understand, is the ad that they're running actually getting in front of a consumer in and way the consumer the can see it and a good environment. And we brought that altogether last year when we launch validated Campaign Essentials. Now in 2013, the market is considering new currencies and comScore's leading the way again with innovation.
One of the ways we view about this and make it easy for our clients to try new things. So we put our performance product, our effectiveness product and our ROI product all together, so that all our clients need to do is tag and add with us once. And from that, they can understand the reach, the delivery, the awareness, the ROI of that campaign based on the insight they need as they move into digital advertising. And we're delivering those insights in a fast-paced, real-time campaign management platform. This is really different from the traditional model of delivering a market research report at the end of the campaign to say, and here's how your money work. What we're delivering today is an actual tool that they can go into and see on a given campaign, how they're doing in terms of reach and impressions, how their brand listed to actually increasing as the campaign goes along. And they can get these 2 measures today. They can add new measures to campaigns as they go, and they can store all of their projects in a central location. Just gives us the unique advantage in that when clients are using us for a few studies, they want to use us for more, because they have all of their research in a single location under a single methodology. So we often start with clients measuring a campaign or 2, and it grows and it grows and it grows. And as you heard about earlier today, we're working with 22 of the top 25 global marketers. These are great opportunities to grow their business because they can see all of their research in a central location with AdEffx.
We are doing this measurement for digital, but we're also offering Advertising Analytics on a multiplatform basis. We have validated Campaign Essentials, which measures digital, display and video, as well as television and mobile. Brand survey list multiplatform, which is a survey-based product that offers television and print and outdoor media campaign, looking at brand list, brand awareness across all types of screens. And then we have a specific product offering in mobile. Mobile is a great and growing area of a digital ad measurement and our brand survey with mobile is helping brands understand if running as ads in mobile environment is really generating that brand favorability and that consumer interaction that they're seeking with their ad dollars. Traditionally, ad measurement has been based on how well a campaign has hit an age and gender target. What we're seeing in digital though is we're able to take all of that additional data that Cameron talked about earlier, and know more about consumers than just their age and gender. We know what they're interested on the purchase. We know that they're interested in travel. And now, a consumer can be more than just the age and gender that they are. They can be the sum of their digital experience. And it really plays out extremely useful ways for marketers. So here's an example of a campaign where originally, the client look at demographic data alone. They look to see if a campaign, which was targeting women, 25 to 54, was actually hitting that demographic target. And unfortunately, they saw that 54% of the time, that campaign was out of target. At that point, the marketer is pretty upset where half the ads are not hitting who they intend it to be. But when they used validated Campaign Essential and look at the behavioral data that we provide, which is something quite unique in the market. We were able to see that in fact, 70% of the ads that ran, ran to people who are heavy online recipe sites visitors. They just weren't all women 25 to 54. Some of them were men, some of them were older, some were younger. But that heavy recipe site visitor was exactly who the CPG brand wanted to reach. They had a recipe product, the products they heavily use in recipes. And in fact, this is a great campaign and it was targeting the right people. So adding in more insights, going beyond age, gender is a unique advantage that digital can provide and comScore's capitalizing that significantly with the Big Data assets that you heard about earlier.
We're giving our clients that data to make that change, to leverage that insight in-flight. We offer them tools to actually alert campaigns if they are providing data that's not working, if they are running in locations that are inappropriate. We can actually even block the ads from running there. This in-flight data yields very positive lift in ROI when it's actively managed. This is a huge contrast to traditional media, which is purchased far in advance and you have to wait until it runs to see how it works. Actively managed campaigns have significantly better ROI. I actually want to talk you through an example of one that we've been working on for quite some time, and that's the Kellogg's. Kellogg's has been a great client for us, and we've been working with them over the past 3 years. And we're looking at 2 of the brands that they have been running. And they've been using real-time data, looking at reach and frequencies, targeting and optimization to see if they can change the ROI they get on their brand by managing those brands actively. And the first brand, they've been able to increase their ROI by 5x using this active optimization strategy. In the second, they've been able to raise it 6x. So having this data, having the ability to understand if your ad is being seen -- if your ad is being seen by the right person in the right content, if it's lifting awareness, having that data can have a substantive impact on a client's business and makes them really turn to comScore for measuring their move of digital dollars.
We've also helped the clients integrate this data into their own system. We have an API in Advertising Analytics that brings this data into our clients' internal analytics system. We also bring the data into the real-time bidding environment, because increasingly dollars are being made, the decisions are being sent during and in portion of a second, choices are being made about where to run advertising. And having that insight in that real-time bidding environment is critical. And then finally, we've actually said that, so that clients who want to use our tools to do deeper analysis can bring this data to our impression level reporting directly into our Digital Analytix Suite, which you'll hear about in a moment from Jodi. So why do we win? We win the ad market because we offer global solutions for brands that need to be able, to be measured globally and consistently. We win because we're consistently innovating, and we do that with a unified solution that makes it easy for our clients to actually link their planning to their in-flight measurements, to their ROIs. We do that across platforms to provide benchmarks to understand how effective advertising is in traditional and in digital media, so that they can move money to the right medium for the right goal. We do that because we give them a better portrait of their consumer than just age and gender. And we allow them to take advantage of that in-flight and even at the nanosecond moment in our TV and we do it with a trusted comScore name based on the strength of our market advantage that you heard from Cameron. And with that, I'd like to introduce Jodi McDermott.
My name is Jodi McDermott. I oversee product management for our Digital Analytix platform and I'm going to be talking about our digital enterprise analytics business today. We have 2 products within our digital business analytics. One is Digital Analytix, which is our Software-as-a-Service analytics platform for businesses to be able to bring in any type of data within their organization into one platform for multiple users to be able to access that data. Whether they're an executive looking at a dashboard, or they're an analyst that's doing deep data mining. It's all sort of one solution. We're going to spend most of our time talking about that today. Our other product is subscriber analytics, and that's specifically focused on the telecommunications market and specifically mobile operators as they look at data across their entire network.
So diving into Digital Analytix, we have a global client footprints that mirrors all of our other products with the one exception of Asia Pacific. That's an emerging market for us. It has a lot of growth potential in it. And we're just starting to move into that space. So 3 core fundamental problems within enterprise analytics. The first is that data is very inflexible. It's siloed across multiple systems. It's difficult to get at. The data doesn't talk to each other. A lot of the data too is processed in slow or batch processing, which is done daily or nightly, and so the data is not necessarily readily accessible to make quick decisions off of. Versus real-time data where you can access it, near real-time as it's happening to understand what's happening with your customers. And what we call the multi-platform blind spot. What this is, is the ability for our customers to be able to understand how their customers interact with their content, their application, et cetera, via different devices. So being able to tie all of that together do have a 360-degree view of what their customers are doing. So legacy analytics systems, costly and inflexible. So how do you think about this? If I was a business user in an organization and I wanted to do some analysis asking a business question. Traditionally what I'm going to do is I'm going reach out to a technical architect or a database administrator within my organization and I'm going to make a request for data. Okay. It's a costly and it's a timely manner because it takes human capital to do it. You have people interacting, pulling data out of systems. A lot of these systems don't talk to each other. Again, they use different vernaculars. The data is stored in different methods, different ways, different structures. And it takes time to pull it all back together. So what this technical person is doing is they deploy [ph] queries across these different database sources, they're pulling the data back together and they're delivering it back to me as that business user. And then I'm either manually pulling that data together or I'm using some other systems to then pull it together, do my analysis and answer my business question. This takes a lot of time and we have customers and business users out there that need to answer questions now and today. And they're going to do it regardless of whether they have the data or not, but that data helps them make a more articulate, refined answer to their questions and to provide guidance to the executive teams and organizations that we support.
So how are we different? ComScore has a much smarter approach on how we solve the same question from an analytics perspective and an architecture perspective. So the way we kind of think about this is, think about how you do a search query, right. We all do that everyday. You get online, you pick your search engine and you enter in what you're searching for. Imagine if it took minutes or hours to get that answer back. Well today many of our users just taking hours and sometimes even days to process data to get an answer back to answer their business question to give them that piece of information. Well what a search engine does is they -- that query very across a large core of servers and really into the cloud utilizing all of those competing resources to be able to run many queries, if you will, and then concatenate those results back together to bring them back to you, the user, when you're running your query, so you get your answer of where do I find this product, or how do I answer my question.
We have got the same method for how we deploy Digital Analytix and how it's architected from an underlying system perspective in that same parallelized processing. So distributing the query across a very large cloud and then bringing all of that data quickly back together to the end user. So Digital Analytix is a product. As we talked to our customers across [indiscernible] We have 3 core ways that we describe this product that resonates with them. The first is flexible. It's a very flexible open system. So what that means is that you can bring in any type of data source, whether the web data or [indiscernible] data, it can be structured data via all of our APIs and SEKs and comScore's tagging [indiscernible]. It can also be back office data information about your inventory, pricing of products, et cetera. But it can also come together with one environment. Lean is the second way that we really talk about the product. Total cost of ownership. Digital Analytix has a smaller footprint within an organization's total cost of ownership perspective. So if you look at what many of our competitors do when they go into sell a system into their clients, those clients have to buy 2 and sometimes 3 or more products to get the same functionality as to what the Digital Analytix platform can supply. So sometimes, it's one product for guiding data mining analysts and another product for the marketer or the executive. We bring all of that together in one solution, and simply provide different lenses or perspective into the platform, so that everyone is using the same system. The third is unified. So whether it be video assets, mobile, gaming platform, which we'll even talk about today. Any type of digital data, we bring that together in one system, so that you can have 1 unified data. And what that means to me as a business user is, I can do analysis comparing video consumption, mobile consumption, web consumption, altogether in one report, in one analysis canvas without having to go to different sources for that data.
Okay, let's talk about how our customers are using Digital Analytix. This example is of leading gaming platform. So with this customer, they needed to maximize gamers on their platform. So what that does is they need to be able to go in, in segment and look at who's using my platform, what games are they playing, and what do these consumers look like? So when you think of a gamer, you probably think of the traditional 13 to 25-year-old male gamer, not to be stereotypical. But you also have a lot of moms and you have dads, you different segments of the market, different household income stratification. And advertisers need to be able to understand who they can reach on that gaming platform. So this is a very unique examples in that if I as a media buyer would to go out and look for metrics on a gaming platform, you're not going to find this metrics in typical. Fix the audio here -- you're not going to find this metrics on typical syndicated research reports.
I'm not sure where I went to. Can anybody jump there? I have to do it? Okay. Everyone close your eyes as we go back in time. All right. Okay. So let's talk about our gaming platform here. So the problem, okay, the problem here is that they want to be able to monetize this platform and there's no simple way to get the message out there to everyone to say hey, here are the different segments of audience that we have on this platform. And you, as an advertiser, that may want to sell toothpaste, guess what, we actually have an audience on our platform that you can sell to make it relevant. And your message is going to resonate on our platform. So what we did is we worked with this customer to bring in comScore panel data, to bring in their gaming console data, web data, to create a solution for them to be able to produce information and insights that their sales team could access via Microsoft Office. So we have a plug-in for Microsoft Office that their sales team was able to essentially pull down data from the Digital Analytix platform in real time, on demand, to be able to create stories around the different users on the gaming platform in order to go in and pitch advertising. So very unique solution with different types of data that you wouldn't normally think off. Okay.
All right, the second example here. This is with a leading worldwide car-rental company. So I'm sure all of you have rented cars before. And you kind of think of a car rental as a commodity product. But we all have our affinities with different brands and all brands are trying to do different things to keep you loyal, et cetera. This is an example where we have a car company using Digital Analytix to analyze all of the in-car navigation system. So when you're in the car, and you're interacting with the navigation system to figure out where you need to go, get your direction, find a gas station, all of that data is being measured by Digital Analytix. So the business users inside of this rental car company are essentially able to go through, look at the patterns about how people use this product that augments the entire customer experience, understand how to optimize it, so that the user has a good driving experience to increase brand loyalty. Another great example of business that is digital, not necessarily thinking about it from their website perspective. Just another great example that all businesses are digital and they have digital types of data and their needs are different in every organization.
Okay. So one of the exciting things that we are talking about all day long here is multi-platform. And as Magid mentioned earlier today, we're very excited to announce the general availability of our multi-platform products for Digital Analytix. So this product is addressing some key issues within standard traditional web analytics as we know them today. So within standard Web Analytics, okay, we have a lot of overcounting, undercounting and miscounting. And what does that mean? From an overcounting perspective, traditional Web Analytics looked accounting browsers. So that number continues to increase based off of the number of devices that people use. And we all use multiple devices, and so we're counted many times. So I love this quote here. My site as 1 bazillion customers. And a lot of people do that. They use that unique browser number or they think that it's a good metric to use, and we know we can do so much better. We're also undercounting. We're undercounting engagements because each time someone interacts with a brand or site, and they're doing it off a different devices, each one of those visits or interactions are counted separately. So if I started my day and I'm perhaps riding home on the subway, et cetera, and I'm looking at my tablet and I'm interacting and watching a video. And then I get home and I stopped the video and I now turn to my PC to finish watching it, perhaps it was a movie and I was logged in, Traditional analytics is going to look at each one of those interactions as separate. And perhaps one of them was 20 minutes and the other was 15 minutes. Well it's going to take the average of those 2. In multi-platform, we can look at that as one customer experience across 2 different devices, but look at it from one customer perspective. And basically say, okay that was actually an engagement of 35 minutes, not an average of those 2 different devices.
The last example here is about miscounting. Miscounting is most critical especially for sites that have conversion metrics because that's their key value metric of understanding how well they're doing. And so with miscounting, you may have, again those 2 different customer experiences where someone didn't buy something, they didn't convert on some value event in the first visit. But then on the second one, they made their purchase. Well in multi-platform analytics, we might be able to get down to that level to say, well they were actually searching for the product in one device and they bought or converted on another. That's 100% conversion. Not an average of 50% across those 2 devices or experiences.
Okay. Multi-platform also is enabling our customers to answer and ask and answer questions they've never been able to do before. So in an old traditional manner you might have said, how many users accessed my website content? But today, they can ask questions such as, how many of my users consume content across multiple devices? And How do I optimize for that? How much money did I make on my website? Different question we ask today. Are multi-platform users valuable than single platform users? What's happening with that total customer value? And what are the engagement metrics from my website? Does multi-device content consumption increase loyalty? And how does it do that? As a product developer, I'm interested in understanding, do I invest first in iOS and then in Android, or perhaps there's value creation happening on a platform that is actually attributing to conversion on another platform? I need to be able to think about that from a business perspective to optimize the entire equation.
So our last example here. But this is for a leading broadband TV and mobile phone provider. They are using our multi-platform product to help understand how consumers are absorbing content, interacting with content across a multiscreen environment. So go back to that concept of watching a movie. I may start the beginning of the day on my phone and actually search the -- oh, you know something, I really want to watch this particular movie today. I know it's going to be on and I'm going to keep it from my smartphone or I'm going to log in to the application and actually schedule the content to be taped. And then I may then interact again with my tablet and start watching that show or movie while I am heading home for the day. And then at the end of the day, I'm moving onto a different device. This company is capturing data from all of those touch points. They have multiple -- they know a lot about their customers so they also have multiple touch points and they also have many keys and identifiers to be able to understand who these folks are and what they're doing. And look forward to Digital Analytix Multi-Platform analysis around their households, their accounts, their users who are done in silos, so they can look at it from one view at a time, but not synthesize all the way across the entire experience. So Digital Analytix Multi-Platform has been critical for their business in understanding that content consumption. And for them, it's helping them create a story back to advertisers to say, this is the engagement across all of the platform. This is what my multiscreen user looks like. And for this company, they're able to repackage their advertising inventory and go back to their advertisers to help increase sell-through on their inventory and have a different way to take their advertising packages to market.
So we're going to be hearing from more of our customers today, including John Kahan from Microsoft, who's going to talk a little bit about how they're using the Digital Analytix platform. But we are closing in on the end here until we take our break. So why do we win? Digital Analytix has resonated with so many of our customers and we've had this fantastic section here in the U.S. And the reason that we win is because our customers need to be able to get that raw data. They need to be able to drill all the way down to an individual record. They need to be able to look at a particular dimension or metric of data to help them make a decision and they need to be able to do it in real time. They don't have time to wait even 2 hours for the data to finish processing, to figure out what they're going to do next. They need to be able to do live segmentation, which enables that type of analysis and capability. We talked a little bit about Microsoft Office integration, that's enabling many of our customers to distribute access to the Digital Analytix platform across their entire enterprise. But also that lower total cost of ownership, one solution meeting many needs throughout the organization. And with that, I'm to turn it over to Serge Matta.
Actually, we're going to take a 5-minute break instead of 10 because we're running a bit behind schedule. Thank you.
All righty. We'll, let's just get started because I know we really want to get this on schedule. This is by far [indiscernible] against my colleagues talking about how wonderful comScore is. We just want to take a pause where we're going to stop talking about ourselves. And we're going to let you guys hear directly from our teams' clients. We have the pleasure of introducing several of our key customers. We make sure to have a broad representation ranging from the largest independent video advertising platform with Brightroll, the world's largest software company, Microsoft. One of the world's leading media and entertainment companies and the largest telecom player in the U.S. with NBC Comcast. And one of the world's largest advertising holding company and the winner of the 2013 Festival and Media U.S. Network of the Year publicist, Starcom MediaVest, with Helen. I don't have a clicker. There you go. Okay. There you go. Before into the speakers, provide you an overview of their business. I wanted just to give you a quick overview of their bios and tell you who's who. First of all, really appreciate everybody coming here and speaking on our behalf. So Tim Avila is the Vice President of Product Marketing for Brightroll, bringing 15 years of experience in product strategy and marketing to the Brightroll team. Tim drives the development and execution of strategy in the Brightroll exchange, and is responsible for all elements of the BRX strategy related to real-time bidding, data provider partnerships, demand-type platforms, mobile partnerships and photo inventory partnerships. John Kahan is the General Manager in Data Analytics -- for Data Analytics for Microsoft online services division. And this expanded role as of July 2012, he is responsible for driving and enabling data-driven decisions across OSD. His seamless task with transforming the data as of this OSD into a strategic and a competitive differentiator for OSD in Microsoft. John reports directly to the President of OSD and serves on the OSD leadership team, shaping the decisions of the future of [indiscernible] MSN and data for OSD and Microsoft. Welcome, John. Helen Katz is the SVP and Director of Research for Starcom MediaVest Group. Helen focuses on advanced video research, return path data and research contract negotiations. Previously, she worked at GM Plan Works, Zenith Media and DDB Needham Chicago. Helen has received an Advertising Research Foundation Great Minds award for research innovation and a Silver Jay Chiat award for innovation. Welcome, Helen. And finally, Andrew Ward serves as the Group Vice President of Comcast Media 360 for Comcast Spotlight, the advertising division, sales division of Comcast Cable. Based on New York City, he works with the client and agents of community to help market to take advantage of rapidly developing, cross-platform advertising opportunities. Welcome, Andrew.
All righty. With that said, I'm going to hand it off to Tim and he's going to do his thing.
Thank you, Serge. I'll take that. So I thought maybe I'd just start today with just a story on -- to give you guys the context to help you understand what's happening in video. My company, Brightroll, as Serge alluded to, is the largest independent video advertising platform. We help TV advertisers basically bring their television messages into the Internet world by running them on Internet type of devices. So if you think back 40 years ago when we first started -- when I guess on television, we first started measuring audiences. We said, hey, what was the #1 way to reach an audience, what was the #1 show? That would have been 1974. And that would have been, All in the Family. Who here knows what kind of share All in the Family did in 1974? Anybody would kind of guess? Huge. That's right. Yes, it's huge in today's terms, I'd say for sure. 30%, see like a 32% share. So that means basically the 32% U.S. household tuning into television at that time are watching that show. It's amazing, right? If you're an advertiser, sort of one of the underpinnings of advertising theory is if you want to get their message into an audience, you need to penetrate that into the audience, you want to reach that audience, what the really efficient way to do it. One television show, one buy to reach 30% U.S. watching television. That's pretty good. Today, it's a fast-forward to 2013, guess what the #1 show is probably like a Sunday Night Football, maybe like Dancing with the Stars on a results night, might do like a 6% share, 7% share, something like that would be amazing. So one of the things that's happening right now as a really important problem for brand advertisers is the notion of audience fragmentation. Audience fragmentation is -- just makes it harder to reach audiences. So what we're seeing is kind of a trend that we're really excited about is the concept of finding audiences at scale and reaggregating those audiences and helping brand advertisers reach those audiences efficiently. And comScore is a key partner of ours in executing this. So talk just a little bit about what sets our company apart. And again, comScore will play a role in kind of all of this. We're the largest independent video web site. What's that really mean, it means by reach in terms of who we reach every month by far, we reach more U.S. users than any other platform. That includes Google. We serve on average more video ads than any other platform, and we're right about equivalent to the number of video ads we serve with Google. If you think about Google, they own YouTube. We roughly serve about the same number of ads each month as Google, to put that in perspective. The second thing that sets us apart I think in the industry is this concept of performance. One of the things that matters to advertisers is, ultimately, what moves off the shelf or what moves out of my showroom or what moves out of my floor. We look at that, for sure, we look at leading indicators that give insight into what is going to happen with sales. And we collect, because we serve more video ads than anyone else, an amazing amount of data about how those ads performed by vertical, by category, by site, by user type. And comScore participates in that by helping us understand the audiences that matter and the audiences we're reaching. I think Anne alluded to it, that we are able now, extensively in real time, to kind of start to see who we're reaching and to begin to make decisions on that. We're just at the early dawn of being able to make real-time decisions, and we're very excited about that. We'll talk more about this in a moment. And then the last thing that sets us apart is this concept of network effect. We operate a marketplace that brings buyers of advertising and sellers of advertising together. And as we do that, what's interesting is, we've aggregated now more than 250 different buyers. 45 of the top 50 television advertisers buy video advertising via our platform. We have more than 250 different ad networks, demand-side platforms, supply-side platforms, publishers, data providers buying on this platform. So when you have a marketplace that size, what you're doing is aggregating supply and demand. And every new buyer and seller adds value into that ecosystem.
What we think about that we do with comScore, it's essential to our business. Extensively, comScore is a source of truth for advertisers. They are measure, the yardstick, by which the performance of campaigns are measured. So it's very important for us to understand those measures and to integrate them into what we're doing. So we have integrated comScore data very deeply into our technology platform. It underlies a lot of the decisioning of how we serve ads and when we serve ads. And really, this means across the board, across all of our comScore's offerings, but extensively, the places where we're seeing the highest value today are around media playing, thinking about what sites make sense for this advertiser. And then in real time, seeing the sites that are delivering the most efficient reach to that into the audience that the advertisers might care about, whether that's mom, whether that's dad, who are active, sports enthusiasts between 18 and 34, all of that information is very, very valuable to us in this in making decisions. The other thing that comScore does for us that's incredibly important is validating that we're reaching the audiences. Those lots are telling us who we're reaching in real time, but it also is validating that we are reaching those audiences, that we're reaching them in the geographies that we said we would, again all of that is very, very important. And then lastly, this concept of measuring once the campaign is sort of completed, measuring the effectiveness of that campaign and what were the results of that campaign. Ultimately, the ROI for the advertiser.
I'll give a couple -- I think it's illustrative to think about our relationship with comScore in terms of the kinds of businesses that we work with. So we work with a major consumer packaged goods brand that deals in cereals and snacks. And this particular CPG brand had a campaign goal of optimizing campaign reach amongst target consumers for -- to really maximize the impact of their brands. So we use video metrics, for example, to begin to understand what type of sites might make sense in terms of the mix for that particular advertiser. We use vCE to validate that we're actually delivering to the audiences we said we would. We use that also to optimize our campaign and make sure that we're delivering into the audiences that we promised we would after the efficiencies that we guaranty to the client. And then lastly is brand survey of the product to understand how in the minds attitudingly of the audiences we reach, how do that change over time versus from the exposed, the unexposed. What we saw was a 60% over indexed in target delivery. That means that we did 60% better than average in terms of delivering that of the audience that our advertiser cared about. So seeing it's a very, very big success. I can tell you that brand list results also were similarly successful.
The last example I'll give is the concept of -- in the automotive space because work with a luxury vehicle manufacturer. In this case, they really wanted to drive engagement and start to begin to conquest market share from some competitors. Again, we use vCE to understand the demographics that we are reaching. The types of consumers in the audiences that we are reaching. We use action list to understand what was actually happening and what this market shares of that plant look like overtime. And we saw when we ran these campaigns over a 400% lift in consumer engagement. So that's just a couple of examples of how Brightroll is using comScore technology. And with that, I'll hand it back to Serge.
Thank you. Let's give it to John.
Thanks, Tim. When Magid asked me to actually do this, the first thing out of my mouth was, I've never done one of these before so I'm not quite sure what to do. And of course, I checked with my internal folks, as you can imagine, working for Microsoft you have to check with like 17 levels to do it and everybody's like, of course do it. And the reason that everybody said, of course do it, is that you need to understand that my role is actually twofold. One which I'm going to step you through, which is to drive data-driven decisions across the Online Services Division and ultimately across Microsoft using high-quality data. But the other side of the equation is I service an executive sponsor for comScore. And what a company as large as Microsoft is and the revenues and diverse of business as it is, we could completely value this relationship that the key was to somebody in charge to make sure despite the fact that we go to market as multiple divisions, and then we come to market with a common strategy across consumer and enterprise at least we attempt to, we needed somebody that was in charge with the relationship to make sure it's healthy and that we were learning and leveraging it together. And so I'm going to take you through the two things. One of it, take you through a little bit about what I do for a living and how it really impacts all of Microsoft and how comScore is an integral part of that. And second, I'll take you through the relationship of Microsoft and comScore, and how far back it dates and what we're doing today.
So first of all, what do I do for a living? I work in the Online Services Division of Microsoft, which is Bing and MSN and our OID business. It's a services business when you really get down to it, it's driven by data and in search at its very essence, MSN as its very essence is a data platform that delivers incredible content, whether it delivers it from the web or first-party content or third-party content. But its very heart is data, and how you refine it and do great things with it is by studying data every single day, both from the years of the data that customers give you by using your products, as well as third-party data that we get through comScore directly. And my job is to drive high-quality data-driven decisions across OSD in a rapid fashion to improve the results of our products. I do this for really one major reason. I do this to transform the data assets that we have into a strategic and competitive differentiator, not just to the Online Services Division but also for Microsoft. And we've been very successful at doing that over the last 5 years. In fact, Bing as a product which has really been the focus of our efforts, has tripled market share against Google which is in the United States. So we've gone from about 8% market share to well north of 27% market share in the last 4 years in what we've been doing. So it's very heavily focused on data, and that's what we focus on directly. And so why comScore and what are we trying to do? So let me kind of break down what I'm trying to do for a living and then how does comScore -- why do we choose comScore and why do we play together directly with them in our efforts. First and foremost is, what we try to do is drive business and product breakthrough through data and analytics across OSD. It's no longer sufficient just to think about what a customer is going to do with your products. We have to predict what it is because the investments are very high and we need to make sure that they have impact in the marketplace well in advance of deliveries. And second is to ensure that data is leveraged as a core asset. The reality is, is that up until about 5 years ago, we didn't think about data as a core asset. We just thought about it as a plumbing behind the search engine, behind MSN, behind the products that we're doing. So we have to change what we are trying to do. And then thirdly, we had to create an ecosystem or a system in a platform across Microsoft that interacts across all products and capabilities, but also interfaces with comScore directly. And then finally, talent is key to this. So why do we choose comScore? What was behind that? The reality is, we have a lot of partners at hand. And we needed a partner that was an independent provider of data. Independent is really important here. The reality is comScore is the interface into the marketplace for our consumers, from an advertising perspective but also for the high-tech community to understand our progress in the marketplace. Second is we needed a partner that was a technology company at its very core. The reality is there's a lot of companies out there that provides data but they don't quite understand how it works with technology. ComScore gets directly with us on the planning of our product and work together to think through what happens to improve the products themselves. Third, we needed measurements that wasn't just across platform, but ultimately was across devices and I'll talk a little bit more about this in a minute. But as you know, devices are exploding. It's no longer the PC with 2 billion PCs on the planet, but it's the growth of the mobile -- the mobile, the growth -- it's the growth of our entertainment platforms, et cetera. And it had to be a cross over the competitors as well. It's no longer sufficient just to look at our own data. And we needed a partner that could see a 360-degree view of our customers. And so together we partnered not just on a U.S. view, but a worldwide view that we used to actually power the products and advertisings and the things that we do. And then finally and certainly not least, we needed a strong partner that could -- I think that could bridge the difference between consumers and advertisers and agencies and publishers. That's not easy from a partnership perspective, because we have to broaden across all of those particular constituents. So let me give you a little bit about what I do for living and you'll see this a little more from a search perspective. First of all, from a search perspective, it's not just about browsers anymore. The reality is, you enter search through devices through different form factors, through different operating systems. It's no longer about mouse and keyboard anymore but it's voice and it's gesture and it's touch and in the future, it's even vision. And then it's a whole new information fabric that scans all of this to support it. And so it's no longer sufficient to power search from within search itself, you have to look for great partnerships across the board in order to do this. And so with this comes incredible measurement and analysis challenges, and I'll kind of give you a view of the challenges and some of the things that we're doing together and the partnership to try to give you a view of where we're going.
First of all in the browser space, the reality is we have a proliferation of devices. It's no longer sufficient just to look at the PC, as I indicated, but whether it be the mobile Phones and what we do for Win Phone or Android or iPhone and what's exploding there, but we have to understand, search behavior across all of this in order to do our business effectively. Somebody who needs to search for something on an iPhone may have a completely different reaction to what they do when do it on a Windows phone or a tablet with Windows running on it. And we have to understand all of those different intricacies to design a product for the optimal consumer experience. Second, devices are being shipped today in nontraditional input. I mean, you're no longer just typing things into a little search box, but people are talking to their devices. And we have to interpret that and understand what that is in a way that delivers the best consumer experience possible. And then finally, information is really just exploding. I mean, we have to make sense of all this information. I was watching earlier that Tim was presenting some of the data that we're doing and I was remembering back several years when they were talking to us about tagging our networks to get insights. And it was an uphill battle internally and Microsoft to try to convince people that what we were trying to do was to get a view of the whole world, and we could not do this by ourselves. We needed a partnership to make that happen. And so hence form the partnership. And so we've made a lot of progress here. The fact is today, we have cross-platform experiences and we have cross-platform measurement together, not just across PC and mobile, but into Xbox and things that we do there into different tablets, into competitive as well as into our views. We have premium experiences across all these devices.
So you've seen Kinect and Xbox and what we're doing there in voice and the way we're trying to do it in gesture and we announced it the other day -- we even could see heartbeat. And so you get an understanding of all the measurement challenges that go along with it and the privacy challenges that go along with it. And so understanding this data and bringing it together to understand it at a way that we can design not just the Xbox experience, but our PC, tablet, mobile experiences in a holistic fashion for consumers and advertisers is critical to our success. And with that goes the explosion of data. I mean, I like Cam's discussion and I remember my first day on this job about 5 years ago, and they asked me to sign an appeal for 5,000 servers and I all but fell off my chair and said, "Chief, I've never signed anything that large." When we installed 50,000 servers about a month ago, and we continue to grow rapidly. The fact is [indiscernible] has expanded as chips to GOPs of our index to over 112 terabytes of data. So it's growing exponentially. So making sense of it in an organized way, in a way that leverages what we're trying to do and doing it in a rapid fashion takes art and science at the same point in time.
And so with that, about 10 years ago, we formed a partnership with comScore, amongst many other partnerships across the board. And today we have over 2,000 Microsoft employees actively, daily executing their work, whether it be in marketing or in the products themselves or in the business development work we do or in the finances and analysis we do across the comScore suite of products. And we do that in 25 different countries, 25 plus countries around the world.
Our partnership started with a very small part of our MSN business, and it has absolutely exploded. Let's just give you a view of where we were in just a couple of years ago and I'll just kind of highlight a couple of key areas for us. I talked heavily about the search experience because that's what I live and breathe everyday, and the fact is search is no longer just a portal that you go to and type in www.thing.com in a browser. The reality is you can search through Xbox, you can search through your mobile phone, you can search through applications, you can search through a variety of different ways without even entering things into a search box. And we need a 360-degree view. And its through the partnership of comScore that we've been able to, every single day, predict quarterly share volumes, understand what's driving those volumes across all of those devices and understanding that within a tenth of a point of share, just given an understanding of what we do. And then take actions accordingly with our partnerships in order to improve the results of what we've done. And with those kind of partnerships and insights is how we drive our business every day.
So just to give you a view of it, this is expandable across Microsoft. The fact is our corporate marketing group today uses the DAx platform and is rolling it out across Microsoft, for marketers to use against their websites to improve the results that they are trying to do. So you can see the partnership is very strong, it's very important, and it's very strategic to us on both sides of the equation. We share intellectual capital back and fourth. We think it's critical to our future, and I'm glad to be here today to help share a little bit with you. Thank you.
Thanks, John. Appreciate it.
Okay. Thanks. We don't work with comScore. So I just thought that would get everybody's attention.
No, really. Sure, it was okay.
[indiscernible] exactly. You may want to take a second. I'm going to go acapella without slides here for a moment and just give you a little bit of a flavor of Comcast business in the advertising business. Obviously, everybody's familiar with Comcast, it's a Philadelphia-based cable company, sort of north of $40 billion in annual revenue. Our advertising business, which I represent, is based here in New York City. We're about a $2.5 billion enterprise, so we're less than 10% of the company's overall revenue. We're a little north of 12% of free cash flow, but that divide from Philadelphia cable company, distributor subscriber-based business model and New York-based advertising, was I think, in many ways over the years indicative of a separation of church and state that existed within the organization.
What's interesting, the walls of that church and state are being drawn down. As you are familiar, obviously, Comcast recently completed its remaining acquisition of NBC Universal, so that we wholly-own that enterprise. And what you're seeing as a result of that intersection of media and technology is really what we think are some fundamental changes in the advertising business. Those I describe in sort of 4 general areas. The first is, we'll talk about this whole notion of precision, ultimately addressability. The ability for us to deliver messaging far more precisely than historically has been available. Really this notion of the convergence of direct marketing strategies and digital video technology. You got to keep in mind that Comcast, as a cable operator, is an amalgam of several cable companies. All analog of architecture, walled garden infrastructure, companies like TCI and Continental and others, MediaOne, that you know over the years. And we're migrating that architecture from that analog infrastructure to a digital and ultimately to an IP infrastructure. Well that architecture is really being built for the primary purpose of keeping and growing our subscriber base in the face of increased competition. But that infrastructure, that architecture, we think, changes the advertising business, and one of the ways it does is allowing for more precise delivery of advertising messages. And I was recently with the CMO of a marketing company that describe their target audience in typical age gender parameters so that we go after women 18 to 49, and then -- he then kind of scratched his head then he said, "My wife is 47 and my daughter is 21, and I can't imagine 2 people more dissimilar in the world than my wife and my daughter."
So for us to start to think about targeting television in a more robust fashion than historically has been available is a critical piece, and I'll come back and give you an illustration of that in a minute. But that's the first leg of the chair. We see this whole idea being able to deliver video messaging much more precisely than historically it's been available to us.
The second theme that we will really talk about is this whole idea of what we call TV Everywhere, the notion of being device-agnostic. Comcast has a business model, as long as you authenticate as being a Comcast subscriber, we want to put content on whatever device you so choose. We don't care if you watch TV on a high def screen in your living room or on a mobile or a tablet device or on demand or online. We want to give you, the viewer, the consumer, the choice. And we've seen it in the music business, and we've seen it in the photography business. The consumer's going to win. The consumer's going to choose how and where and when they consume content. My kids, 17, 15, 11, consume content much differently than when we watch all in the family. And so the reality is in light of that, how do marketers begin to aggregate impressions across all of those screens. I used to work with Young & Rubicam on the media side too long ago to admit, I mean, the idea of putting a media plan together was a pretty simple process. You put a signpost in primetime television and customers came to you. Well now, human attention is really a scarce economic resource, and marketers are tasked with the challenge of aggregating impressions across all of those devices.
So as the cable company migrates an infrastructure from an analog plant, ultimately to an IP plant and distributing video across all of these screens, how do we begin to deliver messaging in an impactful and meaningful way to leverage brands, campaigns and drive improved effectiveness? Such that the second leg of this whole idea of multiplatform integration, people call it TV everywhere, whatever you want to call it, but that idea.
The third thing we see is this whole idea of that pipe, that digital pipe into the home allows for interactivity. So TV historically has been kind of a passively backward experience. How do you put interactive elements into that creative that allows the viewer to engage with the content in more meaningful ways than historically has ever been available? And we work with a pharmaceutical manufacturer that wants -- that allow consumers to request free product sample. Well, how do we put an interactive trigger in that ad, that television ad that allows the viewer to use the remote. We give the marketer an in-address file for fulfillment. How does that level of interactivity start to scale? It's kind of pedestrian at the moment, but how do we link a TV ad to a mobile device or to an email address? And that whole notion of interactivity is, I think, going to change the business in fundamental ways.
So long way around, the first 3 legs of the chair is the idea of precision, the idea of integration across multiple screens, the idea of interactivity leads to the fourth leg, which is actually why we do work with comScore, is perhaps the most important element: The notion of improved accountability, improved measurement. Marketers are being tasked to do more with less. We think that the media that is more accountable not less will be the media that prevail in the future world that we're all describing today. So we very much need to be able to work with a third party analytic company can't come from Comcast, it's got to come -- the data and analytics on the back end have to come from a third-party sort of good housekeeping seal of approval. So we feel it's essential for us to have that verification and that sort of authentication of this strategy provided by a company like comScore that we work terrifically well with.
So let me give you an example. So we work with a leading credit card issuer that has a sort of a premium platinum gold-like card. They buy traditional media against age, gender, adult, 25 to 54. When you really look at their target audience, they're going after a target audience with a household income of $130,000, and a creditworthiness, I can't say credit score, creditworthiness on a high end of the spectrum. When you apply that filter, not adults 25 to 54, when you apply that filter, less than 5% of U.S. homes are their target audience. Now, we're not suggesting they shouldn't be buying national branded media. They should be. But are they more likely to reach their target audience in a community like Winnetka, Illinois when they are in Gary, Indiana, even though both communities live -- are represented in a Chicago television market? How do we begin to stream together all of the Winnetka, Illinois-looking neighborhoods across the country, run messaging on TV and online and on demand and on tablet and mobile in that target movers [ph], and then begin to haul back that exposure data in an aggregated anonymous fashion that we can link to comScore to tie back to an ROI metric? In this particular case, the brand had a call to action URL on the spot to ask the consumer to apply online for a specific offer. So what we wanted to do was work with comScore to create a pre-post testing control to validate that message delivery against that target segment, not adults 25 to 54, but a high creditworthy, high income universe. And what we're able to demonstrate through comScore looking at the Comcast ISP, was to look at homes in that targeted geography and look at their online card application rate, their approval and ultimately their online card spend. And really tieback that experience from a planning standpoint to really drive very specific effectiveness metrics.
So for us, as we start to -- we've talked a lot about it today, as we start to look at this new world, where there's digital video across all of these screens, it's imperative for us to be able to provide the level of accountability and the level of performance metrics that folks like Helen Katz and the Starcom MediaVest Group require in order to hang their hat on that strategy. And comScore is obviously an essential business partner for us in doing that.
So thanks very much, and I'll turn it over to a good business partner, Helen Katz.
The good thing about coming last is that I didn't really have to say very much because everyone else...
I don't think that [indiscernible]
All right. The advantage of going last is that everyone's really pretty much said everything so I don't have to say too much. But I'll just add, I work at Starcom MediaVest Group which is one of the publicist group agencies. We use comScore pretty much as our digital measurement currency, which means that when we're doing digital planning and buying, comScore is the measurement company that we use to determine who we're reaching, how we're reaching and with vCE, validated Campaign Essentials, how well we're reaching -- are we reaching those people for our clients that we think we're reaching. So, really, it's one of the sort of the ground rules, tools that we use across the agency and across most of the publicist group agencies for that purpose.
We also use comScore for a lot on the custom research that we do, so the brand survey those studies we -- what we mostly want to look at attitudinal list for our customers and, again, comScore can provide that for us. We use comScore for a lot of our custom work. We have a consortium that we call the pool, whether it's doing innovative new research on emerging media platforms, and we work closely with comScore in that vein as well, and that's something that I don't think has been mentioned too much, but one of the benefits of a partnership with comScore is we can try new things that haven't been done before and work with a research company that's sort of willing to go out and try new things and it's a whole slew of new products that they continue to develop as perhaps a testament to capture the syndicated world and it's also through the custom world, and we've worked closely in partnership with comScore on that. And probably the last piece is on the global front. SMG is a global agency, and we use comScore across our whole worldwide footprint, again, for both syndicated and custom work.
Thank you. We're going to take -- we're going to get a few questions, so we're going to line up all of those chairs back. So having attended a lot of investor meetings, I actually -- I'm going to enjoy this one. Well, I don't have to answer any of their questions. No, no. I'm going to sit over there.
All righty. So, thanks again, guys. I really appreciate it. So John, comScore's largest client, Microsoft, over the years have been metrics that you can -- have there been metrics that you can share with us that are critical to your business and that your teams are directly measured by?
Well, I think, I mentioned one earlier, which is we set a goal several years ago to grow our market share in the United States [indiscernible] and worldwide. It's kind of a key core metric that we run. The reality is the market is also changing dramatically. And so we've built a tremendous amount of insights and capabilities behind it. Frankly, on the back of comScore's data, all the way up to the executive levels all the way down to the product team levels, the marketers, et cetera. Besides, as I indicated earlier, the market's changing and we announced the other day Windows 8.1. And at Windows 8.1, you'll find data is heavily a part of Windows 8.1. In fact, it's one of the key features now of Windows. And so our market share will change, and with it will be our measures will change. They'll change across device, and they'll change across operating systems, and we have actually been planning this for the better part of the year with comScore because we knew it was coming. It's not like something that was a surprise to us. And so together, we have launched alpha and data products internally, and with them to be able to measure and understand it and not just measure, but understand the drivers of it and be able to take actions within our products and our capabilities with our distribution partners and directly with our products and marketing teams in order to impact it. So it goes beyond measurement, the partnership and what we're working on.
So as been our longest tenured clients and largest, how do you see us in 2013 and beyond?
Well, the good news is we've been planning together. Microsoft is a company that has grown tremendously and rapidly from a pure PC world into multi devices and services. And with that, comScore has come with us. In fact, in a lot of ways, they've led some of the discussions with us. I think it's important to understand that we plan strategically with comScore. We have -- every year, I run a comScore summit with senior executives across Microsoft and across the key areas, the key marketing executives, and we bring them in to try to challenge each other to understand what the future looks like. And 2013 is going to explode with new Xbox, so that's with new Office, new Bing, new Windows. And Bing and the work that I do is integrated into all of it. And the discussions that we're having with comScore is not just from a Bing perspective but it's across all of our product line and not just from an advertising perspective, but also from a product perspective and a marketing perspective. So comScore is integral to those discussions, and we treat them as a key partner in our efforts to delight consumers worldwide and grow our businesses.
Great, thank you. Helen, on a high level, can you explain to the audience, so we saw the beautiful chart from the Wall Street Journal the announcement that you guys made the decision to go with us for preferred vendor for vCE. Can you go and just give everyone in the audience some insight. What was the decision-making process that went through that?
Sure. Yes, it was -- we did a lot of analysis, we did a lot of campaign testing of comScore and the other products in the marketplace to really understand how the product works and what it was delivering for us, the quality of the product and across different categories. We also wanted to make sure that we were working in partnership with whatever company we selected, so that there was a lot of the ability to get the data that we needed fed into our systems, the flexibility to work on the product, to improve the product while we saw a need to do that. And just, really, to your point, John, we really have that partnership where we could work strategically and over the long-term together with that product and not just make it sort of a onetime thing that we will sort of go in and out of the market with.
Would you say your relationship with us enhances your relationships with companies like P&G and Kellogg's? And if so, how?
I think it does. And I think, again, we can work together to solve the client's problems. It helps us to help our clients really to be working sort of collectively and not in little silos separately from what our clients are doing.
Great. Thank you. Andrew, how does the -- so with comScore [indiscernible] because you talked a lot today about multi-platform. How does that fit in into the combined Comcast-NBC overall strategy, big telco and media company all coming together?
Yes. Well -- Helen, let me have... If you look at Comcast's strategy with NBC Universal's as we work with programmers, our objective in working with the programmers is to take that content and put it on every device we have. So historically, our programming negotiations would be around the linear head rise for television. Now it extends across every screen that we have. That negotiation extends across every screen that we have. So you may have read recently about deals we've done with companies like Disney and Viacom and so forth. At the end of the day, what we want to be able to do is put that content on all of those devices. So if you look at VOD, it's just 1 example. So we generated about 450 million views a month on demand on the VOD platform. That's from about 19 million VOD-enabled subscribers. How do we start to put advertising into that content? How do we make that advertising message that's in VOD aggressively enabled? And how do we then tie that back to linear ad exposure data? How do we tie that back to digital exposure data? We need an integrated solution, and that's really what comScore affords us. We need to be able to rationalize those disparate silo screens into a cohesive, analytic and data platform. And that's really the critical component that comScore serves us.
Great. Thank you. And lastly, last but not least, Tim, it's obvious you think you've provide a lot of case studies on vCE and our advertising analytics pillars. So I'm not going to ask you too much on that, but how would you rate us as a company, and currently, how do you expect things to change going forward? And how can work together more with you, guys?
Oh, we're thrilled to be working with -- so closely with comScore.
I'm not going to increase our numbers so don't worry about that.
Yes. I would say you've been a great partner. You continue to be a great partner. As a company that's growing and at a pretty fast clip, you've expanded with us, and we challenge you at times to think beyond sort of the digital display world into more of sort of -- video is a little different as you pointed out earlier and as John and Magid and everyone pointed out today. So we've challenged you, I think in a way as to kind of be on that efficient frontier of where we see video going, and you've come right along with us. So I would echo some of the comments Helen made and John made and certainly Andrew made that you've been a good partner in a sense that you listen to the problems that we have and you adjust your business to address -- help us address those problems ultimately for the advertiser and deliver value back.
Thank you very much. Let's give a round of applause for our clients. Thank you.
Kenneth J. Tarpey
Good afternoon, everybody. Again, Ken Tarpey, CFO. And we'll spend a couple of minutes talking about, really, our financial highlights through our financial model and how -- what you've heard about today, how as we translate from the transformation into the bookings into the revenue, how it impacts both our top and bottom lines over time.
So the first thing I want to try to mention here is the nature of our business model. It's a strong financial model, SaaS-like in its nature, strong gross margins. Our gross margins this past year, I'll show you in a minute, a little bit lower than historical performance has been made investments for the new products particularly vCE and DAx here in the U.S. Now as we leverage those with the bookings and the revenue flow through, we'll start to see the gross margin go up, strong flow-through down to EBITDA and we're also leveraging other areas of our P&L which I will talk about in a minute.
With that expansion from the margin opportunity standpoint, that obviously has a very good flow-through to free cash flow. And our free cash flow yield is good, and we think over time it can become better, which is part of why we have the confidence to declare and issue the stock repurchase program and turn the proper use of the cash that we have available as we see more positive free cash flow coming through the course of the year.
Our business model, and this has been very consistently 85% subscription. Great visibility to the business in terms of seeing which things we're at. Yet projects, as some of the clients mentioned up here earlier, help us to identify new opportunities with them in a profitable fashion. Now the gross margin characteristics are different. Subscription business, higher gross margin, 75% or better. Project business, good service business, 50 percent-ish or so. Over time, if the subscription mix kicks up a little bit, that will increase the gross margin, increase the EBITDA. How could that occur? The new products. DAx and vCE both in terms of their growth rates, and then as the gap between bookings to revenue recognition closes, that could create some acceleration on the subscription side. If that did and subscription went up a little bit from the 85 to little bit higher, that's a good thing. Still doing very good project work, but also increases the margin return because those product businesses have a higher-margin.
Q1. We feel Q1 for those who know us, but those who are getting to know us, there's a pretty good proof point to understand how we're starting to see financial success for the transformation that we've been working through. For those who don't know us that well, we did better in terms of the top line than we thought we were going to do and most of that flow -- a good part of that flow-through to the EBITDA. And then our free cash flow was particularly strong in the first quarter. Throughout this, besides the new product work, international has continued to be a great expansion area for us in terms of new customer growth. We continue to pick up new customers here in the U.S., but we pick up proportionally many more internationally. And now as we add multi-platform and we have the new product internationally, that gives us another stimulus in terms of the international business growth. But all things considered, we felt Q1 was a good proof point as we move forward and have allowed us, and I'll talk in a minute, to make some adjustment to our 2013 guidance and move forward from there.
So to that point, let me spend a minute talking about where we were and where we want to go. 2010, measurement business as Magid has mentioned, 22% EBITDA, company's been very consistently there. That's our next step. That's when we got back to over time. We've indicated from a guidance standpoint, we can see progress this year in our current guidance. And as we performed and if we get to the higher end of those ranges, the higher revenue growth from last year, higher profitability than this past year and stage as well to get back to that next phase. Our core business, which was the 22% back in 2010, continues to expand its margins. Margins are probably 10% higher than what you saw there today. The new products and the impacts of the investments we had to make for the new products as well as expanding our international sales footprint, are the items of that basically that we're looking to recover and get the leverage, get the acceleration to get the margins back to where we want them to be on a longer-term go-forward basis.
Now from the standpoint of gross margins, I've talked to a number of you who are currently involved with us in terms of why will gross margins get better over time. I talked obviously about the leverage, more revenues and a high flow-through for the new products. But there's other elements as well. Our power costs and Cameron and others have talked about how important that is in terms of demographic information in some of the data we use, it's a fairly consistent percentage of our business. Costs grow but not nearly to the rate of our growth of our revenue so we get leverage off of that. Data communication costs in terms of for the next several years, in terms of our Census Network and pulling in all the data, we have volume discounts established that as more of that volume goes up, it won't be growing at the same rate proportional to the revenue we get some leverage from that as well. Clearly, the scale or the leverage on the investments we made in DAx in the U.S. and vCE will contribute to our ability to expand margins from a longer-term perspective.
And then lastly, the subscription revenue mix, which I talked about before, would also have an impact, but again that would be more longer-term. So it kind of sets the stage for improving our profitability performance in 2013 and then beyond when we get to that point.
So overall just in terms of quickly wrapping up here in this piece, things we'd like you to think about as you go away, as the transformation takes hold into our P&L, gross margin improvement, all that we do are SaaS-based, scalable products with a high gross margin as they get the scale and continue high contribution to profitability. We have a prudent customer base, over 2,200 customers to sell to these new products, as well as expansions of our current products, but we also still have new customer opportunities, particularly on the international side.
G&A is an area where as I mentioned we made investments. We needed to make investments to support our international structure in terms of the sales side. We've made those. We're going to look to continue to leverage them. We've been leveraging them from last year and we'll continue to work that way. R&D, a bit longer term, we may get some leverage there, but please bear in mind that continued investments to do what we do will be needed in the R&D side. But as Cam pointed out, we're trying to do those in an efficient way, and longer-term to get some leverage there. Sales and marketing, we think will continue to be fairly consistent as a percentage of revenue since we find the direct sales model to be most efficient to engage with our customers, to sell the current products and the newer products on a worldwide basis. And then lastly, we've adapted to market conditions in all that we do, we will continue to do that as we go forward from that standpoint.
So those are some of the financial highlights I wanted to kind of give context to in terms of how we can continue to grow the business both in terms of top line and profitably. And again lastly, with all that a positive free cash flow contribution. So we feel we're in a good position in terms of our financial model as we go through 2013. And one last point before I turn it over to Magid, the firm has a new investor relations firm, [indiscernible], based here in New York. In the back of the room, I'll ask them both to stand up, Oscar Peta [ph], who leads the engagement team; and Stacy Rowen [ph] and so hopefully you get a chance to say hello to them during cocktails and then help out on an ongoing basis.
So with that, I would now like to turn it back to Magid to do the closing.
Magid M. Abraham
Okay. Well, thank you very much for enduring this long session with us. Thank you for our client presenters, those who are still here. We certainly appreciate the support. Am I on by the way? Could you hear me? Okay, so I appreciate the support.
And well I hope we have communicated today is not only how we got to our position of being a leader, but how we're doing all the tough work that is needed to maintain that leadership, to grow it in an environment where the technology is moving so fast that it is really challenging everybody in a very, very compressed time frame. It took the TV industry that, say, over 50 years to get to -- move from program rating to advertising rating. It is literally from 2011 to 2013, we went from client demanding or being satisfied with silos measurement, web and mobile and video and TV and what other, and now you have a very loud chorus. We want it. And we wanted it yesterday.
Now with that sense of urgency to be responsive to those needs and I hope you got the idea from listening to clients that we are a client-driven company. We are a responsive company. We sit down and we listen to their needs. We work with them and that's how we can get our best ideas. So clearly, one of the unmistakable messages that we get is that the universe is moving very, very, very fast and measurement and analytics need to catch up with it very fast. And change and fast are good for comScore. They're may be challenging in the sense that we're all just running crazy, and we're overwhelmed and exhausted and all of that stuff, but at the end of the day, there is no one that can do what we do as fast as we do it and as completely as we do it, and as thoroughly as we do it. And from that standpoint, the future is on our side. The future -- that the future favors the adaptability that we have. The future favors the fact that everything is becoming so granular, so digital, so diverse. And to be able to measure everything on a census basis, those are the things that we have excelled at, we have pioneered and time is only moving in that direction.
And so we hope that we helped you get a better picture of our business. There are a lot of aspects to our business. So to some extent, it's always very hard to communicate in a 20 hour -- 20 minute conference presentation. What do we do? So hopefully we are able to do the company justice and describe what are all the things that we do. I know at first glance, it sounds like a hodgepodge of different things and why is it that you're doing Digital Analytix, and gee, I thought you're a measurement company and why is it that you're measuring advertising or you're doing surveys for rent surveillance or whatever. I mean, all of these, there is a method to the madness. All of these are connected. They are synergistic. They leverage the same skill set. They leverage the same resources. They answer the same class of needs that clients have. And it really took a lot of effort and lot of energy to be able to deliver that, and we're not done yet. We're still in the middle of this transformation and I think we're way ahead of the game compared to probably anybody else that's facing that same transformation, including some of our clients who are here. I mean the rate of change is so fast, is surprising everybody by what they need to do, discovering it on the fly, having to run while looking back. It's just -- it's incredible this type of change, and it's incredible the opportunity that it really creates for us.
And fundamentally, we'd like to think that the payoff of this is that will be rewarding for our shareholders. For those of you who have stuck with us, we thank you. We know last year was a difficult year, but we're hopefully turning the corner on that. And for those of you who are not shareholders, we would love for you to be our shareholders. If you want to bet on the growth of this industry on the growth of digital on this direction the world is going, comScore is tied to all of it. And if it is not this quarter, it's next quarter. If it's not -- it is inherently and intrinsically tied to a tidal wave that will be here. I can't predict the minute or the time, but we'll be here. You can be as sure as the sun is rising tomorrow.
So with that, what I would like to do is invite my colleagues up here and answer a few questions. I know we are running a little bit late, and we're standing between you and cocktails. So we'd like to be efficient in answering questions, but we'll stay as long as it pays to do that. Jason?
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
Magid M. Abraham
No, we should get you a mic. Hold on. One that works.
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
So one of the questions I think a lot of investors have is as we're seeing this evolution to real-time bidding, programmatic ad buying, even the epitome of data-driven buying, how does that -- how does comScore turn that into a positive, particularly where at one side, you have performance advertisers who say "I'm only going to pay if there's an action so I don't need the data beforehand" to brand advertisers who are saying, "Well, you know, if that's much harder for you to approve why I should be involved in that type of environment" particularly when let's say they're already a client. So how do you upsell for the use of that data into DMPs and SFPs, et cetera? So whole bunch of questions around that.
Thank you. That has actually created more opportunity for us than less because in a RTB environment, the location where you run the ad is often disconnected from who you're running the ad to. So in RTB, real-time bidding, what's happening is clients are buying particular audiences and they're saying, "Let the bid go out to wherever the best price I can get to run it actually is." So having tools to actually understand the value of those variety of places where those ads can run is really critical and our tools are allowing people to understand, "Hey, if I do run in this location, is that location going to be appropriate for me? Is that location going to be safe for my brand?" And we have a lot of clients that are using it in that manner today to understand in an RTB environment, are they actually buying location content that's appropriate? So it's really crucial for the marketers being able to move into that space. It's also critical in terms of viewability. And this both direct response marketers and brand marketers. For brand marketers, they only get a brand impression. They only have that message with the consumer if their brand is seen. So it makes no sense for them to pay $0.01 for an ad that never shows up on a screen. For direct response marketers, they are also measuring whether an action occurs, usually an action online, and they want to pay when that action online occurs. But if the ad that was seen before that action submitted, which is called the conversion pixel, and that conversion pixel fire and no one actually ever saw that ad, someone's getting credit for that action and the ad had nothing to do with the action occurring either. So our services, particularly in the areas of audience targeting and viewability and validation in the vCE suite in particular are really crucial in RTB, and we're seeing healthy adoption in that area.
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
We have a huge market of companies that are still not yet using it. So there's a lot of companies that we can be bringing it into. We also have add-on products to our core vCE. So I mentioned a couple of the APIs and something we call the impression level report. And those are additional services that they can purchase that allow them to more easily pull data into it.
Jason S. Helfstein - Oppenheimer & Co. Inc., Research Division
So both for CPM and [indiscernible].
We'd love to hear you -- could you comment on your thoughts around the -- how the privacy debate is developing, how that might influence government regulation both here and, for example, in the EU, and whether that helps or hinders where you're trying to go with your products?
Magid M. Abraham
Okay, sure. Privacy is obviously always looking around the corner. And every year, there is a debate about whether there will be privacy regulation, what impact it has. First of all, let me emphasize that everything that we do on the tenant side is [indiscernible], and so all the regulation that people talk about, we're within the scope of those regulations as far as the tenant is concerned. Where the debate tends to lie is on the scope of who can set a cookie, whether it is a first-party cookie or a third-party cookie, if people want to opt out of selling cookies, et cetera, et cetera. And there is no question that if in -- now in Europe, they started doing that and if you go, for example, to the economist, first time you go to the economist there is a pop up that will tell you, "By visiting the site, you agree to our cookie party. Click okay to continue." And that basically how they get the opt in. So it's basically, "You want to visit our site? Well, accept it. Otherwise, thank you very much." So people are finding ways to ensure that consent. Now there is no question that the percentage of usage that will not have an identifier associated with it, like a cookie, may increase and may be, today, it may be 3% or 4%. It may end up being 10%, 15%, 20%. It is what it is. We do the best job with it that's possible. And we always have fallback positions in terms of if we can sell third-party cookies, we can sell, accept first-party cookies. We have different ways of collating usages, et cetera. So we're adjustable and I don't think that any of these privacy regulations are things that are kind of a mortal blow by any means. Where they -- some of them, would they be a pain in the ass and we have to make some adjustments to be able to take them into account? Yes. But ultimately, the won't really impact our business. Youssef?
Youssef H. Squali - Cantor Fitzgerald & Co., Research Division
One clarification, maybe one quick question. On the clarification, Cam, I think you said something to the effect that margins for core older business was about 10% higher today than total margins at 18%, 19%. So does that imply...
No, if we went back in 2010 when our EBITDA margin was 22%, so that was just the core measurement business. So more like 24% in that core business today.
Youssef H. Squali - Cantor Fitzgerald & Co., Research Division
Implying that the dilution from the new products is about 300 basis points.
Youssef H. Squali - Cantor Fitzgerald & Co., Research Division
That's helpful. And then two, out of the 2200-or-so companies you guys have or clients you guys have, how many are actually subscribed into 2 or more products, products not from the same, let's call, it Web Analytics, that Web Analytics, web measurement, et cetera. And as you look at that, let's call, it mid-teens organic growth, how much of that is -- would be coming from same-store sales i.e. just growth within same customers through cross-selling versus "get a new customers" because one of the big highlights from the last quarter, at least to us, is the 65 customers that you've added until the nice acceleration from the 40 to 45 that you've been adding over the last 10 quarters or so.
Magid M. Abraham
So I think for the new products, so given the fact that Digital Analytix is new, we probably have somewhere around 20 clients in the U.S. out of a client base of twelve hundred thousand -- 1,200 in the U.S. So obviously, the degree of overlap there is very small. Ultimately, I think I made the statement earlier that every single one of those clients should be of old analytics clients. So there is a lot of potential for that overlap to grow. But it's not there yet just because we just started. I think that there is a lot of overlap certainly within the Audience analytics products. A lot of people that buy, let's say, Audience may buy advertising metrics or may buy video, et cetera, so there is overlap there. There is also a large overlap between Audience and Advertising, although that overlap exists with large publishers. So when large publishers are selling Advertising to advertising agencies, they sometimes have to buy vCE or have to buy things like DSL to be able to use every selling tool with those advertising agencies. So there is overlap there between the audience products that those publishers are buying and the advertising products. For smaller publishers, that overlap doesn't exist because they don't have the scale to be able to buy a vCE or to buy -- to subsidize, if you like, every campaign that they're selling. So from that standpoint, below a certain level of audience, we don't see the overlap. And so yes, that's pretty much it. I would say...
Kenneth J. Tarpey
The other thing I'd add is in Europe, it's a bit different because we have a much stronger client base in Digital Analytix. So that number -- that overlap between our Media Metrix clients and our Advertising clients and DAx is larger, but the opportunity there is also as strong as it is in the U.S. as well.
Magid M. Abraham
Yes, I think we definitely see more growth coming from existing clients, which is the good news except it's going through -- we don't have to create new client relationships, but we also think that this significantly expands our market. The Web Analytics product in particular, for example, we really didn't have an offering sort of business-to-business company that weren't operating digitally before. Now, we do. So there is a market expansion opportunity, but I think that we're going to focus the type of listing for us is in places where we have a good relationship, we have a good reputation. Those are the places where we are most likely to be able to successfully upsell, and that's what we do. Yes?
Two questions, one would just be a kind of a big-picture macro question. To the extent, just the global environment, the macro environment is kind of creating headwinds or tailwinds for you need to address sort of the tone the business is going if you wanted to go there. And then secondly, you provided us an overview of products, but I was interested to hear more a little bit about how your organizing your sales force and your sales force's strategy in terms of going to market with these products.
I'll talk about the sales force strategy. So we are -- in the U.S., we focus our business based on strategic accounts. So we have 35 strategic accounts one of them being like the Microsofts of the world, the AOLs, the Yahoos of the world. So those are key strategic accounts of ours. We then focus on search of the verticals that are very important for us. The telco verticals is important. The agency vertical is very important for us, financial services. So we're sectors, we're strategic accounts and then we have a large sales force that goes after the midmarket. So whereby they can go and sell our audience, our Advertising and our Digital Analytix platforms to smaller, to midsized companies, so rather than just having it -- because that's really the mass market at the end of the day. So it's kind of a combination of all 3 things in the U.S. Overseas, it's different but for the most part overseas, it's really, we just consolidate everything by country. In the U.K. we have a one. We call it comScore One sales force where they're selling all of our products. So we train them on all of our 3 pillars and they're up to speed and the same thing goes for every single one of our countries. I'm sorry I forget your first question...
The first was one if you're willing to go there, kind of the tone of the business right now in terms of the environment.
The macro environment?
Kenneth J. Tarpey
The macro environment I think from the standpoint overall of the macro environment, we got off to a good start this year. Everybody knows conditions in Europe could be better and different. I that's think probably the main area. We are more diverse one of the benefits of our large geographic spread is that it does help us from a rift standpoint in terms of there's one area that's a bit softer, others are doing well. Example of that is this last quarter with the large increase in new client ads that people asked about before. A lot of those client ads came from South America and Asia, where the economies run better and particular countries are in better shape things might have been a bit softer in Europe. So we do have that kind of counterbalance and then clearly having a large installed customer base that you can sell into with the expanded services helps us well as a bit of a counterbalance.
You guys talked about shareholder dilution and the pretty aggressive stock-based compensation plan that you've been using for a while. And how you see that going over time.
Sorry, can you say that again?
I was just curious as the company gets more mature over time, just sort of how you've used stock-based compensation part of your compensation, which has led to a pretty meaningful increase in the share count year-over-year every year out?
Magid M. Abraham
That's an area we're sensitive to and I think this year, you will see a flattening out and then you will see -- our objective is to get it down particularly as a percent of revenue we would get it done. And just the lag effect, what's granted is granted, and we are right now everything in terms of compensation for the senior executive, kind of long-term stock driven. Separating it into long-term. But the short-term, so we lowered the pressure on stock grants to -- and therefore, reduce the percent of stock.
Okay, that's very helpful. And then as you look at the buyback, do you guys mostly offsetting dilution or trying to actually reduce the share count?
Magid M. Abraham
I think we'll be able to reduce share count. I mean certainly, the full amount will reduce share count. Now, it depends on given our 75 1 plan on the parameters in there whether we'll execute all of it and how quickly, but it's kind of out of our hands. But if the entire thing and the next what executed will have a net reduction in share outstanding. Okay. It looks like...
I wanted to quickly ask, you didn't mention anything directly about winning your television management. I'm just curious can you talk about multi-platform? How important is it if your clients in your business to measure what has been what I'll call traditional linear television as part of that mix, and you need a partner to help you do that.
Magid M. Abraham
I think it's important, but I think where the attention is really focused is on all the stuff that's leaking out of linear television. It's really digital video, and that's where we are focused in terms of partnerships for getting traditional television measurement. We have a number of them with various number of set-top box providers. And we have various partnerships in the world. So I can't really predict exactly at this point what will end up being the toolkit for measuring every part of TV, but it is definitely something that we are mindful of. But we are particularly focused on this whole area of digital video, which is basically what's getting everybody a heartache to make sure that they account for it properly. Thank you.
Okay, any other questions? Okay. Before we leave, I would like to remind everybody that there is a gift that you can take on your way out. And it's a gift that's very, very high in symbolism. It's a money clip. It has the comScore name on it. On the back, it's usually part of a circuit board of some sort so it's a part of a computer or a digital card, or whatever. It looks pretty fancy, like an emerald or something, but it's actually a very green, very socially responsible thing. And so if you put it all together, I would like you to leave thinking that with comScore, you will make a lot of money and here is the money clip for you to keep it together.
With that said, also for the guys that took pictures downstairs, your pictures will be available for the whole NASDAQ portrait, very fancy. They will be available for you to take. No charge and all that, on our dime. Thanks, guys.
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