BESPOKE Market Intelligence Social Media Usage and Advertising Surveys April 24, 2015 Executive Summaries: Usage (Consumer Survey): “Social media engagement remains strong and generally improved across platforms this quarter. is the clear leader in most of the areas that we test, but competition for attention continues to heat up among the teen population. Social media users are becoming more tolerant of advertisements within the framework of their social media experience and an increasing percentage of Facebook users are agreeing that the relevance of ads are improving.” Revenues (Advertisers Survey): “Social media advertising budgets are strong and increasing y/y and q/q. Mobile appears to be a driver of increased spending. Facebook performed the best in spending changes y/y and q/q and Twitter performed the worst. Clients are using social media platforms more for branding, but are using Google more for cost/action. Display ads are the top priority and are the category clients are most excited about generally, but when it comes to Facebook clients are most excited about video. Facebook dominated the section where we asked a number of competitive dynamics questions. “ Market Concern (Usage): Market Concern (Advertising): Popularity of competitors is causing Facebook users Effectiveness of social media advertising is debatable as ads are considered invasive and lack relevance. to spend less time on the platform. Bespoke’s Pre-Earnings Report Findings: Bespoke’s Pre-Earnings Report Findings: Social Media Usage Survey: Respondents click on Facebook ads primarily because they like the brand or Facebook has a wide lead over competitive company in the ad. Quality and relevance has improved slowly but steadily over the course of our survey platforms when it comes to the go-to source for volumes. news, messaging, and videos. As displayed in the Social Media Advertising Survey: The majority of respondents replied that Facebook has the ‘most targeted chart below Facebook usage has remained information about its users’ and ‘the best reach’. consistently strong in all of our surveys.

Visit Frequency (18+)

4.98 Facebook

4.13 March (15)

3.38 January (15) Twitter October July 3.34 March Pinterest December August 2.95 LinkedIn

Not at all Less than once A few times a month A few times a Once a day Multiple times a month week a day Facebook Q1 Conference Call: : “There are now 2 million advertisers on Facebook. This is an important milestone for our Facebook Q1 ConferenceCall: community, and we're encouraged that so many businesses are finding value on Facebook.” Mark Zuckerberg: “We continue to see strong growth in daily engagement around the world, David Wehner (CFO): “We're bringing more and more advertisers into the system and that's giving us a better including in our most engaged markets. On mobile, selection of the ads that we can serve to the people using Facebook, and that, again, improves the quality and nearly 1.25 billion people now use Facebook every the relevance.” month, 240 million than a year ago, and we now see Sheryl K. Sandberg (COO): “Ad revenue was $3.3 billion, up 46% or 55% on a constant currency basis... In the more than 1 billion mobile searches every day.” United States, for example, Facebook and Instagram get more than one out of every five minutes spent on mobile… Looking ahead, we believe video will play a significant role in bringing more marketers to mobile.”

1 BESPOKE Market Intelligence Social Media Usage and Advertising Surveys April 24, 2015

Market Concern (Messaging): Market Concern (Video Ads): Will Facebook’s investments in messaging platforms pay off? Will video be a significant source of growth for Facebook? Bespoke’s Pre-Earnings Report Findings: (Facebook is facing Bespoke’s Pre-Earnings Report Findings: (Facebook is in a position of strength) increased competition among teens) Social Media Usage Survey: Between videos being watched on Facebook and Instagram, Facebook is Among the general population, Facebook has a large lead in the clear leader in video watching engagement among consumers. messaging (which it has maintained). Among teens, however, Social Media Advertising Survey: Respondents told us that clients who advertise with Facebook are Facebook’s lead has declined in each of our recent survey most excited about video ads going forward. volumes. It should be an area of concern for Facebook that only 2.1% of teens name WhatsApp as their favorite app for messaging, while 18.4% selected Kik. Facebook has a strong messaging presence, but as Zuckerberg suggests – there is more work to be done.

Facebook Q1 Conference Call: Mark Zuckerberg: “Our expense outlook reflects the broad range of investments that we're making in both our services and infrastructure as we continue to enhance the core experiences on Facebook and Instagram, grow our messaging products…” Facebook Q1 Conference Call: Mark Zuckerberg: “We're also making good progress with video. We're very pleased with our growth here, and this quarter we reached a new milestone of more than 4 billion daily videos views. We also Mark Zuckerberg: Now, here's how we're working to develop our launched an embedded video player that allows people to watch Facebook videos across the web, family of apps so we can give people more options for sharing in and more than 80,000 videos have now been embedded on third-party websites..” different ways. In the future, we expect that people are going to want to share content with their closest friends at an even Sheryl K. Sandberg (COO): ““video is exploding … and that gives us an opportunity to do a lot of work greater frequency than they do today, so messaging is a big 2 with marketers on video.” priority for us. Sheryl K. Sandberg (COO): “We expect more marketers to put mobile video at the heart of their campaigns in the future and we're well-positioned to drive this shift.”