In 2009, Yahoo!-Nielsen Net Index study was launched to gather an baseline understanding of the Filipino internet user Building on this foundation, the study was repeated in 2010 to track shifts in user behaviour and evolving preferences In 2011, the study continues to evolve, to reflect the changing digital landscape…whilst maintaining key longitudinal measures.

1. Digital Philippines 2011
Yahoo!-Nielsen Net Index Highlights
Manila, Philippines
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Company (Philippines), Inc..

2. Yahoo!- Nielsen Net Index 2011
At Yahoo! and Nielsen, we believe that fact-based
Insights should drive decision-making!
• In 2009, Yahoo!-Nielsen Net Index study was launched to gather an baseline
understanding of the Filipino internet user
• Building on this foundation, the study was repeated in 2010 to track shifts in
user behaviour and evolving preferences
• In 2011, the study continues to evolve, to reflect the changing digital
landscape…whilst maintaining key longitudinal measures

3. Research Design
• Methodology Personal face-to-face interviews using two-part structured
questionnaire (linked with Nielsen Media Index)
• Area Coverage National Urban Philippines
(22 major cities including Metro Manila)
• Respondents Males and Females aged 10+ yrs old across all socio-economic
classes who have used the internet in the past month
• Sample Size 1,500
• Sampling Approach Multi-stage Probability Sampling
• Fieldwork Period Q1 2011

4. The Changing Landscape
2009-2011

5. Internet usage has remained largely stable, though we
see some pockets of growth
2009 2010 2011
Past Month Reach (%)
42 43
36 37 37 36
34 33 33
30 31 30 29 30 26 30 30 29
26 24 26 27
23
17
Total Metro Manila Luzon Visayas Cebu Mindanao Davao Mega Manila
Base: Past Month Internet Users aged 10+ across all socio-economic classes in National Urban Philippines
Source: Nielsen media Index 2009 Q1, 2010 Q1, 2011 Q1

6. Despite this stability, overall engagement is on the rise.
Social networking now dominates…
Select Monthly Online Activities (%) 2009 2010 2011
Visiting Social Networking sites 51* 53 82
Search 58 76 80
Instant messaging 63 68 69
Internet Portal 54 73 67
Visiting public chat rooms 54 67 65
Email 63 65 64
Played games online 53 45 54
Listen to songs in music websites - - 45
Downloaded or uploaded music files online 25 37 37
Shared/posted something online that you created 15 24 36
Activities showing significant increase at 95% confidence levels between 2009 and 2011
* Note. The 2009 figure for social networking includes community groups /forums
Base: Past month Internet users aged 10+ across National Urban Philippines
Source: Yahoo!-Nielsen Net Index 2010, 2011

7. Evident from the increased time being spent online,
across mediums and locations
Place of Access (Weekly Avg. Time Spent)
Internet
Home School Work
cafes
2009 4.8 3.4 7.7 4.5
2011 10.4 5.2 11.5 5.5
Base: Past Month Internet Users aged 10+ across all socio-economic classes in National Urban Philippines
Source: Nielsen media Index 2009 Q1, 2010 Q1, 2011 Q1

8. Internet usage highest amongst upscale under 30s…
Past Month Reach (%)
Total Age Gender SEC
2009 2010 2011
65 66
60
52 55 53 54 53
49
44 42 43
30 31 30 31 33 29 29 29 30
25 25 26 24
19 21
13 14 11
3 4 3
Total 10-19 20-29 30-39 40-49 50 and up Male Female SEC ABC SEC C2 SEC DE
Base: Past Month Internet Users aged 10+ across all socio-economic classes in National Urban Philippines
Source: Nielsen media Index 2009 Q1, 2010 Q1, 2011 Q1

9. …fuelled by their appetite for entertainment content
Content Preferences on Internet Portals (%)
Total (T3B %) 10-19 (Index) 20-29 (Index)
International music 68 114 91
Local music 65 104 94
Interesting videos or photos 59 118 101
Games 56 108 94
Technology and gadgets 55 102 103
World news 49 99 103
National/ Local news 48 104 99
Entertainment news 45 116 99
Lifestyle 45 95 118
Sports 45 104 93
Movies, TV or Drama reviews/guides 42 106 97
Business news 38 90 84
City guides 35 100 101
Travel 33 95 103
Finance 30 89 76
Traffic updates 29 104 99
Base: Past Month Internet Users aged 10+ across all socio-economic classes in National Urban Philippines who
Have visited Internet Portals
Source: Yahoo!-Nielsen net Index 2009, 2010 and 2011

10. The shift from shared to private access continues …
2009 2010 2011
Place of access (%)
SEC ABC1
71 69 7
66 6 7
5
35
31 National Mega Manila
27
7 7 5 6 4 5 4
4 2 3 2 0
Internet cafes Home School Work Friend's house Cellphone/ PDA
Base: Past Month Internet Users aged 10+ across all socio-economic classes in National Urban Philippines
Source: Yahoo!-Nielsen net Index 2009, 2010 and 2011

11. Mobile usage needs further tariff rationalisation to gain
traction
Home Internet Offerings Mobile Phone Internet Offerings

12. Filipino Netizens impression of the
changing digital ecosystem?
• Evolution of Social Networking
• Online Transactions (deal aggregation/
e-commerce)

13. Social Networking –
Cant stop this thing we started!

14. Not just an activity but a starting point for the online
experience for many
Internet Usage Pathway (%)
39
30
13 11
5
1
Social Networking Search Email Online News Instant Messenger Games
Question: Please think about the following online services and tell me the order in which you first ever used each.
Base: Past month Internet users aged 10+ across National Urban Philippines
Source: Yahoo!-Nielsen Net Index-2011

15. A dominant platform to connect and communicate…
though mail/messenger remain relevant
Past month online activities (%)
Social Networking Email Messenger
82 68 69
63 65 64 63
51 53
2009 2010 2011 2009 2010 2011 2009 2010 2011
Base: Past month Internet users aged 10+ across National Urban Philippines
# Note. The 2009 figure for social networking includes community groups /forums
Source: Yahoo!-Nielsen Net Index 2010-2011

16. Updating profile is mainly done through PC, Mobile
updates reflect Mobile usage (low)
Mode for updating Social networking profile (%)
Mobile
Phone
Browser
Through PC 3%
Mobile
96% Phone SMS
4%
Question: How do you usually view/ update your Social Networking sites?
Base: Past month Internet users aged 10+ across National Urban Philippines who have visited social networking in Past 3 months
Source: Yahoo!-Nielsen Net Index 2011

17. Social networks start with ‘close contacts/relations’…
but quickly move to less familiar circles…
Connections on Social Networking sites (%)
Regular friends 96
Family members 59
Friends with whom you had lost contact 38
People from outside your city/country 32
Referrals from friends 15
People you met once or twice in person 11
People you only know in the virtual world 3
Co-workers 3
Question: Who are the people you interact with regularly on these Social Networking sites?
Base: Past month Internet users aged 10+ across National Urban Philippines who have visited social networking sites in Past 3 months
Source: Yahoo!-Nielsen Net Index 2011

18. …thus the effort to limit what users share with the
larger/extended group on social networking sites
Steps taken to manage digital profile (%)
Keep Strict Privacy Settings 66
Limit My Personal Info. Available Online 57
Avoid Allowing People Access My Blog/Social Net. Site 45
Limit The Type/Number Of Photos/Video Shared 33
Remove The 'Tag' On Photos/Video Uploaded By Others 17
Limit/Prevent Others From Posting onMy Blog/SNS 16
Avoid Allowing People Access My Blog/SNS 13
Always Check Info About Me Online 13
Deleted A Blog/Social Networking Page 4
Cancelled Another Online Account 2
Question: Who are the people you interact with regularly on these Social Networking sites?
Base: Past month Internet users aged 10+ across National Urban Philippines who have visited Social Networking Sites in Past 3 months
Source: Yahoo!-Nielsen Net Index 2011

19. And the emergence of ‘selective socialization’
Opinions on Social Networking (%)
I've found more people like me who share my interests 74
Allows me to be more social than I am in person 72
I can really reveal parts of my life/personality, I would
69
normally not disclose
I feel less awkward when I communicate on these sites
67
than in person
I feel more in tune to what is going on socially 67
I really try to find just sincere people 63
I've become choosy about whom I socialize with 59
Question: Please tell me to what extent do you agree with each of the following opinions about social networking?
Base: Past month Internet users aged 10+ across National Urban Philippines who have visited SNS in Past 3 months
Source: Yahoo!-Nielsen Net Index 2011

20. Softening of growth of Social networking is becoming
well documented
Facebook Sees Big Traffic Drops in
Facebook sees a Decline in Young
US and Canada as It Nears 700
Million Users Worldwide Users
softpedia, June 12th, 2011
Inside Facebook, June 12th, 2011
ALONE TOGETHER
Social Networks In Decline Why We Expect More From Technology and
Less From Each Other
Smart Insights, April 12th, 2011 By Sherry Turkle

21. So what’s next…
…fragmentation across multiple
platforms OR cataloging on a
single platform?

22. Social Networking - Summary
• Social networking is suited to one-to-many … mail and messenger
remain relevant for personal one-to-one conversations
• The rapid growth of social networks in Philippines, will result in
increased awareness for the need to build “walls” within existing
networks
• These “walls” will be built to control information exchanges and
ensure conversations remain rich and engaging (one-to-few)

23. E-Commerce
Online Deal Aggregation –
A Mixed Bag

24. The backdrop to e-commerce in Philippines
Presence of High reliance on IT and Banking
Traditional trade
counterfeits and inter-personal infrastructure
legacy
knock-offs relationships “evolving”
Lack of
‘accreditation and
guarantees'…by
Buyers need to Buyers feel the Low levels of
default modern
ensure quality by comfort, dealing confidence/trust in
trade actually
physical inspection with known vendors transacting online
encourages
destination
shopping
There is an inherent
reluctance to “trade”
through the Internet

25. Online transacting remains in it’s infancy
Online Transactions (%)
SEC ABC
4
3
Mega Manila
3
1
2010 2011
Question: Have you purchased products online in the past 12 months… payment could be online or offline?
Base: Past month Internet users aged 10+ across National Urban Philippines
Source: Yahoo!-Nielsen Net Index 2011

26. Payments largely made offline, given current trust and
comfort levels with e-payment
Payment methods (%)
Cash (face to face) 53
Credit card 36
Transfer via ATM/Bank 10
Internet Banking 9
Deposited cash at bank branch 4
Online accounts such as Paypal 1
Cheque 1
Debit card 1

27. Group buying sites like Groupon have created
significant buzz recently…
Hailed by Forbes as the "fastest-
Over the past three years, an entirely
growing company in
new industry known as group-buying
history", Groupon turned over
has suddenly emerged, and is growing
US$760 million last year, and expects
at a phenomenal rate.
that to hit the billions this year.
nzherald.com
Forbes

28. Group Buying: Description
These sites negotiate discounts on popular
goods, services and cultural events, which is offered
to thousands of subscribers in a free daily email. The
deals are activated only when a minimum number of
people agree to buy.

29. Current levels of comprehension limit overall interest …
Interest is high among those who understand
EASE OF COMPREHENSION LEVEL OF INTEREST
Extremely
interested
5%
Neither Not at all
15% Understand interested
32% 25%
Quite Slightly
Not at all interested interested
understand 43% 9%
53% Somewhat
interested
18%
Question 1: After hearing the explanation of Deal Aggregation concept, to what extent do you understand it?
Question 2: After having a look at the explanation of Deal Aggregation concept, how interested are you in this overall concept?
Base: Past month Internet users aged 10+ across National Urban Philippines
Source: Yahoo!-Nielsen Net Index-2011

30. Deal Aggregation - Summary
• Pure-play ecommerce offerings are still in nascent stage, given
the constraints around product authenticity and infrastructure
• Online buyers and sellers currently find each other online, but
typically “transact offline”
• For deal aggregation sites to be successful, a mind-shift needs
to occur… there is a need to educate on the concept of deal
aggregation, against a backdrop of reluctance to “pay” online

31. Key Takeaways
1. Internet growth driven by the young and upscale audience
2. Home internet access continues to grow, with engagement levels
increasing with growth in private access
3. Philippines enormous appetite for social networking could
accelerate the emergence of “selective socialisation”
4. Deal aggregation holds significant potential, but comfort in e-
payment platforms and trust levels will dictate the rate of growth!