Rapport Smaato Q1 2014 - RTB Mobile

The Leading Global Mobile RTB Ad Exchange & SSP

Smaato Ad Exchange !Global Mobile RTB Insights!

!

Q1 2014!

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About Smaato

Smaato is the leading monetization platform for mobile app developers and publishers. Smaato owns and operates a mobile dedicated RTB-enabled ad exchange (SMX) and Supply Side Platform (SSP) with truly global reach. Our mission is to increase ad revenue worldwide for our publisher partners. Smaato’s global monetization ecosystem connects more than 76,000 mobile app developers and publishers to 140+ DSPs and 100+ Ad Networks. SMX delivers more than 70 billion ad impressions per month across 450+ million unique users around the world.

Smaato Global Mobile RTB Insights Q1 2014

We are proud to release our Q1 2014 Global Mobile RTB Insights Report. This report contains in-depth analysis of worldwide RTB performance data across SMX in the first calendar quarter of 2014. Recent reports from eMarketer, ComScore and Gartner predict that global mobile ad spend is on pace to rise another 75.1% to $31.5 billion this year. Consumers now spend 32% more time on mobile devices than they do on desktop browsers. SMX performance mirrors these findings, experiencing greater than a 400% increase in mobile advertising spend in 2013. Q1 2014 continues this incredibly strong trend, as described in this report.

Leading Global Mobile RTB Ad Exchange (SMX)


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Global RTB Spend on SMX Increased by 459% YOY

•  SMX has shown a significant growth in RTB spends in Q1 2014 with an uplift of 459% compared to Q1 2013. This shows an increased advertiser interest in mobile programmatic buying and a clear signal that the global spend on mobile RTB will increase even more in 2014.

•  SMX Q1 2014 revenue performance vs. Q4 2013 was nearly identical, exhibiting none of the typical post-holiday digital ad sales slump

Q1 2013 to Q1 2014 RTB growth rates

Source: SMX Platform

Smaato (SMX) Quarterly Revenue Growth

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014


www.smaato.com Source: SMX Platform

Global Smaato supply & demand uplift Q1 2014 (in %)

Q4 2013 Q1 2014

# Auctions # Bid Responses

Q1 2014 Global RTB Demand Was Greater Than Q4 2013 Worldwide auction and bid response data Q4 2013 vs. Q1 2014

•  SMX saw a significant uplift of demand traffic in Q1 2014 compared to Q4 2013 due to an increased number of advertisers bidding on mobile RTB inventory

•  Total number of auctions increased by 132%, while the number of bid responses increased by 73%

Publisher Inventory Analysis (US, EMEA & APAC)


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RTB Fill Rates Continue To Grow In Q1 Across All Regions Smaato global supply fill comparison Q1 2014

US EMEA APAC

RTB SSP or Mediation Others (incl. Direct)

15% 25%

52%

23%

23%

60%

17%

64%

21%

SMX fill rates across different Regions – Q1 2014

•  In Mobile monetization, Ad network continue to be the largest source of demand but Q1 saw a steady growth in RTB fill rates across different regions.

•  Highest RTB fill rate was in the EMEA region (23%), followed by the US (21%) and APAC (17%).



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SMX Reach in Q1: 250B Impressions across 450MM Uniques

Canada 3.44 Billion

USA 51.66 Billion

Mexico 4.56 Billion

Brazil 6.87 Billion

Argentina 182 Million

South Africa 3.01 Billion

Nigeria 2.32 Billion

Spain 2.02 Billion

France 4.77 Billion

Netherlands 1.75 Billion

UK 9.52 Billion

Germany 3.60 Billion

Switzerland 1.78 Billion

Italy 3.38 Billion

Turkey 3.28 Billion

Israel 931 Million

India 21.9 Billion

Russia 3.73 Billion

Singapore 172 Million

Indonesia 11.35 Billion

Australia 1.8 Billion

Japan 1.26 Million

China 2.47 Billion

Smaato Inventory Q1 2014

RTB auction increases in Q1: •  Turkey +214%

•  Italy +196%

•  France +172%

•  India +208% •  Indonesia +170%


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Entertainment Category Is The Largest Source of Global Supply Global publisher traffic performance by category, Q1 2014


•  Entertainment category share across SMX increased to 38% in Q1 dominating global supply traffic, followed by Social Networking (18%) and Games (13%)

•  Best performing category eCPM and fill rates by region:

•  US: Shopping/eCommerce eCPM $3.01, Education fill rate 29%

•  EMEA: Vehicle eCPM $0.68, Weather fill rate 38%

•  APAC: Weather eCPM $0.53, Shopping/eCommerce fill rate 36%

SocialNetworking

Entertainment

% Share of Q4 Auctions

Games Music Communication &Technology

Others

% Share of Q1 Auctions

26%

18%

26%

38%

18%

13%10% 9%

5%4%

15%18%

SMX global publisher supply category performance – Q4 2013 vs. Q1 2014


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320x50 Remains Top RTB Ad Size With 71% Market Share Global top ad sizes by volume, Q4 2013 vs. Q1 2014

Highest eCPM in Q1 Region! Ad size! eCPM!

US 768x1024 $10.4

EMEA 480x320 $2.64

APAC 768x1024 $2.16

Highest fill rate in Q1

Region! Ad size! Fill rate!

US 768x1024 54.7%

EMEA 480x320 51.5%

APAC 320x50 13.6%


•  320x50 still remains top RTB ad size with 71% supply traffic share on a global scale, followed by 216x36 (12%) and 728x90 (6%)

•  768x1024 experienced highest eCPM ($10.4) and highest fill rate (54.7%) in the US.

320x50 720x90 300x250 320x80 216x36 Others

% Share of Q4 Auctions % Share of Q1 Auctions

77%

8%3%

Smaato global top ad sizes performance – Q4 2013 vs. Q1 2014


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Windows Phone OS Ramping Up In Q1 Top device Operating System share, Q1 2014


Smaato global top operating system share - Q1 2014

•  Android (34%), iOS (23%) and Windows Phone OS (15%) remain top device OS in Q1 across all regions •  Windows Phone OS market share experienced a worldwide increase of 75% in Q1 compared to Q4 2013. The

highest regional uplift of Windows Phone OS supply inventory was in the APAC region (506%)

•  In the US, iOS had the highest eCPM ($0.73) while Android experienced the highest fill rate (18%)

23% 15%4% 3%

34%

Android iOS RIMWindowsPhone

Symbian

Smaato Global Advertiser Demand Insights


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Smaato demand advertising spend across SMX by geo


•  The top 3 countries for mobile RTB spend across SMX accounted for 76% of the total spend in Q1 •  The US is the top ad spending country with 66%, followed by the UK (7%) and Italy (3%). Ad spend in Italy

increased by 33% compared to Q4 2013

% of Q1 Global RTB spend across top countries % of RTB auction share by top countries

United States United Kingdom Italy

% Q4 Auctions % Q1 Auctions

35%

27%

6% 5%1% 2%

US Accounted For 66% of Mobile RTB Ad Spend Q1 !!


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US, UK and Australia Maintain Highest Regional Ad Spend Smaato demand advertising spend distribution, Q1 2014


Q1 SMX top ad spend distribution AMERICAS

Q1 SMX top ad spend distribution APAC

Q1 SMX top ad spend distribution EMEA


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RTB Ad Spend In Turkey Grew by 225%! Smaato demand advertising spend uplift, Q4 2013 vs. Q1 2014

RTB ad spend uplift Q4 2013 vs. Q1 2014 top performing countries!

RTB ad spend uplift Country! Uplift in Q1!

Turkey 225%

South Africa 190%

Brazil 104%

Mexico 88%

Spain 77%

Russia 44%

Italy 28%

Indonesia 27%


•  SMX saw significant RTB ad spend uplifts in countries like Turkey (225%), South Africa (190%), Brazil (104%), Mexico (88%) and Spain (77%)

0% RTB eCPM Uplift +200%


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Entertainment & Media 37% of Total Ad Spend Global top advertising categories by spend in Q1 2014

Top advertising categories with uplifts in ad spend

Category Uplift in Q1

Top Entertainment 97%

Top Business & Finance 11%

Top Technology & Telecom 3%


•  Entertainment and Media still generates highest RTB ad spend in Q1 with 37% of the overall revenue, followed by Technology & Telecom (25%), Business & Finance (11%) and Consumer Packaged Goods (CPG) (8%)

•  Of the top 100 global advertising brands according to Advertising Age, 85 are serving ads on SMX

SMX top advertising categories by ad spend – Q1 2014

% Revenue

Entertainment & Media 37%Technology & Telecom

Business & FinanceAdvertising

CPGSocial & Dating

TravelStyle & Fashion

AutomotiveNews & EducationLifestyle & Health

24%11%

8%8%

4%3%

2%2%

1%1%

Global Key Findings Across SMX in Q1


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Highest Q1 RTB Ad Spend in March (Week 9-13) Global SMX RTB performance by weeks, Q1 2014


•  RTB ad spend continued to grow as the quarter progressed. During the last four weeks of Q1, advertisers across SMX had a 45% higher ad spend compared to the first four weeks of the quarter

•  The number of auctions decreased slightly from weeks four to week eight but ramped up again during the last four weeks of Q1.

SMX RTB auctions per week – Q1 2014 SMX RTB ad spend per week – Q1 2014

Auctions

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Week 9

Week 1

0Wee

k 11

Week 1

2Wee

k 13

Spend

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Week 9

Week 1

0Wee

k 11

Week 1

2Wee

k 13


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RTB Spend Highest on Wednesdays and Fridays ! Global SMX RTB performance by day of week, Q1 2014


•  The global SMX RTB ad spend increased as the week progressed and started to drop towards the end of the week •  SMX experienced highest fill rates on Wednesdays and Fridays as ad spend share increased to 16%. Over the

weekend, the ad spend share dropped to 13%

SMX global RTB auctions & ad spend share by day of week - Q1 2014

Monday

5%

10%

15%

20%

25%

30%

35%

Tuesday Wednesday Thursday Friday Saturday Sunday

% Total Auctions % Total Spend

14%13%

16%15% 16%

13% 13%

14% 13%15% 15% 15%14% 14%


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Strongest RTB Activity 4:00pm - 7:00pm PST Global SMX RTB auctions & revenue share by time of day (PST)

Note: The chart above represents data based on top 100 hours of #auctions and spend on SMX


% Auctions % Spend

0:00

1:00

2:00

03:00 4:0

05:0

06:0

07:0

08:0

09:0

010

:0011

:0012

:0013

:0014

:0015

:0016

:0017

:0018

:0019

:0020

:0021

:0022

:0023

:00

5%

10%

15%

20%

25%

30%

35%

Global RTB auctions vs. spend – by time of day (PST)

•  Majority of the global revenue share on the SMX platform was between 4:00 to 7:00 pm PST in Q4 •  About 70% of the global auctions were between 7:00am to 11:00am PST


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Global Demand For App Inventory Increased by 73% SMX mobile web & app inventory uplift, Q4 2013 vs. Q1 2014


•  Global demand for SMX inventory increased significantly in Q1. While bid responses for app inventory increased by 73%, the bid responses for mobile web inventory increased by 33%

•  The number of auctions for both mobile web and app inventory increased by 131% and 109% respectively

Q4 Q1 Q4 Q1


109%

73%

Smaato mobile web inventory uplift (in %) Smaato app inventory uplift (in %)

Q4 Q1 Q4 Q1


131%

33%


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Bid price comparison by bid responses and revenue, Q4 2013 vs. Q1 2014


•  The global revenue across SMX increased in Q1, but advertisers spent more ad dollars in the lowest bid buckets. 40% from the total ad revenue in Q1 came from the bid buckets between 0.00 and 0.99, an uplift of 82% in comparison to Q4 2013

•  65% of the total bids were in the lower bid buckets between 0.00 and 0.99.

SMX top 50 bid buckets ad revenue share Q4 2013 vs. Q1 2014

0.00 - 0.99 1.00 - 1.99 2.00 - 2.99 3.00 - 3.99 4.00 - 4.99

% Revenue Q4 % Revenue Q1

22%

40%

28%

17% 18%13%

8% 7%4% 3%

Ad Spend Focused More on Performance Campaigns in Q1


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Data Enriched Bid Requests Deliver Increased CPMs Impact of third party data on bid requests in Q1

eCPM uplift of 200% Fill rates went up by 68% Average Winning Bid increased by 183% Bid depth uplift by 346% Gender, age, location and device ID parameters still play a major role in generating higher eCPM’s


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Key Findings

•  United States continued to lead RTB spend capturing 66% of the total RTB revenue across SMX, followed by the UK (7%) and Italy (3%)

•  SMX saw significant RTB ad spend uplifts in Turkey (+225%), South Africa (+190%), Brazil (+104%) Mexico (+88%) and Spain (+77%) in Q1

•  The Entertainment and Media sector continued to have the highest spend contributing to 37% of the global spend across SMX, an uplift of 97% compared to Q4 2013

•  The Entertainment category share increased to 38% in Q1 and still dominates the global supply RTB traffic, followed by Social Networking (18%) and Games (13%)

•  Android (34%) and iOS (23%) still dominate the RTB market supply inventory share in Q1. Windows Phone OS (15%) ramped up considerably with an increase of 75% compared to Q4 2013

•  Global demand for app inventory increased significantly by 73% in Q1

•  SMX saw highest RTB spend on Wednesdays (16%) and Fridays (16%) in Q1

•  Enrichment of bid requests using third party data across the SMX platform has lead to increased eCPMs (200%) and fill rates (68%) in Q1

Smaato Global Mobile RTB Insights Report Q1 2014


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Market Outlook

•  Mobile advertising nearly doubled its share of digital ad revenue in 2013 and will remain the growth engine for digital advertising spend this year

•  The evolution of mobile RTB trading and new ad formats through advanced knowledge and education will shape the process of the mobile industry in 2014

•  Excitement around the native ads concept is waning as native is a custom format not ready for scale other than on large publisher properties

•  The ad spend of brands will continue to grow in mobile: from the recent Ad Age Trend report, 85 of the top 100 global advertising brands are serving ads on SMX. This number will rise throughout 2014

•  Advertisers will continue learning mobile and shift focus towards App inventory vs. Mobile-web

•  Mobile gaming is becoming a major advertising category •  Centralized buying across global inventories will continue growing as mobile monetization is a truly global

opportunity

Smaato Global Mobile RTB Insights Report Q1 2014