Smaato Global Trends in Mobile Advertising Report Q32016info.smaato.com/...Global_Trends_in_Mobile_Advertising...Q3_2016.pdf · Smaato’s Global Trends in Mobile Advertising report

Global Trends in Mobile AdvertisingQ3 2016

Copyright © 2017 Smaato Inc. All Rights Reserved.

Global Trends in Mobile AdvertisingQ3 2016Smaato’s Global Trends in Mobile Advertising report offers key insights into the mobile programmatic advertising landscape worldwide during Q3 2016. Our platform delivers up to 300 billion ad impressions each month, which are auctioned through a network of over 450 demand partners. Please note that this report reflects trends across Smaato’s global base of publishers, advertisers and users during Q3 2016. Each report offers a quarterly snapshot, so specific data and observations may not be comparable with previous reports.

Executive SummaryDuring Q3 2016, we observed the following five global trends across the mobile landscape:

Strong Mobile Ad Spending Growth Continued in Q3 2016Global mobile ad spending continued to post robust growth (+64%) in Q3 versus the same quarter last year on the Smaato platform. Growth was driven primarily by the Americas (+77%) and APAC (+64%) regions, followed by EMEA (+22%). In each region, the 2 biggest markets each saw healthy growth and were the primary regional growth drivers. Japan, Turkey and Scandinavia were also regional growth standouts.

App Domination Accelerated, but Mobile Web Still Has ValueAs in previous quarters, mobile ad spending continued to shift in-app, which picked up 8 share points versus mobile web ad spending in Q3. In-app advertising now solidly dominates with 81% global ad spending share. Nonetheless, mobile web also continues to grow in absolute terms, up almost 4% from the same quarter last year with rising eCPMs in Q3.

Android Dethrones iOS as eCPM King, Apple Remains Top Device Brand for Ad SpendingAndroid overtook iOS as the eCPM leader on the Smaato platform and also remained the overall mobile ad spending leader (55% share). Despite device-side stumbles by both Apple and Samsung in Q3, Apple remained the global device brand that saw the highest ad spending on the Smaato platform (41% share), driven by its still high (but slightly lilting) eCPMs and Android OS device fragmentation. Samsung remained #2, even with its Note 7 debacle.

Men are from Android, Women are from iOSAn ad request coming from a man’s smartphone was more than three times as likely to come from an Android device than an iOS device. However, an ad request coming from a woman’s smartphone was 1.5 times more likely to come from an Apple (iOS) device. Notably, this trend is strengthening.

Video Took Off in Q3 2016 Video is surging on the Smaato platform, with video ad spending up 557% in Q3 versus the previous quarter and video eCPMs growing 62% as well. Average video eCPMs in Q3 were more than 9 times higher than the average overall eCPMs on the Smaato platform. 90% of all video ad requests came from apps.

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5.


Strong Mobile Ad Spending Growth Continued in Q3 2016

1

Global mobile ad spending continued to post robust growth (+64%) in Q3 2016 versus the same quarter a year ago on the Smaato platform. Growth was driven primarily by the Americas (+77%) and APAC (+64%) regions, followed by EMEA (+22%).

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Global Ad Spending Growth by Region & Top CountriesQ3 2016 vs. Q3 2015

Source: Smaato Publisher Platform (SPX) - Q3 2016

+885%

+223%

+204%

+178%

+140%

+131%

+82%

+81%

+36%

Puerto Rico

Chile

Uruguay

Canada

Colombia

Costa Rica

Paraguay

Peru

USA

GLOBAL +64%

APAC +64% AMERICAS +77% EMEA +22%

China

Malaysia

Vietnam

Philippines

Thailand

Japan

Taiwan

+486% +300%

+229%

+113%

+107%

+99%

+60%

+43%

+38%

+36%

+33%

+334%

+89%

+81%

+79%

+60%

+59%

+52%

+42%

+33%

Singapore

Egypt

Turkey

Ireland

Sweden

France

Denmark

Spain

South Africa

Germany

United KingdomAustralia

Hong Kong

Copyright © 2017 Smaato Inc. All Rights Reserved. 3

Top 2 Biggest Regional Mobile Ad Spending Markets (by Market Size)Market Size1 and Q3 2016 Growth2

AMERICAS EMEAAPAC

1

2

$45.67USA China UK

Canada Japan Germany$1.80

+81%

+140%

1

2

$27.89

$4.57

+486%

+334%

1

2

$8.01

$2.56

+33%

+36%

2016 Market Size($ Billions)1



Ad Spending Growth

Q3 2016 vs. Q3 20152

Ad Spending Growth

Q3 2016 vs. Q3 20152

Ad Spending Growth

Q3 2016 vs. Q3 20152

Sources: 1 eMarketer, September 2016; 2 Smaato Publisher Platform (SPX) - Q3 2016

Aside from the biggest regional markets by overall ad spending, key notable regional growth standouts were:

• Turkey (+300%), EMEA’s overall growth leader, is a highly wireless nation considered one of the world’s digital banking leaders. With one of Europe’s youngest populations (some 60% of Turks under 35, and 40% under 251), Turkey leads the world in percentage (44%) of consumer purchases made from a mobile device (global average is 31%)2.

• Scandinavia continues to be strong, as already noted last quarter in our previous report.

• Latin American countries, such as Paraguay (+885%), Chile (+204%), Uruguay (+178%), Columbia (+131%) and Peru (+36%), all grew as a result of relatively solid economies and modest advertiser spending in the same quarter last year.

1 Turkey Leapfrogs Europe In Mobile Services, Global Finance Magazine, gfmag.com, October 14, 20162 A Global Perspective of Mobile Commerce, IAB On Device Research, September 2016

In each region, the Top 2 biggest mobile ad spending markets each saw healthy growth in Q3 2016 versus Q3 2015 and were key drivers of regional growth on the Smaato platform.

https://www.smaato.com/resources/reports/global-trends-report-q2-2016/

https://www.gfmag.com/magazine/october-2016/turkey-leapfrogs-europe-mobile-services

http://www.iab.com/wp-content/uploads/2016/09/2016-IAB-Global-Mobile-Commerce-Report-FINAL-092216.pdf


App Domination Accelerates, but Mobile Web Still Has ValueAs in previous quarters, in-app continued to pick up mobile ad spending share versus mobile web in Q3 2016. In-app now solidly dominates ad spending on the Smaato platform with 81% share, up 8 share points versus the same quarter last year.

Moreover, the dominance of in-app over mobile web ad spending is a worldwide phenomenon, true in both advanced as well as emerging markets. In most of the biggest markets except Indonesia, in-app mobile ad spending outpaces mobile web ad spending by a ratio of at least 2-to-1 (and it’s really close to 2-to-1 in Indonesia as well).

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Mobile Web

In-App

27%

20162015

2014

33%

19%

81% 73% 67%

In-App vs. Mobile Web Share of Ad Spending RevenueQ3 2014 - 2016




Mobile Web

In-App

USA

83%

Australia

70%

China

99%

Germany

94%

South Korea

81%

Singapore

73%

Brazil

84%

Turkey

89%

Mexico

87%

Russia

97%

India

83%

67%

South Africa

Indonesia

63%Argentina

85%

France

88%

UK

78%

Japan

67%

Canada

87%

Sweden

90%

Why is in-app spending so much higher? Mobile users worldwide are spending more and more time in apps (i.e. 79% of all ad requests on the Smaato platform come from apps) and advertisers are willing to pay more for the superior user tracking and data availability of the in-app environment. In-app eCPMs are, on average, more than two times higher than mobile web eCPMs on the Smaato platform, a trend that has remained consistent with the same quarter last year.

In-App vs. Mobile Web Share of Ad Spending in Select CountriesQ3 2016


Sources: 1 Smaato Publisher Platform (SPX) - Q3 2016 2 Smaato Publisher Platform (SPX) - Q3 2016 vs. Q3 2015

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Fast Stats: In-App vs. Mobile Web

Mobile Web

In-App

In-AppeCPMs

2x Higherthan Mobile Web

eCPMs1

In-App

79%of all

Ad Requests1

In-AppAd Request

Growth2

+53%Mobile Web

21%of all

Ad Requests1

Mobile WebAd Request Growth2

+4%

Mobile WebeCPM Growth2

+10%

Nonetheless, mobile web is far from dead and still represents 21% of all ad requests and 19% of all mobile ad spending on the Smaato platform, up almost 4% from the same quarter last year. Notably, Q3 2016 mobile web eCPMs are on the rise, increasing more than 10% on average in Q3 2016 versus the previous quarter, indicating advertisers still value this environment.


Market Share by Mobile OS ShipmentsQ3 2016

Source: Gartner, November 2016

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Android

iOS

Other

87.8%

11.5%

0.7%

Android Dethrones iOS as eCPM King, Although Apple Remains Top Device Brand for Ad Spending

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As smartphone sales continue to grow, the battle for operating system (OS) market share is clearly being won by Google’s Android, which continued to capture share at the expense of Apple’s iOS. Android commanded nearly 88% of the Q3 total global mobile OS shipment market in Q3 2016 (up from 86.2% in the previous quarter3) according to Gartner4. In fact, all other major operating systems except Android lost both share and units in Q3 2016 versus the same quarter last year.

Despite Android’s overwhelming market share dominance, advertisers have historically placed a premium on Apple iOS users, paying higher eCPMs for a presumably more affluent demographic able to pay the comparatively higher prices of Apple devices. Apple’s eCPM advantage has been eroding in recent quarters, and in Q4 2015, we projected that Android eCPMs would pull even with those of iOS in as early as Q4 2016. The tipping point came earlier than expected.

3 eMarketer, November 16, 20164 Gartner, November 17, 2016

http://na2.totalaccess.emarketer.com/Reports/Viewer.aspx?R=2001859&ecid=MX1371

http://www.gartner.com/newsroom/id/3516317


Android vs. iOS eCPM


201620152014

eCPM

iOS

Android

Q3 2014 - 2016

Driven by its favorable eCPM trends, Android reigns as the overall mobile ad spending leader on the Smaato platform. In Q3 2016, Android accounted for a steadily increasing 55% of global mobile ad revenue generated by publishers, as iOS share continued to erode, accounting for 41% of global mobile ad spending in Q3 2016, down from 43% ad spending share at the end of 2015.

Android unseated iOS to become the new eCPM leader on Smaato’s SPX platform in Q3 2016. A rise in Q3 2016 Android eCPMs together with declining iOS eCPMs contributed to this leadership change. In fact, since the end of 2014, Android eCPMs have increased 55.3% on the Smaato platform while iOS eCPMs have fallen 3.4% over the same period.


Android

iOS

Other

54.7%

41.8%

3.5%

Global Ad Spending Share by OSQ3 2016


On the smartphone handset/hardware side, despite a third quarter of consecutive decline in the overall worldwide device market (-2.6% Q3 versus year ago5), Q3 2016 saw global smartphone sales continue to rise (+5.4% in Q3 2016 versus same quarter last year6), even as overall mobile phone sales fell (-1.3%, due to the declining popularity of feature phones6). In fact, among all devices, smartphones and Chromebooks were the only device types that posted sales gains in Q3 versus previous year according to Gartner, with traditional tablets showing the steepest decline.

Source: Gartner, November 2016

Worldwide Smartphone Sales to End Users by Top VendorsQ3 2016 (in Millions)

Samsung Apple Huawei Oppo BBKCommunication

Equipment

Ove

rall

Ship

men

t

Q3 2016

Q3 2015

83.6

46.0

27.4

11.9

71.7

43.0

32.5

24.9

19.9

10.4

Among smartphone devices, top-two device manufacturers Samsung and Apple stumbled - Samsung (-14.2%, its worst performance ever) with its Galaxy Note 7 battery debacle and Apple (-6.6%, its lowest share since Q1 2009) with its iPhone7 launch that struggled to stimulate replacement. In fact, Apple’s sales fell by 8.5% in the U.S. and by 31% in China, two of its biggest markets.6

The market leaders thus opened the door for rising star manufacturers, such as Huawei, which closed its device share gap slightly versus Apple. Despite being a share winner, however, Huawei has two serious domestic competitors - Oppo and BBK Communication Equipment - who each doubled their respective market shares in Q3.6

5 Gartner, November 14, 2016 6 Gartner, November 17, 2016

https://www.gartner.com/doc/3513918?ref=AnalystProfile&srcId=1-4554397745

http://www.gartner.com/newsroom/id/3516317



Apple

Samsung

LG

Generic

Motorola

HTC

Generic Web Browser

ZTE

Alcatel

Sony

2.6%

1.9%

1.7%

1.7%

1.1%

1.0%

41.0%

26.0%

7.1%

6.8%

On the Smaato platform, Apple continued its reign as the global device brand with the highest ad spending, capturing 41% share driven by its still high (albeit slightly lilting) eCPMs and Android OS device fragmentation. Samsung followed with 26%, even with its problems, while LG came in third at 7% of all global ad spending on the Smaato platform.

Global Top 10 Device Brands by Ad SpendingQ3 2016


Men are from Android, Women are from iOS

While Android is the undisputed overall worldwide mobile OS market leader and also leads iOS in ad spending on the Smaato platform, there are distinct and notable gender differences among these two rival mobile operating systems.

4

11


Android

iOS

Other

40.3%

59.7%

21.6%

75.8%

2.6%

Android vs. iOS - Share of Global Ad Requests by GenderQ3 2016

In Q3 2016 the majority of ad requests on the Smaato platform coming from smartphones owned by women came from iOS devices, while the majority of ad requests from smartphones owned by men came from smartphones running Android.

• An ad request coming from a man’s smartphone is more than three times as likely to come from an Android device than an iOS device.

• An ad request coming from a woman’s smartphone is 1.5 times more likely to come from an Apple (iOS) device.

Notably, this trend is strengthening - the likelihood that an iOS ad request comes from a smartphone owned by a woman and an Android ad request comes from man’s smartphone is increasing from Q2 to Q3 (and - sneak peak - even more so in Q4) 2016.



Android vs. iOS - Share of Global Ad Spending by GenderQ3 2016


Gender Share Split by Operating System, Ad Spending and RevenueQ3 2016

Android

iOS

40.3% 69.5%

59.7% 30.5%

For ad spending on the Smaato platform, this trend is true as well. Ad spending sent to women’s smartphones is predominantly taking place on an Apple iOS device, while ad spending directed to men’s smartphones is overwhelmingly to a (non-Apple) Android device.

Female

Ad Requests

Android

iOS

Ad Spending

Male

72.1%

27.9%

63.3%

36.7%

34.3%

65.7%

33.8%

66.2%

Conversely, if an ad request is coming from an Android device, the probability of that device belonging to a man is 72.1%. Whereas if an ad request is coming from an Apple device, that smartphone most likely (65.7% likelihood) belongs to a woman, for all ad requests passing gender data on the Smaato platform.


Video Takes Off in Q3 2016

Video is surging on the Smaato platform, as advertisers and publishers alike flock to this engaging format. On the advertiser side of Smaato’s global ad exchange, video ad spending grew 557% in Q3 versus the previous quarter, with video eCPMs growing 62% as well. On the publisher traffic side, video ad requests on the Smaato platform increased 608% in Q3 versus Q2 2016.

Average video eCPMs were more than 9 times higher than the average overall eCPMs on the Smaato platform in Q3 2016. While rich media banner ads (320x50) were still the most popular ad format, video ads garnered 6.8 times higher eCPMs.

5

13


eCPM Ad Spending Ad Requests

+62%

+557%+608%

Growth of Video Ad Spending, eCPMs and Ad RequestsQ3 2016 vs. Q2 2016


By geography, worldwide video eCPMs were overwhelmingly highest in the USA, with fellow native English speaking markets Canada, Australia, New Zealand, the UK and South Africa all landing in the Top 10 video ad spending markets as well. Germany was a particular non-English speaking eCPM standout among the top 10 biggest countries by video ad spending.

Most video activity on the Smaato platform happened in-app, as 90% of all video ad requests came from apps. Additionally, in-app video eCPMs were 1.5 times higher than those of mobile web video ads.


USA860

UK170

Canada270

Australia240

Germany190

New Zealand

180Spain100

Mexico140

France100

SouthAfrica100

Indexed Video eCPMs among Top 10 Countries by Video Ad SpendingQ3 2016



15

320x480(Full Page Interstitial)

300x250(Medium Rectangle)

480x320 302x252 320x50

41.6%

27.5%

5.3%

7.3%

4.7%

Full-page interstitial video ads were the most popular video format among advertisers on the Smaato platform, accounting for 41.6% of video ad spending in Q3 2016. In terms of ad requests, the medium rectangle video format drove the most ad requests at 58.3% of all video ad requests last quarter.

Given the high-engagement factor of the video format and its utility particularly to brand advertisers, we expect video to continue its high growth adoption in Q4 and into 2017.

Share of Video Ad Spending by Ad SizeQ3 2016


Thank You

About Smaato

We hope you’ve enjoyed Smaato’s report on Global Trends in Mobile Advertising - Q3 2016. To download white papers, read case studies and subscribe to our monthly publisher & app developer newsletter, visit us online at www.smaato.com.

Smaato is the leading global real-time advertising platform for mobile publishers and app developers. Smaato runs the world’s largest independent mobile ad exchange and has been pioneering innovative, mobile-first solutions for publishers since 2005.

The Smaato Publisher Platform (SPX) is a global, intelligent and free-to-use self-service platform and ad server that brings native, video and real-time advertising to over 90,000 app developers and mobile publishers. The company’s worldwide reach and extensive network of 450+ demand partners provides a massive variety of advertisers with one single integration. Smaato manages up to 10 billion ads every day around the world, across over 1 billion unique mobile users each month.

http://www.smaato.com

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Smaato Global Trends in Mobile Advertising Report Q32016info.smaato.com/...Global_Trends_in_Mobile_Advertising...Q3_2016.pdf · Smaato’s Global Trends in Mobile Advertising report