Smaato's Global Trends in Mobile Advertising – Q4 2015info.smaato.com/hubfs/Reports/Smaato_Global_Trends_in_Mobile... · Global Trends in Mobile Advertising ... Mobile ad spending

Copyright © 2016 Smaato Inc. All Rights Reserved.

Global Trends in Mobile AdvertisingQ4 2015


Global Trends in Mobile AdvertisingSmaato’s Global Trends in Mobile Advertising - Q4 2015 report offers key insights into the mobile programmatic1 advertising landscape worldwide. Our platform handles over 300 billion ad impressions each month, which are auctioned through a network of over 450 demand partners. By analyzing the flow of impressions across Smaato’s platform, we can identify trends and emerging patterns that impact the entire mobile industry.

Please note that this report reflects the detailed activity and trends across our global base of publishers, advertisers and users during Q4 2015. Each report offers a quarterly snapshot, so specific data and observations may not be comparable with previous reports.

Executive Summary During Q4 2015, we observed the following six global trends across the mobile landscape:

1

1. Programmatic advertising helps automate the decision-making process of media buying by targeting specific audiences and demographics. Pro-grammatic ads are placed using artificial intelligence (AI) and real-time bidding (RTB). Source: Marketing Land, What is Programmatic Advertising?

2. eCPM refers to the “cost per thousand advertising impressions”. It is calculated by dividing the cost of an advertising placement by the number of impressions (expressed in thousands) that it generates. Source: Wikipedia, Cost per mille

2015: A Transformational Year in Mobile Mobile ad spending in the U.S. passed a major milestone in 2015 by exceeding desktop for the first time. Propelled by rising ad spend globally, mobile grabbed a majority share (51.9%) of all digital ad spending last year. Other regions are poised to follow suit.

1.

China’s Rapid Mobile Ad Spend Growth While the U.S. remains the most valuable ad market in the world - and it continues growing at a healthy clip - it pales in comparison to China’s staggering expansion. China experienced a mobile ad spend uplift of 1,246% in Q4 2015, by far the largest uplift observed on the Smaato platform.

2.

Mobile Ad Spend Moves In-App On the Smaato platform, apps dominate mobile websites in terms of global ad spend. In the Americas, in-app share of Smaato ad spend grew from 64% to 77% in just 12 months. The APAC and EMEA regions also saw apps pick up share over the mobile web in Q4 2015.

3.

Android Narrows eCPM Gap on iOS Android’s eCPM2 growth rate was much stronger than that of iOS during Q4 2015. We know that iOS users are no longer 1.55 times more valuable than Android users, but when will Android catch up? Smaato’s data shows that Android eCPMs are projected to pull even with those of iOS as early as Q4 2016.

4.

Data Is the New Currency in Mobile It’s no surprise that advertisers will pay substantially more to publishers who can provide data. But what kind of data is the most lucrative for publishers? Smaato’s platform shows that ads with GPS coordinate data increase eCPM by 162%. On average, publishers who leveraged data saw eCPM triple during Q4 2015.

5.

U.S. Holiday Mobile Ad Spend Peaks Earlier Seasonal trend data pulled from Smaato’s platform in Q4 2015 show that advertisers started spending earlier in the quarter. In previous years, holiday ad spend peaked on Christmas Eve. However, Thanksgiving and Black Friday emerged as the largest ad spend days across the U.S. in Q4 2015.

6.

http://marketingland.com/library/display-advertising-news/display-advertising-programmatic-media-buying

https://en.wikipedia.org/wiki/Cost_per_mille


2015: A Transformational Year in Mobile1

2

3. Tops of 2015: Digital http://www.nielsen.com/us/en/insights/news/2015/tops-of-2015-digital.html 4. Digital Ad Spending in 2015 http://www.emarketer.com/Article/Mobile-Account-More-than-Half-of-Digital-Ad-Spending-2015/1012930#sthash.56hz70Pt.dpuf 5. Seven Years Into the Mobile Revolution http://flurrymobile.tumblr.com/post/127638842745/seven-years-into-the-mobile-revolution-content-is

U.S. Digital Ad Spending - 2015

Source: eMarketer

Smartphone

Desktop51.9%48.1%

U.S. Mobile Ad Spend Growth - Q4 2014 vs. Q4 2015

Source: Smaato Publisher Platform (SPX)

Q4 2014 Q4 2015

+174%

There’s no doubt that 2015 was a significant year for mobile advertising. In the world’s largest ad market, smartphone penetration grew from 78% of U.S. mobile subscribers at the beginning of 2015 to over 80% going into Q4 2015.3 U.S. mobile ad spending also continued its upward trajectory on the Smaato platform, growing a healthy 174% year-over-year from Q4 2014 to Q4 2015.

There were clear signs that mobile reached a tipping point in 2015 as U.S. mobile ad spending exceeded desktop for the first time. According to eMarketer, Mobile accounted for 51.9% of all U.S. digital ad spending in 2015.4

U.S. consumers added almost an hour of time spent on their mobile devices last year at the expense of desktop, an increase of 35% in just one year.3 In 2016, mobile is expected to surpass desktop ad spending, not just in the U.S. but globally.

http://www.nielsen.com/us/en/insights/news/2015/tops-of-2015-digital.html

http://www.emarketer.com/Article/Mobile-Account-More-than-Half-of-Digital-Ad-Spending-2015/1012930#s

http://flurrymobile.tumblr.com/post/127638842745/seven-years-into-the-mobile-revolution-content-is


2

3

China’s Rapid Mobile Ad Spend Growth

Mobile Ad Spend Growth Worldwide - Q4 2015 vs. Q4 2014

VenezuelaCanadaUSAArgentinaMexicoChileUruguay

+405%+308%+174%+71%+31%+24%+24%

+241%+223%+139%+109%+102%+81%+77%+69%

+1,246%+279%+171% +116%+110%+110%+47%

Growth Growth GrowthAMERICAS

IrelandGreeceSwedenSpainBelgiumNetherlandsGermanyRussia

ChinaHong KongNew ZealandSingaporeIndonesiaBangladeshAustralia

EMEA APAC


While the U.S. continues to lead the world with the largest volume of ad impressions each quarter, China is now the fastest growing country in ad impression supply on the Smaato platform. China saw mobile ad impressions more than triple year-over-year in 2015.

China is not the only APAC country posting impressive growth, however. The broader APAC region also showed marked growth in mobile ad impressions, with 8 of the top 10 highest growth countries coming from APAC.

While the Americas showed healthy ad spending growth in Q4 2015 – Venezuela, Canada and the U.S. grew 405%, 308% and 174% respectively – these figures pale in comparison to China. In Q4 2015, China experienced mobile ad spend growth of 1,246%, by far the largest uplift observed on the Smaato platform..

Mobile Ad Impression Growth Worldwide - Q4 2015 vs. Q4 2014


ChinaVenezuelaCanadaPhilippinesIndonesiaBangladeshMalaysia

203%191%127%105%101%87%77%

GrowthCountry 1.2.3.4.5.6.7.

GrowthCountry

GreeceSwitzerlandNigeriaHong KongSpainBelgium

15%13%11%10%4%3%

15. 16.17.18.19.20.

Sri LankaSingaporeJapanNew ZealandU.S.A.MexicoAustralia

73%69%55%52%46%45%15%

GrowthCountry 8.9.

10.11.12.13.14.

Copyright © 2016 Smaato Inc. All Rights Reserved. 4

Based on quarterly ad spend and growth rates on the Smaato platform, we predict that China will pull even with the U.S. as the world’s biggest advertising market on our platform in 2018 (excluding currency fluctuations).

This prediction is intended as a wake-up call for advertisers and publishers unfamiliar with China’s unique mobile market. For example, four of the top five smartphone vendors in China are home-grown, and Huawei leads the pack with 15.2% market share.

Top 5 Smartphone Vendors in China by Year-Over-Year Growth - Q4 2015 vs. Q4 2014

Source: IDC Asia/Pacific Quarterly Mobile Phone Tracker, February 2016

0% 10% 20% 30% 40% 50%

50.8%

16.8%

15.3%

53.3%

33.8%

Top 5 Smartphone Vendors in China by Market Share - Q4 2015

Huawei

Apple

Xiaomi

Oppo

Vivo

Others

36.4%

15.2%

14.6%

14.4%

10%9.4%

Source: IDC Asia/Pacific Quarterly Mobile Phone Tracker, February 2016

The mobile landscape in China is changing fast too; both Oppo and Huawei exceeded 50% year-over-year growth in Q4 2015.


3

5

Mobile Ad Spend Moves In-App

Smaato Platform Integration Methods


17%

75%

8%

SDK

Ad Tag

API

On the Smaato platform, apps dominate mobile websites in terms of ad spend globally. In the Americas, in-app share of Smaato ad spend grew from 64% to 77% in just 12 months. The APAC and EMEA regions also saw apps pick up share over the mobile web in Q4 2015.

It’s interesting to note that over 75% of all publishers on the Smaato platform connect via our Software Developer Kit (SDK), which illustrates a strong preference for in-app advertising.

In-App vs. Mobile Web Ad Spending Share - Q4 2014 & Q4 2015

EMEAAPAC


Q4 2015

Q4 2014

APP

78% Q4 2015

65% Q4 2014

APP

77%64%

APP

77%51%

APP

84%76%

MOBILE WEB

23%36%

MOBILE WEB

23%49%

MOBILE WEB

16%24%

MOBILE WEB

22% Q4 2015

35% Q4 2014

AMERICAS


Android Narrows eCPM Gap on iOSIt is widely known that Android overtook iOS in terms of device market share some time ago. Even in the United States, an iOS stronghold, a majority of subscribers (52.6%) used Android devices to access their apps in Q3 2015.6 Apple’s iOS runs a close second at 42.7%, while smaller players like Windows and BlackBerry account for less than 5% of U.S. market share.

Looking at data from the Smaato platform, Android contributes 54.9% of global ad spend, while iOS accounts for over 43%.

4

6

Top U.S. Smartphone Operating Systems - Q3 2015

Source: Nielsen

52.6%42.7%

0.7%2.8% 1.2%

Android

Apple

Windows Phone

BlackBerry

Other

Ad Spending by Mobile OS - Q4 2015

EMEA

GLOBAL

APAC


AMERICAS

AndroidiOSWindows PhoneBlackBerry

56.13%42.79% 1.03% 0.06%


54.93%43.26% 1.67% 0.14%


51.70%46.69% 1.47% 0.14%


52.60%42.70% 4.25% 0.45%

6. Tops of 2015: Digital - http://www.nielsen.com/us/en/insights/news/2015/tops-of-2015-digital.html

http://www.nielsen.com/us/en/insights/news/2015/tops-of-2015-digital.html


It’s clear that Apple’s iOS has been the smaller but much more lucrative mobile advertising player for many years. Historically, ads on iOS devices have commanded significantly higher eCPMs for publishers. Although iOS is still the eCPM leader today, data from Smaato’s platform show this gap closing, as Android’s eCPM grew at a faster rate in 2015.

Closer analysis of this trend on the Smaato platform shows Android gaining ground on iOS quickly. In Q4 2014, iOS delivered an eCPM 1.55 times higher than that of Android. In Q4 2015, we see that the gap has narrowed - iOS delivered an eCPM just 1.17 times higher than Android.

Both mobile operating systems experienced eCPM growth during this period, but Android’s eCPM growth rate was stronger than that of iOS by a substantial margin. In fact, based on current growth trends, Smaato’s data show that Android eCPMs are projected to pull even with those of iOS as early as Q4 2016. At this time next year, we could well be looking at a new eCPM leader.

7

eCPM Growth by OS - 2014 vs. 2015


iOSAndroid

2014 2015

+51%+14%

Ad Impression Growth by Mobile OS - 2014 vs. 2015


iOSAndroid

+159%

+99%

2014 2015


Data Is the New Currency in MobileAdvertisers are paying significantly more money to publishers that provide accurate data. High quality data facilitates audience targeting, which allows advertisers to deliver relevant ads that encourage meaningful user actions with less waste. In this way, publishers can be confident that the ads shown to their app users are appropriate and relevant.

An analysis of Q4 2015 activity on the Smaato platform demonstrates that data is growing in importance all the time. Publishers who provide reliable data – such as location, gender and/or age – generate significantly more mobile ad revenue than publishers that do not pass this information.

5

Impact of Geo-Targeting Data on eCPM - Q4 2015

+162%

GPS Coordinates

+74%

Zip / Post Code


Impact of Gender Data on eCPM - Q4 2015


+177%

Female

+115%

Male


Impact of Age Data on eCPM - Q4 2015

64+

50-63

35-49

25-34

18-24

6-17

+127%

+96%

+108%

+123%

+170%

+128%


0 50 100 150 200 250

In addition to being more valuable in the absolute, passing data is becoming more valuable over time. eCPMs for ad impressions without data rose 42% year-over-year from 2014 to 2015 on the Smaato platform. During the same time period, ad impressions that passed data saw eCPMs rise by 120%, demonstrating 3 times higher eCPM growth.

It’s clear that everybody in the ecosystem benefits when data is passed – advertisers reach their target audience more efficiently, publishers enjoy more revenue and users see more relevant ads. In summary, everybody wins by passing data.

Impact of Geo & Gender Data on eCPM - Q4 2015


With Geo & Gender Data2014 2015

No Data

+120%

+42%


U.S. Holiday Mobile Ad Spend Peaks EarlierIt’s no surprise that Q4 2015 was the largest mobile ad spending quarter of the year globally. Looking at data from the Smaato platform, the Americas region was the key growth driver with 162% ad spend growth year-over-year in Q4 2015. In fact, the Americas region saw three times higher year-on-year growth in Q4 than the next highest region (APAC).

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Mobile Ad Spending Growth By Region - Q4 2015

AMERICAS APAC EMEA

+28%+52%

+162%

Indexed U.S. Ad Spending During the Holidays - Q4 2015 vs. Q4 2014

500

450

400

350

300

250

200

150

100

50

0


Uplift in AverageSpend +175%

Black Friday 2015

Black Friday 2014

Christmas 2015

Christmas 2014

20152014

Looking at U.S. daily mobile ad spending in the 2015 holiday period, average daily ad spending on the Smaato platform increased 175% versus the 2014 holiday period.

November December

Q4 2015 Average Ad Spend

Q4 2014 Average Ad Spend


Interestingly, there was a clear shift in the timing of holiday ad spending in Q4 2015. We see spending peak much earlier in Q4 2015, moving up to the Black Friday/Thanksgiving timeframe from the Christmas period in the previous year. In fact, four of the top five mobile ad spending days occurred in November 2015, whereas all of the top five mobile ad spending days occurred in December 2014.

Top 5 Ad Spending Days of the Year - 2014 vs. 2015

Top 5 U.S. Mobile Ad Spending Days - 2014 vs. 2015

Nov

1

Nov

3

Nov

5

Nov

7

Nov

9

Nov

11

Nov

13

Nov

15

Nov

17

Nov

19

Nov

21

Nov

23

Nov

25

Nov

27

Nov

29

Dec

1

Dec

3

Dec

5

Dec

7

Dec

9

Dec

11

Dec

13

Dec

15

Dec

17

Dec

19

Dec

21

Dec

23

Dec

25

Dec

27

Dec

29

Dec

31


12/19

/14

11/27

/1511

/28/15

12/5/

15

11/25

/1511

/26/15

12/20

/1412

/21/14

12/24

/14

12/29

/14

500

450

400

350

300

250

200

150

100

50

0

20152014


Summary

Android Closes eCPM Gap on iOS

China’s Ad Spend Growth Challenges U.S.

U.S. Mobile Ad Spend Surpasses Desktop

+51%

+14%

+1,246%

Data Is the New Mobile Currency

+51.9%

Thank You

We hope you’ve enjoyed Smaato’s Smaato’s Global Trends in Mobile Advertising - Q4 2015 report. To download white papers, read case studies and subscribe to our monthly publisher and app developer newsletter, visit us online at www.smaato.com.

eCPM uplift with ZIP Code Data

eCPM uplift with GPS Data+162%

+74%

Mobile grabbed 51.9% of U.S. digital ad spending in 2015

+51% eCPM growth on Android+14% eCPM growth on iOS

+1,246% growth in Chinese ad spend in 2015

+74% eCPM uplift with ZIP code data. +162% eCPM uplift with GPS data.

http://www.smaato.com


About Smaato

13

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.

Smaato’s 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 over 10 billion ads every day around the world, across over 1 billion unique mobile devices each month.

2015 was a pivotal year for mobile advertising, and it also turned out to be a significant year for Smaato. Here are some highlights from a very active 12 months on Smaato’s platform:

• Smaato more than doubled its reach in 2015 and surpassed a key milestone of reaching one billion unique mobile devices per month.

• Smaato’s reach went from about one-third of global smartphone users at the end of 2014 to reaching more than half of all smartphone users worldwide by the end of 2015.

• Ad impressions more than doubled year-over-year from 150 billion monthly ad impressions in Q4 2014 to over 300 billion per month in Q4 2015.

• Ad spending more than doubled from Q4 2014 to Q4 2015, growing 106% year-over-year.

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Smaato's Global Trends in Mobile Advertising – Q4 2015info.smaato.com/hubfs/Reports/Smaato_Global_Trends_in_Mobile... · Global Trends in Mobile Advertising ... Mobile ad spending