The mobile advertising system has exploded — but it’s also left many overwhelmed and confused. In this series titled “Maximizing Mobile Ad Monetization” and presented by Supersonic, publishers learn how to take back the reins and navigate the intricacies of mobile advertising. See the whole series here.
Visions of a truly mobile world are now reality.
Today, mobile devices outnumber people. Ad dollars, once cemented in TV and print, are funneling into our handhelds by the billions. Mobile web traffic now even surpasses that of desktop’s globally.
The industry direction is clear. If you’re not thinking mobile first, you could be last.
A 2011 ComScore study forecasted mobile ad spend to reach $2.5 billion in 2014. This year, it drastically exceeds that prediction, pushing past $28 billion. If one thing is certain, it’s that advertisers see value.
Mobile advertising moves quick. To bring you up to speed, here is the current state of the industry and where it’s headed:
Mobile ad spend takes over desktop
Currently, desktop ad spend leads mobile by $1.18 billion according to recent eMarketer report. This win is short-lived as mobile expects to double desktop spend reaching $49.81 billion in two years’ time.
Mobile’s growth is not entirely cannibalizing as we see digital ad spend growing as a whole. However, desktop spend will stagnate to around $25 billion in the next several years. By 2019, mobile will make up a whopping 72 percent of total spend.
In-app ads overpower mobile web
Users spend significantly more time in apps than they do mobile web. Brands are capitalizing on this consumer trend, pushing for larger in-app budgets in the coming years. eMarketer projects in-app ad spend ($29.66b) to nearly triple mobile web spend ($10.84b) by 2016.
This is in line with IDC research stating in-app ads make well over half of entire app revenue in a majority of countries.
Video formats skyrocket
Mobile video is one of the fastest growing segments in digital advertising. It expects a CAGR of 73 percent leading up to 2018, reaching $4.4 billion in ad revenue in the US alone.
Advertisers play a heavy role in this growth. Brands have found video formats highly effective in engaging users and delivering stronger brand stories. Supersonic reports many of its partners see CTRs in the range of 20-35 percent. As a result, developers are commanding high eCPMS for these slots.
Expect mobile video adoption by both developers and advertisers to explode in 2015.
India: next hot-bed for mobile engagement
Southeast Asia is one of the fastest growing smartphone regions in the world. Specifically India, where broadband internet is scarce and mobile penetration, high. The country expects to reach over 250mm mobile devices this year with more than half of its mobile users connecting to the web.
Supersonic tests with local Indian developers confirm positive results. Like with Millennials here in the states, India’s young demographic are very receptive to mobile ads, leading to promising ad revenue opportunities.
Android leads impressions, iOS in Revenue
The battle of the OS’s is mainly one between Android and iOS. A recent Opera MediaWorks study shows Android and iOS making 90 percent of total global ad impressions and revenue — while Blackberry, Windows, Symbian, and others add up to the remaining ten.
Currently Android leads impressions, collecting 63 percent of mobile traffic with 41 percent of total revenue. Its iOS counterpart manages 11 percent more revenue while leveraging only 27 percent of global impressions.
A call for post-action data
After a user installs an app through an ad, tracking their post-action behavior becomes difficult. This disconnect creates holes in valuable first-party data that could benefit both the advertiser and publisher ecosystem. What does the user do after install? Do they purchase goods? Share content? Uninstall the app?
Advertising ROI is important. And as budgets get larger, we will see more demand for this post-action insight for value-add and re-targeting purposes. Brands, developers and ad tech players will have to work together to bridge these gaps.
Games dominate mobile time spent
Mobile games have topped the charts in user time spent, muscling out its social and music competitors. The average time spent is now over two hours a day!
Mobile games are differentiated. They offer an ad experience unique from the rest. They are immersive, efficient at generating massive amounts of user data, and typically in-app. These are all variables that lead to more targeted and strategic ad campaigns that simply convert.
If brands look to focus where users spend the most time, then expect gaming to see more advertising attention.
Changing viewability standards
There is an internal tug-o-war happening between publishers and advertisers — a war around viewability. Publishers want to generate as many impressions as possible, while advertisers look for guaranteed views. The issue becomes: what exactly counts as a viewed impression and where do we draw the line?
IAB and other industry organizations are redefining standards to address these concerns. The State of Viewability 2015 are the latest results. As new ad formats and loopholes surface, these guidelines and its abiders will need to adapt accordingly.
Users want interactivity
Engaging mobile ads are multi-dimensional. They are interactive. They give users a sense of control that is refreshing and novel for most ad experiences.
Leading brands and developers are adopting rewarded video and playable ad formats for this very reason. These ad slots are highly effective and engaging, driving up CTRs and installs across the board for brand advertisers. Supersonic developers also report increase in user retention and LTV, along with higher eCPM pay-outs with rewarded video content.
Look towards a noteworthy increase in interactive ads while traditional formats like banners take a back seat.
App promotion maturing
User acquisition is tough. Finding just the right audience is tougher. The advent of app promotion, or app install ads, was a step towards streamlining these processes. Deep user targeting and programmatic ad serving capabilities save time and energy in acquiring the right user base. For busy developers and brands with native apps, time is money.
Last year, app install ads totaled $1.67 billion or 8.7 percent of total mobile spend. In 2015, it’s projected to reach $3 billion with a trajectory of 80 percent annual growth. App promotion is still young, but the young grow quick.
Got any ground-breaking trends to add? Tell us in the comments below or share with us on Twitter @SupersonicAds.
Terry Koh is the Content Marketing Manager at Supersonic. Supersonic is a leading mobile monetization and marketing platform trusted by the world’s top publishers and advertisers.
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