Smaato, the leading global real-time advertising platform for mobile publishers and app developers, has released its Q1 2016 Global Trends in Mobile Advertising report. To identify the trends, Smaato analyzed data from billions of mobile ad impressions served on its exchange during the first quarter of 2016.
The report shows strong growth for mobile video advertisements, delivering 11 times higher eCPMs for publishers – a 1,042 percent uplift compared to any other ad format. The report shows there are certain contexts in which mobile video ads drive higher performance. Mobile video ads drive higher revenue when shown in-app versus in the mobile web, with iOS apps delivering almost 3x higher eCPMs over the mobile web.
In terms of app categories that deliver highest eCPMs: music saw a +54% eCPM uplift, followed by Video & Computer Games (+38%), Society (+29%) and then Real Estate (+15%). This makes intuitive sense, as people using apps in the Arts and Entertainment category are already being exposed to rich media (including sound), and mobile video ads may seem less invasive.
Additional findings in the Q1 2016 Global Trends in Mobile Advertising report include:
· Mobile ad spend grew +89% in Q1 year-over-year, with the Americas fuelling the charge by posting +123% ad spend growth.
· Among developing markets, South America became the “Emerging Mobile MVP” with almost double the indexed eCPM of APAC during Q1 2016.
· Larger ad formats like interstitials (320x480) delivered triple the eCPM for publishers versus traditional banner ads (320x50).
· As the world’s second largest advertising market, China saw an astounding +1,198% rise in ad spending.
· Countries that celebrated Chinese New Year saw a +33% bump in pre-holiday mobile ad spending on average over their APAC neighbours who did not celebrate the holiday.
As per the report, the ‘Chinese New Year Effect’ was much greater in 2016 than last year. Countries that celebrate the holiday saw a +254% increase in total mobile ad spending in Q1 2016 versus the same quarter last year, a much higher bump than non-celebrating neighbouring countries in APAC saw over the same period.
Moreover, publishers are constantly evaluating which ad sizes monetize better, so let’s examine the four top performing ad sizes on the Smaato platform. Larger ad formats like Interstitials (320x480) delivered triple the eCPM for publishers than more traditional banner ads (320x50) in Q1 2016, and the gap continues to widen.
Ad sizes are certainly influenced by app categories. For example, Arts & Entertainment and Hobbies & Interests apps generated the highest view rates for bigger ad sizes (300x250, 320x480, 728x50) in Q1 2016. Interstitial ads (320x480) are most viewed when requested from apps in the Automotive and Men’s Health categories. Medium Rectangle ads (300x250) are most highly viewed when requested from apps.
The report also states that ad fraud is the intentional act of serving ads that generate revenue but will never be viewed by real people; it continues to be a thorn in the side of the digital media industry. While there are many different forms of ad fraud, invalid “bot traffic” is expected to cost advertisers $7.2 billion this year, up from $6.3 billion in 2015. Bot traffic is typically used to boost website audience numbers on fraudulent sites, thereby generating revenue for the host website. While mobile advertising is less impacted by bot traffic — a 2015 Forensiq study found that 1% of mobile devices in the U.S. and up to 3% in EMEA and APAC were running apps infected with ad fraud — it does affect all forms of advertising, including search, display, video, social and in-app. As mobile advertising gains increasing market share, most industry observers predict that the fraudsters will follow.
“Mobile video advertising is showing enormous growth potential, helping publishers to boost their monetization efforts and advertisers to engage their target audiences better,” said Ragnar Kruse, CEO and co-founder of Smaato. “It’s very encouraging to see the continued overall strength of quarterly mobile ad spend growth, which is up 89% globally. I’m also impressed by the immunity of mobile ad spend to downward macroeconomic factors. For example, Brazil’s emerging mobile market saw quarterly mobile ad spend grow a surprising +121% in Q1 year-over-year - almost as much as the healthy U.S. market at +130% - despite major economic and political challenges, ” added Kruse.