As consumer behavior shifts to mobile browsing, publishers and advertisers must be poised to maximize opportunities from mobile moments.
The Q2 2019 Quarterly Mobile Index (download the full report) identifies the following key trends:
Mobile in-app inventory unlocks revenue for the advertising industry The in-app environment is rejuvenating creative talents and fostering net new revenue growth for the advertising industry.
High user engagement and advanced technological capabilities are spurring immersive mobile in-app experiences and new creative ad formats, like full screen ads or interactive videos.1 In Q2 2019, in-app impressions rose 26% over last year. While impressions grew across all regions, APAC saw the fastest growth—more than doubling in volume.
The ad monetization rate for non-gaming iOS apps is typically lower than that for Android apps, but this shifted rapidly in the past year.2 iOS’ share now exceeds 50% of worldwide mobile in-app impressions in Q2 2019, up from a one-third the year prior. Video iOS ads are driving much of this growth, rising 127% over last year. iOS share grew in all regions globally—even in APAC, where Android remains dominant; iOS is increasing, rising to 29% share from 16% year prior.
Roughly half of the global in-app ad inventory comes from the North Americas region. While this region commands the majority share, the pace in APAC is accelerating and steadily gaining share. Industry analysts expect the North American overall mobile programmatic media spending share, inclusive of in-app, to fall 4 percentage points by 2022 as APAC continues to expand.3 For the first time, APAC surpassed EMEA as the second largest region for in-app ad impressions in Q2 2019; APAC now accounts for over a quarter of the global inventory.
In-app private marketplaces (PMPs) taking center stage in programmatic media buying. PMPs will be the dominant approach to buying programmatic advertising as soon as next year, surpassing open real-time buying (RTB).
Advertisers will spend $27 billion in digital display spending in 2020, and over half of which will be through PMPs.4 Amid fraud concerns last year, mobile in-app advertising is fiercely driving much of this shift to PMPs from the open market.
In-app inventory rebounded in the open market and grew 26%, after falling 10% between Q2 2017 and Q2 2018 amid mobile in-app fraud concerns last year.5
However, in-app inventory continues to rapidly gain momentum through PMPs; mobile in-app PMP volume grew by 69% in Q2 2019 year-over-year, after almost tripling in the previous year. As a result, the in-app PMP impression share grew by 1 percentage point, while desktop and mobile web shares declined.
Recent efforts to combat app fraud led to IAB’s release of the app-ads.txt specification this March.6 The file facilitates better transparency for buyers as publishers and developers declare partners authorized to sell their inventory within the mobile in-app. 72% of app-ads.txt files currently include PubMatic’s Advertiser System Identifier. Roughly 12% of the top 1000 industry apps published app-ads.txt files as of mid-July 2019, with similar penetration rates on Android and iOS.7 The pressure is on publishers and developers to adopt these new industry standards to protect inventory quality. There is a need for education among app developers to understand why this is important and what matters to buyers.
Video fuels in-app spending during political events. Nine million US households tuned in digitally to livestream the first Democratic debate during the last week of June 2019, with an additional 14 million video views across platforms.8
With TV still the preferred format for political events9 and video driving this past season’s ad spend, marketers are expected to spend $917M on advertising this upcoming political season—a 71% increase over the 2016 presidential primary.10
Mobile ad volume in the US news vertical experienced a spike to 47% above the Q2 weekly average in the last week of June when the first round of Democratic primary debates was held. While it is normal for advertising activity to pick up at the end of the quarter, the spike for the news vertical exceeded that of the industry as a whole, which experienced a 27% boost during the final week of Q2.
Video ads drove the vast majority of Q2 mobile ad spend growth within the news vertical. Impression volume in the news vertical doubled year-over-year in Q2 2019. In-app video experienced the steepest growth curve, rising 391% year-over-year. Industry experts forecast that marketers will spend $11.6 billion on in-app video ads alone in 2019, accounting for 15% of all in-app ad spending and increasing its in-app ad share by another percentage point this year.11
The entire industry is coming together to address in-app quality concerns. The IAB’s app-ads.txt specification is designed to combat fraud, in-app spoofing, and improve buyer transparency. We have seen steady growth in adoption rates, but it is imperative that the industry promotes education and adoption among app publishers and developers in order to build a cleaner marketplace for buyers and grow overall programmatic spending. While there is technical education available on “demystifying” the initiative, better industry-wide communication around the benefits of adoption are still needed.1 PMPs, providing transparent ad placement, are continuing to grow in response to the lack of trust in the industry.
Following a captive audience, political events provide a platform for publishers to better monetize their ads through higher eCPMs and elevated web traffic. During this season, both political and brand marketers gravitate towards video ads, which are sold at a premium compared to display ads—giving publishers an extra spike in monetization opportunities.