QUARTERLY MOBILE INDEX Q3 2019MOBILEADVERTISINGTRENDS

As consumer behavior shifts to mobile browsing, publishers and advertisers must be poised to maximize opportunities from mobile moments.

The Q3 2019 Quarterly Mobile Index (download the full report) identifies the following key trends:

Welcome
Key Trend 01
Key Trend 02
Key Trend 03
Key Takeaways

Key Trend 01

The next wave of mobile advertising is cropping up. For years, the mobile ad monetization rate fell below the amount of time consumers spent on mobile devices, driving rapid inventory growth and spending.¹

With the critical mass of incremental mobile users behind us, further ad monetization growth will come from more time spent or new formats. Mobile is the driving force behind both notions and it is shaping how programmatic buying evolves. Programmatic practices are refining in developed markets, while its reach is growing rapidly in emerging markets.

Mobile Continues To See Double-Digit Growth Despite Its Market Dominance
Top Global Countries Continue To Drive Mobile Ad Buying

Worldwide mobile ads account for three quarters of total digital ad spending in 2019.² Despite its high market penetration, mobile ad platform spending continued to grow aggressively in Q3, rising 28% over last quarter, while desktop ad platform spending declined slightly over the same period. Much of this increase is due to increased mobile ad volume—as there was little change in eCPMs—implying a continued shift from desktop to mobile platforms.

As the largest spender in mobile advertising, the US is the bellwether for how programmatic is evolving overall. US mobile ad volume grew 36% over last quarter, and the following top five countries grew even faster—increasing at a combined 39%. Since the top global markets—such as UK, Canada, Germany, Japan, etc.—are still expanding rapidly, the room for growth looms large with the rest of the world when their programmatic potential becomes unlocked.

Key Trend 02

Video and mobile are intertwined, driving industry expansion. Digital video growth played a key role in giving 2019 the strongest opening six months in digital’s history in the US.³

Mobile video continues to be the fastest growing format across all environments, with inventory increasing 31% in Q3 over last quarter. We can expect continued expansion over the next 18 months as ad buyers plan additional digital video ad spending in 2020.⁴

Mobile Video Continues To Outpace Desktop Video Growth
Ad Effectiveness Spurs Further Video Demand

Overall mobile ad volume increased 23% over last quarter, and mobile video ad volume rose 31% over the same period. The mobile share of video ad volume is growing moderately but consistently. Therefore, we can expect mobile to overtake desktop by early 2020.

Videos are deemed the most effective ad format; average click-through-rates (CTR) for mobile video ads are twice the rate of native CTRs and 10 times that of banner ads on average.⁵ In Q3, mobile video ad volume grew twice the rate of display ads over last quarter, rising 31% and 15%, respectively.

Key Trend 03

Mobile header bidding has evolved to standard practice. Header bidding has reshaped programmatic advertising. It rose to popularity with desktop and mobile web ads but was met with resistance in-app.

Further, it made a minimal appearance outside of the developed markets until 2019. Given strides to eliminate fraud in-app, and the high pace of mobile development in APAC, header bidding is finding new life to its expansion through mobile devices.

Over Half Of Header Bidding Impressions Are Monetized Via Mobile Devices
Header Bidding Expands Into Apps

Four years since the introduction of header bidding, 80% of the top 1,000 publishers sites now use the technology to fill their digital ad inventory.⁶ Header bidding is spurring further mobile ad monetization, which accounted for more than half of header bidding transactions in Q3 2019, a dramatic rise from 41% last quarter.

The growth rate for in-app header bidding platform spending mirrors mobile web, growing 20% and 22% QoQ, respectively. Desktop spending, however, fell 17%—reflective of the continual mobile cannibalization of desktop display.⁷ Growth across Android and iOS is expanding at similar rates. Thanks to industry fraud initiatives like app-ads.txt, Android is making a remarkable recovery in keeping costly scams at bay after a string of fraudulent activity.⁸ As of October 2019, 27% of the top 1,000 sites adopted the app-ads.txt file.⁹

KEY TAKEAWAYS

WHAT DOES THIS MEAN FOR PUBLISHERS AND ADVERTISERS?

1

Expect varied KPIs and benchmarks between different stages of programmatic penetration.

Distinct stages of programmatic development are forming between developed and emerging markets. While there is certain expansion among all regions, local mobile device behaviors dictate the way automated buying evolves. Emerging markets who have leapfrogged desktop internet connectivity are jumping into mobile programmatic advertising headfirst. This urgency for adoption drives mobile eCPMs into a seesaw and creates a surge in demand. Mobile-first economies can expect faster mobile programmatic adoption than developed markets.

2

Adopt a symbiotic technology strategy with mobile and video.

Advertisers worldwide are expected to spend $39 billion on mobile video advertising in 2020 and will more than double to $83 billion by 2024.¹⁰ Video ads create incremental value to publisher revenues, and mobile is the preferred platform for consumption. Ensuring a strong mobile video monetization partner requires a holistic look at capabilities across reporting, quality tools, unique demand, and having the integration flexibility that fits in the short and long-term goals.

3

App publishers who invest in header bidding will likely tap into rapid revenue growth.

Header bidding technology is making progress into apps. After a slow start, in-app header bidding growth is now on par with mobile web. There were several barriers that prevented effective implementation in the app environment: difficulties with server-to-server (S2S) setups and software development kit (SDK) integrations, as well as a lack of header bidding technology understanding.¹¹ Header bidding benefits are now being better realized in-app; there is much room for in-app inventory growth well into 2020.