As consumer behavior shifts to mobile browsing, publishers and advertisers must be poised to maximize opportunities from mobile moments.
The Q1 2020 Quarterly Mobile Index (download the full report) identifies the following key trends:
Mobile will lead digital advertising’s recovery. The coronavirus has brought advertiser spending in certain categories, such as travel and sports, to a halt.
However, with many markets sheltering in place at home, content consumption and web traffic intensified, especially on mobile devices. In APAC where publishers and app developers are finding light after a pandemic-driven lockdown, mobile is at the forefront of its road to recovery.
Despite the declines across all platforms, the shift in share from desktop towards mobile is happening at a quicker pace than before the pandemic, with total mobile reaching 51% by the end of Q1 from 48% at the beginning of March before the onset of the global pandemic.
The novel coronavirus first surfaced in central China where the city of Wuhan went into quarantine on January 24, 2020.1 As ad spend is gradually rising in APAC in tandem with its rehabilitation, mobile is the shining star in its path to recovery — both mobile platform spend and impressions are higher than pre-impact levels and last year by the end of Q1.
Video ads are taking a hit but increased mobile video consumption is here to stay. Mobile video was heading into another banner year until COVID-19 arrived.
Mobile video share plateaued during the pandemic despite a bump in viewership. Since video ads are typically sold at a premium, they were the first to be cut from advertising budgets and hence, more negatively impacted than display ads.
Mobile video ad budgets are being squeezed during the pandemic; mobile video ad spend declined 27% whereas display fell 12% after impact. However, mobile video spending was expanding at such breakneck speeds before the global crisis that mobile video ad spend declined less than display in the quarter overall.
While experts believe that video ad spending in western markets will decline into June of this year, we saw the global mobile share of video ad spend remain constant at 49% in Q1 2020 over last quarter.2 The share varied across regions: Americas – 44%, EMEA – 67%, and APAC – 67%.
Publishers and advertisers seek efficiency and control in-app. When digital advertising budgets contracted at the end of the quarter, publishers continued to integrate header bidding in anticipation of leaner times.
Mobile in-app header bidding expanded as app developers are beginning to overcome technical challenges that posed a significant barrier last year.3 For example, PubMatic’s OpenWrap SDK solves for key adoption hurdles such as creative rendering, simultaneous auctioning, and OM SDK integration. Advertisers, however, are looking for more control; global buyers are utilizing PMPs to help protect their branding, and avoid ad fraud.4
The incremental time spent on mobile devices serves as a boon for PMP since the increase is largely coming from apps. Mobile in-app PMP volume rose 65% during the pandemic while desktop PMP volume fell 20% and in-app volume in the open market fell 15%.
Advertisers reacted quickly to shelter-in-place announcements around the world. PMP in-app spending roughly doubled within the first 5 weeks in each market after a lockdown: +99% in Americas, +96% in EMEA, +167% in APAC. Spending in APAC is up 277% from their first quarantine in January to the end of the quarter, suggesting further growth ahead in Americas and EMEA if they continue to follow in APAC’s trajectory.
Digital advertising took an early hit during the pandemic because this type of media spending is easy to rein in as opposed to traditional, upfront, committed buys. This also means that the return to growth will be much faster when marketers are ready to bring customers back quickly. Digital is the fastest way to reach them, particularly through their mobile devices where consumer behavior is shifting at an accelerated rate. Advertisers are more stringent with their ad dollars during an economic downturn, so efficiency means focus on quality (adoption app-ads.txt spiked at the end of March), and more transparent automated selling through mobile header bidding.5
Despite the impact of stay-at-home viewing, the industry is experiencing a steep reduction in video marketing budgets as brands prepare for an uncertain economic climate. While there is a pullback on upfront and guaranteed commitments, some traditional channels are re-deploying budgets to digital video.6,7 SVOD (subscription-based video on demand) is reaping the benefits during the crisis, but it is anticipated that viewership for AVOD (advertiser-based video on demand) will grow as subscription fatigue sets in.8 More viewers alone will not move the needle for advertising investment when the economy is contracting, however. Buyers need flexible and efficient ad solutions, which programmatic is primed to deliver, along with technology partners who can innovate around user experience.
The effect of the global downturn puts a spotlight on inefficient auctions, and calling for more economical and transparent digital advertising practices – one that header bidding is set up to deliver in-app.9 Private marketplaces (PMP) address another facet of inefficiency – waste from ad fraud. Ad fraud remains higher in-app than in browser environments.10 Therefore, PMPs can provide a shelter through transparent ad placements especially when advertisers are more fiscally conscious.