Q3 Update: Mobile RTB Expands With Tablets, iOS 7 Impacts App Marketing Costs

Mobile-UpdateThis year’s third quarter was marked by a lot of activity in the mobile ad space — several startups specializing in ad targeting, optimization, distribution and other services were snapped up, such as MoPub, JumpTap, Ad-X and EveryScreen Media.

Marketers also continued to explore programmatic buying in mobile and saw Apple’s new iOS 7 drive down app marketing prices for September.

During the third quarter, the average eCPM rate for interstitial ads and banner ads on MoPub’s Marketplace was at $0.99, up from Q2’s average of $0.91. September saw a 20% increase in bid depth (the total number of bids received divided by the number of auctions conducted) between Q2 and Q3. The competitive factor (the average number of bids received for all auctions with a winning bid) reached 7.5 in August and grew 30% to an average of 7.4 in Q3 from a 5.6 average in Q2.

In terms of ad formats, banner ads overtook interstitial ads for the first time ever, according to MoPub’s report.

“Banners finally had their day as their bid depth outpaced that of interstitials for the first time, with an increase of 25% in bid depth,” according to the report. Interstitial ads appear most often on tablets like the iPad and MoPub CEO Jim Payne attributed the dip to a “soft iPad bid depth” in combination with a strong demand for ads on the iPhone.

mopubchartAs for operating systems, iOS continued to drive higher eCPM prices than Android. In September, Android’s eCPM was $0.84 vs. $1.13 for iOS. Mobile ad platform Opera Mediaworks reported similar results. According to Opera Mediaworks, iOS was the “clear leader” in both impressions served and in monetization, capturing 44.4% of all ad requests and nearly 50% of all revenue on its platform. In contrast, Android received 31.3% of ad requests and 27.7% of revenue.

Opera Mediaworks also reported an increase in impressions served on tablets. For Q3 this year, Android and iPad tablets made up nearly 10% of all impressions served, versus 5% in Q3 2012.

In addition, Apple unveiled its latest operating system to users and app developers and marketers took note of the rapid rate at which people upgraded to iOS 7.

“From an advertising perspective, this is important because ad units drive more engagement when there’s something new and if these OSes aren’t being upgraded, some of those new features aren’t available to customers,” said Opera Mediaworks CEO Mahi de Silva. “It’s interesting that in less than two weeks about 60% of Apple users upgraded to iOS 7 whereas only about 50% of Android users have upgraded to the latest OS, Jelly Bean, which was released last year.”

Mobile app marketing platform Fiksu reported declines in app marketing costs for September, which it said was largely due to the rapid adoption of iOS 7 and new iPhone devices.

The company’s cost-per-loyal-user index decreased by 12%, or 22 cents, in September, to $1.68 from August’s $1.90. “This drop can be partially attributed to the surge of highly engaged users downloading and using apps on the recently released iOS 7. This was evident from the Fiksu usage tracker, which showed nearly 60% of users made the upgrade to iOS 7 in the first 10 days,” Fiksu noted in its report.

In terms of real-time bidding (RTB) trends, RTB continued to take a larger share of spend on Nexage’s mobile ad exchange.

“We crossed an important threshold in Q2 when RTB represented more than 50% of spend on the Nexage Exchange, “ said Nexage CMO Victor Milligan. “In Q3, we crossed the 60% threshold as programmatic buying continues its significant growth. We are seeing more buyers and a greater average spend per buyer for mobile-native DSPs, online DSPs extending their business to mobile, ad networks transitioning to programmatic buying and trading desks or agencies making mobile a core element of their businesses and we expect the percentage share to continue to increase.”

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