Mobile is the fastest growth category in digital advertising – and if data from mobile exchanges is any indicator, the same is true for programmatic.
Newly released Q2 data from Smaato, which maintains one of the largest and oldest mobile-specific ad exchanges on the web, show that mobile spend through the platform has grown 69% globally in the last three months alone, and 456% since the same quarter last year.
In Canada, the report shows spend has grown 62% since last quarter – not quite as much as emerging growth leaders like Argentina (234% Q2 over Q1) and Indonesia (111%, same period), but an impressive jump for an established market. Canada is the third-largest market represented on the Smaato Ad Exchange (SMX), after the U.S. and U.K.: Canadian inventory made up 2% of 270 billion impressions available across SMX’s 78,000 apps and mobile sites. (Compare that to the U.K., which made up 7%, and the U.S., with 31%).
Growth in mobile RTB spend has partly been driven by the expanding universe of mobile advertising. The total volume of mobile impressions available has been climbing as publishers bring more online properties and more ad placements into mobile. According to a recent report from Media Experts, mobile RTB volume doubled between Q1 and Q4 2013. More ads available means more opportunities for advertisers to spend.
But digging a bit deeper in Smaato’s numbers shows that despite significant supply growth, the bulk of increased spending on the SMX is actually coming from growing advertiser demand. Though the number of mobile web impressions auctioned grew 41% from Q1 to Q2, advertisers placed 172% more bids on mobile web impressions in Q2 than they did in Q1. For app ads, there were 46% more auctions and 75% more bids.
Of course, growth of spend on the SMX platform doesn’t necessarily reflect growth of the channel as a whole. SMX is only one of several competing mobile ad exchanges, like the Nexage Marketplace and the Millennial Media Exchange (MMX), and Smaato’s data could be distorted by a shift in market share between exchanges.
On the other hand, most independent forecasters haven’t yet begun to break down RTB spending into mobile and desktop categories, so exchange data may be a good proxy in these early stages.
CPG comes to the fore, banner ads stay strong
According to Smaato, CPG and retail, which have been the biggest investors in mobile advertising, took the lead in mobile RTB in Q2. A quarter of all ads bought on the platform in Q2 came from food and retail advertisers.
Spending on the platform was previously dominated by entertainment and media brands, which remain in a dominant second position with a 24% share. Telecom and technology took third with 13%.
As far as ad units, smartphone banners remain the dominant format in mobile RTB. The majority of spend (69%) went to 320×50 mobile banner ads, compared to just 10% for 728×90 tablet banners.
The balance between rich media (including video) and static image ads shifted significantly from Q1 to Q2. In Q1 advertisers spent about 20% more on image ads than rich media, whereas in Q2, equal spend went to both. Smaato pointed to a growing trend in mobile video ads which it expects to continue next quarter.