Video and rewarded in-app advertising drive mobile ad expenditure growth in 2017

Video was the fastest growing mobile advertising format during the second quarter of 2017 with ad expenditure doubling to 142% in a single quarter. That’s according to the latest Smaato Q2 2017 Global Trends in Mobile Advertising Report, which also pinpoints rewarded video as the fastest growing format within video and especially gaming apps.

According to the report, apps were key to mobile ad spend growth during Q2 with app usage increasing steadily. US smartphone users are already spending 89% or 1.6 trillion hours per year of their mobile time in-app. That’s projected to reach 3.5 trillion hours per year in 2021.

Accordingly, more ad spend has been going towards in-app campaigns. Smaato noted 94% of ad spend attributed to in-app versus in-web across its own platform.

In-app eCPMs jumped 79% from Q2 2016 to Q2 2017 and in-app advertising spaces were three times more valuable (up 224%) on average compared to those in mobile web.

Premium in-app advertising was most notable in the Americas where eCPMs were 3x higher than for mobile web. Although in-app is increasing in APAC regions, the area is still home to a large proportion of mobile web traffic and hence a higher attribution of ad spend to the format.

Mobile video has shown some astonishing growth with brand marketers saying they prefer mobile video because it increased brand awareness (44%) and they can reach a higher audience share (34%), according to an eMarketer survey.

Unsurprisingly, the format’s ad spend on Smaato more than doubled during the reporting period. It is followed by native ads with a 50% increase in ad spend.

Meanwhile, rewarded video ads are the clear favourites with impression almost doubling (96%) during the last quarter, whilst ad spend jumped 153% and eCPMs increased 48%. This rise is largely driven by gaming apps, which have embraced rewarded video formats given the positive user experience and high engagement rates.

Interestingly, the report also found that gender was taking on a more prominent role in evaluating mobile advertising. Male users were generating the majority of mobile ad spending (56%) across the Smaato platform. The company says that this is driven by more men owning smartphones in the US compared to women. However, that gap is actually small (78% US men versus 75% of US women).

Gender data on ad request more than doubled the value of advertising (158%) according to Smaato. eCPMS for female users were 25% higher than for male ones on Smaato.

Ragnar Kruse, CEO and co-founder of Smaato, explained:

“In a recent IAB survey, advertisers suggested they plan to spend more than half of their ad budgets on video this year. We are seeing this become a reality across Smaato’s platform, as mobile video is the fastest-growing segment of our business. Based on what we are seeing, we expect mobile video to continue its high growth and become the dominant medium in the years ahead.”