Market Overview

iPhone 7 & Holiday Spend Driving Up Mobile Ad Costs

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BOSTON, Nov. 30, 2016 (GLOBE NEWSWIRE) -- Published today, indexes from Fiksu DSP, the data-fueled mobile marketing technology company, reveal that mobile ad costs are on the rise, a result potentially due to iPhone 7 adoption as well as early holiday ad spend. Fiksu's indexes track year-over-year and monthly metrics, measuring cost per thousand impressions (CPM) and cost per purchaser (CPP) across mobile RTB advertising.

The data also shows that as advertisers see sustained returns and recognize the opportunity to find high quality users on the maturing Android platform, the marketplace is becoming flooded with competition, especially as the holiday season approaches.

"Seasonal competition is evident in this data, but the numbers indicate that these trends may be sustained over the long run," said Tom Cummings, vice president, new market strategy at Fiksu DSP. "It's growing increasingly evident that Android represents a great opportunity to find users who are more likely to make a purchase, so while many advertisers enjoyed the opportunity to find the right users at a lower initial investment, the rest of the market is quickly catching on."

iPhone launch makes waves
CPM on iOS reached $6.74 during October, with both CPM (+26%) and CPP (+40%) rising over the course of the month. It took about three weeks for the new operating system to take over as the most rapidly-adopted OS launch to date, and the index data reflects a rise in competition as advertisers fight to get in front of new users, including both recent iPhone 7 owners and those who upgraded to iOS 10 on older phones.

When viewing the data on a week-to-week basis, the indexes confirm that the spike can be tied to recent device and OS activations, as CPM and CPP during the last week of September and first month of October were among the highest ever recorded by Fiksu. Since October of last year, CPP and CPM on iOS are up 69 percent and 37 percent, respectively.

Holiday spending felt early and often
On both iOS and Android, CPM is up across the board, rising by 26 percent on iOS and 6 percent on Android over the past month. From now through the end of December, these numbers are likely to continue to rise as advertisers seek to reach consumers who are most probable to make purchases and activate new devices during the holiday season.

"Advertisers will be laser-focused on getting their share of the mobile surge around the holidays, driving up bids for higher-quality impressions and emphasizing lifetime value and loyalty," said Cummings. "We already saw this start to happen in October, so those that wait much longer to launch holiday spend are likely to be left out to dry earlier than they may have expected."

Android continues to showcase value
After dropping by 25 percent from August to September, CPP dramatically changed directions in October, rising by 65 percent. While some of this month-to-month increase can be tied to early holiday ad spend, a 129 percent increase in CPP year-over-year from October 2015 indicates a natural progression tied to the increasing maturity of the Android platform: As advertisers become more adept at executing sophisticated user acquisition strategies on the Android platform, competition intensifies as more marketers scramble to reach users at prices that were previously a bargain. This increased competition makes it harder to acquire new users who continue to engage and make the purchases that app publishers want.

CPP rising on both Android and iOS also reflects an influx of smaller developers spending on these platforms. Without the wealth of data, access to creative resources, or sophisticated marketing strategies that larger publishers have, CPP for the smaller player can be higher despite less total spend due to shortcomings in efficiency. 

Along with platform maturity, advertisers on both iOS and Android should also be aware of new developments in advertising content that could impact CPM and their return on investment. "One thing we're watching for is the impact of playable ads," said Cummings. "CPM is typically high for playables, but users tend be very high quality which we see play out as lower CPP results. We're beginning to see that impact and expect that the remainder of Q4 will reveal more of the same."

For more information on Fiksu's indexes visit: https://fiksu.com/fiksu-indexes/

About Fiksu DSP
Fiksu DSP combines a massive, proprietary dataset with powerful segmentation tools to reach high-quality audiences at scale using the top RTB exchanges. Fiksu DSP has executed thousands of successful mobile campaigns to connect brands, agencies and app advertisers to audiences that spend time and money inside the apps they download. Clients include Amazon, Disney, Groupon, Coca-Cola, Electronic Arts, Dunkin' Donuts, and Starcom. Based in Boston, Mass., Fiksu is backed by Noosphere Ventures. More at fiksu.com@Fiksu and on the Fiksu DSP blog.

Contact Jeremy Sacco Director, Marketing Fiksu DSP press@fiksu.com John Costello Senior Account Executive Corporate Ink fiksu@corporateink.com

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