The State of Mobile Advertising, Q4 2012

Executive Summary

In this edition of the State of Mobile Advertising report, we provide our usual insights to mobile ad monetization by device, geography and publisher category, based on data from the Opera Mediaworks mobile ad platform during the last quarter of 2012. However, we also investigate several indicators of changes in the market, as a way to identify three emerging trends to keep a close watch on in 2013.

• The growth of Android as a platform that is driving the acceleration of ad requests and impression volume
• The emergence of the Russian Federation as a vibrant mobile ad market
• The rapid adoption of more sophisticated devices driving equally rapid innovation in ad units

Q4 was a record quarter

The fourth quarter represented more than a two-times increase in impressions and revenue to publishers compared to any other quarter in 2012. This reflects the magnitude of marketing and advertising spend during this quarter, associated with the seasonal impact of holiday shopping.

iOS is still the top OS in monetization — but Android takes the lead in mobile phone impression volume

When it comes to monetization, iOS continues to outperform other device platforms. It leads the group with the highest average eCPM and provides the greatest percentage of publisher revenue.

However, with steady increases throughout 2012, Android emerged late in the year as the leading mobile phone OS as measured by impression volume. The growth in Android impressions was partly driven by the introduction of the Samsung Galaxy S III, a device that now accounts for 9% of all Android traffic.

OS Share	% of traffic	% of revenue
Android	30.94%	29.97%
iOS	41.91%	51.02%
iPhone	29.08%	37.28%
iPad	5.82%	10.49%
iTouch	7.01%	3.26%
RIM	3.74%	4.12%
Symbian	9.01%	1.69%
Other	14.40%	13.20%

Music, Video & Media is #1 Category for impression volume

Among all publisher categories, Arts & Entertainment now generates the most revenue (17.18%), taking a thin lead over Music, Video and Media (17.15%). However, in terms of impression volume, Music, Video and Media is No. 1, with 21.4% of all impressions. Business & Finance continues to produce the most revenue per impression.

Ad requests and impression volume is accelerating across multiple geographies

Across the Opera Mediaworks platform, North America (USA & Canada) continues to drive the majority of ad requests (64%). Compared to Q3 2012, when North America generated 70% of all requests, we can see that the lead is shrinking.

This shrinking U.S. share of ad requests and impressions is due to the growth in international traffic.

One of the most noticeable growth markets emerging over the last few months is the Russian Federation.

Midway through 2012, the Russian Federation was No. 7 in our list of markets with the most ad requests. It is now No. 4, after ad impressions increased over 60% from the end of Q3 to the end of Q4 2012.

This growth closely parallels the uplift in adoption of Android devices in the Russian Federation, which we saw rise over 22% in the same time period.

Innovative ad units capitalize on enhanced device capabilities

As smartphones proliferate and more consumers' handheld devices contain features such as voice recognition, new-to-market gestures, social sharing and even augmented reality capabilities, the opportunity for creative ad units and campaigns appears limitless. Below are two examples of rich media campaigns we created and executed on our mobile-ad platform that take advantage of the sophisticated features of today’s mobile devices.

Madagascar 3 Theater Release

This DreamWorks Animation 3D movie was released in the United States in June. The studio sought to generate excitement about the movie with an interactive entertainment experience that let the user play with and learn more about the much-loved characters. With camera overlay, video, animation and social sharing, the rich media execution leveraged the phone’s inherent features to pull the user deep into the experience.

Sour Patch Kids – UK Launch

Given the 8% growth of pocket candy sales and 15% growth of the “sours” category, Kraft Foods decided to introduce a rebranded version of the well-known U.S. line of candy, Sour Patch Kids, to the U.K. market. The campaign portrayed the concept of “Sour, then Sweet” with animated figures “breaking the glass” on the phone – including a sound effect – only to immediately fix it with Band-Aids.