2016 asia-pacific mobile advertising market report

Mobile Programmatic Advertising Semiannual Statistics and Trends Report

2016 Asia Pacific

Table of ContentsTABLE OFCONTENTS

Overview of Mobile Ad Market- Mobile advertising inventory- Mobile advertising inventory – mobile web and app- Market share of operation system- eCPM- Ratio of mobile advertising format

Observation of Brand-based Mobile AdvertisingObservation of Performance-based Mobile Advertising Observation of DMP TrendsSpecial Edition:Targeting Chinese Travelers Through Programmatic BuyingAbout VponAppendix – TerminologyReport SourceContact Us

Overview of Mobile Advertising Market

http://www.rapidbbs.cn/

Mobile Advertising Inventory

C T Ho M JSou Si

Ma Th Vi I n I

AusNew

3.9

0

0.9

5

0.2

9

0.0

2

2.6

4

1.2

4

0.2

0 0.4

5

0.8

8

0.9

1

3.6

8

2.0

5

0.5

9

0.0

6

Top 3 inventory sources (China, Indonesia, and Japan) take approximately 60% of total biddable inventory

Biddable Inventory In Asia Pacific

Source: Vpon Big Data Group

Greater China Northeast Asia Association of Southeast Asian Nations South Asia

Oceania

Unit: Billion per day

Mobile Web Mobile App

China

Ta iwan

Hong Kong

Macau

Japan

South K

orea

Singapore

Mala

ysia

Tha i land

Vietn

am

Indonesia

I ndia

Austra

l ia

New Zea la

nd

61% 67%52% 52%

74%56% 54% 53% 58% 63%

13%

38%

67% 63%

39% 33%48% 48%

26%44% 46% 47% 42% 37%

87%

62%

33% 37%

Web App

Mobile Advertising Inventory - Mobile Web and AppsIn Indonesia, 87% of the impression is dominated by mobile apps

51%

49%

Mobile APP

Mobile Web

Mobile Web / Apps Mobile Web / Apps by Country



Oceania

s

Android iOS

China

Ta iwan

Hong Kong

Macau

Japan

South K

orea

Sing apore

Mala

ysia

Tha iland

Vietn

am

Indonesia

I ndia

Austra

l ia

New Zea la

nd

49%

71% 64%

34%47%

80%63%

82% 77%68%

93% 94%

40%51%

51%

29% 36%

66%53%

20%37%

18% 23%32%

7% 6%

60%49%

Android iOS

Market Share of Operation SystemAndroid accounts for more than 90% market share in India and Indonesia

31%

Android iOS

69%

Operation System Operation System by Country



Oceania

Unit: USD

eCPM - Effective CPMMacau has the highest eCPM, which is 7.5 higher than the lowest one (Thailand)


eCPM by country

China

Taiwan

Hong Kong

Macau

Japan

South Korea

Singapore

Malaysia

Thailand

Vietnam

Indonesia India

Australia

New Zealand


Oceania

Ratio of Mobile Advertising FormatsBanner is the commonest mobile advertising format while native and video ads have a greater growth momentum


Banner Native Interstitial Video

Ad Format Comparison Across APAC

Native9%

Interstitial5%

Video2%

Banner84%

*The IHS study anticipates in-app native advertising (exclude running on Facebook) will be the fastest-growing ad format in digital advertising and will grow at a 70.7-percent compound annual growth rate between 2015 and 2020

Observation of Brand Based Mobile Advertising

PMP (Private Market Place) is one step above open exchange in the programmatic purchasing landscape, since only invited brands can take part in the auction, and the inventory is typically more premium than in open exchanges. PMP is quickly gaining traction with brand-based advertisers.

On the other hand, high-traffic apps and websites have been able to achieve higher CPM (Cost-Per-Mille) by offering advertising placements through PMP, and their relationships with advertising clients have grown stronger as well.

H&B29%

Retail14%

F&B13%

Tech10%

Finance9%

Entertainment6%

A&A6%

Pharma4%

Other3%

Automobile2%

Real Estate2%

Travel2%

H&B Retail F&B Tech Finance Entertainment A&A Pharma Other Automobile Real Estate Travel

Industry Comparison

Brand-based Mobile Advertising in Programmatic Buying

Unit: Mobile ad budget in USD

Source: Vpon Big Data Group , statistic of programmatic buying mobile ads in Greater China, and Japan.

Advertisers Leverage Programmatic Buying to Purchase Placements at Heavy-traffic Apps to Increase Brand Awareness

Apps in China / Hong Kong / Taiwan

http://www.i-comic.net/a.php

Advertisers Leverage Programmatic Buying to Purchase Placements at Heavy-traffic Apps to Increase Brand Awareness

Apps in APAC

Programmatic Marketing Attracts Serious BudgetsThanks to big data analytics technology and machine learning that enable campaign optimizations, marketers who run performance-based mobile campaigns can focus on their efforts to drive ROI. Marketers cited the following benefits of programmatic buying as the most important:

Source: Campaign Asia-Pacific

Better Contextual targeting

Faster and more efficient

execution

Real-time optimization

Gaming industry evaluates campaign performance by various indicators: Cost Per Acquisition (CPA), Cost Per Install (CPI), Cost Per Engagement (CPE), Customer Li fetime Value (CLV), Lifetime Value (LTV), etc. Gaming industry is the main contributor to performance-based mobile advertising.

Observation of Performance-based Mobile Advertising

Industry Comparison

Game e-Commerce Emerging industryTravel Finance Others e-Commerce12%

Emerging Industry12%

Travel7%


Finance6%Others 3%

Gaming60%

Unit: Mobile ad budget in USD

, statistic of programmatic buying mobile ads in Greater China, and Japan.

$2-$6 $3-$9 $2-$4 6$-$10 $15-$190.00

5.00

10.00

15.00

20.00 20.0

0

20.0

0 Game

$3-$7 $4-$10 $3-$6 7$-$10 $16-$200.00

5.00

10.00

15.00

20.00

Android iOS

Observation of Performance-based Mobile Advertising

Customer Acquisition Cost

e-CommerceEmergingIndustry Travel Finance

Unit: USD

$7-$10$6-$10

GameEmergingIndustry Travel Financee-Commerce

Source: Vpon Big Data Group , statistic of programmatic buying mobile ads in Greater China, and Japan.

Data Management Platform

Improve ROI of marketing and advertising activities

Ability to turn data in insighht

First-party data integration

Reduce wastage in media buying

Data normalization

0% 5% 10% 15% 20% 25% 30%

24%

19%

14%

14%

10%

Reasons for implementing a DMP According to Media Buyers Worldwide

Source: Exhange Wire, “The Evolution of Data Management Platforms: Uniting Media Sellers and Media Buyers in a Quest for Effective Media in Association with Oracle, Sep 2015

Agencies and advertisers implement a DMP in order to integrate systems, merge cross-device data, and take control of primary source data. With DMP, it is accountable to generate more holistic analytics and insights to drive efficient marketing and communications.


Top prioirty Very important Average Not important currently Invest more Won't invest more Not sure/It depends

Source: Joint exploratory research between Zenith Optimedia and Nielsen of over 20 China-based marketing and media senior leaders

Getting a DMP in place has become critical for marketers in China - Asia Pacific’s largest programmatic buying market

Degree of Importance of DMP Future Investment Intention

Very important62%

Top priority24%

Average10%

Not important currently5%

Invest more62%

Not sure / it depends

29%

Won’t invest more10%

Data Management PlatformPopular Tags Collected from Mobile Devices

- Gender- Age- Vocation- Marital status- Ownership of car- Ownership of passport

- Country- City - District- Frequently-visit location - Digital footprint

- Brand- Model - Web - Connection- Telecom operator- Screen resolution

- Installation- Activation - App ranking- Category

- Browsing history- Ads engagement - Lookalike similarity- Media preference- Purchase preference

Demographic Location Device App Interest


Beauty Expert

General Consumer

Modern Parents

Night Gamers Zealous Youth

Chic Cosmopolitan

Property Searcher

Online Shoppers

Gadget Guru

Cool Driver

Digital Readers

Sport Fanatics

Fun Seeker

Active Senior

Finance Guru

World Explorer

Popular Audience Segmentations Adopted by Mobile Marketing Campaigns

Special Edition

Targeting Chinese Travelers by Programmatic Buying

X

http://www.rapidbbs.cn/

Hong Kong

68%

Others

32%

The mobile device and programmatic buying have revolutionized the way that brands and consumers interact. With the support of big data technology, brand can reach cross-border travelers via mobile devices more easily and accurate than ever.

“Programmatic advertisement helps marketers deliver ads to travelers in different stages of their journey: pre-trip, during the trip, and after the trip.” said Victor Wu, CEO at Vpon Big Data Group.

“Chinese travelers receive advertisements and also obtain information on their smartphones. It’s important for brands to leverage mobile devices to connect with cross-border tourists.” said Roland Leung, Commercial Director of APAC Market Opportunities & Innovation at GfK.

Now that technology and the internet have put the world in the palm of our hands, it is high time for marketers to find the right ways to stay connected with global consumers on a more personal level.

Chinese Outbound Travelers Continue to Sore

TRAVELERS SPENDINGThe number of Chinese travelers will rise to 200 million by 2020

By 2025, China’s traveler spending will increase to US$278.7 billion

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015E

2016E2017E

2018E2019E

2020E0

20

40

60

80

100

120

140

160

180

200

China Outbound Travelers(in million border crossings)

China Outbound Traveler Spending(in US$ billion)

US$278.7

US$ 215

Source: World Urban Tourism Federation (WTCF); UNWTO (World Tourism Organization)

Source: World Travel & Tourism Council (WTTC)

2010 2015

2020 2025

What Do They Purchase?Shopping accounts for 27% of spending, while eating well and getting around account for another 20%.

Luxury brands are the pioneers when it comes to targeting Chinese travelers. Tourism-related industry shall seize the revenue opportunities by approaching cross-border consumers via mobile throughout the journey.

Source: GfK survey Q16:. In terms of Renminbi, how much did you spend in the following items in your last overseas trip?Base: n=148

27%

24%20%

11%

6%3%

9%

Shopping Travel expenses AccommodationsFood and beverages Sight-seeing Local transportationOthers

Approaching Chinese Travelers via Mobile Throughout The Journey is A Must

Banner

In terms of consumers' activities with smartphones in stores, the adoption rates of Chinese respondents are ranked top 3 in the following categories.

43% 50% 54% 49%

Take pictures of advertisement product information

Scan barcodes or QR codes to obtain more information

Compare prices Take pictures of actual products they might buy

41%

Buy products through the store's or another website

39%

Buy products through an app on their device

Source: GfK survey among 25,000+ mobile users (ages 15+) in 23 countries – rounded

Banner

Chinese Travelers Can be Reached Before-Trip, During-Trip, and After-Trip

Hong Kong Others

Hong Kong

68%

Others

32%

Hong Kong

68%

1 Thailand

2 Hong Kong

3 South Korea

4 Taiwan

5 Macau

6 Singapore

7 Vietnam

8 Malaysia

2015 Q4 Top 10 Chinese Travelers Destinations

Source: China National Tourism Administration, Q4, 2015

New Zeland3%

Indonesia3%

Malaysia3% Vietnam

3%

Macau7%

Singapore7%

South Korea10%

Thailand10%Australia

10%

Taiwan20%

Japan23%

Mobile ads inventory generated by Chinese Travelers during trip

Targeting Strategies Toward Chinese Travelers

Banner

Attention and Planning

After TripBEFORE-TRIP DURING-TRIP

Retail Traffic

AFTER-TRIP

Retargeting

Deliver travel information to create interests and attentions

Drive online traffic to physical stores upon arrival at destinations

Retarget audiencefor continuous purchase, creating brand loyalty

Banner

Case Study

Hong Kong

68%

Others

32%Target audience: Tourists from Mainland China traveling to

JapanCreative: Ads with different communication messages to target tourists traveling to different regions with different interests.Campaign period: April – May, 2016Location: JapanCampaign is executed by Vpon Big Data Group

Multinational cosmetics and beauty group steps into cross-border tourists marketBackground and objective of the campaignTo escalate the revenue in a regional level, the business group has decided to go beyond its geographic boundaries. Instead of maintaining local market growth within each country in APAC region, this multinational cosmetic and beauty company took a bold step into developing cross-border market. The primary aim is to increase the transactions made by tourists and build a new revenue source to boost the revenue in a larger scale.

Campaign details

Strategy : Provide O2O Solutions

Hong Kong

68%

Others

32%

To encourage an immediate action, a strong incentive was designed to call for action. When the Chinese travelers clicked the mobile ads, mobile-vouchers with exclusive offers were provided to attract tourists to visit the physical stores and to make offline purchases at point-of-sale. The seamless experience helps both parties: for customers, they can store the mobile voucher in their smart devices; for advertisers, they can target the right audience and track ad performance easily.

COUPON

Banner

Utilize Mobile Programmatic Buying to Achieve Targeting Audience in Designated Locations.In this campaign, travelers from Mainland China were categorized by Vpon into two groups: 1) travelers in Tokyo; and 2) travelers in cities other than Tokyo in Japan.

The travelers could be identified through the collaboration with the China-based SSP platforms, such as Baidu, AMEX via data exchange. The features of audience tagging and location targeting allow ads to be timely delivered and make the ads relevant to the audience even while they are abroad.

The advertisements of two different cosmetics and beauty brands could be delivered based on the location and user behavior of the Chinese travelers.

The CTR was 35% higher than benchmark. Thanks to the machine learning mechanism of the bidding engine, the CTR was shown an obvious growth since week 2 after the optimization of finding high potential Chinese travelers. The CTR was improved by 41% and has remained in a constant level after reaching the optimal point.

CTR (Click Through Rate)The CVR of targeted mobile ads through Vpon DSP was 7.4 higher than that of display network ads and 1.4 higher than that of paid search.

CVR (Conversion Rate)

Paid Search Network display ads

5%

Conversion Rate (CVR)

Targeted mobile adsthrough Vpon DSP

0.96%

7.10%

ResultStrive the best performance by machine learning & RTBTo look for the potential audience who are most likely interested in beauty mobile-vouchers among the Chinese travelers in Japan, Vpon’s bidding engine kicked off its machine learning process to find out the valuable target audience and then automatically adjusted the real-time bidding (RTB) price to reach them. As a result, marketing budget was effectively allocated to female shopping enthusiasts to deliver a better performance in this campaign.

About Vpon Big Data GroupVpon, an Asia’s leading Bid Data Technology company.

With extensive media resource reach over 120 billion biddable inventory across Asia Pacific and advanced big data analytic technology, Vpon offers solutions in the areas of cross-border target marketing, driving transactions for O2O and e-Commerce business, as well as increasing awareness of brands.

1500 Collaborative Experiences with Renowned Brands

Report Source

Sources are from database of Vpon mobile DSP, DMP, VDAS SaaS, and several partners including advertisers, ad networks, and some 3rd party data research companies. The report is based on the findings from the campaigns run by all Vpon branch offices. Till June 30th, 2016, Vpon Mobile DSP has connected with dozens of mainstream media platforms, including programmatic buying ad exchange, SSP, PMP, etc. and the coverage has reached 600 million of unique devices across Asia. Duration: January, 2016 – June, 2016

Ad ExchangeAn ad exchange is a virtual marketplace where publishers auction ad inventory individually in real-time. Whenever a user loads an ad on a webpage or mobile app, ad exchange generates an impression. Publishers can sell these impressions at the time they are generated by auctioning them to programmatic buyers on an exchange. Buyers use algorithms to seek out and bid on auctions that match their criteria, in terms of the quality of the placement and whether the user viewing the ad is part of a target audience. When an auction is completed, the winning bidder’s ad is delivered to the user via an ad server.

Data Management Platform, DMPA Data Management Platform is a unified technology platform that intakes disparate first-, second-, and third-party datasets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments.” The First-party data refer to advertisers’ own data, second-party data refers to a partner’s first-party data. Third-party data refer to any data that you can get your hands on, which isn’t first- or second-party data. Demand-Side Platform, DSPA Demand-Side Platform is a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts through one interface. DSPs apply audience targeting algorithms to search through a large supply of available impressions and find those that meet the buyer’s audience and placement criteria. They also manage media delivery and report on campaign performance.

Private Marketplace , PMPA Private Marketplace is an invite-only marketplace where high caliber publishers offer their advertising inventory to a selected group of advertisers. In order to be approved, the buyer may need to pre-negotiate terms with the publisher, pay a sitting fee, or commit to a minimum spend on the platform. Typically, private exchanges host premium inventory, which is more expensive and considered to be higher-quality than that available on open-access exchanges.

Supply-Side Platform, SSPA Supply-Side Platform is a technology platform to enable app/web publishers to manage their advertising inventory, fill it with ads, and generate revenue.

Appendix-Terminology

www.vpon.com

[email protected]

Publishers [email protected]

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