AppFlood published its AppFlood Global Mobile Android Advertising Insights for Q1 2014, which dives into industry updates about mobile ad spend, eCPMs, and insights into the state of the global mobile industry. AppFlood's report compares the mobile spend behavior of Chinese and U.S. mobile tech firms, and identifies the Middle East as a growing mobile market that advertisers are targeting and increasingly spending more of their budget in.

1. AppFlood
Global Mobile Android
Advertising Insights
Q1 2014

2. Q1 2014 mobile ad ecosystem
at a glance
• Mobile traffic grew 45.47% QoQ
• eCPM rose 100% YoY to $0.97
• CPI prices declined to $0.30 in Q1 2014 post-holiday season
• Rich media ads grew 34% MoM and shows signs of chipping away
at interstitial mobile ad revenue
• Asia and the Middle East traffic accounted for 50% of global traffic
combined
• China spread out its mobile ad spend globally, but U.S. advertisers
re-invested 62% of its budget back into the U.S. alone

3. Global mobile traffic continues growth
With more mobile devices shipping to the global market, mobile traffic continues its
consistent growth as traffic increased 45.5% QoQ between Q3 2013 and Q1 2014. Traffic
grew 25.09% MoM.

4. eCPMs are on the upswing
eCPMs have kept pace with mobile ad traffic growth as inventory grows. eCPMs reached
$1.26 in February 2014. Q1 2014’s eCPM rose 100% to $0.97 compared to the same quarter
last year.

5. Cost-per install levels off
post-holiday season
With demand from performance advertisers for traffic cooling off, CPI prices declined
from a high of $0.51 during Q4 2013 to just $0.30 by the first quarter of next year.

6. Interstitials are a cash cow,
but rich media revenue is rallying
Interstitials accounted for the lion’s share (70%) of total mobile ad
revenue by ad format in Q1 2014.

7. However revenue from the interstitial mobile ad format declined 14% MoM as rich media
ate into interstitial revenue and climbed 34% MoM.

8. All eyes are on Asia & the Middle East
Collectively the largest source of traffic in Q1 2014 originated from Asia and accounted for
27% of total traffic. However, the Middle East followed with 23%.

9. Traffic from Asia and North America are
more likely to convert into users
The second largest volume of traffic may have originated from the Middle East, but the
region’s users only accounted for 12% of total installs generated. North America and Asia
lead with 23% of total installs and 21% of total installs respectively.

10. Not surprisingly, western regions clearly lead on install-rates. North America peaked at
7.72% during Q1 2014, while Asia’s IR was just 2.83%.

11. Western Europe and North America compete for
mobile ad spend with the east - Asia and Middle East
North America and Europe combined received 1.7 times the investment
than Asia and the Middle East.

12. Chinese developers outspent U.S. on mobile in H2
2013, but U.S. eclipsed China in Q1 2014
Mobile ad spend from Chinese advertisers outpaced the U.S., growing 110% QoQ
compounded between Q2 2013 and Q1 2014 to the U.S.’s 86% QoQ.
However U.S.
advertisers bounced
back to overtake
China by February
and March 2014.
During the first
quarter of this year
China’s spend
declined 15% MoM,
while the U.S.’s spend
increased 16% MoM.

13. Chinese advertisers have global agendas, while
U.S. advertisers are sticking close to home
To Chinese
advertisers, Asia and
the Middle East
regionally were the
highest priority, which
accounted for 32%
and 21% of their total
budgets in Q1 2014
respectively.
U.S. developers on the
other hand simply re-
invested in the U.S.
with as much as 62%
of their total mobile
ad budget spent on
targeting North
America alone.
The U.S. outspent China in Q1 2014, but Chinese and U.S. advertisers clearly exhibited
completely different mobile advertising strategies. Chinese advertisers diversified their
spend by running global campaigns.

14. Interest in the Middle East mobile market is
growing and can’t be ignored
A clearly underrepresented region increasingly targeted by both western and eastern
developers is the Middle East. The emerging region of Southeast Asia on the other hand
continued to be in demand by Chinese advertisers.

15. As the smartphone penetration rate grows and matures in the Middle East, more mobile
advertisers are demanding Middle East traffic. Consequently, global spend into the Middle
East grew 62.4% QoQ since Q3 2013.

16. The mobile app
economy is evolving
While the mobile app economy has traditionally been western-centric, we’re beginning to
witness a marked shift whereby the east is growing into a contender with the west.
• As demand for inventory increases, the buying power is shifting to China, although
western budgets from the U.S. are competing hand-to-hand.
• Advertisers from China are investing not only in western traffic, but more investment
on mobile is being allocated into eastern traffic from regions including South East Asia
and the Middle East, while U.S. advertisers are reinvesting their spend into the U.S.
• With the app economy evolving, there’s a growing demand for rich media ads as more
brands enter the mobile ad space from both the east and the west.
Data and analysis in the AppFlood Global Mobile Android Industry Insight report are derived from on AppFlood’s mobile
advertising network, including AppFlood Android advertisers, publishers, and partners.

17. Launched by PapayaMobile in July 2012, AppFlood is the
largest global mobile RTB network from China.
AppFlood has since attracted more than 10,000 Android
and iOS developers. Since launch, more than 400 million
unique handsets globally have displayed app promotions
from the AppFlood network.
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