The study was conducted through a 15-minute online survey and was undertaken by 350 people.

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4 Hoop Group was asked to conduct the 3 rd annual IAB Australian mobile landscape study. The study was first undertaken in 2013, and continued in The study was conducted through a 15-minute online survey and was undertaken by 350 people. The survey was sent out to representatives of the advertising industry utilising databases from the IAB and Hoop Group. All respondents were screened for their position in the industry and there involvement and knowledge of mobile advertising.

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6 ($m) Mobile Digital From IAB/PWC Online Advertising Expenditure Report Dec 14

7 Phone Browsing Time % Phone Application Time % Finance, 2% Other, 11% Govt/NFP, 5% Social, 19% News & Info, 2.5% Productivity, 4.5% Other, 8.7% News & Info, 9% Search, 15% Commerce, 20.5% Social, 42.1% Commerce, 11% Portals, 13% Entertainment, 15% Entertainment, 21.7% Market measurement & understanding of consumer habits has increased significantly in last 12 months

8 MOBILE LANDSCAPE 2015 THE RESULTS Graeme Uhd Managing Director - Insights & Strategy Hoop Group

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10 Mobile advertising 31% Mobile advertising 33% 6% 26% Mobile advertising 43% Buyers 2016 Suppliers % 48% Mobile advertising spend had increased since The figure was projected to rise considerably over the next year. In 2014, what proportion of the total ad dollars on DIGITAL that your company handles was for mobile advertising (smartphones OR tablets)?

11 100% 90% 80% 70% 47% 50% 45% Both smartphones and tablets 60% 50% 11% 9% 13% Only tablets 40% 30% 20% 42% 42% 42% Only smartphones 10% 0% Total Buyer Supplier 42% of the respondents only did mobile advertising for smartphones. Just on ½ did it for both phone and tablet devices. Of that value for mobile advertising, what was the approximate split between.

12 100% 90% 80% 25% 26% 25% 70% Mobile video 60% 50% 40% 30% 51% 35% 60% Mobile Display A ¼ of all respondents (both buyer & supplier) were doing mobile video. Mobile search (24%) was higher with buyers (39%) than suppliers (15%). 20% 10% 0% Total Buyer Supplier Of that value for mobile advertising, what was the approximate split between.

13 With Mobile 44% 11% With mobile 49% Buyers 2015 Suppliers % 50% Campaigns with mobile had risen 11% since last years survey. In 2014, what proportion of the ad campaigns your company handled had a mobile (smartphone or tablet) component?

14 Video creative 26% Video creative 30% 14% 36% Video creative 43% There had been an increase in video creative used since last year (up 14%). This was planned to increase in the next year. Of the mobile ad campaigns your company handles, approximately what proportion use video creative? In 2016, what proportion do you estimate will use video creative?

15 Negative change 21% Positive change 53% No change 26% A ¼ of our respondents had seen no change in mobile CPM s, but over a ½ (53%) had seen a positive change. What, if any, change (in % terms positive or negative) have you seen in mobile CPMs over the past 12 months?

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17 Engagement Interactions CTRs Impressions Reach and frequency Sales/transactions Leads generated Buyer % 31% 31% 30% 51% 54% 58% Buyer % 40% 42% 54% 56% 56% 56% CPA App downloads CPC Attribution modelling/share of conversion Brand impact study results CPM Downloads/Redemption Other 1% 28% 28% 28% 20% 19% 18% 17% 0% 18% 18% 34% 44% 52% 56% The measures of assessing performance were a little different when compared to Engagement and interaction still high but lead generation and downloads had decreased (amongst others). Which of the following did you use as key measures to assess performance against the objectives?

18 Completely satisfied Satisfied Dissatisfied Completely dissatisfied NET satisfied 0% 20% 40% 60% 80% 100% All buyers Brand/advertiser Agency 2014 Overall 7% 86% 7% 93% 76% 97% 84% Smartphone 9% 80% 9% 1% 90% 76% 93% 80% Tablet 6% 78% 14% 1% 85% 81% 86% 68% Overall Satisfaction with mobile advertising is high and higher than it was in Satisfaction with tablet advertising is a little lower as it was last year as well. How satisfied are you with the results of your mobile advertising activities on tablets, smartphones, and overall across both devices?

19 Advertising solutions used 0% 20% 40% 60% 80% 100% Advertising solutions planned for future use 0% 20% 40% 60% 80% 100% Mobile banner ads Mobile social 7% 13% 75% 90% 86% 85% (94%) (90%) (86%) (70%) Mobile banner ads Mobile social 6% 9% 94% 90% 89% 81% Mobile video ads 15% 80% 73% (82%) (76%) Mobile video ads 4% 93% 89% Mobile search advertising 20% 66% 77% (84%) (70%) Mobile search advertising 13% 85% 76% In-app advertising 50% 46% 48% (70%) (60%) In-app advertising 29% 70% 64% Native formats 50% (new) 42% (new) 47% Native formats 19% 75% 73% Smartphone Tablet Not used (Solutions used in 2014) Smartphone Tablet None of these The 3 highest used solutions were banners, social and video in % had used native on smartphone (42% on tablet). Looking at the following advertising solutions which have you used and on which device? And which of these do you expect to use in the next 12 months?

20 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Mobile banner ads 90% 94% Mobile banner ads 86% 90% Mobile social 85% 89% Mobile social 75% 81% Mobile video ads 80% 93% Mobile video ads 73% 89% Mobile search advertising 77% 85% Mobile search advertising 66% 76% In-app advertising 50% 70% In-app advertising 46% 64% Native formats 50% 75% Native formats 42% 73% Have used Plan to use Have used Plan to use All buyers plan to use more solutions in the future than they have in the past. Looking at the following advertising solutions which have you used and on which device? And which of these do you expect to use in the next 12 months?

21 0% 10% 20% 30% 40% 50% 60% 70% 80% Publisher Direct 74% Ad Network 67% DSPs 56% Exchanges 47% Private Marketplaces 24% Buyers used multi suppliers to source inventory. This figure did not significantly change between agencies and clients. Which of the following are you using to buy mobile display inventory?

22 Targeting used Targeting most useful Targeting will use more Location specific 70% (70%) 33% (20%) 63% (66%) Audience segment targeting 67% (new) 12% 64% Detailed demographic information 66% 11% (16%) 45% (42%) Consumers time of day usage 60% (72%) 8% (14%) 39% (30%) General location information 55% (66%) 9% 19% Device operating system 45% (64%) 1% 25% Consumer usage by device type 45% (72%) 4% 32% Consumer search and browsing behaviour 43% 10% (14%) 51% (35%) Consumer preference and use of applications 29% 4% (10%) 28% (34%) Planning tool targeting 27% (new) 5% 20% Minimal targeting 15% (Top 5 targeting types in 2014) 3% 1% Location specific targeting was seen as the most useful targeting option and will be used more in the future. Which types of targeting have you used for your mobile ad campaigns to date? Which of the targeting types you ve used has been the most useful? Which types of targeting do you expect to see used more in the next year?

23 Ad formats have used Ad formats used most Ad formats most effective MRECs 75% 13% 22% Video Pre Roll 74% 16% 11% Rich Media 71% 16% 12% Static/non-expanding banners 70% 14% 25% Social Post 60% 10% 7% OTP Interstitial Native in-stream Carousels/sushi train 29% 28% 26% 44% 9% 5% 5% 7% 4% 3% Video Interstitial 25% 4% 3% Native other 17% 4% 3% None of these 2% 3% 2% Static banners were seen to be the most effective format. Which of the following ad formats have you used in your mobile ad campaigns in the last 12 months? And which of these have you used the most? And which of these do you think are the most effective?

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25 100% 8% 90% 80% 28% 3% 23% Not sure 70% 4% No - and I have no plans to 60% 20% 50% No - but I plan to use it in the next 12 months 40% 55% 30% 42% Yes - Sometimes 20% 10% 0% 6% 11% Yes - always There were more buyers using programmatic services this year compared to last. Do you use programmatic buying when purchasing mobile ad placements?

26 100% 90% 80% 86% Don't know 14% Blind 2% 70% 60% Semi blind 55% 50% 40% 35% 30% 20% Fully transparent 29% 10% 0% Buying mobile media in real-time auction based exchanges Trading in private deal environments The majority (86%) used real time auction based exchanges, whilst 35% traded in private deal environments. Which of the following explanations best describes the type of programmatic buying you do? When you buy using programmatic how transparent do you think your buying is?

27 Objectives mobile buying Objectives using programmatic buying Increase brand awareness 71% Increase brand awareness 64% Increase engagement 68% Drive sales in general 59% Drive sales in general 61% Increase engagement 54% Support for specific promotions 47% Support for specific promotions 38% Drive downloads (of client apps) 37% Drive downloads (of client apps) 26% Customer relationship marketing 21% Customer relationship marketing 3% Other 5% Other 3% Just under two-thirds (64%) used programmatic buying to drive brand awareness. What are the objectives when you use programmatic buying for purchasing mobile ad placements?

28 All Mobile Performance measures used Engagement 58% Engagement 57% Interactions 54% CTRs 49% CTRs 51% Interactions 43% Impressions 31% CPA 43% Reach and frequency 31% CPC 41% Sales/transactions 31% Reach and frequency 35% Leads generated 30% Impressions 35% CPA 28% CPM 35% App downloads 28% App downloads 30% CPC 28% Leads generated 27% Engagement was the key measure when accessing programmatic followed by CTR s. This was similar to Attribution modelling/share Brand impact study results CPM Downloads/Redemption Other 1% 20% 19% 18% 17% Sales/transactions Attribution modelling/share of conversion Brand impact study results Downloads/Redemption Other 14% 11% 8% 3% 22% Which of the following did you use as key measures to assess performance against the objectives when you use programmatic buying when purchasing mobile ad placements?

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30 Lack of measurement and tracking/standardised metrics Lack of advertisers understanding around mobile advertising Lack of evidence of effectiveness Difficulty in creating compelling mobile creative Challenge of developing cross-platform creative Lack of integration into wider campaigns Lack of understanding of the cost versus benefit Viewability technical challenges Lack of industry agencies understanding around mobile advertising Lack of internal agency understanding around mobile advertising Mobile device operating system fragmentation Lack of internal agency resource dedicated to mobile advertising Lack of creative opportunities Brand safety concerns Lack of standardised advertising units Ad Fraud Privacy issues There are no barriers Other 25% 23% 20% 18% 16% 14% 13% 11% 11% 9% 7% 7% 6% 6% 5% 3% 10% 37% 35% 27% 24% 13% 18% 19% 21% 4% 8% 17% 11% 7% 13% 5% 41% 54% Measurement & advertisers understanding of the medium were the biggest issues facing the industry in What are the three biggest issues stopping mobile from being a larger proportion of digital ad volume?

31 Mobile Video General Lack of measurement and tracking/standardised metrics 24% 37% Viewability technical challenges 22% 35% Lack of advertisers understanding around mobile advertising 21% 25% Lack of evidence of effectiveness 21% 23% Difficulty in creating compelling mobile creative 20% 20% Lack of understanding of the cost versus benefit 18% 18% Challenge of developing cross-platform creative 14% 16% Lack of industry agencies understanding around mobile advertising 13% 14% Lack of integration into wider campaigns 12% 13% Measurement and understanding was also the top issue for mobile video, however viewabilty and tech issues was seen at the same level. There was also more evidence needed around effectiveness. Lack of creative opportunities Mobile device operating system fragmentation Lack of internal agency understanding around mobile advertising Lack of internal agency resource dedicated to mobile advertising Lack of standardised advertising units There are no barriers Ad Fraud Brand safety concerns Privacy issues Other 1% 8% 7% 6% 5% 5% 11% 11% 10% 16% 11% 11% 9% 7% 7% 6% 6% 5% 3% 10% And what are the three biggest issues stopping mobile video from being a larger proportion of digital mobile ad volume?

32 1 Completely disagree Completely agree 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% NET Agree The mobile screen is rising in value in connecting with consumers 3% 14% 47% 34% 81% Initially the creative or brand idea is more important than what screen it will go on 7% 12% 29% 28% 24% 52% (Agency 37%) Mobile screen advertising is always an add on to other media in the campaign 15% 16% 27% 33% 10% 42% I would spend more on mobile if it was packaged with other media e.g TV & mobile 12% 21% 37% 23% 7% 30% 8 out of 10 people agree that the mobile screen is rising in importance. Please indicate the extent to which you agree with each of the following statements, using the scale where 1 means completely disagree and 5 means completely agree.

33 All Buyer Supplier Targeting capabilities 57% 65% (Agency:70%) 52% Where to buy mobile inventory 54% 57% 53% Cost parameters 40% 42% 39% Audience demographics 37% 45% 31% Industry research 35% 33% 37% Choosing the best metrics to track 33% 28% (Brand/advertiser:6%) 37% Performance data 29% 25% 32% Audience size, insights and case studies were the areas respondents thought they had the least information about. Consumer insight Case studies Comparative audience size 27% 23% 22% 33% (Agency:40%) 27% 22% 22% 21% 23% Please indicate the extent to which you agree with each of the following statements, using the scale where 1 means completely disagree and 5 means completely agree.

34 Location based capabilities All 79% Buyer 83% Supplier 77% Immediacy 71% 59% 79% Targeting and personalisation 66% 65% 66% Interactivity 64% 60% 66% Reach 63% 60% 65% Increased engagement 62% 57% 65% Complementary to other 62% 52% 68% Ability to link with customer 54% 49% 57% Good response rates 48% 49% 48% ecommerce 48% 41% 52% Cost effectiveness 46% 46% 47% Value and return on 43% 32% 51% Driving sales 39% 35% 41% Lead generation 35% 35% 35% Location and Immediacy are the biggest benefits of mobiles. Buyers & supplies list were a little different to this question. How compelling do you find the following characteristics of mobile advertising as benefits of the medium?

35 It generally core to our strategy It is very important It is somewhat important It is not important 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total 29% in % 40% 21% 15% Buyer 30% in % Brand/advertiser: 34% Agency: 56% 50% 15% 13% Supplier 28% in % 34% 24% 16% Multi screen advertising was seen as important but had dropped a little since How important is multi-screen advertising (e.g., TV + digital screens, etc.) in the campaigns and strategies you re involved with?

36 The market is expecting a 26% increase in mobile spend over the next 12 months. 41% see mobile as a significant part of their marketing & expect to use in half of their campaigns. 93% of the buyer side satisfied with their mobile results. Programmatic buying increasing - 66% used with a further 23% expecting to use (next 12 mths). Buyers are expecting to use mobile video in 43% of their mobile campaigns (next 12 mths). Barriers to mobile spend remain similar to last year measurement, client understanding, effectiveness proof and the creative limitations are highest. Viewabilty a concern for mobile video buyers.

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38 MOBILE TRENDS PANEL Moderated by: Jonas Jaanimagi Head of Media Strategy and Operations REA Group

39 MOBILE TRENDS PANEL Jonas Jaanimagi Head of Media Strategy and Operations REA Group Venessa Hunt Mobile Strategy and Advertising Manager Yahoo!7 Ben Sharp Managing Director Australia and New Zealand AdRoll Rob Hall Partner and Managing Director - APAC Big Mobile Ben Campbell Director of Specialist Sales Mi9 IAB Mobile Landscape Presentation 21 April #iabmobile

40 MOBILE CREATIVITY Mike Zeederberg Managing Director Zuni

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