INSIGHTS FROM OPERA MEDIAWORKS

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1 INSIGHTS FROM OPERA MEDIAWORKS The first mobile ad platform built for brands, delivering breakthrough marketing at scale 90% of the top AD AGE GLOBAL ADVERTISERS 850 million+ UNIQUE USERS Over 18,000 SITES AND APPLICATIONS HIGHLIGHTS FOR THE FIRST QUARTER OF 2015 Android leads in traffic and revenue generation, but ios and tablets lead in monetization Social Networking leads all media categories for impression volume and revenue generation Asia, Americas and Africa show strong growth

2 Android is global leader for traffic and revenue, but ios and tablets are tops for monetization One year ago, in the first quarter of 2014, we witnessed a key moment in mobile advertising: Android overtook ios as the top platform for traffic, as measured by mobile ad impressions served. Now, in the first quarter of 2015, Android continues to dominate the market, with a 65.2% share of impressions a nudge higher than the 62.7% of Q4 2014, but a big push up from its 42.8% share of one year ago. Now, Android is starting off the year by setting another benchmark. For the first time since we started The State of Mobile Advertising report in 2012, Android is leading revenue generation across our platform, albeit by only a fraction of a percentage point. Traffic and revenue share by device OS OS / device % of traffic % of revenue Android 65.17% 45.77% Phone 62.45% 42.46% Tablet 2.72% 3.31% ios 22.34% 45.44% iphone 17.22% 27.29% ipad 3.99% 17.45% ipod 1.14% 0.69% BlackBerry 1.87% 1.96% Symbian 3.99% 1.27% Windows 0.16% 0.09% Other 6.46% 5.48% Traffic & revenue share by OS Android ios Other Symbian BlackBerry Windows Phone Traffic 65.17% 22.34% 6.46% 3.99% 1.87% 0.16% Revenue 45.77% 45.44% 5.48% 1.27% 1.96% 0.09% Video and rich media Looking at how video ads perform on each of the two major mobile operating systems, we found that ios outperforms Android for both percentage of impressions served and revenue. Apple device users also have a significantly higher completion rate than Android users (87.2% vs. 76.7%). 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Impression share and completion rates, by mobile OS 87.15% 76.72% 62.69% 56.57% 42.84% 36.23% Android ios % of impressions % of revenue Completion rate p.2

3 However, in terms of monetization potential (the ratio of revenue to impressions), ios still leads among all device platforms. The ipad generates the highest revenue per impression of any device / platform combination; in fact, its monetization share in Q1 was over 4X that of its traffic volume. Android tablets are making headway, too, as revenue increased this quarter now to be just over par with their traffic volume. Look for Android tablets to continue this trend over the coming months. 5:1 Ratio of share of revenue to share of impressions served (:1) :1 3:1 2:1 1: Android tablet ipad Android phones iphones It s important to note that ios devices reach higher monetization levels, primarily because those devices have a larger market share in regions where advertising rates are higher, such as Western Europe and the United States. Impression share by OS, global comparison US & EU5 (UK, DE, ES, IT, FR) Rest of world 0% 10% 20% 30% 40% 50% 60% other ios Android p.3

4 Social sites, apps get most traffic and are no. 1 for revenue Social Networking apps continue to reign supreme in terms of total traffic across the Opera Mediaworks platform, with a 30.2% share of impressions. Social Networking is also now our largest revenue producer, taking over the leading spot from Music, Video & Media. The Games category is in the no. 2 position for revenue, less than 0.15% behind Social Networking. Meanwhile, the Business, Finance & Investing category continues to carry the highest-valued inventory, delivering the greatest revenue per impression. Other Business, Finance & Investing Productivity Sports Shopping & App Stores Arts & Entertainment Games News & Information Communications Services Music, Video & Media Social Networking Traffic and revenue to pubs / apps from brand advertising 0% 5% 10% 15% 20% 25% 30% 35% % of revenue % of impressions Video advertising is growing in popularity across a number of brand verticals. Movie & Television Entertainment advertisers are the clear leader for use of video ads in their campaigns. Video ads are also prominent in Food & Drink and Automotive campaigns. Share of video brand ad impressions & revenue by brand vertical Games Sporting Goods Computer and Electronics Insurance Automotive Food & Drink Movie & Television Entertainment Other 0% 5% 10% 15% 20% 25% 30% 35% % of revenue % of impressions p.4

5 The mobile ad market continues to globalize Revenue and impressions are increasing across virtually all geographies, and this quarter s traffic and revenue analysis by geography revealed the ongoing globalization of the mobile advertising market. While the United States is still the clear leader in terms of traffic and revenue generation, there is significant expansion of mobile advertising in Asia, the Americas and Africa. This expansion inevitably causes a relative decline in market share across both metrics for the United States and Europe, as seen in the table, but we are seeing that those markets continue to grow in volume, too. Top 25 countries United States India Indonesia Russian Federation Mexico United Kingdom South Africa Brazil Canada Argentina Nigeria Italy Venezuela Bangladesh Australia Pakistan 1.82% 0.71% Japan 5.71% Turkey 9.97% France 42.76% Germany 9.93% % Vietnam impressions Ukraine Spain Philippines 29.09% Colombia United States Asia Pacific Europe Americas (non-u.s.) Africa Middle East Oceania Q to Q growth rates measured by impressions in the fastest-growing global markets 70% 60% 50% 40% 30% 20% 10% 0% 18.79% 60.95% 32.31% APAC Americas Africa Compared to Q4 2014, very little changed in the top 25 countries, by ad impressions served. There were two newcomers to the list (Columbia and Venezuela), while Malaysia and Saudi Arabia dropped off the Top 25, as they slipped to no. 26 and no. 27 respectively though less than.01% separates Columbia from Saudi Arabia. p.5

6 Video advertising ratios across 7 countries Video advertising is growing at a rapid rate across multiple geographies, but there are a few countries that are seeing far higher use of the format than others. Looking at the list of the top 25 countries on our platform, we found, for instance, that the U.S.s market share of video ads is 2.5X its share of our total reach of users. In other words, U.S. consumers are viewing significantly more video ads than consumers in the rest of the world, as are consumers in the other countries shown here United States Canada United Kingdom Australia Germany Japan France Ratio of video impressions to unique users Video advertising is booming 60% The growth of video % of Opera Mediaworks demand-side business 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0 Q Q Q Share of impressions Share of revenue delivered to publishers & app developers In the past year, the share of impressions from video ad formats has increased over 5X, from 2.5% of all impressions in Q to now just over 12.8% of impressions. Meanwhile, revenue from video has grown to become over 55% of revenue delivered to publishers. p.6

7 MOBILE ADVERTISING SPECIAL FOCUS Intelligent Audience Creation You can t walk within two feet of a conversation about mobile advertising without hearing the term big data. Publishers and app developers are gathering more and more data from their users, and the ability to efficiently collect, store and access data at scale to target advertising is becoming one of the most critical elements of the mobile advertising industry. It all starts with collection of raw data from three pillars of information: context, activity and demographics. Context The right now Activity Context across time Demographics Personal characteristics However, data collection is only half the story; turning that data into actionable intelligence about an audience is the real challenge. Globally, using some form of contextual information to target campaigns has been the norm for years. However, the use of custom audience-creation methodologies is gaining momentum, and, in some regions, over 85% of campaigns are targeted to an audience that was created specifically for one particular advertising campaign. Almost 80% of mobile users spread their mobile activity across multiple site and app categories, while approximately 21% focus on a single app category. By collecting and combining observations of context, activity and demographics into these audience segments, we can develop a more complete view of users' intent and their likelihood of engaging with a particular type of ad. The graphic on the next page depicts our three user groups on the left. On the right, you can see a breakdown of the sites visited by users of three different site categories. Bubble size is relative to the number of unique users in each group. p.7

8 8 User clusters by number of sites visited Q Society Technology & Computing Education Shopping Health & Law Government Fitness & Politics Careers Family & Hobbies Parenting & Interests Personal Finance Food & Drink Real Estate ScienceAutomotive Home & Garden Style & Fashion Religion & Spirituality Travel Sports Games 3-sites Business News Arts & Entertainment p.8

9 Family & Parenting Q The most contextually diverse group of user (28% of all users) has a very broad range of interests, visiting seven or more site categories. The chord diagram below shows how one of these segments (users who spend most of their time on education sites) disperse their visits across other site categories. The size of the connecting lines represents the volume of traffic going to the site categories shown on the outside of the circle. So how do you create an audience given all the complexities? Starting from the data collected from our three pillars of information, you integrate that data through four core activities: 1. Unleash contextual information with segmentation. 2. Refine audiences with behavioral insights. 3. Accelerate into real time with machine learning and measurement strategies. 4. Be transparent about privacy. Through these four activities, advertisers can build audiences, homing in on a very specific subset of consumers that will be most receptive to the ad messaging of their campaign. Click here to download our in-depth look at how to use these four activities for intelligent audience creation. Style & Fashion Real Estate Technology & Computing Society Religion & Spirituality Science Hobbies & Interests Personal Finance Business Food & Drink Careers Automotive Health & Fitness Shopping Sports Travel Games Home & Garden Law Government & Politics News Education Arts & Entertainment p.8

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