THE STATE OF MOBILE ADVERTISING Q2 2015 BENCHMARK REPORT

THE STATE OF MOBILE ADVERTISING Q2 2015 BENCHMARK REPORT

TABLE OF CONTENTS Introduction Benchmark Data Advertiser Recommendations About the Data

GREETINGS, Welcome to Ampush s Q2 2015 Benchmark Report. Each quarter, we share data and insights based on the campaigns we run on behalf of our customers on the world s best mobile-first, cross-device, advertising platforms. We hope this information will help you understand the latest marketing trends in what is arguably one of the most exciting - and challenging - times for marketers in recent memory. That s because as consumers have shifted a majority of their digital time spent to mobile, advertisers have found that the tactics that might have worked on PCs just a few years ago haven t been as effective at acquiring, activating and re-engaging their audiences on smartphones. By helping its customers run advertising in-feed and at the identity level, using primarily mobile inventory acquired programmatically through Facebook, Twitter, Pinterest, and, coming soon, Instagram, Ampush makes mobile marketing perform. Not surprisingly, advertisers are coming to recognize the advantages of a managed approach to this advertising. That s one reason why Ampush s technology and team serve some of the biggest advertisers spanning multiple industry verticals, including gaming, e-commerce, travel, financial services, media and entertainment, and CPG. We re pleased to offer what we ve gleaned from running campaigns on behalf of some of the world s top companies. If your company is looking to make a significant investment in marketing that drives results with mobile consumers and grows your bottom line, we d love to hear from you. Simply click this link to get in touch with our Sales team. Thanks for reading, Jesse Pujji, Nick Shah, and Chris Amos Ampush Founders 1

AMPUSH MOBILE GROWTH OUT-PACING THE MARKET Powered by more customers embracing direct response AMPUSH TOP 10 HIGHLIGHTS The increased adoption of mobile as a customer acquisition channel across all verticals caused mobile spend to more than double year-over-year, and it increased by 28% quarterover-quarter. Quarter-over-quarter mobile spend growth is 26% for Facebook and 59% for Twitter; and the total spend on Facebook was approximately 10X greater than spend on Twitter. Ampush s mobile ad spending grew 152% yearover-year and 28% quarter-over-quarter. Direct response campaign objectives accounted for nearly half of all mobile spend, up significantly from Q1. Also, among Ampush s customer base, more companies representing more verticals have increased their spending, compared to prior quarters. We believe that s because they recognize the power and efficiency of advertising on mobile-first, in-feed platforms. In other words, this stuff works for much more than just gaming developers. There was a 22% quarterover-quarter increase in CPM, 8% increase in CPC, and a 6% increase in CTR. The Americas saw the biggest bump in ad spend, which grew 12% quarter-over-quarter, followed by the Asia Pacific region at 5%. The Gaming vertical continued to have the largest share of mobile spend at 34% for Q2. Direct response advertising accounted for 44% of total mobile spend in Q2, up from 27% in Q1. Travel, Financial Services, and Entertainment were the verticals with the highest increases in mobile spend for the quarter. Gaming ads saw the highest overall CTR at 1.29%, as well as the lowest CPC at $0.60, followed closely by Tech Services at 1.27% and $0.65, respectively. The verticals with the lowest CPM during Q2 2015 were Entertainment and Gaming, at $5.28 and $6.30, respectively. The rise in CPM and CPI is both seasonal (prices decrease in Q1 due to less demand, and then increase throughout the year) and systemic (prices in general have been rising every year). 2

Q2 2015 IN NUMBERS 300 MOBILE SPEND GROWTH INDEX 100% BREAKDOWN OF SPEND BY PLACEMENT 200 80% 100 60% 40% 20% Compared to the second quarter of 2014, overall mobile Q2 2014 Q1 2015 Q2 2015 spend increased by 152% year-over-year as more marketers MOBILE DESKTOP are looking to mobile, in-feed ads to grow and scale their businesses. The seasonality drop in Q1 2015 is an industry trend seen year-over-year due to less demand compared to Q4. Ampush expects continued growth in mobile spend as the Advertiser spending continues to be dominated by mobile, compared to desktop. year progresses. 3

Q2 2015 IN NUMBERS 1000 MOBILE SPEND GROWTH BY OBJECTIVE VIDEO SPEND GROWTH 800 600 400 200 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q1 2015 Q2 2015 BRAND DR (NON-MAI) MAI *The numbers from quarter to quarter can vary significantly depending on individual customer performance by vertical and objective. *DR excludes Mobile App Installs on line graph. Video spend increased by 199% quarter-over-quarter, including mobile and desktop. Direct Response objectives continue to lead the way as marketers shift strategy to more downstream tactics. That means deploying tactics aimed at improving customer lifetime value (LTV), profitability or ROAS (return-on-ad-spend). It also means a greater interest in ads that send people directly to a landing page to purchase a specific product. With Pinterest opening up ad inventory during the second half of the year, the desire and potential for DR objectives should only increase overtime. 4

CREATIVE IS ESSENTIAL TO EFFICIENCY $ 8.00 $7.00 CPM $ 0.80 $ 0.70 CPC Why do we include a headline about creative over a bunch of bar charts? Well, when compared $ 6.00 $ 0.60 to the same period one year ago, $ 5.00 $4.00 $ 0.50 $ 0.40 the cost per clicks, impressions, and installs increased in Q2 of this year. As such, Ampush found $ 3.00 $ 0.30 that as demand and the cost to $ 2.00 $ 1.00 $ 0.20 $ 0.10 reach, engage, and acquire a customer grows, ad creative and the ability to give customers an immersive experience is critical. For instance, cinemagraphs and $ 16.00 CPI 1.60 % CTR micro-videos enable marketers to creatively and effectively engage their customers. See $14.00 1.40 % page 8 for a recommendation on $ 12.00 $10.00 1.20 % 1.00 % how to successfully create visual experiences for your target customer with compelling and $8.00 0.80 % unique ad creative. $ 6.00 0.60 % $ 4.00 0.40 % $ 2.00 0.20 % 5

AMERICAS: LARGEST DRIVER OF MOBILE SPEND GROWTH 300 250 200 150 100 50 MOBILE SPEND GROWTH INDEX BY REGION Gaming customers are the primary drivers of growth as they spend more in international markets, where impressions tend to be cheaper, reducing overall CPM. Increased competition for ad inventory boosted CPM in the second quarter of 2015 in the Americas. AMERICAS APAC EMEA CPM BY REGION AMERICAS $7.06 EMEA $4.70 APAC $4.93 6

VERTICALS RAMP UP SPENDING, AND AMPUSH BROADENS ITS BASE MOBILE SPEND GROWTH BY VERTICAL (HIGHEST GROWTH) MOBILE SPEND GROWTH BY VERTICAL 6000 5000 4000 3000 2000 450 400 350 300 250 200 150 100 50 1000 CPG E-COMMERCE/ RETAIL EDUCATION GAMING TECH SERVICES ENTERTAINMENT FINANCIAL SERVICES TRAVEL 2.50% CTR BY VERTICAL While Ampush saw a few verticals decline or remain 2.00% flat in the second quarter, several have experienced tremendous growth, resulting in a broadening customer 1.50% base. Gaming, now a relatively mature market, saw the 1.00% slowest growth, while Travel, Financial Services, and Entertainment were the highest growing verticals. These 0.50% verticals understand the effectiveness of direct response, mobile in-feed ads and continued to invest marketing CPG E-COMMERCE/ RETAIL EDUCATION ENTERTAINMENT FINANCIAL SERVICES GAMING TECH SERVICES TRAVEL budget through the second quarter. Q2 2014 CTR Q1 2015 CTR Q2 2015 CTR 7

THE AMPUSH RX Perscriptions for campaign success Here we share our top five industry trends and recommendations for mobile advertising across mobile in-feed platforms for the second half of 2015. 1) FRESH CREATIVE IS KEY Using a wide variety of original creative (i.e., not just leaning on stock images) along with frequent refreshes is critical to maintaining cost efficiency in a saturated market. For example, Ampush typically introduces new creative variants every week for its gaming customers. Campaign success relies heavily on reaching users with the highest propensity to transact, and this challenge is being met with hyper-personalizing creative and activating unique customer data. Ampush Recommends: Refresh no less than every 3 weeks to prevent ad fatigue, and allow some flexibility with your brand guidelines to enable the best ads for Facebook and Twitter. 2) EMBRACE NEW AD PRODUCTS In search of greater personalization and performance, successful advertisers are venturing beyond the traditional static image ad and delivering richer engagement via video, cinemagraphs, carousel ads, and dynamic ads that feature their online product catalog. These advertisers reap the benefits of early adoption, which often includes lower prices in a less competitive marketplace. An Ampush customer using video ads for the first time found that these immersive ads resulted in 95% of mobile app installs and drove more than 93% of clicks. These lower-priced ad products can deliver outstanding results, and Ampush s Creative and Media Analytics teams can help you to maximize performance while understanding which ad products work best for your vertical. Ampush Recommends: Every new ad product is an opportunity to showcase your brand in a new environment with a targeted audience and seek out ways to not just deploy, but push the limits of these new placement opportunities to drive performance gains. When one customer launched carousel ads for the first time, Ampush was able to decrease cost per sign-ups by more than 13%. Embracing these new ad products, even when they are unfamiliar, allows Ampush to show you how you can use them to achieve your desired results. 8

3) TELL A STORY WITH MOTION Video and the cinemagraph have proven valuable as a medium for effective storytelling - and to drive mobile app installs. Advertisers are seeing tremendous success using video in a sequence of ads mapped to the buying cycle. When a video ad geared toward driving a mobile app install is combined with static ads using ad sequencing, the conversion results are even more impressive, increasing 1.3X, compared to control ads. Ampush Recommends:. Videos and cinemagraphs drive higher rates of engagement at lower prices than static advertisements. One Ampush customer saw that CPI for video ads was 20% less expensive compared to static ads, which resulted in them dedicating 90% of their campaign spend to video. Use motion and visually appealing direct response ads such as short form video and cinemagraph creative on Facebook to tell your story and increase user engagement, including app installs or clicks. 4) SHIFT TOWARDS ROAS OPTIMIZATION Return on ad spend (ROAS), not cost per acquisition, is the true indicator of a campaign s success. Access to detailed data about customers and the buying cycle is helping advertisers better calculate customer lifetime value and, therefore, more accurately determine cost per acquisition (CPA) goals. When one customer increased its daily spend by 75%, Ampush simultaneously decreased the cost per sign-up by more than 5%. Ampush Recommends: Make your goals measurable, and ensure that you have a variety of custom metrics to understand what will drive return-on-ad-spend (ROAS). It s all about quality over quantity, and higher acquisition costs means paying the right price for the right users rather than a higher price for average users. Keeping customer LTV top of mind ensures you re targeting for a profitable pocket. 9

5) TEST NEW CHANNELS Facebook remains a no-brainer for mobile customer acquisition; however, eagerness to test out newer channels, including Twitter, Pinterest and, coming soon, Instagram continues to grow as they mature into robust platforms with unique offerings capable of achieving success. Savvy advertisers are developing effective mobile strategies and expanding their efforts across additional channels. Ampush Recommends: Be innovative and remember that your Facebook strategy, for example, may not work for your Twitter or Pinterest approach! In order to be successful, your ads need to look and feel different across different channels. Ampush has the data and experience to modify your marketing strategy across multiple platforms, and to ensure the look and feel is unique to the native user experience. Ampush is one of only a handful of companies whose technology and team have been recognized by Facebook, Twitter, Pinterest, and Instagram. We possess the know-how to create, deploy and optimize ads across all these channels. ABOUT THE DATA The data in this report was aggregated across a portfolio of advertisers leveraging Ampush s AMP platform to manage and scale their mobile advertising campaigns on Facebook and Twitter. Ampush customers include leading direct response and brand advertisers across gaming, e-commerce, travel, financial services, CPG, and other verticals. The information is collected with seven-day post-click attribution, meaning we wait for the quarter to end plus one week before we collect and analyze the data. Data in this report is specific to the advertisers and objectives represented in Ampush s customer portfolio, and should not be used as a proxy for spend or pricing trends on Facebook, Twitter, or the broader mobile advertising marketplace. Because Pinterest opened its platform in mid-june, it did not contribute meaningfully to the Q2 data. Data in this report should not be compared to any prior or future publications due to the dynamic nature of the data set each period. For inquiries, please email research@ampush.com. 10

GROW YOUR BUSINESS Ampush helps customers run advertising on Facebook, Twitter, Pinterest, and, coming soon, Instagram. Visit www.ampush.com to learn more about our technology, team and solutions.