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December 2010 Harris Interactive Survey:

How Consumers Interact with Mobile App Advertising

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18-34 (U.S. Adults)

40%

35-44 (U.S. Adults)

21%

45-54 (U.S. Adults)

21%

55+ (U.S. Adults)

18%

Mobile App User Demographics(Age)

In December 2010, Harris Interactive conducted a survey on how consumers perceive and interact with mobile app advertising. The survey was administered to a universe of Adults 18+ in the United States.

The most significant and striking finding of the survey was that nearly half of the U.S. adult population states that they click on mobile app ads by mistake. This finding is especially startling since a large portion of mobile app advertising is sold on a cost-per-click (CPC) model. Other findings that are outlined below include consumer preferences towards free apps and in-app mobile advertising.

Executive Summary

Harris Interactive Survey: Key Highlights

Mobile apps are popular across all age groups. 40% of U.S. adults 18-34 years old use mobile apps, making this age the largest group of adopters among adults in the U.S. Mobile apps are also popular with U.S. adults ages 35-44 and 45-54. 21% of the people in both of these age groups use mobile apps. While 57% of men use apps, 43% of women do as well.

Men (U.S. Adults)

57%

Women (U.S. Adults)

43%

Mobile App User Demographics(Gender )

Demographic Information of Mobile App Users

Consumers Prefer Free Apps

95%93%

99%

93%97%

Total (U.S. Adults)

18-34 (U.S. Adults)

35-44 (U.S. Adults)

Men (U.S. Adults)

Women (U.S. Adults)

% Of U.S. Adults Who Prefer Free Apps to Paid Apps

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Almost half of U.S. adults agree with the following statement, “While using mobile apps, I click on ads by mistake more often than I do on purpose.” Accidental clicks are especially prevalent in the 18-34 age group – 61% of people in this age group reported clicking on a mobile app ad more often by mistake than on purpose. To date, most mobile ads are sold on click-based models. The implications are immense—nearly half of mobile advertising dollars are wasted due to people accidentally clicking within mobile apps.

Most Consumers Click on Mobile App Ads by Mistake

95% of the U.S. adult population prefers free apps. Even affluent consumers prefer free apps – 96% of people that have a HHI of $75K plus prefer free apps. Given that consumers prefer free apps, mobile app developers and publishers have to depend on ad revenue to monetize their apps. These findings highlight the importance of effective mobile app advertising.

47%

61% 61% 60%

Total (U.S. Adults)

18-34 (U.S. Adults)

Men 18-34 (U.S. Adults)

Women 18-34 (U.S. Adults)

% Agree: “While using mobile apps, I click on ads by mistake more often than I do on purpose.”

95% 96%

Total (U.S. Adults) Income: $75K+ (U.S. Adults)

% Of U.S. Adults Who Prefer Free Apps to Paid Apps - HHI

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According to Harris Interactive, 71% of U.S. adults agree with the following statement, “I prefer mobile ads that keep me inside of the app when I click on them instead of ads that take me out of the app to a web browser when I click on them.” In mobile environments, consumers prefer ads that do not disrupt their user experience by pulling them out of an app and taking them to a mobile web browser.

63% of U.S. adults prefer to sign up—or opt in—to receive deals, information, and newsletters from marketers through mobile apps. In contrast, only 38% are receptive to commercials or video ads in mobile apps (examples of such ads include those offered by Apple iAds).

Consumers Prefer Mobile Ads That Keep Them in Apps

In Mobile Apps, Consumers Prefer Signing Up for Deals and Information

71%

73%

68%

78%

Total (U.S. Adults)

18-34 (U.S. Adults)

Men 18-34 (U.S. Adults)

Women 18-34 (U.S. Adults)

% Agree: “I prefer mobile apps that keep me inside of the app when I click on them instead of ads that

take me out of the app to a web browser when I click on them.”

63%

80% 82%77%

38%28%

36%

16%15% 18%27%

6%

Total (U.S. Adults)

35-44 (U.S. Adults)

Men 35-44 (U.S. Adults)

Women 35-44 (U.S. Adults)

Consumer Mobile Ad Preferences(By ad type)

Coupons, deals, or newsletters Ads that of fer updates f rom app developers Commercials/video ads

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Mobile advertising is no longer a “nice to have.” On the contrary, it has become a “must buy” for marketers. eMarketer projects mobile ad spending in the U.S. will surpass $1 billion in 2011. Similarly, research firm Borrell Associates predicts that the mobile app advertising market will rocket to more than $8 billion by 2015. Below are a few tips to help marketers who plan to add mobile to their digital marketing mix.

Advertisers can’t ignore mobile advertising. This survey reveals that mobile apps are popular across all age groups. In addition, mobile app advertising is effective at reaching both men and women. Mobile marketing is essential to increasing the reach of a digital advertising plan.

A large portion of mobile app advertising is sold on cost-per-click pricing models. Given that nearly half of the U.S. adult population state that they click on apps accidentally, mobile advertisers must be cautious while purchasing CPC mobile advertising solutions. Luckily, there are solutions in the market that allow marketers to circumvent click-based advertising.

The 2010 Harris Interactive survey found that nearly half of U.S. adults clicked on a mobile ad by mistake. It is not surprising that the survey found nearly three-fourths of the U.S. adult population preferred in-app mobile advertising that keeps them in the app. Broadly speaking, there are two solutions that offer in-app advertising: Apple iAds and Pontiflex AppLeads. Below is a screen shot of an ad running on the Apple iAds platform. Screen shots of Pontiflex in-app signup mobile ads are shown on the next page.

Implications for Marketers

I. All demographics use mobile apps

II. Click-based ad models don’t work in a mobile world

III. Incorporate in-app ads to your digital marketing mix

Apple iAds Mobile Ad

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Apple iAds is an in-app mobile platform that delivers branded experience in mobile environments. iAds offers an extensive branding experience at the moment of engagement in a way that is similar to television advertising. The platform has generated a lot of buzz, but it has not yet been widely adopted by marketers due to an extensive creative approval process and a minimum ad spending requirement of one million dollars. One or both of these points have prevented some brand marketers from running campaigns on the iAds platform. Adidas, for example, pulled a $10 million campaign after Apple rejected its creative concept three times.

Like iAds, Pontiflex mobile signup ads are a form of in-app mobile advertising. Using Pontiflex, marketers can run ads on top apps on the iPhone and Android platforms and only pay for new-to-file signups. Signup ads don’t pull consumers out of mobile apps and drive them to a mobile web browser. Instead, they offer a simple sign-up form where consumers can opt in to receive email communications from brands that they want to hear from.

As the Harris Interactive survey results showed, consumers want to sign up for deals, information, and newsletters from brands that they like via mobile apps. They also deem commercial and video to be disruptive to their mobile app usage. To best utilize these insights, marketers should offer relevant and compelling messages to consumers via mobile apps. Examples of mobile platforms that enable advertisers to offer deals and information include Facebook and Pontiflex.

The Harris Interactive survey provides compelling insights on how consumers perceive and interact with mobile advertising.

The survey shows mobile app usage to be prevalent across all demographics.The most significant finding was that nearly half the U.S. adult population states that they click on in-app mobile ads more often on accident than on purpose. This poses a problem for marketers who could be charged for accidental clicks.

Conclusion

IV. Provide compelling offers to consumers in mobile appsPontiflex In-app Signup Mobile Ads

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The survey also revealed that consumers prefer mobile app ads that keep them in apps, not ads that pull them out of an app and take them to a clunky web browser. Lastly, consumers prefer receiving compelling deals and information from the brands they trust via mobile app advertising.

Since 95% of U.S. adults prefer free apps, mobile app advertising will become an increasingly important part of the mobile economy by keeping apps free. Mobile app ads will also provide an ad revenue stream to developers and publishers. By providing compelling deals through in-app advertising, marketers can capitalize on consumer preferences to the fullest, and make the most of the mobile opportunity.

Pontiflex is the industry’s leading mobile, email and social acquisition platform. Pontiflex’s patent-pending technology enables online and mobile publishers to monetize their sites and apps, and serve ads to visitors where they are most engaged. With Pontiflex, people can submit their information to advertisers within the ad unit itself without having to click away from the site or app.

Advertisers who use Pontiflex include Fortune 500 brands and leading non-profits like Kimberly-Clark, Disney, Tommy Hilfiger, and the ASPCA.

Publishers who use Pontiflex to connect with these advertisers and increase revenue include Monster.com, Evite.com, Cafepress.com, Brisk Mobile, Demand Media, and thousands of mobile, content, and e-commerce sites.

To find out more about Pontiflex, please visit www.pontiflex.com. You can also reach Arun Krishnan, Vice President, Marketing at arun@pontiflex.com or by calling 718.801.8483.

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