mobile advertising & user acquisition in china

MOBILE ADVERTISING & USER ACQUISITION IN CHINA

2015

INTRODUCTION

China is a complex market because the mobile ecosystem is highly fragmented, and

mobile consumption habits and preferences differ greatly from the West. To succeed in

this market, companies need best services, technologies and people available. By

launching the China Knowledge Hub together with Newzoo, we aim to help global

audiences understand the complexities of the Chinese mobile consumer, and how they

can tap into the potential of this vast mobile-first market.

Since the start of our co-operation in 2014, the relationship with TalkingData has

evolved into a strategic one. We share the ambition to be global leaders in the field of

mobile intelligence and analytics services. TalkingData is by far the leading provider of

mobile intelligence on China and it is a great privilege to be able to share their unique

insights to the Western world.

LEO CUICEO TalkingData

PETER WARMANCEO Newzoo

NOTESDATA SOURCE

• TalkingData Mobile Data Research Center's data uses a combination of its App Analytics, Game Analytics, Ad Tracking, and data exchanged from business partners, such as app

stores, mobile channels and operators. The data in this report is mainly based on monitoring results of TalkingData Ad Tracking. By November 2015, TalkingData Ad Tracking had

tracked over 200 advertising platforms and covered more than 800 million mobile devices. At its peak, it monitors more than 30 million clicks on a daily basis.

DEFINITIONS

• Clicks: The number of times an ad is clicked

• Activations: the number of devices that download and activate the app for the first time

• Advertising volume: the number of ads served on advertising platforms

• Incentivized advertising: reward users with something, such as virtual currency in game, in exchange for them being exposed to an advertisement

• Direct response advertising: invite consumers to click, download and sometimes register for product promotions

• Brand awareness advertising: create brand awareness with consumers through repeated exposure to an advertisement

3

Data source: TalkingData Mobile Data Research Center

2011-2016 © TalkingData.com

MOBILE ADVERTISING TRENDS IN 2015

2011-2016 © TalkingData.com4


MOBILE BRAND-AWARENESS ADVERTISING:

Brands are increasing their awareness advertising on

mobile devices, boosting their share of all ads to 36.5%

MOBILE DIRECT-RESPONSE ADVERTISING:

• For iOS, the number of clicks increased 255% in

2015, while the activation numbers increased 12%.

The growing activation volume is the result of a larger

number of clicks. Advertisers are no longer dependent

on incentivized ads.

• The number of clicks and activations on Android in

2015 has grown 112% and 146%, respectively.

Android ad owners focus on the outcomes of

subcontracting promotions and have increasing

demand for third-party data on monitoring ad

performances.

More Traffic

GAMING IS STILL THE KEY SECTOR:

Gaming remains the sector with the most mobile

advertising, with gaming-related clicks taking 59.6% of

total clicks in 2015. However, this is significantly lower

than the 81.1% in the previous year

RAPID ENTRY OF EMERGING INDUSTRIES:

Advertisers from emerging industries such as financial

services, real estate, and education are increasing their

advertising volume on mobile devices

More Industries

More precision

MORE ADS ON DMP:

Ads placed using a DMP don’t make up a large share of

total ads, but have witnessed rapid growth. In total, the

proportion of incentivized ads on DMP have climbed

200%

SOME INDUSTRIES ARE MORE AWARE OF DMP:

Advertisers from gaming, e-commerce, and financial

services are more aware of DMP advertising

A SIGNIFICANT INCREASE IN ADVERTISING EFFECT:

Compared with normal advertising, ads on DMP have

shown a significant increase in both CVR and CTR

PART 1 MOBILE BRAND-AWARENESS ADVERTISING

MOBILE BRAND AWARENESS VS. DIRECT RESPONSE ADS

6

The share of mobile brand-

awareness ads showed a

strong Y-o-Y increase

Compared to PC advertising, mobile

advertising offers the opportunity to

target audiences more precisely. In

2015, a significant higher share of

mobile advertising were brand-

awareness campaigns, now

accounting for 36.5% of all ads.

MOBILE BRAND-AWARENESS ADS VS. DIRECT-RESPONSE ADS(BASED ON TOTAL NUMBER OF MOBILE ADS SERVED)

Data source: enterprise interviews, public data compiled by TalkingData Mobile Data Research Center

74%

26%

63%

37%

20152014


MOBILE BRAND-AWARENESS ADS: POPULARITY OF ADS FORMATS

7

Mobile brand-awareness

advertisers prefer videos

and information streams

Video and information streams are

the major ad formats employed for

mobile brand-awareness ads.

Combined they take up more than

50% of the total ads that are served,

followed by splash screen ads and

search engine ads.

POPULARITY OF MOBILE BRAND-AWARENESS AD FORMATS(BASED ON TOTAL NUMBER OF MOBILE ADS SERVED)



PART 2 MOBILE DIRECT-RESPONSE ADVERTISING

CLICK & ACTIVATION TRENDS FOR DIRECT-RESPONSE ADS (IOS)


iOS witnessed a rapid

growth in the number of

clicks while the growth in

number of activations

slowed down in 2015.

The number activations of mobile

direct response ads climbed only

12% in 2015, much lower than the

growth in number of clicks.

Data source: TalkingData Mobile Data Research CenterNotes: activation refers to the volume triggered by promotion, excluding natural activation.

GROWTH IN NUMBER OF CLICKS OF MOBILE DIRECT-RESPONSE ADS

GROWTH IN NUMBER OF ACTIVATIONS OF MOBILE DIRECT-RESPONSE ADS

CLICK & ACTIVATION TRENDS FOR DIRECT-RESPONSE ADS (ANDROID)


Both clicks & activations

saw rapid growth on

Android

Android advertisers mainly rely on

third party app stores to launch ads,

and use ad platforms as an

alternative solution. In 2015, the

number of ad clicks on Android grew

by112%, while activation volume

climbed 146%. Android advertisers

appear to have shifted from the

traditional approach to using more

ad platforms for precise targeting. Data source: TalkingData Mobile Data Research Center

Notes: activation refers to the volume triggered by promotion, excluding natural activation.

GROWTH NUMBER OF CLICKS OF MOBILE DIRECT-RESPONSE ADS

GROWTH NUMBER OF ACTIVATIONS OF MOBILE DIRECT-RESPONSE ADS

CLICK RATES ON IOS VS. ANDROID


iOS takes the highest share of

clicks

Chinese Android traffic has been

monopolized by the biggest Android app

stores, which are the first choice when you

want to release an app in China. iOS is a

different story because the traffic is directed

to the AppStore from ad platforms.

Therefore, iOS relies more on ad platforms

than Android. From the second half of

2014 to the first half of 2015, the rise of

incentivized ads has triggered a decline in

the share of iOS, but it climbed back to

87.7% in the second half of 2015.

MOBILE AD CLICKS 2014-2015(AS PERCENTAGE OF TOTAL NUMBER OF MOBILE ADS CLICKED)


ACTIVATION ON IOS VS. ANDROID


In terms of activation, the two platforms have become more balanced

From 2014 to 2015, activation

volume on the two platforms has

grown to a more balanced level. By

the second half of 2015, activation

volume on the Android platform

accounted for 43.3% of the total vs.

just 12% on the first half of 2014.

SHARE OF ACTIVATION VOLUME FOR IOS AND ANDROID(AS PERCENTAGE OF TOTAL NUMBER OF MOBILE ADS ACTIVATED)


TOP 5 PROVINCES IN AD CLICKS


Users from Beijing, Shanghai, Guangzhou and other coastal provinces tend to click more mobile ads

Ad clicks are relatively higher in

Beijing, Shanghai, Guangzhou and

coastal provinces like Jiangsu and

Zhejiang. This reflects the

geographical distribution of mobile

devices.

TOP 5 PROVINCES IN AD CLICKS ON IOS AND ANDROID(AS PERCENTAGE OF TOTAL NUMBER OF MOBILE ADS CLICKED)


TOP 5 PROVINCES IN ACTIVATION


Guangdong and coastal provinces have the highest mobile ad activation volume

In terms of activation, Guangdong

tops both platforms. On iOS,

Zhejiang, Jiangsu and Fujian take

relatively large shares. On Android,

aside from Guangdong and Jiangsu,

Beijing, Shandong and Henan also

rate highly.

TOP 5 PROVINCES IN ACTIVATION ON IOS AND ANDROID(AS PERCENTAGE OF TOTAL NUMBER OF ACTIVATIONS)


ADVERTISING SHARE OF VARIOUS SECTORS


New sectors strongly increase mobile advertising efforts

In 2014, the established mobile

advertising sectors such as gaming

and social networking took up more

than 90% of all mobile ads. In 2015,

the shares of these two sectors

dropped dramatically to 62.4%.

Sectors that are relatively new to

mobile advertising (“emerging

sectors”), like new media and e-

commerce, are rapidly taking a

larger share of the market.

MOBILE ADVERTISING SPLIT PER SECTOR(AS PERCENTAGE OF TOTAL NUMBER OF MOBILE ADS SERVED)

Data source: TalkingData Mobile Data Research CenterNotes: New media refers to video, music, broadcasting, news and other mobile end apps.

AD CLICKS OF SECTORS RELATIVELY NEW TO MOBILE ADVERTISING


Sectors relatively new to mobile advertising, like finance, real estate and medical care, see rapid growth in ad clicks

In 2015, mobile ad clicks of new

“emerging” sectors witnessed rapid

growth. The finance, real estate,

education, and medical care sectors

have seen the fastest growth. Mobile

ads are becoming increasingly

diversified in terms of industries.

GROWTH OF MOBILE AD CLICKS IN EMERGING SECTORS


E-commerce Finance + Real Estate + Education + Healthcare

New media Travel and transportation

USER ACQUISITION COSTS ACROSS SECTORS


iOS users are more expensive to acquire

The cost of customer acquisition is

generally higher on the iOS platform

than on Android. It is also more

costly for the financial sector to earn

customers than for gaming and e-

commerce.

Data source: enterprise interviews, public data compiled by TalkingData Mobile Data Research Center

COST OF USER ACQUISITION PER VERTICAL | IOS & ANDROID

TRENDS IN ABNORMAL CLICKS


Abnormal* clicks account for 11.6% of total clicks on average

In 2015, abnormal clicks on mobile

ads took an average of 11.6% of

total clicks. This was much lower at

the beginning of the year, around

5%, and peaked in July when the

share reached 19.7%. Rise of

abnormal clicks should be alarming

and might be caused by click fraud.

TalkingData can help you closely

monitor abnormal clicks.

ABNORMAL CLICKS ON MOBILE ADS(BASED ON MOBILE AD VOLUME IN ABSOLUTE NUMBERS)


*Rules to decide abnormality include the discreteness of IPs, abnormal time span and abnormal activation requests.

TRENDS IN ABNORMAL ACTIVATION


Abnormal* activationgrows significantly in promotional seasons

On average, abnormal activation

accounts for 6.1% of the total

monthly activations. This share surges

in the promotional periods of the

year, reaching an average of 11% in

August, September and December.

TalkingData can help you closely

monitor abnormal clicks.

ABNORMAL ACTIVATION OF MOBILE ADS(BASED ON MOBILE AD VOLUME IN ABSOLUTE NUMBERS)


*Rules to decide abnormality include the discreteness of IPs, abnormal time span and abnormal activation requests.

PART 3 MOBILE PRECISION MARKETING

SHARE OF ADVERTISERS USING MOBILE DMP IS RISING


Share of advertising via DMP climbs by around 200%.

In 2015, mobile ads on DMP

accounted for 11.8% of the total, up

from 3.9% in the previous year. This

represents a growth of about 200%.

Advertisers that prefer DMP come

mostly from the gaming, e-commerce

and financial sectors.


EFFECT OF ADS SERVED VIA A DMP


Ads served via a DMP are more effective

Compared with non-DMP delivery,

ads served via DMP see a significant

improvement on both CVR and CTR

with the effect most pronounced on

CVR.

MOBILE DIRECT-RESPONSE ADS: A COMPARISON BETWEEN EFFECTS OF DMP ADS AND NORMAL ONES ON CTR & CVR


移动广告网络-点击量TOP20

glispa InMobi 百度联盟Tencent Social

Ads adSage Mobvista Chartboost AdWords Chance Ad Toutiao.com

DOMOB Baidu Search Adwo Youmi.net Appcoach Unity Ads Avazu Private Exchange

Youku Guohead.com MobPartner

4 5 6 7 8 9 10

11 12 13 14 15 16 17 18 19 20

321

TOP 20 MOBILE ADVERTISING NETWORKS BY NUMBER OF CLICKS

Data source: TalkingData Mobile Data Research CenterNotes: The ranking is based on the total annual clicks of advertising networks in 2015 provided by TalkingData Ad Tracking

23 2011-2016 © TalkingData.com

TOP 20 MOBILE ADVERTISING NETWORKS BY NUMBER OF ACTIVATIONS

24

Data source: TalkingData Mobile Data Research CenterNotes: The ranking is based on the total annual activation volume of advertising networks in 2015 provided by TalkingData Ad Tracking.

Tencent Social Ads


TOP 20 MOST POPULAR MOBILE ADVERTISING NETWORKS


Data source: TalkingData Mobile Data Research CenterNotes: The ranking is based on the total annual promotions of advertising networks in 2015 provided by TalkingData Ad Tracking.

Tencent Social Ads

TOP 20 MOBILE ADVERTISING NETWORKS BY OVERALL STRENGTH


Data source: TalkingData Mobile Data Research CenterNotes: The ranking is based on a comprehensive calculation of user coverage, clicks, media quality and other indexes of advertising networks in 2015

Tencent Social Ads

Adwo

TOP 10 DISTRIBUTION CHANNELS


Data source: TalkingData Mobile Data Research CenterNotes: The ranking is based on the monitoring results provided by TalkingData Ad Tracking in 2015

Tencent Social Ads

ABOUT TALKINGDATATalkingData is China’s largest, independent Big Data service platform that focuses on the

mobile app marketplace. TalkingData provides best-in-class Big Data products and

services, such as mobile app analytics, mobile ad tracking, mobile game analytics, mobile

market intelligence, DMP (Data Management Platform), and industry consulting. Today,

80% of the Top 50 app developers in China utilize TalkingData to track their app metrics,

analyze user data points, and optimize monetization. Industry giants such as China

Merchants Bank, Citic Bank, Ping An Group also rely on TalkingData’s enterprise Big

Data solution to build their core data infrastructure towards a new mobile era.

BIG DATA FOR SMARTER BUSINESS DECISIONS AND BETTER SOCIETY

CONTACT

THANK YOU

BUSINESS DEVELOPMENT

Yuanyuan Meng (Grace)

[email protected]

MARKETING COLLABORATION

Furui Wang (Freedom)

[email protected]

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