Mobile ad buying shifts in response to Android maturity, iPhone sales, holiday strategy

BOSTON, Dec. 28, 2016 -- Published today, November indexes from Fiksu DSP, the data-fueled mobile marketing technology company, reveal indications of the RTB market responding to key factors in the mobile industry including holiday spend, iPhone adoption and Android maturity.

Surprisingly, media costs declined across both platforms, in contrast to the expected seasonal impact. The cost to buy ad space on the Android platform is still lower than on iOS, with RTB CPMs falling to $3.59 in November on Android and $5.99 on iOS.

Costs across the iOS platform remained relatively flat month over month, with cost per purchaser (CPP) rising only 1 percent since October and CPM falling 11 percent. CPP on Android has now surpassed iOS, rising 16 percent in the month of November and showing startling year over year growth, up 225 percent since November 2015.

“As these numbers illustrate, it was slightly less expensive to buy ads in November, but more expensive to compete for users’ attention,” said Tom Cummings, vice president, new market strategy at Fiksu DSP.

Costs are falling back to earth after iPhone 7 launch
During October, the iOS indexes spiked up, with CPP rising 40 percent and CPM rising 26 percent. This was likely a response to the iPhone 7 launch, as the numbers cooled down dramatically in November. Interestingly, as Fiksu industry trackers have noted, iPhone 7 adoption has been historically low, at only 6% after 90 days. Ad costs falling back to earth in November may be an indicator that the slower-than-expected adoption has led marketers to be less bullish on iOS than they have been during previous device launches.

Holiday budgets are being spread more strategically
In years past, marketers have been quick to increase mobile ad spend in November as part of the run up to the hectic mobile holiday season. This year’s departure from that trend may indicate that marketers have become more strategic and might be allocating those November dollars to December and January. That tends to be a highly efficient way to reach users, as new devices are being filled with apps for weeks after being activated. In the past, marketers who spend in January tend to get more value, since the rest of the market was competing for space in November. As more brands catch on to this longer-tail strategy, competition in January may increase.

Android excitement has led to competition and overcorrection
Last month’s Fiksu analysis noted that Android represents a great opportunity to find users who are more likely to make a purchase, and while many advertisers enjoyed the opportunity to find the right users at a lower initial investment, the rest of the market is quickly catching on. While ad prices dropped – perhaps an overcorrection resulting from high October competition – it became more expensive to reach a purchasing user. These numbers fall in line with the findings of the recent consumer survey report from Fiksu, which found that 87 percent of smartphone users use fewer than 10 apps per day. While the audience is out there, it’s increasingly difficult for developers to break into that small group of apps that users interact with regularly.

“While the November indexes show indications of some unexpected behavior, it’s clear that we’re reaching a point of relative parity between iOS and Android,” said Cummings. “Publisher costs are down, engagement is up, but it’s not easy to master the combination of finding the right person at the right time to make them buy something. With another Christmas behind us, it will be interesting to see what kind of story the December numbers tell.”

For more information on Fiksu’s indexes visit: https://fiksu.com/fiksu-indexes/

About Fiksu DSP
Fiksu DSP combines a massive, proprietary dataset with powerful segmentation tools to reach high-quality audiences at scale using the top RTB exchanges. Fiksu DSP has executed thousands of successful mobile campaigns to connect brands, agencies and app advertisers to audiences that spend time and money inside the apps they download. Clients include Amazon, Disney, Groupon, Coca-Cola, Electronic Arts, Dunkin’ Donuts, and Starcom. Based in Boston, Mass., Fiksu is backed by Noosphere Ventures.

More at fiksu.com, @Fiksu and on the Fiksu DSP blog.

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Jeremy Sacco
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Fiksu DSP
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