Future-Casting:User Acquisition & Monetization

in 2013 and Beyond

Bryan BuskasVP Sales & MarketingAdColony

@BBuskas@AdColony

Global Leader in HD Mobile Video for User Acquisition & Monetization with

80% of the Top 100 Grossing Developers on iOS and Android

“User Acquisition

is Monetization”

SURVEY DETAILS

•Goal:- Evaluate current state of user acquisition ecosystem

(attitudes, preferences, platforms) on iOS and Android to identify trends, insights and benchmarks for 2013 and beyond

•Details:- Fielded: July 2 - July 9 2013- Participants: Top 100 Grossing developers & agencies- 23 questions requiring 78 responses- 41% completion rate

SAMPLE SURVEY PARTICIPANTS

DESIGNING AN EFFECTIVE CAMPAIGN

PartnersChannel &

FormatCampaign

Type & Goal

Also: off device, traditional, online, etc.

Type Goal

Test Test

LaunchBurst

Distribution, Volume, Rankings

EngagementSustain

ROI

• Offerwall

• Free App Networks

• Banner

• Interstitial

• Social

• Video

• 100s of Ad Networks

• 100,000s of Developers

CHANNEL / FORMAT USAGE

Source: AdColony 2013 Customer Survey (July 2013)

What UA channels and ad formats are

currently being used by

Top 100 Grossing mobile

developers?

Jan’13 July’13

Video 100% 100%

Facebook 68% 94%

Display/Banner 89% 86%

Interstitials 100% 83%

Direct deals 63% 72%

Free App Networks 95% 64%

Offer Walls 100% 64%

Cross promo 68% 53%

Other 5% 3%

TRENDS IN CHANNEL / FORMAT USAGE

Source: AdColony 2013 Customer Survey (July 2013)

• Video and social formats are delivering reach, results and growing share of performance advertising budgets

• Static and incentivized formats continue to decline in both usage and effectiveness

Jan’13 July’13

Video 100% 100%

Facebook 68% 94%

Display/Banner 89% 86%

Interstitials 100% 83%

Direct deals 63% 72%

Free App Networks 95% 64%

Offer Walls 100% 64%

Cross promo 68% 53%

Other 5% 3%

CHANNEL / FORMAT EFFECTIVENESS

Source: AdColony 2013 Customer Survey (July 2013)

What UA channels and ad formats are most effective

at achieving campaign

goals?

July’13

Video 89%

Facebook App Install Ads 88%

Interstitials 74%

Direct Deals 43%

Cross Promotion 39%

Display / Banners 39%

Offer Walls 24%

Free App Networks 9%

Other 0%

SELECTING A PARTNER

SELECTING A PARTNER

Source: AdColony 2013 Customer Survey (July 2013)

Jan’13 July’13

Quality of User 95% 97%

Price 84% 89%

Targeting 63% 86%

Service 74% 83%

Volume 95% 81%

What are the most important

factors in selecting and

evaluating your UA

partner(s)?

TRENDS IN PARTNER SELECTION

Source: AdColony 2013 Customer Survey (July 2013)

Jan’13 July’13

Quality of User 95% 97%

Price 84% 89%

Targeting 63% 86%

Service 74% 83%

Volume 95% 81%

• Volume has decreased from the most important factor in January to the least important factor in July

• User quality and price are the two most important factors in selecting a mobile advertising partner and have both increased in importance in 2013

• Targeting and Service both increased in importance as campaigns have become more sophisticated and focused with key partners

FORECASTING 2013 & BEYOND

Source: AdColony 2013 Customer Survey (July 2013)

•We asked the Top 100 Grossing Developers: “Compared to 2013, in 2014 my UA campaigns will...”- increase in size- increase in reach (more geographies)- shift more to iOS- shift more to Android- shift more to Windows or other platforms- shift more to video- shift more to display/banners- shift more to interstitials- shift more to direct deals- shift more to offer walls- shift more to social (e.g. Facebook)- be more focused on CLV than cost- shift more to free app networks- test new channels- be more focused on CPI- be more focused on CLV than cost- be more focused with select partners

FORECASTING 2013-2014

Source: AdColony 2013 Customer Survey (July 2013)

0%

25%

50%

75%

100%

Jan’13 Jul’13 2014

Increase in sizeIncrease in reach (geo)Utilize new channelsShift to socialShift to videoMore focused on CLV than costMore focused on CPIShift to interstitialsShift to AndroidShift to direct dealsShift to iOSShift to display/bannersShift to offerwallsShift to free app networks

Q: “Compared to 2013, in 2014 my UA campaigns will...”A: %’s are top 2 box responses agreeing with the statement

TRENDS ON THE DOWN (& OUT?)

Source: AdColony 2013 Customer Survey (July 2013)

0%

25%

50%

75%

100%

Jan’13 Jul’13 2014

Utilize new channelsShift to social

More focused on CPI

Shift to iOSShift to display/bannersShift to offerwallsShift to free app networks

Q: “Compared to 2013, in 2014 my UA campaigns will...”A: %’s are top 2 box responses agreeing with the statement

TRENDS ON THE DOWN (& OUT?)

Source: AdColony 2013 Customer Survey (July 2013)

0%

25%

50%

75%

100%

Jan’13 Jul’13 2014

Q: “Compared to 2013, in 2014 my UA campaigns will...”A: %’s are top 2 box responses agreeing with the statement

• Advertisers continue to have a lower willingness to test new channels and partners today and in 2014 as ad spends continue to become more focused with proven and trusted partners

• Advertisers say they will be less focused on price (CPI) in 2014 and instead focus on ROI and CLV

• Ad spends on static ad formats (display, offerwalls, free app networks) are projected to remain limited and decline in 2014

TRENDS ON THE UP & UP

Source: AdColony 2013 Customer Survey (July 2013)

0%

25%

50%

75%

100%

Jan’13 Jul’13 2014

Increase in sizeIncrease in reach (geo)

Shift to videoMore focused on CLV than cost

Shift to interstitialsShift to AndroidShift to direct deals

Q: “Compared to 2013, in 2014 my UA campaigns will...”A: %’s are top 2 box responses agreeing with the statement

TRENDS ON THE UP & UP

Source: AdColony 2013 Customer Survey (July 2013)

0%

25%

50%

75%

100%

Jan’13 Jul’13 2014

Q: “Compared to 2013, in 2014 my UA campaigns will...”A: %’s are top 2 box responses agreeing with the statement

• Top advertisers expect to continue to increase budgets and expand the reach of their campaigns globally due to established tracking solutions and proven ROI

• Full screen ads (video, interstitials) continue to grow and secure a larger share of performance advertising budgets

• Advertisers continue to focus more on CLV than CPI

ADDITIONAL INSIGHTS

Source: AdColony 2013 Customer Survey (July 2013)

39%

31%

11%

11%

6%3%

Video Social (e.g. Facebook) Interstitials

Other Television Banners

What UA channel are you most excited about in 2014?

ADDITIONAL INSIGHTS

Source: AdColony 2013 Customer Survey (July 2013)

•Managing UA campaigns is a real-time commitment! 3/4 of top developers actively manage their UA campaigns multiple times a week if not daily

• Retention (2nd day), First session IAP and Tutorial completion are early indicators of a high quality loyal user who is likely to monetize directly in the future via IAP

• 100% of top developers use custom internal tools to analyze campaign results and ROI

• Localize! Top advertisers localize for 10+ geographies

For additional insights:

ua@adcolony.com

@BBuskas@AdColony