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February 2017
THE STATEOF MOBILE MONETIZATION
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Table of ContentsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IntroductionP3
10OFFICES
Usage Restrictions
Key FindingsP4
MethodologyP5
In App Advertising
P8-9
ResultsP9-34
Appendix AP33-35
The information, materials, data, images, graphics, and other components of this report ("Report") are copyrighted and owned or controlled by Mobbo, (Big Data Technologies LTD.) unless otherwise noted. Unauthorized use of the Report may violate copyright, trademark and/or other intellectual property rights of Mobbo. The Report may not be modified, copied, distributed, republished, uploaded, posted, decompiled, or transmitted in any way, without the prior written consent of Mobbo. When citing Our Data or Reports, if so permitted by us, blog , reports or slide decks you receive through our Site or Services, you must clearly indicate the source as “Mobbo”. If you are publishing screenshots of Mobbo tables, charts, or other content, the Mobbo logo must be clearly visible in the screenshots.
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IntroductionT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
To improve and ultimately perfect an app, developers need to select the right SDKs – Software Development Kits. However, in today’s marketplace app developers are literally inundated with SDK choices, making it difficult to choose the best ones.
The Mobbo Power Index offers app publishers and marketers robust benchmarks of mobile app SDK components, helping them to make informed decisions about the best technology stacks. The report sheds light on the scale and performance of popular SDK components and tracks the movers and shakers in the mobile industry. This research has been conducted after studying a database of over 3.1 Million analyzed apps, and over 1,000 SDK components scanned across iOS and Android and all categories, which make it the most in depth study to date.
The findings provide valuable information for app publishers in their quest to pinpoint the best SDKs to integrate with, as well as for service providers in the mobile app economy who want to understand the competitive landscape in their field.
Since scale is a key factor in achieving statistical validity, larger media sources gain an advantage in this study. However, it is important to remember that smaller, niche SDK providers may also deliver good results for app publishers so, testing several technology providers - both large and small - is recommended.
Changes in the mobile ad industry and the sunset of SDK’s due to M&A and Consolidation led us to not present data from Mobilecore (by IronSource), MobPartner, Adwhirl and PlayHaven.
For any feedback and insights about this report, feel free to email us at [email protected].
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78% of “Top Overall” ranked apps on Android and 55% on iOS, have implemented at least one In-App Advertising SDK, which seems to become a must-have component of any mobile app monetization stack.
Google Continues to dominate: Admob (by Google) maintains its position as the top In-App Advertising SDK in Q4 2016 and dominates with 83% Android Share Of Voice and 78% share, on iOS globally, followed by Chartboost with 25% and 35%, and Facebook with 24% and 6.5%, respectively.
Cheetah Mobile leads the Growth rate chart with 122.72% Growth during Q4, delivering unrivaled scale and impressive retention on Android, followed by Avocarrot with 81.96% and Supersonic (by Ironsource) with 79.45%.
Chartboost and Applovin Scale on gaming apps, While Admobshare is slowly declining in that category.
When isolating Non-gaming Apps we can see that Facebook Audience scales in mobile apps.
1iOS apps have X2.5 more Paid applications and games versus Android.
Android apps are more aggressive with ads, 63.4% of Android apps (non games) contain ads, Versus 25.4% on iOS, over X2.5 difference.
RevMob, Avocarrot and AdMob assume the top 3 positions holding the lowest SDK uninstall rate on Android.
Chartboost, Applovin and Startapp assume the top 3 positions holding the lowest SDK uninstall rate on iOS.
Admob leading market share position is likely to continue to shrink in the future, albeit it’s scale, due to the fact that app developers understand the advantages and uplift in fill rate and in total revenue from leveraging several In-App Advertising SDK’s simultaneously.
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Key FindingsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
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9
10
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Scope: +1,000 Technology stacks of 3.1 Million apps worldwide, across all categories on iTunes and Google Play.
Date range: Q4 (October-December) 2017
Uninstall Rate was calculated by taking the number of SDK removals (uninstalls) from October to December 2016 (inclusive) and dividing it by the total number of active SDK implementations.
Scope Uninstall Rates
MethodologyT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
Share of Voice
Market Share
Growth was calculated by: A) Subtracting SDK removals from the number of new SDK implementations from October to December 2016 (inclusive) to get the gross implementations for that period, followed by: B) Dividing the number of gross implementations by the number of implementations at the start of the period.
Growth
Power Index factors several parameters as follows:
• 50% weight given to scale (- total number of active SDK implementations)
• 30% weight given to popularity among top apps (-number of SDK implementations in apps ranked in top charts)
• 20% weight given to retention (- uninstall rate)
Power Index
Share Of Voice (SOV) - is the percentage of apps utilizing a specific SDK in the monetization category taking into consideration that apps often employ several SDKs simultaneously.
Market Share is the percentage of the market controlled by a specific SDK in the In-App Advertising vendors’ category. It is calculated by dividing the number of apps that have implemented each SDK by the total number of apps that use an SDK from the same category.
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80.30%
7.70%
21.30%
Contain Ads Paid Apps Contain In AppPurchases
77.70%
18.10%
10.70%
Contain Ads Paid Apps Contain In AppPurchases
Monetization Methods - Games
Android
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
Games
7
63.40%
8.30%4.70%
Contain Ads Paid Apps Contain In AppPurchases
25.40%
21.20%
4.20%
Contain Ads Paid Apps Contain In AppPurchases
Monetization Methods – Apps (Non Game Apps)
Android
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
Apps
8
2.73
3.64
1.74
2.82
IOS Android
9.3310.2
4.1
5.3
IOS Android
Average Count across all apps with advertising SDK’s
Methodology - Top Publishers that were tested include:
Miniclip, Kiloo, Outfit7, Chetah Mobile, Halfbrick Studios,
Surpax, Fingersoft, Sega, Second arm
Average SDK count per app – Among Top Publishers + Popular Apps
Advertising SDK count per app that contains advertsA n d r o i d v s I O S
2.4 6.1
Games
Apps
9
• Android apps are more aggressive with ads, Over X2.5 Android apps (- non games) contain ads versus iOS apps, 63.4% of the apps on Android Versus 25.4% on iOS.
• Apps that contain advertising SDK’s, do not settle on one single monetization SDK in their app, Android and iOS Games contain on average 3.64 and 2.73 Advertising SDK’s components per app.
• Top Game Publishers on Android and iOS utilize on average a whopping 10 different Advertising SDK’s in their gaming apps in order to maximize their in-app advertising revenues.
• iOS apps have X2.5 more Paid applications and games versus Android, probably because iPhone owners prefer to pay for content rather than skirt paid content for free ad-supported apps.
• iOS users spend more per app and are more willing to spend in the first place compared to their Android using counterparts.
• 21% of Android games contain in app purchases, compared to 10% in iOS, this monetization method is likely to keep growing on both platforms.
• Although Android based devices outsell iPhones, iPhone developers still make more money from in app purchases, thus they seem to rely less on ads for generating income.
Monetization Methods. Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
10
In-App Advertising. Share of VoiceT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
ANDROID
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In-App Advertising. Share of VoiceT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
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Share Of Voice. Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
Admob Dominates
Admob dominates with 83.1% of the Android Share Of Voice, and 78% iOS globally, followed by Chartboost with 25% SOV on Android and 35% on iOS. Facebook Audience Network is close behind with 24% SOV but on iOS it’s only at 8th place with 6.5% SOV.
Android Competition Fierce
We can see that the competition on Android is fiercer with Chartboost and Facebook Audience Network at nearly the same SOV, with 24.96% and 24.4% respectively.
Distribution of Monetization SDK vary by Platform
The distribution of the monetization SDKs is very different on each platform, AppLovin is very popular on iOS (20%), but on Android they drop to just 12% SOV, while Startapp figures on Android surpass iOS with 19% on Android and 5% SOV on iOS.
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2
3
2
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With the ever-increasing pace of technical and creative innovation across app development, the past few years have brought some unanticipated market developments, particularly in terms of market consolidation, all of which benefits the advertiser, the app development industry and end users.
This paper sets out some of the movements in the ad-tech sector and looks at industries seeking to increase their involvement with software developers. There are a number of advantages perceived by both buyers and the SDK providers in aggregating their resources, which we will outline. We will look at the movers and shakers in the changing mobile ad-tech landscape and what can be learnt by any company seeking to scale up their operations, maximize their In-App Advertising and keep up with the competition to keep their edge.
The Push For Ad Industry Consolidation
There have been numerous high ticket M&A’s in the advertising industry in the last few years, with optimism looking set to continue for the foreseeable future. TechCrunch reported that in the first quarter of 2016 alone, there were 72 merger and acquisitions between advertising and marketing technology and digital media firms: “…to bolster or establish their own audience, round out their tech stack or neutralize potential threats.” *1
Acquisitions of ad-tech companies come not just from within the tech sector, but from other industries. Verizon, a telecoms company, for instance, has been involved in over a dozen acquisitions to date. Market leaders such as Oracle in the Cloud and Data sector have been involved in ten and Walmart seven moves apiece. Industries as diverse as telecoms, retail and business software are investing in ad-tech as trends involving their verticals and those in tech merge.
Mobile Ad-Tech Industry OverviewT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
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• NativeX - Acquired by Mobvista
• HeyZap - Acquired by (- Fyber parent company) RNTS
• InnerActive – Acquired by RNTS
• MobPartner - Acquired by Cheetah Mobile
• AdColony - Acquired by Opera
• Nexage - Acquired by Millennial Media owned by AOL
• Avocarrot - Acquired by company Glispa
• Smaato - Acquired by Spearhead
• SuperSonic – Merged with IronSource
Over the past years’ buy ups of SDK in-app advertising companies have continued apace, e.g.:
Conversion By Consolidation: Mobile Ad-Tech M&A activity
In a world, that is increasingly shifting its focus to a mobile first scenario, the Desktop Internet as we know is slowly declining. Companies are gradually understanding the impact of an app ecosystem and many of them are taking the plunge from being mobile-first to an app-only model. One of the driving factors behind this change of outlook has been the success of mobile-focused ad networks showcased in our report that have been the key in driving user interaction inside apps by placing targeted ads based onmeticulous user profiling. While Google did have a head start in the business with Admob being the current global market leader, things are starting to change.
Mobile Ad-Tech Industry OverviewT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
• AppLovin - Acquired by Orient Hontai Capital
• LiquidM - Acquired by Litagus
• TapJoy - Acquired by Offerpal-Media
• Mopub - Acquired by Twitter
• Flurry - Acquired by Yahoo
• Millennial Media – Acquired by AOL (Verizon)
• MobFox – Acquired by Matomy.
• Fiksu - Acquired by ClickDealer.
• PlayhHaven - Acquired by RockYou
15
33.83%
34.35%
35.12%
36.69%
39.17%
40.36%
41.02%
46.65%
47.44%
48.85%
49.42%
61.15%
79.45%
81.96%
122.72%
TapJoy
Smaato
AdMob
StartApp
Appodeal
AdColony
RevMob
Vungle
AppLovin
Yandex ADS
Unity ADS
Nexage
Supersonic
Avocarrot
Cheetah Mobile
90 Day Growth Rate – Part IT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
ANDROID
Movers & Shakers in the In-App Advertising Category
* Growth during Q4 2016
16
5.80%
5.97%
8.65%
13.34%
16.12%
21.46%
23.97%
25.37%
25.84%
26.32%
26.72%
27.97%
28.55%
31.95%
33.35%
Millennial Media
Nend
MobFox
AppBrain
Appnext
HeyZap
Smart AdServer
Leadbolt
MoPub
Swelen
ADTECH
inMobi
Chartboost
Amazon Ads
90 Day Growth Rate – Part IIT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
* Growth during Q4 2016
ANDROID
Movers & Shakers in the In-App Advertising Category
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Growth Rate. Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
1
2
3
Avocarrot is in second place with 81.96% growth rate
Supersonic is trailing close behind with 79.45% holding the 3rd place
Nexage is the last SDK that passes the 50% mark with 61.15% growth rate4
Cheetah Mobile shows the best growth rate with 122.72% growth during Q4 2016
18
28.57%
5.14%
2.17%
7.19%
9.78%
21.55%
19.45%
11.76%
49.79%
14.15%
14.17%
11.76%
65.01%
4.84%
4.85%
5.03%
5.33%
5.88%
6.46%
9.06%
10.11%
10.50%
11.22%
20.31%
27.15%
82.56%
Unity ADS
Millennial…
AppBrain
RevMob
Amazon Ads
AppLovin
AdColony
MoPub
Chartboost
inMobi
StartApp
AdMob
Share of Voice. Apps vs GamesT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
* January 2017
ANDROID
Mobile Monetization Share Of Voice: Apps vs. Games
3.06%
1.90%
4.75%
12.00%
2.26%
2.28%
7.16%
3.24%
2.40%
12.72%
4.43%
4.69%
4.72%
1.96%
0.07%
0.18%
0.44%
0.53%
0.64%
0.96%
0.98%
1.18%
1.33%
1.65%
3.09%
3.14%
3.56%
4.50%
Playhaven
Fyber
Leadbolt
HeyZap
iMobile
Yandex ADS
TapJoy
Nend
Avocarrot
Vungle
Supersonic
Nexage
Appodeal
Smaato
Games
Apps
19
• If we look at how developers monetize games vs apps we can see that there are differences in what SDK they choose, this is due to the fact that some companies specialize in ads for games – such is the case with Chartboost. Although Chartboost only allows games to integrate their SDK we can still see that 10% of non game apps have them integrated and 49% of the games that contain ads monetize with Chartboost.
• Unity ADS is holding 28.57% of the SOV in games while it only has 4.84% in apps
• Next we see AppLovin with 21.55% of the SOV in the games category and only 6.46% in apps.
Android Apps vs Games - Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
ANDROID
20
Share of Voice. Apps vs GamesT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
* January 2017
Mobile Monetization Share Of Voice: Apps vs. Games
1.73%
1.30%
5.20%
2.66%
5.35%
4.19%
1.07%
4.48%
0.16%
0.87%
2.96%
3.22%
3.42%
4.12%
4.80%
5.24%
Smaato
Amazon Ads
Mobclix
RevMob
MillennialMedia
MoPub
TapJoy
StartApp
IOS
5.26%
5.69%
5.75%
7.81%
12.91%
13.53%
33.50%
57.24%
69.08%
7.89%
1.94%
3.39%
1.87%
4.88%
3.25%
5.24%
9.76%
88.29%
inMobi
Flurry Ads
UnityAds
AdColony
Vungle
AppLovin
Chartboost
AdMob
Games
Apps
21
• Interestingly AdMob dominates on iOS with 88.29% of app using it and 69.08% of games.
• ChartBoost is in second place with 9.76% of apps and 57.24% of games using it making it the most widely used SDK in games on both platforms.
• Facebook Audience Network is in 7.89% of apps but only in 5.26% of games on iOS.
• Millennial Media is also less suited for games as they drop from 5.35% in apps to 3.42% in games.
• This category is dominated by game centric monetization solutions as we can clearly see from the data with more SDKs being deployed in games than in apps – this is probably due to the number of users playing each day and having to fill the ad inventory.
iOS Games vs Apps. Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
22
9.58%
11.09%
12.27%
14.12%
20.34%
21.34%
22.18%
22.69%
23.87%
24.20%
31.43%
70.25%
7.53%
3.26%
4.93%
12.36%
5.56%
11.26%
24.96%
12.29%
12.90%
14.26%
24.40%
83.13%
Amazon Ads
TapJoy
MillennialMedia
inMobi
Vungle
MoPub
Chartboost
AppLovin
AdColony
Unity ADS
AdMob
Share Of Voice. Top AppsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
* January 2017
Mobile In-App Advertising Share Of Voice By Platform: Top Apps vs. All Apps
1.85%
2.18%
2.52%
2.69%
2.69%
2.69%
2.86%
3.03%
3.19%
3.19%
3.19%
3.19%
6.22%
7.56%
4.03%
1.26%
0.75%
19.01%
0.33%
4.14%
0.57%
4.39%
1.72%
0.39%
0.18%
0.11%
0.71%
3.67%
Smaato
Cheetah Mobile
NativeX
StartApp
MoLogiq
Nexage
Inneratctive
HeyZap
Leadbolt
Mobvista
HyprMx
Opera…
Fyber
Supersonic
ANDROID
Top Apps
All Apps
23
AdMob is the clear winner here with 83.13% of all apps using it and 72.25% of the top apps.
Facebook Audience Network has 31.43% SOV in the top apps on Android and 24.4% SOV overall.
Chartboost are slightly less popular in top apps than in all apps with 22.18% and 24.96% respectively
StartApp have the biggest drop-off here with 19.01% of all apps using their SDK but only 2.69% of the Top Apps doing so.
Share Of Voice. Top Apps Key Observations
AdMob Facebook Audience Chartboost StartApp
ANDROID
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
24
12.99%
7.57%
9.71%
3.15%
18.35%
16.54%
17.01%
24.07%
20.09%
22.13%
38.06%
3.93%
4.07%
4.16%
4.25%
6.18%
6.43%
7.74%
8.05%
16.67%
26.54%
61.20%
MoPub
Mobclix
MillennialMedia
StartApp
FacebookAudience
UnityAds
Vungle
AdColony
AppLovin
Chartboost
AdMob
Share Of Voice. Top AppsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
* January 2017
Mobile In-App Advertising Share Of Voice By Platform: Top Apps vs. All Apps
1.61%
2.48%
6.29%
3.48%
6.19%
2.61%
2.88%
2.24%
3.85%
7.90%
5.49%
0.42%
0.77%
0.92%
1.21%
1.57%
1.59%
1.76%
2.28%
2.39%
2.54%
3.67%
NativeX
Fiksu
Fyber
Amazon Ads
Supersonic
Leadbolt
Hyprmx
PlayHaven
HeyZap
TapJoy
inMobi
IOS
Top Apps
All Apps
25
AdMob is the top monetization SDK on iOS with 61.20% of apps integrating it and 38.06% of the Top Apps.
AdColony is the runner up with 24.07% of the top apps using it but only 8.05% of all apps meaning they are making it where it counts.
Chartboost is at 3rd place with 22.13% SOV in Top Apps and 26.54% in All Apps.
StartApp actually lose SOV when comparing Top Apps, 3.15%, to 4.25% in All Apps
AdMob Top SDK AdColony Runner Up
Chartboost is 3rd StartApp
1
Share Of Voice. Top Apps Key Observations - iOS
2
3 4
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
26
In-App Advertising. Uninstall Rate (lower is better)
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
ANDROID
27
In-App Advertising. Uninstall Rate (lower is better)
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
28
Uninstall Rate. Key ObservationsT H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
Android
• RevMob has the best retention, with only 2.9% uninstall rate
• Avocarrot has similar numbers with 3.0% uninstall rate
• On the other side of the spectrum we have LoadBolt with 64.8% uninstall rate, Followed by Millennial Media which is the only other SDK that surpasses the 50% mark with 52.9% uninstall rate
iOS
• Charboost lead with a remarkably low uninstall rate of only 0.47%
• AppLovin is in second place with 0.66%
• In third place we have StartApp with 1.24%
• As we can see iOS apps are characterized by low removal rates may be, due to the long updating process on iTunes
29
17%
12%11% 11%
9% 9%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%14%
9% 9% 8%7% 7%
0%
2%
4%
6%
8%
10%
12%
14%
16%14%
8% 8% 7%
6% 6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
SINGAPORECANADAUSA
Market Share by Country
15%
9%
6% 6%5% 4%
0%
2%
4%
6%
8%
10%
12%
14%
16%15%
11% 10% 10%
8% 8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18% 14%
9% 9%8%
6% 6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
JAPANRUSSIAGERMANY
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
ANDROID
Share of voice on Google Play Top Overall charts – top 500 apps in each region*
30
17%
6%
3% 3% 3% 3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%32%
17%
12% 12% 10% 9%
0%
5%
10%
15%
20%
25%
30%
35% 26%
13%
8% 8% 7% 6%
0%
5%
10%
15%
20%
25%
30%
SINGAPORECHINAUSA
Market Share by Country
25%
14%
9% 9% 8% 7%
0%
5%
10%
15%
20%
25%
30%
19%
7%5% 5% 5%
3%
0%
5%
10%
15%
20%
25%29%
14%
8% 8% 8%6%
0%
5%
10%
15%
20%
25%
30%
35%
INDIARUSSIAJAPAN
T H E S T A T E O F M O B I L E M O N E T I Z A T I O N – F E B 2 0 1 7
IOS
Share of voice on iTunes Top Overall charts – top 1500 apps in each region*
31Power Index
Top 20 Advertising SDK's
Powered By
32Power Index
Top 20 Advertising SDK's
Powered By
33
Drivers of Ad-tech Aggregation Trends
Corporations face a market increasingly constrained from various angles; finding new ways to create revenue is challenging. U.S. Telecoms providers foresee their wireless market reaching its peak domestically. Furthermore, the Federal Communications Commission and Department of Justice prevents mergers and acquisitions within their own sector (e.g. AT&T lawsuit for trying to purchase T-Mobile USA).
Diversifying into ad-tech allows them to profit from their biggest existing asset i.e. specific and unique data about their consumers. They can build and offer services that are precisely targeted, measurable and flexible for 3rd party advertisers. Everyone benefits. Companies wanting to monetize data assets can tap into new technical resources, offering measurable ROI to clients marketing to mobile consumers. Advertisers monetise their marketing budgets more effectively. Tech companies benefit from investment and reach fresh huge markets their partner has access to.
Tech buyers bring media buying, digital advertising and marketing automation capabilities in-house, simultaneously solving their own media agency transparency challenges. Cohesion of financial, development and marketing strategies also improves.
Demand for digital and mobile advertising is increasing exponentially amongst business to customer companies. According to e-Marketer *4, Consumer Packaged Goods (CPG) advertisers are estimated to spend nearly $6 billion on digital advertising in 2016; this offers exponential growth for service providers.
Some corporations see transitioning from hardware to software as vital to adapt to this emerging digitally aggregated environment. As clients of software behemoths such as IBM, Oracle and Salesforce increase their spend on digital marketing, so Saas and DaaS companies expand their cloud-based marketing services and parent companies capitalise on digital’s developments.
Technology M&A’s are helping companies evolve their business strategy in keeping with market trends, ultimately securing their survival.
“…technology the key focus for growth… Without a winning technological product to provide additional value for mobile advertisers, the battle for market share for most networks is already lost.” *2
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Disruptive Tech Trends and The Drivers For M&A
It seems that telecoms companies, B2C enterprises, SaaS/DaaS, gaming companies and Chinese firms investing in tech will be the market movers to watch in the emerging market re-structuring.
“…mobile ad tech is transforming, and only those with superior technology or size will survive.” *2
Whatever the background the rationale for entering into M&A arrangements will vary, but the statistics will doubtless drive investments.
For instance, according to NewZoo, the mobile gaming market continues its exponential growth and is, “… set to reach about 50% of the entire game market by 2020.” *2 NewZoo’s latest quarterly Global Games Market Report *5 says that the gaming market has already reached $99.6bn this year. Of this market, 37% (valued at $36.9bn), is mobile users. As a whole, the market is healthily up 8.5% compared to 2015. APAC currently have 47% of market share.
Verizon has shown aggressive, high value market acquisitions in the ad-tech sphere. For example: AOL was purchased in 2015 for $4.4 billion, then Yahoo in July 2016 for $4.8 billion. This brought exposure to a larger audience, through content sites such as The Huffington Post, Yahoo! Finance and TechCrunch; ‘ownership’ and monetizing connections to audiences is key to adding value.
In the retail sector, the global brand Walmart has been acquiring multiple marketing, engagement and analytics service providers. In 2014, WalmartLabs purchased Stylr, a fashion app drawing on inventory from local outlets to help customers find clothes they like more easily. They then bought Adchemy, an e-commerce technology company. 2015 saw them purchase PunchTab, a platform that collects data about customer in-store activity and loyalty. Their buy-up of Jet.com e-commerce software developers further highlight the importance Walmart places on digital objectives for customer monetization.
In 2014 Oracle invested heavily in consumer data and advertising technology capabilities, investing $400 million in acquiring BlueKai, $1.2 billion in Datalogix for, buying Maxymiser in 2015 and recently, AddThis for $200 million. *1 Oracle Data Cloud has been critically boosted via their acquisitions *8 and has increased their competitiveness e.g. Adobe. Protection of market position by leveraging technology to use data more affordably offers competitive advantage.
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