This week we’ve released our inaugural mobile advertising benchmark report! We take a unique look at the mobile advertising spending habits of the biggest spending consumer mobile apps and how it’s been impacted by the Covid-19 pandemic. For challenger apps it should give insight into your desired media mix as you scale and act as a benchmark for the biggest spending apps versus your peers.

To give you insight into the dataset we’re exploring, here’s some of the key stats and methodology behind the study:

• Over 100 different consumer mobile apps
• The median spend of our customers is $265k per month
• The total sample of annual spend we’re looking at is $500m
• We’ve ensured that no single advertiser represents more than 20% of the dataset to avoid data being skewed by one single advertiser’s dynamics
• It’s a longitudinal study starting at the beginning of Q1 2019 and finishing at the end of Q1 2020

I’ll share some of the top-level findings quickly in this blog post but to get the in-depth findings download the full report by completing the form at the bottom of this post.

The big three

Facebook, Google and Apple Search Ads dominated advertiser adoption. Facebook and Google were out ahead with 91% and 89% average adoption respectively throughout the period we looked at. However, Apple was a close thirds with an average of 78% adoption across the five quarters.

When looking at share of wallet though, Facebook and Google are the dominant duopoly. For share of wallet across all our advertisers Facebook and Google take over two thirds of spend with a combined 69.2%, with Facebook taking marginally more at 36.6%. Apple Search Ads haven’t converted their high adoption numbers into a share of wallet that challenges Google and Facebook, with a 7.6% share of wallet. This is likely due to the pull nature of Apple Search Ads vs the push nature of Facebook and Google.

For advertisers spending less than $250k per month, what we do see is that Facebook takes the lion’s share with 66% overall. Meanwhile, Google has a lower share of wallet at this level of spend relative to those spending over $250k per month with just 19.9% of smaller advertiser spend. This is likely due to the larger budgets required to make Google’s Universal App Campaigns (UAC) scale effectively.

Snapchat’s continued growth

We also saw the continued growth of Snapchat. They’ve done well to see 54% growth year-over-year in advertiser adoption, finishing Q1 2020 at 50.6% adoption. As you can see in Chart 1 above, they did see a significant dip in Q4, however, we see a lot of gaming advertisers pull back on major platforms during Q4 as big spending ecommerce brands enter the market to acquire holiday shoppers. Facebook, Google, Snapchat, Twitter and Pinterest all saw a drop in adoption from Q3 19 to Q4 19.

However, Snapchat’s 50.6% adoption translated into just a 3.3% overall share of wallet. Comparing this to LiftOff who had a 29.7% advertiser adoption in Q1 2020 but a 2.4% share of wallet, suggests Snapchat still has an opportunity to grow budget share. In particular there seems to be gains for them in developing more mature offerings for the top-tier ($1m+ per month) and lower-tier (Under $250k per month) of advertisers where they had just a 2.8% and 1% share of wallet respectively. When compared to the 6.1% share they gained for the mid-tier of advertisers spending $250k to $1m per month there definitely seems to be opportunity to grow budgets at the top and bottom end of the market.

TikTok’s meteoric rise

TikTok began their meteoric rise in the mobile user acquisition world with the launch of their ad product at the beginning of 2019. It’s seen them nearly double advertiser adoption every quarter since, finishing with 12.3% adoption in Q1 2020.

Despite a modest 0.6% share of wallet overall, they have already surpassed the 0.2% share of wallet held by both Twitter and Pinterest, cementing their place as a breakout channel for early adopting mobile advertisers. With a global active user base bigger than Twitter, Snapchat or Pinterest, they could accelerate into the top 5 adopted channels in 2020 with a more mature advertising offering.

Diversify as you scale

Across our advertiser base we saw they used 6.7 different channels on average. So you can’t simply rely on the big three channels as you scale spend. However, for those advertisers spending less than $250K per month, those three channels were enough as they averaged 3.0 channels used throughout the period. At this level you can still hit your performance metrics within Facebook, Google and Apple Search Ads.

As you scale spend to $250k-$1m a month you have to experiment outside those channels as those advertisers used 7.2 channels on average throughout the five quarters studied. As spend goes above $1m a month you need to diversify further, with 10.1 channels used on average.

However, overall there is a greater trend towards consolidation, in particular amongst the largest advertisers who reduced the number of channels used by 15% when comparing Q1 19 to Q1 20. Across the board we saw an average 10% reduction in channels used when comparing the two quarters.

Covid-19 on Mobile UA Budgets

There is a clear decline in advertising spend as the fast outbreak of Covid-19 could be seen globally. However this showed a surge in ad spend towards the end of March. As we break this down we can see how this is impacted differently between gaming and non-gaming advertisers. Non-gaming advertisers (including the likes of travel & transport) have seen a steady decline, and although showing some signs of recovery, they are still below the baseline. Gaming however has seen a surge in UA investment, most likely taking advantage of lower CPMs from reduced advertising competition as well as increase in usage from social distancing & lockdown measures.

Conclusion

What we see overall is that the dominance of Facebook and Google holds strong in mobile user acquisition. However, there are challenger channels with TikTok and Snapchat growing strongly.

Whilst, when you spend less than $250k a month you can rely on Facebook, Google and Apple search ads to hit your performance metrics, you have to look outside of this as you scale further. From what we see, the most popular additional channels are Snapchat, LiftOff, one of the major 6 ad networks (Applovin, Chartboost, ironSource,Tapjoy, Unity Ads and Vungle) and increasingly TikTok.

Certain categories are clearly capitalising on market dynamics created by Covid-19, and it is certainly an area to monitor in Q2 to get a fuller picture.

At the time of writing this report there remains significant uncertainty on when things may return to ‘normal’, but one thing for sure is that there will be growing emphasis on the accountability of performance in user acquisition. Advertisers who can show strong monetisation as well as the ability to drive performance during these times will likely continue to scale.

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